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Analysis of Prescribed Assumptions <br /> None. <br /> Analysis of Non-prescribed Assumptions <br /> Unless otherwise specified below,all non-prescribed assumptions have been determined with input <br /> from the actuary,even though the plan sponsor may be ultimately responsible for selecting the <br /> assumption. <br /> . ,�, _� �� _ - <br /> . . � . . - . <br /> All Economic Economic assumptions are based on input from a variety of published <br /> Assumptions sources of historical and projected future financial data. Each <br /> assumption was reviewed for reasonableness with the source <br /> information as well as for consistency with the other economic <br /> assumptions. <br /> Discount rate Since the plan is not funded by an irrevocable trust,the discount rate is <br /> equal to the 20-Year Municipal Bond Yield. <br /> 20-Year Municipal Bond The municipal bond rate assumption was set by considering published <br /> Yield rate information for 20-year high quality,tax-exempt,general obligation <br /> municipal bonds as of the Measurement Date. <br /> Salary Increases The salary scale has been determined based on the long-term inflation <br /> assumption plus any additional wage increase assumption in excess of <br /> inflation.The additional wage assumption is based on a review of <br /> increases in the taxable wage base compared to inflation. Any additional <br /> information on expected salary increases provided by the client is also <br /> reflected in the assumption. <br /> Inflation The long-term inflation assumption has been chosen based on a review <br /> of historical changes in the Consumer Price Index(CPI.) Published <br /> projections of future inflation rates were also considered. <br /> Mortality The rates used are recent tables developed and recommended by the , <br /> Society of Actuaries. ', <br /> Retirement& The retirement and withdrawal assumptions used to value GASB 75 <br /> Withdrawal liabilities are similar to those used to value pension liabilities for <br /> Minnesota public employees. The state pension plans base their <br /> assumptions on periodic experience studies. ' <br /> Disability Plan disability benefits are of similar value to other plan benefits. , <br /> Therefore,disability incidence is presumed to be included in retirement ' <br /> and withdrawal incidence. , <br /> Medical Trend Rate The medical trend rates have been chosen based on a review of <br /> historical health care increase rates,projected health care increase <br /> rates,and projected health care expenditures as a percentage of GDP. <br /> The components of health care costs were considered when developing '�� <br /> the aggregate set of trend rates. <br /> Retiree Plan The plan participation percentages for retirees and their spouses reflect <br /> Participation&Percent past,current,and expected future expectations of inedical plan , <br /> of Married Retirees enrollment for current actives and retirees. These amounts are adjusted ' <br /> Electing Spouse to reflect population changes,differences in actual versus expected <br /> Coverage liabilities,and changes in enrollment/participation patterns. <br /> City of Pequot Lakes <br /> Page 15 <br />