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Indian River County, Florida Sheriff Notes To Financial Statements Year Ended September 30, 2017 NOTE 5 — PENSION PLAN - Continued Florida Retirement System - Continued Pension Liabilities: At September 30, 2017, the Division of Retirement calculated the Sheriffs liability of $39,773,209 for the FRS plan and $8,074,827 for the HIS Program, for a total of $47,848,036 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2017, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2017. The Sheriffs proportion of the net pension liability was based on a projection of the Sheriffs long-term share of contributions to the Pension Plan relative to the projected contributions of all participating employers, actuarially determined. At September 30, 2017, the Sheriffs proportion was .134463% for the FRS Pension Plan and .075519% for the HIS Program. Discount Rate for Pension Plan: The discount rate used to measure the total pension liability was 7.10%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that the Sheriffs contributions will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Pension Plans' fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Sensitivity of the Sheriffs Proportionate Share of the Net Position Liability to Changes in the Discount Rate for the Pension Plan: The following presents the Sheriff s proportionate share of the net pension liability (NPL) of the Pension Plan calculated using the discount rate of 7.10%. Also presented is what the Sheriffs proportionate share of the FRS plan NPL would be if it were calculated using a discount rate that is I% lower or I% higher than the current rate: Sheriff s proportionate share of NPL 1 % Decrease (6.10% $ 71,987,106 Current Discount Rate (7.10%) $ 39,773,209 I% Increase (8.10% $ 13,028,294 Discount rate for the HIS Program: In general, the discount rate for calculating the 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 Program is essentially funded on a pay- as-you-go basis, the depletion date is considered to be immediate. The single equivalent discount rate is equal to the municipal bond rate selected by the plan sponsor. The Bond Buyer General Obligation 20 - Bond Municipal Bond Index was adopted as the applicable municipal bond index.