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CITY OF LINO LAKES, MINNESOTA
<br />NOTES TO FINANCIAL STATEMENTS
<br />December 31, 2019
<br />$103,255 reported as deferred outflows of resources related to pensions resulting from City
<br />contributions subsequent to the measurement date will be recognized as a reduction of the net
<br />pension liability during 2020. Other amounts reported as deferred outflows and inflows of
<br />resources related to pensions will be recognized in pension expense as follows:
<br />Year Ended Pension
<br />December 31 1 Expense
<br />2020 ($103,476)
<br />2021 (208,887)
<br />2022 (17,699)
<br />2023 3,546
<br />2024
<br />Thereafter
<br />($3261516l
<br />2. PEPFF Pension Costs
<br />At December 31, 2019, the City reported a liability of$2,71 l,539 for its proportionate share of the
<br />PEPFF's net pension liability. The net pension liability was measured as of June 30, 2019 and the
<br />total pension liability used to calculate the net pension liability was determined by an actuarial
<br />valuation as of that date. The City's proportionate share of the net pension 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, 2018 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 0.2547%, which was a decrease of0.0121 % from its proportion measured as of June 30,
<br />2018. The City also recognized $34,384 for the year ended December 31, 2019 as revenue (and an
<br />offsetting reduction of net pension liability) for its proportionate share of the State of Minnesota's
<br />on-behalf contributions to the PEPFF. Legislation passed in 2013 required the State of Minnesota
<br />to begin contributing $9 million to the PEPFF each year, until the plan is 90"/o fimded or until the
<br />State Patrol Plan (administered by the Minnesota State Retirement System) is 90"/o fimdecl,
<br />whoever occurs later. In addition, the state will pay $4.5 million on October I, 2018 and October
<br />I, 2019 in direct state aid. Thereafter, by October I of each year, the state will pay $9 million until
<br />full fimding is reached or July I, 2048, whichever is earlier.
<br />For the year ended December 31, 2019, the City recognized pension expense of $406,851 for its
<br />proportionate share of the PEPFF's pension expense.
<br />CITY OF LINO LAKES, MINNESOTA
<br />NOTES TO FINANCIAL STATEMENTS
<br />December 31, 2019
<br />At December 31, 2019, the City reported its proportionate share of the PEPFF's deferred outflows
<br />of resources and defu:red inflows of resources related to pensions from the following sources:
<br />Deferred Outflo'IW Deferred Inflo\W
<br />of Resources of Resources
<br />Differences between expected and
<br />actual economic experience $115,694 $421,284
<br />Changes in actuarial assumptions 2,289,610 3,079,016
<br />Net collective between projected and
<br />actual investment earnings 564,922
<br />Changes in proportion 138,350 127,759
<br />Contributions paid to PERA
<br />subsequent to the measurement date 234 728
<br />Total $2,778J82 $4,192,981
<br />A total of $234,728 reported as deferred outflows of resources related to pensions resulting from
<br />City contributions subsequent to the measurement date will be recognized as a reduction of the net
<br />pension liability during 2020. Other amounts reported as deferred outflows and inflows of
<br />resources related to pensions will be recognized in pension expense as outflows:
<br />Year Ended Pension
<br />December 31, Expense
<br />2020 ($175,200)
<br />2021 (382,258)
<br />2022 (1,106,431)
<br />2023 (8,694)
<br />2024 23,256
<br />Thereafter
<br />($1,649,327l
<br />The net pension liability will be liquidated by the general, water and sewer fimds.
<br />E. ACTUARIAL ASSUMPTIONS
<br />The total pension liability in the June 30, 2019 actuarial valuation was determined using an individual entry-
<br />age normal actuarial cost method and the following actuarial assumptions:
<br />Inflation
<br />Active Member Payroll Growth
<br />Investment Rate of Return
<br />2.50% per year
<br />3 .25% per year
<br />7.50%
<br />Salary increases were based on a service-related table. Mortality rates for active members, retirees,
<br />survivors, and disabilitants for all plans were based on RP 2014 tables for males or females, as appropriate,
<br />with slight adjustments to fit PERA's experience. Cost ofliving benefit increases after retirement for
<br />retirees are assumed to be 1.25% per year for the General Employees Plan and 1.0% per year for the Police
<br />and Fire Plan. IV-29
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