A Moment with MOSERS September 2022

Oct 5, 2022, 15:36 PM

September 2022 A Moment with MOSERS

The MOSERS Board of Trustees met for their regular quarterly meeting on September 22, 2022. Since the official minutes of that meeting won't be available until after they are approved at the next quarterly board meeting, we are providing this summary in order to get information to you more quickly. Please watch the video above and read the information below to learn more.

Welcome to this edition of A Moment with MOSERS!

On September 22nd, the MOSERS Board met for their third quarter meeting. As always, the main objective of Board meetings is to ensure the long-term sustainability of promised benefits. To that end, the top priority of this meeting was certifying the employer contribution rates for FY24. This is the fiscal year than begins July 1, 2023 and ends June 30, 2024.

In this update, I will focus on the MSEP, since it is our largest retirement plan covering the majority of our members. Following an in-depth presentation from our independent external actuary, the MOSERS Board certified the MSEP employer contribution rate for FY24 at 27.26% of payroll. The employer contribution rate is the percent of pay that a MOSERS-covered employer contributes every pay period to properly fund the retirement plan.

The funded ratio of the plan was calculated at 58%. You may recall in 2018, after significant analysis and deliberation, the Board adopted a funding policy that we knew would increase the employer contribution rate and decrease the plan's funded ratio. While there are short-term challenges, this funding policy is designed to ensure the long-term sustainability of MOSERS. You may recall that the Governor and the General Assembly approved an extraordinary payment of $500 million to MOSERS during the 2022 regular legislative session. MOSERS received that payment in July 2022 (or after June 30, 2022), and is therefore not reflected in the MSEP funded ratio.

The Investment Committee report included a presentation regarding a proposed proxy voting policy, as requested by the Board at the June Board meeting. The Board voted to retain a proxy voting advisor and utilize an approved proxy voting policy. The proxy voting advisor shall consider only factors that relate to the economic value of the System's investments and shall cast votes in the best economic interest of the members of the System. This new proxy policy will be utilized where applicable in the current investment portfolio and will be one of the considerations in the hiring process for new investment opportunities when analyzing total risk and return.

Next, our Board investment consultant and staff provided the Board with an update of recent investment performance. Our investment return for FY22, ending June 30, 2022, was -9%. We know that each individual year's performance will not meet the Board's assumed rate of return of 6.95%. You will recall the FY21 performance of 26.33% exceeded that assumed rate of return. As long-term investors, MOSERS strives to maintain an investment portfolio that will, over the long-term, achieve investment return objectives.

The 2022 MOSERS Board of Trustees election cycle concluded on September 21. The official election results indicated that Crystal Wessing, Jenny Jacobs, and Gary Findlay were re-elected to the Board of Trustees by the members of the system to serve another 4-year term. This new term cycle begins January 1, 2023. Congratulations to Crystal, Jenny, & Gary and thank you to ALL the candidates who participated in the election.

Thank you for watching this edition of A Moment with MOSERS. In this life, we only have so many moments. Please know we appreciate you spending THIS moment with us. We hope you stay well, have a great day, and enjoy this beautiful time of year!

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