"Status of Pensions in Philadelphia and the forecast for the future"

At our December meeting Fran Beilli, Executive Director, Philadelphia Board of Pensions, and Sumit Handa, CIO, Philadelphia Board of Pensions addressed the membership on the 'Status of Pensions in Philadelphia and the Forecast for the Future" The present Philadelphia Board of Pensions, approved by City Council in December 1956, is composed of the Director of Finance, The Managing Director, the City Solicitor and he Personnel Director and the nine person Membership Board, made up of elected Civil Service staff who serve for a four year term of office. The Board approves all benefits but its major role is that of 'trustee' to ensure that the Retirement System remains actuarially and financially sound for the benefit of current and future benefits recipients. The Board, with the assistance of its professional consultants, develops the policies and strategies which will enable the Board to successfully execute its fiduciary obligations. The Executive Director, aided by a staff of 75 personnel, administers the day to day activities of the Retirement System, providing services to over 64,000 members. Mr. Biella and Mr. Handa gave a detailed report on the state of our pension system today, based on the April 2014 Actuarial Valuation Report: As of July 1, 2013. We will summarize a few of their statements here, but suggest that members visit the Boards website to read the entire report and further detailed information on these, and other, points. - The return on assets for the year ending June 30, 2013 was favorable when benchmarked against the assumed 7.95% return. -The Unfunded Actuarial Liability is the excess of the Systems actuarial liability over the actuarial value of assets. The UAL increased from $5.083 billion as of July 1, 2012 $5.327 billion as of July, 2013. - The funding ratio decreased from 48.1% as of July 1, 2012 to 47.4% as of July 1, 2013. - The MMO (Minimal Municipal Obligation) increased from $523.4 million for FYE 2014 to $556.0 million for FYE 2015. Members were told that when reading the reports they should remember that each valuation given is merely a snapshot of the long term progress of the pension fund. It is equally important to judge a current years valuation result relative to historical trends, as well as trends expected in the future. Overall the future of the Philadelphia Pension fund is a promising one. The web site can be accessed by going to City of Philadelphia / Government / Boards / Board of Pensions and Retirement. Also available on the web site are The Investment Policy; Philadelphia Code; Pension Regulations; COP Deferred Compensation Plan as well as copies of present and past Actuarial Valuation Reports and various pension forms.