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Indian River County, Florida <br />Notes To Financial Statements <br />Year Ended September 30, 2018 <br />NOTE 13 - RETIREMENT PLAN - Continued <br />Retiree Health Insurance Subsidy (HIS) Program - Continued <br />Actuarial Assumptions: The total pension liability for the HIS Program in the July 1, 2018 actuarial <br />valuation was determined using the following actuarial assumptions, applied to all periods included in <br />the measurement: <br />Valuation date: <br />Measurement date: <br />Discount rate: <br />Long-term expected rate of return: <br />Municipal bond rate: <br />Inflation: <br />Salary increase: <br />Mortality: <br />Actuarial cost method: <br />July 1, 2018 <br />June 30, 2018 <br />3.87% <br />N/A <br />3.87% <br />2.60% <br />3.25%, average, including inflation <br />Generational RP -2000 with Projections Scale BB <br />Individual Entry Age <br />The actuarial assumptions that determined the total HIS Program pension liability used in the July 1, <br />2018 valuation were based on the results of an actuarial experience study for the period July 1, 2008 <br />through June 30, 2013. <br />The following changes in actuarial assumptions occurred in 2018: <br />• The municipal rate used to determine the total pension liability was increased from 3.58% to 3.87%. <br />Discount Rate for HIS Program: In general, the discount rate for calculating the total pension liability is <br />equal to the single rate equivalent to discounting at the long-term expected rate of return for benefit <br />payments prior to the projected depletion date. Because the HIS Program is essentially funded on a <br />pay-as-you-go basis, the depletion date is considered to be immediate. The single equivalent discount <br />rate is equal to the municipal bond rate selected by the plan sponsor. The Bond Buyer General <br />Obligation 20 -Bond Municipal Bond Index was adopted as the applicable municipal bond index. <br />Long-term Expected Rate of Return: As stated above, the HIS Program is essentially funded on a pay- <br />as-you-go basis. As such, there is no assumption for a long-term expected rate of return on a portfolio, <br />no assumptions for cash flows into and out of the pension plan, or assumed asset allocation. <br />92 <br />