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NOTE 8 —DEFINED BENEFIT PENSION PLANS — STATE-WIDE (CONTINUED) <br />The target allocation and best estimates of geometric rates of return for each major class are summarized <br />in the following table: <br />Long -Term Expected Real Rate <br />Asset Class Target Allocation of Return <br />Domestic Stocks 3 5.5 % 5.10% <br />International Stocks 17.5% 5.30% <br />Bonds (Fixed Income) 20.0% 0.75% <br />Alternative Assets (Private Markets) 25.0% 5.90% <br />Cash 2.0% - % <br />Total 100% <br />F. Discount Rate <br />The discount rate used to measure the total pension liability in 2020 was 7.5%. The projection of cash <br />flows used to determine the discount rate assumed that contributions from plan members and employers <br />will be made at rates set in Minnesota Statutes. Based on these assumptions, the fiduciary net positions of <br />GERF and PEPFF were projected to be available to make all projected future benefit payments of current <br />plan members. Therefore, the long-term expected rate of return on pension plan investments was applied <br />to all periods of projected benefit payments to determine the total pension liability. <br />G. Pension Liability Sensitivity <br />The following presents the City's proportionate share of the net pension liability for all plans it participates <br />in, calculated using the discount rate disclosed in the preceding paragraph, as well as what the City's <br />proportionate share of the net pension liability would be if it were calculated using a discount rate 1 <br />percentage point lower or 1 percentage point higher than the current discount rate: <br />The City's Proportionate <br />Share of the GERF Net <br />Pension Liability: <br />The City's Proportionate <br />Share of the PEPFF Net <br />Pension Liability: <br />1% Decrease in Current <br />Discount Rate Discount Rate <br />(6.5%) (7.5%) <br />$5,438,489 <br />$6,297,343 <br />H. Pension Plan Fiduciary Net Position <br />1% Increase in <br />Discount Rate <br />(8.5%) <br />$3,393,429 $1,706,418 <br />$3,159,502 $563,489 <br />Detailed information about each pension plan's fiduciary net position is available in a separately -issued <br />PERA financial report that includes financial statements and required supplementary information. That <br />report may be obtained on the internet at www.mnpera.org. <br />86 <br />