SWBNO pension funding improves to 73%; board finalizes $10M infrastructure allocation

SWBNO pension funding improves to 73%; board finalizes $10M infrastructure allocationStrong investment returns have reduced the Sewerage and Water Board of New Orleans' unfunded pension liability to $98.8 million, allowing the utility to lower its 2026 contribution rate while finalizing agreements with Brookfield and IFM for global infrastructure investments.

The utility's pension funded ratio increased to 73.65%, up from 70.2% two years ago, driven by strong investment returns of 17% in 2024 and 13.5% in 2025.

Board members approved a reduced employer contribution rate of 18.16% for 2026, totaling an estimated $11.28 million.

The committee advanced a corrective resolution to finalize a $10 million global infrastructure allocation split evenly between investment managers Brookfield and IFM.

The Sewerage and Water Board of New Orleans (SWBNO) is seeing steady improvements in the financial health of its pension system, allowing the utility to slightly lower its upcoming employer contribution rate while finalizing new external investment allocations. During a July 8, 2026, pension committee meeting, actuary Mitchell Bilbe presented the January 1, 2026, actuarial valuation report, revealing that the plan's funded ratio has improved to 73.65%, up from 70.2% two years prior. The plan currently holds an actuarial value of assets of $276 million against an actual accrued liability of $374.8 million, leaving an unfunded liability of $98.8 million. Bilbe noted the improved funded status was largely driven by robust investment returns that exceeded the plan's 7% long-term expected return assumption, netting 17% in 2024 and 13.5% in 2025. Additionally, the board adopted an updated mortality assumption based on the PUB 2016 tables, adjusted for Louisiana's higher mortality rates, which reduced the total liability by $600,000. Because of the plan's positive trajectory, SWBNO's employer contribution rate will decrease from 18.3% to 18.16% of payroll for 2026. The committee unanimously approved Resolution 94-2026 to accept this rate, which translates to an estimated $11.28 million utility contribution for the year. Employee contributions will remain flat at 6%. In a separate financial action, the committee advanced Resolution 066A-2026, a corrective measure formalizing the utility's global infrastructure investment allocations. The board had previously selected Brookfield and IFM to manage a 7% asset allocation, but the initial resolution contained descriptive errors. A staff member clarified that the corrected resolution explicitly names the two firms and confirms they will split a total allocation of $10 million—equating to $5 million each—rather than $10 million per firm as incorrectly stated in a prior public meeting. The updated language also removes the word "private" from the asset class description to ensure consistency with the utility's investment policy statement regarding "global infrastructure." Funding for the new managers is expected to be completed by September 30, 2026. Finally, staff addressed retiree concerns regarding recent state legislation altering SWBNO's governance. Utility counsel clarified that while the legislation could theoretically change the future composition of the pension’s Board of Trustees if the utility's Board of Directors changes, it does not directly impact the management or benefits of the pension system itself, and strict fiduciary constraints remain in place.