I attended the PERA meeting on December 8th. As you can imagine with the markets being the way they are the PERA Correctional Plan fund performed at a -6.4% for 2022. Compare that to a +30.3% in 2021.
In short our fund lost money last year.
Currently the Actuarial Rate of Return (expected income from investments) is at 7.5% (set by the legislature) . Because of what the markets are doing PERA recommended that the legislature investment return assumption be lowered to between 5.64 and 6.55. This does not reflect what money actually comes in but gives PERA an idea of how healthy the funds are.
If the actuarial return assumptions do end up in the 6% range it's possible for our funding to drop below 85%. If that happens for more than 2 years our COLA drops down to 1-1.5% depending on the Social Security Cost of living! Currently we're at 2.5%! PERA Executive Director Doug Anderson pointed out if our COLA drops there is NO mechanism to bring it back up to 2.5% without legislative action.
Because of that I believe that in addition to pushing for our PERA Pension and Social Security to be exempt from the Minnesota State Tax I think MNCORA should push to add a mechanism to raise our COLA back up if it drops when the economy improves.
This was PERA's last meeting until February 16th 2023 when the new PERA Board is set. As you know I was endorsed by MNCORA for the Retired, Disabled and Survivor Representative seat. I would appreciate your vote when the Ballots come out in January.
Wade Laszlo
President MNCORA
Reposted from MNCORA Blog
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