2019 & 2020-COH - DWS Financial Statements and Supplementary Information With Independent Auditor's Report

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County of Hawaii Department of Water Supply (A component unit of the County of Hawaii, State of Hawaii) NOTES TO FINANCIAL STATEMENTS June 30, 2020 and 2019 NOTE G - EMPLOYEE BENEFITS (Continued) The total OPEB liability in the July 1, 2018 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified: Inflation 2.50% Salary increases 3.50% to 7.00%, including inflation Investment rate of return 7.00% Healthcare cost trend rates PPO Initial rates of 10.00%; declining to a rate of 4.86% after 13 years HMO Initial rate of 10.00%; declining to a rate of 4.86% after 13 years Part B & base monthly contribution Initial rates of 4.00% and 5.00%, declining to a rate of 4.70% after 12 years Dental Initial rates of 5.00% for the first three years; followed by 4.00% Vision Initial rates of 0.00% for the first three years, followed by 2.50% Life insurance 0.00% Mortality rates are based on system -specific mortality tables utilizing scale BB to project generational mortality improvement. The actuarial assumptions used in the actuarial valuation as of July 1, 2019 was based on the results of an experience study as of June 30, 2018, with most of the assumptions based on the period from July 1, 2013 through June 30, 2018. The actuarial assumptions used in the actuarial valuation as of July 1, 2018 was based on the results of an actuarial experience study for the five-year period ended June 30, 2015 as conducted for the ERS. 41