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CITY OF LINO LAKES, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 2021 <br /> <br /> <br /> <br /> <br />C. PARTICIPANTS <br /> <br />As of the January 1, 2021 actuarial valuation, participants of the plan consisted of: <br /> <br />Active employees 60 <br />Inactive employees or beneficiaries <br />currently receiving benefits 3 <br />Total 63 <br /> <br />D. TOTAL OPEB LIABILITY AND CHANGES IN TOTAL OPEB LIABILITY <br /> <br />The City’s total OPEB liability of $502,243 was measured as of December 31, 2021 and was <br />determined by an actuarial valuation as of January 1, 2021. Changes in the total OPEB liability during <br />2021 were: <br /> <br />Balance - beginning of year $613,474 <br />Changes for the year: <br />Service cost 65,484 <br />Interest 13,256 <br />Changes of benefit terms - <br />Differences between expected and actual experience (250,908) <br />Changes in assumptions 93,391 <br />Benefit payments (32,454) <br />Net changes (111,231) <br />Balance - end of year $502,243 <br /> The OPEB liability will be liquidated by the general, water and sewer funds. <br /> <br /> <br />E. ACTUARIAL ASSUMPTIONS AND OTHER INPUTS <br /> <br />The total OPEB liability in the January 1, 2021 actuarial valuation was determined using the following <br />actuarial assumptions and other inputs, applied to all periods included in the measurement, unless <br />otherwise specified: <br /> <br />Inflation 3.00% <br />Salary increases 3.00% <br />Discount rate 2.25% <br />Investment rate of return N/A <br />Healthcare cost trend rates 6.25% for 2021, decreasing 0.25% per year <br /> to an ultimate rate of 5% for 2026 and beyond <br />Retirees' share of benefit-related costs 100% <br />Since the plan is funded on a pay-as-you-go basis, both the discount rate and the investment rate of return <br />was based on the 20-year AA rated municipal bond rate as of December 31, 2021, obtained from <br />https://www.spglobal.com/spdji/en/indices/fixed-income/sp-municipal-bond-20-year-high-grade-rate- <br />index/#overview. <br /> <br />73