Pennsylvania Code › Title 16 - COMMUNITY AFFAIRS › Part IV - Public Employee Retirement Commission › Chapter 203 - ACTUARIAL AND FINANCIAL REPORTS ON MUNICIPAL EMPLOYE PENSION SYSTEMS › Section 203.3 - Range of economic actuarial assumptions

Current through Register Vol. 54, No. 28, July 13, 2024
(a)
Selection of actuarial
				assumptions.
The actuarial valuation report shall be prepared using
				actuarial assumptions selected jointly by the actuary of the municipal pension
				plan and the governing body of the municipal pension plan. The actuarial
				assumptions shall represent the best available joint estimate of the actuary
				and the governing body of future occurrences in the case of each actuarial
				assumption. The economic actuarial assumptions shall additionally be either
				within the range for economic actuarial assumptions specified in subsection (b)
				or accompanied in the actuarial valuation report with the documentation
				specified in subsection (c) that explains and justifies the choice of one or
				more assumptions outside of the range.
(b)
Range of economic actuarial
				assumptions.
No explanatory or justificatory documentation as
				specified in subsection (c) is required to accompany the actuarial valuation
				report if the following conditions are met:
(1) Economic actuarial assumptions reflect
				annual percentage increase amounts.
(2) The actuarial assumption as to interest
				or investment earnings is not less than 5% or more than 9%.
(3) The actuarial assumption as to salary
				projection or individual pension plan member salary increase for municipal
				pension plans with a salary related benefit plan is not greater than the
				actuarial assumption as to interest or investment earnings and is not less than
				the amount of the actuarial assumption as to interest or investment earnings
				reduced by 3%. If the actuarial assumption as to salary projection or
				individual pension plan member salary increase applicable to the municipal
				pension plan is in the form of probability rates that differ for various ages,
				the rate to be used for this comparison shall be calculated by the actuary
				preparing the report, with appropriate accompanying documentation, and shall be
				the average rate under the probability table for the ages 30 through
				50.
(4) The actuarial assumption as
				to total covered payroll increase, for a municipal pension plan of a
				municipality that has been determined to be financially distressed and to which
				a remedy of delayed implementation of the funding standard under section 607(g)
				or (h) of the act (53 P. S. §
											895.607(g) or
				(h)) is applicable, is not greater than 4%
				nor less than .0%.
(5) The
				actuarial assumption as to inflation, for a municipal pension plan that
				provides for automatic cost-of-living postretirement adjustments based on
				increases in the Federal consumer price index or other recognized measure of
				inflation, is not greater than the amount of the actuarial assumption as to
				interest or investment earnings reduced by 2% and is not less than the amount
				of the actuarial assumption as to interest or investment earnings reduced by
				5%.