YT YouTube2Text

YouTube2Text → Transcripts → July 24, 2026 PERS Board Meeting

July 24, 2026 PERS Board Meeting — Transcript

by Oregon Public Employees Retirement System · 21,265 words · 3,262 segments · language en · Watch on YouTube

Open in transcriber Summarize with AI Download SRT/VTT

Full transcript

0:15Yeah, there's
0:23>> [clears throat]
0:24[laughter]
0:30>> You're not you're not
0:33[laughter]
0:34>> right. That's too
0:42[laughter]
0:45electrical has
1:44Good morning. For the record, Kevin
1:45Olen, uh, director PERS. Uh, before we
1:49begin the agenda, I just want to go over
1:51a few items. Uh, this meeting is being
1:53recorded and the audio and video will be
1:55available on the PERS website after the
1:58meeting.
1:59Uh if you're online, you'll see a window
2:01showing all the board members at their
2:02usual seats and they copy the agenda on
2:04the projector screen behind you. Uh a
2:07few other items to note. As always,
2:09public testimony will be taken on action
2:11items at the chair's discretion with
2:14written testimony prefer preference to
2:16be submitted via the purge website.
2:18There was no written testimony submitted
2:21or maintaining agenda items today. With
2:24that, I'll turn the meeting over to
2:25chair Haramo.
2:27Thanks, Kevin. With that, the July 24,
2:302026 PERS board meeting is convened.
2:34First item of business is approval of
2:37the May 29, 2026 meeting minutes. Are
2:41there any comments on those minutes?
2:44Do we have a motion to approve?
2:46>> John Scan, I move that we approve the
2:49May 29th, 2026 board meeting minutes as
2:53presented.
2:54>> Thank you. Second.
2:55>> This is Kristen Connor. I second.
2:57>> All in favor?
2:58>> John Scandan. I
3:00>> Kristen Connor. I
3:02>> Bob Hon. Robert Tintel. I
3:04>> Jon Hario. I thank you all. With that,
3:07we'll go to the director's report.
3:08Kevin.
3:10>> Thank you, Chair Haro. Vice Chair
3:12Scanland. Board members. For the record,
3:14Kevin Olen, director. Welcome to our
3:16July 24th board meeting. As always, a
3:19lot of interesting agenda items to work
3:21through this morning. Uh with respect to
3:24the director's report, uh this typically
3:26covers things that aren't in the board
3:28agenda and is a overview of recent
3:31agency accomplishments. A couple of
3:33noteworthy items. Uh first off, on July
3:371st, PERS celebrated our 80th
3:39anniversary. We have updated our PERS
3:41history book if anyone's looking for
3:43some nice poolside reading this summer.
3:46Uh second, we're thrilled to have
3:47completed our managed service migration
3:49project, which now allows us to pivot to
3:52working with the DAS data center
3:54services group on our setup to the new
3:56state resiliency site in Bend. And we're
3:59hoping to have that project completed in
4:01early 2027.
4:04And as well, for the first time ever,
4:06PERS has set up an internship program,
4:08and we're pleased to have two interns
4:10working within the information services
4:12division over this next few months.
4:15With respect to the investment report,
4:17as noted in the packet, the May return
4:19showed regular account earnings of
4:20positive 4.24%.
4:23Uh I haven't seen the official returns,
4:25but I believe it will show that uh they
4:28dropped about 14 basis points. So
4:29year-to-ate earnings are around 4.09%.
4:33[clears throat]
4:33With respect to the budget, we're
4:35running tight, but uh still doing well.
4:37We did get some funds uh into our budget
4:40through the uh Eboard and we'll be going
4:42to the September Eboard for further
4:44funding.
4:46Uh after I finish my report, Crystalall
4:48from CM will provide the board with
4:50summary results of the 2025 benchmarking
4:53study.
4:54Following that, administrative rule
4:56making, our policy coordinators will
4:58notice two rules and recommend adoption
5:00of four rules. Uh following that,
5:03Christy Ivers will provide a
5:05modernization project program update.
5:08Then uh Barb and Barb Demoling Paris and
5:11Noel Cru Cruz from Seagull uh Consulting
5:14will recommend adoption of the revised
5:172027 retirey health insurance plan
5:20renewal and rates given the changes to
5:22some of our carriers. Then Richard
5:25Horford will provide recommendations on
5:27our 2729 agency request budget. And
5:31finally, Milleman will be presenting the
5:33December 31st, 2025 systemwide valuation
5:36results. And these results will inform
5:39what the 2729
5:41actual actual contribution rates will be
5:43for the board, which will be approving
5:46at the September board meeting. With
5:49that, any questions on my uh board
5:52report?
5:55>> No questions. Thank you, Kevin. Uh with
5:57that we'll move to the benchmarking
5:59results from CM.
6:03>> Great. Uh thank you. Uh can everyone
6:06hear me?
6:07>> Yes, we can.
6:09>> Perfect. Thank you for confirming Kevin.
6:11My name is Christopher Dah. I am the
6:12co-head of client coverage with CM. Um
6:16I'll provide a little introduction to CM
6:18and we'll walk through your pension
6:20administration results. So CM exists to
6:22help plans do better for their members.
6:24We're fully independent thirdparty
6:26company that provides data and
6:28actionable insights to institutional
6:30investors for over 30 years. His
6:33historically this has taken the form of
6:35benchmark reporting on cost and
6:37performance to participating plans and
6:40more recently has include um communities
6:43that provide peer-to-peer exchange of
6:45insights and datadriven research. Today
6:48we'll review your pension administration
6:50cost and service versus a peer group.
6:52I'll walk through both of those items
6:54along with some trends. Um, and we'll
6:57leave some time for questions at the
6:59end. If we could advance to the next
7:02slide, please.
7:04So, the key takeaways for the period
7:06ending June 2025 include the following.
7:09Your service score was 61. This was
7:11below the peer median um and driven by a
7:15couple of various strengths. So, um,
7:17first contact resolution within your
7:19contact center, meeting members out in
7:21the field, and salary and service credit
7:23information online. Um, it was impacted
7:26by a couple of areas. So, contact center
7:28accessibility, pension inceptions, fewer
7:31online tools, and less outbound
7:33communication than peers. I'll go
7:35through those items in more detail as I
7:39walk through the presentation. your
7:40service score has increased by three
7:42points over the last eight years and
7:44we'll we'll provide some context on
7:46what's driving that as well. On the cost
7:48side, your 20 your costs were $27 per
7:53active member and annuitant. These were
7:55$84 above the peers uh with peer average
8:00which was $122.
8:03Your higher costs were mainly driven by
8:06having more FTE and higher governance,
8:10operations, and support costs. And
8:11again, we'll break those down as I walk
8:13through the presentation. Your cost did
8:15increase by 6.8% peranom over the last
8:18number of years, predominantly driven by
8:20some of the major projects and legisl
8:23legislative uh enhancements that were uh
8:26implemented. Um peers saw increases of
8:304.7%.
8:32When we put these two items together, we
8:33look at what we call the cost
8:34effectiveness score. Um, and this is
8:37just an illustration of your cost versus
8:39your peers and your service versus your
8:41peers. Um, based on your results, we see
8:45that you're higher cost and lower
8:47service than the average participant
8:48within the universe. And I will also put
8:50that into context as I walk through the
8:52presentation. If we could advance to the
8:54next slide, we'll just take a look at um
8:57you how we develop the insights that
9:00will walk through the presentation. So
9:02they are based on the 81 pension plans
9:04that participate in our annual
9:06subscription spread across US, Canada
9:09and Europe with nearly half of those
9:11plans coming from the US about 34.
9:14During my presentation when I reference
9:15the universe or all average I'll be
9:17referring to this group of plans. In
9:20addition to the broader universe, we do
9:22build custom peer groups based on uh
9:24these 14 plans. If we could advance to
9:27the next slide, please.
9:29Um and so for the purposes of
9:33comparing your pension administration
9:35results, both cost and performance
9:37against peers, we build peer groups
9:40based on similar size of members by
9:44active and annuitant member count. Um,
9:47given your size at around 370,000
9:52members, both active and annuitant
9:54members, we believe that these 14 peers
9:57offer valuable comparisons for cost and
9:59performance. Um, I will also note on
10:03this slide that there were no changes to
10:04your peer group from last year. So, we
10:06are looking at comparable results
10:08yearover-year.
10:10If we could advance to the next slide,
10:11we'll start with a discussion of uh your
10:15complexity because it does drive a lot
10:18of the results that we'll review. So
10:21your complexity remains very high within
10:23our universe. It is highest within your
10:26peer group and third highest across our
10:29universe as a whole. Number of drivers
10:32impacting your uh complexity. So you
10:34have um higher pension payment options.
10:38You'll offer more multiple plan types
10:41and overlays and you offer more benefit
10:44formulas for your members and this
10:48drives or impacts your your uh the
10:50administration of the plan in a number
10:52of ways. Um so it's a negative impact on
10:56service levels. Your agents need to be
10:58more prepared to address more different
11:00items and more nuance across the options
11:03that are available to them.
11:05It does increase cost and it does reduce
11:08the productivity overall in the front
11:10office. If we could advance to the next
11:12slide, we'll just put these results into
11:14context. So we do have we do uh this
11:17chart is designed to illustrate the
11:19relationship between cost and
11:20complexity. Um the top leftand quadrant
11:24indicates that a plan has relative high
11:27complexity and relative lower cost. the
11:30universe are highlighted by the light
11:32green circles while your peers are
11:33highlighted by the blue circles. Your
11:352025 results are donated uh illustrated
11:38by that black circle in the top right
11:40hand quadrant indicating high
11:45um you high relative complexity and high
11:48relative cost. Where your purple
11:51triangle was is where you were eight
11:52years ago. So you have seen that u costs
11:55have increased as you've gone through
11:56some of this pension modernization that
11:58you're you've been working through. If
12:00we could advance to the next slide,
12:02we'll we'll we'll focus on the next few
12:04slides. We'll focus on the cost story.
12:06So your costs were $27 per active member
12:09and annuitant. This was $84 above the
12:12peer average. Your business as usual
12:14costs were $163
12:17and these were about $56 above the pure
12:19average. While major projects were $43
12:22per member, those were $29 before above
12:25the peer average. I have uh specific
12:29content around both the business as
12:31usual and major project spend that we'll
12:34review. But first, let's take a look at
12:36what's driving the differences in those
12:38costs. If we could advance to the next
12:40slide.
12:40>> Yes, sorry.
12:41>> Sorry to interrupt your flow. I do have
12:42one question on your page 27. Um, so you
12:46just talked about the change in relative
12:48complexity versus relative cost from 18
12:51to today.
12:53>> Yep.
12:53>> Looks like that spread is maybe about
12:55$80. Does that mean that if we looked at
12:58and I'm now moving to your next slide,
13:0028. Does that mean if we had looked at
13:03this in 2018 that 207 versus 122 would
13:07look more like 122 versus 122?
13:12Um
13:14I think that's a fair assessment. Uh
13:18yes. Um if I'm understanding what you're
13:21asking,
13:23um you would have in 20. So on the if we
13:27could go back one slide on the chart, um
13:31you uh you were lower cost at that time
13:34and still that same level of complexity
13:36versus your peers. Um so costs did
13:40increase
13:41um over the last number of years
13:44predominantly because we're implementing
13:46your system modernization and addressing
13:48some of the um the legislative uh um
13:53enhancements that you've been required
13:56to integrate and so that's what's caused
13:58your costs to be high over that time
14:00period. So I I think I'm not sure who's
14:02asking the question but I think the
14:03answer it is yes.
14:05>> Yeah. Okay. Thank you Chris.
14:09So just looking at the cost story, we
14:12talked about this uh slide already. Um
14:14let's go advance to the next slide and
14:17we'll look at what's driving the costs.
14:19Um so the first we we look at four key
14:22areas. The first one is staffing levels.
14:24So you have more front office staff per
14:2710,000 member than your peers do. You're
14:30at 5 5.8 staff per 10,000. Peers are at
14:34three. This is resulting in about a $40
14:36difference per member. Um, you have
14:39lower third party costs than members.
14:40You're at $4 and peers are at $7. So,
14:43this is resulting in you being $3 lower
14:45than peers. Um, you have lower costs per
14:49FTE. Um, and so in this categor,
14:54building utilities, HR and and IT spend
14:58per staff. And overall, you are lower
15:02across each of those four categories.
15:04This is resulting in $8 lower cost than
15:07your peers. And then the last item and
15:10and the largest driver of your cost
15:12difference is you have higher support
15:14costs per member. And this is uh $57 in
15:17difference. Here we're seeing higher
15:19support costs across most categories
15:21with major projects and actual legal and
15:24autoc cost driving the bulk of the
15:26difference. When we bundle up those four
15:28items, this is how we're getting to that
15:30$84 for 2025.
15:34If we could advance to the next slide,
15:37we'll take a quick look at maybe what's
15:39driving uh some of the higher staffing
15:42levels. Um you your headcount has um has
15:48historically been supported by higher
15:49transaction volumes uh processed by the
15:53plan and 2025 was no different. We see
15:56that overall you're processing 23% more
15:59transactions. Couple areas that I'll
16:01focus in on here is transaction uh
16:04values were driven by higher new pay
16:07inceptions and purchases and transfers
16:09in where you are you're processing 128
16:12and 75% higher volumes respectively than
16:15your peers. The other big area in this
16:18section is that member communications
16:20category uh where volumes are being
16:22driven by calls, emails, uh incoming
16:25mail and member presentations where you
16:27are um you can see there you're you're
16:30quite a bit higher than peers
16:32respectively and and so this your
16:34complexity and the volume of
16:36transactions that you're processing is
16:38requiring more staff to support that. We
16:41could advance to the next slide. We'll
16:43look at business as usual costs
16:46specifically. Um, as I mentioned at the
16:48outset, $163.56
16:51above the peers. Um, on the chart on the
16:54right, we break down the business as
16:56usual cost across two primary
16:59categories. The front office where we
17:01see
17:03um, you have higher costs across each of
17:06the category. And this speaks this ties
17:10back specifically that the last slide
17:11where you're doing more transaction
17:13volumes across memory transactions,
17:16communications and data and collection
17:18on the governance and support. We also
17:20see that you're higher than peers across
17:22most categories with it driving the bulk
17:25of that difference. Again, those system
17:27modernization efforts and integrating
17:29some of the uh legislative changes
17:32driving those IT costs a little higher
17:33than your peers.
17:35If we could advance to the next slide,
17:37we'll take a look at major project
17:38spend. Um, you're at $43, $29 above the
17:42peer average. Again, the peer average is
17:45for all of your peers. Some of them are
17:47going through modernization and some of
17:49them aren't. So, that average typically
17:51a little bit lower because not everyone
17:52is in the midst of a modernization like
17:54yourself. So, we expect your uh major
17:58project spend to be a little higher
17:59given the modernization efforts that
18:01you're going through and those
18:02legislative changes which we've
18:04identified in 2025 was SB1049.
18:08Um, your 8-year average is at $30. This
18:10is $21 above the peer average on major
18:14project spend. If we could advance to
18:17the next slide, we'll take a look at IT
18:19security spend. We have decided recently
18:23to isolate IT security spend from IT
18:26spend overall primarily because fraud
18:30and cyber security prevention has become
18:32an increasingly important topic within
18:34the community and plans has specifically
18:36asked if we could start attributing
18:38this. We see that your IT security spend
18:40was $2.58
18:4258 per member. This was below the pure
18:45average of $343.
18:48If we could advance to the next slide.
18:52Um this is just some comparisons around
18:55activities and the costs for those
18:57activities. Um we see that collections
19:00in data maintenance costs uh in include
19:04data and money from employers uh and
19:08service to employers and major projects
19:11are both big drivers of your cost buy
19:14activity. On the next slide, this is
19:18looking at the same data um
19:22uh the slide is designed to illustrate
19:25cost per activity by activity volume
19:28instead of by member. So just framing it
19:30a slightly different way. Again, the
19:32story doesn't change some of those key
19:34categories that we know you have more
19:37complexity and and more staff to support
19:39the higher transaction volumes driving
19:41the story there. And finally, closing
19:44the cost section, we'll look at the the
19:46um cost trend over time. I mentioned you
19:49were at 6.8% over the last eight years.
