6.3. SR 06-15-2020 - Laserfiche WebLink

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CITY OF ELK RIVER NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 9 DEFINED BENEFIT PENSION PLANS— STATE-WIDE (CONTINUED) D. Pension Costs (Continued) 3. Total Pension Expense For year ended December 31, 2019, the City and HRA recognized total pension expenses of $2,641,823 and $6,510, respectively, for their proportionate shares of the pension expense for all of the plans in which they participate. E. Actuarial Assumptions The total pension liability in the June 30, 2019, actuarial valuation was determined using an individual entry -age normal actuarial cost method and the following actuarial assumptions: Inflation 2.50% per year Active Member Payroll Growth 3.25% per year Investment Rate of Return 7.50% Salary increases were based on a service -related table. Mortality rates for active members, retirees, survivors, and disabilitants were based on RP 2014 tables for all plans for males or females, as appropriate, with slight adjustments to fit PERA's experience. Cost of living benefit increases after retirement for retirees are assumed to be 1.25% per year for the General Employees Plan and 1.0% per year for the Police and Fire Plan. Actuarial assumptions used in the June 30, 2019 valuation were based on the results of actuarial experience studies. The most recent six -year experience study in the General Employees Plan was completed in 2019. The most recent four-year experience study for Police and Fire Plan was completed in 2016. The following changes in actuarial assumptions and plan provisions occurred in 2019: General Employees Fund Changes in Actuarial Assumptions: The mortality projection scale was changed from MP-2017 to MP-2018. Changes in Plan Provisions: The employer supplemental contribution was changed prospectively, decreasing from $31.0 million to $21.0 million per year. The state's special funding contribution was changed prospectively, requiring $16.0 million due per year through 2031. Police and Fire Fund Changes in Actuarial Assumptions: The mortality projection scale was changed from MP-2017 to MP-2018. Changes in Plan Provisions: There have been no changes since the prior valuation. (65)