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<br /> 92 <br />City of Elk River <br />Notes to Basic Financial Statements <br /> <br /> <br />NOTE 12 – PENSION PLANS (CONTINUED) <br /> <br />Defined Benefit Pension Plan – Volunteer Firefighter's Relief Association <br /> <br />C. Employees Covered by Benefit Terms <br />At December 31, 2022, the following employees were covered by the benefit terms: <br /> <br />Inactive employees entitled to but not yet receiving benefit payments 14 <br />Active employees 53 <br />Total 67 <br /> <br />D. Contributions <br />Minnesota Statutes Chapter 424A.092 specifies minimum support rates required on an annual basis. <br />The minimum support rates from the municipality and from State aids are determined as the amount <br />required to meet the normal cost plus amortizing any existing prior service costs over a ten year <br />period. The City's obligation is the financial requirement for the year less state aids. Any additional <br />payments by the City shall be used to amortize the unfunded liability of the relief association. The <br />Association is comprised of volunteers: therefore, there are no payroll expenditures (i.e., there are <br />no covered payroll percentage calculations). During the year, the City recognized as revenue and as <br />an expenditure on behalf payment of $275,775 made by the State of Minnesota for the Relief <br />Association. <br /> <br />E. Net Pension Liability <br />The City's net pension liability was measured as of December 31, 2022, and the total pension liability <br />used to calculate the net pension liability was determined by an actuarial valuation as of that date. <br /> <br />The total pension liability in the December 31, 2022, actuarial valuation was determined using the <br />following actuarial assumptions, applied to all periods included in the measurement: <br /> <br />Inflation 2.50 % Per year <br />Discount rate 5.00 % Per year <br />Investment rate of return 5.00 % <br />The demographic assumption of mortality is based on the rates use in the July 1, 2020, Minnesota <br />PERA Police & Fire Plan actuarial valuation as described below. <br /> <br />Healthy Pre-retirement: Pub-2010 Public Safety Employee mortality tables with projected <br />mortality improvements based on scale MP-2021. <br /> <br />Healthy Post-retirement: Pub-2010 Healthy Retired Public Safety mortality tables with projected <br />mortality improvements based on scale MP-2021 with male rates being adjusted by a factor of 0.98. <br />Page 213 of 464