Actuarial Experience Study
Actuarial assumptions are the foundation of SCERS’ funding strategy. They guide projections about how long members will work, how salaries will grow, how long retirees will live, and what investment returns will look like. But the future doesn’t always play out exactly as expected. That’s why SCERS conducts a regular Actuarial Experience Study—to compare what actually happened with what was assumed, and to make adjustments where needed.
What the Experience Study Does
The Experience Study is a deep dive into the demographic and economic trends within SCERS’ membership. It asks questions like:
- At what ages are members really retiring, and how does that compare to the assumption?
- Are members living longer than previously expected?
- Do actual salary increases match the projected rate of growth?
- How many members are leaving employment before retirement, and when?
By analyzing years of real data, the study identifies patterns that either confirm or challenge the assumptions used in the actuarial valuation.
How Often It’s Conducted
SCERS performs an Experience Study approximately every three to five years. This schedule ensures that assumptions remain up to date without overreacting to short-term fluctuations. The results are presented to the Board of Retirement, which decides whether to adopt recommended changes to the assumptions.
Why It Matters
Updating assumptions is not just an academic exercise—it has a direct impact on funding. For example, if members live longer than expected, benefits will be paid out for more years, increasing costs. Adjusting mortality assumptions ensures those costs are reflected in contribution rates now, rather than leaving future generations to cover the shortfall.
Similarly, if members are retiring later than expected, the system may collect more contributions before benefits begin, which can strengthen funding. Every assumption feeds into the actuarial valuation, so keeping them accurate is essential for fairness and sustainability.
Confidence Through Accuracy
For members, the Experience Study demonstrates SCERS’ commitment to managing the plan responsibly and adapting to changing realities. For employers, it helps ensure contribution rates are based on realistic expectations, not outdated models. And for the Board, it provides the evidence needed to make informed policy decisions.
By aligning assumptions with actual experience, SCERS strengthens its ability to keep retirement promises across generations.