19:52Uh a reasonable number given where the
19:55broader peer group and universe is at.
19:59Peers are at 4.7%, universe is at 4.2%
20:03given the modernization efforts you're
20:05going through. And you can see that with
20:06the lighter blue on the top of your bar
20:09chart. Those major project spends did
20:11tick up in 2020 and have been higher
20:13since as you worked through those
20:15modernization efforts. On a
20:17year-over-year basis, your costs were up
20:198.5%.
20:20This was at a lower rate than PICE,
20:22which saw increases of 11.7%.
20:25So, that concludes my comments on the
20:27cost portion of the presentation. I'm
20:29going to pivot to the service side. Uh,
20:32and so on your service score, as I
20:35mentioned, 61, 21 points below the peer
20:37median of 82. The table on the bottom
20:40right illustrates your service score
20:41across the four key member journeys that
20:44we track. I'm not going to go through
20:46that on this slide. We will dig into
20:48each of those over the next four slides.
20:50So, if we can advance to the next slide,
20:51we'll start with the active member
20:53experience. The service score was 54.
20:56This was 27 points below the peer
20:59median. And driven by a couple of areas
21:01of strengths. So, call quality, you had
21:03high first contact resolution, you're at
21:0696%, peers are at 87. On one-on-one
21:09counseling, you do a great number of
21:12counseling sessions in field. Uh, and
21:15your members value that experience.
21:18On the opportunity side, your contact
21:20center accessibility, members do find it
21:23uh harder to access you by phone. You
21:26have four menu layers whereas peers have
21:28about 1 and a half and your call weight
21:30times are 1,41
21:33seconds versus peers around 529 seconds.
21:37It's worth noting that 1,041 seconds is
21:40an improvement over the previous year
21:42which is which was around 1,25 seconds.
21:45So trending in the right direction there
21:47on your secure website. Your active
21:49members access your secure website at a
21:52lower rate than peers. Um, with respect
21:55to targeted communications, your peers
21:57have more email addresses and are
22:01sending more targeted communications for
22:03key activities uh to their members on
22:06purchases. Around 86% of your peers
22:09provide purchase service credits over
22:12the phone. Plus, they provide written
22:14estimates in 9 days where it's taking
22:16you about 18.
22:18on personal information. Peers offer
22:20more secure messaging including
22:23uploading of documents
22:26and uh recent history of correspondence.
22:29And then finally on member statements,
22:3193% of your peers post their member
22:33statements online uh and with more
22:37timely information. Um and so that's a
22:42summary of the active member experience.
22:44If we could advance the slide, we'll
22:46look at the inactive member experience.
22:48Your score here was 70, very close to
22:50the peer median at 74. This is an area
22:53where your secure your members do access
22:56your secure website at a much higher
22:58rate. And so we we see that in the
23:00results there. Uh the one opportunity
23:02that we did identify here was tracking
23:04inactive members. You have fewer emails
23:07for your inactive memberers than peers
23:10and you also don't track the members
23:13that have reached the age of retirement
23:14and have yet to receive a benefit where
23:17uh a number of your peers do.
23:20If we could advance to the next slide,
23:22we'll look at the retiring member
23:25experience. Service score was 55. This
23:28was 28 points below the peer median. Uh
23:32uh sorry, that's not right. Oh, sorry.
23:34before the below the peer median of 83
23:36um areas of strength. So salary and
23:39service credit information you maintain
23:42upto-date salary and service credit
23:44information through through your secure
23:46website uh and it's complete to the most
23:49recent pay period as well. Member
23:52presentations. We talked about this
23:53before. You deliver a good deal of
23:55infield member presentations higher
23:57rates than your peers. Opportunities. We
24:00talked a little bit about targeted
24:01communications already. 64% of your
24:04peers engage both active and inactive
24:06members as they approach the age of
24:08retirement with a targeted communication
24:10campaign. Uh pension estimates assisted
24:13service. So nearly all of your peers
24:15provide estimates over the phone and
24:18your written estimate uh sorry and they
24:20provide risk estimates in 8 days. Takes
24:23about 18 days for you to complete a
24:26written estimate
24:29on the retirement applications.
24:3286% of peers uh permit retirement
24:34applications online. Currently, you do
24:37not. Plus, you require notoriization of
24:39retirement applications. On pension
24:42estimates, only 3% of your members
24:46pensions are incepted without a cash
24:47flow interruption of greater than one
24:49month. Peers are doing this at around
24:5183%.
24:52About 30% of your survivors are incepted
24:56without that cash flow interruption.
24:58Peers are doing that at around 69%. And
25:01then finally, disability inceptions
25:03takes about five months for you to
25:05return a decision versus three for
25:07peers.
25:10And then the last section is just around
25:12the annuitant service score. Your score
25:14was 73. This was 16 points below the
25:17peer median of 89. Um we talked a little
25:20bit about targeted campaigns already and
25:22the and a couple of the other member
25:24journeys. Same uh comment applies here.
25:27pension payments. About 86% of your
25:30peers allow uh annuitant members to
25:33change banking information and
25:34withholding tax through their secure
25:36website. Um we've also talked about your
25:39secure website and a couple of the other
25:41member journeys. Your uh annuitant
25:44members do access your secure website at
25:46a lower rate than your peers do. and
25:48then feedback. Um, peers do survey their
25:52members uh through the website and the
25:55phone experience at various points
25:57through the member journeys. You
25:58currently do not.
26:01Moving forward to the service score
26:02trend, we do see that your service score
26:05has increased uh by three points over
26:08the last eight years. Uh over the last
26:11year, a couple of improvements. So, uh,
26:14one-on-one counseling, you provide more
26:16counseling in fields, uh, than peers,
26:19and your in counseling sessions have
26:21increased by a fair amount from, uh,
26:23from 3,400 to 4,100 during that time
26:27period. Pension estimate calculators now
26:30allow members to model different
26:32retirement start dates. So, that
26:34enhancement is reflected in the
26:36improving service score trend. And then
26:39a new attendance can change banking
26:41information online. That's an
26:42improvement over the last year. Uh one
26:45area uh of change over the last year
26:48that had a slight drawback on your
26:50service score was disability inception
26:52turnaround times fell from uh four
26:55months last year to 5 months this year.
26:57And so that had an impact slightly. Over
27:00the long term, the secure website,
27:02you've added functionality to the secure
27:04website and member usage continues to
27:07increase on an annual basis. So, that's
27:09positive. And then meeting members, uh
27:12you've increased the member
27:13presentations and counseling session um
27:17to prepandemic levels. So, good result
27:20overall there. If we could advance to
27:22the last slide.
27:24Uh oh, sorry. Um we'll talk first about
27:27the cost effectiveness. Um this is our
27:30cost effectiveness score. It's designed
27:32to illustrates a plan a plan's relative
27:34service against this relative cost
27:36versus your peers. Uh ideally you want
27:38to plot in the top lefthand quadrant
27:40indicating high relative service and
27:42lower relative costs. The peers are
27:45highlighted by light blue and the
27:46universe is highlighted in green. Your
27:492025 results are illustrated by the
27:52black circle and plotted in the right
27:55quadrant indicating lower relative
27:56service and higher relative cost than
27:59peers. And again, we've moved from that
28:01purple triangle uh from a few years ago.
28:05Um if we could advance to the last
28:07slide, I'll just conclude uh that my
28:09prepared remarks for the day. Uh so your
28:11service score was 61 below the peer
28:14median driven from some areas of
28:16strength. So, first contact resolution,
28:18one-on-one counseling in the field, and
28:20salary and service credit information
28:21online impacted by contact center
28:24accessibility and pension inceptions.
28:26Those were the bigger drivers of of the
28:29service score being lower. Um, the trend
28:32has improved over the last 8 years, up
28:34three points. Um, and and I know from
28:36conversations with leadership that the
28:38modernization should address a lot of
28:40the service uh areas that we've talked
28:42about here today. Uh so we expect to see
28:45things improve as that modern age comes
28:47online. On the on the cost side, $27 per
28:52member, $84 above the peer average, most
28:55of that being driven by major project
28:57enhancement, but also uh having more
29:00FTEs and higher support costs per
29:02member. Um overall, you are higher cost
29:06and lower service than the average
29:08participant within the universe. But we
29:10know as I mentioned that the plan is
29:12actively working on improving the
29:14digital experience through enhanced
29:16system modernization efforts. Um so with
29:19that I'll pause to see if there are any
29:20questions from uh from the audience or
29:23the board.
29:26>> Yeah. Uh this is John Scan. I I had a
29:29few questions. Um and first off just to
29:33say thanks for um presenting this
29:35although to me it's not terribly good
29:38news. Um it it's um to to know that we
29:42cost a lot more and we're doing a lot
29:44less with that money. Uh and as um
29:47stewards of that I um I obviously take
29:51that really um quite seriously. Um the
29:54one I had uh to start is um as we're
29:59looking at the peer groups, it was
30:01determined by by size and I get that,
30:04you know, the the scale of what we're
30:06doing, but um it also seems like the two
30:10big drivers of our problem here uh have
30:14to do with um not being modernized. Now,
30:17I think um particularly in the secure
30:20website area, I I think we're we're
30:23really uh we we got way behind the gun
30:26on that and and we're we're really
30:28paying for it um now. And I and
30:31obviously the complexity
30:34um where we're on the, you know, upper
30:36level of complexity. I and I get that
30:38that drives a lot of this, but um I
30:41guess another concern for me is that
30:43while um we're improving, we're not
30:46improving at the same rate as our peers.
30:48Um and again, I think it might be a
30:51problem looking at peers only from this
30:53uh standpoint of of size of the plan
30:56because it doesn't take into account the
30:58complexity which I think is creating
31:00that drag where we're not improving as
31:03quickly and we're we're spending money.
31:05Um, we're also increasing our costs at a
31:09higher rate than our peers are. So, if
31:13we were to kind of adjust for the
31:15complexity thing, does it look any
31:18better? [laughter]
31:19I guess is my question.
31:25>> Kevin, did you want to take that one or
31:27did you want
31:28>> Sure.
31:29>> Sure. Uh, good points all vice chair
31:32scandlin.
31:34you can automate away complexity. Uh
31:37however, you know, if you look back just
31:40from 2019 to 2025,
31:43uh we spent 6 years and $75 million
31:45implementing Senate Bill 1049.
31:48And during that interim period, we did
31:50not have any opportunity to make
31:52enhancements much many enhancements to
31:54our service because we're focused on
31:56that. Currently, we're in the the early
31:59stages of implementing House Bill 4045.
32:04uh about6 or 7 million this year and
32:07we're asking for $17.4
32:09million in the next biania to do that.
32:13So if you're to scrape away the
32:15legislative mandated costs I think our
32:17cost would go down quite a bit. We would
32:20overlay that with the modernization cost
32:22but over time you can automate uh away
32:25complexity. Uh in my previous life we
32:28were the third most complex plan in
32:29Canada. We had the second highest
32:31service score and the lowest cost
32:34remember. So there is ways of doing it
32:36but we are in many ways a creature of
32:40our circumstance in the fact that we do
32:42a lot of things manually and this is
32:44truly a public service announcement for
32:47modernization.
32:48I really do think that uh and we've
32:51talked about this. We will be using the
32:54CM scores on many things to to baseline
32:58how we're doing. Uh you know you take a
33:01look at the fact that we're 400% for
33:03data uh as compared to our peers. As we
33:07improve the way we ingest data, clean it
33:10uh and not have as many manual processes
33:12around it. we will definitely see a lot
33:14more efficiencies and effectiveness uh
33:17from both a timeliness perspective as
33:20well as a cost per member perspective.
33:22One of the big drivers of service score
33:24is timeliness and as you see 86% of our
33:29peers which would probably say that
33:31maybe there's one other out of the 14
33:32that doesn't do online retirement
33:34applications. Those are easy cost driver
33:38diminishers as as you move through. Uh
33:41again my previous life we had 75% of our
33:44members that applied online and could do
33:46it in 20 minutes. Whereas now we have
33:48retirement application sessions. We have
33:50to go through and we have to verify the
33:51data etc etc etc. So as we modernize
33:55there's huge opportunities to improve
33:58across all aspects of of the CM service
34:01scores.
34:03>> This is Kristen Connor. I just have a
34:05follow-up question mostly to that Kevin.
34:07Um and Chris maybe for you as well on
34:09that peer group sh Thank you for sharing
34:11kind of the application that's a a
34:12really great thing to highlight in terms
34:14of where the modernization is going to
34:16have implications that are going to both
34:18provide cost benefit savings as well as
34:20hopefully service enhancements on the
34:22score but you know Chris you mentioned
34:24that there are various plans in stages
34:26of modernization is there any way that
34:28you can share any insights from those
34:31peers that are further along on the
34:32modernization efforts and show how those
34:34implementations are you know affecting
34:36those savings as well as helping the
34:38service scores. I mean, Kevin, I think
34:39you just gave an example, but it's hard
34:41to see where we are in our journey
34:43compared to the peers to see what those
34:44scores look like. So, is this just a
34:46moment in time where we are in uh and
34:49again, then the Senate bill
34:50implementations is is not helping that
34:52project cost either. I I understand that
34:54with maybe less service enhancement
34:56potential. So, just trying to kind of
34:59figure out what that looks like if as we
35:01move further along in modernization.
35:03>> Sure. Sure. happy to jump in here. So, a
35:06couple let's let's delineate the the
35:09higher cost because I think there's two
35:10drivers to the higher cost in the major
35:12project. To Kevin's point, part of it is
35:15implementing some of the legislative
35:16changes that have been uh that the the
35:20the plan has been asked to integrate. Um
35:22and from my understanding, that's been
35:24the majority of the major projects been
35:26over the last six years. It's only been
35:28in the last couple of years where we
35:30started down the road of the system
35:31modernization efforts and those costs.
35:34Um,
35:35as you well know, those costs will be
35:37sort of the next few years while that
35:39modernization efforts go on. Um, the
35:41plans that do go through the exercise of
35:43modernizing do see an improved service
35:45score. You're you're creating more
35:46self-service options for their members
35:48to access their information online. It's
35:51reducing call volumes into your contact
35:53center. that does have the unintended
35:55consequence of making the calls that
35:57come into the consent contact center a
35:59little bit more complex and so the time
36:01on the call tends to increase a little
36:03bit but overall what we see is call
36:05volumes are coming down. Uh uh human
36:09intervention with the transaction
36:12processing is coming down because
36:14members are able to process the things
36:15that they need to directly online. um
36:18the the need for written pest and
36:20estimates for example would go down
36:22because they can do the estimates
36:24through calculators online directly. Um
36:27so a number of ways where um the the the
36:31the modernization efforts enhance your
36:35the team's ability to service the
36:38members on the phone or directly through
36:40self-service mediums. Uh and we're
36:42seeing that consistently throughout the
36:44industry. The other thing I know in in
36:46working with Kevin and the team is they
36:47do use the the insights from the report
36:51specifically to help guide where to make
36:53enhancements to the service model where
36:55they can while working in parallel to
37:00get that system modernization online.
