6.3 SR 06-05-2023 - Laserfiche WebLink

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City of Elk River Notes to Basic Financial Statements NOTE 12 — PENSION PLANS (CONTINUED) Defined Benefit Pension Plan — Volunteer Firefighter's Relief Association C. Employees Covered by Benefit Terms At December 31, 2020, the following employees were covered by the benefit terms: Inactive employees entitled to but not yet receiving benefit payments 8 Active employees 43 Total 51 D. Contributions. Minnesota Statutes Chapter 424A.092 specifies minimum support rates required on an annual basis. The minimum support rates from the municipality and from State aids are determined as the amount required to meet the normal cost plus amortizing any existing prior service costs over a ten year period. The City's obligation is the financial requirement for the year less state aids. Any additional payments by the City shall be used to amortize the unfunded liability of the relief association. The Association is comprised of volunteers: therefore, there are no payroll expenditures (i.e., there are no covered payroll percentage calculations). During the year, the City recognized as revenue and as an expenditure on behalf payment of $252,658 made by the State of Minnesota for the Relief Association. E. Net Pension Liability The City's net pension liability was measured as of December 31, 2021, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The total pension liability in the December 31, 2021, actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation Discount rate Investment rate of return 2.25 % Per year 5.00 % Per year 5.00 % The demographic assumption of mortality is based on the rates use in the July 1, 2020, Minnesota PERA Police & Fire Plan actuarial valuation as described below. Healthy Pre -retirement: Pub-2010 Public Safety Employee mortality tables with projected mortality improvements based on scale MP-2020. Healthy Post -retirement: Pub-2010 Healthy Retired Public Safety mortality tables with projected mortality improvements based on scale MP-2020 with male rates being adjusted by a factor of 0.98.