Acton-Boxborough Regional School District Notes to Basic Financial Statements Year Ended June 30, 2024
Actuarial Assumptions
The total pension liability in the January 1, 2024, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement that was rolled back to December 31, 2023:
Valuation date……………………………… January 1, 2024.
Actuarial cost method……………………… Entry Age Normal Cost Method.
Amortization method……………………… Prior year's total contribution increased by 6.50% for fiscal 2023 through fiscal 2028, and thereafter the remaining unfunded liability will be amortized on a 4.00% annual increasing basis; ERI liability amortized in level payments.
Remaining amortization period……………… 14 years from July 1, 2022.
Asset valuation method……………………… The difference between the expected return and the actual investment return on a market value basis is recognized over a five year period. Asset value is adjusted as necessary to be within 20% of the fair value.
Investment rate of return/Discount rate…… 7.15%
Inflation rate………………………………… 3.25%
Projected salary increases…………………… Varies by length of service with ultimate rates of 4.00% for Group 1, 4.25% for Group 2 and 4.50% for Group 4
Cost of living adjustments…………………… 5.00% of the first $16,000 for fiscal 2023 and 3.00% of the first $16,000 thereafter. Mortality Rates: Pre-Retirement……………… The RP-2014 Blue Collar Employee Mortality Table projected generationally with Scale MP-2021.
Healthy Retiree…………… The RP-2014 Blue Collar Healthy Annuitant Mortality Table projected generationally with Scale MP-2021.
Disabled Retiree…………… The RP-2014 Blue Collar Healthy Annuitant Mortality Table set forward one year and projected generationally with Scale MP-2021.
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