Class Target Long-term Expected Real Allocation Rate of Return Income 20.00% 1.70% Tangible Assets 5.00% 4.0% Real Estate 15.00% 5.80% Global Equity 37.00% 6.0% Private Equity 23.00% 9.0% The inflation component used to create the above table is 2.20 percent, and represents WSIB’s most recent long-term estimate of broad economic inflation. Discount Rate The discount rate used to measure the total pension liability was 7.50 percent. To determine the discount rate, an asset sufficiency test was completed to test whether the pension plan’s fiduciary net position was sufficient to make all projected future benefit payments of current plan members. Consistent with current law, the completed asset sufficiency test included an assumed 7.70 percent long-term discount rate to determine funding liabilities for calculating future contributions rate requirements. Consistent with the long-term expected rate of return, a 7.50 percent future investment rate of return on invested assets was assumed for the test. Contributions from plan members and employers are assumed to continue to be made at contractually required rates. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return of 7.50 percent on pension plan investments was applied to determine the total pension liability. Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following table presents the ____________ School District’s proportionate share of the collective net pension liability (NPL) calculated using the discount rate of 7.50 percent, as well
Class Target Allocation Long-term Expected Real Rate of Return Income 20.00% 1.70% Tangible Assets 5.00% 4.0% Real Estate 15.00% 5.80% Global Equity 37.00% 6.0% Private Equity 23.00% 9.0% The inflation component used to create the above table is 2.20 percent, and represents WSIB’s most recent long-term estimate of broad economic inflation. Discount Rate The discount rate used to measure the total pension liability was 7.50 percent. To determine the discount rate, an asset sufficiency test was completed to test whether the pension plan’s fiduciary net position was sufficient to make all projected future benefit payments of current plan members. Consistent with current law, the completed asset sufficiency test included an assumed 7.70 percent long-term discount rate to determine funding liabilities for calculating future contributions rate requirements. Consistent with the long-term expected rate of return, a 7.50 percent future investment rate of return on invested assets was assumed for the test. Contributions from plan members and employers are assumed to continue to be made at contractually required rates. Based on those assumptions, the pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return of 7.50 percent on pension plan investments was applied to determine the total pension liability. Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following table presents the ____________ School District’s proportionate share of the collective net pension liability (NPL) calculated using the discount rate of 7.50 percent, as well
TrackchangeOCBOA_F196_PensionNote16-17.docx