State of Hawaii Taxable General Obligation Bonds of 2020, Series FZ Investor Presentation
Pension System
The State is committed to funding the pension system
STATE
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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