| GOING CONCERN VALUATION RESULTS AS at 31.12.2019 | PLAUSIBLE ADVERSE SCENARIO RESULTS AS AT 31.12.2019 | |||
|---|---|---|---|---|
| INTEREST RATE RISK | DETERIORATION OF ASSET VALUES | LONGEVITY RISK | ||
| Going Concern Financial Status | ||||
| Market value of assets | $34,778,000 | $35,900,000 | $31,648,000 | $34,778,000 |
| Going concern funding target | $26,686,000 | $29,512,000 | $26,686,000 | $27,484,000 |
| Funding excess (shortfall) | $8,092,000 | $6,388,000 | $4,962,000 | $7,294,000 |
| Estimated Employer’s Current Service Cost including expense allowance | ||||
| 2020 | $100,000 | $100,000 | $100,000 | $100,000 |
The balance of this Appendix provides details of the plausible adverse scenarios selected and the determination of the impact on the going concern results.
Interest Rate Risk
The purpose of this scenario is to illustrate the sensitivity of the Plan’s going concern results to the potential that interest rates will be lower than expected. For this purpose, we have assumed an immediate parallel decrease in market interest rates underlying fixed income investments, where fixed income investments include the following categories as shown in the investment policy summarized in Appendix B.
Using a methodology consistent with the one used to determine the going concern discount rate, we have determined that a parallel decrease in market interest rates of 100 basis points would have a non-trivial probability (between 1 in 10 and 1 in 20) of occurring within the year following the valuation date. For purpose of this scenario, we have assumed that such a decrease in market interest rates would occur immediately on the valuation date and would have the following impact on the value of assets and going concern assumptions: