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City of Redwood City
<br />Notes to the Basic Financial Statements
<br />For the fiscal year ended June 30, 2017
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<br />NOTE 9 – EMPLOYEE BENEFITS (CONTINUED)
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<br />The table below reflects the long‐term expected real rate of return by asset class. The rate of return
<br />was calculated using the capital market assumptions applied to determine the discount rate and asset
<br />allocation. These rates of return are net of administrative expenses.
<br />
<br />New
<br />Strategic Real Return Real Return
<br />Asset Class Allocation Years 1 ‐ 10(a) Years 11+(b)
<br />Global Equity 51.00% 5.25% 5.71%
<br />Global Fixed Income 20.00% 0.99% 2.43%
<br />Inflation Sensitive 6.00% 0.45% 3.36%
<br />Private Equity 10.00% 6.83% 6.95%
<br />Real Estate 10.00% 4.50% 5.13%
<br />Infrastructure and Forestland 2.00% 4.50% 5.09%
<br />Liquidity 1.00%‐0.55%‐1.05%
<br />Total 100%
<br />(a) An expected inflation of 2.5% used for this period.
<br />(b) An expected inflation of 3.0% used for this period.
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<br />Changes in the Net Pension Liability:
<br />
<br />The changes in the Net Pension Liability for each Plan follow:
<br />
<br />Miscellaneous Plan:
<br />Total Pension Plan Fiduciary Net Pension
<br />Liability Net Position Liability/(Asset)
<br />Balance at June 30, 2016 (1)$ 274,601,243 $ 198,433,873 $ 76,167,370
<br />Changes in the year:
<br />Service cost 4,988,704 4,988,704
<br />Interest on the total pension liability 20,902,896 20,902,896
<br />Differences between actual and expected
<br />experience 2,720,291 2,720,291
<br />Plan to Plan Resource Movement 8,562 (8,562)
<br />Contribution ‐ employer 7,063,347 (7,063,347)
<br />Contribution ‐ employee 2,605,290 (2,605,290)
<br />Net investment income 1,020,359 (1,020,359)
<br />Administrative expenses (120,935) 120,935
<br />Benefit payments , including refunds of
<br />employee contributions (13,150,802) (13,150,802)
<br />Net changes 15,461,089 (2,574,179) 18,035,268
<br />Balance at June 30, 2017 $ 290,062,332 $ 195,859,694 $ 94,202,638
<br />Increase (Decrease)
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<br />6.1.E. - Page 90
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