Message From the President

  • Author | Michael G. Fann
  • 3/19/2024 1:30 pm

Dear Partners,

Public Entity Partners is proud of its financial history and the stability that has historically allowed dividends to be returned to its members. Since 1997, Public Entity Partners has returned a total of $132 million to the membership in the form of a dividend credit, applied to the renewal invoices of qualifying members. This does not include the additional $7 million of COVID-19 Emergency Relief funds that were returned to our members in FY 2020.

Base rates are forward-looking and cover the current risk exposures of members. PE Partners uses an independent, third-party actuary to evaluate loss history and current exposures to ensure that base rates are adequate for covering the cost of claims. Dividend recommendations provided to PE Partners’ Board of Directors take past performance into account.

As most members are aware, the Board of Directors did not declare a dividend for the 2023-2024 renewal year. This was only the second time in the history of the PE Partners dividend program that a dividend was not declaredIn October 2022, 30-year yields rose over 4% for the first time since 2011, two-year yields surged to the highest since 2007 and the consumer price index experienced the highest increase since 1982. 

All these factors caused treasuries to tumble, leaving investment portfolios across the country with unrealized losses. As a result, PE Partners made the conservative financial decision to forego a dividend for the 2023-2024 year, which we believe was in the best long-term interest of our membership.

As part of the GASB (Governmental Accounting Standards Board®) standards that PE Partners is held to, we are required to book unrealized losses on our investments. From December 2022 to December 2023, the unrealized losses on our investments decreased significantly. During the same period, based on our yearly actuarial study, the Reserve for Losses & Loss Expenses also decreased. Both of these events resulted in positive financial results for PE Partners.

PE Partners also uses a Capital Adequacy Policy to set desired benchmarks for its unrestricted net position. Even with the fluctuations within the market, along with the national economic downturn, our financial strength remained within our preferred Capital Adequacy range as defined by our actuarial studies and approved by our Board of Directors. 

Public Entity Partners is pleased to report that a dividend of $4 million for the upcoming 2024-2025 renewal period was approved by our Board of Directors. We stand committed to the service we provide to our risk-sharing partnership, which includes more than 300 cities and towns and 180-plus local service agencies. We work diligently to confidently provide the financial strength you rely on — for today and the years ahead. 
Michael G. Fann, President/ CEO
Public Entity Partners