Comprehensive Annual Financial Report 12/31/2019

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CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2019 C. PARTICIPANTS As of the January 1, 2019 actuarial valuation, participants of the plan consisted of: Active employees 42 Inactive employees or beneficiaries currently receiving benefits 4 Total 46 D. TOTAL OPEB LIABILITY AND CHANGES IN TOTAL OPEB LIABILITY The City’s total OPEB liability of $560,631 was measured as of December 31, 2019 and was determined by an actuarial valuation as of January 1, 2019. Changes in the total OPEB liability during 2019 were: Balance - beginning of year $756,644 Changes for the year: Service cost 53,789 Interest 10,893 Changes of benefit terms - Differences between expected and actual experience (245,168) Changes in assumptions - Benefit payments (15,527) Net changes (196,013) Balance - end of year $560,631 The OPEB liability will be liquidated by the general, water and sewer funds. E. ACTUARIAL ASSUMPTIONS AND OTHER INPUTS The total OPEB liability in the January 1, 2019 actuarial valuation was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified: Inflation 3.00% Salary increases 3.00% Discount rate 2.00% Investment rate of return 2.00% Healthcare cost trend rates -5.37% for 2019, 7% for 2020, decreasing 1% per year to an ultimate rate of 3% for 2024 and beyond Retirees' share of benefit-related costs 100% The previous actuarial valuation included a liability for benefits provided to the beneficiary of a deceased employee. As of the most recent actuarial valuation date, the beneficiary was not enrolled in the City’s plan, but has been assigned a 20% probability of returning to the plan. 75