37:02Your system is about 22 years old which
37:04is just a little older than uh the
37:07average within our universe. Uh the
37:10average is about 20 years. So you're at
37:13that point where that modernization
37:15efforts will have a significant lift
37:18once fully implemented in improving the
37:21member experience. On the cost side of
37:24system modernization, there's a big lift
37:26to get it off the ground. Um but
37:29typically what we see once it's off the
37:31ground costs do come down a little bit
37:34but generally what's happening is plants
37:36continue to go through continuous
37:37improvement projects each year to bolt
37:41on different uh enhancements to the
37:44service model that they're delivering to
37:46their members. So while the costs will
37:49come down postmodernization, the major
37:51project spend it works its way through
37:54um there will be higher costs um than
37:58the pre-modernization
38:00efforts to pay for those continuous
38:03improvement projects. And and what we've
38:04seen is when plans do go through that
38:07that exercise and making continuous
38:09improvement uh enhancements to the
38:11service model either digitally or
38:13through contact center, however they're
38:15doing it. um it's lowering the need to
38:18do a massive modernization investments
38:22um
38:23uh um in in a shorter time frame. And
38:27what I mean by that is instead of
38:29needing to do a modernization in 10
38:30years, if you're doing those continuous
38:32improvement projects, you probably can
38:34get away with doing your next
38:35modernization in 15, 20, maybe 25 years,
38:38right? And so that investment in
38:41improving the customer experience or the
38:43member experience on a consistent basis
38:46once the modernization is done is
38:48typically what we're seeing at your
38:49peers domestically in the US and at
38:52other organization other pension
38:53organizations around the world.
38:58>> Thank you.
38:59>> Yeah.
39:00>> Hi, this is Bob H. I just want to level
39:02set here a little bit um so that we
39:04don't get a gut punch again next year.
39:06I'm looking at the modernization
39:07timeline which we'll talk about later
39:09that's not concluding until at least
39:112034
39:13um or maybe longer
39:16delays. We have the the Senate bill that
39:19you talked or House bill whatever that
39:20you uh talked about Kevin who knows what
39:23coming from the legislator legislatorure
39:25next year year before or year after that
39:27or something like that. I don't think
39:29we'll see this score improve. I mean,
39:31the the the costs for modernization are
39:33only going to go up in the next few
39:34years as as as planned, right? We we
39:36know that. So, I don't think we're going
39:38to see these numbers greatly turn around
39:40for at least 5 years, if not maybe a
39:44little more. What my one level set on
39:47this here?
39:48>> In many ways, you're correct. It's it's
39:50going to be a slow ramp up because we
39:52have to go through the RFP process. So,
39:55we're a year away from selecting a
39:57vendor. then uh few years before we
40:00start to implement and see some benefits
40:02to to things. So it's going to be 3 to
40:05four years before we start to see it.
40:07But a lot of the systems that are out
40:10there
40:12have so many of these features built in
40:14that we can do. So once we uh can
40:16leverage it we'll see a dramatic
40:18increase in the service score uh
40:20especially on the online functionality
40:23much more uh robust than what it was
40:26even 5 or 10 years ago. So I think once
40:29we get to that point of moderniz
40:31modernization you will see that service
40:33score go up substantially and relatively
40:36quickly. we can go from 60 to 80
40:38probably in a couple years and bigger
40:42some of the parts again two aspects of
40:45the service score that CM uses one is
40:47the functionality that we have and the
40:49second part is timeliness and by having
40:51a system that isn't as infused with
40:55manual processes as is currently the
40:57case our time to respond will be
40:59significantly less and that's a great
41:02thing for both employers and members
41:07This Robert Tintel uh thank you for the
41:09benchmarking report. It is very
41:11interesting to see where we are and I
41:13don't think there's any surprise to uh
41:15the increased cost due to modernization
41:18and that's going to address service
41:20levels and we know so you know hopefully
41:22those things are going to improve and
41:23it's eventually going to be good things
41:26but I'm wondering aside from the cost
41:28with the modernization program and the
41:30service levels where they're at where we
41:32know um there did seem to be some higher
41:34overhead costs in some areas or I guess
41:37my question is were what were the
41:39takeaways aside Aside from the
41:40modernization and service levels, was
41:42there anything that you gleaned from it
41:44new that you thought, well, maybe PERS
41:46could do something differently on the
41:48margins until we get to the
41:49modernization implementation and and see
41:52the increased service level changes.
41:54>> Good question, board member Tintto. You
41:56know, if you take a look at the what I
41:58will say is the the basic admin costs,
42:00those are subject to the modernization.
42:03We do have slightly higher costs in
42:05actual services and this is not to meant
42:07to point out millamin but what we do is
42:11different than a lot of plans in the
42:12fact that we do a full actual evaluation
42:14every year and an experience study every
42:16two years. Uh a lot of peers will do an
42:19actual evaluation every second or third
42:21year and an experience study every 5
42:23years. I think it's beneficial for us to
42:26expend those funds so that we are much
42:28more on top of where we're at from a
42:30funding status perspective and making
42:32sure that through the experience study
42:35uh our our actual experience is more
42:37reflected in our assumptions and
42:39methodology. So I I believe it's money
42:41well spent. And given the fact that we
42:43also
42:45basically set a contribution rate for
42:47each of our 98 employers, that's
42:49something that's completely different
42:51than a lot of our our peers where it's
42:54one contribution that fits everybody. So
42:57just again going back to the overall
42:59complexity of PERS and how we are set
43:02up, uh it does drive cost more so than
43:05than a lot of others. I can't say I'm
43:08disappointed, but I'm was somewhat
43:09shocked that we went from second to
43:11third, and I've questioned Chris and
43:13others from CM about that, but
43:15supposedly one plan uh their legislators
43:19uh went crazy. Uh even more so than what
43:21we've seen in the past. But fear not, uh
43:24when House Bill 4045 comes into effect,
43:27that will actually increase our
43:28complexity score yet again.
43:31>> Kevin, it almost seems like you wear
43:33your complexity as a badge of honor.
43:35>> [laughter]
43:35>> Yes.
43:40>> Thank you everyone. Just this is jarred
43:42on just a couple comments.
43:45Thank you for this. Um always good to
43:47see the truth. It it seems to me there's
43:50technical debt that we're going to
43:51chase. Um agree with Bob's comment. This
43:54probably doesn't get better before
43:57uh in the near term. Uh you're you're
43:59probably going to go through that U and
44:00it probably gets worse uh underneath the
44:03hood. So Kevin, one comment for you.
44:07When you look at the opportunities, many
44:09of these feel like they're definitely
44:10downstream of major system changes. Some
44:13seem like they're not. For example, I
44:15see email addresses showing up several
44:17times. It doesn't seem like that's
44:20something that requires a system
44:21upgrade. So I I'd like to understand
44:23that if I could.
44:24>> Certainly. Uh with respect to emails,
44:27one of the things that the
44:29communications group has done over the
44:30last few years is really go out uh to
44:33try and get people to sign up for egov
44:36delivery and that's our primary way of
44:38distributing uh member uh publications
44:43and our numbers have increased. We'll
44:45continue to do uh campaigns,
44:49communication campaigns to try and bring
44:51that up. The bigger part is once we have
44:54a new system and and including a client
44:58relationship management system that will
45:01give us the opportunity to do a lot more
45:03direct uh output and outreach to members
45:06and drive those numbers up. So uh we are
45:10working with what we have with EGV
45:12delivery but as we get into a client
45:14relationship management system that has
45:16robust features we'll be able to drive
45:18that number up quite quickly and then
45:20given the functionality that will be
45:22available within our online member
45:24services as members understand that as
45:28we do communication campaigns on that
45:30you'll see the numbers go up uh pretty
45:33substantially. That's been my experience
45:35in my last few lives where we've got
45:36more digital uh functionality and people
45:39go to that uh because that's the way of
45:42doing business. Everybody's used to
45:43doing self-service.
45:45>> Okay. Thank you Kevin. Second and last
45:47when you look at the cost comparison per
45:49activity on uh Chris your slide 35 and I
45:53don't know if this is a Chris or a Kevin
45:54question. Collections and data
45:56maintenance is maybe 30% of the
45:59variance.
46:01I'm I'm really surprised the cost is
46:03that much higher. I look at item 3A data
46:06and money from employers is $23
46:10of the $84 gap. What what's driving
46:12that? What's
46:13>> driving that is the number of staff that
46:15we have? If you look at the staffing
46:18that we have, we have 20ome in uh
46:20employer services and then another 40 in
46:23either member account adjustment team or
46:26data integrity group. So we've got about
46:2760 staff that are in one way or another
46:31fixating on cleaning the data that we
46:33have. When we moved over 20ome years ago
46:37from our old system to Jclarity, there
46:41wasn't a lot of cleaning going along
46:43because we had 6 months to do it. And so
46:45we've got a lot of again if
46:47[clears throat] you want to say
46:48technical debt, we have a lot of data
46:49debt that as we go through data
46:51cleansing and data migration over to the
46:54new system, we'll have it a lot better
46:57as well. We will be able to build in
47:00better upfront edits so that the
47:02information coming in is cleaner than it
47:05currently is right now.
47:07>> Thank you, Kevin. That's
47:09>> Can I just jump in on that as well? This
47:11is one of those items that's impacted by
47:13your complexity. The collection of data
47:16from the the uh the employers and the
47:19nuance of the different payment options
47:21and the different um uh avail the
47:25different um items on that complexity
47:29score where you are quite a bit higher.
47:32That's going to drive the
47:33[clears throat] the need to have more
47:35staff to ingest that information and
47:37make sure what's coming in is accurate
47:39and actionable. Um and so we see that
47:42that is one of the the direct effects of
47:45having so much complexity across the the
47:49the membership bases that you're
47:51administering.
47:52>> Okay. Thank you Chris.
47:55Okay. No more questions. Appreciate your
47:57time Chris.
47:58>> My pleasure.
48:00>> Next item of business is notice of rule
48:02making expiring side accounts.
48:34Item B1 is a noted. Can you guys hear
48:38me? Okay,
48:43it's better. Oh, there we go. All right.
48:45Uh, item B1 is a notice of proposed
48:48amendments to the employer's side
48:52account rule. Uh this rulemaking
48:54addresses the end of the site accounts
48:57life cycle. Uh employer side accounts
49:00reduce employer pension contribution
49:02rates by transferring advertised amounts
49:06from the side account to the employer
49:08reserve uh account over a defined
49:12amortization period. Our existing rule
49:15governs the establishment, funding,
49:18amortization and investment earnings of
49:22site accounts but uh it does not address
49:25how site accounts are administered as
49:28they are near the end of their
49:31advertisation schedule.
49:33Hers is now seeing the uh first
49:36significant group of site accounts
49:38reaching the end of their advertisation
49:41periods. Therefore, staff have
49:44identified the need for establishing
49:47procedures in the rule for the
49:49transition from an active site account
49:52to its final reconciliation and closure.
49:56The proposed amendments uh in this rule
49:58would do five things. First,
50:02um it would establish inactive status or
50:06depleted side accounts. So when a side
50:09account balance is reduced to zero or
50:13below before the end of its amortization
50:17schedule
50:18uh the employer's side account rate
50:21offset would end beginning with the
50:24following month and the side account
50:26would be designated as inactive.
50:30Second it would preserve historical rate
50:33adjustments. So although future rate
50:36offsets would be uh would cease once a
50:39site account becomes inactive,
50:42payroll reports and corrections relating
50:45to periods before the account became
50:48inactive
50:49uh would continue to receive the
50:51applicable set account adjustments
50:54ensuring employers uh receive consistent
50:57treatment regardless of when payroll
51:00corrections are submitted. And then
51:03third uh provide for final
51:05reconciliation and account closure. Um
51:09inactive count will remain open until
51:12completion of the annual earnings
51:14allocation for the final calendar year
51:18of its amortization schedule.
51:21And then so after uh reconciliation
51:24employers will be invoiced. Uh for any
51:27negative balance necessary to restore
51:30the account to zero or any remaining
51:34positive balance will be disposed of
51:36under the rule uh before the account is
51:39administrative.
51:42And then fourth uh establish a procedure
51:45for disposing any remaining positive
51:48balances. So when the uh remaining
51:51balance equals to or exceeds 35% of the
51:56employer payroll
51:59um the employer would have the option to
52:02elect to either establish a new side
52:06account or transfer the remaining
52:08balance
52:09uh to a existing side account. Um any
52:14smaller remaining balance would instead
52:16be credited back to the employer uh in a
52:19manner determined by PERS as they
52:22generally do not support meaningful
52:24future rate relief revertization.
52:28And then lastly uh the
52:32uh we will clarify administrative fee
52:35treatment. In other words,
52:36administrative fees would no longer be
52:39assessed after the last calendar year in
52:42which a site account transfers an
52:46amortized amount to the employer reserve
52:48account. Uh these amendments establish a
52:52comprehensive administrative framework
52:54governing the final phase of a site
52:57accounts life cycle including the
53:00sessation of future rate offsets uh
53:03treatment of historical payroll
53:05corrections final reconciliation
53:08disposition of any remaining balances
53:11and administrative closure.
53:14Uh and this is a notice only. So no
53:18actions required at this time. Uh we
53:20will move forward with the amendments as
53:23presented today and anticipate bringing
53:26these changes for adoption at the next
53:28board meeting. Are there any questions
53:31on this particular
53:34>> Mr. Robert Tintel? I don't have a
53:35question but I do want to thank you for
53:37the work on this for clarifying the
53:39rules and what will happen in this. I
53:41also want to commend PERS on the
53:44outreach that's just beginning to
53:45employers for those impacted by expiring
53:48site accounts and all the work that it's
53:50going to take and so I just appreciate
53:52all those efforts and active measures to
53:55meet with employers and let them know.
53:57Thank you for all that.
53:58>> Thank you board member.
54:00>> Okay, I will now move on to item B2.
54:06B2 is a notice of proposed amendments to
54:09our employer incentive fund program
54:12rule. Uh this rule making
54:16[clears throat] addresses a gap in the
54:18administration of partially matched
54:20employer incentive fund application
54:23under the current rule if applicable I'm
54:26sorry if available EIF funds are not
54:29sufficient to fully match uh a
54:32employer's approved U lumpsum payment
54:36commitment. The available funds are used
54:39to provide a partial match. However, the
54:43rule does not explain uh how PERS should
54:46administer the remaining unmatched
54:49portion of that approved commitment or
54:53how additional EIF funds
54:56uh that later becomes available during
54:58the same application period would be
55:01allocated to that unmatched portion.
55:05Uh the proposed amendments establish a
55:08process for that situation. the
55:11unmatched portion of employer's approved
55:14commitment
55:16uh would be placed on a waiting list
55:19while preserving the employer's original
55:22application priority.
55:24So if additional EIF funds becomes
55:27available during the same application
55:29period, uh for example, because another
55:32employer withdraws or reduces its
55:35commitment, uh those funds would then be
55:38offered to employers on the waiting list
55:41in priority order.
55:43Uh employers also will not be required
55:46to submit the unmatched portion of their
55:49commitment unless and until matching
55:52funds become available. Overall, the
55:56amendments provide a clear and
55:58predictable process for administering
56:00partially funded applications and
56:03allocating any matching funds that
56:05become available later in the
56:06application uh period if any.
56:10Uh this is also a notice only. So no
56:13actions required at this time. We will
56:16move forward with the rule amendments as
56:18presented here and anticipate bringing
56:21these changes for adoption at the next
56:23board meeting. Are there [snorts] any
56:24question on this particular
56:29>> and Robert Tintel not a question again
56:31just a comment again I appreciate the
56:33rule making in this area as well. Um uh
56:35just a a comment about and for board
56:39members who may not know but uh to get
56:41in that prioritization and to submit an
56:43application and it it PERS is very clear
56:45on the timing and the process and what
56:47you have to do but it's uh I've had a
56:49co-orker describe it to me is it's like
56:52applying for kids summer camp for you
56:54because you have to go online and you
56:55have to be ready to hit submit at the
56:58very moment it opens up because it
57:00closes right away. Right. So to get in
57:02that priority order, it is very
57:05important that you adhere to all the the
57:07guidance that that comes out from PERS
57:09and you're ready and available to hit
57:11submit on your application because it's
57:14it's or buying concert tickets or right
57:17you know it is very uh popular and uh
57:20processed for at times. So you got to be
57:23ready to get in that order. So
57:25>> thank you for providing providing that
57:26colorful context.
