Page 108 - 2018 Comprehensive Annual Financial Report - City of Winston-Salem

Best estimates of real rates of return for each major asset class included in the pension plan’s target asset allocation as of
June 30, 2018, and the nal investment return assumption, are summarized in the following table:
Long-Term
Target Expected Real
Asset Class Allocation Rate of Return
Equity Funds 69% 5.75%
Fixed Income Funds 30 2.85
Cash 1 0.85
Total Weighted Average Real Return 100% 4.83%
Plus in ation 3.00
Total return w/o adjustment 7.83
Risk adjustment (0.58)
Total Expected Return 7.25%

Discount Rate. The discount rate used to measure the total pension liability was 7.25%. The projection of cash ows used
to determine the discount rate assumed that plan member contributions will be made at the current contribution rate
and that City contributions will be made at rates equal to the di erence between actuarially determined contribution
rates and the member rate.

Based on those assumptions, the pension plan’s duciary net position was projected to be available to make all projected
future bene t payments of current plan members.
Therefore, the long-term expected rates of return on pension plan investments was applied to all periods of projected
bene t payments to determine the total pension liability.

Changes in the Net Pension Liability
Increase (Decrease)
Total Pension Plan Fiduciary Net Position
Liability Net Pension Liability
(a) (b) (a) - (b)
Balances at 6/30/17 $ 19,108,051 $ 9,807,894 $ 9,300,157
Changes for the year:
Service cost 429,595 - 429,595
Interest 1,699,044 - 1,699,044
Di erences between expected and
actual experience 2,267,413 - 2,267,413
Changes of assumptions 885,664 - 885,664
Contributions - employer - 1,402,746 (1,402,746)
Net investment income - 905,322 (905,322)
Bene t payments, including refunds of
member contributions (1,854,762) (1,854,762) -
Adminstrative expense - (6,884) 6,884
Net changes 3,426,954 446,422 2,980,532
Balances at 6/30/18 $ 22,535,005 $ 10,254,316 $ 12,280,689

102 2018 AN NUAL R E P O R T