Laserfiche WebLink
City of Little Canada, Minnesota <br />Notes to the Financial Statements <br />December 31, 2024 <br />Note 4: Defined Benefit Pension Plans - Statewide (Continued) <br />F. Actuarial Assumptions <br />The following changes in actuarial assumptions and plan provisions occurred in 2024: <br />General Employees Fund <br />Changes in Actuarial Assumptions <br />Changes in Plan Provisions <br />The total pension liability for each of the cost-sharing defined benefit plans was determined by an actuarial valuation <br />as of June 30, 2024, using the entry age normal actuarial cost method. The long-term rate of return on pension plan <br />investments used to determine the total liability is 7%. The 7% assumption is based on a review of inflation and <br />investment return assumptions from a number of national investment consulting firms. The review provided a range <br />of investment return rates considered reasonable by the actuary. An investment return of 7% is within that range. <br />Inflation is assumed to be 2.25% for the General Employees Plan. Benefit increases after retirement are assumed to <br />be 1.25% for the General Employees Plan. <br />Salary growth assumptions in the General Employees Plan range in annual increments from 10.25% after one year of <br />service to 3% after 27 years of service. Mortality rates for the General Employees Plan are based on the Pub-2010 <br />General Employee Mortality Table. <br />Actuarial assumptions for the General Employees Plan are reviewed every four years. The General Employees Plan <br />was last reviewed in 2022. The assumption changes were adopted by the board and became effective with the July 1, <br />2023 actuarial valuation. <br />- Rates of merit and seniority were adjusted, resulting in slightly higher rates. <br />- Assumed rates of retirement were adjusted as follows: increase the rate of assumed unreduced retirements, slight <br />adjustments to Rule of 90 retirement rates, and slight adjustments to early retirement rates for Tier 1 and Tier 2 <br />members. <br />- Minor increase in assumed withdrawals for males and females. <br />- Lower rates of disability. <br />- Continued use of Pub-2010 general mortality table with slight rate adjustments as recommended in the most recent <br />experience study. <br />- Minor changes to form of payment assumptions for male and female retirees. <br />- Minor changes to assumptions made with respect to missing participant data. <br />-The workers’ compensation offset for disability benefits was eliminated. The actuarial equivalent factors updated to <br />reflect the changes in assumptions. <br />85