Councilmember Godden left office on January 1, 2016.
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Retirement System takes steps to maintain fiscal health

The board of the Seattle City Employees Retirement System (SCERS) last week received its regular evaluation of the retirement system’s finance from the actuaries, Milliman, Inc. The news was disconcerting, but not unexpected.

The economic recession and market drops of 2008 have adversely impacted the retirement fund’s assets. This has been true for all such retirement systems and, although SCERS has suffered significant losses, the system remains strong relative to many other cities. Prior to the recession, the funded ratio had reached 92.4 percent. It has now slipped to a 62.0 percent ratio, a level not experienced since 1984.

The good news for those who are part of the system is that retirees do not have to worry about these losses since their retirement benefits are a guaranteed part of their employment contract. That reassurance can’t be repeated too often.

The other good news is that the city will soon take steps to address the actuary’s findings. Already the Council has acted to authorize an increase in the contribution rate of city employees by 2 percent – likely with a 1 percent increase in 2011 and 1 percent in 2012. There will be a matching 2 percent from the city, for a total of 4 percent. When phased in, this increase will provide an additional $24 million per year in needed capital for the system to remain healthy, a down payment on our unfunded liabilities

In addition, the Retirement Board is in the midst of a complete review of the fund’s investment allocations, using the expertise of its outside firm, Pension Consulting Alliance.  The goal will be to select an investment portfolio that generates strong returns while minimizing volatility and risk. This plan will be put in motion to protect and rebuild retirement funds lost to the decline. The Retirement Board is committed to exploring all avenues to get our fund to the necessary levels.

We are committed to protecting our retirees, their benefits and the long-term health of the city’s retirement system. Along with continued discussion, I have requested a full review of investment and decision-making procedures, oversight and contribution requirements to ensure the Retirement Board is making the best possible decisions for our employees.