actuarial valuation as of july 1, 2019 · 2019-11-27 · the actuarial cost method are unchanged...

North Dakota Highway Patrolmen’s Retirement System

Actuar ia l Valuat ion as of Ju ly 1 , 2019

Table of Contents

North Dakota Highway Patrolmen’s Retirement System Actuarial Valuation Report as of July 1, 2019

i

Section Page Introduction

A Actuarial Valuation Results 1-3 Comments on the Actuarial Valuation 4-6 Risk Measures 7

8 Summary of Actuarial Valuation Results Actuarial Valuation Results – Gain/Loss Analysis

9 Historical Trends of Funded Ratio and Employer Contributions 10

11 Actuarial Valuation Results Solvency Test Funded Ratio History

B Asset Exhibits 1 Statement of Fiduciary Net Position 2 Statement of Changes in Fiduciary Net Position 3 Development of Actuarial Value of Assets 4 Changes in Actuarial Value of Assets 5 Historical Comparison of Actuarial Value of Assets to Market

Value of Assets 6 Historical Comparison of Total Investment Income

C

Membership Data

1-2 Summary of Participant Data 3 Age/Service/Salary 4 Historical Schedule of Active Member Data 5 Summary of Active Member Data 6 Schedule of Members in Pay Status 7 Schedule of New Pensions Awarded during the Year 8 Schedule of Average Benefit Payments 9 Schedule of Retirees and Beneficiaries Added to and Removed

from the Rolls

D 1-15 GASB Statement Nos. 67 and 68 Schedules

E Actuarial Valuation Procedures 1-2 Actuarial Assumptions in the Actuarial Valuation Process 3-7 Actuarial Valuation Assumptions

F 1-4 Benefit Provisions

G 1-7 Calculation of the GASB Statement Nos. 67 and 68 Single Discount Rate

H 1-5 Glossary of Terms

November 15, 2019 Board Members North Dakota Highway Patrolmen’s Retirement System Bismarck, North Dakota Members of the Board: We are pleased to provide our formal annual Actuarial Valuation Report as of July 1, 2019, for the North Dakota Highway Patrolmen’s Retirement System (“HPRS”). The actuarial valuation was performed at the request of the Board and is intended for use by the Board and HPRS and those designated by the Board and HPRS. This report may be provided to parties other than the Board and HPRS only in its entirety and only with the permission of the Board and HPRS. GRS is not responsible for unauthorized use of this report.

The purposes of the actuarial valuation are to measure the funding progress of HPRS and to determine the actuarial employer contribution rate for the HPRS for the Plan Year commencing July 1, 2019, and ending on June 30, 2020. This actuarial valuation also provides information required by GASB Statement Nos. 67 and 68. This report should not be relied on for any purpose other than the purposes described herein. Determinations of financial results, associated with the benefits described in this report, for purposes other than those identified above may be significantly different.

The actuarial employer contribution rate in this report is determined using the actuarial assumptions and methods disclosed in Section E of this report. This report includes common risk metrics on page A-5 but does not include a more robust assessment of the risks of future experience not meeting the actuarial assumptions. Additional assessment of risks was outside the scope of this assignment. This actuarial valuation assumed the continuing ability of the plan sponsor to make the contributions necessary to fund this plan. A determination regarding whether or not the plan sponsor is actually able to do so is outside our scope of expertise and was not performed. The actuarial valuation was based upon information furnished by the NDPERS Staff, concerning benefits provided by the North Dakota Highway Patrolmen’s Retirement System, financial transactions, plan provisions and census data for active members, terminated members, retirees and beneficiaries as of July 1, 2019. We checked for internal and year-to-year consistency, but did not audit the data. We are not responsible for the accuracy or completeness of the information provided by the NDPERS Staff.

Board Members North Dakota Highway Patrolmen’s Retirement System Page 2

This report was prepared using actuarial assumptions adopted by the Board as authorized under North Dakota Administrative Code Section 71-05. All actuarial assumptions used in this report are reasonable for the purposes of this actuarial valuation. Additional information about the actuarial assumptions is included in Section E of this report. The investment return assumption was decreased from 7.75 percent to 7.50 percent since the last actuarial valuation as of July 1, 2018. All other actuarial assumptions and the actuarial cost method are unchanged from the last actuarial valuation as of July 1, 2018.

The interest rate earned on member contributions will decrease from 7.25 percent to 7.00 percent effective January 1, 2020 (based on the adopted decrease in the investment return assumption). There were no other changes since the last actuarial valuation as of July 1, 2018.

This report has been prepared by actuaries who have substantial experience valuing public employee retirement systems. To the best of our knowledge the information contained in this report is accurate and fairly presents the actuarial position of the North Dakota Highway Patrolmen’s Retirement System as of the actuarial valuation date. All calculations have been made in conformity with generally accepted actuarial principles and practices, and with the Actuarial Standards of Practice issued by the Actuarial Standards Board.

Bonita J. Wurst and Amy Williams are Members of the American Academy of Actuaries and meet the Qualification Standards of the American Academy of Actuaries to render the actuarial opinions herein.

The signing actuaries are independent of the plan sponsor.

Gabriel, Roeder, Smith & Company will be pleased to review this actuarial valuation and Report with the Board of Trustees and to answer any questions pertaining to the actuarial valuation.

Respectfully submitted,

Gabriel, Roeder, Smith & Company

Bonita J. Wurst, ASA, EA, MAAA, FCA Amy Williams, ASA, MAAA, FCA Senior Consultant Senior Consultant cc: Mr. Scott Miller, NDPERS Mr. Derrick Hohbein, NDPERS

SECTION A ACTUARIAL VALUATION RESULTS

Comments on the Actuarial Valuation


A-1

Purpose

At your request, we have performed an actuarial valuation of the North Dakota Highway Patrolmen’s Retirement System (“HPRS”) as of July 1, 2019.

The purposes of this actuarial valuation are as follows:

• To determine the funding status of the System as of the actuarial valuation date; • To determine the actuarial employer contribution rate for the fiscal year beginning July 1, 2019;

and • To provide other data required by NDPERS.

Pension plan financial reporting under GASB Statement Nos. 67 and 68 is provided in Section D of this report.

Membership Data

We received the data from the NDPERS Staff. We performed certain checks for reasonableness and found the data to be complete and reliable for actuarial valuation purposes. However, we did not audit the data.

A total of 144 active members were included in the actuarial valuation as of July 1, 2019. Between the 2018 and 2019 actuarial valuations, the number of active employees decreased by 10 members, or 6.5 percent. The average annual actuarial valuation pay increased by 3.1 percent, from $69,723 to $71,904 between the 2018 and 2019 actuarial valuation. There were 7 active members who were eligible for retirement (normal, early or Rule of 80) as of July 1, 2019.

The number of benefit recipients increased by nine since the last actuarial valuation. The average monthly benefit increased, from $3,194 to $3,342. During the year ending June 30, 2019, there were 10 members awarded a benefit.

There were 22 inactive members as of July 1, 2019, who were vested and elected to receive a deferred benefit. The average monthly deferred benefit is $2,262. There were 20 inactive members as of July 1, 2019, who elected to receive a refund of contributions.

Section C summarizes the membership data.

Plan Provisions

Section F outlines the principal benefit provisions of the HPRS. The interest rate earned on member contributions will decrease from 7.25 percent to 7.00 percent effective January 1, 2020 (based on the adopted decrease in the investment return assumption). There were no other changes since the previous actuarial valuation. The Board set the rate at 2 percent for the indexing percentage for the year beginning July 1, 2019, applicable to the final average salaries of HPRS deferred vested members.

Comments on the Actuarial Valuation (Continued)


A-2

Actuarial Assumptions and Methods

This report was prepared using actuarial assumptions adopted by the Board as authorized under North Dakota Administrative Code Section 71-05. All actuarial assumptions used in this report are reasonable for the purposes of this actuarial valuation.

Beginning with the actuarial valuation as of July 1, 2017, the Board adopted changes to the economic actuarial assumptions (excluding the salary increase assumption) and asset valuation method. The actuarial assumptions were based on a review of the economic actuarial assumptions performed by GRS. GRS did an additional review of the investment return assumption prior to the July 1, 2019 actuarial valuation. The Board adopted a decrease in the investment return assumption from 7.75 percent to 7.50 percent first effective with the actuarial valuation as of July 1, 2019. All other actuarial assumptions and the actuarial cost method are unchanged from the last actuarial valuation as of July 1, 2018.

All other actuarial assumptions used in the actuarial valuation as of July 1, 2019, were based on an experience review for the five-year period ending July 1, 2014, which was performed by the prior actuary, and were first adopted for use commencing with the July 1, 2015, actuarial valuation.

We recommend that an experience study be conducted for the period July 1, 2014 through July 1, 2019 prior to the next actuarial valuation.

Section E outlines the actuarial assumptions and methods used in the actuarial valuation. The actuarial assumption for administrative expenses is equal to the prior years’ administrative expenses, adjusted for inflation. In total, the administrative expense assumption has increased from $31,112 to $44,644.

The actuarial employer contribution rate is calculated using a 20-year open period, level percentage of payroll amortization method. The remaining amortization period will be reset to 20 years in each future actuarial valuation. We believe that calculating the actuarial contribution rate using a slightly longer period (such as 25 years) would also be reasonable.

Plan Asset Return

On a market value basis, HPRS assets had an investment return of approximately 5.45 percent (net of investment expenses). On an actuarial value of asset basis, NDPERS assets had an investment return of approximately 8.72 percent on an actuarial value of assets basis, which compares to the prior year assumed rate of return of 7.75 percent.

The actuarial value of assets is currently 99.4 percent of the market value of assets. There are $513,223 in net asset gains currently being deferred that will be phased into the actuarial value of assets over the next four years.

Gain/Loss Analysis

During the plan year ending June 30, 2019, the unfunded actuarial accrued liability (“UAAL”) increased from $22,278,028 as of July 1, 2018, to $25,412,734 as of July 1, 2019, which is an increase of $3,134,706. The key factors contributing to the increase in the UAAL were the investment return assumption change, statutory contributions that were lower than those under the actuarially determined contribution rate

Comments on the Actuarial Valuation (Continued)


A-3

and data changes and other experience. The increase was partially offset by favorable salary experience and recognition of deferred gains in the actuarial value of assets. The unfunded actuarial accrued liability based on the market value of assets is $24,899,511.

Funded Ratio

The funded ratio measures the portion of the actuarial accrued liability (calculated based on the actuarial assumptions disclosed in this report) that is currently funded. The funded ratio is 76.1 percent on an actuarial value of assets basis and 76.6 percent on a market value of assets basis.

The funded ratio and unfunded actuarial accrued liability are useful for assessing the need for and the amount of future unfunded liability contributions (excludes normal cost contributions). They are not appropriate for assessing the sufficiency of plan assets to cover the estimated cost of settling the System's benefit obligations.

Employer Contributions

The actuarially determined contribution rate is calculated as the normal cost contribution (to fund benefits accruing during the year) plus a contribution to amortize the unfunded liability. The unfunded liability contribution rate is calculated using a 20-year open period, level percentage of payroll amortization method. The remaining amortization period will be reset to 20 years in each future actuarial valuation. If employers contributed the actuarial contribution rate, the contribution rate would be expected to gradually decrease using a 20-year open amortization period as the funded ratio gradually increased. An open amortization period is expected to gradually improve the funded ratio. However, the funded ratio is not expected to reach 100 percent under this method (assuming no actuarial gains or losses) because the remaining unfunded liability at each future actuarial valuation date is re-amortized over a new 20-year period.

The contributions that are made by employers are based on fixed contribution rates that are set by statute (and not based on the actuarially determined rate). The statutory contribution rate of 19.70 percent is significantly lower than the actuarial contribution rate of 29.38 percent.

The portion of the statutory contribution that is applied toward the unfunded liability is the statutory contribution rate minus the employer normal cost rate. The unfunded liability contribution rate from the statutory contribution is lower than the rate calculated using the 20-year level percentage of payroll amortization period and is not high enough to amortize the unfunded liability over any period of time.

We recommend an increase to the statutory contribution rate such that the unfunded liability is amortized over a period of no longer than 30 years.

Historical Trends

The funded ratio declined during the past 10 years from a high of 79.8 percent in 2010, to a low of 68.2 percent in 2013, and increased to the current funded ratio of 76.1 percent.

Risk Measures


A-4

Risks Associated with Measuring the Accrued Liability and Contributions

The determination of the accrued liability and the statutory and actuarially determined contribution requires the use of actuarial assumptions regarding future economic and demographic experience. Risk measures, as illustrated in this report, are intended to aid in the understanding of the effects of future experience differing from the actuarial assumptions used in the course of the actuarial valuation. Risk measures may also help with illustrating the potential volatility in the accrued liability and the statutory and actuarially determined contribution that result from the differences between actual experience and the actuarial assumptions. Future actuarial measurements may differ significantly from the current measurements presented in this report due to such factors as the following: plan experience differing from that anticipated by the economic or demographic actuarial assumptions; changes in economic or demographic actuarial assumptions due to changing conditions; increases or decreases expected as part of the natural operation of the methodology used for these measurements (such as the end of an amortization period, or additional cost or contribution requirements based on the Plan’s funded status); and changes in plan provisions or applicable law. The scope of an actuarial valuation does not include an analysis of the potential range of such future measurements. Examples of risk that may reasonably be anticipated to significantly affect the plan’s future financial condition include:

1. Investment risk – actual investment returns may differ from the expected returns; 2. Asset/Liability mismatch – changes in asset values may not match changes in liabilities, thereby

altering the gap between the accrued liability and assets and consequently altering the funded status and contribution requirements;

3. Contribution risk – actual contributions may differ from expected future contributions. For example, actual contributions may not be made in accordance with the plan’s funding policy or material changes may occur in the anticipated number of covered employees, covered payroll or other relevant contribution base;

4. Salary and Payroll risk – actual salaries and total payroll may differ from expected, resulting in actual future accrued liability and contributions differing from expected;

5. Longevity risk – members may live longer or shorter than expected and receive pensions for a period of time other than assumed;

6. Other demographic risks – members may terminate, retire or become disabled at times or with benefits other than assumed resulting in actual future accrued liability and contributions differing from expected.

The effects of certain trends in experience can generally be anticipated. For example, if the investment return since the most recent actuarial valuation is less (or more) than the assumed rate, the cost of the plan can be expected to increase (or decrease). Likewise if longevity is improving (or worsening), increases (or decreases) in cost can be anticipated.

Risk Measures


A-5

The statutory contribution may be considered as a minimum contribution that complies with State statute. The timely receipt of contributions is critical to support the financial health of the plan. Users of this report should be aware that contributions made in accordance with the funding policy do not necessarily guarantee benefit security. Plan Maturity Measures Risks facing a pension plan evolve over time. A young plan with virtually no investments and paying few benefits may experience little investment risk. An older plan with a large number of members in pay status and a significant trust may be much more exposed to investment risk. Generally accepted plan maturity measures include the following:

2018 2019

Ratio of the Market Value of Assets to Payroll 7.35 7.86Ratio of Actuarial Accrued Liability to Payroll 9.16 10.27Ratio of Actives to Retirees and Beneficiaries 1.21 1.06Ratio of Non-Investment Cash Flow to Market Value of Assets -1.40% -2.20%

Ratio of Market Value of Assets to Payroll The relationship between assets and payroll is a useful indicator of the potential volatility of contributions. For example, if the market value of assets is 2.0 times the payroll, a return on assets 5% different than assumed would equal 10% of payroll. A higher (lower) or increasing (decreasing) level of this maturity measure generally indicates a higher (lower) or increasing (decreasing) volatility in plan sponsor contributions as a percentage of payroll. Ratio of Actuarial Accrued Liability to Payroll The relationship between actuarial accrued liability and payroll is a useful indicator of the potential volatility of contributions for a fully funded plan. A funding policy that targets a funded ratio of 100% is expected to result in the ratio of assets to payroll and the ratio of liability to payroll converging over time. The ratio of liability to payroll may also be used as a measure of sensitivity of the liability itself. For example, if the actuarial accrued liability is 2.5 times the payroll, a change in liability 2% other than assumed would equal 5% of payroll. A higher (lower) or increasing (decreasing) level of this maturity measure generally indicates a higher (lower) or increasing (decreasing) volatility in liability (and also plan sponsor contributions) as a percentage of payroll. Ratio of Actives to Retirees and Beneficiaries A young plan with many active members and few retirees will have a high ratio of active to retirees. A mature open plan may have close to the same number of actives to retirees resulting in a ratio near 1.0. A super-mature or closed plan may have significantly more retirees than actives resulting in a ratio below 1.0.

