Resolution No. 5146 - Laserfiche WebLink

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CITY OF EUGENE, OREGON Notes to Basic Financial Statements (5) Other Information, continued (C) Retirement Plan – Oregon PERS (OPERS), continued Long-Term Expected Rate of Return, continued Each asset class assumption is based on a consistent set of underlying assumptions, and includes adjustment for the inflation assumption. These assumptions are not based on historical returns, but instead are based on a forward- looking capital market economic model. Compound Annual Return Asset class Target (Geometric) Core fixed income 7.20%4.50% Short-term bonds 8.00%3.70% Intermediate-term bonds 3.00%4.10% High yield bonds 1.80%6.66% Large cap US equities 11.65%7.20% Mid cap US equities 3.88%7.30% Small cap US equities2.27%7.45% Developed foreign equities 14.21%6.90% Emerging foreign equities 5.49%7.40% Private equity 20.00%8.26% Opportunity funds/absolute return 5.00%6.01% Real estate (Property) 13.75%6.51% Real estate (REITS) 2.50%6.76% Commodities 7.71%6.07% Assumed inflation – mean 2.75% Sensitivity of the City's proportionate share of the net pension asset (liability) to changes in the discount rate The following presents the City's proportionate share of the net pension asset (liability) calculated using the discount rate of 7.75%, as well as what the City's proportionate share of the net pension asset (liability) would be if it were calculated using a discount rate that is 1 percentage-point lower (6.75%) or 1 percentage-point higher (8.75%) than the current rate: Current 1% DecreaseDiscount rate1% Increase (6.75%)(7.75%)(8.75%) City’s proportionate share of the net pension liability (asset) $64,598,235 (30,504,733)(110,939,775) Pension plan fiduciary net position Detailed information about the pension plan's fiduciary net position is available in the separately issued OPERS financial report Changes in Plan Provisions Subsequent to Measurement Date The Oregon Supreme Court on April 30, 2015, ruled that the provisions of Senate Bill 861, signed into law in October 2013, that limited the post-retirement COLA on benefits accrued prior to the signing of the law was unconstitutional. Benefits could be modified prospectively, but not retrospectively. As a result, those who retired before the bills were passed will continue to receive a COLA tied to the Consumer Price Index that normally results in a 2.0% increase annually. OPERS will make restoration payments to those benefit recipients. continued 74