Changes in Net Position ................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................ 80

Union Public Schools Notes to the Financial Statements

FOR THE YEAR ENDED JUNE 30, 2021

NOTE G -EMPLOYEE RETIREMENT SYSTEM

Actuarial Assumptions: The total pension liability as of June 30, 2021, was determined using the following actuarial assumptions; applied to all periods included in the measurement:

 Actuarial Cost Method—Entry Age Normal.

 Inflation—2.25%.

 Future Ad Hoc Cost-of-living Increases—None.

 Salary Increases—Composed of 2.25% wage inflation, plus .75% productivity increase rate, plus step-rate promotional increase for members with less than 25 years of service.

 Investment Rate of Return—7.00%

 Retirement Age—Experience-based table of rates based on age, service, and gender. Adopted by the Board in July 2020 in conjunction with the five year experience study for the period ending June 30, 2019.

 Mortality Rates after Retirement—Males and females: 2020 GRS Southwest Region Teacher Mortality table.

Generational mortality improvements with the Ultimate MP scales are projected from the year 2020.

 Mortality Rates for Active Members—Pub-2010 Teachers Active Employee Mortality table. Generational mortality improvements in accordance with the Ultimate MP scales are projected from the year 2010.

The long-term expected rate of return on pension plan investments was determined using a building block method in which best estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.

The target asset allocation and best estimates of arithmetic expected real rates of return for each major asset class as of June 30, 2021, are summarized in the following table:

Domestic equity International equity Domestic Fixed Income Real estate* Alternative Assets Total

Target

Asset Allocation

43.5 19.0 22.0 9.0 6.5 100.0

Long-Term Expected Real Rate of Return

7.5 8.5 2.5 4.5 6.2

*The Real Estate total expected return is a combination of US Direct Real Estate (unleveraged) and US Value added Real Estate (unleveraged).