Risk Measures


A-6

Ratio of Net Cash Flow to Market Value of Assets A positive net cash flow means contributions exceed benefits and expenses. A negative cash flow means existing funds are being used to make payments. A certain amount of negative net cash flow is generally expected to occur when benefits are prefunded through a qualified trust. Large negative net cash flows as a percent of assets may indicate a super-mature plan or a need for additional contributions. Additional Risk Assessment Additional risk assessment is outside the scope of the annual actuarial valuation. Additional assessment may include scenario tests, sensitivity tests, stochastic modeling, stress tests and a comparison of the present value of accrued benefits at low-risk discount rates with the actuarial accrued liability.

Summary of Actuarial Valuation Results


A-7

Total % of Payroll Total % of Payroll

Active MembersNumber 154 144 Average Age 37.4 37.8Average Years of Benefit Service 10.6 11.2Average Years of Vesting Service 11.1 11.8Total Payroll 10,737,297$ 10,354,210$ Projected Annual Compensation 11,510,736 11,081,594

Inactive Members (Vested and Non-Vested)Number 42 42 Total Annualized Benefits (Vested) 771,841$ 597,108$ Total Accumulated Contributions (Non-vested) 482,901$ 462,981$

Retired Members and BeneficiariesNumber 127 136 Total Annualized Benefits 4,867,383$ 5,454,919$

Total Membership 323 322

Actuarial Accrued Liabil ityActive Members 38,273,161$ 40,020,230$ Inactive Members (Vested and Non-Vested) 7,506,340 5,567,673 Retired Members and Beneficiaries 52,606,459 60,727,127 Total 98,385,960 106,315,030

Actuarial Value of Assets 76,107,932$ 80,902,296$

Unfunded Actuarial Accrued Liabil ity 22,278,028$ 25,412,734$

Funded Ratio (Actuarial Value of Assets) 77.4% 76.1%

Annual Gross Normal Cost Benefits 2,818,006$ (24.48%) 2,877,493$ (25.97%)Expenses of Administration 31,112 (0.27%) 44,644 (0.40%)Total 2,849,118 (24.75%) 2,922,137 (26.37%)

Amortization of Unfunded Liabil ity 1 1,617,517$ (14.05%) 1,807,817$ (16.31%)

Annual Contribution Requirement:Employer Portion 2,935,707$ (25.50%) 3,256,102$ (29.38%)Employee Portion 1,530,928 (13.30%) 1,473,852 (13.30%)Total 4,466,635 (38.80%) 4,729,954 (42.68%)

Actuarial Contribution 2,935,707$ (25.50%) 3,256,102$ (29.38%)Statutory Employer Contribution 2,267,615 (19.70%) 2,183,074 (19.70%)Statutory Contribution Deficit/(Surplus) 668,092 (5.80%) 1,073,028 (9.68%)

Amortization Period from Statutory Rate (Years) 62.0 Infinite

Results Based on Market Value of AssetsMarket Value of Assets 78,929,000$ 81,415,519$

Unfunded Actuarial Accrued Liabil ity 19,456,960$ 24,899,511$

Funded Ratio (Market Value of Assets) 80.2% 76.6%

Total Annual Gross Normal Cost 2,849,118 (24.75%) 2,922,137 (26.37%)

Amortization of Unfunded Liabil ity 1 1,412,691$ (12.27%) 1,771,307$ (15.98%)

Annual Contribution Requirement:Employer Portion 2,730,881$ (23.72%) 3,219,592$ (29.05%)Employee Portion 1,530,928 (13.30%) 1,473,852 (13.30%)Total 4,261,809 (37.02%) 4,693,444 (42.35%)

Actuarial Contribution 2,730,881$ (23.72%) 3,219,592$ (29.05%)Statutory Employer Contribution 2,267,615 (19.70%) 2,183,074 (19.70%)Statutory Contribution Deficit/(Surplus) 463,266 (4.02%) 1,036,518 (9.35%)

Amortization Period from Statutory Rate (Years) 41.2 Infinite

Valuation as of July 1, 2019Valuation as of July 1, 2018

1 Amortization as a level percentage of payroll over a 20-year open period. Total payroll assumed to increase by 3.75%.

Actuarial Valuation Results Gain/Loss Analysis


A-8

Unfunded liabil ity at previous valuation 22,278,028$

Expected unfunded liabil ity at current valuationNormal cost for plan year 2,849,118 Interest on unfunded liabil ity and normal cost 1,834,891 Contributions using actuarial rate with interest to current valuation date 4,636,488 Total expected change in unfunded liabil ity at current valuation 47,521

Total expected unfunded liabil ity at current valuation 22,325,549

Change due to:Amount of contributions (statutory vs actuarial contributions) 1,000,793 Amount of administrative expenses 12,916 Recognition of asset (gains)/losses (727,475) Salary experience (1,370,779) Retirement experience 230,662 Withdrawal experience (71,179) Disabil ity experience (11,258) Death in Service experience 19,122 Death After Retirement experience (50,656) New entrants -

Data changes and other experience1 1,012,176 Change in actuarial assumptions 3,042,863 Changes in plan provisions2 - Total change 3,087,185

Unfunded liabil ity at current valuation 25,412,734$

FY 2019 Employer Contribution Rate 25.50%

Expected FY 2020 Employer Contribution Rate 25.02%Expected FY 2020 Employer Contribution Rate with New Pay Base 26.14%Impact due to New Pay Base 1.12%

Change due to:Amount of contributions (statutory vs actuarial contributions) 0.66%Amount of administrative expenses 0.12%Recognition of asset (gains)/losses -0.48%Salary experience -0.90%Retirement experience 0.16%Withdrawal experience -0.05%Disabil ity experience -0.01%Death in Service experience 0.01%Death After Retirement experience -0.03%New entrants 0.00%

Data changes and other experience1 0.68%Change in actuarial assumptions 3.08%Changes in plan provisions2 0.00%Total change 3.24%

FY 2020 Actuarial Employer Contribution Rate 29.38%

FY 2020 Statutory Contribution Rate 19.70% 1Approximately $390,000 of the change due to Data changes and other experience can be explained by deferred members retiring earlier than expected. 2The change due to the change in the interest rate earned on member contributions is included with assumption changes.

Historical Trends of Funded Ratio and Employer Contributions


A-9

Funded Ratio History

79.8%

73.7%70.3% 68.2%

72.3% 73.5%70.2%

75.2% 77.4% 76.1%

$0

$20

$40

$60

$80

$100

$120

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Accrued Liability Actuarial Value of Assets Market Value of Assets Funded Ratio

Mill ions

Valuation Year

Actuarial Employer Contribution Rate History

25.11%21.70% 21.42%

27.11%25.91% 25.50%

29.38%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

2013/2014 2014/2015 2015/2016 2016/2017 2017/2018 2018/2019 2019/2020

% of Pay

Valuation Year/Fiscal Year

Actuarial Valuation Results Solvency Test ($ in Millions)


A-10

(1) (2) (3)

Active Retirees, Active Members Actuarial

Date Total Actuarial Member Term Vested and (Employer Value of

6/30 Accrued Liability Contributions Beneficiaries Financed Portion) Assets (1) (2) (3)

2010 61.8$ 10.5$ 36.1$ 15.2$ 49.3$ 100% 100% 18%

2011 67.1 11.6 37.4 18.1 49.5 100% 100% 3%

2012 68.5 12.1 39.3 17.1 48.1 100% 92% 0%

2013 71.9 13.5 40.5 17.9 49.0 100% 88% 0%

2014 75.5 14.8 41.9 18.8 54.6 100% 95% 0%

2015 80.1 12.3 54.1 13.7 58.9 100% 86% 0%

2016 87.9 14.3 53.9 19.7 61.7 100% 88% 0%

2017 94.0 16.0 57.3 20.7 70.7 100% 95% 0%

2018 98.4 17.4 60.1 20.8 76.1 100% 98% 0%

2019 106.3 18.2 66.3 21.8 80.9 100% 95% 0%

Valuation Portion (%) of Present Value Covered

By Assets

Funded Ratio History


A-11

Actuarial Valuation

Actuarial Value of Assets

Actuarial Accrued Liability

Unfunded AAL (UAAL)

Date (a) (b) (b – a)

7/1/2010 49,325,610$ 61,782,124$ 12,456,514$ 79.8 %7/1/2011 49,479,855 67,144,926 17,665,071 73.77/1/2012 48,094,209 68,455,622 20,361,413 70.37/1/2013 49,039,331 71,892,312 22,852,981 68.27/1/2014 54,563,383 75,464,668 20,901,285 72.37/1/2015 58,875,531 80,112,217 21,236,686 73.57/1/2016 61,733,910 87,921,960 26,188,050 70.27/1/2017 70,722,302 94,047,078 23,324,776 75.27/1/2018 76,107,932 98,385,960 22,278,028 77.47/1/2019 80,902,296 106,315,030 25,412,734 76.1

Funded Ratio (a / b)

60.065.070.075.080.085.0

Funded Ratio as of 07/01

Funded Ratio

SECTION B ASSET EXHIBITS

Statement of Fiduciary Net Position


B-1

June 30, 2018 June 30, 2019Assets

Cash -$ -$

ReceivablesContribution receivable 559 0Interest receivable 168,481 254,928Due from other fiduciary funds 6,051 0Due from Uniform Group Insurance Plan 0 0Due from other state agencies 0 0Total receivables 175,091 254,928

InvestmentsExternal Investment Pool 78,746,199 81,155,769 Equities - - Fixed income - - Real estate - - Annuities - - Alternative investments - - Invested cash - -

Total Investments 78,746,199 81,155,769

Prepaid expenses - - Invested Securities Lending Collateral 232,284 264,646 Capital assets (net of depreciation/ amortization) 8,269 4,822

Total assets 79,161,843 81,680,165

Liabilities

Salaries payable - - Accounts payable 559 - Due to other fiduciary funds - - Due to Uniform Group Insurance Plan - - Securities Lending Collateral 232,284 264,646 Due to other state agencies - - Accrued compensated absences - -

Total liabilities 232,843 264,646

Net position restricted for pensions 78,929,000$ 81,415,519$

Fiscal Year Ending

Statement of Changes in Fiduciary Net Position


B-2

June 30, 2018 June 30, 2019Additions

Contributions:From employer 2,152,970$ 2,090,886$ From employee 1,453,533 1,411,619 Transfer from general fund - - Transfers from other plans - - Total contributions 3,606,503 3,502,505

Investment income:Net change in fair value of investments 5,146,945 2,678,760 Interest and dividends 1,747,053 1,784,059Less investment expense (183,453) (217,565) Net investment income 6,710,545 4,245,254

Securities Lending Income 5,980 5,647

Repurchase service credit 281,573 167,824

Miscellaneous income (187) (41)

Total additions 10,604,414 7,921,189

DeductionsBenefits paid to participants 4,893,808 5,341,256 Refunds 87,569 49,859 Transfers to other plans - -

4,981,377 5,391,115 Administrative expenses 30,353 43,555

Total deductions 5,011,730 5,434,670

Change in net position 5,592,684 2,486,519

Net position restricted for pensions

Beginning of year 73,336,316 78,929,000

End of year 78,929,000$ 81,415,519$

Fiscal Year Ending

Development of Actuarial Value of Assets


B-3

Fiscal Year Ending 2018 2019 2020 2021 2022 2023Beginning of Year: (1) Market Value of Assets 73,336,316$ 78,929,000$ (2) Actuarial Value of Assets1 70,722,302 76,107,932End of Year: (3) Market Value of Assets 78,929,000 81,415,519 (4a) Contributions (Incl. repurchase svc credit) 3,887,889 3,670,288 (4b) Net Disbursements 5,011,730 5,434,670 (5) Total Investment Income 6,716,525 4,250,901 =(3)-(1)-(4a)+(4b) (6) Projected Rate of Return 7.75% 7.75% (7) Projected Investment Income =(1)x(6)+([1+(6)]^.5-1)x(4a-4b) 5,640,828 6,049,903

(8) Asset Adjustment - - (9) Investment Income in Excess of Projected Income 1,075,697 (1,799,002) (10) Excess Investment Income Recognized This Year (5-year recognition)

(10a) From This Year 215,139$ (359,800)$ (10b) From One Year Ago 653,504 215,139 (359,800)$ (10c) From Two Years Ago 0 653,504 215,139 (359,800)$ (10d) From Three Years Ago 0 0 653,504 215,139 (359,800)$ (10e) From Four Years Ago 0 0 0 653,502 215,141 (359,802)$ (10f) Total Recognized Investment Gain/(Loss) 868,643 508,843 508,843 508,841 (144,659) (359,802)

(11) Change in Actuarial Value of Assets =(4a)-(4b)+(7)+(8)+(10f) 5,385,630 4,794,364End of Year: (3) Market Value of Assets 78,929,000$ 81,415,519$ (12) Final Actuarial Value of Assets as of 6/30 = (2)+(11) 76,107,932$ 80,902,296$ (13) Difference Between Market & Actuarial Values 2,821,068 513,223(14) Estimated Market Value Rate of Return on Total Plan Assets 9.23% 5.45%(15) Actuarial Value Rate of Return 9.28% 8.72%(16) Ratio of Actuarial Value to Market Value 96.4% 99.4%

1Asset gains and losses in FY 2016 and prior were fully recognized as of July 1, 2017, and subsequent asset gains/losses will be smoothed in over a five-year period.

Changes in Actuarial Value of Assets


B-4

DateEmployer

ContributionsMember

Contributions**Administrative

ExpensesBenefit Payments

and RefundsInvestment

Income

Actuarial Value of Assets at End

of Year

Market Value of Assets at End of

Year

7/1/2010 1,196,562$ 741,271$ (18,154)$ (3,402,152)$ 610,947$ 49,325,610$ 44,838,156$

7/1/2011 1,285,699 839,872 (22,734) (3,568,301) 1,619,709 49,479,855 52,705,421

7/1/2012 1,423,154 907,695 (26,674) (3,662,247) (27,574) 48,094,209 51,243,115

7/1/2013 1,586,186 1,161,784 (29,237) (3,772,316) 1,998,705 49,039,331 57,044,084

7/1/2014 1,864,632 1,330,938 (27,983) (3,787,735) 6,141,200 54,563,383 65,666,865

7/1/2015 2,002,291 1,448,227 (30,925) (4,745,510) 5,638,065 58,875,531 66,675,728

7/1/2016 2,127,355 1,436,236 (31,450) (4,713,495) 4,039,733 61,733,910 65,811,337

7/1/2017* 2,155,944 1,711,155 (30,195) (4,806,319) 5,880,380 70,722,302 73,336,316

7/1/2018 2,152,970 1,734,919 (30,353) (4,981,377) 6,509,471 76,107,932 78,929,000

7/1/2019 2,090,886 1,579,402 (43,555) (5,391,115) 6,558,746 80,902,296 81,415,519

10-Year Total 17,885,679 12,891,499 (291,260) (42,830,567) 38,969,382 * Asset gains and losses in FY 2016 and prior were fully recognized as of July 1, 2017, and subsequent asset gains/losses will be smoothed in over a five-year period.

