KENTUCKY STATE UNIVERSITY
NOTES TO FINANCIAL STATEMENTS
(Continued)
June 30, 2021
Year ending June 30:
2022 $ (239,000)
2023 (229,000)
2024 (231,000)
2025 (207,000)
2026 (182,000)
Thereafter (72,000)
$ (1,160,000)
Actuarial Assumptions - The total OPEB liability in the June 30, 2020 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement:
| Valuation Date | June 30, 2019 |
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| Measurement Date | June 30, 2020 |
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| Investment rate of return | 8.00%, net of OPEB plan investment expense, including inflation |
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| Projected salary increases | 3.50-7.20%, including inflation |
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| Inflation rate | 3.00% |
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| Real Wage Growth | 0.50% |
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| Wage Inflation | 3.50% |
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| Healthcare cost trend rates | |
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| Under 65 | 7.25% for 2020 decreasing to an ultimate rate of 5.00% by FY 2029 |
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| Ages 65 and Older | 5.50% for FY 2019 decreasing to an ultimate rate of 5.00% by FY 2022 |
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| Medicare Part B Premiums | 2.63% for FY 2019 with an ultimate rate of 5.00% by 2031 |
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| Municipal Bond Index Rate | 3.50% |
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| Discount Rate | 8.00% |
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| Single Equivalent Interest Rate | 8.00%, net of OPEB plan investment expense, including price inflation |
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Mortality rates were based on the RP-2000 Combined Mortality Table projected to 2026 with projection scale BB and set forward two years for males and one year for females for the period after service retirement and for dependent beneficiaries. The RP-2000 Disabled Mortality Table set forward two years for males and seven years for females is used for the period after disability retirement.
The demographic actuarial assumptions for retirement, disability incidence, withdrawal, rates of plan participation, and rates of plan election used in the June 30, 2019 valuation were based on the results of the most recent actuarial experience studies for the System, which covered the five-year period ending June 30, 2015. The remaining actuarial assumptions used in the June 30, 2019 valuation of the Medical Insurance Fund (MIF) were based on a review of recent plan experience done concurrently with the June 30, 2019 valuation. The health care cost trend rate assumption was updated for the June 30, 2019 valuation and was shown as an assumption change in the Total OPEB Liability (TOL) roll forward while the change in initial per capita claims costs were included with experience in the TOL roll forward.
The long-term expected rate of return on OPEB 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 OPEB 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 weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.
55.