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<br />Assumptions from the State of Missouri: <br /> Assumption Percentage %of Cities <br /> 8% of higher 14% <br /> 7½ – 7¾% 45% <br /> 6¾ – 7¼% 24% <br /> 6½% or lower 17% <br />Mr. Siepman noted the City was in a conservative interest rate of 6½% where most of his <br />other clients were at 7½%. <br /> <br />Ms. Carr asked how many of the plans funded at 80% or better used the assumption rate <br />of 6½%. Mr. Siepman said he did not know as the two tables were not cross-matched but <br />a conservative plan could be 100% funded at 6% assumption rate. Conversely he said <br />there could a plan at 8% assumption and only be 55% funded. <br /> <br />Ms. Carr asked how the City could measure itself. <br /> <br />Mr. Siepman noted that 45% of all plans were using 7½ to7¾% interest rate so if the City <br />used this, the liability obligation of the City would clearly be in the upper end of the 80% of <br />being funded. He noted that almost half of the cities were using the 7½ - 7¾% and if <br />asked where U City would be, they would be close to the middle or above, from a relative <br />standpoint, the plan was similar to a lot of other plans. <br /> <br />Mr. Crow asked for a copy of the list from the State of Missouri that Mr. Siepman quoted <br />from. <br /> <br />Ms. Carr said the pension board has asked the City set aside $1.2 million for the pension <br />fund if there was nothing demanding of the City’s money. She asked if this was a <br />necessity. <br /> <br />Mr. Siepman said it would be good to fund the status of the plan sooner rather than later <br />but as an actuary he will never tell the City how to spend their money. He noted the <br />necessity was to meet the City’s funding policy which was the 30 year amortization plus <br />the cost of the plan. <br /> <br />Ms. Carr asked about moving to a 15 year amortization. Mr. Siepman said that was in <br />discussion as the 30 year amortization was at the upper end and new accounting rules <br />were coming in place in 2014, as the GASB, Government Accounting Standards Board, <br />sets the accounting standards. <br /> <br />Mr. Price asked if the investments in the fund had something to do with the fund and Mr. <br />Siepman agreed. He said the biggest driver was what kind of returns the City would get on <br />their investments. <br /> <br />Ms. Carr asked for a suggestion to insure the long-term health of the plan. Mr. Siepman <br />said a safe investment presently might be at 2% or less. In order to get 6½% the City will <br />need to take some element of risk. He stated that he did not know of a way to insure long <br />term health of the plan, given the current volatility in investments. <br /> <br />Mr. Crow asked when the new actuary numbers would be out this year. Mr. Siepman <br />noted they were due around April. Mr. Crow said he was told that as long as the defined <br />3 <br /> <br />