analysis that simulates the volatility of annual investment
returns above and below the assumed rate of return, applying
methodology determined by the actuary.
Section 2. Title 71 is amended by adding a section to read:
§ 5909. Stress test of system.
(a) General rule.--The actuary shall conduct an annual
stress test of the system and the board shall submit the results
of the stress test to the Governor, the General Assembly and the
Independent Fiscal Office no later than July 1 of each year. The
stress test shall include a scenario analysis, simulation
analysis and sensitivity analysis.
(b) Report by Independent Fiscal Office.--No later than
September 1 of each year, the Independent Fiscal Office shall
produce a report summarizing the results of the stress test,
including a calculation of the ratio of projected employer
pension contributions to projected State revenues under a
scenario analysis.
(c) Definitions.--As used in this section, the following
words and phrases shall have the meanings given to them in this
subsection unless the context clearly indicates otherwise:
"Scenario analysis." Projections of assets, liabilities,
unfunded actuarial accrued liabilities, the change in unfunded
actuarial accrued liabilities, employer contributions, benefit
payments, service costs, payroll and calculations of the ratios
of assets to liabilities, employer contributions to payroll and
operating cash flow to assets for each of the next:
(1) Twenty years, based upon then-current plan
assumptions and statutory funding methodology established
under sections 5707 (relating to death benefits) and 5708
(relating to supplemental annuities).
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