57:29[laughter]
57:31>> Okay. Um
57:33now [clears throat] I'll move on to item
57:34uh B3 which is for adoption of edits to
57:38our OSGP loan program uh rule. Uh at the
57:42last board meeting we presented the
57:45proposed amendments. uh the amendments
57:48authorized AC payments as additional uh
57:53loan repayment option reducing reliance
57:55on employer payroll deductions and
57:58providing participants with a continuous
58:01uh repayment method even after
58:04separation from employment. Uh the
58:07amendments also clarify uh participant
58:10responsibilities for loan repayment.
58:14Establish procedures for missed or
58:16failed AC uh payments. verify uh loan
58:22eligibility following a deemed
58:24distribution and eliminated the current
58:2812-month waiting period before a
58:31participant may obtain a new loan after
58:34fully repaying a prior loan. Uh we have
58:37received no uh comments and made no
58:40additional changes to the rule since our
58:43last board meeting. And at this time,
58:45we're seeking a motion to adopt the
58:48proposed amendments to the OSGP loan
58:50program rule.
58:53>> Uh, John Scan, I would like to u move to
58:58adopt modifications to the OSGP loan
59:01program rules as presented.
59:04Bob has stacked that and maybe let CM
59:07know we're doing this to make our score
59:09go up.
59:11>> Thank you all. All in favor? Sean
59:14Scandlin I
59:15>> Kristen Connor I
59:16>> Bob I Robert Tintel I
59:19>> Jardonio I thank you.
59:22>> Uh finally item B4 is for adoption of
59:27edits to our PERS health insurance
59:29program enrollment rule. Uh at the
59:32board's last meeting we presented the
59:34proposed amendments. As a brief reminder
59:37that those amendments uh do four things.
59:41First, uh they provide additional
59:44flexibility for certain Medicare
59:46eligible spouses to enroll independently
59:49uh in PIP. Second, they clarify
59:52enrollment requirements for Medicare uh
59:55companion plans and existing enrollment
59:58windows. Uh third, they extend the
1:00:03special enrollment period following the
1:00:05loss of other group health coverage from
1:00:0930 days to 60 days. And then finally,
1:00:12they allow standalone enrollment in PIP
1:00:15dental coverage without requiring uh
1:00:18enrollment in a PIP health plan while
1:00:21clarifying that uh family members
1:00:24enrolling in dental coverage must enroll
1:00:27in the same dental plan. Uh during the
1:00:30public comment period, uh one commenter
1:00:33suggested clarifying the requirement
1:00:36that a individual be covered by another
1:00:40group health plan for 24 consecutive uh
1:00:44month. Uh in response, staff revised the
1:00:48rule to clarify that the requirement is
1:00:51uh coverage for at least 24 consecutive
1:00:54months. Uh, no other substantive changes
1:00:57were made. At this time, we're seeking a
1:01:00motion to adopt the proposed amendments
1:01:02to the PERS health insurance program in
1:01:04Woman.
1:01:06>> This is Kristen Connor. I move to adopt
1:01:08the updates to the PERS health insurance
1:01:10program as presented.
1:01:13>> John Scamlin, I second.
1:01:14>> Thank you both. All in favor?
1:01:16>> John Scamlin. I
1:01:18>> Connor I. Bob H. I. Robert Tintel. I
1:01:24>> Thank you.
1:01:37Chair Hario, members of the board, for
1:01:39the record, I'm Melanie Chandler, a
1:01:41research policy coordinator on your
1:01:43policy team. I'm here today to discuss
1:01:46item B5, which is the adoption of
1:01:48rulemaking regarding acceptable
1:01:50electronic signatures.
1:01:52We have brought the established
1:01:54transmission of information reports and
1:01:56documents rule uh to the board for
1:01:58update in an effort to provide
1:01:59transparency of uh PERS practice that we
1:02:02have been operating with since the
1:02:05pandemic in 2020. Just want to make sure
1:02:07everybody understands how things
1:02:09operate. Uh as presented, the rule
1:02:12clarifies when wet signatures are
1:02:14required as to opposed to when
1:02:15electronic or digital signatures are
1:02:18acceptable
1:02:20uh with the rationale that forms
1:02:22involving where and how benefits are
1:02:24paid have an elevated risk for fraud.
1:02:28Those forms require wet signatures for
1:02:30members, beneficiaries, and alternate
1:02:32payes. as wet signatures are unique for
1:02:35each individual and represent a
1:02:37verifiable record um of a person's
1:02:40consent. Conversely, documents submitted
1:02:43to PERS by employers do not involve the
1:02:46same fraud concerns. As such, for
1:02:48employers, PERS accepts any signature
1:02:50formats, including digital
1:02:54or or electronic. Finally, in the course
1:02:56of business, staff does encounter
1:02:59electronic signatures on other documents
1:03:00such as trustee to trustee transfer
1:03:02forms or court documents submitted in
1:03:05divorce proceedings. Pur can generally
1:03:07accept those without staff needing to
1:03:09confirm uh their origins. No public
1:03:13comments were received on the rule uh
1:03:15since notice, but minor modifications
1:03:17were made to the rule uh to enhance
1:03:19clarity um so all parties understand
1:03:22exactly what we were trying to convey. I
1:03:25am happy to answer any questions. Um but
1:03:27if not, we respectfully seek a motion to
1:03:30adopt the rule as presented.
1:03:34Roberts until I move to adopt
1:03:36modifications to the acceptable
1:03:39electronic signatures rules as
1:03:41presented.
1:03:45>> John Scanland second.
1:03:47>> Thank you both. All in favor?
1:03:49>> John Scanland I.
1:03:50>> Priston Connor I. A very enthusiastic
1:03:53eye.
1:03:55Bob H. Ibertio.
1:03:59I thank you.
1:04:09Next item of business is the adoption of
1:04:11rulemaking LWOP and creditable service.
1:04:20Good morning, board chair,
1:04:23members of the board. For the record,
1:04:25Ann Marie Vu presenting for adoption
1:04:27item B6, the rules relating to credible
1:04:31service and leave of absence without
1:04:33pay, commonly referred to as LWAP. As
1:04:36explained in the memo, after
1:04:38implementing recent updates, staff found
1:04:41two areas needing clarification.
1:04:44First, the credible service rule could
1:04:46imply members must be paid for all hours
1:04:49meeting the major fraction of the month.
1:04:52That is not required. Under statute, a
1:04:55member meets the major fraction of the
1:04:57month requirement if they work more than
1:04:59half the calendar days in the month and
1:05:02receive salary for hours worked. There
1:05:04is no minimum salary amount or minimum
1:05:07hours. Second, OAP reporting language
1:05:11needed clarification. Employers must
1:05:14report LWOP when the total LWOP days in
1:05:17a calendar month reach major fraction of
1:05:21the month. The prior reporting could be
1:05:23misread to mean every ah sorry each
1:05:27single elot period must individually
1:05:30reach major fraction of the month. The
1:05:32revised language makes clear that
1:05:34multiple elw periods in the same month
1:05:36must be added together. As previously um
1:05:40discussed, we also made ma minor
1:05:43housekeeping edits for statutory
1:05:46alignments.
1:05:47No additional changes were made after
1:05:49notice and no public comments were
1:05:52received. So if the board has no
1:05:54questions then pers respectfully
1:05:57requests adoption of the rule. Thank
1:06:00you.
1:06:03>> Robert Tinsel. I move to adopt the LWAP
1:06:07and credible service rules as presented.
1:06:10Bob H. I second.
1:06:15>> Thank you both. All in favor.
1:06:17>> John Scan.
1:06:19>> Kristen Connor. I
1:06:20>> Bob H. I
1:06:21>> Robert Tintto.
1:06:22>> Jardio I. Thank you.
1:06:25>> Next item of business.
1:06:26>> Next item of business is the
1:06:27modernization update.
1:06:30Christie.
1:06:33>> Good morning, Chair Hario, Vice Chair
1:06:35Scan, and members of the board. For the
1:06:38record, I am Christy Ivers, the
1:06:39modernization director. Today, I just
1:06:42have general updates for you across the
1:06:45modernization program.
1:06:48Next slide, please.
1:06:51Our modernization program road map
1:06:53really just depicts those priority
1:06:55projects for you all. And it's just
1:06:57important to note that the RFPs that are
1:07:00listed on this road map are on our
1:07:01critical path within that program
1:07:04schedule. So they're probably one of the
1:07:06most important things on this whole road
1:07:08map.
1:07:10But nothing else has changed since the
1:07:12last time you guys saw.
1:07:15Next slide please.
1:07:19So for the modernization program and I
1:07:22think given the CM reports I feel
1:07:25obligated to say that the modernization
1:07:27program does plan to improve its CM
1:07:29scores, reduces manual processes and
1:07:32reduce costs for our members.
1:07:35Today the overall program portfolio is
1:07:38on budget and on schedule. The DevOps
1:07:41funding request of 1.8 8 million was
1:07:44approved by the emergency board in June
1:07:47which is important that we were able to
1:07:50get that through and this funding really
1:07:53prepares ISD for modernization
1:07:55activities in the 2729 bianium. So it
1:07:57was critical that we got that funding to
1:07:59get that that body of work um started.
1:08:03A work order contract was completed
1:08:05recently um in June to onboard a vendor
1:08:09to analyze the batch jobs for
1:08:11optimization. So that is a little bit of
1:08:13our technical debt that we're trying to
1:08:15take care of and this work does help us
1:08:17keep those lights on
1:08:20for the organizational change management
1:08:23workstream. The change champion network
1:08:26which I'm calling it CCN because it's a
1:08:28lot easier to say is in the process of
1:08:31being rolled out. So, the CCN is going
1:08:34to act as a two-way communication for
1:08:36our workforce
1:08:38to help with upcoming changes, for
1:08:41example, like adoption of new processes,
1:08:44surfacing risks and resistance, and more
1:08:46importantly, just gathering frontline
1:08:48feedback from our workforce. As we're
1:08:51rolling it out, we're just focusing on
1:08:54internal to PERS. And as we start moving
1:08:57forward with the new pension
1:08:58administration system, we will start
1:08:59looking at SECN for our external
1:09:02interested parties.
1:09:06Next slide, please.
1:09:11The modernization division is always
1:09:13recruiting and we have recently hired
1:09:15two new project managers and a part-time
1:09:19contractor has been hired to assist the
1:09:22modernization program. So this position
1:09:24currently is helping out with contracts
1:09:27and we have a lot of contracts moving
1:09:29forward right now. So she has been a big
1:09:31help for the modernization program
1:09:34for the hybrid integration platform
1:09:36project. EIS is working on our stagegate
1:09:39one endorsement. So all of the stars
1:09:42have finally aligned. Thank goodness.
1:09:45So everything's trending up on the
1:09:46hybrid integration platform project.
1:09:51The data governance committee is
1:09:52overseeing 26 queries that we shared
1:09:55with you guys at the last board meeting
1:09:57and the business analysis has been
1:09:59underway.
1:10:01As we started reviewing some of their
1:10:03analysis, we realized that it was a
1:10:05bigger lift than expected. So, a daily
1:10:08cleaning work order contract is in
1:10:10process right now to bring in some
1:10:12contractors to assist with this critical
1:10:14body of work. This is another one of
1:10:16those bodies of work that we have to
1:10:18make sure that we are focused on and
1:10:20moving moving the ball down the field.
1:10:25Gartner um who is our independent
1:10:27quality management services vendor, they
1:10:30just recently completed their interviews
1:10:33for their next quarterly report. So at
1:10:35the next board meeting, I will likely
1:10:37have new observations to share from
1:10:39them.
1:10:42Next slide, please.
1:10:46Okay,
1:10:48so as you know, PERS is hyperfocused on
1:10:51the specialized consultant RFP contract.
1:10:53We try to keep the ball moving forward
1:10:56and down the field, but unfortunately we
1:10:58have experienced a 5-week delay because
1:11:00our assigned procurement analyst at DS
1:11:03accepted another position. I tried to
1:11:06bribe her to stay, but it didn't work
1:11:08because the new position was way too
1:11:10good and she couldn't turn it down.
1:11:13So, we had a little bit of a delay
1:11:14there. Um, but as for a current update
1:11:18and a positive update, DAS has assigned
1:11:21a new procurement analyst and things are
1:11:24starting to move fast for us again. So,
1:11:27the good news is that the contract is in
1:11:29DOJ's hands for legal sufficiency
1:11:31review. So, once that's completed, we'll
1:11:34be working with the the vendor again,
1:11:37which is Seagull, and hopefully be able
1:11:39to wrap this up pretty quickly.
1:11:42So things are back on track.
1:11:45Regarding future state requirements, we
1:11:48sent out a survey to employer reporters
1:11:50to gather requirements from them. The
1:11:53survey was sent out on Monday 7:20. As
1:11:57of Wednesday, we received 80 responses,
1:12:00which is showing a pretty good
1:12:02engagement so far. So I was happy to see
1:12:04that. The survey is asking about
1:12:07requirements like uh what are your
1:12:09reporting needs and self-service
1:12:11functionality. There's about 10
1:12:13questions. Once we get that information,
1:12:15we will start
1:12:17kind of laying out that plan so that we
1:12:20can continue to gather more requirements
1:12:22for from our employers.
1:12:27And then as far as upcoming activities,
1:12:29my goal is to have that finalized
1:12:31specialized consulting contract
1:12:32completed.
1:12:34Next slide, please.
1:12:37So, you guys have seen the modernization
1:12:39paths um RFP life cycle many times, and
1:12:42this really is just to show kind of
1:12:44where we're at. I was estimating that it
1:12:46would take us about 6 months. We're
1:12:48sitting at 8 months right now. So
1:12:50because of the delay and then also we
1:12:52had to do a second round of evaluations
1:12:54kind of like put us um into that
1:12:56eightmonth mark but I'm I'm thinking
1:12:58that we will have that specialized
1:12:59consultant contract completed
1:13:02next month.
1:13:07Okay, next slide please.
1:13:10So for the telefan project I only have
1:13:12good news to report. So the phase 2B was
1:13:15implemented successfully on June 29th
1:13:18and a fix was also applied successfully
1:13:21on June 30th to reduce the number of
1:13:24calls being transferred to the
1:13:25receptionist queue. We talked a little
1:13:27bit about this at the last board
1:13:28meeting. If there was a lot of
1:13:30background noise, it would just shoot
1:13:32them to the receptionist queue. So if
1:13:34they had their TV on too loud, it would
1:13:35shoot them to the receptionist queue. So
1:13:37after the fix the first day showed a
1:13:39reduction of calls to that receptionist
1:13:41queue. We are continuing to monitor it
1:13:44because there still might be a few more
1:13:45tweaks, but ultimately um we had a uh it
1:13:49was a good fix ultimately for us.
1:13:54The phase 3 service order, which is
1:13:56another contract, it's just service
1:13:58order is the is the word that the vendor
1:14:00chooses to use,
1:14:02is being reviewed and finalized right
1:14:04now. And we should have that to EIS next
1:14:07week for their review. and then we'll be
1:14:10able to get that finalized and get that
1:14:11work started in September.
1:14:16Next slide, please.
1:14:20For our jump project, um phase 2, which
1:14:24is also um it's, you know, work package
1:14:27number two, they refer to it as that. Um
1:14:29the development has completed on May
1:14:3129th and it was handed over to the MIM
1:14:34project team as planned. So there was
1:14:36work that needed to get done that the
1:14:37MIM project had to use which is really a
1:14:40part of that integration with RJclarity
1:14:42and the MIM project.
1:14:45Phase three is our employee portal
1:14:47screens and they are in process of being
1:14:50updated to meet the ADA compliance.
1:14:53The development is currently ahead of
1:14:55schedule which is good news and it's
1:14:57about 75% complete.
