Hawaii Visitor Industry and Public Health Update slide image

Hawaii Visitor Industry and Public Health Update

Pension System The State is committed to funding the pension system STATE OF 1959 FY2019 market value of assets increased to $17.2 billion with a funded ratio of 55.2% ■To meet the commitment that ERS achieve full funding within a 30-year horizon, the State enacted legislation to phase-in higher systemwide employer contribution rates in steps through FY2021 (pictured right) ■The State has appropriated the full amount for FY2021 Enacted Higher Rates (Employer Contributions) General Police & Fire FY 2017 17% 25% The ERS adopted a crisis risk strategy approximately 6 years ago which will allocate approximately 20% of its portfolio assets (presently at 16% of assets) to strategies intended to hold their value in a crisis scenario. FY 2018 18% 28% FY 2019 19% 31% FY 2020 22% 36% ■FY2020 total portfolio return was 1.26% FY 2021 24% 41% 75% of the ERS portfolio is liquid, and the plan has not experienced any liquidity issues to date ERS has on average less exposure to illiquid private investments than its peers (25% vs 36%) ■The stress test shows that the ERS can withstand a -20% return in year 1, followed by 20 years with returns at 5% (2 percentage points below the assumed rate) before returning to 7% and require only moderate rate increases to ensure that the funding period never extends beyond 30 years in any future annual valuation For further information, please visit https://ers.ehawaii.gov/wp-content/uploads/2020/01/2019-Actuarial-Valuation.pdf Source: Employee's Retirement System of the State of Hawaii. 13 HAWAI
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