06-06-2018 Council Packet - Laserfiche WebLink

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CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2017 (61) NOTE 7 DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED) C. Contributions Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. Contribution rates can only be modified by the state legislature. 1. GERF Contributions Basic Plan members and Coordinated Plan members were required to contribute 9.1% and 6.50%, respectively, of their annual covered salary in calendar year 2017. The City was required to contribute 11.78% of pay for Basic Plan members and 7.50% for Coordinated Plan members in calendar year 2017. The City contributions to the GERF for the year ended December 31, 2017 were $84,726. The City contributions were equal to the required contributions as set by state statute. D. Pension Costs 1. GERF Pension Costs At December 31, 2017, the City reported a liability of $1,078,886 for its proportionate share of the GERF’s net pension liability. The City’s net pension liability reflected a reduction due to the State of Minnesota’s contribution of $6 million to the fund during PERA’s fiscal year ending June 30, 2017. The state of Minnesota’s proportionate share of the net pension liability associated with the City totaled $13,538. The net pension liability was measured as of June 30, 2017, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City’s proportion of the net pension liability was based on the City’s contributions received by PERA during the measurement period for employer payroll paid dates from July 1, 2016 through June 30, 2017, relative to the total employer contributions received from all of PERA’s participating employers. At June 30, 2017, the City’s proportion was .0169%, a decrease of .0008% from June 30, 2016. For the year ended December 31, 2017, the City recognized pension expense of $112,400 for its proportionate share of the GERF’s pension expense. At December 31, 2017, the City reported its proportionate share of the GERF’s deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Outflows of Inflows of Description Resources Resources Differences Between Expected and Actual Economic Experience 35,557$ 69,407$ Changes in Actuarial Assumptions 179,118 108,158 Net Difference Between Projected and Actual Earnings on Pension Plan Investments 6,968 - Changes in Proportion and Differences Between City Contributions and Proportionate Share of Contributions - 87,096 City Contributions Subsequent to the Measurement Date 43,105 - Total 264,748$ 264,661$