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Risk Assessment

Risk Assessment

Updated Scorecard Information

We use a risk “scorecard” to summarize and quantify the current risk profile of the Washington State pension systems. The scorecard also allows us to demonstrate how certain pension proposals affect the risk profile.

We prepare a Risk Assessment to generate the scorecard. Risk Assessments use participant data, plan provisions, asset values, and assumptions about participant behavior, legislative practices in the areas of funding and benefit enhancements, and future economic conditions. Every year, we collect new information about each of these to update the current risk profile of the pension systems.

We display the latest pension scorecard below.

 Pension Score Card
Category  (Dollars in Billions)  Value Year Score
Affordability      
    Chance Pensions will Consume More than 8% of GF-S1 5.1% 2024 82
    5% Chance GF-S1 Consumption will Exceed 8.0% 2024 62
    5% Chance Employer Contribution Rate will Exceed 16.7% 2028 57
Risk        
    Chance of PERS 1, TRS 1 in Pay-Go2 22.7% 2032 37
    Chance of Open Plan in Pay-Go2 2.3% 2060 58
    5% Chance Annual Pay-Go Cost3 in PERS 1, TRS 1 Exceed $1.3 2018 42
    5% Chance Annual Pay-Go Cost3 in Open Plans Exceed $9.3 2060 0
    Chance of Total Funded Status Below 60% 21.2% 2046 44
Total Weighted Score     53
1 Approximately 3% of current GF-S budget; does not include higher education.  
2 When today's value of annual cost exceeds $25 million.      
3 Pay-Go costs on top of normal pension costs.      

 

Please see the 2010 Risk Assessment Report for more information on the development and use of the pension scorecard.

Annually, we will continue to update the scorecard and the risk assessment model. Please replace this score card in the future when a more recent scorecard becomes available.

Every six years, consistent with the demographic experience study, we will update assumptions about new entrants, participant behavior, legislative practices, and future economic scenarios. Occasionally, we will update portions of the risk assessment off of these cycles if deemed necessary. Please see the Projection Disclosures page for a description of projection assumptions that have changed since the 2010 Risk Assessment Report was published.

If you are interested in seeing why the scorecard changed from last year’s measurement, please see the Reconciliation Analysis page.

  

Report PDF

 

PDF icon 2010 Risk Assessment [10MB] 

Report may take 5-10 minutes to load, individual sections are below.

PDF icon About this Report/Executive Summary [462KB] 

PDF icon Main Report Body [4MB]

PDF icon Appendixes [2MB]

   

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Last Reviewed: 12/4/13
Last Updated: 12/11/13

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