Lawmakers press consultants on FY2027 spike, vesting rules and wage‑growth assumptions

Several legislators pressed Makita on uncertain early outcomes and key assumptions underlying the cash‑flow projections.

Senator Conway questioned the projection showing a large benefit outflow in fiscal year 2027, saying "the assumption there that we're going to see a huge increase in that year is somewhat questionable" given limited intake to date. Makita responded that Milliman and the Office of State Actuary supplied conservative assumptions and that a sizeable portion of early outflows reflects disabled participants who can claim immediately rather than participants subject to the 10‑year vesting rule.

On vesting, Senator Conway emphasized the plan's 10‑year vesting requirement and the "3 of the last 6" condition as complicating prediction of near‑term outflows. Makita reiterated its understanding that the first‑year cash flow is composed largely of disabled participants and other provisions that allow early claims.

Members also asked about wage‑growth assumptions that drive payroll‑based revenue. Makita said wage growth assumed in sensitivity runs was "somewhere around... between 2.5, 3.5 percent" and acknowledged that higher wage growth raises revenue; senators urged close coordination with actuaries and other state pension assumptions when finalizing projections.

The exchange left open the need for follow‑up work on assumptions and clarified that near‑term cash‑flow uncertainty is material to any allocation decision.