How Safe is Georgetown's Public Pension?

Georgetown and its employees participate in the Texas Municipal Retirement System(TMRS) and therefore have little input into the management and investment policies since they are one of many participants.

TMRS actually suffered a negative return of 3.4% on investments in 2018 as shown in the following chart from their 2018 Comprehensive Annual Financial Report, which can be found on their website.

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TMRS is better off than the aggregate of all the public pension funds in Texas as shown below. This chart shows the percentage of funding to meet all the liabilities. Wall Street Journal

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The adjusted values are a result of more realistic assumptions about investment returns.

TMRS assumes an investment return of 6.75% and that is compared with actuarial returns for the last 10 years.

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The bottom line is that TMRS needs to further reduce their assumed rate of return to a more realistic rate such as the 6.3% earned over the last 10 years.

Such a reduction would significantly lower the funded ratio below the reported 87.1%.

The only thing that Georgetown can do is to lobby TMRS, along with other participants, to lower their assumed investment rate of return so that a realistic estimate of under-funding can be established. Only then can steps be taken to achieve 100% funding for all TMRS participants.