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.
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