The target asset allocation and best estimates of arithmetic nominal rates of return for each major asset class are summarized in the following table:
| Non-hazardous | ||
| Asset Class | Target Allocation | Long-Term Nominal Rate of Return |
|---|---|---|
| 2019 | ||
| U.S. Equity | 17.50% | 4.73% |
| International Equity | 17.50 | 6.71 |
| Global Bonds | 10.00 | 3.00 |
| Credit Fixed | 17.00 | 4.59 |
| Real Estate | 5.00 | 7.00 |
| Absolute Return | 10.00 | 5.00 |
| Real Return | 10.00 | 5.00 |
| Private Equity | 10.00 | 6.50 |
| Cash Equivalents | 3.00 | 1.50 |
| Total | 100.00% | |
| Hazardous | ||
| Asset Class | Target Allocation | Long-Term Nominal Rate of Return |
| 2019 | ||
| U.S. Equity | 17.50% | 4.73% |
| International Equity | 17.50 | 6.71 |
| Global Bonds | 4.00 | 3.00 |
| Credit Fixed | 24.00 | 6.70 |
| Real Estate | 5.00 | 9.00 |
| Absolute Return | 10.00 | 5.00 |
| Real Return | 10.00 | 7.00 |
| Private Equity | 10.00 | 6.50 |
| Cash Equivalents | 2.00 | 1.50 |
| Total | 100.00% | |
Changes in Assumptions and Benefit Terms Since Prior Measurement Date – There were no changes in assumptions as of June 30, 2018 from June 30, 2017 measurement date.
However, 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.
34.