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CITY OF LINO LAKES, MINNESOTA
<br />NOTES TO FINANCIAL STATEMENTS
<br />December 31, 2019
<br />age (age 65 if hired prior to July I, 1989, or age 66 for individuals hired on or after July I, 1989).
<br />Members retiring under Rule of 90 are exempt from the delay to normal retirement.
<br />2. PEPFF Benefits
<br />Benefits for the PEPFF members first hired after June 30, 2010, but before July I, 2014, vest on a
<br />prorated basis from 50"/o after five years up to I 00% after ten years of credited service. Beoefits
<br />for PEPFF members first hired after June 30, 2014, vest on a prorated bases from 50"/o after ten
<br />years up to I 00"/o after tweoty years of credited service. The annuity accrual rate is 3% of average
<br />salary for each year of service. A full, unreduced peosion is earned when members are age 55 and
<br />vested, or for members who were first hired prior to July I, 1989, when age plus years of service
<br />equal at least 90.
<br />Annuities, disability benefits, and survivor benefits are increased effective every January I. Beginning
<br />January I, 2019, the postretirement increase will be fixed at I%. Recipients that have been receiving
<br />the annuity or benefit for at least 36 months as of the June 30 before the effective date of the increase
<br />will receive the full increase. For recipients receiving the annuity or beoefit for at least 25 months but
<br />less than 36 months as of the June 30 before the effective date of the increase will receive a reduced
<br />prorated increase.
<br />C. CONTRIBUTIONS
<br />Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. Contribution
<br />rates can only be modified by the state legislature.
<br />I. GERF Contributions
<br />Coordinated Plan members were required to contribute 6.5% of their annual covered salary in fiscal
<br />year 2019; the City was required to contribute 7.5% for Coordinated Plan members. The City
<br />contributions to the GERF for the year ended December 31, 2019 were $208,807. The City
<br />contributions were equal to the required contributions as set by state statute.
<br />2. PEPFF Contributions
<br />Police and Fire member's contribution rates increased from I 0.8% of pay to 11.3% and employer
<br />rates increased from 16.2% to 16.95% on January I, 2019. The City contributions to the PEPFF
<br />for the year ended December 31, 2019 were $452, 731. The City contributions were equal to the
<br />required contributions as set by state statute.
<br />D. PENSION COSTS
<br />I. GERF Pension Costs
<br />At December 31, 2019, the City reported a liability of$2,200,453 for its proportionate share of
<br />GERF's net pension liability. The City's net peosion liability reflected a reduction due to the State
<br />of Minnesota's contributionof$16 million to the fimd in 2019. The State of Minnesota is
<br />considered a non-<>mployer contributing entity and the state's contribution meets the definition of a
<br />special fimding situation. The State of Minnesota's proportionate share of the net pension liability
<br />associated with the City totaled $68,330. The net pension liability was measured as of June 30,
<br />2019, and the total pension liability used to calculate the net pension liability was determined by an
<br />CITY OF LINO LAKES, MINNESOTA
<br />NOTES TO FINANCIAL STATEMENTS
<br />December 31, 2019
<br />actuarial valuation as of that date. The City's proportion of the net peosion liability was based on
<br />the City's contributions received by PERA during the measurement period for employer payroll
<br />paid dates from July I, 201s'through June 30, 2019, relative to the total employer contributions
<br />received from all of PERA's participating employers. At June 30, 2019, the City's proportionate
<br />share was 0.0398%, which was an increase of0.0017% from its proportionate share measured as of
<br />June 30, 2018.
<br />City's proportionate share of the net pension liability
<br />State of Minnesota's proportionate share of the net
<br />pension liability associated with the City
<br />Total
<br />$2,200,453
<br />68,330
<br />$2,268,783
<br />For the year ended December 31, 2019, the City recognized pension expeose of $258,464 for its
<br />proportionate share of the GERF's peosion expense. In addition, the City recognized an additional
<br />$5,117 as pension expense (and grant revenue) for its proportionate share of the State of
<br />Minnesota's contribution of$16 million to the GERF.
<br />At December 31, 2019, the City reported its proportionate share of the GERF's deferred outflows
<br />of resources and deferred inflows of resources related to pensions from the following sources:
<br />Deferred Outflows Deferred Inflows
<br />of Resources of Resources
<br />Differences between expected and
<br />actual economic experience $61,578 $
<br />Changes in actuarial assumptions 174,770
<br />Net collecti"' between projected and
<br />actual in...stment earnings 224,356
<br />Changes in proportion 124,187 113,155
<br />Contributions paid to PERA
<br />subsequent to the measurement dale 103 255
<br />Total $28J,020 $512~81 IV-28
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