Glossary

The approximate amount it will cost to provide retirement benefits to retirees—both current and future. To determine this amount, PERA uses economic and demographic assumptions to help project how much money will be needed to pay retirement benefits.
The time it will take (measured in years) to be fully funded.
The anticipated annual rate of investment return over time. In other words, a prediction of how much investments will earn—and grow—over time.
Factors that affect how PERA’s liabilities and assets are calculated. Assumptions include population growth, life expectancy, and the assumed rate of return.
A plan where employees and employers contribute money that is invested. The plan manages the investment of the funds and assumes the risk. The employee receives a benefit determined by a number of factors, such as length of employment and salary history.
The employee (and possibly the employer) contributes money, controls the investment, and assumes the risk. The amount of money contributed and the success of investment decisions determines how much income will be available in retirement.
The status when a plan can pay all its liabilities, which is the amount it owes to current retirees and will owe to future retirees.
The measure of the fund’s current assets (such as cash and investments) compared to the expected future liabilities, which include all future retiree benefits.
The status of a plan when its funds are projected to be depleted in the future.
The status of a plan when its trust funds have enough money to pay benefits throughout the amortization period.
The difference between future payment obligations (or liabilities) and the present value of funds (or assets).