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Elk River Municipal Utilities <br />Elk River, Minnesota <br />Notes to the Financial Statements <br />December 31, 2023 <br />Note 3: Defined Benefit Pension Plans -Statewide (Continued) <br />Changes in Plan Provisions <br />- An additional one-time direct state aid contribution of $170.1 million will be contributed to the Plan on <br />October 1, 2023. <br />- The vesting period of those hired after June 30, 2010, was changed from five years of allowable service to three <br />years of allowable service. <br />- The benefit increase delay for early retirements on or after January 1, 2024, was eliminated. <br />- A one-time, non -compounding benefit increase of 2.5 percent minus the actual 2024 adjustment will be payable in a <br />lump sum for calendar year 2024 by March 31, 2024. <br />G. Discount Rate <br />The discount rate used to measure the total pension liability in 2023 was 7.0 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 <br />in Minnesota statutes. Based on these assumptions, the fiduciary net position of the General Employees, Police and Fire <br />Funds and Correctional Plans were projected to be available to make all projected future benefit payments of current <br />plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods <br />of projected benefit payments to 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, <br />calculated using the discount rate disclosed in the preceding paragraph, as well as what the Utilities' proportionate share <br />of the net pension liability would be if it were calculated using a discount rate one percentage point lower or one <br />percentage point higher than the current discount rate: <br />1 Percent 1 Percent <br />Decrease (6.0%) Current (7.0%) Increase (8.0%) <br />General Employees Fund $ 5,698,079 $ 3,220,927 $ 1,183,376 <br />I. 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.ora. <br />47 <br />112 <br />