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CITY OF PLEASANTON NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 Note 11: Defined Benefit Pension Plan (Continued) e.Information Common to the Miscellaneous and Safety Plans Actuarial Assumptions – The total pension liabilities in the June 30, 2021, actuarial valuations were determined using the following actuarial assumptions for the Miscellaneous and Safety Plans: Miscellaneous & Safety June 30, 2020 June 30, 2021 7.15% 2.50% Varies by Entry Age and Service Derived using CalPERS Membership Data for all Funds1 The lesser of Contract COLA or 2.5% until Purchasing Power applies, 2.5% thereafter Entry - Age Normal Cost Method in Accordance with the Requirements of GASB Statement No. 68 1 The mortality table used was developed based on CalPERS specific data. The table includes 15 years of mortality improvements using the Society of Actuaries Scale 90% MP 2016. For more details on this table, please refer to the December 2017 experience study report (based on CalPERS demographic data from 1997 to 2015) that can be found on the CalPERS website. Mortality Measurement Date Valuation Date Post Retirement Benefit Increase Actuarial Cost Method Actuarial Assumptions: Discount Rate Projected Salary Increase Inflation Discount Rate – The discount rate used to measure the total pension liability for each Plan was 7.15 percent. The projection of cash flows used to determine the discount rate for each Plan assumed that contributions from plan members in the Public Employees Retirement Fund (PERF) will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, each Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members for all plans in the PERF. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability for each Plan. The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Such cash flows were developed assuming that both members and employers will make their required contributions on time and as scheduled in all future years. 106