2025 Annual Comprehensive Report

Deferred Outflows

Deferred Inflows

of Resources

of Resources

Differences between expected and actual experience

$

7,569,535

$

Changes of assumptions and other inputs

648,687

Net difference between projected and actual earnings on pension plan investments City contributions subsequent to the measurement date

970,930

1,847,118 10,065,340

Total

$

$

970,930

$1,847,118 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a decrease of the net pension liability in the year-ended June 30, 2026. Other amounts reported as deferred inflows and deferred outflows of resources related to pensions will be recognized in pension expense as follows:

Year ended June 30: 2026

$

2,610,861 1,912,402 1,334,399 896,150 493,480 7,247,292

2027 2028 2029 2030

$

Actuarial Assumptions The entry age normal actuarial cost method, amortized on a level dollar closed period was used in the December 31, 2023 actuarial valuation. The total pension liability rolled forward to December 31, 2024 was determined using the following actuarial assumptions, applied to all periods included in the measurement:

Inflation

2.5 percent

Salary Increases

3.25 to 7.75 percent, including inflation 5.50 percent, net of pension plan investment expense, including inflation

Investment rate of return

The plan currently uses mortality tables that vary by age, and health status (i.e. disabled and healthy). The current mortality rates are based on published tables and based on studies that cover significant portions of the U.S. population. The healthy mortality rates also contain a provision to reflect future mortality improvements. The actuarial assumptions used in the December 31, 2023 valuation were based on the results of an actuarial experience study for the period January 1, 2015 through December 31, 2019. The rates of mortality for the period after service retirement are according to the Pub-2010 amount-weighted Safety Mortality Table for retirees projected from 2010 using generational improvement with Scale MP-2019. Investment Policy and Long-Term Expected Rate of Return The Separation Allowance’s investment policy, adopted by the City Council in April 2017, allows for investment in instruments authorized by G.S. 159-30 as well as investments available to the North Carolina State Treasurer when managing funds with the same purpose. The investment policy may be amended by a majority vote of Council members. The following was the City Council’s adopted asset allocation policy as of June 30, 2025:

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