KENTUCKY STATE UNIVERSITY SCHEDULE OF THE UNIVERSITY'S (KSU) PROPORTIONATE SHARE OF THE NET PENSION LIABILITY KENTUCKY EMPLOYEES' RETIREMENT SYSTEM June 30, 2020 (Amounts in thousands)

Non-hazardous

2020 2019 2018 2017 2016 2015

KSU's proportion of the net pension liability $ 42,075 $ 30,999 $ 32,618 $ 29,146 $ 29,408 $ 28,555

KSU's proportionate share of the net pension liability 0.30% 0.23% 0.24% 0.26% 0.29% 0.32%

KSU's covered payroll $ 4,358 $ 3,583 $ 3,888 $ 4,321 $ 5,390 $ 5,453

KSU's proportionate share of the net pension liability as a share of its covered payroll 956.47% 865.17% 838.94% 674.52% 545.60% 523.66%

Plan fiduciary net position as a percentage of total pension liability 13.66% 12.84% 13.30% 14.80% 18.83% 22.32%

2020 2019 2018

Hazardous

KSU's proportion of the net pension liability $ 393 $ 939 $ 237

KSU's proportionate share of the net pension liability 0.07% 0.19% 0.05%

KSU's covered payroll $ 39 $ 61 $ 79

KSU's proportionate share of the net pension liability as a share of its covered payroll 1,007.69% 1,539.34% 300.00%

Plan fiduciary net position as a percentage of total pension liability 55.49% 56.10% 54.80%

Notes: This table represents data that is one year in arrears.

Changes in Assumptions: For fiscal year 2020, there was an increase to the salary increase assumptions for individual members and the base retiree mortality tables were replaced with a KERS-specific mortality table developed using the actual mortality experience of non-disabled retirees in KERS. Mortality tables for disable retirees and active members were updated with Public Retirement Mortality tables. Termination rates and rates of disability incidence were increased. Retirement rates were decreased slightly for members with participation date prior to July 1, 2003. For members with participation date on or after July 1, 2003, retirement rates were set equal to 80% of the retirement rates applicable for the pre-July 1, 2003 participants for ages below 65. There were no changes for fiscal year 2019. For fiscal year 2018, the demographic and economic assumptions that affect the measurement of the total pension liability have been updated as follows:

• The assumed investment rate of return was decreased from 6.75% to 5.25% (Non-hazardous) and 7.50% to 6.25% (Hazardous).
• The assumed rate of inflation was reduced from 3.25% to 2.30%.
• Payroll growth assumption was reduced from 4.00% to 3.05%.

Changes in Benefit Terms: During the 2018 legislative session, House Bill 185 was enacted, which updated the benefit provisions for active members who die in the line of duty. Benefits paid to the spouses of deceased members have been increased from 25% of the member's final rate of pay to 75% of the member's average pay. If the member does not have a surviving spouse, benefits paid to surviving dependent children have been increased from 10% of the member's final pay rate to 50% of average pay for one child, 65% of average pay for two children, or 75% of average pay for three children. The TPL as of June 30, 2018 is determined using these updated benefit provisions.

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