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Notes to the Financial Statements <br />June 30, 2020 <br />E. Retirement Enhancement Pension Plan (continued) <br />Discount rate <br />The discount rate used to measure the total pension liability was 6.25% percent. The <br />projection of cash flows used to determine the discount rate assumed that contributions from <br />the employer will be made at statutorily required rates, actuarially determined. The discount <br />rate is based on the PARS moderate investment policy. <br />Long-term expected rate of return <br />The arithmetic long-term expected real rates of return by asset class for the next 10 years as <br />provided in a report by JP Morgan. For years thereafter, returns were based on historical <br />average index real returns over the last 30 years assuming a similar equity/fixed investment <br />mix and a 2.26% inflation rate. Investment expenses were assumed to be 25 basis points <br />per year. These returns were matched with cash flows for benefits covered by plan assets <br />and the Bond Buyer 20 -Bond General Obligation index was matched with cash flows not <br />covered by plan assets to measure the reasonableness of the choice in discount rate. <br />The expected real rates of return by asset class are as follows: <br />Long-term <br />Current target expected real <br />Asset class allocation return <br />Equity <br />48.25% <br />5.65% <br />Fixed income <br />45.00% <br />1.39% <br />R E ITS <br />1.75% <br />5.06% <br />Liquidity <br />5.00% <br />0.00% <br />Total 100.00% <br />The following table shows the changes in total net pension liability recognized over the <br />measurement period. <br />53 <br />Increase (decrease) <br />Total Pension <br />Plan Fiduciary <br />Net Pension <br />Liability <br />Net Position <br />Liability/(Asset) <br />(a) <br />(b) <br />(c) _ (a) - (b) <br />Measurement date 6/30/2018 <br />$ 5,019,718 <br />$ - <br />$ 5,019,718 <br />Recognized changes resulting from: <br />Service cost <br />74,003 <br />- <br />74,003 <br />Interest <br />181,199 <br />- <br />181,199 <br />Difference between expected and <br />actual experience <br />(104,240) <br />- <br />(104,240) <br />Changes of assumptions <br />(915,222) <br />- <br />(915,222) <br />Net investment income <br />222,780 <br />(222,780) <br />Benefit payments <br />(831,066) <br />(831,066) <br />- <br />Contributions - employer <br />- <br />4,000,000 <br />(4,000,000) <br />Contributions - employee <br />- <br />- <br />- <br />Administrative expenses <br />- <br />(42,311) <br />42,311 <br />Net change <br />(1,595,326) <br />3,349,403 <br />(4,944,729) <br />Measurement date 6/30/2019 <br />$ 3,424,392 <br />$ 3,349,403 <br />$ 74,989 <br />53 <br />