Sarasota County Comprehensive Annual Financial Report 2020

Sarasota County, Florida Notes to Financial Statements September 30, 2020 $7,483,313 reported as deferred outflows of resources related to pensions resulting from County contributions to the FRS Plan subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended September 30, 2021. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized as an increase (decrease) in pension expense as follows: Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized as an increase (decrease) in pension expense as follows: Year Ending September 30 Amount 2021 $ 22,721,791 2022 33,087,285 2023 27,130,953 2024 16,195,599 2025 3,923,733 Thereafter - Actuarial Assumptions The total pension liability in the July 1, 2020, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation 2.40% Per year Salary Increases 3.25% Average, Including inflation Investment Rate of Return 6.90% Net of investment expense, Including inflation Mortality rates were based on the Generational RP-2000 with Projection Scale BB. The actuarial assumptions used in the July 1, 2020 valuation were based on the results of an actuarial experience study for the period July 1, 2013 through June 30, 2018. The long-term expected rate of return on pension plan investments is not based on historical returns, but instead is based on a forward-looking capital market economic model. The allocation policy’s description of each asset class was used to map the target allocation to the asset classes shown below. Each asset class assumption is based on a consistent set of underlying assumptions, and includes an adjustment for the inflation assumption. The target allocation, as outlined in the FRS Plan’s investment policy, and best estimates of arithmetic and geometric real rates of return for each major asset class are summarized in the following table: Asset Class Target Allocation Annual Arithmetic Return Compound Annual (Geometric) Return Standard Deviation Cash 1.0% 2.2% 2.2% 1.2% Fixed income 19.0% 3.0% 2.9% 3.5% Global equity Real estate (property) Private equity Strategic investments 54.2% 10.3% 11.1% 4.4% 8.0% 6.4% 10.8% 5.5% 6.7% 5.8% 8.1% 5.3% 17.1% 11.7% 25.7% 6.9% Assumed Inflation - Mean 2.4% 1.7% 129