October Board Meeting Summary

The Public School and Education Employee Retirement Systems of Missouri (PSRS/PEERS) Board of Trustees convened at 8:30 a.m. Oct. 26, 2026, at the PSRS/PEERS offices at 3210 W. Truman Blvd., Jefferson City, Missouri. Board members in attendance were Beth Knes, Katie Webb, Chuck Bryant, Amanda Perschall, Allie Gassmann, and John Ruth. Also present were Executive Director Dearld Snider, Chief Operating Officer Sarah Swoboda, Chief Investment Officer Craig Husting, Chief Counsel Mike Moorefield, Director of Internal Audit Jeff Hyman,  Incoming Director of Internal Audit Lexi Bonnott, Chief Financial Officer Brandon Robertson, Director of Human Resources Michelle Varcho, Director of Member Services Nicole Hamler, Director of Employer Services Stacie Verslues, Chief Technology Officer Lisa Scheulen, Chief Information Security Officer Jake Woratzeck, Director of Communications Susan Wood, Director of Executive and Board Administration Jennifer Martin, and other PSRS/PEERS staff members.

System Operations

Approval of Minutes

The Board unanimously approved the minutes from the Sept. 2, 2026, and Sept. 22, 2026, open sessions.

Order of Business

The order of business was approved without changes.

Other

None

Investment Report

Ongoing Investment Activity

Craig Husting, along with Michael Hall from Russell, reviewed ongoing investment activities, including estimated investment performance through Sept. 30, 2026. The estimated return for the first quarter of fiscal year 2027 (July 1, 2026, through Sept. 30, 2026) was approximately 0.7%. Husting discussed the current asset allocation of the PSRS/PEERS portfolio, the long-term strategy, and broad portfolio expectations.

Investment Policy Changes

The Investment Policy was originally adopted in 1995. The investment staff periodically conducts a full review of the policy and recommends changes to the Board. The last review was conducted in April 2026.

Husting discussed changes to the Private Credit Implementation Manual and to the Real Estate Implementation Manual. The recommended Private Credit Manual changes would allow staff to deploy up to $1.5 billion in private credit co-investments or direct lending without an external consultant. The previous limit was $500 million.

The recommended Real Estate Implementation Manual changes would shift sub-asset class targets from 45% Core Real Estate, 45% Non-Core Real Estate, and 10% Infrastructure to 40% Core Real Estate, 40% Non-Core Real Estate, and 20% Infrastructure.

Following discussion, the proposed Investment Policy changes were approved by unanimous vote.

Private Equity and Private Credit Review with Pathway

Vincent Dee, Wayne Smith, Derrek Ransford, and Matthew Spader from Pathway Capital Management presented an organizational update and reviewed the PSRS/PEERS' Private Equity, Private Equity Co-investment, and Direct Credit programs. Pathway reported that the PSRS/PEERS Private Equity portfolio it advises produced an annualized return of 15.7% for the 10-year period ended June 30, 2026. By comparison, the public equity benchmark returned 13.3% over the same period. The Co-investment and Direct Credit portfolios have shorter track records. Pathway reported that the PSRS/PEERS Co-investment portfolio had produced an annualized return of 14.8% for the 10-year period ended June 30, 2026, and that the Direct Credit portfolio had produced an annualized return of 9.7% for the five-year period ended June 30, 2026

Report of the Actuary

June 30, 2026, Valuation

Brandon Robertson provided opening remarks to introduce the actuarial team in attendance from PwC US (PwC) ; reminded the Board that several assumptions changes were adopted by the Board and are first being reflected in the June 30, 2026, valuations pursuant to the experience study conducted earlier in 2026; thanked staff and PwC for their efforts; and identified the materials to be presented and available for reference. He noted that PwC's presentation would conclude with their recommendations for the fiscal year 2027-2028 contribution rates and January 2027 COLA, which were action items for the Board.

Cindy Fraterrigo, Gina Uhrich, and Becky Brenza from PwC, then presented the results of the June 30, 2026, actuarial valuations for the Systems.

Fraterrigo presented an introduction to our annual actuarial valuations, including the primary purpose of funding actuarial valuations, the balance equation followed for computing funding requirements, common features of a funding valuation, and statutory/policy bases followed. She then reviewed the primary actuarial assumptions reflected in the valuations and the directional impact on the ADC rate of changes in the assumptions.

Uhrich reviewed key developments during fiscal year 2026, including a summary of the assumption and method changes adopted in June pursuant to the latest experience study; fiscal year 2026 member, investment, and inflation experience; and recent legislation affecting the actuarial valuations.

Brenza presented the preliminary June 30, 2026, actuarial valuation results. She reviewed summaries of membership counts in comparison to the actuarial accrued liabilities, five-year historical data on various membership statistics, and changes in assets and liabilities from the prior year. She reported the June 30, 2026, preliminary pre-funded status, based on the actuarial value of assets, has decreased to 88.2% from 89.1% the prior year for PSRS and decreased to 89.7% from 89.9% for the prior year for PEERS. She also reported the preliminary actuarially determined contribution rates of 29.67% for PSRS and 13.09% for PEERS. She then presented a 10-year historical review of changes in our pre-funded status and contribution rates.

Uhrich then presented additional information, including projections, risks, and considerations that supported their recommendation for the contribution rates. To illustrate potential risk, she presented projections showing how future ADC rates could be affected if investment returns were 0% for one year rather than the assumed 7.3%. She noted that other differences between actual experience and actuarial assumptions, as well as changes in the member population, could also affect future ADC rates. She then presented statistical information on the maturity and leverage of the plans, explaining why ADC rates are sensitive to differences between expected and actual experience. Finally, she reviewed numerical information showing how liabilities, funded status, and ADC rates could be affected by COLAs, investment returns that differ from assumptions, and changes in actuarial assumptions.

