Communicating the Facts on the MERS Experience Study Presented by: [Insert Name]

What is an Experience Study? The Experience Study takes place every five years The study reviews MERS’ funding policy for Defined Benefit plans and compares actual experience of our plan with current actuarial assumptions A comprehensive study of this kind is a fiscal best practice designed to ensure municipalities have enough assets in their plan to provide for the benefits that are expected to be paid

Experience Study Goals Goals of the Experience Study: Ensure municipalities can pay promised benefits to employees and that each plan is making reasonable progress to achieve full funding Encourage each generation to incur cost benefits for employees within that generation Create balanced and properly funded plans for employees

Key Changes as a Result of the Experience Study Three key changes that impact our plan: Mortality Rates Increasing Investment Rate of Return Assumption Decreasing Amortization Policy Update

Click here for a complete overview of the assumption changes. Summary of Changes Key Change More Information Mortality Rates Table Increasing Employees are living longer causing pensions to be paid longer and therefore costs will increase. Investment Rate of Return Assumption Decreasing Assumption rate is changing from 8% to 7.75% Amortization Policy Update The amortization period is the length of time needed to eliminate a pension plan’s unfunded liability. A fixed amortization period gives a specific target date to each plan by which all known obligations will be full funded. There will be a shorter fixed amortization period. This ensures that each generation incurs the cost of benefits for the employees who provide service within that generation, rather than deferring those costs to future generations. Click here for a complete overview of the assumption changes.

How will these changes affect our MERS Defined Benefit plan? [Here you can talk about how your municipality will be affected by the results of the Experience Study. Refer to the letter MERS provided you that included your specific impacts.] The MERS Retirement Board approved an optional “phase in” for the total impact over the next 5 years (impacting fiscal years 2017 – 2021), though MERS strongly encourages municipalities to pay the full impact right away.

How Will MERS Help? Recognizing that every municipality has unique needs, MERS offers a broad range of customizable plans to fit our budget, needs and goals. MERS will partner with us to help set fiscal goals and discuss our options to address our unfunded accrued liability. MERS is available to assist us in answering any questions with local media and the public The MERS team has been trained to explain the issues clearly They will work in partnership with us to deliver a consistent message across the state and to our local media