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Town Hall Meeting. WRS Vision, Mission and Values. Vision: Partnering to Build F inancial S ecurity for Members and Their F amilies Mission: Provide expert administration and responsible investment of Wyoming’s public retirement and supplemental savings programs Values:

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Wrs vision mission and values
WRS Vision, Mission and Values

Vision:

Partnering to Build Financial Security for Members and Their Families

Mission:

Provide expert administration and responsible investment of Wyoming’s public retirement and supplemental savings programs

Values:

Integrity, Accountability, Commitment, Excellence

Town Hall Meeting


What is a pension
What is a pension?

  • A traditional pension plan (defined benefit plan) is a group retirement plan that offers a predictable monthly defined benefit in retirement

  • It provides workers with a steady, predictable income stream in retirement that cannot be outlived

  • The average pension benefit for the WRS Public Employee Plan was $16,382 per year in 2011, for public safety and judicial plans the average was higher

Town Hall Meeting


Pensions reduce economic hardships among elderly
Pensions reduce economic hardships among elderly

“The analysis indicates pensions exert an independent, positive impact on older Americans’ economic well-being – an effect we call the ‘pension factor.’”

Dr. Frank Porell, gerontologist and co-author of The Pension Factor 2012

Town Hall Meeting


Dialogue feedback

Why do pensions matter?

Pensions offer the best retirement security for employees

Pensions are a valuable recruitment and retention tool for employers

Pensions are economically efficient and prevent future public assistance expenditures

Pension payments have a ripple effect which stimulates and stabilizes the local and national economy – $1 becomes $1.20 in Wyoming according to NIRS

Resource: Why Do Pensions Matter? National Institute on Retirement Security

Dialogue & Feedback

Town Hall Meeting


Wrs retirement benefits by county dollar amounts in millions
WRS Retirement Benefits by County (dollar amounts in millions)

Source: WRS Database 2011

Town Hall Meeting


Study shows economic value of pension payments
Study shows economic value of pension payments

Wyoming Pension Payments by Source from 1993-2009

Source: Pensionomics 2012 Measuring the Economic Impact of DB Pension Expenditures, NIRS, March 2012

Town Hall Meeting


Management of pension plans involves balancing four factors
Management of pension plans involves balancing four factors

Investment Gains/Losses Contributions

+

=

Administrative Costs + Member Benefits

We’ve had to make some adjustments to

Contributions and benefits to keep this balance


Nationwide trend toward adjusting pension provisions
Nationwide trend toward adjusting pension provisions

43 states, including Wyoming, made changes to their pension plans between 2009 and 2011

  • Increasing contributions

  • Higher Age and Service Requirements for Normal Retirement

  • Reductions in COLA provisions

    Source: National Conference of State Legislatures

Town Hall Meeting


1 1 2012 valuation results wrs public employee pension plan
1/1/2012 Valuation ResultsWRS Public Employee Pension Plan

The plan is healthy. The board is carefully watching trends to see if further adjustments are needed.

Town Hall Meeting


2012 Funding Ratio Snapshot – 81.9% Can be expected to decline slightly next year due to 5-year smoothing

With smoothing/averaging

Town Hall Meeting


Retirees need help offsetting inflation

Previously awarded COLAs are still being paid to retirees

It is unlikely WRS will be able to fund COLAs without additional funding

Change in state law setting a higher requirement to award COLAs from internal assets

Legislature will make future COLA decisions

Retirees need help offsetting inflation

Town Hall Meeting


Purchasing power e rosion g reatest for those retired longest
Purchasing Power ErosionGreatest for those retired longest

A member who retired in 1991 would be able to purchase only 48.8% of goods and services in 2011. WRS has partially offset inflation with prior COLA awards increasing the 1991 retiree’s purchasing power to 63.9%

Town Hall Meeting


Cola alternatives needed

For current retirees– target COLAs to make them more affordable and get external appropriation for them. WRS has provided the legislature a tool to use for estimating costs.

For current employees – establish a COLA plan and give employees an incentive to self-fund COLAs. Employers would have a choice to opt into the plan.

COLA Alternatives Needed

Town Hall Meeting


Questions
Questions?

Town Hall Meeting


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