The recognition of prior year net deferred asset gains as of July 1, 2017, is not included as investment income. ** Member Contributions include miscellaneous income.

Historical Comparison of Actuarial Value of Assets to Market Value of Assets


B-5

110.0%

93.9% 93.9%86.0% 83.1%

93.8% 93.8%96.4% 96.4% 99.4%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Actuarial Value of Assets Market Value of Assets Ratio of AVA to MVA

Mill ions

Valuation Year

Historical Comparison of Total Investment Income


B-6

Amount ReturnActuarial Value

of Assets Amount ReturnMarket Value

of Assets

7/1/2010 (1,482,473)$ 610,947$ 1.24 % 49,325,610$ 5,346,702$ 13.29 % 44,838,156$

7/1/2011 (1,465,464) 1,619,709 3.33 49,479,855 9,332,729 21.16 52,705,421

7/1/2012 (1,358,072) (27,574) (0.06) 48,094,209 (104,234) (0.20) 51,243,115

7/1/2013 (1,053,583) 1,998,705 4.20 49,039,331 6,854,552 13.52 57,044,084

7/1/2014 (620,148) 6,144,200 12.61 54,563,383 9,242,929 16.29 65,666,865

7/1/2015 (1,325,917) 5,638,065 10.46 58,875,531 2,334,780 3.59 66,675,728

7/1/2016 (1,181,354) 4,039,733 6.93 61,733,910 316,963 0.48 65,811,337

7/1/2017 (969,415) 5,880,380 9.00 70,722,302 8,494,394 13.00 73,336,316

7/1/2018 (1,123,841) 6,509,471 9.28 76,107,932 6,716,525 9.23 78,929,000

7/1/2019 (1,764,382) 6,558,746 8.72 80,902,296 4,250,901 5.45 81,415,519

10-Year Total (12,344,649) 38,972,382 6.57 52,786,241 9.58

Non-Investment Income Amount

Total Investment Income (Actuarial Assets Basis)

Total Investment Income (Market Assets Basis)Actuarial

Valuation Date

(5.00)

0.00

5.00

10.00

15.00

20.00

25.00

Asset Return for the Year Ended 6/30

Actuarial Value of Assets Return Market Value Return

SECTION C MEMBERSHIP DATA

Summary of Participant Data (July 1, 2018 and July 1, 2019)


C-1

Alternate Deferred InactiveActives Payees Disabled Beneficiaries Vested Members Totals

Total Participants as of July 1, 2018: 154 95 6 1 25 22 20 323

New Entrants and Rehires 0 Net Transfers 0 Data Corrections/Other Changes 0 Vested Terminations (3) 4 (1) 0 Non-Vested Terminations (2) 2 0 Disabled 1 1Retirements (5) 9 (4) 0 Deaths with Beneficiary 0 Deaths w/o Beneficiary (1) (1)New Former Spouse 0 Expired Annuity or Stop Payment (1) (1)

Continuing 144 94 6 1 25 18 18 319Net Changes (10) 8 0 1 0 0 0 (1)

Total Participants as of July 1, 2019: 144 103 6 2 25 22 20 322

Retirees

Summary of Participant Data (July 1, 2018 and July 1, 2019)

(Continued)


C-2

Valuation as of July 1, 2018

Valuation as of July 1, 2019

Active MembersNumber 154 144 Average Age 37.4 37.8Average Benefit Service 10.6 11.2Average Vesting Service 11.1 11.8Total Payroll 10,737,297$ 10,354,210$

Inactive Members1

Number 22 22 Total Monthly Benefits 64,320$ 49,759$

Inactive Members Elected Refunds1

Number 20 20 Total Account Balance 482,901$ 462,981$

Disabled MembersNumber 1 2 Total Monthly Benefits 2,870$ 4,326$

Retired MembersNumber 95 103 Total Monthly Benefits 362,588$ 410,093$

BeneficiariesNumber 25 25 Total Monthly Benefits 34,362$ 34,362$

QDROs (Alternate Payees)Number 6 6 Total Monthly Benefits 5,795$ 5,795$

Total Membership 323 322

1 Includes Transfers.

Age/Service/Salary as of July 1, 2019


C-3

Current Age Under 5 5-9 10-14 15-19 20-24 25-29 30-34 35 and Over TotalsValuation

PayrollContribution

Account BalanceUnder 20 - - - - - - - - 0 -$ -$

20-24 2 - - - - - - - 2 111,336 22,650 25-29 15 8 - - - - - - 23 1,393,024 933,156 30-34 9 20 5 - - - - - 34 2,260,102 2,117,702 35-39 2 7 11 8 - - - - 28 2,052,066 3,289,659 40-44 - 1 7 14 4 - - - 26 2,093,326 4,633,515 45-49 1 2 6 3 12 1 - - 25 1,952,922 5,125,820 50-54 - - 1 - 1 4 - - 6 491,434 2,059,715 55-59 - - - - - - - - 0 - - 60-64 - - - - - - - - 0 - - 65-69 - - - - - - - - 0 - - 70-74 - - - - - - - - 0 - -

75 and Over - - - - - - - - 0 - -

Total 29 38 30 25 17 5 0 0 144 10,354,210$ 18,182,216$

Previous Valuation Current Valuation ChangeAverage Age: 37.4 37.8 0.4

11.1 11.8 0.7Average Annual Pay: $69,723 $71,904 $2,181Average Account Balance: $113,227 Average Account Balance: $126,265 $13,038

Vested Participants 72 Vested Participants 71 (1)Nonvested Participants 82 Nonvested Participants 73 (9)Total Participants 154 Total Participants 144 (10)

Current AgeLess Than

$20,000 $20,000-$29,999

$30,000-$39,999

$40,000-$49,999

$50,000-$59,999

$60,000-$69,999

$70,000-$79,999

$80,000-$89,999

$90,000-$99,999 $100,000 & Over Totals

Under 20 - - - - - - - - - - 0 20-24 - - - - 2 - - - - - 2 25-29 - - - - 9 14 - - - - 23 30-34 - - - 1 5 20 6 1 - 1 34 35-39 - - - - - 9 12 6 - 1 28 40-44 - - - - - 2 12 7 3 2 26 45-49 - - - - - 2 12 7 3 1 25 50-54 - - - - - 1 2 1 1 1 6 55-59 - - - - - - - - - - 0 60-64 - - - - - - - - - - 0 65-69 - - - - - - - - - - 0 70-74 - - - - - - - - - - 0

75 and Over - - - - - - - - - - 0

Total 0 0 0 1 16 48 44 22 7 6 144

Average Annual Pay:

Annualized Salary as of Valuation Date

Vesting Service as of Valuation Date

While not used in the financial computations, the following group averages are computed and shown because of their general interest.

Average Age:Average Vesting Service: Average Vesting Service:

Historical Schedule of Active Member Data through July 1, 2019


C-4

Valuation Date 7/1 Number

Annual Payroll ($ in Millions)

Average Annual Pay 1

% Increase in Avg Pay

2010 139 7.7$ 55,666$ 5.6%

2011 133 8.0 60,168 8.1%

2012 145 8.2 56,323 (6.4)%

2013 149 9.3 62,741 11.4%

2014 156 10.1 65,037 3.7%

2015 161 10.8 66,921 2.9%

2016 156 10.5 67,479 0.8%

2017 151 10.6 70,393 4.3%

2018 154 10.7 69,723 (1.0)%

2019 144 10.4 71,904 3.1%

1 Prior to the actuarial valuation as of July 1, 2017, annual payroll and average annual pay were based on projected annual compensation for the upcoming year. Beginning with the actuarial valuation as of July 1, 2016, annual payroll and average annual pay are based on annualized payroll as of the actuarial valuation date. Results prior to 2016 provided by NDPERS prior actuary.

Summary of Active Member Data as of July 1, 2019


C-5

Active Members

Eligible For: TotalRetirement

Normal 0Rule of 80 1Early Retirement 6

Total Retirement 7

Deferred Retirement 64

Total Vested 71Non-Vested 73

Grand Total 144

Schedule of Members in Pay Status as of July 1, 2019


C-6

Monthly Amount Normal Early Disability Service* Beneficiary** TotalUnder $200 1 0 0 0 2 3$200 - $400 0 0 0 0 4 4$400 - $600 0 0 0 0 0 0$600 - $800 0 0 0 0 1 1$800 - $1,000 1 0 0 0 3 4$1,000 - $1,200 1 0 0 0 5 6$1,200 - $1,400 1 0 0 1 7 9$1,400 - $1,600 0 0 1 0 2 3$1,600 - $1,800 0 0 0 0 2 2$1,800 - $2,000 0 0 0 0 0 0$2,000 - $2,200 1 2 0 1 1 5$2,200 - $2,400 4 1 0 0 0 5$2,400 - $2,600 2 0 0 4 2 8$2,600 - $2,800 1 0 0 5 0 6$2,800 - $3,000 0 0 1 5 0 6$3,000 - $3,200 2 0 0 7 0 9$3,200 - $3,400 1 1 0 2 0 4$3,400 - $3,600 1 0 0 6 1 8$3,600 - $3,800 2 1 0 2 0 5$3,800 - $4,000 0 0 0 3 0 3$4,000 - $4,200 0 0 0 2 1 3$4,200 - $4,400 0 0 0 4 0 4$4,400 - $4,600 1 0 0 4 0 5$4,600 - $4,800 1 0 0 4 0 5$4,800 - $5,000 0 0 0 2 0 2$5,000 and Over 3 0 0 23 0 26Total 23 5 2 75 31 136 Payment Option Normal Early Disability Service* Beneficiary** TotalLife 0 0 0 0 5 5Level Social Security Payment 0 0 0 0 0 0Joint & 100% Survivor 10 2 0 47 3 62Joint & 50% Survivor 13 3 2 28 23 695 Year C & L 0 0 0 0 0 010 Year C & L 0 0 0 0 0 0Total 23 5 2 75 31 136 Age Normal Early Disability Service* Beneficiary** TotalUnder 50 0 0 0 2 0 250 - 54 0 1 2 8 1 1255 - 59 5 3 0 19 1 2860 - 64 2 0 0 11 4 1765 - 69 4 0 0 17 3 2470 - 74 1 0 0 12 3 1675 - 79 0 0 0 6 5 1180 - 84 6 1 0 0 9 1685 - 89 4 0 0 0 4 890 and Over 1 0 0 0 1 2Total 23 5 2 75 31 136

Previous Valuation Current Valuation ChangeAverage Age 68.1 67.9 -0.2

Average Monthly Benefit $3,194 $3,342 $148Total Members in Pay Status 127 136 9

* Includes Rule of 80. ** Includes alternate payees.

Schedule of New Pensions Awarded during the Year as of July 1, 2019


C-7

Monthly Amount Normal Early Disability Service* Beneficiary** TotalUnder $200 0 0 0 0 0 0$200 - $400 0 0 0 0 0 0$400 - $600 0 0 0 0 0 0$600 - $800 0 0 0 0 0 0$800 - $1,000 0 0 0 0 0 0$1,000 - $1,200 0 0 0 0 0 0$1,200 - $1,400 0 0 0 1 0 1$1,400 - $1,600 0 0 1 0 0 1$1,600 - $1,800 0 0 0 0 0 0$1,800 - $2,000 0 0 0 0 0 0$2,000 - $2,200 0 0 0 0 0 0$2,200 - $2,400 0 1 0 0 0 1$2,400 - $2,600 0 0 0 0 0 0$2,600 - $2,800 0 0 0 0 0 0$2,800 - $3,000 0 0 0 0 0 0$3,000 - $3,200 0 0 0 0 0 0$3,200 - $3,400 0 0 0 0 0 0$3,400 - $3,600 0 0 0 0 0 0$3,600 - $3,800 0 0 0 0 0 0$3,800 - $4,000 0 0 0 0 0 0$4,000 - $4,200 0 0 0 0 0 0$4,200 - $4,400 0 0 0 0 0 0$4,400 - $4,600 0 0 0 0 0 0$4,600 - $4,800 0 0 0 0 0 0$4,800 - $5,000 0 0 0 0 0 0$5,000 and Over 1 0 0 6 0 7Total 1 1 1 7 0 10 Payment Option Normal Early Disability Service* Beneficiary** TotalLife 0 0 0 0 0 0Level Social Security Payment 0 0 0 0 0 0Joint & 100% Survivor 1 1 0 6 0 8Joint & 50% Survivor 0 0 1 1 0 25 Year C & L 0 0 0 0 0 010 Year C & L 0 0 0 0 0 0Total 1 1 1 7 0 10 Age Normal Early Disability Service* Beneficiary** TotalUnder 50 0 0 0 2 0 250 - 54 0 0 1 5 0 655 - 59 1 1 0 0 0 260 - 64 0 0 0 0 0 065 - 69 0 0 0 0 0 070 - 74 0 0 0 0 0 075 - 79 0 0 0 0 0 080 - 84 0 0 0 0 0 085 - 89 0 0 0 0 0 090 and Over 0 0 0 0 0 0Total 1 1 1 7 0 10

Previous Valuation Current ValuationNew Pensions Awarded 4 10

Average Age 59.5 52.9Average Monthly Benefit $4,050 $5,206

*Includes Rule of 80. **Includes alternate payees.

Schedule of Average Benefit Payments


C-8

<10 10-14 15-19 20-24 25-29 >=30 Total2015 Number of Retirees 1 1 5 5 66 18 96

Average Monthly Benefit $1,456 $2,054 $2,135 $2,777 $3,751 $4,359 $3,689Average Years of Service 2.25 11.17 17.18 22.20 27.84 31.16 27.18

2016 Number of Retirees 1 1 4 4 63 19 92Average Monthly Benefit $1,456 $2,054 $2,135 $2,741 $3,756 $4,387 $3,728Average Years of Service 2.25 11.17 17.11 22.46 27.90 31.22 27.42

2017 Number of Retirees 3 0 5 6 62 18 94Average Monthly Benefit $809 $0 $2,315 $2,975 $3,886 $4,359 $3,737Average Years of Service 2.36 0.00 17.18 22.24 27.84 31.16 26.74

2018 Number of Retirees 0 2 4 5 65 20 96Average Monthly Benefit $0 $1,481 $2,388 $2,923 $3,862 $4,366 $3,807Average Years of Service 0.00 11.75 17.10 22.75 27.89 31.36 27.56

2019 Number of Retirees 1 3 4 6 68 23 105 Average Monthly Benefit $1,456 $1,765 $2,388 $3,351 $3,917 $4,854 $3,947Average Years of Service 2.25 11.69 17.10 22.96 27.93 31.33 27.27

Years of Vesting Service

Includes retired and disabled members. Results prior to 2016 provided by NDPERS prior actuary.

Schedule of Retirees and Beneficiaries Added to and Removed from the Rolls


C-9

Year No. Ann. Benefits* No. Ann. Benefits* No. Ann. Benefits* No.** Ann. Benefits*

2010 109 3,324,423$ 5 191,085$ (1) (13,126)$ 113 3,502,382$ 30,995$ 5.4%2011 113 3,502,382 2 58,150 0 0 115 3,560,532 30,961 1.7%2012 115 3,560,532 3 179,349 (2) (45,783) 116 3,694,098 31,846 3.8%2013 116 3,694,098 4 169,974 (4) (114,418) 116 3,749,654 32,325 1.5%2014 116 3,749,654 2 138,200 (1) (64,069) 117 3,823,785 32,682 2.0%2015 117 3,823,785 16 967,969 (5) (94,620) 128 4,697,134 36,696 22.8%2016 128 4,697,134 2 68,562 (7) (179,032) 123 4,586,664 37,290 -2.4%2017 123 4,586,664 6 172,703 (2) (26,340) 127 4,733,027 37,268 3.2%2018 127 4,733,027 4 194,391 (4) (60,036) 127 4,867,383 38,326 2.8%2019 127 4,867,383 10 624,714 (1) (37,177) 136 5,454,919 40,110 12.1%

Retirement

Added to Rolls Removed from Rolls End of Year BalanceAverageAnnualBenefit

% Increasein Annual

BenefitBeg of Year

* $ in millions. ** Includes alternate payees. Results prior to 2016 provided by NDPERS prior actuary.

