Worried about increasing unfunded liabilities for Fairfax County’s three pension plans despite increased county contributions each year, the McLean Citizens Association’s (MCA) board of directors on March 6 passed a resolution calling on county officials to submit those plans to independent, in-depth “stress tests.”
All three plans – the Employee Retirement System, Police Officers Retirement System and Uniformed Retirement System – have failed to meet their return-on-investment assumptions during eight of the past 10 years, according to the resolution.
“This pattern cannot continue without adversely affecting the county’s financial position, its ability to fund other programs and its standing in the bond markets,” MCA’s resolution read.
The Virginia Retirement System since 2017 has undergone stress tests and sensitivity reports, the results of which are forwarded to the General Assembly. But regular reports on the county’s three pension plans do not focus on adverse scenarios, explain ramifications in plain English or outline potential strategies to reduce unfunded liabilities rapidly, the resolution read.
The MCA board’s resolution called for stress tests that would accomplish those objectives and analyze optimal governance structures, including trustee selection and training policies, for Fairfax County’s three pension plans.
