05-26-2021 Council Packet - Laserfiche WebLink

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CITY OF LITTLE CANADA, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2020 NOTE 7 DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED) D.Pension Costs (Continued) 1. General Employees Fund Pensions Costs (Continued) For the year ended December 31, 2020, the City recognized pension expense of $27,337 for its proportionate share of the General Employees Plan’s pension expense. In addition, the City recognized an additional $2,700 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. At December 31, 2020, the City reported its proportionate share of the General Employees Plan’s deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Description Deferred Outflows of Resources Deferred Inflows of Resources Differences between expected and actual economic experience $ 9,183 $ 3,811 Changes in actuarial assumption -37,342 Net differences between projected and actual earnings on pension plan investments 17,401 - Changes in proportion and differences between city contributions and proportionate share of contributions 52,371 43,560 City contributions subsequent to the measurement date 51,351 - Total $ 130,306 $ 84,713 The $51,351 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2021. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year Ended December 31, Pension Expenses Amount 2021 $ (58,374) 2022 (6,795) 2023 35,076 2024 24,335 E.Actuarial Assumptions The total pension liability in the June 30, 2020, actuarial valuation was determined using the following actuarial assumptions: Inflation 2.25% per year Active member payroll growth 3.00% per year Investment rate of return 7.50% Salary increases were based on a service-related table. Mortality rates for active members, retirees, survivors, and disabilitants were based on Pub-2010 General Employee Mortality table for the General Employees Plan. Cost of living benefit increases for retirees are assumed to be 1.25% per year for the General Employees Plan. 70