Economic

In the valuation process, assumptions are required for four economic variables: the expected rate of investment return, inflation, salary growth, and membership growth.  Economic assumptions affect expectations regarding the accumulation of assets and the growth of projected pension benefits.  

The assumptions used in valuing the retirement systems are adopted by the Pension Funding Council (PFC).  The PFC adopted a new salary growth assumption in July 2008, which is subject to change by the Legislature.  All other rates in current use were prescribed by the Legislature in 2001.