Comprehensive Annual Financial Report 12/31/2017

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CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2017 I. PENSION PLAN FIDUCIARY NET POSITION Detailed information about the SVF plan's fiduciary net position at June 30, 2017 is available in a separately -issued PERA financial report that includes financial statements and required supplementary information. That report may be obtained at www.mnpera.org. Note 10 POST -EMPLOYMENT BENEFITS OTHER THAN PENSIONS (OPEB) A. PLAN DESCRIPTION In addition to providing the pension benefits described in Note 8 and 9, the City provides post - employment health care benefits, as defined in paragraph B, through its group health insurance plan (the plan). The plan is a single -employer defined benefit OPEB plan administered by the City. The authority to provide these benefits is established in Minnesota Statutes Sections 471.61 Subd. 2a and 299A.465. The benefits, benefit levels, employee contributions and employer contributions are governed by the City and can be amended by the City through its personnel manual and collective bargaining agreements with employee groups. No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75. B. BENEFITS PROVIDED The City is required by State Statute to allow retirees to continue participation in the City's group health insurance plan if the individual terminates service with the City through service retirement or disability retirement. Active employees, who retire from the City when over age 50 and with 20 years of service, may continue coverage with respect to both themselves and their eligible dependent(s) under the City's health benefits program until age 65. The City provides health coverage for peace officers or firefighters disabled or killed in the line of duty in accordance with Minnesota Statute 299A.465. The amount of coverage provided is equal to the employer portion of health insurance premiums that would have otherwise been paid if the officer or firefighter was an active employee. During 2017, benefits were provided to one officer disabled in the line of duty and one officer killed in the line of duty. All health care coverage is provided through the City's group health insurance plans. The retiree is required to pay 100% of their premium cost for the City -sponsored group health insurance plan in which they participate. The premium is a blended rate determined on the entire active and retiree population. Since the projected claims costs for retirees exceed the blended premium paid by retirees, the retirees are receiving an implicit rate subsidy (benefit). The coverage levels are the same as those afforded to active employees. Upon a retiree reaching age 65, Medicare becomes the primary insurer and the City's plan becomes secondary. 01