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Elk River Municipal Utilities <br />Elk River, Minnesota <br />Notes to the Financial Statements <br />December 31, 2022 <br />Note 3: Defined Benefit Pension Plans - Statewide (Continued) <br />Actuarial assumptions used in the June 30, 2022 valuation was 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 />The following changes in actuarial assumptions and plan provisions occurred in 2022: <br />General Employees Fund <br />Changes in Actuarial Assumptions <br />• The mortality improvement scale was changed from Scale MP-2020 to Scale MP-2021. <br />Changes in Plan Provisions <br />There were no changes in plan provisions since the previous valuation. <br />G. Discount Rate <br />The discount rate used to measure the total pension liability in 2022 was 6.50 percent. The projection of cash flows used <br />to determine the discount rate assumed that contributions from plan members and employers will be made at rates set in <br />Minnesota Statutes. Based on these assumptions, the fiduciary net position of the General Employees Fund was <br />projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term <br />expected rate of return on pension plan investments was applied to all periods of projected benefit payments to <br />determine the total pension liability. <br />H. Pension Liability Sensitivity <br />The following presents the Utilities' proportionate share of the net pension liability for all plans it participates in, calculated <br />using the discount rate disclosed in the preceding paragraph, as well as what the Utilities' proportionate share of the net <br />pension liability would be if it were calculated using a discount rate one percentage point lower or one percentage point <br />higher than the current discount rate: <br />1 Percent 1 Percent <br />Decrease (5.50%) Current (6.50%) Increase (7.50%) <br />General Employees Fund $ 7,130,761 $ 4,514,419 $ 2,368,614 <br />Pension Plan Fiduciary Net Position <br />Detailed information about each pension plan's fiduciary net position is available in a separately issued PERA financial <br />report that includes financial statements and required supplementary information. That report may be obtained on the <br />Internet at www.mnpera.org. <br />45 <br />128 <br />