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Indian River County, Florida <br />Notes To Financial Statements <br />Year Ended September 30, 2020 <br />NOTE 14 - OTHER POSTEMPLOYMENT BENEFITS PLAN (OPEB) - Continued <br />E. Discount Rate - Continued <br />Calculation of the Single Discount Rate - Continued <br />The Single Discount Rate (SDR) is equivalent to applying these two rates to the benefits that <br />are projected to be paid during the different time periods. The SDR reflects (1) the <br />long-term expected rate of return on OPEB Plan investments (during the period in which <br />the fiduciary net position is projected to be sufficient to pay benefits) and (2) tax-exempt <br />municipal bond rate based on an index of 20 -year general obligation bonds with an average <br />AA credit rating as of the measurement date (to the extent that the contributions for use <br />with the long-term expected rate of return are not met). <br />For the purpose of this valuation the expected rate of return on OPEB Plan investments is <br />6.00%, the municipal bond rate is 2.41%; and the resulting SDR is 6.00%. The County has <br />adopted a broadly diversified investment portfolio composition consisting of equity, debt, <br />and cash. Asset allocations are divided between short-term and long-term investments. <br />Short-term asset allocations include cash and investments with maturities of 180 days or <br />less. Long-term asset allocations range from 0-60% for equities, 0-60% for fixed income <br />securities, and 0-100% for cash. <br />The County has a policy and a track record of depositing a full amount of the Actuarially <br />Determined Contribution developed under the Entry Age Method. Consequently, the plan's <br />fiduciary net position is projected to be sufficient to pay benefits and the resulting SDR is <br />6.00%. <br />F. Sensitivity of Net OPEB Liability <br />Regarding the sensitivity of the net OPEB liability to changes in the SDR, the following <br />presents the plan's net OPEB liability, calculated using a SDR of 6.00%, as well as what the <br />plan's net OPEB liability would be if it were calculated using a SDR that is one percent lower <br />or one percent higher: <br />Sensitivity of Net OPEB Liability <br />to the Single Discount Rate Assumption <br />1% Decrease <br />(5.00%) <br />$ 3,857,389 <br />Current Single Discount <br />Rate Assumption <br />(6.00%) <br />1% Increase <br />(7.00%) <br />$ 1,384,640 $(864,355) <br />101 <br />