US - The Kansas Public Employees Retirement System (KPERS) has recorded a 30% unfunded actuarial liability (UAL).
According to KPERS, which has total assets of just less than US$ 11.3bn (as of June 2005) and a membership of over a 250,000, recent funding improvements mean it is in actuarial balance but poor funding projections could seriously hamper progress.
The report stated: “Funding projections would deteriorate further with a significant market downturn.”
KPERS stated the UAL will continue to increase until statutory employer rates “catch up” with actuarially- required rates. It warned 2006 will see costs for the State of Kansas continue to soar by an additional $30 to $40m more each year to make higher employer contributions and debt service payments.
Local employers will contribute approximately $7 to $15m more in each of the next ten years, the fund added.
The system’s investment return ending June 2005 offered some good news with 12.1% exceeding its long term actuarial target of 8%. Over the last ten years the annual return has averaged 9.1% compared to the five year average return of 3.5%.
Acting chief investment officer Scott Peppard commented on the recent upturn in performance: “The system holds a substantial portion of its equity investments within a global or international format. This proved to be especially fortuitous in fiscal year 2005. “International equity markets returned a combined 13.7%, versus the US equity investment returns of 9.3% Other positive contributions in the portfolio included traditional fixed income, 9.1%, and alternative investments 12.8%”
Jonathan Stapleton asks whether newly-accredited professional trustees should be a statutory fixture on pension scheme boards.
Savers are being warned by the Insolvency Service to guard their pension pots from investment scammers and negligent trustees as it winds up 24 companies.
Respondents say they should only be required in certain situations as the system is not broken.