Kansas Public Employees Retirement System, Topeka, returned 13% for calendar year 2010, but the gains were not enough to prevent the system’s liabilities from increasing by $590 million.
The rise in liabilities caused the system’s funding ratio to drop to 62% for 2010; it was 64% at year-end 2009. The unfunded liability was $8.3 billion as of Dec. 31, 2010, up from $7.7 billion a year earlier.
The system projects that it is on track to return 22% for fiscal year 2011, according to a KPERS news release.
Glenn Deck, KPERS’ executive director, said in a telephone interview that the system’s funded ratio was dragged down by losses experienced in 2008, adding the system uses a five-year smoothing methodology to determine its actuarial value. “In a market value basis, we improved,” he said.
Separately, the KPERS board voted 5-4 to keep its actuarial return assumption at 8%. Mr. Deck said the system is scheduled to revisit the return assumption issue next year.