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Indian River County, Florida <br />Notes To Financial Statements <br />Year Ended September 30, 2020 <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, 2020 <br />actuarial valuation was determined using the following actuarial assumptions, applied to all <br />periods included in 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, 2020 <br />June 30, 2020 <br />2.21% <br />N/A <br />2.21% <br />2.40% <br />3.25% average, including inflation <br />PUB -2010 base table, projected <br />generationally with Scale MP -2018 <br />Individual Entry Age <br />The actuarial assumptions that determined the total HIS Program pension liability used in <br />the July 1, 2020 valuation were based on the results of an actuarial experience study for <br />the period July 1, 2013 through June 30, 2018. The following changes in actuarial <br />assumptions occurred in 2020: <br />• The municipal rate used to determine the total pension liability decreased from 3.87% <br />to 2.21%. <br />• The mortality assumption changed from Generational RP -2000 with Projection Scale BB <br />tables to the PUB -2010 base table, projected generationally with Scale MP -2018. <br />Discount Rate for HIS Program: In general, the discount rate for calculating the total <br />pension liability is equal to the single rate equivalent to discounting at the long-term <br />expected rate of return for benefit payments prior to the projected depletion date. <br />Because the HIS Program is essentially funded on a pay-as-you-go basis, the depletion date <br />is considered to be immediate. The single equivalent discount rate is equal to the <br />municipal bond rate selected by the plan sponsor. The Bond Buyer General Obligation <br />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 <br />on a pay-as-you-go basis. As such, there is no assumption for a long-term expected rate of <br />return on a portfolio, no assumptions for cash flows into and out of the pension plan, or <br />assumed asset allocation. <br />92 <br />