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Actuarial Assumptions and Other Inputs
The total OPEB liability was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified:
Inflation 2.25 percent
Salary Increases Based on the revised inflation and individual member pay increases adopted by the 2020 FRS Actuarial Assumptions Conference and used n the July 1, 2020 FRS Actuarial Valuation
Discount Rate 2.45 percent
Healthcare Cost Trend Rates Starting at 6.50% and gradually decreasing according to the
Getzen Model to an ultimate trend rate of 3.99% in 2040
Aging Factors Based on the 2013 SOA Study “Health Care Costs – From Birth to Death.”
Expenses Administrative expenses are included in the per capita health costs.
The discount rate was based on the daily rate of Fidelity’s 20-Year Municipal General Obligation AA Index closest to but not later than the measurement date.
Demographic assumptions employed in the actuarial valuation were the same as those employed in the July 1, 2020, actuarial valuation of the FRS Defined Benefit Pension Plan. These demographic assumptions were developed by FRS from an actuarial experience study, and therefore are appropriate for use in the OPEB Plan actuarial valuation. These include assumed rates of future termination, mortality, disability, and retirement. In addition, salary increase assumptions (for development of the pattern of the normal cost increases) were the same as those used in the July 1, 2020, actuarial valuation of the FRS Defined Benefit Pension Plan. Assumptions used in valuation of benefits for participants of the FRS Investment Plan are the same as for similarly situated participants of the FRS Defined Benefit Pension Plan.