KENTUCKY STATE UNIVERSITY
NOTES TO FINANCIAL STATEMENTS
(Continued)
June 30, 2021
2022 $ (10,053,139)
2023 (2,325,320)
2024 1,419,871
2025 4,581,073
$ (6,377,515)
Actuarial assumptions - The total pension liability was determined by actuarial valuation as of June 30, 2020, using the following actuarial assumptions, applied to all periods included in the measurement:
| Valuation date | June 30, 2019 |
|---|
| Inflation | 3.00% |
|---|
| Salary increases | 3.50% - 7.30%, average, including inflation |
|---|
| Investment Rate of Return | 7.50%, net of pension plan investment expense, including inflation |
|---|
| Municipal bond index rate | 3.50% |
|---|
| Single equivalent interest rate | 7.50% |
|---|
| Post-Retirement Benefit Increases | 1.50% annually |
|---|
Mortality rates were based on the RP-2000 Combined Mortality Table for Males or Females, as appropriate, with adjustments for mortality improvements based on a projection of Scale BB to 2025, set forward two years for males and one year for females.
The actuarial assumptions used in the June 30, 2020 valuation were based on the results of an actuarial experience study for the period July 1, 2010 - June 30, 2015 adopted by the Board on November 19, 2016.
The long-term expected return on pension plan investments was determined using a log-normal distribution analysis in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighing the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class for the June 30, 2020 actuarial valuation, are summarized in the following table:
43.