SECTION D GASB STATEMENT NOS. 67 AND 68 SCHEDULES

GASB Statement Nos. 67 and 68


D-1

Discussion

Accounting Standard

For pension plans that are administered through trusts or equivalent arrangements, Governmental Accounting Standards Board (GASB) Statement No. 67 establishes standards of financial reporting for separately issued financial reports and specifies the required approach for measuring the pension liability. Similarly, GASB Statement No. 68 establishes standards for state and local government employers (as well as non-employer contributing entities) to account for and disclose the net pension liability, pension expense and other information associated with providing retirement benefits to their employees (and former employees) on their basic financial statements. The following discussion provides a summary of the information that is required to be disclosed under these accounting standards. A number of these disclosure items are provided in this report. However, certain non-actuarial information, such as notes regarding accounting policies and investments, is not included in this report and the retirement system and/or plan sponsor will be responsible for preparing and disclosing that information to comply with these accounting standards.

Financial Statements

GASB Statement No. 68 requires state or local governments to recognize the net pension liability and the pension expense on their financial statements. The net pension liability is the difference between the total pension liability and the plan’s fiduciary net position. In traditional actuarial terms, this is analogous to the accrued liability less the market value of assets (not the smoothed actuarial value of assets that is often encountered in actuarial valuations performed to determine the employer’s contribution requirement). Paragraph 57 of GASB Statement No. 68 states, “Contributions to the pension plan from the employer subsequent to the measurement date of the collective net pension liability and before the end of the employer’s reporting period should be reported as a deferred outflow of resources related to pensions.” The information contained in this report does not incorporate any contributions made to the HPRS subsequent to the measurement date of July 1, 2019. The pension expense recognized each fiscal year is equal to the change in the net pension liability from the beginning of the year to the end of the year, adjusted for deferred recognition of the liability and investment experience. Pension plans that prepare their own, stand-alone financial statements are required to present two financial statements – a statement of fiduciary net position and a statement of changes in fiduciary net position in accordance with GASB Statement No. 67. The statement of fiduciary net position presents the assets and liabilities of the pension plan at the end of the pension plan’s reporting period. The statement of changes in fiduciary net position presents the additions, such as contributions and investment income, and deductions, such as benefit payments and expenses, and net increase or decrease in the fiduciary net position.

GASB Statement Nos. 67 and 68 (Continued)


D-2

Notes to Financial Statements

GASB Statement No. 68 requires the notes of the employer’s financial statements to disclose the total pension expense, the pension plan’s liabilities and assets, and deferred outflows and inflows of resources related to pensions. GASB Statement Nos. 67 and 68 require the notes of the financial statements for the employers and pension plans to include certain additional information. The list of disclosure items should include:

• A description of benefits provided by the plan; • The type of employees and number of members covered by the pension plan; • A description of the plan’s funding policy, which includes member and employer contribution

requirements; • The pension plan’s investment policies; • The pension plan’s fiduciary net position, net pension liability and the pension plan’s fiduciary net

position as a percentage of the total pension liability; • The net pension liability using a discount rate that is 1% higher and 1% lower than used to

calculate the total pension liability and net pension liability for financial reporting purposes; • Significant actuarial assumptions and methods used to calculate the total pension liability; • Inputs to the discount rates; and • Certain information about mortality assumptions and the dates of experience studies.

Retirement systems that issue stand-alone financial statements are required to disclose additional information in accordance with GASB Statement No. 67. This information includes:

• The composition of the pension plan’s board and the authority under which benefit terms may be amended;

• A description of how fair value is determined; • Information regarding certain reserves and investments, which include concentrations of

investments greater than or equal to 5%, receivables and insurance contracts excluded from plan assets; and

• Annual money-weighted rate of return.

Required Supplementary Information

GASB Statement No. 67 requires a 10-year fiscal history of:

• Sources of changes in the net pension liability; • Information about the components of the net pension liability and related ratios, including the

pension plan’s fiduciary net position as a percentage of the total pension liability, and the net pension liability as a percent of covered-employee payroll; and

• A comparison of the actual employer contributions to the actuarially determined contributions based on the plan’s funding policy.



D-3

Timing of the Actuarial Valuation

An actuarial valuation to determine the total pension liability is required to be performed at least every two years. The net pension liability and pension expense should be measured as of the pension plan’s fiscal year end (measurement date) on a date that is within the employer’s prior fiscal year. If the actuarial valuation used to determine the total pension liability is not calculated as of the measurement date, the total pension liability is required to be rolled forward from the actuarial valuation date to the measurement date. The total pension liability shown in this report is based on an actuarial valuation performed as of July 1, 2019, and a measurement date of July 1, 2019.

Single Discount Rate

Projected benefit payments are required to be discounted to their actuarial present values using a Single Discount Rate that reflects (1) a long-term expected rate of return on pension plan investments (to the extent that the plan’s fiduciary net position is projected to be sufficient to pay benefits) and (2) a tax-exempt municipal bond rate based on an index of 20-year mixed maturity general obligation bonds with an average Standard & Poor’s Corp.’s AA credit rating (which is published by Fidelity) as of the measurement date (to the extent that the contributions for use with the long-term expected rate of return are not met). For the purpose of this actuarial valuation, the expected rate of return on pension plan investments is 7.50%; the municipal bond rate is 3.13% (based on the most recent date available on or before the measurement date of the “20-year Municipal GO Index” from Fidelity); and the resulting Single Discount Rate is 7.50%.

Effective Date and Transition

GASB Statement Nos. 67 and 68 are effective for fiscal years beginning after June 15, 2013, and June 15, 2014, respectively.



D-4

Executive Summary as of June 30, 2019

Actuarial Valuation Date 7/1/2019Measurement Date of the Net Pension Liabil ity 7/1/2019Plan's Fiscal Year Ending Date (Reporting Date) for GASB 67 6/30/2019Employer's Fiscal Year Ending Date (Reporting Date) for GASB 68 6/30/2020

MembershipNumber of - Retirees and Beneficiaries 136 - Inactive, Non-retired Members 42 - Active Members 144 - Total 322 Covered Payroll 10,354,210$

Net Pension LiabilityTotal Pension Liabil ity 106,315,030$ Plan Fiduciary Net Position 81,415,519 Net Pension Liabil ity 24,899,511$ Plan Fiduciary Net Position as a Percentage

of Total Pension Liabil ity 76.58 %Net Pension Liabil ity as a Percentage

of Covered Payroll 240.48 %

Development of the Single Discount RateSingle Discount Rate 7.50 %Long-Term Expected Rate of Investment Return 7.50 %Long-Term Municipal Bond Rate* 3.13 %Last year ending June 30 in the 2019 to 2119 projection period

for which projected benefit payments are fully funded 2119

Total Pension Expense 5,175,123$

Deferred Outflows and Deferred Inflows of Resources by Source to be recognized in Future Pension ExpensesDeferred Outflows

of ResourcesDeferred Inflows

of Resources

Difference between expected and actual experience 338,360$ 497,866$ Changes in assumptions 4,888,671 - Net difference between projected and actual earnings

on pension plan investments 482,560 - Total 5,709,591$ 497,866$

*Source:

Fixed-income municipal bonds with 20 years to maturity that include only federally tax-exempt municipal bonds as reported in Fidelity Index’s “20-Year Municipal GO AA Index” as of June 28, 2019. In describing this index, Fidelity notes that the municipal curves are constructed using option-adjusted analytics of a diverse population of over 10,000 tax-exempt securities.



D-5

Pension Expense under GASB Statement No. 68 Total for All Employers

Fiscal Year Ended June 30, 2019* A. Calculation of Total Pension Expense

1. Service Cost 2,818,006$ 2. Interest on the Total Pension Liabil ity 7,527,064 3. Current-Period Benefit Changes - 4. Employee Contributions (made negative for addition here)** (1,579,443) 5. Projected Earnings on Plan Investments (made negative for addition here) (6,049,903) 6. Pension Plan Administrative Expense 43,555 7. Other Changes in Plan Fiduciary Net Position 41 8. Recognition of Outflow (Inflow) of Resources due to Liabil ities 1,355,756 9. Recognition of Outflow (Inflow) of Resources due to Assets 1,060,047

Total Pension Expense 5,175,123$ Differences between expected and actual experience and changes in assumptions are recognized in pension expense using a systematic and rational method over a closed period equal to the average of the expected remaining service lives of all employees who are provided with pensions through the pension plan (active employees and inactive employees) determined as of the beginning of the measurement period. At the beginning of the current measurement period, the average expected remaining service lives of the 144 active employees in the plan was approximately 12.8894 years. Additionally, the total plan membership (active employees and inactive employees) was 322. As a result, the average of the expected remaining service lives for purposes of recognizing the applicable deferred outflows and inflows of resources established in the current measurement period is 5.7642 years. Additionally, differences between projected and actual earnings on pension plan investments should be recognized in pension expense using a systematic and rational method over a closed five-year period. For this purpose, the deferred outflows and inflows of resources are recognized in the pension expense as a level dollar amount over the closed period identified above. *Based on a measurement date of July 1, 2019. Will be used for fiscal year ending June 30, 2020. **Includes repurchases of service credit.



D-6

Statement of Outflows and Inflows Arising from Current and Prior Reporting Periods GASB Statement No. 68 – Total For All Employers

Fiscal Year Ended June 30, 2019*

Deferred Outflows Deferred Inflows Net Deferred Outflowsof Resources of Resources (Inflows) of Resources

1. Differences between expected and actual experience 338,360$ 497,866$ (159,506)$ 2. Assumption Changes 4,888,671 - 4,888,671 3. Net Difference between projected and actual

earnings on pension plan investments 482,560 - 482,560 4. Total 5,709,591$ 497,866$ 5,211,725$

Year Ending Net Deferred OutflowsJune 30 (Inflows) of Resources

2020 1,868,778$ 2021 893,493 2022 1,235,170 2023 841,261 2024 373,023

Thereafter - Total 5,211,725$

A. Deferred Outflows and Deferred Inflows of Resources by Source to be Recognized in Future Pension Expenses

B. Deferred Outflows and Deferred Inflows of Resources by Year to be Recognized in Future Pension Expenses

*Based on a measurement date of July 1, 2019. Will be used for fiscal year ending June 30, 2020.



D-7

Schedule of Recognition of Changes in Total Net Pension Liability/(Asset) from Current and Prior Reporting Periods

Recognition Total Period Deferred (Years) (2020-2024) 2017 & Prior

2014 (299,964)$ 6.44 (20,496)$ (186,312)$ (46,578)$ (46,578)$ (20,496)$ -$ -$ -$ -$ -$ 2015 984,241 7.31 311,026 403,929 134,643 134,643 134,643 134,643 41,740 - - - 2016 39,748 6.6948 16,000 11,874 5,937 5,937 5,937 5,937 4,126 - - - 2017 21,564 6.3229 11,334 3,410 3,410 3,410 3,410 3,410 3,410 1,104 - - 2018 (621,359) 6.2141 (421,375) - (99,992) (99,992) (99,992) (99,992) (99,992) (99,992) (21,407) - 2019 (67,748) 5.7642 (55,995) - - (11,753) (11,753) (11,753) (11,753) (11,753) (8,983) - Total (159,506) 232,901 (2,580) (14,333) 11,749 32,245 (62,469) (110,641) (30,390) -


2014 -$ 6.44 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 2015 394,419 7.31 124,639 161,868 53,956 53,956 53,956 53,956 16,727 - - - 2016 3,945,801 6.6948 1,588,269 1,178,766 589,383 589,383 589,383 589,383 409,503 - - - 2017 1,257,370 6.3229 660,790 198,860 198,860 198,860 198,860 198,860 198,860 64,210 - - 2018 - 6.2141 - - - - - - - - - - 2019 3,042,863 5.7642 2,514,973 - - 527,890 527,890 527,890 527,890 527,890 403,413 - Total 4,888,671 1,539,494 842,199 1,370,089 1,370,089 1,370,089 1,152,980 592,100 403,413 -


2014 (4,701,088)$ 5.00 -$ (3,760,872)$ (940,216)$ -$ -$ -$ -$ -$ -$ -$ 2015 2,865,533 5.00 - 1,719,321 573,107 573,105 - - - - - - 2016 4,978,923 5.0000 995,783 1,991,570 995,785 995,785 995,783 - - - - - 2017 (3,267,518) 5.0000 (1,307,006) (653,504) (653,504) (653,504) (653,504) (653,502) - - - - 2018 (1,075,697) 5.0000 (645,419) - (215,139) (215,139) (215,139) (215,139) (215,141) - - - 2019 1,799,002 5.0000 1,439,202 - - 359,800 359,800 359,800 359,800 359,802 - - Total 482,560 (703,485) (239,967) 1,060,047 486,940 (508,841) 144,659 359,802 - -


2014 (5,001,052)$ Varies by Type (20,496)$ (3,947,184)$ (986,794)$ (46,578)$ (20,496)$ -$ -$ -$ -$ -$ 2015 4,244,193 Varies by Type 435,665 2,285,118 761,706 761,704 188,599 188,599 58,467 - - - 2016 8,964,472 Varies by Type 2,600,052 3,182,210 1,591,105 1,591,105 1,591,103 595,320 413,629 - - - 2017 (1,988,584) Varies by Type (634,882) (451,234) (451,234) (451,234) (451,234) (451,232) 202,270 65,314 - - 2018 (1,697,056) Varies by Type (1,066,794) - (315,131) (315,131) (315,131) (315,131) (315,133) (99,992) (21,407) - 2019 4,774,117 Varies by Type 3,898,180 - - 875,937 875,937 875,937 875,937 875,939 394,430 - Total 5,211,725 1,068,910 599,652 2,415,803 1,868,778 893,493 1,235,170 841,261 373,023 -

2024 2025

2023 2024 2025

Year Ending June 30 2018 2019Total Difference

Increase (Decrease) in Pension Expense Arising from All SourcesRecognized in Year Ending June 30

2020 2021 2022 2023

Year Ending June 30 2018

Difference between projected and actual

earnings on pension plan investments 2019

2022 2023 2024 2025

Increase (Decrease) in Pension Expense Arising from net difference between projected and actual earnings on pension plan investmentsRecognized in Year Ending June 30

2020 2021 2022

Recognized in Year Ending June 30Year Ending June

30 Changes in assumptions 1 2018 2019 2020 2021

Increase (Decrease) in Pension Expense Arising from changes in assumptions

Increase (Decrease) in Pension Expense Arising from difference between expected and actual experience

Difference between expected and actual

experience

Recognized in Year Ending June 30Year Ending June

30 2018 2019 2020 2021 2022 2023 2024 2025

1For fiscal year ending June 30, 2016, includes difference in liability due to change in actuary and updated assumption to limit projected benefits to the projected Internal Revenue Code Section 415 limit which projects the limit at the actuarial valuation year by the inflation assumption used in the actuarial valuation. For fiscal year ending June 30, 2017, includes difference in liability due to changes in the investment return assumption, inflation assumption, benefit indexing assumption for inactive vested members and updated assumption to limit projected benefits to the projected Internal Revenue Code Section 415 limit which projects the limit at the actuarial valuation year by the inflation assumption used in the actuarial valuation. For fiscal year ending June 30, 2019, includes difference in liability due to changes in the investment return assumption.



