4.1 ERMUSR 04-08-2025 - Laserfiche WebLink

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Elk River Municipal Utilities Elk River, Minnesota Notes to the Financial Statements For the Year Ended December 31, 2024 Note 4: Defined Benefit Pension Plans - Statewide (Continued) C. Contributions Minnesota Statutes chapters 353, 353E, 353G, and 356 set the rates for employer and employee contributions. Contribution rates can only be modified by the state Legislature. General Employees Fund Contributions General Plan members were required to contribute 6.50 percent of their annual covered salary in fiscal year 2024 and the Utilities was required to contribute 7.50 percent for General Plan members. The Utilities' contributions to the General Employees Fund for the years ending December 31, 2024, 2023 and 2022, were $349,758, $339,650 and $333,178, respectively. The Utilities' contributions were equal to the required contributions for each year as set by state statute. D. Pension Costs General Employees Fund Pension Costs At December 31, 2024, the Utilities reported a liability of $2,037,020 for its proportionate share of the General Employees Fund's net pension liability. The Utilities' net pension liability reflected a reduction due to the State of Minnesota's contribution of $16 million. The State of Minnesota is considered a non -employer contributing entity and the state's contribution meets the definition of a special funding situation. The State of Minnesota's proportionate share of the net pension liability associated with the Utilities totaled $52,673. Utilities' Proportionate Share of the Net Pension Liability $ 2,037,020 State of Minnesota's Proportionate Share of the Net Pension Liability Associated with the Utilities 52,673 Total $ 2,089,693 The net pension liability was measured as of June 30, 2024, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The Utilities's proportion of the net pension liability was based on the Utilities's contributions received by PERA during the measurement period for employer payroll paid dates from July 1, 2023 through June 30, 2024, relative to the total employer contributions received from all of PERA's participating employers. The Utilities's proportionate share was 0.0551 percent at the end of the measurement period and 0.0576 percent for the beginning of the period. For the year ended December 31, 2024, the Utilities recognized pension expense of $47,314 for its proportionate share of the General Employees Plan's pension expense. In addition, the Utilities recognized an additional negative $1,011 as pension expense (and grant revenue) for its proportionate share of the State of Minnesota's contribution of $16 million to the General Employees Fund. During the plan year ended June 30, 2024, the State of Minnesota contributed $170.1 million to the General Employees Fund. The State of Minnesota is not included as a non -employer contributing entity in the General Employees Plan pension allocation schedules for the $170.1 million in direct state aid because this contribution was not considered to meet the definition of a special funding situation. The Utilities recognized $93,722 for the year ended December 31, 2024 as revenue and an offsetting reduction of net pension liability for its proportionate share of the State of Minnesota's on -behalf contributions to the General Employees Fund. 46 109