Town Hall Meeting

1. Town Hall Meeting

2. 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

3. 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

4. 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

5. 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

6. WRS Retirement Benefits by County (dollar amounts in millions) Source: WRS Database 2011 Town Hall Meeting

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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

13. 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

14. 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

15. Questions? • Contact WRS if you have follow-up questions or input. • 307-777-7691 • pension@wyo.gov Town Hall Meeting