Based on the Board's Actuarial Funding Policies and the results of the June 30, 2026, preliminary actuarial valuation results, Fraterrigo recommended no change to the contribution rates for the 2027-2028 school year and a 2% COLA for eligible retirees and beneficiaries in January 2027.

Set Contribution Rate for 2027-2028

The Board voted unanimously to maintain the contribution rate for PSRS at 29% (14.5% each for members and employers) and PEERS at 13.72% (6.86% each for members and employers) for fiscal year 2027-2028, as recommended by the actuary. This was the seventeenth year for the actuary to recommend the rates to be 29% for PSRS and 13.72% for PEERS.

Set January 2027 COLA

In accordance with the Systems' Funding Policies and the recommendation of the actuary, the Board voted unanimously to grant a 2% COLA for January 2027.

Management Report

Key Accomplishments

Sarah Swoboda reviewed the following key accomplishments since the September Board meeting.

Member and employer initiatives included the Employer Services department's Employer Conference, which provided education and networking opportunities for the Systems' payroll contacts.

Staff updates included congratulating Lexi Bonnot on her selection as the incoming Director of Internal Audit and welcoming AJ Womack as the organization's new AI Innovation Engineer.

On the investment side, Susan Conrad was named a Lifetime Influential Woman and Rene Collins was named a Rising Star, both by Pensions & Investments. The investment team also launched Investment Days, part of the SHIFT Initiative, to help navigate the major shift in the investment world. The full investment and investment operations teams will meet four to five times per year on Fridays, rotating between the Jefferson City and St. Louis offices. The first session was held Sept. 25, with the next scheduled for December 5, and the goal is to deepen the culture and expertise of the investment team.

Lastly, Board Chair Beth Knes was reappointed to the PSRS/PEERS Board by Governor Kehoe.

Together, these accomplishments reflect continued progress in employer engagement, staff development, recognition of investment talent, and Board continuity.

CPI-U Update

Mr. Dearld Snider reviewed the COLA policy set by the Board of Trustees at their November 3, 2017, meeting. According to the policy, COLAs may be granted based on the CPI-U as follows:

Snider explained that the Consumer Price Index for Urban Consumers (CPI-U) is calculated by the Bureau of Labor Statistics (BLS). The CPI-U is the measure of the change in prices of goods and services purchased by urban consumers between any two time periods. A PSRS/PEERS regulation requires that the time period for the CPI-U calculation used in the determination of a COLA be from June to June. Based on the values provided by the BLS, the CPI-U calculation for fiscal year 2026-2027 is 0.89% through  Sept. 30, 2026. The October 2026 CPI-U update will be released Nov. 10, 2026.

Dr. Eric Park: Plaque Presentation and Comments

Dearld Snider presented former trustee Dr. Eric Park with a plaque and thanked him for his more than five years of service to the Systems and Missouri Public School Educators across the state.

Public Comment

None

Other

None

Closed Session

The Board went into closed session at 11:28 p.m.

State of the Systems Address

The Board voted to go back into open session for the State of the Systems' Address and Associations Meeting. 

Dearld Snider presented the State of the Systems in October 2026, covering membership and service, investments, the actuarial valuation, and the outlook for the Systems.

The presentation opened with membership. As of June 30, 2026 (unaudited), PSRS/PEERS served 328,196 total members, including 173,366 in PSRS and 154,830 in PEERS. Total membership has grown 13.5% over the past five years, with active membership up 3.3% and retiree membership up 14.8%.

On service and cost, the 2025 CEM Benchmarking results showed PSRS/PEERS delivering high service at low cost, with a total service score of 90 and an administration cost per active member and annuitant that is $27 below the peer average.

On investments, the market value of invested assets was $68.6 billion as of June 30, 2026. Returns were 12.9% over one year, 7.5% over five years, 9.7% over 10 years, and 7.7% over 20 years, partially net of fees. Over the 10 years ended June 30, 2026, investment return exceeded 67% of other public plans while risk was lower than 67% of those plans, based on the Wilshire TUCS universe of public pension plans with assets over $1 billion. The presentation also discussed the investment "trilemma" of earning the 7.3% assumed rate of return, exceeding the policy benchmark, and achieving returns with lower volatility, noting that this combination is rare. It illustrated why the path of returns matters: The same 7.3% annualized return over 10 years can leave a plan anywhere from 76% to 131% funded, depending on the order of returns.

The actuarial valuation section, based on the preliminary June 30, 2026, valuation, showed both Systems above 88% prefunded, with PSRS at 88.2% and PEERS at 89.7%. The recommendation for Fiscal Year 2028 is no change to contribution rates, keeping PSRS at 29% (14.5% each for members and employers) and PEERS at 13.72% (6.86% each for members and employers). This will be the 17th year of steady contribution rates. A 2% cost-of-living adjustment is also recommended for Jan. 1, 2027, which would bring total COLAs from 2021 through 2027 to 20%.

Mike Moorefield from PSRS/PEERS then asked those in attendance from the education associations to share any concerns or goals they have for the upcoming legislative year. Representatives from the Missouri National Education Association, Missouri State Teachers Association, Missouri Retired Teachers Association, Missouri Association of School Administrators, and Missouri Association of Rural Education were all present on behalf of their Associations.

Adjournment

The Board adjourned at 1:50 p.m.

This summary is not official minutes of the PSRS/PEERS Board of Trustees meeting. The official minutes will be approved at the next PSRS/PEERS Board of Trustees meeting and will be posted to our website at that time.