ACFR - FY2021 FINAL 5-13-22 USE THIS ONE - Flipbook - Page 86
NOTES TO FINANCIAL STATEMENTS
CITY OF EUSTIS, FLORIDA
(Continued)
Note 5 - Pension Funds (Continued)
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Actuarial Assumptions - The total pension liability on June 30, 2021, actuarial
valuation was determined using the following actuarial assumption, applied to all
periods included in the measurement:
Inflation
Salary increases
Investment rate of return
2.40 %
3.25 %, average, including inflation
6.80% net of pension plan investment
expense, including inflation
Mortality rates were based on the Generational PUB-2010 with Projection Scale MP2018 tables.
The actuarial assumptions used on July 1, 2021; valuation was based on the results
of an actuarial experience study for the period from July 1, 2013, through June 30,
2018.
The long-term expected rate of return on Pension Plan investments was not based
on historical returns but 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 actual
geometric 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
1.00%
20.00%
54.20%
10.30%
10.80%
3.70%
100.00%
2.10%
3.80%
8.20%
7.10%
11.70%
5.70%
38.60%
(1) As outlined in the Pension Plan's investment policy
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