Section 22F: Revised retirement system funding schedule
Summary
Section 22F allows local and county retirement systems to revise their existing Section 22D funding schedules based on an actuarial valuation conducted as of January 1, 2009 or later, extending the unfunded liability amortization period to no later than June 30, 2040. Annual amortization increases under a revised schedule may not exceed 4%, no year's payment may be less than the prior year's payment until fully funded, and if a year's payment would exceed the prior year by more than 8%, PERAC approval is required. Systems may also use a revised schedule to increase the COLA base amount in $1,000 increments.
Statutory Text
Section 22F: Revised retirement system funding schedule
Section 22F.
A system, other than the state employees' retirement system and the teachers' retirement system, which conducts an actuarial valuation of the retirement system as of January 1, 2009, or later, may establish a revised retirement system funding schedule, subject to the approval of the actuary, which reduces the unfunded actuarial liability of the system to zero not later than June 30, 2040, as long as: (1) the payment in a year under the revised schedule or a subsequent schedule is not less than the payment in a prior fiscal year under the then current schedule until the system is fully funded; and (2) the increase in the amortization component of the appropriations required by the schedule from year to year does not exceed 4 per cent and is so designed that the funding schedule and any updates to it reduce the unfunded actuarial liability of the system to zero on or before June 30, 2040.
If an updated actuarial valuation allows for the development of a revised schedule with reduced payments, the revised schedule shall be adjusted to reduce the unfunded liability of the system to zero by an earlier date to the extent required to ensure that the appropriation required for a particular year under the new schedule shall not be less than the amount identified for that year under the prior schedule established under this section.
If a schedule established under this section would result in an appropriation in the first fiscal year of the schedule that is greater than 8 per cent more than the appropriation in the previous fiscal year, the requirement of clause (2) of subsection (a) may be adjusted with the approval of the public employee retirement administration commission.
Systems may establish a schedule under this section that provides for an increase in the maximum base amount on which the cost-of-living adjustment is calculated pursuant to section 103, in multiples of $1,000. Acceptance of this subsection shall be in accordance with paragraph (j) of section 103.