Although the recommended changes would increase the minimum recommended cash contribution initially, it would substantially reduce the risk that ERFC would need much higher cash contributions down the road.
Since employer cash contributions are funded primarily from property taxes, paying down unfunded liabilities more rapidly would reduce the risk that the Board of Supervisors would substantially increase property taxes in the future. Indeed, if ERFC had used more conservative assumptions that better controlled unfunded liabilities, the school system could have saved over $500 million in unfunded liability amortization payments over the past twenty years.
The resolutions are available in the MCA Documents Library. Use the links below to access the Resolutions.
Recommendation: Adopt a More Conservative ERFC Amortization Method
Recommendation: Reduce Assumed ERFC Pension Fund Discount Rate