In a world of underfunded pension plans, the Milwaukee City Employes' Retirement System estimates it is fully funded, said Bernard J. “Jerry” Allen, executive director.
The $3.96 billion system had slipped to 99% funding as of Jan. 1, 2009, according to the latest annual actuarial study by Buck Consultants, the system's actuarial consulting firm. The previous year's actuarial study showed the system was 130% funded, Mr. Allen said. A new study is expected to be completed in May to determine the funded status as of Jan. 1, 2010. “We expect the funded status will improve to more than 100% for 2010,” he said.
Because the funding level fell below 100% in 2009, the city of Milwaukee and the other public employers that belong to the system by law had to contribute a combined $60 million to the system — the first employer contribution made to the system in about 15 years, Mr. Allen said.
Mr. Allen attributes the system's strong funded position to “the board's good judgment in asset allocation” over the long term and outperformance in investment returns for calendar year 2009.
W. Martin “Wally” Morics, Milwaukee city comptroller and chairman of the MCERS board, and Michael Murphy, Milwaukee city alderman and chairman of the board's investment committee “are the architects of the success of this fund,” Mr. Allen said.
Mr. Allen credits the two elected officials and other board members like them. “They have had a steady hand and had the foresight to invest in real estate and international equities long before most pension funds, while having a value tilt in domestic equities” that served the fund well, Mr. Allen said. — Barry B. Burr