Reso 2020-033 CAFR for Fiscal Year Ended June 30, 2019

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