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CITY OF LINO LAKES, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 2020 <br /> <br /> <br /> <br /> <br />Year Ended Pension <br />December 31, Expense <br />2021 (276,783) <br />2022 (826,720) <br />2023 (40,472) <br />2024 113,360 <br />2025 (34,937) <br />Thereafter - <br />($1,065,552) <br /> <br />The net pension liability will be liquidated by the general, water and sewer funds. <br /> <br /> <br />E. ACTUARIAL ASSUMPTIONS <br /> <br />The total pension liability in the June 30, 2020 actuarial valuation was determined using an individual entry- <br />age normal actuarial cost method and the following actuarial assumptions: <br /> <br />Inflation 2.50% per year <br />Active Member Payroll Growth 3.25% per year <br />Investment Rate of Return 7.50% <br /> <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 of living benefit increases after retirement for <br />retirees are assumed to be 1.25% per year for GERF and 1.0% per year for PEPFF. <br /> <br />Actuarial assumptions used in the June 30, 2020 valuation were based on the results of actuarial experience <br />studies. The most recent four-year experience study for GERF was completed in 2019. The assumption <br />changes were adopted by the Board and become effective with the July 1, 2020 actuarial valuation. The most <br />recent four-year experience study for PEPFF was completed in 2020. <br /> <br />The following changes in actuarial assumptions and plan provisions occurred in 2020: <br /> <br />General Employees Fund <br />Changes in Actuarial Assumptions: <br /> The price inflation assumption was decreased from 2.50% to 2.25%. <br /> The payroll growth assumption was decreased from 3.25% to 3.00%. <br /> As recommended in the June 30, 2019 experience study, assumed salary increase rates were <br />decreased 0.25% and assumed rates of retirement were changed resulting in more unreduced <br />(normal) retirements and slightly fewer Rule of 90 and early retirements. Assumed rates of <br />termination and disability were also changed. <br /> The base mortality tables were changed from RP-2014 tables to Pub-2010 tables, with adjustments. <br /> The mortality improvement scale was changed from Scale MP-2018 to Scale MP-2019. <br /> The assumed spouse age difference was changed from two years older for females to one year <br />older. <br /> The assumed number of married male new retirees electing the 100% Joint & Survivor option <br />changed from 35% to 45%. The assumed number of married female new retirees electing the 100% <br />67