ACFR - FY2020 5-28-21 FINAL - Flipbook - Page 82
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 July 1, 2020, actuarial
valuation was determined using the following actuarial assumptions, applied to all
periods included in the measurement:
Inflation
2.50 %
Salary increases
2.00%, average, including inflation
Municipal bond rate
2.66%
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.
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Discount Rate - The discount rate used to measure the total pension liability was
2.21%. In general, the discount rate for calculating the total pension liability is equal to
the single rate equivalent to discounting at the long-term expected rate of return for
benefit payments prior to the projected depletion date. Because the HIS benefit is
essentially funded on a pay-as-you-go basis, the depletion date is considered to be
immediate, and the single equivalent discount rate is equal to the municipal bond rate
selected by the HIS Plan sponsor. The Bond Buyer General Obligation 20-Bond
Municipal Bond Index was adopted as the applicable municipal bond index.
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Sensitivity of the City’s Proportionate Share of the Net Position Liability to
Changes in the Discount Rate - The following represents the City’s proportionate
share of the net pension liability calculated using the discount rate of 2.21%, as well as
what the City’s proportionate share of the net pension liability would be if it were
calculated using a discount rate that is one percentage point lower 1.21% or one
percentage point higher 3.21% than the current rate:
HIS Net Pension Liability (Asset)
1% Decrease
1.21%
City's proportionate share of
the net pension liability
$ 237,533
65
Discount Rate
2.21%
$
205,486
1% Increase
3.21%
$ 179,256
