Laserfiche WebLink
Indian River County, Florida <br />Notes To Financial Statements <br />Year Ended September 30, 2016 <br />NOTE 13 - RETIREMENT PLAN - Florida Retirement System (FRS) - Continued <br />Pension Plan - Continued <br />• The mortality assumption applied to active members was updated to better anticipate expected <br />future experience. <br />Long-term Expected Rate of Return: The long-term expected rate of return on pension plan investments <br />are not based on historical returns, but instead are based on a forward-looking capital market economic <br />model. The allocation policy's description of each class was used to map the target allocation to the <br />asset classes shown below. Each asset class assumption is based upon a consistent set of underlying <br />assumptions and includes an adjustment for the inflation assumption. The target allocation and best <br />estimates of arithmetic and geometric real rates of return for each major asset class are summarized in <br />the following table: <br />Asset Class <br />Cash <br />Fixed Income <br />Global Equity <br />Real Estate (Property) <br />Private Equity <br />Strategic Investments <br />Total <br />Assumed inflation -mean. <br />Annual <br />Target Arithmetic <br />Allocation Return <br />1% 3.0% <br />18% 4.7% <br />53% 8.1% <br />10% 6.4% <br />6% 11.5% <br />12% 6.1% <br />100% <br />88 <br />Compound <br />Annual <br />(Geometric) <br />Return <br />3.0% <br />4.6% <br />6.8% <br />5.8% <br />7.8% <br />5.6% <br />2.6% <br />Standard <br />Deviation <br />1.7% <br />4.6% <br />17.2% <br />12.0% <br />30.0% <br />11.1% <br />1.9% <br />