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NOTE 9 — DEFINED BENEFIT PENSION PLANS — STATE-WIDE (CONTINUED) The target allocation and best -estimates of geometric real rates of return for each major asset class are summarized in the following table: Asset Class Target Allocation Domestic Equity 33.50% International Equity 16.50% Fixed Income 25.00% Private Markets 25.00% Total 100.00% F. Actuarial Assumptions Long -Term Expected Real Rate of Return 5.10% 5.30% 0.75% 5.90% The total pension liability in the June 30, 2021, actuarial valuation was deteiniined using an individual entry -age noinial actuarial cost method. The long-teini rate of return on pension plan investments used in the deteiniination of total liability is 6.50%. This assumption is based on review of inflation and investments return assumptions from a number of national investment consulting films. The review provided a range of return investment return rates deemed to be reasonable by the actuary. An investment return of 6.50% was deemed to be within that range of reasonableness for financial reporting purposes. Inflation is assumed to be 2.25% for the GERF and 2.25% for the PEPFF. Benefit increases after retirement are assumed to be 1.25% for the GERF. The PEPFF benefit increase is fixed at 1.00% per year and that increase was used in the valuation. Salary growth assumptions in the GERF range in annual increments from 10.25% after one year of service to 3.00% after 29 years of service, and 6.00% per year thereafter. In the PEPFF, salary growth assumptions range from 11.75% after one year of service to 3.00% after 24 years of service. Mortality rates for the GERF are based on the Pub-2010 General Employee Mortality Table. Mortality rates for the PEPFF are based on the Pub-2010 Public Safety Employee Mortality tables. The tables are adjusted slightly to fit the PERA's experience. Actuarial assumptions for the GERF are reviewed every four years. The most recent four-year experience study for the GERF was completed in 2019. The assumption changes were adopted by the Board and became effective with the July 1, 2020 actuarial valuation. The most recent four-year experience study for the PEPFF was completed in 2020, adopted by the Board, and became effective with the July 1, 2021 actuarial valuation. The following changes in actuarial assumptions occurred in 2021: 1. GERF: • The investment return and single discount rates were changed from 7.50% to 6.50%, for financial reporting purposes. • The mortality improvement scale was changed from Scale MP-2019 to Scale MP-2020. 85