Laserfiche WebLink
CITY OF LITTLE CANADA, MINNESOTA <br />NOTES TO BASIC FINANCIAL STATEMENTS <br />DECEMBER 31, 2022 <br /> <br /> <br /> <br />(60) <br />NOTE 8 DEFINED BENEFIT PENSION PLANS – STATE-WIDE (CONTINUED) <br />F. Actuarial Methods Assumptions (Continued) <br />Inflation is assumed to be 2.25 percent for the General Employees Plan. Benefit <br />increases after retirement are assumed to be 1.25 percent for the General Employees <br />Plan through December 31, 2054 and 1.5 percent thereafter. <br /> <br />Salary growth assumptions in the General Employees Plan range in annual increments <br />from 10.25 percent after one year of service to 3.0 percent after 27 years of service <br /> <br />Mortality rates for the General Employees Plan are based on the Pub-2010 General <br />Employee Mortality Table. The tables are adjusted slightly to fit PERA’s experience. <br /> <br />Actuarial assumptions for the General Employees Plan are reviewed every four years. <br />The most recent four-year experience study for the General Employees Plan was <br />completed in 2019. The assumption changes were adopted by the Board and became <br />effective with the July 1, 2020 actuarial valuation. <br /> <br />The following changes in actuarial assumptions and plan provisions occurred in 2022: <br /> <br />General Employees Fund <br /> <br />Changes in Actuarial Assumptions: <br />x The mortality improvement scale was changed from Scale MP-2020 to Scale MP- <br />2021. <br /> <br />Changes in Plan Provisions: <br />x There were no changes in plan provisions since the previous valuation. <br /> <br />G. Discount Rate <br />The discount rate for the General Employees Plan used to measure the total pension <br />liability in 2022 was 6.5 percent. The projection of cash flows used to determine the <br />discount rate assumed that contributions from plan members and employers will be <br />made at rates set in Minnesota Statutes. Based on these assumptions, the fiduciary net <br />position of the General Employees Fund was projected to be available to make all <br />projected future benefit payments of current plan members. Therefore, the long-term <br />expected rate of return on pension plan investments was applied to all periods of <br />projected benefit payments to determine the total pension liability.