The LPCR held its first meeting of the legislative session on March 11th. It called itself to order and the State’s pension managers made reports.
The State Board of Investment had a return of 12.3% through the end of the last fiscal year ending in June. This brings value of the assets of the general employee fund to slightly over $18 billion which, balanced against future liabilities, means that the MSRS fund is 99.8% funded. In the last legislative session, the future assumed rate of return was reduced to 7% to account for potential future volatility in the market and to err on to a more conservative outlook of future performance. After all, having surpluses in fund balances is a better problem to have than running short because the assumed rate of return was too high.
While it is good news to hear that the funds are doing well and the fund management creates stability, it’s even better is when benefits for current and future retirees improve. The MSRS Board has proposed an increase to the multiplier from 1.7% to 1.9% for credits earned after July 1 of 2025. In other words, if this proposal makes it through the legislature, the value of future credits will increase by 11.8%. Another proposal from the MSRS board affects current retires they proposed a 1.75% cost-of-living increase as of January 1, 2026, instead of the current cap of 1.5%. While these enhancements fall far short of where inflation has left the value of our pension, this is movement in the right direction.
It’s important to note that these are merely proposals of potential future action that haven’t even been formally introduced to the Commission yet – there will be more to come!