1:15:01The schedule indicator is is yellow
1:15:03still because the project manager is
1:15:05currently in the process of rebaselining
1:15:07the project due to the schedule change
1:15:09to June 30th of 2027. So the next time
1:15:12you see this report um the schedule
1:15:14indicator will be green. We'll be back
1:15:16on track for that
1:15:19and then for upcoming activities for
1:15:22phase 4 that we are planning a
1:15:24technology upgrade. So the Red Hat JBoss
1:15:27enterprise application platform, so it's
1:15:29also referred to as EAP version 8.0
1:15:32upgrade is being planned and that work
1:15:35won't actually happen until the next
1:15:37bianium. So we're in the process of
1:15:39writing a policy option package right
1:15:40now requesting funding and contractors
1:15:43to help us get that work done.
1:15:48Next slide, please.
1:15:50[clears throat]
1:15:53So for the member identity access
1:15:55management project MIM a lot of good
1:15:58work is happening on this project
1:15:59despite the schedule indicator being red
1:16:01and I'll explain that in a second for
1:16:04the identity protection phase of this
1:16:06project. It is making good progress and
1:16:08the functional and technical design
1:16:11deliverables have been completed and
1:16:13approved. So ultimately the analysis and
1:16:15design phases are in nearing completion
1:16:19for the identity verification part of
1:16:21this project. We have experienced delays
1:16:24in contract negotiations and it's not
1:16:26that's not new news to you guys. You
1:16:27guys have heard that um over the last
1:16:29few updates that I've provided and that
1:16:32is why the schedule is red right now. I
1:16:35hope to see improvement in this area in
1:16:37the next board reading. Um and for a
1:16:40recent update, we did send the base
1:16:44contract to Deote and we just received
1:16:46Deote's redlinined
1:16:48uh red lines back on that contract and
1:16:52we are going to be back on track and
1:16:54moving the ball down the field next
1:16:55week. So we'll be reviewing Deoit's red
1:16:58lines and then submitting that back to
1:17:00DOJ and and start moving uh that part of
1:17:03that project forward. and we were
1:17:06expecting to have this contract done by
1:17:07now. So, that is why you're seeing the
1:17:09schedule read. I don't hide anything.
1:17:11I'm definitely going to be telling you
1:17:12guys where all of the issues are and
1:17:15that has been a concern. I think the
1:17:17last time I reported out on it, it was
1:17:19the schedule was yellow and so now we
1:17:21are reporting it out as red. I'm hoping
1:17:23that we're trending up since we've
1:17:25received uh Deoit's red lines um this
1:17:27week.
1:17:31And if we do have further delays, I will
1:17:33say there is a contingency in place. And
1:17:35um depending on what happens in the next
1:17:37week or so at the next board meeting, I
1:17:39will I will share if we had to actually
1:17:42uh trigger that contingency plan.
1:17:46So hopefully we'll get the contract in
1:17:47place soon.
1:17:51Next slide, please. Thank you so much
1:17:53for your time today. I know I just had
1:17:55general updates, but I'm happy to answer
1:17:58any questions you may have today.
1:18:04Yeah. Uh, thank you. This is John Scan.
1:18:06I saw in one of the slides there was a
1:18:09247
1:18:12um, where was it? 247 IVR selfervice
1:18:17and I I was having a hard time conce
1:18:22a truth that came through and I'm
1:18:26concerned now about my retirement or
1:18:27whatever. uh and I call you at 3:00 in
1:18:30the morning or whatever, what what what
1:18:33would the IVR what what would the
1:18:35self-service on the IVR be? I'm I'm I'm
1:18:38I'm not sure I understand that.
1:18:41>> Thank you for your question, Vice Chair
1:18:42Scan. Appreciate that. Um we are still
1:18:46trying to understand what our
1:18:48requirements are for that IVR and
1:18:51improving it for our for our members
1:18:53ultimately. So that's really what that
1:18:55phase three is. And so we have been
1:18:57looking at how to enhance that IVR
1:18:59system for so we can provide some 24/7
1:19:02IVR self-service. So if I call and I
1:19:04need to know like when is the next expo,
1:19:07it could actually send me a text telling
1:19:10me when that next expo date is. As far
1:19:12as like if you had a question that was
1:19:14more of a deep dive kind of question
1:19:16about your retirement or something that
1:19:19would be a little bit more difficult for
1:19:21a kind of like a bot to answer that
1:19:24question. It would still have to be when
1:19:26we're open. So, it won't it's not going
1:19:29to handle everything, but it will we're
1:19:31trying to at least help people out to
1:19:34get some answers quickly instead of
1:19:37having to wait on the phone for 20
1:19:39minutes for an answer. Does that answer
1:19:41your question?
1:19:42>> Thank you. That that's fantastic. I I've
1:19:44always, you know, thought the where we
1:19:47saw in the last uh presentation about
1:19:51benchmarking where, you know, we're
1:19:52we're taking a lot more calls, which is
1:19:55one of the reasons why we have higher
1:19:57costs. So, anything I think that goes in
1:20:00that direction of reducing those calls.
1:20:02Uh, every time the phone rings, it costs
1:20:04money. Um, and that, you know, that
1:20:06that's great. So, I applaud those
1:20:08efforts. Thank you.
1:20:10>> Thank you, Vice Scan. Appreciate the
1:20:12question.
1:20:13Thank you, Christie. Great presentation
1:20:15as always.
1:20:16>> Thank you. Appreciate it.
1:20:18>> Next item of business is the PERS PHIP
1:20:202027 rate adjustment approval.
1:20:34Green means go. Good morning, Chair
1:20:36Hario, members of the board. For the
1:20:38record, I am Barbara Paris, first health
1:20:40insurance program manager. And before we
1:20:43really get into what I'm here for today,
1:20:46I wanted to take a moment just to share
1:20:48a few insights on the shifts we've been
1:20:50seeing in the retirey healthcare. Um,
1:20:52especially as it relates to PIP's
1:20:54coverage options and our plans moving
1:20:56forward. Um, this will also help provide
1:20:59some clarification and context about why
1:21:01I'm here today. So over the past few
1:21:04years, PEIP has navigated some
1:21:06significant changes, notably with the
1:21:07departure of two carriers, Providence
1:21:10and Pacific Source from our offerings.
1:21:12And these changes were out of PHIP's
1:21:14control. So Pacific Source decided to
1:21:17exit the group Medicare space as part of
1:21:19a broader reassessment of their market
1:21:21presence in Oregon, Idaho, and Montana.
1:21:24Providence faced similar challenges and
1:21:26a res as a result Providence health
1:21:28plans will no longer continue with PEP's
1:21:30Medicare Advantage plans in 2027. So I
1:21:33think we mentioned that in May. Um
1:21:35carriers across the board are grappling
1:21:37with market pressures around cost
1:21:39management and the provisions of
1:21:40affordable coverage for both commercial
1:21:43and retiree populations. for the retiree
1:21:48coverage specifically. CMS continues to
1:21:51change uh to make changes to impact the
1:21:54cost of coverage to retirees and the
1:21:57inflation reduction act also has had a
1:21:59significant impact especially on the
1:22:02changes to part D coverage. So many
1:22:04retiree systems are also considering
1:22:06decoupling their part D plans for
1:22:08Medicare advantage medical coverage. Um
1:22:12decoupling is essentially
1:22:14um having two separate contracts, one
1:22:17for the medical portion and then one for
1:22:19the prescription portion of the Medicare
1:22:22Advantage plan. Um some carriers have
1:22:25invested in internal operations to make
1:22:27decoupling seamless to the pro to
1:22:29programs like PHIP and their members.
1:22:31Um, so it just seems as it's still one
1:22:33that it's actually two separate um
1:22:36products and it this has been um seen
1:22:40improvements and premium cost savings
1:22:43when compared to fully integrated
1:22:45Medicare Advantage
1:22:47uh prescription drug plans. So
1:22:48separating out them is is causing is
1:22:51actually helping plans like ours save
1:22:53money. Um, with Providence Health Plans
1:22:57no longer operating as a health plan and
1:22:59insurer, we may see more carrier options
1:23:02emerge in the Oregon marketplace. So,
1:23:05previously Providence had had less
1:23:07incentive to contract with inet provider
1:23:12in network providers with other
1:23:13carriers, right? They were the insurer
1:23:16and but now that they're no longer the
1:23:17insurer, they may be be more willing to
1:23:20contract with other Medicare Advantage
1:23:22carriers. So this will uh do two things.
1:23:26Um it'll allow for more access points
1:23:29for these carriers which will also aid
1:23:31in increasing competition in the Oregon
1:23:33market. So as Providence exits, carriers
1:23:37are looking to come in and take that
1:23:39business. And so that will hopefully
1:23:41increase um the Oregon market
1:23:44uh choices. So while PHIP recently
1:23:48completed a request, so where I'm going
1:23:50with all this is uh we recently recreate
1:23:53completed a request for proposal for the
1:23:55full program for 2027.
1:23:58Um we have observed notable shifts in
1:24:01the market particularly with regard to
1:24:03Medicare advantage plans over the last 8
1:24:06to 10 months. But with these ongoing
1:24:08changes to our market, PEIP is
1:24:10proactively seeking innovative
1:24:12opportunities to reduce premiums for
1:24:14retirees while maintaining stable
1:24:16highquality coverage. So, we are
1:24:19preparing to engage the market for
1:24:21Medicare Advantage PO plans for the 2028
1:24:24plan year. So, going back out and and
1:24:27looking to see what's out there and and
1:24:31with the recent developments um the new
1:24:34possibility, you know, these
1:24:35possibilities may present themselves
1:24:37potentially yielding enhanced benefits
1:24:39and cost savings for our retirees.
1:24:43Any questions?
1:24:46Okay. So, why I'm here today, I'm here
1:24:48to seek board approval to update rates
1:24:51for the 2027 PHIP plan year, including
1:24:54rate credits to offset cost increases
1:24:56for impacted members. So, as I mentioned
1:24:59previously, uh Providence will be
1:25:02exiting PHIP Medicare Advantage plans
1:25:04effective January 1st, 2027. Um, so PIP
1:25:08was notified of this change pretty late
1:25:10in the process. So we really limited the
1:25:14time for us to to go and and analyze
1:25:19the impact it would have to our members
1:25:22be prior to the May 26 board meeting. Um
1:25:25so PIP has worked with seagull
1:25:26consulting to assess member and
1:25:28financial impacts. So reviewing affected
1:25:32membership
1:25:33we reviewed the affected me membership
1:25:36and started developing mitigation
1:25:39strategies. So remaining contracted
1:25:41health plans or CHPS providers will
1:25:45offer o over overlapping coverage on
1:25:48impacted counties or the counties where
1:25:50Providence previously serviced. Um we
1:25:54are in current discussions with Province
1:25:56to continue to maintain provider access
1:25:59for 2027 via other CHP offerings. So
1:26:03having our other CHPS
1:26:06uh be able to utilize Providence's
1:26:10services. Um
1:26:13there have been no definitive outcomes
1:26:15on this yet. We're still we're still
1:26:16talking about it. It's still lots of
1:26:19communication surrounding that. Um but
1:26:22we do have communication plans in place
1:26:24to inform members of changes and
1:26:26available options. So um
1:26:30so in order to address the cost
1:26:32differential between the comparable
1:26:33Medicare advantage plans to the
1:26:35terminated providence align plan
1:26:39recommends utilizing the add an
1:26:41additional rate credit applied to the
1:26:43United Healthcare rate in accordance to
1:26:45the policy. This approach will help
1:26:47offset impacted Providence members while
1:26:50ensuring that biders remain accountable
1:26:52for submitting responsible proposals
1:26:54that reflect the best possible value and
1:26:56total cost for our members.
1:26:59Um so today um PHIP recommends adopting
1:27:02the updated United Healthcare premium
1:27:04rate as outlined in item C.1 attachment
1:27:06one PIP 2027 plan year proposed rates
1:27:10and the PERS board may pass a motion to
1:27:13approve the revised proposed rates for
1:27:152027 plan year as presented in the
1:27:18attachment or direct staff to make
1:27:21changes to these terms or explore other
1:27:23options. Um, PIP staff recommends the
1:27:26PERS board approve the updated rates for
1:27:28the 2027 plan year as presented in
1:27:30attachment one.
1:27:34>> M Robert, I have a question.
1:27:36>> Yes.
1:27:36>> Um, so the credit comes from the net
1:27:39balance uh in the fund I assume. Is
1:27:44>> yes. And then as we as some of the
1:27:47proposed legislation that may come
1:27:49forward for expanding PHIP to OPSERT
1:27:52members would that is this the same fund
1:27:55that it would come to is or is that
1:27:57separate?
1:27:57>> Totally separate.
1:27:58>> Okay, that was my question on that.
1:28:00Thank you. And with that, I will move to
1:28:04approve the revised proposed rates for
1:28:06the 2027 plan year as presented in item
1:28:09C1 attachment one. PIP 2027
1:28:14uh PY proposed rules.
1:28:17>> PY is plan year.
1:28:19>> Plan year. Yeah, I read that and I
1:28:20couldn't remember. Plan year proposed
1:28:22rules. Thank you. Does Bob H. I second
1:28:25that.
1:28:26>> Thank you both. All in favor?
1:28:29>> John Scan? I
1:28:31>> Kristen Connor. I
1:28:32>> Bob Hest. I
1:28:33>> Robert Tinteli.
1:28:34>> Jardonio. I thank you very much.
1:28:38>> Next item of business is the 2729 agency
1:28:41request budget.
1:28:58>> Good morning, Chairo. Members of the
1:29:00board, for the record, Richard
1:29:01Horsesford, chief financial officer here
1:29:03at PERS. Uh today I am presenting the uh
1:29:08the final agency request budget policy
1:29:11option packages. Uh but within the pack,
1:29:13I did provide a few slides uh to go over
1:29:16bond funding. Uh if you recall at the
1:29:19last meeting, I mentioned the idea that
1:29:21uh that we may pursue bond funding. And
1:29:24one of the differences in the um in the
1:29:27policy option packages is one policy
1:29:29option package refers to that. So in
1:29:32approving the packages, you will be
1:29:35approving the uh pursuing the bonds. So
1:29:38uh I thought it important to give a
1:29:40little bit more background on how we
1:29:42went through deciding that that that may
1:29:44be a good idea so that you are better
1:29:46informed. Uh so overall the the basic
1:29:50question came down to do do we borrow
1:29:53funds for modernization projects at
1:29:56roughly four to 5% bond rates or should
1:29:59we spend the funds out of earning uh out
1:30:02of our um earnings on the trust where
1:30:04leaving money in the trust would be
1:30:06assumed to earn the 6.9. So on that
1:30:09highest level yeah 6.9 higher than four
1:30:12to five probably good but it's it's not
1:30:15quite that simple. Uh so what we did was
1:30:18went through and evaluated what would uh
1:30:22what would the bond cost likely be given
1:30:24the current circumstances? What would
1:30:26the administration costs be? We know uh
1:30:29from talking to other peers that have
1:30:31done bonds. Uh we would need to add at
1:30:33least one accounting staff to to manage
1:30:36the all of the the required reporting,
1:30:40the invoicing, the tracking. So uh so it
1:30:43doesn't come without cost. Um we assumed
1:30:47that uh again 6.9% earnings on OPERF uh
1:30:52and that over the life of the project we
1:30:55we started with saying we'll issue we
1:30:57would issue about $165 million of bonds
1:31:00that would be $55 million each bianium
1:31:04over the next three bianiums which uh
1:31:07based on our current estimates seems
1:31:09reasonable. uh but that uh as as you
1:31:12know many of these figures subject to
1:31:14change as time goes on. Using those
1:31:17assumptions we we come to a result that
1:31:20issuing bonds would be a net positive of
1:31:23$6.5 million of of savings over uh over
1:31:27the 10-year period uh with a present
1:31:30value of about 4 million. Uh it's it's
1:31:33interesting when we look at the the
1:31:36entire trust fund. This this isn't
1:31:37enough savings to move any any of the
1:31:40rates uh that are charged to employers.
