NOTE 10 – OTHER POSTEMPLOYMENT BENEFITS PLANS (OPEB) (Continued)

Members whose participation on or after 1/1/2014:

Nonhazardous contributions equal to 6% and Hazardous contributions equal 9% of all creditable compensation, with 5% (Non-hazardous) and 8% (Hazardous) being credited to the member's account and 1% deposited to the KRS 401(h) Account. Interest paid on the members' accounts will be set at 2.5%. Member is entitled to a full refund of contributions and interest in their individual account, however, the 1% contributed to the insurance fund is non-refundable.

Total OPEB Liability: The total other postemployment benefits ("OPEB") liability was measured as of June 2019 using an actuarial valuation as of June 30, 2018. The financial reporting actuarial valuation as of June 30, 2019, used the following actuarial methods and assumptions, applied to all periods included in the measurement:

Inflation 2.30 percent

Payroll growth rate Salary increases Investment rate of return Healthcare trend rates Pro-65 0.00 percent for KERS non-hazardous and hazardous

Pre-65

Post-65

0.00 percent for KERS non-hazardous and hazardous

3.55 to 15.30 percent, varies by service

6.25 percent

Initial trend starting at 7.00 percent at January 1, 2020 and gradually decreasing to an ultimate trend rate of 4.05 percent over a period of 12 years.

Initial trend starting at 5.00 percent at January 1, 2019 and gradually decreasing to an ultimate trend rate of 4.05 percent over a period of 10 years.

The mortality table used for active members is PUB-2010 General Mortality table projected with the ultimate rates from the MP-2014 mortality improvement scale using a base year of 2010. The mortality table used for healthy retired members is a system-specific mortality table based on mortality experience from 2013-2018, projected with the ultimate rates from MP-2014 mortality improvement scale using a base year of 2019. For disabled members, the mortality table used is PUB-2010 Disabled Mortality table, with a 4-year set-forward for both male and female rates, projected with the ultimate rates from the MP-2014 mortality improvement scale using a base year of 2010.

Discount rate assumptions:

• (a)Discount Rate: The discount rate used to measure the total Non-hazardous OPEB liability was 5.73%, which was reduced from the 5.86% discount rate used in the prior year. The discount rate used to measure the total Hazardous OPEB liability was 5.66%, which was decreased from the 5.88% discount rate used in the prior year.
• (b)the local employers and plan members would contribute the actuarially determined contribution rate of projected compensation over the remaining 24-year closed amortization period of the unfunded actuarial accrued liability.
• (Continued)
• 44.