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CITY OF LINO LAKES, MINNESOTA
<br />NOTES TO FINANCIAL STATEMENTS
<br />December 31, 2019
<br />B, BENEFITS PROVIDED
<br />The SVF provides lump-sum retirement, death, and supplemental benefits to covered firefighters and
<br />survivors. Benefits are paid based on the number of years of service multiplied by a benefit level per
<br />year of service approved by the City of Lino Lakes. Members are eligible for a lump-sum retirement
<br />benefit at 50 years of age with five years of service. Plan provisions include a pro-rated vesting
<br />schedule that increases from 5 years at 40% through 20 years at I OO"A,.
<br />C. CONTRIBUTIONS
<br />The SVF is funded by fire state aid, investment earnings and, ifnecessary, employer contributions as
<br />specified in Minnesota statutes, and voluntary City contributions. The State of Minnesota contributed
<br />$121,630 in fire state aid to the plan for the year ended December 31, 2019. Required employer
<br />contributions are calculated annually based on statutory provisions. The City's statutorily-required
<br />contributions to the SVF plan for the year ended December 31, 2019 were $0. The City's contributions
<br />were equal to the required contributions as set by state statute, if applicable.
<br />D. PENSION COSTS
<br />At December 31, 2019, the City reported a net pension asset of $317,669 for the SVF plan. The net
<br />pension asset was measured as of December 31, 2019. The total pension liability used to calculate the
<br />net pension asset in accordance with GASB 68 was determined by PERA applying an actuarial formula
<br />to specific census data certified by the fire department. The following table presents the changes in net
<br />pension liability during the year.
<br />Plan Net
<br />Total Fiduciary Pension
<br />Pension Net Liability
<br />Liability Position (Asset)
<br />!!L_ Q!} (a-b)
<br />Beginning balance December 31, 2018 $224,407 $389,320 ($164,913)
<br />Changes for the year:
<br />Service cost 52,320 52,320
<br />Interest on pension liability 16,603 16,603
<br />Actuarial experience (gi,ins) / losses (22,680) (22,680)
<br />Projected investment earnings 23,359 (23,359)
<br />Contributions -employer
<br />Contributions -State of MN 121,630 (121,630)
<br />Asset (gi,in) / loss 54,704 (54,704)
<br />Benefit payouts
<br />PERA administrative fee (694) 694
<br />Net changes 46J43 198 999 (152,756)
<br />Balance end of year December 31, 2019 $2701650 $588~19 !$317,669)
<br />There were no benefit provision changes during the measurement period.
<br />CITY OF LINO LAKES, MINNESOTA
<br />NOTES TO FINANCIAL STATEMENTS
<br />December 31, 2019
<br />For the year ended December 31, 2019, the City recognized pension expense of$44,225.
<br />At December 31, 2019, the City reported deferred inflows of resources from the following sources:
<br />Difference between projected and
<br />actual investment earnings
<br />Differences between expected and
<br />actual economic experience
<br />Total
<br />Deferred Outflows
<br />of Resources
<br />$
<br />41,856
<br />_$_41,856
<br />Deferred Inflows
<br />of Resources
<br />$27,039
<br />24,374
<br />$51,413
<br />Amounts reported as deferred outflows and inflows of resources related to pensions will be recognized
<br />in pension expense as follows:
<br />Year Ended
<br />December 31,
<br />2020
<br />2021
<br />2022
<br />2023
<br />2024
<br />Thereafter
<br />E, ACTUARIAL ASSUMPTIONS
<br />Pension
<br />~e
<br />($291)
<br />1,290
<br />4,921
<br />(15,477)
<br />The total pension liability at December 31, 2019, was determined using the entry age normal actuarial
<br />cost method and the following actuarial assumptions:
<br />Retirement eligibility at the later of age 50 or 20 years of service
<br />• Investment rate of return of 6.00/o
<br />• Inflation rate of3.0%
<br />There were no changes in actuarial assumptions in 2019
<br />F. DISCOUNTRATE
<br />The discount rate used to measure the totsl pension liability was 6.00/o. The projection of cash flows
<br />used to determine the discount rate assumed that contributions to the SVF plan will be made as
<br />specified in statute. Based on that assumption and considering the funding ratio of the plan, the
<br />fiduciary net position was projected to be available to make all projected future benefit payments of
<br />current active and inactive members. Therefore, the long-term expected rate of return on pension plan
<br />investments was applied to all periods of projected benefit payments to determine the total pension
<br />liability. IV-31
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