CAFR - sdcera

A C T U A R I A L /
C O S T M E T H O D S & A S S U M P T I O N S
HISTORIC SUMMARY OF ASSUMPTIONS
FOR THE YEARS ENDED JUNE 30
Fiscal Year Ended 3 Year 5 Year
Assumption 2007 2006 2005 2004 2003 2002 2001 Average Average
Inflation 1 2.30% 3.75% 3.30% 3.70% 4.10% 2.90% 5.70% 3.13% 3.44%
Assumed 3 3.83 3.90
Average Pay increase 6.8 3.4 4.9 5.5 8.5 5.2 4.5 5.03 5.82
Assumed 3 4.25 4.15
Merit & Longevity Pay Increase 1.9 2.9 1.1 0.6 2.4 2.3 (1.2) 1.97 1.78
Assumed 4 1.00 1.00
Total Payroll 8.5 6.2 0.5 1.2 9.6 10.8 8.7 5.07 5.20
Assumed 3 4.25 4.15
Investment Return Rate 2 14.0 10.8 6.5 5.7 3.7 5.8 10.5 10.43 8.14
Assumed 5 8.25 8.25
Real Rate of Investment Return 11.7 7.0 3.2 2.0 (0.4) 2.9 4.8 7.30 4.70
Assumed 6 4.42 4.35
Admin. Expenses (% of Assets) 0.1 0.1 0.1 0.2 0.2 - - 0.10 0.14
Assumed 0.10 0.14
1
Based on June to June change in Consumer Price Index for San Diego, All Items, 1982-84=100.
Please note that this index is different from the measure used to determine the annual retiree COLA.
2
Based on actuarial value of assets, not market value or book value.
3
Effective with June 30, 1997 valuation, this assumption has been reduced from 4.5% to 4.0%
4
Effective with June 30, 2003 valuation, this assumption has been increased from 0.5% to 1.0%
5
Effective with June 30, 1997 valuation, this assumption has been increased from 8.0% to 8.25%
6
Effective with June 30, 1997 valuation, this assumption has been increased from 3.5% to 4.25%
Source: Gabriel, Roeder, Smith & Company, Annual Actuarial Valuation, until June 30, 2002
The Segal Company, Annual Actuarial Valuation since June 30, 2003
68 COMPREHENSIVE ANNUAL FINANCIAL REPORT 2007