1:31:43So it it's relatively small in in terms
1:31:46of the whole, but anytime we can find $6
1:31:49million, we we should. So uh so with
1:31:53that, uh staff is is recommending that
1:31:56we pursue bond funding. I would uh I
1:31:59would put an asterisk on that because u
1:32:03the actual bond funding would happen
1:32:05over a year from now and a lot can
1:32:07happen in that time. So just because
1:32:10we've we've put the marker down and said
1:32:13we're going to pursue this reserving the
1:32:15right to sit here a year from now and
1:32:18say whoa situations have changed this no
1:32:20longer makes sense. We would we would
1:32:22call uh call a timeout at that time and
1:32:24and use our regular funds. But uh given
1:32:28the bond uh budget schedule, we would
1:32:31need to put this in the pops today. I'll
1:32:34pause with that. See if there's
1:32:35questions on this general concept.
1:32:41So moving on to the rest of the
1:32:44presentation, uh we've included uh the
1:32:48policy option packages. Most of these
1:32:51you have seen uh over the last several
1:32:53board meetings. There are a few notable
1:32:56changes that I want to draw your
1:32:58attention to. Uh within within this, we
1:33:02are looking for action to approve the
1:33:052729 policy option packages. Uh as we
1:33:10look through the presentation today, the
1:33:12policy option packages are presented in
1:33:15order of uh of priority and the way
1:33:18they'll be presented to uh to the state.
1:33:22uh starting with uh with 101 which is uh
1:33:26house bill 4045 implementation because
1:33:28that is legislatively mandated it needs
1:33:31to be up uh a priority 17.4 4 million.
1:33:35Uh, and I should I should note most of
1:33:38these numbers have slight changes as
1:33:40we've updated for inflations and rates.
1:33:43So the I'll highlight the ones that have
1:33:45changed because we've made any changes.
1:33:48Uh, POP 102 modernization implementation
1:33:52for 16.6 million. 103 modernization
1:33:56supporting positions uh for 9.6 million.
1:34:00Uh and then POP 104, here's where a
1:34:04difference comes. The modernization
1:34:05pension administration system. In the
1:34:08prior assumptions, we had used a $35
1:34:10million figure for this based on uh
1:34:13request from our state partners because
1:34:16we don't have an actual quote and
1:34:19numbers. This is going in as a $1 pop
1:34:21today just uh as a placeholder. As we
1:34:25move through the budget cycle and come
1:34:27up with more firm numbers that we can
1:34:29use as quotes, we will uh we will insert
1:34:32a number which assume to be 35 million
1:34:35but just don't have enough to
1:34:37>> ju just a procedural question. How does
1:34:39that 35 million contingency get tracked
1:34:42as this moves through the process? Is
1:34:44that just in your head or
1:34:47>> Yeah, that that yeah, that's a number
1:34:48that that's not official at all. It's
1:34:50just saying, hey, you know, here's our
1:34:52best guess right now. But because it is
1:34:54a best guess, uh as we go through the
1:34:57budget process, uh our our agency
1:35:00request budget will continue to show
1:35:02this as $1. When we get into the uh the
1:35:06legislative budget, we will work with
1:35:08partners at the legislative fiscal
1:35:10office to update this number to uh to a
1:35:13more reasonable. So they'll need to work
1:35:14with us to make that recommendation at
1:35:16that side.
1:35:18>> Thank you.
1:35:20>> Uh moving forward uh modernization
1:35:23legacy stabilization for 13.2 million uh
1:35:28enterprise risk management at 935,000.
1:35:33Uh IT dues and subscriptions 2.1
1:35:36million. Uh IT staffing uh 1.1 million.
1:35:41uh again supporting staff to to manage
1:35:44some of the increasingly complex items
1:35:46that are happening within the system. Uh
1:35:50policy and compliance staffing,
1:35:52continuation of of a number of staff
1:35:54that are working on dealing with
1:35:56backlogs. Uh death identification again
1:35:59identifying as people die so we make
1:36:02sure that we're updating records
1:36:03properly and paying the right benefits.
1:36:05Um, a new piece in here, deferred
1:36:08maintenance, 433,000.
1:36:11We're currently in the process of a long
1:36:13range strategic plan uh at at the
1:36:16building to look or long range facility
1:36:19plan. Get my wording right there. Uh to
1:36:22determine what things are needed in the
1:36:24building. Uh the building is is some 30
1:36:27years old. While it's been maintained
1:36:29well, we recognize there are things that
1:36:31probably need to be done. So, uh, this
1:36:33is an estimate based on on what what we
1:36:36think will will come out of that plan,
1:36:38but, uh, we will report back to the
1:36:40board if, uh, if anything new and
1:36:43interesting comes out of it, but we want
1:36:45to make sure we have some funding
1:36:46available to address anything uncovered.
1:36:50Uh, the last item in here, uh, tax
1:36:53remedy for 219,000.
1:36:56So overall the policy option packages as
1:36:59presented today uh total 62.5 million uh
1:37:04again a smaller number primarily driven
1:37:06by the fact that uh that that pension
1:37:09administration system is currently a
1:37:12placeholder at $1.
1:37:14Entertain questions or uh request a
1:37:17motion from the board to approve the
1:37:18policy option packages.
1:37:23>> Do I have a motion?
1:37:25Uh, this is Bob H and I motion that we
1:37:29approve the 2729 agency request budget
1:37:32as submitted to the department of
1:37:34administrative services chief financial
1:37:36office with regret that the uh, board
1:37:39Hawaii retreat was not in there.
1:37:41>> That's okay. Again this year
1:37:44>> perhaps next
1:37:46>> Robert until I second the motion.
1:37:49>> Thank you both. All in favor?
1:37:52>> John Scan? I
1:37:54>> Connor I.
1:37:55>> Bob H. I
1:37:56>> Robert Tintel.
1:37:58>> Jordan I. Thank you. Appreciate it.
1:38:01>> C. Can I ask a question real quick and
1:38:03not related to the to the facility
1:38:06budget? Uh what's the what's the
1:38:09long-term plan for for this facility? I
1:38:11mean with with remote work and things
1:38:12like that. I mean do we still need this
1:38:14much of a building? Can can we sublet
1:38:16part of it? We still need to do the
1:38:18maintenance. I'm not not questioning
1:38:19that. Yes, Chair Hero and uh and board
1:38:22member H. That's a that is a core
1:38:25question that we're looking at within
1:38:26the the long range facility plan both
1:38:30physically physical state making sure
1:38:32that the the roof and the windows and
1:38:34all those things are working but then
1:38:35looking at the bigger picture of how do
1:38:38we utilize the building. uh we continue
1:38:40to have conversations through uh through
1:38:42a department admin administrative
1:38:44services process to look at all
1:38:47buildings in the state and find
1:38:48opportunities for other state agencies
1:38:51to to sublet space where appropriate. So
1:38:55we've had several conversations with
1:38:57other agencies that may have interest in
1:38:59in subleting part of the building. uh um
1:39:03the exact end result of that. I I think
1:39:05we're too early to say, but certainly
1:39:07pursuing, hey, there's a lot of empty
1:39:09space. How can we better utilize it?
1:39:13>> On that note, I expect we'll either have
1:39:15an update for the board either in
1:39:16September or December.
1:39:20>> Thank you.
1:39:22Final item is the 2025 system valuation
1:39:26results from Milleman.
1:39:38All right, good morning uh Chair Hario,
1:39:42members of the board. Matt Laravey uh
1:39:44with the Portland office of Milleman
1:39:45joined by as always by Scott Prepern and
1:39:47we are the retained actuaries for the
1:39:49system. Uh as noted on the slides here,
1:39:51we're here to present the uh bianial
1:39:53valuation results. This is a summary of
1:39:56the overall system level results um for
1:39:59the rates that will go into effect July
1:40:01of next year for a two-year period.
1:40:02Scott and I will be back two months from
1:40:04now with the employer specific rates for
1:40:07proposed adoption.
1:40:09So, um we'll get the ne get the slides
1:40:12moving to the right here. Oh, well done.
1:40:15All right, cool. So, um going to start
1:40:18uh I'm going to pretend I'm a visual
1:40:19learner rather than a math person. I'm
1:40:21going to start with some lines. So we'll
1:40:23start here with the the the systems
1:40:25liabilities, the actual real accured
1:40:26liability for the most recent valuation
1:40:28on the right and the three prior
1:40:30valuations to the left of that. What do
1:40:33we see here? Um very predictable stable
1:40:36increases. The actual acred liability is
1:40:38a present value of all of our future
1:40:40benefit promises. Uh we expect that that
1:40:43will go up every year. Um it has two
1:40:46forces that drive it upward and one
1:40:47force that reduces it. The two upward
1:40:49forces are what's called the normal
1:40:50cost. That's the benefits accured for
1:40:52this year's service performed in 2025 by
1:40:55PERS members. Also, the acred liability
1:40:57is a present value of future promises.
1:40:59As those future promises that are
1:41:01projected come one year closer to being
1:41:03paid, it's an interestbearing function.
1:41:05It goes up with the discount rate. And
1:41:07then we have a decrease every time we
1:41:08pay a benefit. We paid about 6 to7
1:41:10billion in benefits from the system. So,
1:41:12you can see here uh between a three and
1:41:14three.5 billion increase year-over-year.
1:41:17Fully expected. nothing particularly
1:41:20exciting uh to report to all of you in
1:41:22that front. Things are pretty stable on
1:41:24the membership side, both retirees and
1:41:27activives. So if that's the liability
1:41:29side of the ledger, next side of the
1:41:31ledger, which is uh generally a little
1:41:32bit less predictable and sometimes less
1:41:34stable, are the assets. These are the
1:41:37assets include excluding the side
1:41:39accounts. We value these at a fair
1:41:41market value. You can see here from the
1:41:44text on the slide, we had a pretty
1:41:45decent 2025. the returns were nearly
1:41:4810%. That's nearly uh 3% above our
1:41:51long-term assumption. Because of that,
1:41:53we had a nearly $6 billion increase in
1:41:56the market value of assets. So, kind of
1:41:58we got not just the assumption, but an
1:42:01above expectation level as well. We the
1:42:03returns came in 2.53 billion two and a
1:42:06half to three billion above where we
1:42:08might have hoped they would be based on
1:42:09our long-term assumptions. So, positive
1:42:11there about a three billion three to
1:42:14three half billion dollar increase in
1:42:15liabilities. Here you've got a nearly $6
1:42:16billion increase in your fair market
1:42:19assets. So if we turn to the next slide,
1:42:21that's the difference between those two.
1:42:23Assets minus li acred liabilities is
1:42:25what's referred to as our unfunded
1:42:26liability or UAL. This is also sometimes
1:42:29referred to as actuarial shortfall
1:42:31primarily because of the good 2025
1:42:34investment returns. This went down more
1:42:36than we were expecting. Uh we're down to
1:42:3826.6 billion. One of the most important
1:42:41exercises in my mind that we do every
1:42:43year at the end of the year is we do the
1:42:44financial modeling where we project
1:42:46forward what does this number look like?
1:42:48All of our contribution rates are
1:42:50calibrated to get this red line to zero
1:42:52systematically over time. When we last
1:42:54presented this to the board in December
1:42:56of this year, we were projecting that
1:42:57this would go to zero uh 10 years from
1:43:00now in 2036 if our investment returns
1:43:03hit that 6.9%
1:43:06uh actuarial assumption for future
1:43:08investment returns. Scott will carry on
1:43:10a little bit uh about the site accounts.
1:43:12The site account assets uh would raise
1:43:15the funded status above what we're
1:43:16showing here. Site accounts are
1:43:18currently um 3 to4 billion and uh would
1:43:23cause the funded status including those
1:43:25assets that are in the legally
1:43:26restricted trust to be closer to 80%.
1:43:28right now. Okay.
1:43:31So, turning from kind of the the dollar
1:43:33amounts to contribution rates, which is
1:43:35always a key focus of the employers,
1:43:37let's start here with the collared base
1:43:39rate. What the collared base rate is is
1:43:41it's the rate that's paid by employers
1:43:43from two sources. Employer contributions
1:43:46or employer site account transfers. As
1:43:49you can see here, looking over the last
1:43:50three biania most recent results on the
1:43:52right from this valuation, this has been
1:43:54a pretty stable number. slight decrease
1:43:58from the current bienia bianium to
1:44:00coming up to the bianium from this
1:44:01valuation they'll start in July that
1:44:03slight decrease is because observe
1:44:05benefits are less valuable than tier one
1:44:08tier 2 benefits so as we have more of
1:44:09our tier one tier 2s continue to retire
1:44:11and they're replaced by offsert members
1:44:13the overall cost rate drops down a
1:44:15little bit despite the good investment
1:44:17results this rate is stable because of a
1:44:20board decision and our advice to kind of
1:44:22keep that unfunded liability
1:44:24amortization rate steady for employers
1:44:26is to try to get to zero for the
1:44:29unfunded liability quicker than if we
1:44:31were starting to reduce rates. We're not
1:44:32going to reduce unfunded li liability
1:44:34rates until we're within sight of 90%
1:44:36funded status excluding site accounts
1:44:38and we're only around 76 right now. Also
1:44:42worth noting here, the foot footnotes
1:44:43sometimes are important. Um this is all
1:44:46prior to the effects of Senate Bill 849
1:44:50on the school district rates. has had a
1:44:51a you know significant financially
1:44:54positive effect for school district
1:44:55funding but that is not included in
1:44:56these system level results.
1:44:59Okay. So if the prior contribution rates
1:45:03which is the collard base rates that can
1:45:04be paid from two sources were stable
1:45:06this is clearly not the picture of
1:45:08stability. This is the net rate. This is
1:45:10after netting out the site account
1:45:11transfers. So this isn't stable but it's
1:45:13also predictable with what we've shown
1:45:15to the pers and other interested parties
1:45:17not just over the prior valuation but
1:45:19over years. um the net rate continues to
1:45:22climb. You can see here that you know at
1:45:24a system level it's up over 2 and a
1:45:26half% uh in terms of the employer
1:45:29contribution needs. This is because of a
1:45:32decrease in the employer side accounts
1:45:34and we'll talk about the employer side
1:45:36accounts in a few minutes here and give
1:45:37some more detail on that. This was uh
1:45:40predictable and while this is being
1:45:42shown here at a system level site
1:45:44accounts are an individual employer
1:45:45decision. So this 2 1/2 plus% increase
1:45:48in the net rates is really a mixture of
1:45:50some employers that have extremely
1:45:51stable contribution net rates and other
1:45:54ones that have increases that are
1:45:55significantly higher than 2 and a half%
1:45:57because of the site account financing
1:45:59decisions that they make.
1:46:01So speaking to the site accounts which
1:46:03is the next slide over the three most
1:46:05recent biania including this valuation
1:46:07result on the right here you can see the
1:46:08site account offset rate if we go back
1:46:11to two biani ago site account offset
1:46:13rate was between 6 and a half and 7% of
1:46:16pay at a system average level like I
1:46:18said this varies not just by employer
1:46:20but even drawing back to pooling
1:46:21arrangements that differs between like
1:46:23our school districts and our state and
1:46:24local government pool um the fact that
1:46:27this is drawing down the way it is is a
1:46:29feature not a bug
1:46:31Um the site accounts were set up many of
1:46:33them were set up 20 plus years ago and
1:46:35were all scheduled to expire or many of
1:46:38them were scheduled to expire during
1:46:402027. So this timing is well known and
1:46:43the employers have been benefiting from
1:46:45decreases in their contribution levels
1:46:47while those that established bonds have
1:46:48also been making debt service payments
1:46:50that generally speaking are going to
1:46:52expire in 2027. It's a market timing
1:46:55exercise if you do a bond. It's a
1:46:57leveraging exercise, but I think
1:46:59generally those side account kind of
1:47:01leverage bets have paid off uh very
1:47:03well, but they are going away. So the
1:47:066.64% offset you saw for a system
1:47:08average level two biania ago. Most of
1:47:11the site accounts involved in that are
1:47:13expiring in the middle of 2027, which is
1:47:15why you see that downward drift there,
1:47:17which corresponds to the upward increase
1:47:19in the system net average rate. Um any
1:47:23questions on that so far?
