Mortality rates in the July 1, 2020 valuation for disabled individuals reflects the Pub-2010
Public Retirement Plans Amount-Weighted Mortality Tables, projected to the valuation
date with Scale MP-2019, setback 10 years (previously was the RP-2014 Adjusted to 2006
Blue Collar Mortality Table projected to the valuation date with Scale MP-2018, setback 10
years).
Target Allocation
The long-term expected rate of return on pension plan investments was selected from a best
estimate range determined using the building block approach. Under this method, an expected
future real return range (expected returns, net of pension plan investment expense and inflation)
is calculated separately for each asset class. These ranges are combined to produce the long-term
expected rate of return by weighting the expected future real rates of return net of investment
expenses by the target asset allocation percentage and by adding expected inflation. The target
allocation and best estimates of arithmetic real rates of return for each major class are
summarized in the following table:
Long-term
Expected
Target Real Rate
Asset Class Allocation ofRetum Weighting
Intermediate Bond 40.00% 2.00% 0.80%
US Large Cap Equity 30.00% 6.25% 1.88%
US Small Cap Equity 10.00% 7.75% 0.78%
International Equity 20.00% 6.00% 1.20%
Total 100.00% 4.66%
Inflation 2.40%
Expected arithmetic nominal return 7.06%
Discount Rate
The discount rate used to measure the total pension liability was 7.00%. The projection of
cash flows used to determine the discount rate assumed that the plan member contributions
will be made at the current contribution rate and that employer contributions will be made
at contractually required rates, actuarially determined. Based on those assumptions, the
pension plan’s fiduciary net position was projected to be available to make all projected
future benefit payments to current active and inactive plan members. Therefore, the long-
term expected rate of return on pension plan investments was applied to all periods of
projected benefit payments to determine the total pension liability.
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