GASB 74 RSI Exhibits. Financial Statement Disclosure (Liabilities as of June 30, 2017)

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1 GASB 74 RSI Exhibits 1. EFFECT OF 1% CHANGE IN HEALTHCARE TREND In the event that healthcare trend rates were 1% higher than forecast and employee contributions were to increase at the forecast rates, the Net OPEB Liability would increase to $91,791,470 or by 27.2% and the corresponding Service Cost would increase to $2,452,608 or by 44.9%. If such healthcare trend rates were 1% less than forecast and employee contributions were to increase at the forecast rate, the Net OPEB Liability would decrease to $55,395,739 or by 23.3% and the corresponding Service Cost would decrease to $1,134,702 or by 34.0%. Impact of a 1% Change in the Healthcare Trend Rate as of June 30, % Decrease (4.00%) Current Trend Rate (5.00%) 1% Increase (6.00%) Net OPEB Liability 55,395,739 72,172,296 91,791,470 Service Cost with Interest 1,134,702 1,718,986 2,491, EFFECT OF 1% CHANGE IN DISCOUNT RATES If the discount rate were 1% higher than what was used in this valuation, the Net OPEB Liability would decrease to $83,711,647 or by 14.6%. If the discount rate were 1% lower than was used in this valuation, the Net OPEB Liability would increase to $61,626,866 or by 16.0%. Impact of a 1% Change in the Discount Rate as of June 30, % Decrease (5.50%) Current Discount Rate (6.50%) 1% Increase (7.50%) Net OPEB Liability 83,711,647 72,172,296 61,626,866 Service Cost with Interest 2,158,570 1,718,986 1,364,182 Page 1

2 3. INVESTMENT POLICY GASB 74 RSI Exhibits Investment Target Allocation & Expected Long-Term Real Rate of Return Asset Class Target Allocation Asset Class Long-Term Expected Real Rate of Return Domestic Equity - Large Cap 14.50% Domestic Equity - Large Cap 4.00% Domestic Equity - Small/Mid Cap 3.50% Domestic Equity - Small/Mid Cap 6.00% International Equity - Developed Market 16.00% International Equity - Developed Market 4.50% International Equity-Emerging Market 6.00% International Equity-Emerging Market 7.00% Domestic Fixed Income 20.00% Domestic Fixed Income 2.00% International Fixed Income 3.00% International Fixed Income 3.00% Alternatives 23.00% Alternatives 6.50% Real Estate 14.00% Real Estate 6.25% Cash 0.00% Cash 0.00% Total % Real Rate of Return 4.79% II. Inflation Assumption 2.75% III. Total Nominal Return [I. + II.] 7.54% IV. Investment Expense 0.50% V.Net Investment Return* [III.-IV.] 7.04% Page 2

3 GASB 74 RSI Exhibits 4. SCHEDULE OF NET OPEB LIABILITY CHANGE Schedule of Changes in the Town's Net OPEB Liability and Related Ratios June 30, 2017 Total OPEB Liability 78,971,459 I. Service Cost 1,718,986 II. Interest on Total OPEB Liability 4,861,019 III. Changes in Benefit terms 0 IV. Difference between Expected & Actual Plan Experience 0 V. Changes of assumptions 0 VI. Benefit payments, including refunds of member contributions (3,057,836) VII. Net Change in OPEB liability [I.+II.+III.+IV.+V.+VI.] 3,522,169 VIII. Total OPEB liability - beginning of period 75,449,290 IX. Total OPEB liability - end of period [VII.+VIII.] 78,971,459 Plan Fiduciary net position 6,799,163 X. Interest on Fiduciary Net Position 323,587 XI. Earning from Plan Investments 414,222 XII. Net investment gain/(loss) [X.+XI] 737,809 XIII.Employer Contribution to trust 1,083,088 XIV. Benefit payments from trust, including refunds of member contributions 0 XV. Administrative expense 0 XVI. Other 0 XVII. Net change in plan fiduciary net position [XII.+XIII] 1,820,897 XVIII. Plan fiduciary net position - beginning of period 4,978,266 XIX. Plan fiduciary net position - end of period [XVII.+XIVIII.] 6,799,163 XX. Net OPEB Liability [IX.-XIX.] 72,172,296 XXI. Plan fidicuary net position as % of total OPEB liability [XIX. / IX.] 8.61% XXII. Covered employee payroll 64,604,681 XXIII. Plan NOL as % of covered employee payroll [XX. / XXII.] % Single Discount Rate to calculate Plan Liabilities 6.50% Page 3

4 GASB 74 RSI Exhibits 4. ACTUARIALLY DETERMINED CONTRIBUTION (ADC) Actuarially Determined Contribution - Deficiency / (Excess) June 30, 2017 I. Service Cost 1,718,986 II. 30 year amortization of NOL at 6.50% 5,189,455 III. Actuarial Determined Contribution [I. + II.] 6,908,441 IV. Contributions in relation to the actuarially determined contribution (4,140,924) V. Contribution deficiency / (excess) [III. + IV.] 2,767,517 Covered employee payroll 64,604,681 Contributions as a % of covered employee payroll 6.41% Page 4

5 Notes to Required Supplementary Information (As of June 30, 2017) Notes to Required Supplementary Information: Valuation Date: Actuarial Cost Method: Asset-Valuation Method: Actuarially Determined Contribution was calculated as of June 30, Individual Entry Age Normal Market Value of Assets as of the Measurement Date, June 30, Actuarial Assumptions: Investment Rate of Return: Single Equivalent Discount Rate: Inflation: Salary Increases: Cost of Living Adjustment: Pre-Retirement Mortality: Post-Retirement Mortality: Disabled Mortality: 7.04%, net of OPEB plan investment expense, including inflation. 6.50% (7.00% for Sewer Enterprise), net of OPEB plan investment expense, including inflation. 2.75% as of June 30, 2017 and for future periods 3.00% annually as of June 30, 2017 and for future periods Not Applicable RP-2000 Employees Mortality Table projected generationally with scale BB and a base year 2009 for males and females. RP-2000 Healthy Annuitant Mortality Table projected generationally with scale BB and a base year 2009 for males and females. RP-2000 Healthy Annuitant Table projected generationally with Scale BB and a base year 2012 for males and females. Page 5

6 Notes to Required Supplementary Information (As of June 30, 2017) Plan Membership Plan Membership: At June 30, 2017, OPEB plan membership consisted of the following Inactive employees or beneficiaries currently receiving benefits: 873 Active Employees: 741 Total: 1,614 Changes in Assumptions: Effective June 30, 2017 Discount rate is 6.50% - previously 5.50% Discount rate for Sewer Enterprise is 7.00% - previously 7.75% The assumed pre-retirement mortality table is the RP-2000 Employees Mortality Table projected generationally with scale BB and a base year 2009 for males and females. The assumed post-retirement mortality table is the RP-2000 Healthy Annuitant Mortality Table projected generationally with scale BB and a base year 2009 for males and females. The actuarial cost method is Individual Entry Age Normal Previously Projected Unit Credit Page 6

Town of Halifax Other Postemployment Benefits Plan. GASB 74/75 Actuarial Valuation. as of June 30, For reporting dates

Town of Halifax Other Postemployment Benefits Plan GASB 74/75 Actuarial Valuation as of June 30, 2016 For reporting dates June 30, 2017 June 30, 2018 Delivered TABLE OF CONTENTS LETTER SECTION PAGE I PRINCIPAL