11-13-2018 Council Meeting Packet

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CITY OF LINO LAKES, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION NOTES TO RSI December 31, 2017 Note A LEGAL COMPLIANCE -BUDGETS The General Fund budget is legally adopted on a basis consistent with accounting principles generally accepted in the United States of America The legal level of budgetary control is at the department level for the General Fund. Note B OPED INFORMATION No assets are accumulated in a trust that meets the criteria in paragraph 4 ofGASB Statement No. 75 to pay related benefits. There are no factors that affect trends in the amounts reported, such as changes of benefit tenns or assumptions. Note C PENSION INFORMATION PERA-General Employees Retirement Fund 20 I 7 Changes Changes in Actuarial Assumptions: • The Combined Service Annuity (CSA) loads were changed from 0.8 percent for active members and 60 percent for vested and non-vested deferred members. The revised CSA loads are now 0.0 percent for active member liability, 15.0 percent for vested deferred member liability and 3.0 percent for non-vested deferred member liability. • The assumed post-retirement benefit increase rate was changed from 1.0 percent per year for all years to 1.0 percent per year through 2044 and 2.5 percent per year thereafter. 2016 Changes Changes in Actuarial Assumptions: • The assumed post-retirement benefit increase rate was changed from 1.0% per year through 2035 and 2.5% per year thereafter to 1.0% per year for all future years. The assumed investment return was changed from 7 .9% to 7 .5%. The single discount rate was changed from 7.9% to 7.5%. • Other assumptions were changed pursuant to the experience study dated June 30, 20 I 5. The assumed future salary increases, payroll growth, and inflation were decreased by 0.25% to 3.25% for payroll growth and 2.50% for inflation. PERA Public Employees Police and Fire Fund 2017 Changes Changes in Actuarial Assumptions: • The single discount rate was changed from 5.6% to 7.5%. Assumed salary increases were changed as recommended in the June 30, 2016 experience study. The net effect is proposed rates that average 0.34 percent lower than the previous rates. CITY OF LINO LAKES, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION NOTES TO RSI December 31, 2017 • Assumed rates of retirement were changed, resulting in fewer retirements. • The Combined Service Annuity (CSA) load was 30 percent for vested and non-vested deferred members. The CSA has been changed to 33 percent for vested members and 2 percent for non- vested members. The base mortality table for healthy annuitants was changed from the RP-2000 fully generational table to the RP-2014 fully generational table (with a base year of 2006), with male rates adjusted by a factor of0.96. The mortality improvement scale was changed from Scale AA to Scale MP- 2016. The base mortality table for disabled annuitants was changed from the RP-2000 disabled mortality table to the mortality tables assumed for healthy retirees. • Assumed termination rates were decreased to 3.0 percent for the first three years of service. Rates beyond the select period of three years were adjusted, resulting in more expected terminations overall. • Assumed percentage of married female members was decreased from 65 percent to 60 percent. • Assumed age difference was changed from separate assumptions for male members ( wives assumed to be three years younger) and female members (husbands assumed to be four years older) to the assumption that males are two years older than females. • The assumed percentage offemale members electing Joint and Survivor annuities was increased. • The assumed post-retirement benefit increase rate was changed from 1.00 percent for all years to 1.00 percent per year through 2064 and 2.50 percent thereafter. 20 I 6 Changes Changes in Actuarial Assumptions: • The assumed post-retirement benefit increase rate was changed from 1.0% per year through 2037 and 2.5% per year thereafter to 1.0% per year for all future years. • The assumed investment return was changed from 7.9% to 7.5%. The single discount rate changed from 7.9% to 5.6%. • The assumed future salary increases, payroll growth, and inflation were decreased by 0.25% to 3.25% for payroll growth and 2.50% for inflation. Single Employer -Fire Division There are no factors that affect trends in the amounts reported, such as change of benefit terms or assumptions. With only two years reported in the RSI, there is no additional information to include in the notes. IV-45