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CITY OF ST. ANTHONY, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 2019 <br /> <br /> <br /> <br /> <br />Actuarial assumptions used in the June 30, 2019 valuation were based on the results of actuarial <br />experience studies. The most recent four-year experience study in the General Employees Plan was <br />completed in 2019. The most recent four-year experience study for Police and Fire Plan was <br />completed in 2016. <br /> <br />The following changes in actuarial assumptions and plan provisions occurred in 2019: <br /> <br />General Employees Fund <br />Changes in Actuarial Assumptions: <br /> The mortality projection scale was changed from MP-2017 to MP-2018. <br /> <br />Changes in Plan Provisions: <br /> The employer supplemental contribution was changed prospectively, decreasing from $31.0 <br />million to $21.0 million per year. The State’s special funding contribution was changed <br />prospectively, requiring $16.0 million due per year through 2031. <br /> <br />Police and Fire Fund <br />Changes in Actuarial Assumptions: <br /> The mortality projection scale was changed from MP-2017 to MP-2018. <br /> <br />Changes in Plan Provisions: <br /> There have been no changes since the prior valuation. <br /> <br />The State Board of Investment, which manages the investments of PERA, prepares an analysis of the <br />reasonableness on a regular basis of the long-term expected rate of return using a building-block <br />method in which best-estimate ranges of expected future rates of return are developed for each major <br />asset class. These ranges are combined to produce an expected long-term rate of return by weighting <br />the expected future rates of return by the target asset allocation percentages. The target allocation and <br />best estimates of geometric real rates of return for each major asset class are summarized in the <br />following table: <br /> <br />Long-Term Expected Long-Term Expected <br />Asset Class Real Rate of Return Nominal Rate of Return <br />Domestic equity 4.76%7.26% <br />International equity 5.41%7.91% <br />Fixed income 2.01%4.51% <br />Real estate and alternatives 4.53%7.03% <br />Cash and equivalents 0.74%3.24% <br />Total (weighted average)5.26% <br />Reduced for assumed investment expense -0.08% <br />Net assumed investment return (rounded to 1/4%)5.25% <br /> <br /> <br />70