Discount rate - The discount rate used to measure the total pension liability was 5.25% (Non-hazardous) and 6.25% (Hazardous), which was reduced from the 6.75% (Non-hazardous) and 7.50% (Hazardous) discount rates used in the prior year. The projection of cash flows used to determine the discount rate assumed that local employers would contribute the actuarially determined contribution rate of projected compensation over the remaining 26-year amortization period of the unfunded actuarial accrued liability. The actuarial determined contribution rate is adjusted to reflect the phase in of anticipated gains on actuarial value of assets over the first four years of the projection period. Projected inflows from investment earnings were calculated using the long-term assumed investment return of 5.25% for Non-Hazardous and 6.75% for Hazardous for the June 30, 2017 actuarial valuation. The long-term assumed investment rate of return was applied to all periods of projected of benefit payments to determine the total pension liability.
Sensitivity of the University's proportionate share of the net pension liability to changes in the discount rate - The University's proportionate share of the net pension liability has been calculated using a discount rate of 5.25% (Non-hazardous) for the June 30, 2017 actuarial valuation. The following presents the University's proportionate share of the net pension liability calculated using a discount rate 1% higher and 1% lower than the current rate as of June 30, 2018:
| 1% Decrease (4.25%) | Current Discount Rate (5.25%) | 1% Increase (6.25%) | |
|---|---|---|---|
| Non-Hazardous Proportionate share of the Collective Net Pension Liability | $ 37,242,518 | $ 32,618,138 | $ 28,773,195 |
| 1% Decrease (5.25%) | Current Discount Rate (6.25%) | 1% Increase (7.25%) | |
| Hazardous Proportionate share of the Collective Net Pension Liability | $ 301,620 | $ 237,122 | $ 183,602 |
Kentucky Teachers' Retirement System - Defined Benefit Plan
Plan Description – The Kentucky Teachers’ Retirement System (KTRS), a cost sharing - multiple employer public employee retirement system. KTRS is a defined benefit plan providing for retirement, disability, death benefits and health insurance. Participants have a fully vested interest after the completion of 60 months of service, 12 of which are current service. KTRS issues a publicly available financial report that includes financial statements, required supplementary information, and detailed information about the pension plan's fiduciary net position. That report may be obtained by writing to Kentucky Teachers’ Retirement System, 479 Versailles Road, Frankfort, Kentucky, 40601 or by calling (502) 573-3266.
35.