06-14-2021 Council Packet - Laserfiche WebLink

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CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2019 C. PARTICIPANTS As of the January I, 2019 actuarial valuation, participants of the plan consisted of: Acti"' employees Inacti"' employees or beneficiaries cmrently receiving benefits Total 42 4 46 D. TOTAL OPED LIABILITY AND CHANGES IN TOTAL OPED LIABILITY The City's total OPED liability of$560,631 was measured as of December 31, 2019 and was determined by an actuarial valuation as ofJanuary I, 2019. Changes in the total OPEB liability during 2019were: Balance -beginning of year Changes for the year: Service cost Interest Changes of benefit terms Differences between expected and actual experience Changes in assumptions Benefit payments Net changes Balance -end of year The OPEB liability will be liquidated by the general, water and sewer funds. E. ACTUARIAL ASSUMPTIONS AND OTHER INPUTS $756,644 53,789 10,893 (245,168) {15,527) {196,013) $560.631 The total OPEB liability in the January I, 2019 actuarial valuation was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measmement, unless otherwise specified: Inflation 3.00% Salary increases 3 .00% Discount rate 2.00% Jn"'stment rate ofretmn 2.00% Healthcare cost trend rates -5.37% for 2019, 7% for 2020, decreasing I% 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"/o probability of returning to the plan. CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2019 Since the plan is funded on a pay-as-you-go basis, both the discount rate and the investment rate of return was based on the 20 year AA rated municipal bond rate as of January 14, 2020, obtained from www.finsbonds.com/market-yields. Mortality rates were based on the SOA RP-2014 Total Dataset Mortality tables with Scale MP-2019. Based on past experience of the plan, 90"/o of future retirees are assumed to continue medical coverage until age 65. 25% of future police/fire retirees are assumed to select spousal coverage. No spousal coverage is assumed for other future retirees. 50"/o of police/fire employees are assumed to retire at age 55, the balance at age 65. 50"/o of other City employees are assumed to retire at age 62, the balance at age 65. F. SENSITIVITY OF THE TOTAL OPEB LIABILITY TO CHANGES IN THE DISCOUNT RATE The following presents the total OPEB liability of the City, as well as what the City's total OPEB liability would be ifit were calculated using a discount rate that is I% lower (I%) or I% higher (3%) than the cmrent discount rate: Total OPED liability !%Decrease 1% $595,065 Discount Rate 2% $560,631 1% Jncrease 3% $526,577 G. SENSITIVITY OF THE TOTAL OPEB LIABILITY TO CHANGES IN THE HEALTHCARE COST TREND RATES The following presents the total OPED liability of the City, as well as what the City's total OPED liability would be ifit were calculated using healthcare cost trend rates that are I% lower (6% decreasing to 2%) or I% higher (8% decreasing to 4%) than the current healthcare cost trend rates: Total OPED liability !%Decrease (6% decreasmg to 2%) $499,408 Healthcare Cost Trend Rates (7% decreas91.g to 3%) $560,631 1%Jncrease (8% decreasing to 4%) $633,959 H. OPED EXPENSE AND DEFERRED OUTFLOWS AND INFLOWS OF RESOURCES RELATED TO OPED For the year ended December 31, 2019, the City recognized $39,649 of OPEB expense. At December 31, 2019, the City reported deferred outflows and inflows of resources related to OPEB from the following sources: Differences between expected and actual experience Deferred Outflows of Resources £11,786 Deferred Inflows of Resources $279 .. 081 IV-33