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Elk River Municipal Utilities <br />Elk River, Minnesota <br />Notes to the Financial Statements <br />December 31, 2021 <br /> <br />Note 3: Defined Benefit Pension Plans - Statewide (Continued) <br />The $158,351 reported as deferred outflows of resources related to pensions resulting from the Utilit contributions <br />subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended <br />December 31, 2022. Other amounts reported as deferred outflows and inflows of resources related to pensions will be <br />recognized in pension expense as follows: <br /> <br />E. Actuarial Assumptions <br /> <br />The total pension liability in the June 30, 2021 actuarial valuation was determined using an individual entry-age normal <br />actuarial cost method. <br />The long-term rate of return on pension plan investments used in the determination of the total liability is 6.5 percent. <br />This assumption is based on a review of inflation and investments return assumptions from a number of national <br />investment consulting firms. The review provided a range of return investment return rates deemed to be reasonable by <br />the actuary. An investment return of 6.5 percent was deemed to be within that range of reasonableness for financial <br />reporting purposes. <br />Inflation is assumed to be 2.25 percent for the General Employees Plan. Benefit increases after retirement are assumed to <br />be 1.25 percent for the General Employees Plan. <br />Salary growth assumptions in the General Employees Plan range in annual increments from 10.25 percent after one year <br />of service to 3.0 percent after 29 years of service and 6.0 percent per year thereafter. <br />Mortality rates for the General Employees Plan are based on the Pub-2010 General Employee Mortality Table. The tables <br /> <br />Actuarial assumptions used in the June 30, 2021 valuation were based on the results of actuarial experience studies. The <br />most recent four-year experience study in the General Employees Plan was completed in 2019. The assumption changes <br />were adopted by the Board and become effective with the July 1, 2020 actuarial valuation. <br /> <br />44 <br />116 <br />