How Has PERA’s Funded Status Changed?

Since 2008, PERA’s funding levels have changed in reaction to market forces and actions by the PERA Board.  Today, the divisions have mostly moved to orange status, which indicates that the time to reach 100% funded is estimated at more than 50 years out.  It does not mean that PERA will run out of money or be unable to pay benefits.

Here is where PERA funding levels have been since 2008.

The chart shows at what year in the future PERA would be 100% funded organized by fiscal year. You can see that before Senate Bill 1 in 2010 PERA was going to run out of money. Senate Bill 1 changes brought the divisions into the green. The lower than expected returns in 2015 then moved some of the divisions to yellow.

Below is the key for the color coding developed by PTA during their independent study of PERA. You can learn more about the 2015 Signal Light Study by visiting this post.

And, here is where PERA funding levels were after the PERA Board voted at the end of 2016 to reduce the expected rate of return to 7.25% and adopted new mortality tables that reflect longer life spans.

As you can see, the divisions have mostly moved to orange status. This means they will not run out of money and will be able to pay all benefits, but the time to reach 100% funding is more than 50 years out.