1:47:26as compelling as I thought it was going
1:47:27to be. Okay, so if we go to the next
1:47:29slide, for those of us who are not
1:47:31visual learners or for folks like Kevin
1:47:34and Heather who get to go down and try
1:47:35to explain things in a non-visual way to
1:47:38members of the executive and leg
1:47:39legislative branches. Here's the prior
1:47:42eight slides but in text format as a
1:47:44small act of presentation and actuial
1:47:46mercy. I will not go through this slide
1:47:49and I will turn it to Scott to talk
1:47:51about some detail. Oh, you want me to go
1:47:52talk to
1:47:53>> covering? Yeah, you're
1:47:54>> cover this one too. All right, I'll
1:47:55cover this one, too. Jump ahead.
1:47:56>> Okay, so differences. I talked about
1:47:59site accounts really come down to the
1:48:01employer level. We're showing net rates
1:48:02go up, collard base rates be stable, but
1:48:06it really varies by employer. Two super
1:48:08prime examples here are the state
1:48:10government, as noted on the prior slide
1:48:14um that I didn't cover too well, but we
1:48:15had back in 2023 through a voter-enacted
1:48:18amendment, the state agreed to set a $2
1:48:20billion pension obligation bond. Those
1:48:22proceeds were put into the trust and
1:48:24offset were an offset to state
1:48:26government contribution payments to PERS
1:48:28a net rate collard rate offset for over
1:48:3120 years. That rate offset for the 2527
1:48:35bianium is shown in the blue here. So
1:48:36the state's contribution rates in our
1:48:38current bienium are 3.62% of pay lower
1:48:42than they otherwise would have been
1:48:44because of those bond proceeds in the
1:48:46associated side account. So prior
1:48:49valuation the state had a collarded base
1:48:51rate of nearly 27% of pay shown in the
1:48:54red but because of the side account
1:48:56offsets they had an offset of 3.6% 6% of
1:48:59pay from the POB pension obligation bond
1:49:01proceeds and they were paying in the
1:49:02current bienium the state's paying a net
1:49:04rate of about 23.3% of pay and we go to
1:49:08this valuation on the right that site
1:49:10account has expired we've kind of
1:49:13calibrated that offset so that it
1:49:14expires at the same time as the bond
1:49:16payments this has been scheduled this
1:49:18way for over 20 years so the state's
1:49:21base rate collarded base rate is quite
1:49:24stable versus last bianium with it's
1:49:27between 26 and 27 7% of pay, but there's
1:49:29no offset anymore. So, the net rate, the
1:49:31state, the rate that the state will
1:49:32actually have to pay is 3.06%
1:49:36of pay higher. However, the state's also
1:49:38not paying any debt service any further
1:49:42on those 2 billions of POBS that they
1:49:44set up 20 years ago. So, state
1:49:46government big net rate increase, but it
1:49:49was predictable and forecast. We turn to
1:49:52another big employer that didn't have a
1:49:53site account. This is the city of
1:49:54Portland. They're also in the state and
1:49:56local government rate pool. the
1:49:58valuation two years ago when we set the
1:50:00city's rate, their collared base rate is
1:50:03between 25 and 26% of pay and they were
1:50:05contributing all of that because they
1:50:07didn't have a site account rate offset.
1:50:08Their base rates a little bit different
1:50:10than the states because they have a
1:50:11different mixture of employees public
1:50:13safety versus general service compared
1:50:14to state government. This valuation
1:50:18their base rate remained quite stable
1:50:20but they didn't have that swing in their
1:50:22net rate because we don't have an
1:50:23expiring site account because there
1:50:24wasn't a site account to exist. So that
1:50:26idea of showing about a 2.5% increase in
1:50:30the net contribution rate across the
1:50:31system average is this sort of dynamic
1:50:33where it's a bigger increase for the
1:50:35state and it's a very small increase for
1:50:37the city of Portland. Small example but
1:50:39writ large that goes to the kind of the
1:50:41broad dynamic that we have which is why
1:50:43the rates that we come back to the board
1:50:44with for adoption two months from now
1:50:46are so important and they can you know
1:50:47their mileage may vary compared to what
1:50:49we show at a system or pool level here.
1:50:52All right.
1:50:54So there's my there's my act of mercy
1:50:56slide that I want.
1:50:57>> So this is the the written record of
1:50:58some of what we discussed on the first
1:51:00nine slides. So skip this
1:51:02>> uh jump into the next section here. An
1:51:04update to a slide you've all seen many
1:51:06times before. Just kind of the long-term
1:51:08history of the total pension rate here
1:51:12all the way back to rates that were set
1:51:13before the great financial crisis and
1:51:15then to the rates that come out of this
1:51:17valuation on the far right. Um, so Matt
1:51:19R, you talked a fair bit about where
1:51:21those 2729 rates are. But just as a
1:51:24reminder here, the kind of gray line is
1:51:27the uncolored rate. So that's what kind
1:51:29of moves dynamically every valuation
1:51:32kind of the pure actuarial rate. And
1:51:34then the light blue is the collared base
1:51:35rate that kind of chases that over time
1:51:38upwards. And as Matt noted, because of
1:51:41the asymmetry of the collar policy where
1:51:43we don't allow that to come down until
1:51:44we're closer to 90% funded, that now has
1:51:47kind of leveled out. Even though the
1:51:48gray line has come down in the last
1:51:51couple years, we have kept the colored
1:51:53base rate to kind of get the funded
1:51:54status um improvement earlier. We've
1:51:57kept that level. And then the dark blue
1:51:59is the colored net rate. Again, the
1:52:01difference of the subtraction of the
1:52:02side account, which earlier in this
1:52:04period, the difference between the light
1:52:06and the dark blue was quite a bit. While
1:52:08uh there were a lot of side accounts
1:52:10still running and now as many of those
1:52:11are expiring, it has shrunk and those
1:52:13are much closer than they used to be. So
1:52:16a lot of information here kind of for
1:52:17the record um on things that have
1:52:20affected these rates over time, but just
1:52:22like to keep this updated and then uh
1:52:24come back to it as necessary.
1:52:28So next few slides we'll cover um a
1:52:31little more detail and some background
1:52:32on a couple of those results and happy
1:52:34to take questions along the way as
1:52:35needed. This is really a tabular format.
1:52:38Gives some of the results behind uh the
1:52:40kind of stick charts we showed earlier.
1:52:42And big points here, we've got all the
1:52:44way back to the 123123 rate setting
1:52:47evaluation, the interim advisory
1:52:49evaluation we did last year. And then on
1:52:51the far right, this year's results. So
1:52:53kind of middle of the page, funded
1:52:55status in UL. The UL at this year's rate
1:52:58setting valuation is 26.6 billion, down
1:53:01from the 29.4 the last time we set
1:53:03rates. So that's really what's pushing
1:53:05the uncolored rate down. We're in a
1:53:06better funded position. 76% funded
1:53:09rather than 72 excluding site accounts.
1:53:12And then bottom of the page, as you can
1:53:14see, the funded status including site
1:53:16accounts, which is about 80% now when
1:53:18you include the 3.8 billion remaining of
1:53:21site account assets.
1:53:25Um just a kind of a reminder of what we
1:53:28have covered today that this is going to
1:53:30this is all kind of high level summary
1:53:31results but we will be publishing the
1:53:33full formal evaluation in September and
1:53:35then in September's meeting we'll come
1:53:37back with the individual employer
1:53:39results and all of this is based on kind
1:53:42of status of the system at the end of
1:53:432025 latest and greatest assumptions
1:53:46adopted at the last experience uh study.
1:53:48So all that is built into both today and
1:53:50the detailed results that will be coming
1:53:51later.
1:53:53I'll skip the next couple slides that
1:53:55are process ones really for the record.
1:53:57Again, it's part of kind of a two-year
1:53:59rate setting cycle that we are nearing
1:54:01the end of. Um but did want to spend a
1:54:03moment here on um oftentimes one way or
1:54:07another we're either comparing the
1:54:09results we're talking about today to the
1:54:10last rate setting evaluation since that
1:54:12what's affect what's being paid this
1:54:14bianium and comparing the next bianium
1:54:16or as we'll show on the next slide last
1:54:18year's advisory valuation which is the
1:54:20last thing we've kind of shared with
1:54:21employers on directionally. So we like
1:54:24to look at changes since the last rate
1:54:26setting evaluation what's the same
1:54:27what's different. Um, as noted, the end
1:54:29of 2023 is where we kind of measured and
1:54:32locked the rates that went into effect
1:54:34for 2527. So, since then, the board did
1:54:37adopt new assumptions and methods. There
1:54:39weren't anything, you know, as you
1:54:40recall from last year, weren't anything
1:54:42that dramatically uh kind of moved the
1:54:44needle on that. Asset returns over the
1:54:47intervening 2-year period were greater
1:54:49than the long-term 6.9% assumption in
1:54:52aggregate. We had a a year below and a
1:54:54year above accumulatively a little bit
1:54:56better little to the good system payroll
1:54:59increased 13% since the 2023 valuation.
1:55:04So that kind of can cut both ways. It
1:55:06can add some to the liabilities when
1:55:07that happens to individuals and when
1:55:09headcount grow goes up as it did here 4%
1:55:11growth in active membership count. But
1:55:13that also gives us a bigger payroll base
1:55:16on which all contribution rates are
1:55:17assessed. So, it actually kind of tamps
1:55:19down that uncolored rate because you're
1:55:21charging it over a bigger base. Um, and
1:55:24then as Matt alluded to earlier,
1:55:27particularly relevant for school
1:55:28districts, Senate Bill 849 reduce the
1:55:31actual paid 2527 school district rate by
1:55:331.68% with the SDULF uh funds. And we
1:55:39understand there there are right now
1:55:41funds that will help offset for 2729. We
1:55:44have an estimate there of 1.37%
1:55:47of payroll as the offset. Uh we will be
1:55:51incorporating that into what we provide
1:55:53in September, but then we will be kind
1:55:55of updating and replacing the school
1:55:56district rates early next year as we
1:55:58understand there will be uh potentially
1:56:01greater balance in the sulf at the end
1:56:03of this year that can be built in. So
1:56:06that's kind of our our placeholder
1:56:07number and then uh there will be a step
1:56:09even after the board adopts propos rates
1:56:12in September there will revisit those
1:56:13for school district early next year.
1:56:18Okay. And if we're looking back to
1:56:20compared to last year's advisory
1:56:21valuation that already would have built
1:56:23in all the experience study would have
1:56:24built in one year of investment returns
1:56:27which had been a little below the
1:56:28assumed return. Uh so but if we're com
1:56:31comparing to results there we've had uh
1:56:34almost 9.7% return in 2025 so makes
1:56:38things a little bit better here and
1:56:40system payroll growth was still above
1:56:41assumption but more moderate. Um it's
1:56:43started to come back closer to the
1:56:44assumption in the last couple years
1:56:46especially last year.
1:56:48Okay. Uh reminder kind of what's under
1:56:51the hood in our valuation really the
1:56:53fundamental obligation of the plan is
1:56:54the benefit payments to individuals
1:56:56which is projected here over the next 30
1:56:59years. This continues on in our
1:57:01valuation far beyond 30 years. It goes
1:57:03until the last benefit is paid, but we
1:57:04uh only show 30 years here. Again, sort
1:57:07of thinking of the blue is retirees,
1:57:09inactive, people who have left
1:57:11employment but have not yet started
1:57:12benefits is that yellow and green are
1:57:14the future benefit payments to be paid
1:57:15for people who are currently active at
1:57:16the valuation and will retire in the
1:57:18future. Um so all of those benefit
1:57:21payments kind of get projected out. If
1:57:24you compare them to the dotted line from
1:57:25last year, there's not much change year
1:57:26to year. is pretty predictable, but then
1:57:28we discount those back to get into the
1:57:30liabilities that we tend to talk about
1:57:31and measure for um uh for the unfunded.
1:57:36>> Scott, if I if I squint, it looks like
1:57:40206 comes down from 2025.
1:57:44>> It does.
1:57:45>> Does that mean we're actually going to
1:57:46be on the other side of the curve at
1:57:47that point?
1:57:48>> Very important to note here that this is
1:57:49because of the nature of the valuation,
1:57:52we're taking everybody who's in the plan
1:57:54at the valuation date. There will be
1:57:56future hires who will add on
1:57:59at at the end but the valuation
1:58:02>> but aren't we replacing higher cost
1:58:04members with lower cost members?
1:58:06>> We are and so the the cost per person is
1:58:10coming down but that's not exactly
1:58:12what's depicted here and that this is a
1:58:15more narrow illustration of just people
1:58:17who are in the door at 1231 2025.
1:58:20And so
1:58:22the in reality when we get, you know, 30
1:58:26years out, we don't expect the 30-year
1:58:29out number to actually be quite what
1:58:31we're showing here because it will be
1:58:33this is the number for everybody who's
1:58:34in the door now and we'll have 30 years
1:58:36of new entrance.
1:58:37>> Just started to retire.
1:58:39>> Are these are these nominal numbers or
1:58:40they discounted?
1:58:41>> Uh they're nominal and then we discount
1:58:43them to get the liability.
1:58:44>> Yeah. Okay. Thank you very much.
1:58:46>> Yep.
1:58:47>> Yeah. So it's you know this is a closed
1:58:49group. Um and in essence every year the
1:58:51benefit payments have two forces that
1:58:52will drive it upward and one force that
1:58:54will drive it downward. The upward
1:58:55forces are colas for continuing retirees
1:58:58and new retirements. The downward force
1:59:00is deaths of existing retirees. And so
1:59:03given this is a closed group valuation
1:59:04kind of some of the significance of the
1:59:0525 to 30 years out is that one of those
1:59:08two upward forces which is future
1:59:09retirements will basically have come to
1:59:11its conclusion for our current closed
1:59:13group and then it's just strictly
1:59:15mortality versus cola and the group on
1:59:18average will be older at that point. So
1:59:19that's a little bit why you see that
1:59:20bend in the curve that combination of a
1:59:22closed group and it's like one of the
1:59:23two upward forces goes away once
1:59:25everybody that's currently active or
1:59:27effectively everybody is retired.
1:59:33uh from those benefit payments like I
1:59:34said we calculate liabilities uh these
1:59:37bar charts on the next slide top set are
1:59:40what we would call the actual acred
1:59:42liability so that's what we were showing
1:59:43earlier and is used to measure the UL
1:59:46that's the present value of those
1:59:47benefits that's allocated to service
1:59:50prior to the valuation date so
1:59:52everything essentially before 2026
1:59:54and then we've split this out between
1:59:56the active groups which are in different
1:59:58shades of blue there with OBS SER now
2:00:00being the largest crude liability group
2:00:03uh for the activives at 17% of the total
2:00:06liability but by far the largest is the
2:00:09retirees for tier 1 tier 2 61% of the
2:00:12system acred liability and if you add
2:00:15that up with the retirees from obser and
2:00:17the inactive from all tiers nearly 70%
2:00:20of the system is for people who are no
2:00:21longer of the liability for the system
2:00:23is for people who are no longer working
2:00:25for PERS employers that's to be expected
2:00:27that's where the benefit payments that's
2:00:29where the Um the liability is expected
2:00:31to be tilted but it is a very mature
2:00:33system in that way.
2:00:36Um the bottom set of bars here is the
2:00:39normal cost. So that is a sliver of the
2:00:41liability that we is allocated by the
2:00:43cost method for what's um coming up in
2:00:46the next year. So you can think of it as
2:00:47sort of like the cost of the benefits
2:00:49being earned in the next year. It's not
2:00:50exactly that under this cost method but
2:00:52that's conceptually. Um so that is all
2:00:56activives by by its nature and very much
2:00:59tilted to observe. So 78% of the normal
2:01:02cost is for observe members now. So the
2:01:05active population has very heavily
2:01:07transition to observe over time as you'd
2:01:09expect. If we um compare this about five
2:01:12years ago I think that was under 60% for
2:01:14OBSER. So it it has been as tier one and
2:01:18tier 2 members by and large transition
2:01:20to retirement. We are much more of an
2:01:23observe heavy system than we used to be.
