ACFR - FY2020 5-28-21 FINAL - Flipbook - Page 78
NOTES TO FINANCIAL STATEMENTS
CITY OF EUSTIS, FLORIDA
(Continued)
Note 5 - Pension Plans (Continued)
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Actuarial Assumptions - The total pension liability in the June 30, 2019 actuarial
valuation was determined using the following actuarial assumption, applied to all
period included in the measurement:
Inflation
Salary increases
Investment rate of return
2.50 %
2.00%, average, including inflation
N/A net of pension plan investment
expense, including inflation
Mortality rates were based on the Generational RP-2000 with Projection Scale BB
tables.
The actuarial assumptions used in the July 1, 2020, valuation were based on the
results of an actuarial experience study for the period July 1, 2018 through June 30,
2019.
The long-term expected rate of return on Pension Plan investments was not based
on historical returns, but instead is based on a forward-looking capital market
economic model. The allocation policy’s description of each asset class was used to
map the target allocation to the asset classes shown below. Each asset class
assumption is based on a consistent set of underlying assumptions and includes an
adjustment for the inflation assumption. The target allocation and best estimates of
arithmetic and geometric real rates of return for each major asset class are
summarized in the following table:
Asset Class
Cash
Fixed Income
Global Equity
Real Estate (Property)
Private Equity
Strategic Investments
Total
Target
Allocation (1)
Annual
Arithmetic
Return
0.00%
19.00%
54.00%
10.30%
11.10%
5.60%
100.00%
2.20%
3.00%
8.00%
6.40%
10.80%
5.50%
35.90%
(1) As outlined in the Pension Plan's investment policy
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