Agenda Packet 12-9-19 Meeting - Laserfiche WebLink

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CITY OF EUGENE, OREGON Notes to Basic Financial Statements continued (5) Other Information, continued (C) Retirement Plan – Oregon PERS (OPERS), continued Actuarial Valuations, continued The total pension liability in the December 31, 2016 actuarial valuation was determined using the following: Valuation Date:December 31, 2016 Measurement Date: June 30, 2018 Experience Study Report: 2016, published July 26, 2017 Actuarial cost method Entry Age Normal Amortization method: Amortized as a level percentage of payroll as layered amortization bases over a closed period; Tier One/Tier Two UAL is amortized over 20 years and OPSRP pension UAL is amortized over 16 years. Asset valuation method: Market value of assets Inflation rate:2.50% Investment rate of return: 7.20% Discount Rate:7.20% Projected salary increases: 3.50% Cost of living adjustments Blend of 2.00% COLA and graded COLA (1.25%/0.15%) in accordance with Moro decision; blend based on service. Mortality:Healthy retirees and beneficiaries: RP-2014 Healthy annuitant, sex-distinct, generational with Unisex, Social Security Data Scale, with collar adjustments and set-backs as described in the valuation. Active members: RP-2014 Employees, sex-distinct, generational with Unisex, Social Security Data Scale, with collar adjustments and set-backs as described in the valuation. Disabled retirees: RP-2014 Disabled retirees, sex-distinct, generational with Unisex, Social Security Data Scale. Actuarial assumptions Actuarial valuations of an ongoing plan involve estimates of the value of projected benefits and assumptions about the probability of events far into the future. Actuarially determined amounts are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. Experience studies are performed as of December 31 of even numbered years. The methods and assumptions shown above are based on the 2016 Experience Study which reviewed experience for the four-year period ending on December 31, 2016. GASB Statement No. 68 reporting requirements allows for the measurement date (June 30, 2018) to be 12 months prior to the reporting date (June 30, 2019) and the actuarial valuation date (December 31, 2016) to be 30 months prior to the reporting date. The new pension asset (liability) for the June 30, 2019 reporting data will be based on the December 31, 2017 actuarial valuation date. Discount Rate The discount rate used to measure the total pension liability was 7.20% for the Defined Benefit Pension Plan. The projection of cash flows used to determine the discount rate assumed that contributions from plan members and those of the contributing employers are made at the contractually required rates, as actuarially determined. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments for the Defined Benefit Pension Plan was applied to all periods of projected benefit payments to determine the total pension liability. 69 December 9, 2019, Meeting - Item 2CCC Agenda - Page 113