University of Oregon 2019 Annual Financial Report
Notes to the Financial Statements
For the Year Ended June 30, 2019 (dollars in thousands)
Valuation Date
Measurement Date
Experience Study Report
Actuarial Cost Method
Asset Valuation Method
Actuarial Assumptions:
Inflation Rate
December 31, 2016
June 30, 2018
2016, published July 26, 2017
Entry Age Normal
Market value of assets
2.50 percent
Long-term Expected Rate of Return
7.20 percent
7.20 percent
3.50 percent
Discount Rate
Projected Salary Increases
Cost of Living Adjustments (COLA)
Mortality:
Healthy retirees and beneficiaries:
Blend of 2.00% COLA and graded COLA (1.25%/0.15%) in accordance with
Moro decision; blend based on service.
RP-2014 Healthy Annuitant, sex distinct, generational with Unisex, Social Security Data Scale with collar
adjustments and set-backs as described in valuation.
Active members:
RP-2014 Employees, sex distinct, generational with Unisex, Social Security Data Scale with collar adjustments and
set-backs as described in valuation.
Disabled retirees:
RP-2014 Disabled retirees, sex distinct, generational with Unisex, Social Security Data Scale.
Actuarial Methods and Assumptions
Actuarial valuations of an ongoing plan involve estimates
of the value of projected benefits and assumptions about
the probability of events far into the future. Actuarially-
determined amounts are subject to continual revision as
actual results are compared to past expectations and new
estimates are made about the future. Experience studies
are performed as of December 31 of even numbered years.
The methods and assumptions shown above are based on
the 2016 experience study, which reviewed experience
for the four-year period ending on December 31, 2016.
An actuarial valuation of the system is performed to
determine the level of employer contributions. The
most recently completed valuation was performed as of
December 31, 2016. The valuation included projected
payroll growth at 3.50 percent. The pension benefit
obligation is a standardized disclosure measure of the
present value of pension benefits. It is adjusted for the
effects of projected salary increases estimated to be payable
in the future as a result of employee service to date.
Pension Plan Liability
The components of the Plan's collective net pension
liability as of the measurement dates:
As of June 30,
Total Pension Liability
Plan Fiduciary Net Position
Plan Net Pension Liability
2018
2017
$ 84,476,100 $ 79,851,700
69,327,500 66,371,700
$ 15,148,600 $ 13,480,000
Discount Rate
The PERS Board reviews the discount rate in odd-
numbered years. The discount rate used to measure
the total pension liability was 7.20 percent for the
defined benefit pension plan. The projection of cash
flows used to determine the discount rate assumed
that contributions from plan members and those of the
contributing employers are made at the contractually
required rates, as actuarially determined. Based on those
assumptions, the pension plan's fiduciary net position
was projected to be available to make all projected
future benefit payments of current plan members.
Therefore, the long-term expected rate of return on
pension plan investments for the defined benefit
pension plan was applied to all periods of projected
benefit payments to determine the total pension liability.
Sensitivity of the UO's Proportionate Share of the
Net Pension Liability to Changes in the Discount
Rate
The sensitivity analysis shows the sensitivity of the
UO's proportionate share of the net pension liability to
changes in the discount rate. The following presents
the UO's proportionate share of the net pension liability
calculated using the discount rate of 7.20 percent, as
well as what the UO's proportionate share of the net
pension liability would be if it were calculated using a
discount rate that is one percentage point lower or one
percentage point higher than the current rate:
38 University of OregonView entire presentation