MYTH: Underfunding in the MERS system is caused by overly generous assumptions about future investment returns and mortality rates.
FACT: Underfunding occurs for many reasons including, historical benefit enhancements and the once in 100 year market downturn of 2008. In addition, as a voluntary system, many plans joined MERS underfunded.
To ensure assumptions are sound, we perform an Experience Study every five years. This best practice helps us ensure that each municipality's plan assets are adequate to provide for the benefits that are expected to be paid and that each plan is making reasonable progress to achieve full funding.