6.4 SR 06-06-2022 - Laserfiche WebLink

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City of Elk River Notes to Basic Financial Statements NOTE 11 — PENSION PLANS (CONTINUED) Defined Benefit Pension Plan — Volunteer Firefighter's Relief Association (Continued) E. Net Pension Liability (Continued) The discount rate used to measure the total pension liability was 5.00%. The projection of cash flows used to determine the discount rate assumed that contributions to the plan will be made as specified in statute. Based on that assumption and considering the funding ratio of the plan, the fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive members. 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. F. Changes in the Net Pension Liability Balances at December 31, 2020 Changes for the year Service cost Interest cost Differences between expected and actual experience Changes of assumptions Contributions - State and local Net investment income Benefit payments Administrative expense Net changes Balances at December 31, 2021 Increase (Decrease) Total Plan Fiduciary Net Pension Net Pension Liability Position Liability (a) (b) (a) - (b) $ 3,126,959 $ 3,758,327 $ (631,368) 154,084 - 154,084 158,331 - 158,331 (141,716) - (141,716) 16,270 - 16,270 - 236,496 (236,496) - 326,613 (326,613) (228,840) (228,840) - - (13,085) 13,085 (41,871) 321,184 (363,055) $ 3,085,088 $ 4,079,511 $ (994,423) Sensitivity of the net pension liability to changes in the discount rate. The following table on the next page presents the net pension liability of the City, calculated using the discount rate of 5.00%, as well as what the City's net pension liability would be if it were calculated using a discount rate that is 1- percentage-point lower (4.00%) or 1-percentage-point higher (6.00%) than the current rate: 93