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CITY OF PARIS, TEXAS <br />Notes to Financial Statements (Continued) <br />September 30, 2021 <br />IV. Detailed Notes on All Activities and Funds (Continued) <br />F. Employee Retirement Systems and Plans (Continued) <br />1. Texas Municipal Retirement System (Continued) <br />Actuarial Assumptions (Continued) <br />Salary increases were based on a service -related table. For calculating the actuarial liability and the <br />retirement contribution rates, the gender -distinct 2019 Municipal Retirees of Texas mortality tables are <br />used. The rates are projected on a fully generational basis by scale UMP to account for future mortality <br />improvements. Based on the size of the city, rates are multipled by an additional factor of 100%. For <br />disabled annuitants, the mortality tables for healthy retirees are used with a 4 -year set -forward for males <br />and a 3 -year set -forward for females. In addition, a 3.5% and 3% minimum mortality rate is applied to <br />reflect the impairment for younger members who become disabled for males and females, respectively. <br />The rates are projected on a fully generational basis by scale UMP to account for future mortality <br />improvements subject to the floor. <br />The actuarial assumptions were developed from the actuarial investigation of the experience of TMRS over <br />the four year period from December 31, 2014 to December 31, 2018. They were adopted in 2019 and first <br />used in the December 31, 2019 valuation. <br />The long-term expected rate of return on pension plan investments is 6.75%. The pension plan's policy in <br />regard to the allocation of invested assets is established and may be amended by the TMRS Board of <br />Trustees. Plan assets are managed on a total return basis with an emphasis on both capital appreciation as <br />well as the production of income, in order to satisfy the short-term and long-term funding needs of TMRS. <br />The long-term expected rate of return on pension plan investments was determined using a building-block <br />method in which best estimate ranges of expected future real rates of return (expected returns, net of <br />pension plan investment expense and inflation) are developed for each major asset class. These ranges are <br />combined to produce the long-term expected rate of return by weighting the expected future real rates of <br />return by the target asset allocation percentage and by adding expected inflation. The target allocation and <br />best estimates of arithmetic real rates of return for each major asset class are summarized in the following <br />table: <br />Asset Class <br />Global Equity <br />Core Fixed Income <br />Non -Core Fixed Income <br />Real Return <br />Real Estate <br />Absolute Return <br />Private Equity <br />Total <br />Taraet Allocation <br />ER <br />30.0% <br />10.0 <br />20.0 <br />10.0 <br />10.0 <br />10.0 <br />10.0 <br />100.00/0 <br />Long -Tenn Expected Real <br />Rate of Return (Arithmetic) <br />5.30% <br />1.25 <br />4.14 <br />3.85 <br />4.00 <br />3.48 <br />7.75 <br />