D-8

Statement of Details of Outflows and Inflows from Current and Prior Reporting Periods

Total Deferred

(2020-2024) 2017 & Prior 2018 2019 2020 2021 2022 2023 2024 2025Difference between expected and actual experience 338,360$ 419,213$ 143,990$ 143,990$ 143,990$ 143,990$ 49,276$ 1,104$ -$ -$ Changes in assumptions 4,888,671 1,539,494 842,199 1,370,089 1,370,089 1,370,089 1,152,980 592,100 403,413 - Difference between projected and actual earnings on investments 991,401 628,674 - 1,060,047 486,940 - 144,659 359,802 - - Total 6,218,432 2,587,381 986,189 2,574,126 2,001,019 1,514,079 1,346,915 953,006 403,413 -

Total Deferred

(2020-2024) 2017 & Prior 2018 2019 2020 2021 2022 2023 2024 2025Difference between expected and actual experience (497,866)$ (186,312)$ (146,570)$ (158,323)$ (132,241)$ (111,745)$ (111,745)$ (111,745)$ (30,390)$ -$ Changes in assumptions - - - - - - - - - - Difference between projected and actual earnings on investments (508,841) (1,332,159) (239,967) - - (508,841) - - - - Total (1,006,707) (1,518,471) (386,537) (158,323) (132,241) (620,586) (111,745) (111,745) (30,390) -

Total Deferred

(2020-2024) 2017 & Prior 2018 2019 2020 2021 2022 2023 2024 2025Total Liabil ities 4,729,165$ 1,772,395$ 839,619$ 1,355,756$ 1,381,838$ 1,402,334$ 1,090,511$ 481,459$ 373,023$ -$ Total Assets 482,560 (703,485) (239,967) 1,060,047 486,940 (508,841) 144,659 359,802 - - Total 5,211,725 1,068,910 599,652 2,415,803 1,868,778 893,493 1,235,170 841,261 373,023 -

(Inflows) of Resources

Outflow of Resources

Recognized in Year Ending June 30

Increase (Decrease) in Pension Expense Arising from Assets and LiabilitiesRecognized in Year Ending June 30

Recognized in Year Ending June 30



D-9

Schedules of Required Supplementary Information

Schedule of Net Pension Liability and Related Ratios Multiyear

Total Plan Net Position Net Pension LiabilityFY Ending Pension Plan Net Net Pension as a % of Total Covered as a % of

30-Jun Liability Position Liability Pension Liability Payroll 1 Covered Payroll

2014 75,432,901$ $65,666,865 9,766,036$ 87.05% $9,348,386 104.47%2015 80,112,217 66,675,728 13,436,489 83.23% 10,145,713 132.44%2016 87,921,960 65,811,337 22,110,623 74.85% 10,526,791 210.04%2017 94,047,078 73,336,316 20,710,762 77.98% 10,629,403 194.84%2018 98,385,960 78,929,000 19,456,960 80.22% 10,737,297 181.21%2019 106,315,030 81,415,519 24,899,511 76.58% 10,354,210 240.48%

Last 10 Fiscal Years (which may be built prospectively)

1 Prior to the actuarial valuation as of July 1, 2016, covered payroll was based on projected annual compensation. Beginning with the actuarial valuation as of July 1, 2016, covered payroll is based on annualized payroll as of the actuarial valuation date.

Sensitivity of Net Pension Liability

to the Single Discount Rate Assumption The following presents the net pension liability/(asset) of the HPRS, calculated using the current discount rate of 7.50%, as well as what the HPRS’s net pension liability/(asset) would be if it were calculated using a discount rate that is 1-percentage point lower (6.50%) or is 1-percentage point higher (8.50%) than the current rate.

Current Single Discount

1% Decrease Rate Assumption 1% Increase6.50% 7.50% 8.50%

$ 38,662,943 $ 24,899,511 $ 13,491,914



D-10

Schedule of Changes in Net Pension Liability and Related Ratios Current Report Period Fiscal Year Ended June 30, 2019

2019

Total pension liabilityService cost 2,818,006$ Interest on the total pension l iabil ity 7,527,064 Changes of benefit terms 0 Difference between expected and actual experience (67,748) Changes of assumptions 3,042,863 Benefit payments and refunds (5,391,115) Net change in total pension liability 7,929,070

Total pension liability - beginning 98,385,960 Total pension liability - ending (a) 106,315,030$

Plan fiduciary net positionContributions - Employer 2,090,886$ Contributions - Employee 1,411,619 Contributions - Service credit repurchases 167,824 Pension plan net investment income 4,250,901 Benefit payments and refunds (5,391,115) Pension plan administrative expense (43,555) Transfers and Other Income (41) Net change in plan fiduciary net position 2,486,519

Plan fiduciary net position - beginning 78,929,000 Plan fiduciary net position - ending (b) 81,415,519$

Net pension liability - ending (a) - (b) 24,899,511$

Plan fiduciary net position as a percentageof total pension liability 76.58 %

Covered-employee payroll 10,354,210$ Net pension liability as a percentage

of covered-employee payroll 240.48 %

Fiscal Year Ending June 30,



D-11

Schedule of Changes in Net Pension Liability and Related Ratios Multiyear

2019 2018 2017 2016 2015 2014

Total pension liabilityService cost 2,818,006$ 2,738,268$ 2,701,326$ 2,226,286$ 2,038,291$ 1,894,183$ Interest on the total pension l iabil ity 7,527,064 7,203,350 6,951,177 6,311,403 6,007,875 5,750,017 Changes of benefit terms 0 0 0 0 0 0 Difference between expected and actual experience (67,748) (621,359) 21,564 39,748 984,241 (299,964) Changes of assumptions1 3,042,863 0 1,257,370 3,945,801 394,419 0 Benefit payments and refunds (5,391,115) (4,981,377) (4,806,319) (4,713,495) (4,745,510) (3,784,735) Net change in total pension liability 7,929,070 4,338,882 6,125,118 7,809,743 4,679,316 3,559,501

Total pension liability - beginning 98,385,960 94,047,078 87,921,960 80,112,217 75,432,901 71,873,400 Total pension liability - ending (a) 106,315,030$ 98,385,960$ 94,047,078$ 87,921,960$ 80,112,217$ 75,432,901$

Plan fiduciary net positionContributions - Employer 2,090,886$ 2,152,970$ 2,155,944$ 2,127,355$ 2,002,291$ 1,864,632$ Contributions - Employee 1,411,619 1,453,533 1,455,540 1,436,236 1,351,798 1,243,520 Contributions - Service credit repurchases 167,824 281,573 249,436 0 96,429 87,418 Pension plan net investment income 4,250,901 6,716,525 8,494,394 309,099 2,334,780 9,239,929 Benefit payments and refunds (5,391,115) (4,981,377) (4,806,319) (4,713,495) (4,745,510) (3,784,735) Pension plan administrative expense (43,555) (30,353) (30,195) (31,450) (30,925) (27,983) Transfers and Other Income (41) (187) 6,179 7,864 - - Net change in plan fiduciary net position 2,486,519 5,592,684 7,524,979 (864,391) 1,008,863 8,622,781

Plan fiduciary net position - beginning 78,929,000 73,336,316 65,811,337 66,675,728 65,666,865 57,044,084 Plan fiduciary net position - ending (b) 81,415,519$ 78,929,000$ 73,336,316$ 65,811,337$ 66,675,728$ 65,666,865$

Net pension liability - ending (a) - (b) 24,899,511$ 19,456,960$ 20,710,762$ 22,110,623$ 13,436,489$ 9,766,036$

Plan fiduciary net position as a percentageof total pension liability 76.58 % 80.22 % 77.98 % 74.85 % 83.23 % 87.05 %

Covered-employee payroll 10,354,210$ 10,737,297$ 10,629,403$ 10,526,791$ 10,145,713$ 9,348,386$ Net pension liability as a percentage

of covered-employee payroll 240.48 % 181.21 % 194.84 % 210.04 % 132.44 % 104.47 %

Fiscal Year Ending June 30,

1For fiscal year ending June 30, 2016, includes difference in liability due to change in actuary and updated assumption to limit projected benefits to the projected Internal Revenue Code Section 415 limit which projects the limit at the actuarial valuation year by the inflation assumption used in the actuarial valuation. For fiscal year ending June 30, 2017, includes difference in liability due to changes in the investment return assumption, inflation assumption, benefit indexing assumption for inactive vested members and updated assumption to limit projected benefits to the projected Internal Revenue Code Section 415 limit which projects the limit at the actuarial valuation year by the inflation assumption used in the actuarial valuation. For fiscal year ending June 30, 2019, includes difference in liability due to changes in the investment return assumption. 2Prior to the valuation as of July 1, 2016, covered payroll is based on projected annual compensation. Beginning with the valuation as of July 1, 2016, covered payroll is based on annualized payroll as of the valuation date. 10 fiscal years will be built prospectively. Values prior to fiscal year ending June 30, 2016 were calculated by the prior actuary.



D-12

System Asset Allocation

Asset Class

Domestic Equities 30.00 % 6.30 % 1.89 %International Equities 21.00 % 6.93 % 1.46 %Private Equity 7.00 % 10.15 % 0.71 %Global Fixed Income 23.00 % 2.11 % 0.49 %Global Real Assets 19.00 % 5.41 % 1.03 %Cash Equivalents 0.00 % 0.25 % 0.00 %

Total 100.00 % 5.57 %

Allocation-WeightedLong-Term Expected Long-Term Expected

Target Allocation Real Rate of Return Real Rate of Return

Asset allocation and long term expected arithmetic returns were provided by NDPERS and are net of inflation of 2.25%. The discount rate used to measure the total pension liability was 7.50%. The projection of cash flows used to determine the discount rate assumed plan member and statutory/Board approved employer contributions will be made at rates equal to those based on the July 1, 2019 and July 1, 2018 HPRS actuarial valuation reports. For this purpose, only employer contributions that are intended to fund benefits of current plan members and their beneficiaries are included. Projected employer contributions that are intended to fund the service costs of future plan members and their beneficiaries are not included. Based on those assumptions, the pension plan’s fiduciary net position was projected to be sufficient to make all projected future benefit payments of current 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.



D-13

Schedule of Contributions Multiyear Last 10 Fiscal Years

Actuarially Contribution Actual ContributionFY Ending Determined Actual Deficiency Covered as a % of

30-Jun Contribution Contribution (Excess) Payroll 1 Covered Payroll

2014 2,347,598$ 1,864,632$ 482,966$ 9,348,386$ 19.95 %2015 2,201,479 2,002,291 199,188 10,145,713 19.74 %2016 2,307,420 2,127,355 180,065 10,526,791 20.21 %2017 3,060,351 2,155,944 904,407 10,629,403 20.28 %2018 2,948,756 2,152,970 795,786 10,737,297 20.05 %2019 2,935,707 2,090,886 844,821 10,354,210 20.19 %

1 Prior to the actuarial valuation as of July 1, 2016, covered employee payroll was based on projected annual compensation. From the actuarial valuation as of July 1, 2016, covered employee payroll is based on pensionable payroll for membership data used in the actuarial valuation.

10 fiscal years will be built prospectively.



D-14

Valuation Date: July 1, 2019Notes The actuarially determined contribution amount is calculated as of June 30, 12 months prior to the end of

the fiscal year in which the contributions are reported.

Methods and Assumptions Used to Determine Actuarially Determined Contribution Rates:Actuarial Cost Method Entry Age NormalAmortization Method Level Percentage of Payroll, Open Period

Assumed annual payroll growth of 3.75% Remaining Amortization Period 20 yearsAsset Valuation Method 5-Year smoothed marketInflation 2.50%Salary Increases Service-based table for members with less than five years of service and age-based table for members with

more than five years of serviceInvestment Rate of Return 7.75%Retirement Age Age-based table of rates that are specific to the type of eligibil ity condition. Mortality RP 2000 Combined Healthy Mortality table, sex-distinct, with rates set back 2 years for males and 3 years

for females. RP 2000 Disabled Mortality table, sex-distinct, with rates set back 1 years for males (no setback for females), with rates multiplied by 125% for post-retirement disabled mortality. Mortality rates are projected from 2014 using the Social Security Administration (SSA) Intermediate Cost scale.

Other Information:Notes There were no benefit changes during the year.

The economic assumptions (excluding salary increases) and the asset smoothing method were updated beginning with the actuarial valuation as of July 1, 2017 based on a review performed by GRS. All other actuarial assumptions were adopted by the Board based on an experience study covering the period July 1, 2009, through June 30, 2014.The employer rate to the System is the statutory contribution rate of 19.70% of payroll.

Methods and Assumptions Used to Determine GASB 67/68 Net Pension Liability:Actuarial Cost Method Entry Age NormalAsset Valuation Method Plan Fiduciary Net Position (Market value of assets, no asset smoothing)Inflation 2.50%Salary Increases Service-based table for members with less than five years of service and age-based table for members with

more than five years of serviceInvestment Rate of Return 7.50%Retirement Age Age-based table of rates that are specific to the type of eligibil ity condition. Mortality RP 2000 Combined Healthy Mortality table, sex-distinct, with rates set back 2 years for males and 3 years

for females. RP 2000 Disabled Mortality table, sex-distinct, with rates set back 1 years for males (no setback for females), with rates multiplied by 125% for post-retirement disabled mortality. Mortality rates are projected from 2014 using the Social Security Administration (SSA) Intermediate Cost scale.

Other Information:Notes There were no benefit changes during the year.

The economic assumptions (excluding salary increases) were updated beginning with the actuarial valuation as of July 1, 2017 based on a review performed by GRS. The investment return assumption was decreased from 7.75% to 7.50% beginning with the actuarial valuation as of July 1, 2019. All other actuarial assumptions were adopted by the Board based on an experience study covering the period July 1, 2009, through June 30, 2014.The employer rate to the System is the statutory contribution rate of 19.70% of payroll.



D-15

Schedule of Reconciliation of Net Pension Liability

Beginning Net New Net Recognition of Ending NetPension Pension Employer Deferred Prior Net Deferred Pension

FY Ending Liability Expense Contributions (Inflows)/Outflows (Inflows)/Outflows LiabilityJune 30, (1) (2) (3) (4) (5) (6)=(1)+(2)-(3)+(4)-(5)

2014 14,829,316$ 815,608$ 1,864,632$ (4,014,256)$ -$ 9,766,036$ 2015 9,766,036 1,203,461 2,002,291 3,482,487 (986,796) 13,436,489 2016 13,436,489 3,203,032 2,127,355 7,373,367 (225,090) 22,110,623 2017 22,110,623 3,659,448 2,155,944 (1,537,350) 1,366,015 20,710,762 2018 20,710,762 3,195,876 2,152,970 (1,381,925) 914,783 19,456,960 2019 19,456,960 5,175,123 2,090,886 3,898,180 1,539,866 24,899,511

10 fiscal years will be built prospectively. Values prior to fiscal year ending June 30, 2016 were calculated by the prior actuary.

SECTION E ACTUARIAL VALUATION PROCEDURES

Actuarial Assumptions in the Actuarial Valuation Process


E-1

Normal cost and the allocation of benefit values between service rendered before and after the valuation date were determined using the Individual Entry Age Normal actuarial cost method having the following characteristics:

• The normal cost for each individual active member, payable from the date of employment to the date of retirement, is sufficient to accumulate the value of the member’s benefit at the time of retirement; and

• Each annual normal cost is a constant percentage of the member’s year-by-year projected covered pay.

