Institutional Federal Compliance Report 2021

Expected Rate of Return The long-term rate of return on pension plan invest- ments was determined using a building-block method in which best-estimate ranges of expected real rates of return are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class for both NYCERS and NYCTRS are summarized in the following tables: 114 • Notes to Basic Financial Statements _________________________________________________________________________ NYCERS Real Return Long-Term Target Arithmetic Expected Rate Asset Class Allocation Basis of Return U.S. public market equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29% 5.70% 1.65% International public market equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13% 6.10% 0.79% Emerging public market equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7% 7.60% 0.53% Private market equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7% 8.10% 0.57% U.S. fixed income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33% 3.00% 0.99% Alternatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11% 4.70% 0.52% Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100% 5.05%

NYCTRS Real Return Arithmetic

Long-Term Expected Rate of Return

Target

Asset Class

Allocation

Basis

U.S. public market equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . International public market equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Emerging public market equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Private market equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . U.S. fixed income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Alternatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

29% 12% 9% 6% 33% 11%

5.70% 6.10% 7.60% 8.10% 3.00% 4.70%

1.65% 0.73% 0.68% 0.49% 0.99% 0.52% 5.06%

100%

Discount Rate The discount rate used to measure the total pension liability as of June 30, 2017 for both NYCERS and NYCTRS was 7 percent. The projection of cash flow used to determine the discount rate assumed that employee contributions will be made at the rates applicable to the current Tier for each member and that the employer contributions will be made based on rates determined by the Actuary. Based on those assumptions, the respective fiduciary net positions of NYCERS and NYCTRS were projected to be available to make all projected future benefit payments of

current active and non-active NYCERS and NYCTRS members. Therefore, the long-term expected rate of return on NYCERS and NYCTRS investments was applied to all periods of projected benefit payments to determine the total pension liability. The following presents CUNY’s proportionate share of the net pension liabilities calculated using the discount rate of 7 percent, as well as what CUNY’s proportionate share of the net pension liability would be if it were cal- culated using a discount rate that is 1 percentage point lower (6 percent) or 1 percentage point higher (8 percent) than the current rate (amounts in millions): 1% Current 1% Decrease Assumption Increase (6%) (7%) (8%) TIAA is a privately operated, multi-employer defined contribution retirement plan. The obligations of employers and employees to contribute to TIAA and of employees to receive benefits from TIAA are governed by the New York State Education Law and applicable New York City laws. 350.2 $ 672.1 $ 242.3 $ 505.2 $ 147.5 365.6

NYCERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ NYCTRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

TIAA CUNY also provides pension plans for its employees through the Teachers’ Insurance and Annuity Asso- ciation (TIAA). TIAA provides retirement and death benefits for or on behalf of those full-time professional employees and faculty members electing to participate in this optional retirement program.