2022 Annual Comprehensive Financial Report

Actuarial Assumptions The total OPEB liability was determined by an actuarial valuation as of June 30, 2020 using the following actuarial assumptions applied to periods included in the measurement, unless otherwise specified:

Inflation

2.50% 0.75% 3.25%

Real wage growth Wage inflation

Salary increases, including wage inflation General employees

3.25% - 8.41% 3.25% - 8.15% 3.25% - 7.90%

Firefighters

Law enforcement officers

Long-term investment rate of return (LIRR), net of OPEB plan investment expense, including price inflation

5.50%

Municipal bond index rate Prior measurement date

2.16% 3.54%

Measurement date

Year Fiduciary net position is projected to be depleted Prior measurement date

2038 2036

Measurement date

Single equivalent interest rate (SEIR), net of OPEB plan investment expense, including price inflation Prior measurement date

3.00% 4.02%

Measurement date

Health care cost trends

7.00% for 2020 decreasing to an ultimate rate of 4.50% by 2030

Pre-medicare

Mortality rates were based on the Pub-2010 mortality tables, with adjustments for LGERS experience and generational mortality improvements using Scale MP-2019. The demographic actuarial assumptions for retirement, disability incidence, withdrawal, and salary increases used in the June 30, 2020 valuation were based on the results of an actuarial experience study for the period January 1, 2015 - December 31, 2019, adopted by the LGERS Board.

Discount rate The discount rate used to measure the total OPEB liability was based on the LIRR and the SEIR. The projection of cash flows used to determine the discount rate assumed that contributions from employers will be made to pay benefits directly to Plan members as they come due and to contribute the average of contributions made during the last five years to the OPEB Benefit Trust each year. Based on these assumptions, the Plan’s fiduciary net positon was projected to be available to make all projected future benefit payments of the current Plan members until 2036. Therefore, the long-term expected rate of return on OPEB investments was applied to those periods of projected benefit payments and then the SEIR was used to determine the total OPEB liability.

37pp