Andrew Roos

This newsletter provides updates on the Employees' Retirement System of Rhode Island, highlighting positive pension fund performance and introducing a new 'Back to Basics' investment strategy. The strategy involves reallocating over $550 million from hedge funds to traditional, high-growth investments like low-fee index funds, complemented by 'risk protection' assets such as investment-grade bonds, U.S. Treasury bonds, and real estate, to accelerate funding status recovery and enhance retirement security. The document also includes legislative updates from the 2016 session affecting retirees, such as new tax exemptions and adjusted post-retirement employment rules, and information on available financial advisory services for members.

This document is an actuarial experience study for the Municipal Employees' Retirement System (MERS), covering a six-year period from 2005 to 2010. It provides an in-depth analysis and offers recommendations for various actuarial assumptions and methods, including inflation, investment return, salary increase rates, mortality, disability, retirement, and termination rates. The study also quantifies the actuarial impact of these proposed changes on liabilities and employer contribution rates, aiming to ensure the appropriateness of the assumptions for future valuations.

The meeting commenced with roll call verification. Key discussions included the approval of draft meeting minutes from December 17, 2025. The Treasurer reported on the implementation of a new payroll system, noting that associated issues were being addressed, and highlighted the completion of the audit with the Officer Auditor General, which facilitated an application for a GFOA award. The Executive Director provided updates, confirming payroll processing of over $90 million, noting no new SIC book items, and detailing the upcoming board election process, which will involve issuing a notice soon and appointing an election committee managed with the board of elections. The Board approved December 2025 pensions. The Disability Committee recommended approval for several disability claims (items 2 through 5, 7, and 8), with item 6 approved after a member recused themselves. Item 1 was tabled pending verification of the applicant's employment status at the time of application. The Legal Council reported that Judge Nestle Bush filed an appeal challenging a prior decision.

The meeting commenced with roll call and approval of the draft meeting minutes from the July and August 2025 pensions as presented. Key discussion points for the upcoming October board meeting were highlighted, including a recommendation to slightly increase state police employer contribution rates due to FAS enhancements, and a discussion regarding retirees experiencing negative benefit impact since 2011. The main agenda item involved the annual budget presentation, which detailed expenditures categorized into personnel costs, contractual services, and top rate expenses. The budget framework, capped at 17.5 basis points of the five-year investment portfolio average, was presented as $15.9 billion, consistent with the prior year's active budget. Specific line items discussed included salaries (39 FTEs for retirement and 5 FTEs for the investment office), contractual services covering legal services, audit/actuary costs (including the fifth year of the GRS contract and planning for a new RFP), IT contracts (renewal with Telus Health), and operational expenditures like postage, supplies, and occupancy costs. Discussions also clarified that costs related to new employer units joining the system are charged directly to those units. Following the budget review, the Board moved into executive session to discuss litigation involving the retirement board. Upon returning to open session, the executive session resulted in three motions passing: to dismiss an appeal in a workers' compensation matter before the Supreme Court, to seal the executive session minutes, and to fix the executive session minutes.

The meeting commenced with roll call confirming a quorum. The Board approved the drafting and executive session minutes from the June 11, 2025 meeting. Updates were provided, confirming the signing of a contract for an IT audit with Compass IT Compliance and noting new legislative provisions affecting the retirement system, particularly regarding post-retirement for teachers. The status of the excess revenue transfer for Fiscal Year 2026 was reviewed, noting that $21.6 million was received on June 27th. A question was raised regarding the methodology used for calculating pension fund percentage funding compared to external sources, which prompted a commitment to investigate and report back. An update on the Executive Director search was also noted. A discussion followed regarding an administrative appeal hearing for Pina Alfiero, which was withdrawn by the petitioner after a hearing officer upheld the executive director's decision. Significant discussion centered on the Disability Committee's recommendation regarding item number eight concerning a disability claim for a West Warwick case, including deliberations over the interpretation of medical evidence, the standard of clear and convincing evidence, and the process for potential appeals to the committee and subsequently to workers' compensation court. The committee's recommendation on item eight was ultimately approved by a vote of nine to five, despite concerns raised about the evidence presented in that case. Finally, a legal report proposed drafting legislation for the next meeting regarding ruling on partial pensions.