The current policy of the Board to grant a COLA on each January 1 as follows: If the June to June change in the CPI-U is less than 2% for one or more consecutive one-year periods, a COLA increase of 2% will be granted when the cumulative increase is equal to or greater than 2%, at which point the cumulative increase in the CPI-U will be reset to zero. For the following year, the starting CPI-U will be based on the June value immediately preceding the January 1 at which the 2% cost-of-living increase is granted. - 52 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2024 NOTE G – RETIREMENT PLANS - CONTINUED Actuarial Assumptions - Continued If the June to June change in the CPI-U is greater than or equal to 2%, but less than 5%, a COLA increase of 2% will be granted. If the June to June change in the CPI-U is greater than or equal to 5%, a COLA increase of 5% will be granted. If the CPI decreases, no COLA is provided. The COLA applies to service retirements and beneficiary annuities. The COLA does not apply to the benefits for in-service death payable to spouses (where the spouse is over age 60), and does not apply to the spouse with children pre-retirement death benefit, the dependent children pre- retirement death benefit, or the dependent parent death benefit. The total lifetime COLA cannot exceed 80% of the original benefit. PSRS members receive a COLA on the second January after retirement, while PEERS members receive a COLA on the fourth January after retirement. Mortality Assumptions  Actives PSRS: Experience-adjusted Pub-2010 Teachers Mortality Table for Employees with generational projection using the MP-2020 improvement scale. Experience adjustments are equal to the healthy retiree experience-based adjustment factors at all ages for both males and females.  Actives PEERS: Experience-adjusted Pub-2010 General (Below-Median Income) Mortality Table for Employees with generational projection using the MP-2020 improvement scale. Experience adjustments are equal to the healthy retiree experience- based adjustment factors at all ages for both males and females.  Non-Disabled Retirees PSRS: Mortality rates for non-disabled retirees and beneficiaries are based on the Pub-2010 Teachers Mortality Table for Healthy Retirees and the Pub-2010 Teachers Mortality Table for Contingent Survivors, respectively. The tables are projected generationally using the MP-2020 improvement scale and multiplied by the experience-based adjustment factors shown below at all ages for both males and females. The non-disabled factor is 1.10 for males and 1.04 for females. The contingent survivor factor is 1.18 for males and 1.07 for females. - 53 -

The non-disabled factor is 1.10 for males and 1.04 for females. The contingent survivor factor is 1.18 for males and 1.07 for females. - 53 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2024 NOTE G – RETIREMENT PLANS - CONTINUED Actuarial Assumptions - Continued  Non-Disabled Retirees PEERS: Mortality rates for non-disabled retirees and beneficiaries are based on the Pub-2010 General (Below-Median Income) Mortality Table for Healthy Retirees and the Pub-2010 General (Below-Median Income) Mortality Table for Contingent Survivors, respectively. The tables are projected generationally using the MP-2020 improvement scale and multiplied by the experience- based adjustment factors shown below at all ages for both males and females. The non- disabled factor is 1.13 for males and 0.94 for females. The contingent survivor factor is 1.01 for males and 1.07 for females.  Disabled Retirees PSRS: Experience-adjusted Pub-2010 Teacher Disability Mortality Table, projected generationally using the MP-2020 improvement scale. Experience adjustments are equal to the healthy retiree experience-based adjustment factors at all ages for both males and females.  Disabled Retirees PEERS: Experience-adjusted Pub-2010 Generational Disability Mortality Table, projected generationally using the MP-2020 improvement scale. Experience adjustments are equal to the healthy retiree experience-based adjustment factors at all ages for both males and females. Changes in Actuarial Assumptions and Methods For PSRS, the retirement rates assumption was updated for the June 30, 2023 valuation due to the passage of Senate Bill 75 (HCS/SSS/SB 75), which added the 2.55% benefit formula multiplier for members that retire with 32 or more years of service. There have been no other changes to the actuarial assumptions and methods used for PSRS or PEERS since the June 30, 2021 valuations, which included various assumption updates pursuant to the 2021 experience study. The next experience studies are scheduled for 2026. Fiduciary Net Position: The Systems issue a publicly available financial report (ACFR) that can be obtained at www.psrs-peers.org. - 54 -