Financing of Unfunded Actuarial Accrued Liabilities. The unfunded actuarial accrued liability is amortized using 20-year open level-percentage of pay amortization of the unfunded liability as of the actuarial valuation date for purposes of calculating the actuarial contribution rate. Actuarial Value of Pension Plan Assets. The calculated value is determined by adjusting the market value of assets to reflect the investment gains and losses (the difference between the actual investment return and the expected investment return) during each of the last five years at the rate of 20 percent per year. This asset smoothing method was adopted by the Board for use beginning with the July, 1 2017 actuarial valuation. Net deferred asset gains attributable to fiscal years 2016 and prior were fully recognized as of July 1, 2017. Actuarial Valuation Assumptions. The contribution and benefit values of the System are calculated by applying actuarial assumptions to the benefit provisions and census information furnished, using the actuarial cost method described above. The principal areas of financial risk which require assumptions about future experiences are:

• Long-term rates of investment return to be generated by the assets of the Plan; • Patterns of pay increases to members; • Rates of mortality among members, retirees and beneficiaries; • Rates of withdrawal of active members; • Rates of disability among members; and • The age patterns of actual retirement.

In an actuarial valuation, the monetary effect of each assumption is calculated for as long as a present covered person survives; a period of time which can be as long as a century. Actual experience of the Plan will not coincide exactly with assumed experience. Each actuarial valuation provides a complete recalculation of assumed future experience and takes into account all past differences between assumed and actual experience. The result is a continual series of adjustments (usually small) to the computed contribution rate.

Actuarial Assumptions in the Actuarial Valuation Process

(Concluded)


E-2

From time-to-time it becomes appropriate to modify one or more of the actuarial assumptions, to reflect experience trends (but not random year-to-year fluctuations). Thus, an experience review of the North Dakota Public Employees’ Retirement System for the period July 1, 2009 to July 1, 2014, was performed by the prior actuary to compare the demographic and economic experience against the actuarial assumptions used in the actuarial valuations. Most of the actuarial assumptions described in this section were adopted by the Board for use beginning with the July 1, 2015 actuarial valuation. Additional information regarding the rationale for the actuarial assumptions based on the prior actuary’s experience study may be found in the 2015 experience review report. All actuarial assumptions are expectations of future experience, not current market measures. Prior to the July 1, 2017 actuarial valuation, GRS performed an economic study to review the key economic actuarial assumptions and the asset valuation method. Additional information regarding the rationale for the actuarial assumptions based on the GRS economic study may be found in the report dated February 20, 2017. GRS did an additional review of the investment return assumption prior to the July 1, 2019 actuarial valuation and issued a letter dated April 1, 2019. Additional information regarding the decrease in the investment return assumption can be found in this letter. Except where noted, most actuarial assumptions described in this section were adopted by the Board for use beginning with the July 1, 2015 actuarial valuation. The actuarial assumptions were provided by, and are the responsibility of, the NDPERS Board. GRS was unable to judge the reasonableness of some of the actuarial assumptions and methods without performing a substantial amount of additional work beyond the scope of the assignment, and did not do so.

Actuarial Valuation Assumptions


E-3

Current Actuarial Valuation Assumptions and Methods

The assumed rate of investment return used was 7.50 percent, net of expenses, annually. This assumption was adopted by the Board for use beginning with the July 1, 2019 actuarial valuation. The assumed rate of price inflation is 2.50 percent. No Cost of Living Adjustments (COLA) are provided to benefits recipients. Therefore, there is no COLA assumption for this actuarial valuation. The rates of annual salary increase used for individual members are in accordance with the following table. This assumption is used to project a member’s current salary to the salaries upon which benefit amounts will be based.

Service At Beginning

of YearIncrease

Rate0 15.00%1 10.00%2 8.00%

Age*Under 36 8.00%36 - 40 7.50%41 - 49 6.00%

50+ 5.00% *Age-based salary increase rates apply for employees with three or more years of service.

The assumed rate of total payroll growth used in amortizing the unfunded liability as a level percentage of pay is 3.75 percent. This assumption was adopted by the Board for use beginning with the July 1, 2017 actuarial valuation. The assumed rate of benefit indexing for inactive vested benefits is 3.00 percent. This assumption was adopted by the Board for use beginning with the July 1, 2017, actuarial valuation. Application of Internal Revenue Code Section 415 Limits Benefits for future retirees are assumed to be limited by the IRC Section 415 limits. The limit for retirement ages of 62 and older is $225,000 in 2019. The limits for retirement ages before age 62 are reduced from age 62 for early commencement using 5.0% interest, beginning of month payments, the 2019 Applicable Mortality Table (as published in IRS Notice 2018-83), and assumes forfeitable accrued benefits upon death prior to retirement.

Actuarial Valuation Assumptions (Continued)


E-4

The projected limits are assumed to increase by 2.50 percent annually. This assumption was adopted by the Board for use beginning with the July 1, 2017, actuarial valuation. The mortality assumptions are as follows:

Male Female Setback Setback

RP-2000 Combined Healthy Mortality Table (healthy mortality)*

2 years 3 years

RP-2000 Disabled Retiree Mortality Table (disabled post retirement)**

1 year 0 years

*To provide a margin for future mortality improvements, generational mortality improvements from the year 2014 using the Social Security Administration (SSA) 2014 Intermediate Cost scale were assumed.

**Rates multiplied by 125 percent.

Following is a table with the life expectancies by age as of the actuarial valuation date.

Age Men Women Men Women

20 66.29 70.55 26.99 43.0625 61.06 65.29 25.76 40.0030 55.84 60.03 24.34 36.8035 50.61 54.76 22.70 33.4440 45.43 49.53 20.81 29.9245 40.29 44.32 18.63 26.2350 35.20 39.17 16.28 22.6055 30.20 34.10 14.20 19.3760 25.34 29.12 12.29 16.4765 20.72 24.33 10.46 13.7770 16.50 19.88 8.67 11.2675 12.70 15.81 7.02 9.0480 9.41 12.21 5.60 7.1385 6.72 9.10 4.45 5.5190 4.70 6.59 3.40 4.2095 3.37 4.86 2.42 3.22

100 2.60 3.88 1.85 2.66105 2.20 3.20 1.56 2.09

Expectancy (years) in 2019

Healthy Mortality Disabled Mortality

Future LifeExpectancy (years) in 2019

Post-RetirementFuture Life



E-5

Rates of separation from active membership are represented by the following table (rates do not apply to members eligible to retire and do not include separation on account of death or disability). This assumption measures the probabilities of members terminating employment.

0 10.00%1 5.00%2 5.00%3 5.00%4 5.00%

AgeUnder 35 2.50%

35+ 1.00%

Rates

Service Beginning

of Year

Service and Age-Based Rates For First Five Years of Service

Rates

Vested participants who terminate are assumed to elect the option with the greater present value:

1) A refund of their accumulated contributions with interest or 2) A deferred benefit.

Withdrawal rates end upon eligibility for early retirement. Early retirement eligibility is as follows: Age 50 and 10 years of service.



E-6

Rates of disability: Before age 65: Males: 20% of OASDI disability incidence rates.

Females: 10% of OASDI disability incidence rates. Age 65 and later: 0.25% per year. Rates of disability were as follows:

Age Male Female20 0.0120% 0.0060%25 0.0171% 0.0085%30 0.0220% 0.0110%35 0.0295% 0.0147%40 0.0440% 0.0220%45 0.0719% 0.0360%50 0.1212% 0.0606%55 0.2018% 0.1009%60 0.3254% 0.1627%65 0.2500% 0.2500%

Rates of retirement for members eligible to retire during the next year were as follows:

Age Male & Female50 20.00%51 20.00%52 20.00%53 20.00%54 20.00%55+ 100.00%

Assumed Service Credit:

All active members (full time and part time) are assumed to earn one full year of service for each assumed future year of service.

Marital Status:

It is assumed that 100 percent of participants have an eligible spouse at the time of retirement or pre-retirement death. The male spouse is assumed to be three years older than the female spouse. Spouses are assumed to be the opposite sex of the employees and retirees. The relatively low rate of same-sex spouses does not have a material actuarial impact on the actuarial valuation results.



E-7

Form of Payment Election Assumption:

Form of Payment Election Percentage 50% Joint and

Survivor 100%

Benefit Service:

Exact fractional years of service are used to determine the amount of benefit payable.

Decrement Timing: Retirement is assumed to occur at the beginning of the year. All other decrements are assumed to occur at the middle of the year.

Decrement Operation:

Turnover decrements do not operate after the member reaches retirement eligibility (early or normal).

Eligibility Testing:

Eligibility for benefits is determined based upon the age nearest birthday and service on the date the decrement is assumed to occur.

Pay Increase Timing:

Beginning of (fiscal) year.

Expenses:

Assumed administrative expenses were added to the Normal Cost and are based on the prior year’s expenses, adjusted for inflation. The assumed amount added to the Normal Cost is:

ExpensesAssumed FY 2019 31,112$ Actual FY 2019 43,555 Assumed FY 2020 44,644

Changes in Actuarial Valuation Assumptions and Methods since the Previous Actuarial Valuation

The Board adopted a decrease in the investment return assumption from 7.75 percent to 7.50 percent first effective with the actuarial valuation as of July 1, 2019. All other actuarial assumptions and the actuarial cost method remain unchanged from the last actuarial valuation as of July 1, 2018.

SECTION F BENEFIT PROVISIONS

Brief Summary of Plan Provisions as of July 1, 2019


F-1

Current Actuarial Valuation Plan Provisions This Section summarizes the major benefit provisions of the North Dakota Highway Patrolmen’s Retirement System as included in the actuarial valuation. It is not intended to be, nor should it be, interpreted as a complete statement of all plan provisions. 1. Normal Service Retirement:

Eligibility: Attainment of age 55 with at least 10 years of eligible employment, or at any age with age plus service equal to at least 80 (Rule of 80). Benefit: 3.60% of final average salary for each of the first 25 years of service plus 1.75% of final average salary for service in excess of 25 years.

2. Early Retirement: Eligibility: Attainment of age 50 with 10 years of eligible employment. Benefit: The Normal Service Retirement benefit as determined above, reduced by one-half of one percent for each month before age 55.

3. Disability Benefit: Eligibility: Accumulation of six months of service and inability to engage in substantial gainful activity. Benefit: 70% of the member’s final average salary at disability minus workers’ compensation, with a minimum of $100 per month.

Brief Summary of Plan Provisions as of July 1, 2019 (Continued)


F-2

4. Deferred Vested Retirement: Eligibility: Ten years of eligible employment. Benefit: The Normal Service Retirement benefit i s payable at age 55 or the Rule of 80, if earlier. Vested benefits are indexed at a rate set by the Retirement Board based on the increase in final average salary from date of termination to benefit commencement date, as follows:

Year BeginningAverage Annual

IncreaseThree-Year Average

Increase7/1/1994 3.00% 3.01%7/1/1995 2.00% 2.86%7/1/1996 2.00% 2.33%7/1/1997 3.00% 2.33%7/1/1998 1.80% 2.27%7/1/1999 1.26% 2.02%7/1/2000 2.00% 1.69%7/1/2001 1.81% 1.69%7/1/2002 1.73% 1.85%7/1/2003 0.00% 1.18%7/1/2004 0.00% 0.58%7/1/2005 4.00% 1.33%7/1/2006 4.00% 2.67%7/1/2007 4.00% 4.00%7/1/2008 4.00% 4.00%7/1/2009 5.00% 4.33%7/1/2010 5.00% 4.67%7/1/2011 2.00% 4.00%7/1/2012 2.00% 3.00%7/1/2013 3.00% 2.33%7/1/2014 3.00% 2.67%7/1/2015 3.00% 3.00%7/1/2016 2.00% 2.67%7/1/2017 0.00% 1.67%7/1/2018 0.00% 0.67%7/1/2019 2.00% 0.67%

Reduced early retirement benefits can be elected upon attainment of age 50.



F-3

5. Pre-Retirement Death Benefits:

(a) Eligibility: Ten years of eligible employment. Benefit: One of the following options:

• Lump sum payment of member’s accumulated contributions with interest.

• 50% of the member’s accrued benefit (not reduced on account of age) for the surviving spouse’s lifetime.

(b) Eligibility:

Less than 10 years of service. Benefit: Lump sum payment of member’s accumulated contributions with interest.

6. Normal and Optional Forms of Payment: Normal form of payment: Monthly benefit for life with 50% of the benefit continuing for the life of the surviving spouse (if any). Optional forms of payment:

• 100% joint and survivor annuity. • Twenty-year certain and life annuity. • Ten-year certain and life annuity. • A partial lump sum payment in addition to one of the annuity options above.

• An actuarially equivalent graduated benefit option with either a one percent or two

percent increase to be applied the first day of January of each year. Not available for disability or early retirements or in combination with a partial lump sum option or a deferred normal retirement option.



F-4

7. Final Average Salary: Average of the highest salary received by the member for any 36 months employed during the last 180 months of employment.

8. Contributions: Member contributions as a percent of monthly salary: 13.30% Member contributions earn interest at an annual rate equal to 0.5% less than the actuarial interest rate assumption. The current rate is 7.25% and the rate is decreasing to 7.00% effective January 1, 2020. State contributions as a percent of monthly salary for each participating member: 19.70% Changes in Plan Provisions since the Previous Actuarial Valuation There have been no changes in plan provisions since the previous actuarial valuation as of July 1, 2018.

SECTION G CALCULATION OF THE GASB STATEMENT NOS. 67 AND 68 SINGLE DISCOUNT RATE

Calculation of the Single Discount Rate


G-1

GASB Statement No. 67 includes a specific requirement for the discount rate that is used for the purpose of the measurement of the Total Pension Liability. This rate considers the ability of the System to meet benefit obligations in the future. To make this determination, employer contributions, employee contributions, benefit payments, expenses and investment returns are projected into the future. The current employer and employee fixed rate contributions are assumed to be made in each future year. The Plan Net Position (assets) in future years can then be determined and compared to its obligation to make benefit payments in those years. As long as assets are projected to be on hand in a future year, the assumed actuarial valuation discount rate is used. In years where assets are not projected to be sufficient to meet benefit payments, the use of a municipal bond rate is required, as described in the following paragraph. The Single Discount Rate (SDR) is equivalent to applying these two rates to the benefits that are projected to be paid during the different time periods. The SDR reflects (1) the long-term expected rate of return on pension plan investments (during the period in which the fiduciary net position is projected to be sufficient to pay benefits) and (2) a tax-exempt municipal bond rate based on an index of 20-year general obligation bonds with an average AA credit rating as of the measurement date (to the extent that the contributions for use with the long-term expected rate of return are not met). For the purpose of this actuarial valuation, the expected rate of return on pension plan investments is 7.50%; the municipal bond rate is 3.13%; and the resulting Single Discount Rate is 7.50%. The tables in this section provide detailed information on the development of the Single Discount Rate for the Highway Patrol plan. The Projection of Contributions table shows the development of expected contributions in future years. Normal Cost contributions for future hires are not included (nor are their liabilities). The Projection of Plan Fiduciary Net Position table shows the development of expected asset levels in future years. The Present Values of Projected Benefit Payments table shows the development of the Single Discount Rate (SDR). It breaks down the benefit payments into present values for funded and unfunded portions and shows the equivalent total at the SDR.

