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CITY OF LINO LAKES, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 2016 <br /> <br /> <br /> <br /> <br />E. ACTUARIAL ASSUMPTIONS <br /> <br />The total pension liability in the June 30, 2016 actuarial valuation was determined using the following <br />actuarial assumptions: <br /> <br />Inflation 2.50% per year <br />Active member payroll growth 3.25% per year <br />Investment rate of return 7.50% <br />Salary increases were based on a service-related table. Mortality rates for active members, retirees, <br />survivors, and disabilitants were based on RP-2014 tables for the GERF and RP-2000 tables for the <br />PEPFF for males or females, as appropriate, with slight adjustments. Cost of living benefit increases <br />for retirees are assumed to be 1% for all future years for the GERF and PEPFF. <br /> <br />Actuarial assumptions used in the June 30, 2016 valuation were based on the results of actuarial <br />experience studies. The most recent four-year experience study in the GERF was completed in 2015. <br />The experience study for PEPFF was for the period July 1, 2004 through June 30, 2009. <br /> <br />The following changes in actuarial assumptions occurred in 2016: <br /> <br />General Employees Retirement Fund <br /> The assumed post-retirement benefit increase rate was changed from 1.0% per year through <br />2035 and 2.5% per year thereafter to 1.0% per year for all future years. <br /> The assumed investment return was changed from 7.9% to 7.5%. The single discount rate was <br />changed from 7.9% to 7.5%. <br /> Other assumptions were changed pursuant to the experience study dated June 30, 2015. The <br />assumed future salary increases, payroll growth, and inflation were decreased by 0.25% to <br />3.25% for payroll growth and 2.50% for inflation. <br /> <br />Public Employees Police and Fire Fund <br /> The assumed post-retirement benefit increase rate was changed from 1.0% per year through <br />2037 and 2.5% per year thereafter to 1.0% per year for all future years. <br /> The assumed investment return was changed from 7.9% to 7.5%. The single discount rate was <br />changed from 7.9% to 5.6%. <br /> The assumed future salary increases, payroll growth, and inflation were decreased by 0.25% to <br />3.25% for payroll growth and 2.50% for inflation. <br /> <br />68