Laserfiche WebLink
CITY OF SAN LEANDRO <br />NOTES TO BASIC FINANCIAL STATEMENTS <br />For The Year Ended June 30, 2019 <br /> <br /> <br />NOTE 13 – PENSIONS PLAN (Continued) <br /> <br />B. Information Common to the Miscellaneous and Safety Plans <br /> <br />The City’s net pension liability for each Plan is measured as the total pension liability, less the pension <br />plan’s fiduciary net position. The net pension liability of each of the Plan is measured as of June 30, <br />2018, using an annual actuarial valuation as of June 30, 2017 rolled forward to June 30, 2018 using <br />standard update procedures. A summary of principal assumptions and methods used to determine the net <br />pension liability is shown below. <br /> <br />Actuarial Assumptions – The total pension liabilities in the June 30, 2017 actuarial valuations were <br />determined using the following actuarial assumptions: <br /> <br />All Plans <br />Valuation Date June 30, 2017 <br />Measurement Date June 30, 2018 <br />Actuarial Cost Method Entry-Age Normal Cost Method <br />Actuarial Assumptions: <br />Discount Rate 7.15% <br />Inflation 2.50% <br />Payroll Growth 3.0% <br />Projected Salary Increase Varies by Entry Age and Service <br />Investment Rate of Return 7.15% (1) <br />Mortality Derived using CalPERS Membership Data for all Funds (2) <br /> Post Retirement Benefit Increase <br />Contract COLA up to 2.00% until Purchasing Power Protection <br />Allowance Floor on Purchasing Power applies 2.50% thereafter. <br />(1) Net of pension plan investment and adminstrative expenses, including inflation. <br />(2) The mortality table used was developed based on CalPERS' specific data. The table includes <br />15 years of mortality imporvements using the Society of Actuaries Scale 90% of scale MP <br />2016. For more details on this table, please refer to the December 2017 experience study <br />report (based on CalPERS demographic data from 1997 to 2015) that can be found on the <br />CalPERS website. <br /> <br />Change of Assumptions – For the measurement date of June 30, 2018, the inflation rate was reduced <br />from 2.75% to 2.50%. <br /> <br />Discount Rate – The discount rate used to measure the total pension liability for each Plan was 7.15%. <br />The projection of cash flows used to determine the discount rate for each Plan assumed that contributions <br />from all plan members in the Public Employees Retirement Fund (PERF) will be made at the current <br />member contribution rates and that contributions from employers will be made at statutorily required <br />rates, actuarially determined. Based on those assumptions, each Plan's fiduciary net position was <br />projected to be available to make all projected future benefit payments of current plan members for all <br />plans in the PERF. Therefore, the long-term expected rate of return on plan investments was applied to all <br />periods of projected benefit payments to determine the total pension liability for each Plan. <br /> <br />The long-term expected rate of return on pension plan investments was determined using a building-block <br />method in which best-estimate ranges of expected future real rates of return (expected returns, net of <br />pension plan investment expense and inflation) are developed for each major asset class. <br /> <br /> <br />78225