Common use of Actuarial Methods and Assumptions Clause in Contracts

Actuarial Methods and Assumptions. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and the plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short- term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long- term perspective of the calculations. In the actuarial valuation as of July 2011, the entry age normal actuarial cost method was used. The actuarial assumptions included a 7.25 percent investment rate of return, which is the expected long- term investment returns on the Department’s funds, a 3% general inflation assumption, an annual aggregate payroll increase rate of 3.25% and healthcare cost trend rate ranging from 8.9% to 5% through the year 2021. The UAAL is being amortized as a level dollar amount over 30 years on a closed basis starting June 30, 2010.

Actuarial Methods and Assumptions. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and the plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short- short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long- long-term perspective of the calculations. In the actuarial valuation as of July 2011June 2013, the entry age normal actuarial cost method was used. The actuarial assumptions included a 7.25 percent investment rate of return, which is the expected long- long-term investment returns on the Department’s funds, a 3% general inflation assumption, an annual aggregate payroll increase rate of 3.25% and healthcare cost trend rate ranging from 8.98.3% to 5% through the year 2021. The UAAL is being amortized as a level dollar amount over 30 years on a closed basis starting June 30, 2010.