The next experience studies are scheduled for 2026. Fiduciary Net Position: The Systems issue a publicly available financial report (ACFR) that can be obtained at www.psrs-peers.org. - 54 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2024 NOTE G – RETIREMENT PLANS - CONTINUED Actuarial Assumptions - Continued Expected Rate of Return The long-term expected rate of return on investments was determined in accordance with Actuarial Standard of Practice (ASOP) No. 27, Selection of Economic Assumptions for Measuring Pension Obligations. ASOP No. 27 provides guidance on the selection of an appropriate assumed rate of return. The long-term expected rate of return on the Systems’ investments was determined using a building-block method in which best-estimate ranges of expected future real rates of returns (expected returns, net of investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the Systems’ target allocation as of June 30, 2023 are summarized below. Asset class Target asset allocation Long-term expected real return arithmetic basis U.S. Public Equity % 23.00 % 4.81 Hedged Assets 6.00 2.39 Global Equity 16.00 6.88 U.S. Treasuries 15.00 (0.02) U.S. TIPS - 0.29 Public Credit - 0.80 Private Credit 8.00 5.61 Private Equity 21.00 10.90 Private Real Estate 11.00 7.47 Total % 100.00 - 55 -

Treasuries 15.00 (0.02) U.S. TIPS - 0.29 Public Credit - 0.80 Private Credit 8.00 5.61 Private Equity 21.00 10.90 Private Real Estate 11.00 7.47 Total % 100.00 - 55 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2024 NOTE G – RETIREMENT PLANS - CONTINUED Actuarial Assumptions - Continued Discount Rate The long-term expected rate of return used to measure the total pension liability was 7.30% as of June 30, 2023, and is consistent with the long-term expected geometric return on plan investments. The actuarial assumed rate of return of 7.30% is consistent with the June 30, 2022 valuations and is based on the actuarial experience studies conducted during the 2021 fiscal year. The projection of cash flows used to determine the discount rate assumed that employer contributions would be made at the actuarially calculated rate computed in accordance with assumptions and methods stated in the funding policy adopted by the Board of Trustees, which requires payment of the normal cost and amortization of the unfunded actuarially accrued liability in level percent of employee payroll installments over 30 years utilizing a closed period, layered approach. Based on this assumption, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Discount Rate Sensitivity The sensitivity of the District's net pension liabilities to changes in the discount rate is presented below. The District's net pension liabilities calculated using the discount rate of 7.30% is presented as well as the net pension liabilities (assets) using a discount rate that is 1.0% lower (6.30%) or 1.0% higher (8.30%) than the current rate. 1% decrease (6.30%) Current rate (7.30%) 1% increase (8.30%) PSRS Proportionate share of the net pension liability / (asset) $ 84,563,735 $ 45,439,442 $ 13,042,420 PEERS Proportionate share of the net pension liability / (asset) 8,332,752 4,389,184 1,099,590 NOTE H – DEFERRED COMPENSATION PLANS The District offers its employees a choice of deferred compensation plans created in accordance with Internal Revenue Code Sections 403(b) or 457. These plans, available to all District employees, permit them to defer a portion of their salary until future years. The District makes these plans available to its employees as an accommodation only. The District’s role in connection with the plans is generally limited to processing the paperwork necessary to remit the participant’s salary withholdings (deferrals) to the unrelated financial institution. - 56 -

The District makes these plans available to its employees as an accommodation only. The District’s role in connection with the plans is generally limited to processing the paperwork necessary to remit the participant’s salary withholdings (deferrals) to the unrelated financial institution. - 56 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2024 NOTE I – OTHER POSTEMPLOYMENT BENEFITS (OPEB) Plan Description and Benefits Provided In addition to providing the pension benefits described above, the District provides continuation of medical, dental, and vision insurance coverage, including prescription drugs, to employees who are eligible for normal or early retirement under PSRS or PEERS. Retirees and their dependents that elect to participate must pay the premium in effect for the current plan year or any subsequent year at the premium rates in effect at that time. Since retirees pay the premium for each year, the District's share of any premium cost is determined on the basis of a blended rate or implicit rate subsidy calculation. The plan is not accounted for as a trust fund since an irrevocable trust has not been established. A stand-alone financial report is not available for the plan. No assets are accumulated in a trust that meets all of the criteria in GASB Statement No. 75, paragraph 4. Actuarial analysis completed on employees covered by benefit terms at June 30, 2024: Number Average Age Actives 450 45.9 Retired and beneficiaries 224 83.8 Total 674 Contributions The District currently pays for the implicit rate subsidy associated with these postemployment health care benefits on a pay-as-you-go basis. The District determines contribution requirements and they may be amended by the District. - 57 -