Institutional Federal Compliance Report 2021

of service. Participants with less than five years of service are not vested. The funding policy is to contribute enough to the Upstate Plan to satisfy the annual required contribution. Employer contributions for 2018 were $2.0 million. Employees do not contribute to the plan. At December 31, 2017, membership of the Upstate Plan totaled 1,413 members, comprising 378 active members, 272 inactive vested members, and 763 retirees and beneficiaries currently receiving benefits. The Upstate Plan issues a stand-alone financial report on a calendar year basis that includes disclosure about the elements of the plan’s basic financial state- ments. These financial statements are prepared on the accrual basis of accounting in accordance with GAAP, with investments reported at fair value and benefits recognized when due and payable in accor- dance with the terms of the Upstate Plan. The Upstate Plan’s fiduciary net position for purposes of deter- mining net pension liability has been determined on the same basis used by the Upstate Plan. The 114 • Notes to Basic Financial Statements _________________________________________________________________________ pension plan financial statements may be requested at FOIL@upstate.edu . Net Pension Liability and Other Pension-Related Amounts SUNY recognized a net pension liability related to the Upstate Plan of $1.5 million as of June 30, 2018, based on the net pension liability as reported by the plan as of December 31, 2017, as follows (amounts in millions): Total pension liability . . . . . . . . . . . . . . . . . . . $ 105.1 Plan fiduciary net position . . . . . . . . . . . . . . . 103.6 Net pension liability . . . . . . . . . . . . . . . . $ 1.5 Pension expense for the year was $0.7 million. At June 30, 2018, SUNY reported deferred outflows of resources and deferred inflows of resources related to the Upstate Plan from the following sources (amounts in millions): Deferred Deferred Outflows of Inflows of Resources Resources

Differences between expected and actual experience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ Net difference between projected and actual investment earnings on pension plan investments . . . . . . . . Changes in assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Employer contributions subsequent to measurement date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

1 $

—00000

3

9

—00000

—00000 —00000

1

5 $

9

The employer contributions of $1.1 million made subsequent to the measurement date will be recognized as a reduction of net pension liability in the year ended June 30, 2019. Remaining amounts reported as deferred outflows of resources and deferred inflows of resources related to the Upstate Plan will be rec- ognized in pension expense as follows (amounts in millions):

December 31, 2017 measurement included an inflation factor of 3 percent, projected salary increases of 3.5 percent and an investment rate of return of 6.5 percent. Mortality rates were based on the RP-2014 Mortality Tables with full generational projections using Scale MP-2017. Expected Rate of Return The long-term expected rate of return on pension plan investments was determined in accordance with ASOP No. 27, which provides guidance on the selec- tion of an appropriate assumed investment rate of return. Consideration was given to the expected future real rates of return (expected returns, net of pension plan investment expense and inflation) for each major class as well as historical investment data and plan performance. Best estimates of arithmetic real rates of return for each major asset class included in the Upstate Plan’s target asset allocation as of December 31, 2017 is as follows:

Fiscal Year 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

(0.4) (0.9) (2.2) (1.9) (5.4)

Actuarial Assumptions The total pension liability at June 30, 2018 was deter- mined by using an actuarial valuation as of December 31, 2017. The actuarial assumptions included in the

Long-Term Expected Rate of Return

Target

Asset Class

Allocation

U.S. equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Non-U.S. equities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fixed income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Alternatives (Real assets) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

50% 15% 30% 5%

4.60% 4.50% 0.75% 3.50%

100%