Experience apportionments are discretionary increases in pension credits or benefits.
Experience apportionments are increases in pension credits or benefits:
The Board of Pensions grants experience apportionments, based on an apportionment policy, at the sole discretion of its Board of Directors.
Each year, the Board of Directors uses the apportionment policy to determine whether to grant an apportionment and, if so, what it will be. The policy takes into account the Pension Plan objectives, seeking to balance short- and long-term goals:
The policy is also informed by periodic asset/liability studies.
Solvency, or plan funding status, is the primary factor that drives the determination. A funding status of 100 percent — fully funded — means that assets in the plan are able to meet current and future benefits obligations. The greater the funding status, the more opportunity to grant an apportionment to help protect current and future retiree benefits from inflation with minimal risk to the plan.
If the Pension Plan is funded at