Changes in Plan Provisions
A 13th check, reduced approximately 5% from historical levels, to be paid in fiscal year 2026 was granted. For the actuarial valuation as of June 30, 2025, the timing of the postretirement benefit increase assumption was changed due to the passage of House Enrolled Act No. 1221. The act requires supplemental benefit funding for an inflation-indexed 13th check for participants who commence prior to July 1, 2029 and a 1% COLA for commencements thereafter. No additional benefits have yet been granted beyond this fiscal year 2026 13th check
Long-Term Return Expectation
The long-term return expectation has been determined by using a building-block approach and assumes a time horizon, as defined by INPRS Investment Policy Statement. A forecasted rate of inflation serves as the baseline for the return expectation. In order to determine the expected long-term nominal market rate of return, the asset class geometric real returns are projected for a 30-year time horizon. These returns are combined with a projected covariance matrix and the target asset allocations to create a range of expected long-term real market rates of return for the portfolio. A range of possible expected long-term rates of return is created by adding the forecasted inflation to the expected long-term real rates of return.
| Global Asset Class | Long-Term Expected Rate of Return (Geometric Basis) |
Target Asset Allocation |
||
|---|---|---|---|---|
| Public Equity | 4.0% | 20.0% | ||
| Private Markets | 6.9 | 15.0 | ||
| Fixed Income, Ex Inflation-Linked | 3.2 | 20.0 | ||
| Fixed Income, Inflation-Linked | 1.8 | 15.0 | ||
| Commodities | 2.7 | 10.0 | ||
| Real Estate | 5.4 | 10.0 | ||
| Absolute Return | 3.2 | 5.0 | ||
| Risk Parity | 5.3 | 20.0 | ||
| Cash and Cash Overlay | 1.7 | N/A |
Discount Rate
The discount rate used to measure the total pension liability was 6.25% as of June 30, 2025 and is equal to the long-term expected return on plan investments.