Projection of Contributions


G-2

Projected Contributions from Current Employees

Projected Service Cost and Expense

Contributions

ProjectedUAL

Contributions

ProjectedTotal

Contributions Admin Expenses Total EANC

2020 1,473,852$ 1,447,212$ 734,789$ 3,655,853$ 43,571$ 2,877,493$ 2021 1,522,801 1,490,216 861,032 3,874,050 43,361 2,969,656 2022 1,559,698 1,521,213 935,103 4,016,014 43,192 3,037,720 2023 1,602,106 1,557,012 997,236 4,156,354 42,979 3,116,139 2024 1,639,928 1,586,033 1,069,294 4,295,256 42,586 3,183,376 2025 1,668,204 1,604,964 1,154,891 4,428,060 42,145 3,231,023 2026 1,692,157 1,617,557 1,241,049 4,550,762 41,249 3,268,465 2027 1,687,857 1,602,543 1,352,079 4,642,479 40,623 3,249,777 2028 1,701,908 1,604,834 1,419,988 4,726,731 39,715 3,267,027 2029 1,695,887 1,585,464 1,527,704 4,809,054 38,899 3,242,451 2030 1,696,512 1,575,158 1,623,206 4,894,877 38,183 3,233,488 2031 1,702,859 1,569,076 1,717,199 4,989,134 37,296 3,234,639 2032 1,696,620 1,551,603 1,831,439 5,079,662 36,345 3,211,878 2033 1,686,869 1,527,662 1,945,347 5,159,877 34,682 3,179,849 2034 1,629,995 1,461,627 2,093,824 5,185,446 33,132 3,058,491 2035 1,580,733 1,400,402 2,201,326 5,182,460 31,510 2,949,624 2036 1,527,353 1,336,085 2,326,220 5,189,658 29,781 2,833,657 2037 1,466,467 1,265,265 2,455,781 5,187,513 27,250 2,704,482 2038 1,353,967 1,146,850 2,622,178 5,122,995 24,484 2,476,333 2039 1,225,903 1,017,954 2,750,013 4,993,870 22,177 2,221,680 2040 1,125,882 912,590 2,852,696 4,891,168 19,100 2,019,372 2041 978,120 764,083 3,013,765 4,755,968 16,398 1,725,805 2042 850,529 640,389 3,113,335 4,604,253 13,886 1,477,032 2043 729,729 535,830 3,203,977 4,469,535 11,272 1,254,287 2044 599,593 419,308 3,315,192 4,334,092 8,471 1,010,430 2045 455,949 299,301 3,395,245 4,150,496 6,005 749,245 2046 327,630 204,546 3,430,874 3,963,050 4,286 527,890 2047 238,177 142,520 3,460,746 3,841,443 2,866 377,831 2048 162,300 93,053 3,505,869 3,761,222 1,674 253,679 2049 96,589 55,557 3,517,393 3,669,539 417 151,729 2050 24,448 12,663 3,548,405 3,585,516 190 36,921 2051 11,393 5,236 3,576,131 3,592,760 - 16,629 2052 - - 3,635,295 3,635,295 - - 2053 - - 3,712,679 3,712,679 - - 2054 - - 3,774,144 3,774,144 - - 2055 - - 3,866,598 3,866,598 - - 2056 - - 3,983,966 3,983,966 - - 2057 - - 4,107,139 4,107,139 - - 2058 - - 4,221,740 4,221,740 - - 2059 - - 4,352,734 4,352,734 - - 2060 - - 4,479,049 4,479,049 - - 2061 - - 4,619,192 4,619,192 - - 2062 - - 4,746,280 4,746,280 - - 2063 - - 4,881,363 4,881,363 - - 2064 - - 5,045,673 5,045,673 - - 2065 - - 5,205,160 5,205,160 - - 2066 - - 5,357,763 5,357,763 - - 2067 - - 5,537,329 5,537,329 - - 2068 - - 5,771,869 5,771,869 - - 2069 - - 6,005,014 6,005,014 - -

Year

Projection of Plan Fiduciary Net Position


G-3

ProjectedBeginning

Plan Fiduciary Net Position

ProjectedTotal

ContributionsProjected

Benefit Payments

ProjectedAdministrative

ExpensesProjected Investment

Earnings at 7.500%

ProjectedEnding


(a) (b) (c) (d) (e) (f)=(a)+(b)-(c)-(d)+(e)

2020 81,415,519$ 3,655,853$ 5,678,230$ 43,571$ 6,030,091$ 85,379,663$ 2021 85,379,663 3,874,050 5,888,036 43,361 6,327,719 89,650,034 2022 89,650,034 4,016,014 6,071,229 43,192 6,646,485 94,198,113 2023 94,198,113 4,156,354 6,270,964 42,979 6,985,412 99,025,935 2024 99,025,935 4,295,256 6,533,446 42,586 7,342,962 104,088,121 2025 104,088,121 4,428,060 6,823,117 42,145 7,716,866 109,367,785 2026 109,367,785 4,550,762 7,302,246 41,249 8,099,750 114,674,802 2027 114,674,802 4,642,479 7,646,627 40,623 8,488,495 120,118,525 2028 120,118,525 4,726,731 8,090,112 39,715 8,883,580 125,599,009 2029 125,599,009 4,809,054 8,507,123 38,899 9,282,323 131,144,363 2030 131,144,363 4,894,877 8,895,814 38,183 9,687,098 136,792,342 2031 136,792,342 4,989,134 9,373,575 37,296 10,096,608 142,467,213 2032 142,467,213 5,079,662 9,838,382 36,345 10,508,477 148,180,625 2033 148,180,625 5,159,877 10,560,546 34,682 10,913,406 153,658,680 2034 153,658,680 5,185,446 11,240,099 33,132 11,300,236 158,871,132 2035 158,871,132 5,182,460 11,780,531 31,510 11,671,220 163,912,770 2036 163,912,770 5,189,658 12,416,590 29,781 12,026,251 168,682,307 2037 168,682,307 5,187,513 13,305,400 27,250 12,351,252 172,888,422 2038 172,888,422 5,122,995 14,263,712 24,484 12,629,150 176,352,371 2039 176,352,371 4,993,870 15,012,242 22,177 12,856,714 179,168,537 2040 179,168,537 4,891,168 15,992,984 19,100 13,028,145 181,075,766 2041 181,075,766 4,755,968 16,838,755 16,398 13,135,165 182,111,747 2042 182,111,747 4,604,253 17,550,776 13,886 13,181,152 182,332,490 2043 182,332,490 4,469,535 18,303,247 11,272 13,165,136 181,652,643 2044 181,652,643 4,334,092 19,061,237 8,471 13,081,352 179,998,380 2045 179,998,380 4,150,496 19,671,829 6,005 12,928,130 177,399,172 2046 177,399,172 3,963,050 20,003,886 4,286 12,714,123 174,068,172 2047 174,068,172 3,841,443 20,231,323 2,866 12,451,498 170,126,924 2048 170,126,924 3,761,222 20,366,446 1,674 12,148,019 165,668,046 2049 165,668,046 3,669,539 20,511,073 417 11,804,948 160,631,044 2050 160,631,044 3,585,516 20,332,800 190 11,430,652 155,314,221 2051 155,314,221 3,592,760 20,129,466 0 11,039,651 149,817,166 2052 149,817,166 3,635,295 19,857,914 0 10,638,937 144,233,484 2053 144,233,484 3,712,679 19,573,879 0 10,233,469 138,605,754 2054 138,605,754 3,774,144 19,276,765 0 9,824,593 132,927,726 2055 132,927,726 3,866,598 18,965,919 0 9,413,591 127,241,995 2056 127,241,995 3,983,966 18,640,885 0 9,003,452 121,588,527 2057 121,588,527 4,107,139 18,301,375 0 8,596,478 115,990,769 2058 115,990,769 4,221,740 17,947,171 0 8,193,909 110,459,248 2059 110,459,248 4,352,734 17,578,165 0 7,797,456 105,031,273 2060 105,031,273 4,479,049 17,194,383 0 7,409,141 99,725,080 2061 99,725,080 4,619,192 16,795,884 0 7,031,010 94,579,397 2062 94,579,397 4,746,280 16,382,717 0 6,664,977 89,607,938 2063 89,607,938 4,881,363 15,955,109 0 6,312,837 84,847,028 2064 84,847,028 5,045,673 15,513,325 0 5,978,087 80,357,463 2065 80,357,463 5,205,160 15,057,379 0 5,664,031 76,169,275 2066 76,169,275 5,357,763 14,587,084 0 5,372,853 72,312,807 2067 72,312,807 5,537,329 14,102,244 0 5,108,083 68,855,974 2068 68,855,974 5,771,869 13,602,740 0 4,875,849 65,900,953 2069 65,900,953 6,005,014 13,088,589 0 4,681,740 63,499,117

Year

Projection of Plan Fiduciary Net Position (Continued)


G-4

ProjectedBeginning


ProjectedTotal

ContributionsProjected

Benefit Payments

ProjectedAdministrative

ExpensesProjected Investment

Earnings at 7.500%

ProjectedEnding


(a) (b) (c) (d) (e) (f)=(a)+(b)-(c)-(d)+(e)2070 63,499,117$ 6,263,901 12,560,033$ 0$ 4,530,597$ 61,733,582 2071 61,733,582 6,558,892 12,017,576 0 4,429,019 60,703,916 2072 60,703,916 6,874,034 11,461,966 0 4,383,857 60,499,840 2073 60,499,840 7,220,700 10,894,160 0 4,402,224 61,228,605 2074 61,228,605 7,569,627 10,315,350 0 4,491,042 62,973,924 2075 62,973,924 7,953,437 9,727,292 0 4,657,727 65,857,797 2076 65,857,797 8,356,907 9,132,214 0 4,910,786 69,993,276 2077 69,993,276 8,742,882 8,532,511 0 5,257,242 75,460,889 2078 75,460,889 9,131,560 7,931,202 0 5,703,766 82,365,013 2079 82,365,013 9,542,261 7,331,862 0 6,258,767 90,834,179 2080 90,834,179 9,958,940 6,738,533 0 6,931,145 100,985,732 2081 100,985,732 10,359,910 6,155,563 0 7,728,743 112,918,821 2082 112,918,821 10,764,627 5,587,394 0 8,659,548 126,755,602 2083 126,755,602 11,163,578 5,038,385 0 9,732,212 142,613,007 2084 142,613,007 11,586,976 4,512,559 0 10,956,470 160,643,895 2085 160,643,895 12,011,622 4,013,477 0 12,342,800 180,984,841 2086 180,984,841 12,444,352 3,544,218 0 13,901,584 203,786,560 2087 203,786,560 12,890,615 3,107,203 0 15,644,237 229,214,209 2088 229,214,209 13,352,338 2,704,239 0 17,583,151 257,445,458 2089 257,445,458 13,836,650 2,336,347 0 19,731,874 288,677,636 2090 288,677,636 14,343,430 2,003,857 0 22,105,191 323,122,401 2091 323,122,401 14,870,972 1,706,350 0 24,718,929 361,005,952 2092 361,005,952 15,421,016 1,442,792 0 27,590,154 402,574,330 2093 402,574,330 16,001,264 1,211,480 0 30,737,665 448,101,779 2094 448,101,779 16,611,741 1,010,481 0 34,182,104 497,885,144 2095 497,885,144 17,252,697 837,586 0 37,945,824 552,246,079 2096 552,246,079 17,929,968 690,019 0 42,053,266 611,539,293 2097 611,539,293 18,648,689 565,280 0 46,531,316 676,154,018 2098 676,154,018 19,408,773 460,577 0 51,409,263 746,511,477 2099 746,511,477 20,209,376 373,080 0 56,718,774 823,066,546 2100 823,066,546 21,052,366 300,737 0 62,494,109 906,312,284 2101 906,312,284 21,938,960 240,973 0 68,772,386 996,782,657 2102 996,782,657 22,868,160 191,962 0 75,593,684 1,095,052,539 2103 1,095,052,539 23,832,298 152,071 0 83,000,895 1,201,733,661 2104 1,201,733,661 24,831,533 119,717 0 91,039,965 1,317,485,441 2105 1,317,485,441 25,864,998 93,125 0 99,760,382 1,443,017,696 2106 1,443,017,696 26,924,749 71,458 0 109,215,121 1,579,086,108 2107 1,579,086,108 28,009,346 54,821 0 119,460,801 1,726,501,434 2108 1,726,501,434 29,117,449 41,257 0 130,558,253 1,886,135,879 2109 1,886,135,879 30,248,449 30,626 0 142,572,874 2,058,926,576 2110 2,058,926,576 31,400,775 22,397 0 155,574,910 2,245,879,864 2111 2,245,879,864 32,573,048 15,874 0 169,639,812 2,448,076,851 2112 2,448,076,851 33,768,757 11,227 0 184,848,786 2,666,683,167 2113 2,666,683,167 34,992,723 7,640 0 201,289,461 2,902,957,710 2114 2,902,957,710 36,247,101 5,179 0 219,056,331 3,158,255,964 2115 3,158,255,964 37,534,226 3,222 0 238,251,166 3,434,038,135 2116 3,434,038,135 38,860,912 1,816 0 258,983,732 3,731,880,964 2117 3,731,880,964 40,231,861 506 0 281,372,474 4,053,484,793 2118 4,053,484,793 41,654,458 212 0 305,545,155 4,400,684,193 2119 4,400,684,193 43,133,227 12 0 331,639,569 4,775,456,977

Year

Discount Rate Development Present Values of Projected Benefits Ending

June 30 for 2020 to 2069


G-5

ProjectedBeginning


ProjectedBenefit Payments

Funded Portion ofProjected

Benefit Payments

Unfunded Portion ofProjected

Benefit Payments

Present Value of Funded Benefit Payments Using

Expected Return Rate of 7.50%

(v)

Present Value of Unfunded Benefit

Payments Using Municipal Bond Rate

of 3.13%(vf)

Present Value ofAll Benefit

Payments UsingSingle Discount Rate

(SDR) of 7.50%

(b) (c) (d) (e) (f)=(d)*v^((a)-.5) (g)=(e)*vf ^((a)-.5) (h)=((c)/(1+SDR)^(a-.5)

2020 81,415,519$ 5,678,230$ 5,678,230$ 0$ 5,476,571$ 0$ 5,476,571$ 2021 85,379,663 5,888,036 5,888,036 0 5,282,722 0 5,282,722 2022 89,650,034 6,071,229 6,071,229 0 5,067,053 0 5,067,053 2023 94,198,113 6,270,964 6,270,964 0 4,868,607 0 4,868,607 2024 99,025,935 6,533,446 6,533,446 0 4,718,503 0 4,718,503 2025 104,088,121 6,823,117 6,823,117 0 4,583,912 0 4,583,912 2026 109,367,785 7,302,246 7,302,246 0 4,563,536 0 4,563,536 2027 114,674,802 7,646,627 7,646,627 0 4,445,355 0 4,445,355 2028 120,118,525 8,090,112 8,090,112 0 4,375,046 0 4,375,046 2029 125,599,009 8,507,123 8,507,123 0 4,279,592 0 4,279,592 2030 131,144,363 8,895,814 8,895,814 0 4,162,908 0 4,162,908 2031 136,792,342 9,373,575 9,373,575 0 4,080,449 0 4,080,449 2032 142,467,213 9,838,382 9,838,382 0 3,983,987 0 3,983,987 2033 148,180,625 10,560,546 10,560,546 0 3,978,067 0 3,978,067 2034 153,658,680 11,240,099 11,240,099 0 3,938,650 0 3,938,650 2035 158,871,132 11,780,531 11,780,531 0 3,840,022 0 3,840,022 2036 163,912,770 12,416,590 12,416,590 0 3,764,980 0 3,764,980 2037 168,682,307 13,305,400 13,305,400 0 3,753,011 0 3,753,011 2038 172,888,422 14,263,712 14,263,712 0 3,742,622 0 3,742,622 2039 176,352,371 15,012,242 15,012,242 0 3,664,211 0 3,664,211 2040 179,168,537 15,992,984 15,992,984 0 3,631,249 0 3,631,249 2041 181,075,766 16,838,755 16,838,755 0 3,556,542 0 3,556,542 2042 182,111,747 17,550,776 17,550,776 0 3,448,307 0 3,448,307 2043 182,332,490 18,303,247 18,303,247 0 3,345,255 0 3,345,255 2044 181,652,643 19,061,237 19,061,237 0 3,240,736 0 3,240,736 2045 179,998,380 19,671,829 19,671,829 0 3,111,207 0 3,111,207 2046 177,399,172 20,003,886 20,003,886 0 2,942,999 0 2,942,999 2047 174,068,172 20,231,323 20,231,323 0 2,768,800 0 2,768,800 2048 170,126,924 20,366,446 20,366,446 0 2,592,830 0 2,592,830 2049 165,668,046 20,511,073 20,511,073 0 2,429,062 0 2,429,062 2050 160,631,044 20,332,800 20,332,800 0 2,239,954 0 2,239,954 2051 155,314,221 20,129,466 20,129,466 0 2,062,840 0 2,062,840 2052 149,817,166 19,857,914 19,857,914 0 1,893,034 0 1,893,034 2053 144,233,484 19,573,879 19,573,879 0 1,735,775 0 1,735,775 2054 138,605,754 19,276,765 19,276,765 0 1,590,165 0 1,590,165 2055 132,927,726 18,965,919 18,965,919 0 1,455,370 0 1,455,370 2056 127,241,995 18,640,885 18,640,885 0 1,330,631 0 1,330,631 2057 121,588,527 18,301,375 18,301,375 0 1,215,252 0 1,215,252 2058 115,990,769 17,947,171 17,947,171 0 1,108,588 0 1,108,588 2059 110,459,248 17,578,165 17,578,165 0 1,010,041 0 1,010,041 2060 105,031,273 17,194,383 17,194,383 0 919,060 0 919,060 2061 99,725,080 16,795,884 16,795,884 0 835,125 0 835,125 2062 94,579,397 16,382,717 16,382,717 0 757,750 0 757,750 2063 89,607,938 15,955,109 15,955,109 0 686,486 0 686,486 2064 84,847,028 15,513,325 15,513,325 0 620,909 0 620,909 2065 80,357,463 15,057,379 15,057,379 0 560,614 0 560,614 2066 76,169,275 14,587,084 14,587,084 0 505,213 0 505,213 2067 72,312,807 14,102,244 14,102,244 0 454,345 0 454,345 2068 68,855,974 13,602,740 13,602,740 0 407,677 0 407,677 2069 65,900,953 13,088,589 13,088,589 0 364,900 0 364,900

