10.1. SR 06-05-2017 - Laserfiche WebLink

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CITY OF ELK RIVER NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDING DECEMBER 31, 2016 NOTE 9 DEFINED BENEFIT PENSION PLANS —STATE-WIDE (CONTINUED) F. Discount Rate The discount rate used to measure the total pension liability was 7.5%, a reduction from the 7.9% used in 2015. The projection of cash flows used to determine the discount rate assumed that employee and employer contributions will be made at the rate specified in statute. Based on that assumption, each of the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. G. Pension Liability Sensitivity The following presents the City's proportionate share of the net pension liability for all plans it participates in, calculated using the discount rate disclosed in the preceding paragraph, as well as what the City's proportionate share of the net pension liability would be if it were calculated using a discount rate 1 percentage point lower or 1 percentage point higher than the current discount rate: GERF PENSION LIABILITY 1% Decrease in 1% Increase in Discount Rate Current Discount Discount Rate Description (6.50%) Rate (7.50%) (8.50%) City's Proportionate Share of the GERF Net Pension Liability '....$ 13,135,065 $ 11,651,488 $ 6,046,327 PEPFF PENSION LIABILITY De City's Proportionate Share of the PEPFF Net Pension Liability H. Pension Plan Fiduciary Net Position 1 % Decrease in Discount Rate (4.60%) 17,190,808 Current Discount Rate (5.60°/x) 12,280,312 1% Increase in Discount Rate (6.60%) $ 8,268,065 Detailed information about each pension plan's fiduciary net position is available in a separately -issued PERA financial report that includes financial statements and required supplementary information. That report may be obtained on the Internet at www.mnpera.org; by writing to PERA at 60 Empire Drive #200, St. Paul, Minnesota, 55103-2088; or by calling (651) 296-7460 or 1-800-652-9026. NOTE 10 DEFINED CONTRIBUTION PLAN Three council members of the City of Elk River are covered by the Public Employees Defined Contribution Plan (PEDCP), a multiple -employer deferred compensation plan administered by the Public Employees Retirement Association of Minnesota (PERA). The PEDCP is a tax qualified plan under Section 401(a) of the Internal Revenue Code and all contributions by or on behalf of employees are tax deferred until time of withdrawal. Plan benefits depend solely on amounts contributed to the plan plus investment earnings, less administrative expenses. Minnesota Statutes, Chapter 353D.03, specifies plan provisions, including the employee and employer contribution rates for those qualified personnel who elect to participate. An eligible elected official who decides to participate contributes 5 percent of salary which is matched by the elected official's employer. (63)