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CITY OF LITTLE CANADA, MINNESOTA <br />NOTES TO BASIC FINANCIAL STATEMENTS <br />DECEMBER 31, 2022 <br /> <br /> <br /> <br />(57) <br /> <br />NOTE 8 DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED) <br /> <br />Benefit increases are provided to benefit recipients each January. The postretirement <br />increase is equal to 50 percent of the cost-of-living adjustment (COLA) announced by <br />the SSA, with a minimum increase of at least 1 percent and a maximum of 1.5 percent. <br />Recipients that have been receiving the annuity or benefit for at least a full year as of the <br />June 30 before the effective date of the increase will receive the full increase. Recipients <br />receiving the annuity or benefit for at least one month but less than a full year as of the <br />June 30 before the effective date of the increase will receive a reduced prorated <br />increase. For members retiring on January 1, 2024, or later, the increase will be delayed <br />until normal retirement age (age 65 if hired prior to July 1, 1989, or age 66 for individuals <br />hired on or after July 1, 1989). Members retiring under Rule of 90 are exempt from the <br />delay to normal retirement. <br /> <br />C. Contributions <br />Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. <br />Contribution rates can only be modified by the state legislature. <br /> <br />1. General Employees Fund Contributions <br />Coordinated Plan members were required to contribute 6.50 percent of their annual <br />covered salary in fiscal year 2022 and the City was required to contribute 7.50 <br />percent for Coordinated Plan members. The City’s contributions to the General <br />Employees Fund for the year ended December 31, 2022, were $104,636. The City’s <br />contributions were equal to the required contributions as set by state statute. <br /> <br />D. Pension Costs <br />1. General Employes Fund Pension Costs <br />At December 31, 2022, the City reported a liability of $1,473,127 for its proportionate <br />share of the General Employees Fund’s net pension liability. The City’s net pension <br />liability reflected a reduction due to the State of Minnesota’s contribution of $16 <br />million. The State of Minnesota is considered a non-employer contributing entity and <br />the state’s contribution meets the definition of a special funding situation. The State <br />of Minnesota’s proportionate share of the net pension liability associated with the <br />City totaled $43,311. <br /> <br />The net pension liability was measured as of June 30, 2022, and the total pension <br />liability used to calculate the net pension liability was determined by an actuarial <br />valuation as of that date. The City’s proportionate share of the net pension liability <br />was based on the [entity’s] contributions received by PERA during the measurement <br />period for employer payroll paid dates from July 1, 2021 through June 30, 2022, <br />relative to the total employer contributions received from all of PERA’s participating <br />employers. The City’s proportionate share was 0.0186 percent at the end of the <br />measurement period and 0.0177 percent for the beginning of the period.