2:01:28All right. Now, a little more detail on
2:01:29the change in the U that Matt showed in
2:01:32graphical form earlier. Uh he mentioned
2:01:35that we had 2.6 kind of to the good a
2:01:38decrease in the unfunded acred
2:01:39liability. So8% or 8 uh billion of that
2:01:44was expected just due to the functioning
2:01:46of the contribution rates and and sort
2:01:47of the funding policy driving that down
2:01:50over time. But then the biggest driver
2:01:52was the u investment outperformance
2:01:55compared to assumption which took $2
2:01:56billion more off of that and then there
2:01:59was a little bit of a demographic loss
2:02:00of 0.2 um the push back the other way.
2:02:07Um little bit of detail just um on the
2:02:10two big groups in tier one tier two and
2:02:12their funded status. So we talked about
2:02:14system funded status. This shows the
2:02:16state and local government rate pool and
2:02:18school districts and how they are kind
2:02:20of calculated and rated separately. The
2:02:22SLGRP is a little bit less well funded
2:02:25than the average of the system at 72%
2:02:28excluding side accounts, 75% with side
2:02:30accounts. School districts are a little
2:02:32bit better funded, 81% and 87
2:02:35respectively. The other thing to note on
2:02:37here just we have some ratios as far as
2:02:38like the asset to payroll ratio. School
2:02:41districts have more assets relative to
2:02:42their payroll. makes them more exposed
2:02:44to goods and bads on the investment
2:02:47return. So the uncolllory rate there
2:02:49goes down more when it's a good
2:02:51investment return year and it can go up
2:02:53more uh when it's a poor investment
2:02:55return year.
2:02:59Uh we'll get into a little bit more
2:03:01great detail on these next slides and
2:03:02just a reminder that when we are showing
2:03:04system average stuff that's not what an
2:03:05actual employer pays but it's it's
2:03:07representative employers um have you
2:03:10know for all the reasons here have sort
2:03:12of unique um aspects with their site
2:03:14accounts their normal cost blends and so
2:03:16that's what really comes in September in
2:03:17that listing for all
2:03:21we've talked about the total
2:03:22contribution rate it really is um
2:03:24composed of a few different components
2:03:26so the normal cost rate again kind the
2:03:29cost of the benefits being allocated to
2:03:31each year. This is shown separately in
2:03:33black for the SLGRP, blue for the school
2:03:36districts, and green for OPSER. Couple
2:03:38things to note. They do kind of go in
2:03:40that order as far as the magnitude here,
2:03:42as the tier one, tier 2 tiers are higher
2:03:46cost for exactly the reasons that were
2:03:47described earlier.
2:03:49The black line for SLGRP has a mix of
2:03:52police and fire in general service. It
2:03:53has a little more tilting to police and
2:03:55fire. That's a higher cost, higher
2:03:56normal cost benefit. So it tends to be a
2:03:58little higher than school districts, but
2:04:00all of these then have trended down uh
2:04:02since the last rate setting valuation.
2:04:05Um and so a little bit of a downward
2:04:07pressure on the normal cost for tier
2:04:09one, tier two members. That's largely
2:04:11that as it gets to be a smaller and
2:04:14smaller group. they tend to be people
2:04:15who inherently have been working for a
2:04:17longer time and that their cost of
2:04:19benefits is spread out over a longer
2:04:20working career. It's no longer very
2:04:23heavily driven by money match which was
2:04:25a higher uh cost benefit for the people
2:04:27who had it affected. So there's some
2:04:28reasons that that gets pushed down a
2:04:29little over time.
2:04:33>> And yeah, a question pertains to the
2:04:37previous slide and that is that um these
2:04:40rates are not showing the um AP
2:04:43contributions which is the offset,
2:04:46right?
2:04:47>> Um correct. So this is the total normal
2:04:49cost rate before the uh the member
2:04:53redirect portion
2:04:54>> member redirect not going to the AP
2:04:56currently um and comes back and pays
2:04:59part of this. So this is the total
2:05:00normal cost rate and then uh for an
2:05:03observe member for example it's uh 65
2:05:08>> 75
2:05:09>> 75.65 65 is our assumption because of
2:05:11the yeah um on a system average level
2:05:14because you either some people pay zero
2:05:16some people pay 0 75 if you recall we
2:05:18have an assumption for um how much we
2:05:21deduct that because of the uh average
2:05:23pay level that turns and off
2:05:26>> and you're not including the 2.5 of tier
2:05:28one and two because that's diminished
2:05:32>> correct I mean those so say for a school
2:05:34district normal cost rate 14.65 65 is
2:05:38the total rate paid 2.5 by the member
2:05:42the rest by the employer. So it does
2:05:44carve out of this at the end and we kind
2:05:46of show that in the detail when we add
2:05:48this to the UI and everything else and
2:05:50then take off the redirect. Um, so it
2:05:53does matter at that individual level
2:05:55within tier one, tier two payroll, but
2:05:57to your point like the the blended
2:05:59average of how much of the redirect on a
2:06:02system average level or even an employer
2:06:04level is much more driven by observe now
2:06:07because that is much more of a
2:06:08population. So a blend of like the 25
2:06:11and the the 75 and you get down to
2:06:13something more like a a 0.9 or a 1%
2:06:17average depending on what group you're
2:06:18looking at.
2:06:22Thank you. Good question. Um, so if
2:06:25normal cost is kind of the first step in
2:06:27the contribution rates, UAL rates are
2:06:29the second. And so this uh shows again
2:06:33for for those group if you kind of work
2:06:34from clockwise in the upper right.
2:06:36School districts again, SLJP and OBSRP
2:06:40uh multi-year picture here. And I'll
2:06:42just really focus on school districts
2:06:43for for purpose of illustration. But
2:06:46again, we've got a a gray uncolored rate
2:06:49that um as of the 2123 rate setting for
2:06:53that bianium was the same as the blue
2:06:56line up there, the colored rate at
2:06:5713.95.
2:06:59Had good investment returns that drove
2:07:00the uncolored rate down, but the collar
2:07:02rate didn't change because we're not yet
2:07:04close to 90%. So board policy did not
2:07:06allow that to drop. when there was a
2:07:08reversal in the markets in the
2:07:10subsequent couple years and the
2:07:11uncolored rate started to go up for
2:07:12school districts again school district u
2:07:15colored rate just stayed steady and it
2:07:17still is even though now the uncolored
2:07:20rate has uh dipped down further so what
2:07:22that means is it's been you know a
2:07:24steady rate for for biania for um SLJP
2:07:28and school districts both here on the U
2:07:30rate and if you look at the school
2:07:31districts the difference between the
2:07:321395 and the 949 is sort of a cushion in
2:07:36the current built into the current rate
2:07:38for future poor investment performance
2:07:41or losses. We'll have to move the
2:07:43uncolored rate up further before it
2:07:45really comes through and forces an
2:07:47increase in the rate that the employer
2:07:49feels in their base rate.
2:07:55Um, and then similar to the site account
2:07:58chart we showed earlier in total, this
2:07:59kind of separates it for school district
2:08:00versus SLGRP. Again, same pattern as a
2:08:05large number of the side accounts have
2:08:07expired as scheduled and will no longer
2:08:09have a rate offset for those specific
2:08:11site accounts in 2729. Then the average
2:08:14rate has come down. School districts
2:08:16have always been kind of more heavily
2:08:18into site accounts than SLJP or other
2:08:21employers. And so coming from a higher
2:08:23base a few years ago and more of those
2:08:25expiring. There are still some site
2:08:27accounts that are expiring later by any
2:08:28year which is why there are still rate
2:08:29offsets but um the lion share has always
2:08:32been scheduled for 2027.
2:08:36Um the next few slides put collect some
2:08:39of these into tables. I won't really
2:08:41spend uh time on them unless there's
2:08:44questions. There's a lot more detail in
2:08:45the appendix that goes to all of these
2:08:47and you can see the inner workings. Um
2:08:49but just kind of a helpful reference at
2:08:50times for it all in one place.
2:08:55And then uh this projected contribution
2:08:57exercise
2:08:59again an update of something the board
2:09:01has seen before. But if you kind of work
2:09:03on the state agency line, the first row
2:09:05here, what we're showing is a projection
2:09:08of 20 25 to 27 payroll and then the
2:09:12total contribution of 2.7 billion by
2:09:14applying the rates to that payroll for
2:09:17the 2527 for the current bianium and
2:09:20then seeing what that's projected to
2:09:21grow out to as the both payroll
2:09:23increases for 2729 according to your
2:09:26assumption and then um the net rates
2:09:28that we see from this valuation that are
2:09:31going up mainly due to the expiration of
2:09:33site accounts. And so what you see for
2:09:35the state the 2.7 billion estimated
2:09:38dollar amount for current bianium
2:09:40growing to almost 3.3 billion for 550
2:09:43million change shown there on that row.
2:09:46If you kind of look across all these and
2:09:48look down to the total line, it's a 8.2
2:09:50billion going up to 9.7. So 1.5 billion
2:09:53total system estimated contribution. Um
2:09:56this is a a rough and simple
2:09:59illustration um kind of predicated on
2:10:02payroll growth going exactly to
2:10:04assumption and everything like that but
2:10:05shows kind of the direction um of this.
2:10:10And then on the next slide we we do just
2:10:12want to always note that that 1.5
2:10:14billion in this case is composed of a
2:10:16couple different things. both.9 billion
2:10:19that is really due to the increase in
2:10:21the net rates and mainly again driven by
2:10:24expiration of site accounts but 6
2:10:27billion that would just happen naturally
2:10:28even if the rates were unchanged because
2:10:30payroll is growing right so that there's
2:10:32uh when you think of it in dollar terms
2:10:34it's important to um recognize some of
2:10:36that is just built in by the nature of
2:10:38growing payroll
2:10:40>> Scott I was going to make a comment
2:10:42that's this the slide in the previous
2:10:44one that I'm really interested to see
2:10:46where actual And uh because from an
2:10:48employer experience obviously uh there's
2:10:51an assumed payroll growth of 3.4 but we
2:10:54know and anecdotally from a lot of other
2:10:57employers and market studies, union
2:10:59negotiations, we've seen wild increases
2:11:02in our total personnel costs. Uh but yet
2:11:05then it's also offset by well we've had
2:11:08to reduce positions and vac unfilled uh
2:11:12positions and things. So, it's going to
2:11:14be interesting to see obviously when we
2:11:16I'm looking forward to our employer
2:11:17rates coming up, but then when we get to
2:11:20actually into 27 to 29 and and seeing
2:11:23how the actual costs and then obviously
2:11:25how that affects side account side
2:11:28accounts that are continuing um as those
2:11:30costs continue to be amortized because
2:11:33it's going to impact rates eventually.
2:11:35So, that's just a big unknown too as
2:11:37well. Obviously you have to make
2:11:38assumptions but the actuals it's going
2:11:41to be interesting to see where they land
2:11:42>> right and agreed over the last couple
2:11:44experience studies we certainly had seen
2:11:47um payroll growing both at individual
2:11:49and system level kind of above the
2:11:51long-term assumption um and made some
2:11:54you know short-term assumptions in the
2:11:55experience study the last couple times
2:11:56for that and then we have seen that at
2:11:59least start to moderate I mentioned
2:12:00before I think 4.5% total system growth
2:12:03in this last year which is still above
2:12:06our long-term assumption of 34 four, but
2:12:08is well down from the eight or nine that
2:12:11we had, I think, in um at least some of
2:12:13the years coming out of out of the
2:12:15pandemic and some of the um new
2:12:17contracts and new bargaining. So, I will
2:12:20be interested to see where that trends
2:12:22as well.
2:12:27Uh then just the last point, so all of
2:12:28those dollar amounts on the prior slide
2:12:31and discussed here are total amounts.
2:12:33And then to uh board member Scanland's
2:12:36point, part of that is paid by
2:12:37redirected member EPSA contributions. So
2:12:40we have an an estimate of dollar amounts
2:12:43for the member redirect and then sort of
2:12:44the net so breaking that 9.7 million
2:12:48into roughly if you will um 300 million
2:12:51for member redirect contributions and
2:12:539.4 billion from employers. the this
2:12:57does have that dynamic where the um the
2:13:00two and a half percent and the 0 75 are
2:13:03shifting as the payroll continues
2:13:05[clears throat] to shift to OPS obser
2:13:06and noted in there is we assume 2.4 4
2:13:08and 0.65 because people who are below
2:13:11the pay threshold don't get a member
2:13:13redirect and so on a net basis it's
2:13:15about a 10 basis point haircut to the
2:13:17the nominal the 2.5
2:13:22uh very last section here retirey
2:13:23healthcare again this is a small part of
2:13:26the these trusts are a small part the
2:13:28the RIA and the the RIPA um as noted
2:13:31here RIA being the Medicare eligible
2:13:33subsidy and RIPA being the state
2:13:35specific premed uh these continue to
2:13:38wellfunded. Um, uh, RIA went from 242%
2:13:43funded to 275% funded. Uh, RIPA is, uh,
2:13:47behind that, but not in bad shape at
2:13:49246% funded. Um, again, these, at least
2:13:52current under current law, only are
2:13:55eligible to tier one 122 members to a
2:13:57point that was made earlier. I know
2:13:59that's uh, a point of discussion at
2:14:01times in legislature and at times we're
2:14:02asked to study different things.
2:14:04Clearly, if new members came in, a big
2:14:07cost would come in here um over time and
2:14:09this funded status would look quite
2:14:11different potentially in a hurry. So, um
2:14:13always worth keeping in mind. As far as
2:14:15contribution rates, there is a normal
2:14:17cost rate. There's still a cost of
2:14:18benefits being earned in here, but under
2:14:20board policy, that's allowed to be
2:14:21offset to the extent that it brings it
2:14:24to zero because of the strong funded
2:14:26position. Um so, continues to be a zero
2:14:30rate for these programs going into the
2:14:32next bay.
2:14:35That's really it. Uh between now and the
2:14:37September meeting, we're going to
2:14:38prepare the employer specific rates that
2:14:40we will bring to you in uh for adoption
2:14:42at the meeting. We'll issue the full 100
2:14:45plus page evaluation report and um get
2:14:47the individual employer reports, work
2:14:49with per staff to have those ready to go
2:14:51out to employers after they're adopted.
2:14:54And finally in December, we'll come back
2:14:55with the more long-term both steady and
2:14:57variable return projections of where
2:14:59this could go over time and
2:15:01incorporating what's known in the OPERF
2:15:04returns. Usually through about the end
2:15:05of September is what we can build in
2:15:06there to get a little better idea of
2:15:08where we're going.
2:15:11>> Any questions?
2:15:13Thank you for a great overview as
2:15:14always.
2:15:15>> Kevin, before we adjourn, when would you
2:15:17like to start the audit committee?
2:15:19>> We will start at 11:30. Okay. Thank you
2:15:22all. We're adjourned.
2:15:40But no.

About this transcript

This page contains the full transcript of July 24, 2026 PERS Board Meeting by Oregon Public Employees Retirement System, generated from the public captions YouTube serves with the video. The transcript has 21,265 words across 3,262 segments, with the original timestamps preserved so you can click any line to jump to that moment in the embedded player.

What you can do with it

Use the transcript to take notes, quote the speaker, build a study guide, generate a summary with ChatGPT or Claude via the YouTube Summary tool, or export it as a timed subtitle file with YouTube to SRT. You can also re-open it in the transcriber to translate the transcript into 100+ languages.

Free YouTube transcript tool

YouTube2Text is a free YouTube transcript generator — no signup, no daily limit. Paste any YouTube link and get the full transcript instantly, with timestamps, click-to-jump, translation to 100+ languages, AI prompts for ChatGPT, Claude, and Gemini, and exports to TXT, SRT, VTT, or Markdown.