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PROCESS 0 <br /> Part 2 <br /> range of reasonableness. As a practical matter, the Actuary should discuss key assumptions and <br /> methods with the employer, including recommendations . The employer should communicate the <br /> chosen assumptions and methods to the Actuary for use in the valuation. <br /> This is the approach GRS will follow in its engagement with Indian River County. Please see <br /> "Analysis of Methods" on page 37 of this section for a further discussion of the determination of <br /> actuarial and amortization methods . <br /> KEY ASSUMPTIONS <br /> Demographic and Economic Assumptions <br /> ( Turnover , Retirement Age , Disability Retirement Age , Mortality , <br /> Projected Salary Increases , Inflation Rate , etc . ) <br /> Assumptions that relate to the population should match those used in any related pension <br /> valuation, especially when actuarial experience studies have been performed to set the <br /> demographic assumptions . There are times however, when certain demographic assumptions <br /> used in the pension valuations are not appropriate for an OPEB valuation . For most OPEB plan <br /> structures, salary levels are not relevant to the benefits or member contributions required. <br /> However, the pattern of future salary increases can be used to develop the expected pattern of the <br /> County' s Normal Cost and its amortization payment. Again, it is generally best to follow the <br /> pension assumptions for salary increases, when performing the OPEB valuation. <br /> The assumed rate of general price inflation will also generally match those in the related pension <br /> valuation. <br /> Health Care Trend Data <br /> GRS has national and regional data that will be used in setting the health care trend rate. This <br /> rate starts higher (generally in the 9% to 11 % range for medical and higher for prescription <br /> drugs) and then ratchets down to about 4% to 5 % in perpetuity. We will look at the experience <br /> and history in Indian River County region and discuss the usage of this assumption with the <br /> County in the course of this valuation. There are several other health-related assumptions which <br /> must be developed and adopted. These include participation or acceptance rates , lapse rates , <br /> Medicare offsets , and others . <br /> Amortization Timeframe <br /> This assumption is at the discretion of the County. GRS will provide guidance and suggestions <br /> to ensure that the timeframe is within the Actuary' s range of reasonableness . <br /> G Gabriel Roeder Smith & Company 36 <br />