Year(a)

Discount Rate Development Present Values of Projected Benefits Ending

June 30 for 2070 to 2119


G-6

ProjectedBeginning


ProjectedBenefit Payments

Funded Portion ofProjected

Benefit Payments

Unfunded Portion ofProjected

Benefit Payments

Present Value of Funded Benefit Payments using

Expected Return Rate (v)

Present Value of Unfunded Benefit

Payments Using Municipal Bond Rate

of 3.13%(vf)

Present Value ofAll Benefit

Payments UsingSingle Discount Rate

(SDR) of 7.50%

(b) (c) (d) (e) (f)=(d)*v^((a)-.5) (g)=(e)*vf ^((a)-.5) (h)=((c)/(1+SDR)^(a-.5)

2070 63,499,117$ 12,560,033$ 12,560,033$ 0$ 325,734$ 0$ 325,734$ 2071 61,733,582 12,017,576 12,017,576 0 289,922 0 289,922 2072 60,703,916 11,461,966 11,461,966 0 257,226 0 257,226 2073 60,499,840 10,894,160 10,894,160 0 227,426 0 227,426 2074 61,228,605 10,315,350 10,315,350 0 200,319 0 200,319 2075 62,973,924 9,727,292 9,727,292 0 175,720 0 175,720 2076 65,857,797 9,132,214 9,132,214 0 153,461 0 153,461 2077 69,993,276 8,532,511 8,532,511 0 133,380 0 133,380 2078 75,460,889 7,931,202 7,931,202 0 115,330 0 115,330 2079 82,365,013 7,331,862 7,331,862 0 99,177 0 99,177 2080 90,834,179 6,738,533 6,738,533 0 84,792 0 84,792 2081 100,985,732 6,155,563 6,155,563 0 72,052 0 72,052 2082 112,918,821 5,587,394 5,587,394 0 60,839 0 60,839 2083 126,755,602 5,038,385 5,038,385 0 51,033 0 51,033 2084 142,613,007 4,512,559 4,512,559 0 42,518 0 42,518 2085 160,643,895 4,013,477 4,013,477 0 35,178 0 35,178 2086 180,984,841 3,544,218 3,544,218 0 28,897 0 28,897 2087 203,786,560 3,107,203 3,107,203 0 23,567 0 23,567 2088 229,214,209 2,704,239 2,704,239 0 19,079 0 19,079 2089 257,445,458 2,336,347 2,336,347 0 15,334 0 15,334 2090 288,677,636 2,003,857 2,003,857 0 12,234 0 12,234 2091 323,122,401 1,706,350 1,706,350 0 9,691 0 9,691 2092 361,005,952 1,442,792 1,442,792 0 7,622 0 7,622 2093 402,574,330 1,211,480 1,211,480 0 5,954 0 5,954 2094 448,101,779 1,010,481 1,010,481 0 4,620 0 4,620 2095 497,885,144 837,586 837,586 0 3,562 0 3,562 2096 552,246,079 690,019 690,019 0 2,730 0 2,730 2097 611,539,293 565,280 565,280 0 2,080 0 2,080 2098 676,154,018 460,577 460,577 0 1,577 0 1,577 2099 746,511,477 373,080 373,080 0 1,188 0 1,188 2100 823,066,546 300,737 300,737 0 891 0 891 2101 906,312,284 240,973 240,973 0 664 0 664 2102 996,782,657 191,962 191,962 0 492 0 492 2103 1,095,052,539 152,071 152,071 0 363 0 363 2104 1,201,733,661 119,717 119,717 0 266 0 266 2105 1,317,485,441 93,125 93,125 0 192 0 192 2106 1,443,017,696 71,458 71,458 0 137 0 137 2107 1,579,086,108 54,821 54,821 0 98 0 98 2108 1,726,501,434 41,257 41,257 0 69 0 69 2109 1,886,135,879 30,626 30,626 0 47 0 47 2110 2,058,926,576 22,397 22,397 0 32 0 32 2111 2,245,879,864 15,874 15,874 0 21 0 21 2112 2,448,076,851 11,227 11,227 0 14 0 14 2113 2,666,683,167 7,640 7,640 0 9 0 9 2114 2,902,957,710 5,179 5,179 0 6 0 6 2115 3,158,255,964 3,222 3,222 0 3 0 3 2116 3,434,038,135 1,816 1,816 0 2 0 2 2117 3,731,880,964 506 506 0 0 0 0 2118 4,053,484,793 212 212 0 0 0 0 2119 4,400,684,193 12 12 0 0 0 0

141,856,068$ 0$ 141,856,068$

Year(a)

Projection of Plan Net Position and Benefit Payments


G-7

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

2020

2023

2026

2029

2032

2035

2038

2041

2044

2047

2050

2053

2056

2059

2062

2065

2068

2071

2074

2077

2080

2083

2086

2089

2092

2095

2098

2101

2104

2107

2110

2113

2116

$ (In Thousands)

Year

PROJECTION OF PLAN NET POSITION AND BENEFIT PAYMENTS

Projected Plan Net Position Projected Benefit Payments for Current Members

SECTION H GLOSSARY OF TERMS

Glossary of Terms


H-1

Accrued Service Service credited under the system which was rendered before the date of the actuarial valuation.

Actuarial Accrued Liability

(AAL) The AAL is the difference between the actuarial present value of all benefits and the actuarial value of future normal costs. The definition comes from the fundamental equation of funding which states that the present value of all benefits is the sum of the Actuarial Accrued Liability and the present value of future normal costs. The AAL may also be referred to as "accrued liability" or "actuarial liability."

Actuarial Assumptions These assumptions are estimates of future experience with respect to rates

of mortality, disability, turnover, retirement, rate or rates of investment income and compensation increases. Actuarial assumptions are generally based on past experience, often modified for projected changes in conditions. Economic assumptions (compensation increases, payroll growth, inflation and investment return) consist of an underlying real rate of return plus an assumption for a long-term average rate of inflation.

Actuarial Cost Method A mathematical budgeting procedure for allocating the dollar amount of the actuarial present value of the pension trust benefits between future normal cost and actuarial accrued liability. The actuarial cost method may also be referred to as the actuarial funding method.

Actuarial Equivalent A single amount or series of amounts of equal actuarial value to another

single amount or series of amounts, computed on the basis of appropriate actuarial assumptions.

Actuarial Gain (Loss) The difference in liabilities between actual experience and expected

experience during the period between two actuarial valuations is the gain (loss) on the accrued liabilities.

Actuarial Present Value (APV) The amount of funds currently required to provide a payment or series of

payments in the future. The present value is determined by discounting future payments at predetermined rates of interest and probabilities of payment.

Actuarial Present Value of Future Plan Benefits

The amount of funds presently required to provide a payment or series of payments in the future. It is determined by discounting the future payments at a predetermined rate of interest, taking into account the probability of payment.

Actuarial Valuation The actuarial valuation report determines, as of the actuarial valuation date,

the service cost, total pension liability, and related actuarial present value of projected benefit payments for pensions.

Actuarial Valuation Date The date as of which an actuarial valuation is performed.

Glossary of Terms


H-2

Actuarial Value of Assets (AVA)

Smoothed value of assets that recognizes the difference between the expected investment return using the actuarial valuation assumption of 7.50 percent and the actual investment return over a five-year period. Dampens volatility of asset value over time.

Actuarially Determined

Contribution (ADC) or Annual Required Contribution (ARC)

A calculated contribution into a defined benefit pension plan for the reporting period, most often determined based on the funding policy of the plan. Typically the Actuarially Determined Contribution has a normal cost payment and an amortization payment.

Amortization Method The method used to determine the periodic amortization payment may be a

level dollar amount, or a level percent of pay amount. The period will typically be expressed in years, and the method will either be “open” (meaning, reset each year) or “closed” (the number of years remaining will decline each year.

Amortization

Paying off an interest-bearing liability by means of periodic payments of interest and principal, as opposed to paying it off with a lump sum payment.

Amortization Payment The amortization payment is the periodic payment required to pay off an interest-discounted amount with payments of interest and principal.

Asset Return The net investment return for the asset divided by the mean asset value.

Example: if $1.00 is invested and yields $1.08 after a year, the asset return is 8.00 percent.

Cost-of-Living Adjustments Postemployment benefit changes intended to adjust benefit payments for the effects of inflation.

Cost-Sharing Multiple-

Employer Defined Benefit Pension Plan (cost-sharing pension plan)

A multiple-employer defined benefit pension plan in which the pension obligations to the employees of more than one employer are pooled and pension plan assets can be used to pay the benefits of the employees of any employer that provides pensions through the pension plan.

Covered-Employee Payroll The payroll of employees that are provided with pensions through the

pension plan. Deferred Inflows and

Outflows The deferred inflows and outflows of pension resources are amounts used under GASB Statement No. 68 in developing the annual pension expense. Deferred inflows and outflows arise with differences between expected and actual experiences; changes of assumptions. The portion of these amounts not included in pension expense should be included in the deferred inflows or outflows of resources.

Glossary of Terms


H-3

Deferred Retirement Option

Program (DROP)

A program that permits a plan member to elect a calculation of benefit payments based on service credits and salary, as applicable, as of the DROP entry date. The plan member continues to provide service to the employer and is paid for the service by the employer after the DROP entry date; however, the pensions that would have been paid to the plan member are credited to an individual member account within the defined benefit pension plan until the end of the DROP period. Other variations for DROP exist and will be more fully detailed in the plan provision section of the valuation report.

Discount Rate

For GASB purposes, the discount rate is the single rate of return that results in the present value of all projected benefit payments to be equal to the sum of the funded and unfunded projected benefit payments, specifically:

1. The benefit payments to be made while the pension plan’s fiduciary net position is projected to be greater than the benefit payments that are projected to be made in the period; and

2. The present value of the benefit payments not in (1) above, discounted using the municipal bond rate.

Entry Age Actuarial Cost

Method (EAN) The EAN is a cost method for allocating the costs of the plan between the normal cost and the accrued liability. The actuarial present value of the projected benefits of each individual included in an actuarial valuation is allocated on a level basis (either level dollar or level percent of pay) over the earnings or service of the individual between entry age and assumed exit ages(s). The portion of the actuarial present value allocated to a valuation year is the normal cost. The portion of this actuarial present value not provided for at a valuation date by the actuarial present value of future normal costs is the actuarial accrued liability. The sum of the accrued liability plus the present value of all future normal costs is the present value of all benefits.

Fiduciary Net Position The fiduciary net position is the market value of the assets of the trust

dedicated to the defined benefit provisions. Funded Ratio The actuarial value of assets divided by the actuarial accrued liability.

Measures the portion of the actuarial accrued liability that is currently funded.

GASB The Governmental Accounting Standards Board is an organization that exists in order to promulgate accounting standards for governmental entities.

Long-Term Expected Rate of

Return The long-term rate of return is the expected return to be earned over the entire trust portfolio based on the asset allocation of the portfolio.

Glossary of Terms


H-4

Market Value of Assets

(MVA)

The value of assets currently held in the trust available to pay for benefits of the Pension Plan. Each of the investments in the trust is valued at market price which is the price at which buyers and sellers trade similar items in the open market.

Money-Weighted Rate of Return

The money-weighted rate of return is a method of calculating the returns that adjusts for the changing amounts actually invested. For purposes of GASB Statement No. 67, money-weighted rate of return is calculated as the internal rate of return on pension plan investments, net of pension plan investment expense.

Multiple-Employer Defined

Benefit Pension Plan A multiple-employer plan is a defined benefit pension plan that is used to provide pensions to the employees of more than one employer.

Municipal Bond Rate The Municipal Bond Rate is the discount rate to be used for those benefit

payments that occur after the assets of the trust have been depleted. Net Pension Liability (NPL) The NPL is the liability of employers and non-employer contributing entities to

plan members for benefits provided through a defined benefit pension plan. Non-Employer Contributing

Entities Non-employer contributing entities are entities that make contributions to a pension plan that is use to provide pensions to the employees of other entities. For purposes of the GASB accounting statements, plan members are not considered non-employer contributing entities.

Normal Cost The annual cost assigned, under the actuarial funding method, to current

and subsequent plan years. Sometimes referred to as “current service cost.” Any payment toward the unfunded actuarial accrued liability is not part of the normal cost.

Other Postemployment

Benefits (OPEB) All postemployment benefits other than retirement income (such as death benefits, life insurance, disability and long-term care) that are provided separately from a pension plan, as well as postemployment healthcare benefits regardless of the manner in which they are provided. Other postemployment benefits do not include termination benefits.

Real Rate of Return The real rate of return is the rate of return on an investment after adjustment

to eliminate inflation. Service Cost The service cost is the portion of the actuarial present value of projected

benefit payments that is attributed to a valuation year.

Glossary of Terms


H-5

Total Pension Expense

The total pension expense is the sum of the following items that are recognized at the end of the employer’s fiscal year: 1. Service Cost 2. Interest on the Total Pension Liability 3. Current-Period Benefit Changes 4. Employee Contributions (made negative for addition here) 5. Projected Earnings on Plan Investments (made negative for addition here) 6. Pension Plan Administrative Expense 7. Other Changes in Plan Fiduciary Net Position 8. Recognition of Outflow (Inflow) of Resources due to Liabilities 9. Recognition of Outflow (Inflow) of Resources due to Assets

Total Pension Liability (TPL) The TPL is the portion of the actuarial present value of projected benefit

payments that is attributed to past periods of member service. Unfunded Actuarial Accrued

Liability (UAAL) The UAAL is the difference between actuarial accrued liability and valuation assets.

Valuation Assets

The valuation assets are the assets used in determining the unfunded liability of the plan. For purposes of GASB Statement Nos. 67 and 68, the valuation assets are equal to the market value of assets.

actuarial valuation as of july 1, 2019 · 2019-11-27 · the actuarial cost method are unchanged...

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