1 / 21

VRS Overview

VRS Overview. Virginia Governmental Employees Association. Robert P. Schultze, VRS Director September 13, 2014. Agenda. VRS Overview Investments Summary Questions. VRS Overview. VRS Total Membership. As of July 31, 2014. *Inactive/deferred members as of June 30, 2014.

kostya
Download Presentation

VRS Overview

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. VRS Overview Virginia Governmental Employees Association Robert P. Schultze, VRS Director September 13, 2014

  2. Agenda • VRS Overview • Investments • Summary • Questions

  3. VRS Overview

  4. VRS Total Membership As of July 31, 2014 *Inactive/deferred members as of June 30, 2014

  5. Benefit Comparison Information above obtained from the June 30, 2013, Actuarial Valuation.

  6. Funds Flow (estimated) For the Fiscal Year Ended June 30, 2014

  7. Net Assets Available for Benefits Fiscal Year

  8. Funded Status: State Employees New GASB Accounting Rules will reflect funded status using Market Value of Assets effective 6/30/14 for plan reporting and 6/30/15 for employer reporting. Projected Funded Status using Market Value of Assets (New GASB Standard) Projected Funded Status using Actuarial Value of Assets (Funding Standard) • Assumptions: • Fiscal Year 2014 investment return estimated at 15.7%. • Other projected years’ investment returns assume 7.0% with 2.5% inflation rate. • Assets estimated at actuarial value of assets (five-year smoothing).

  9. Estimated VRS Employer Contribution Rates • Added cost to achieve the 2015/2016 contribution rate increases is approximately $315 millionfor the biennium in General Funds. • Fiscal Year 2014 investment return estimated at 15.7%. • Above contribution rates are net of employee contributions.

  10. Investments

  11. VRS Fiscal Year Returns Fiscal Year

  12. Fund Performance

  13. VRS Asset Allocation as of June 30, 2014 (Dollar Amounts in Billions/Percent of Total Fund)

  14. Retirement Resources

  15. Retirement Preparedness in U.S. Households New study on financial preparedness of pre-retirees (Wharton Pension Research Council) in the U.S. found the following: • Roughly half of U.S. households are unlikely to maintain their pre-retirement standards of living • Compared to prior generations of retirees, current pre-retirees are less prepared for the following reasons: • People are living longer • Healthcare costs have risen dramatically • Social Security is less generous • 401(k) plans have replaced defined benefit plans

  16. Retirement Planning • More than 38 million U.S. working-age households do not have retirement accounts. (NIRS Feb. 2014) • “Employees really need to be saving up to 15% of pay for 30 to 40 years to have a sufficient nest egg for retirement.” – Christine Marcks, president of Prudential Retirement • “Overall, 75% of Baby Boomers say tax deferral is an important trait of a retirement investment.” – Insured Retirement Institute (IRI) • “When they go through a retirement income calculation, 20% of participants increase the amount they contribute by five percentage points, from 4% to 9%. Turning up the deferral rate at age 32 or 33 can have a profound impact. ‘That’s the powerful moment of truth for them,’ ” says Marcks. – February 21, 2014 (PLANSPONSOR.com)

  17. Retirement Resources at VRS • Visit www.varetire.org and set up a myVRS account • Benefit Estimator • Financial Planner • Review your Member Benefit Profile (MBP) • Register for group seminars or one-on-one consultations • View a video on your plan; view Financial Matters video series • Review your plan member handbook and Getting Ready to RetireGuide

  18. Summary

  19. Upcoming Issues • 2015 General Assembly Session and 2014-16 Budget • Maintain adherence to commitment to fund the plan in the budget • Pension Reform Is Still Alive and Well • Other states: several states still are in the midst of pension reform • Virginia: Hybrid plan implemented and plan used as a model for other states

  20. Upcoming Issues • Pension Accounting • GASB pension rules go into effect in 2014 for VRS and in 2015 for employers • GASB just issued draft Other Post-Employment Benefit (OPEB) rules • Contribution Rates • State and teacher contribution rates now expected to remain flat, a significant decrease over prior year’s projections

  21. Questions?

More Related