06-13-2022 City Council Packet - Laserfiche WebLink

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CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2021 For the year ended December 31, 2021, the City recognized pension expense of $116,950. At December 31, 2021, the City reported deferred outflows and inflows of resources from the following sources: Difference between projected and actual investment earnings Differences between expected and actual economic experience Total Deferred Outflows Deferred Inflows of Resources of Resources $79,375 61,435 58,112 $61,435 $137,487 Amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Year Ended Pension December 31, Expense 2022 ($18,573) 2023 (38,971) 2024 (23,494) 2025 4,986 2026 - Thereafter - E. ACTUARIAL ASSUMPTIONS The total pension liability at December 31, 2021, was determined using the entry age normal actuarial cost method and the following actuarial assumptions: • Retirement eligibility at the later of age 50 or 20 years of service • Investment rate of return of 6.0% • Inflation rate of 3.0% There were no changes in actuarial assumptions in 2021. F. DISCOUNT RATE The discount rate used to measure the total pension liability was 6.0%. The projection of cash flows used to determine the discount rate assumed that contributions to the SVF plan will be made as specified in statute. Based on that assumption and considering the funding ratio of the plan, the fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. 70