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CITY OF LINO LAKES, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 2017 <br /> <br /> <br /> <br /> <br />C. PARTICIPANTS <br /> <br />As of the January 1, 2017 actuarial valuation, participants of the plan consisted of: <br /> <br />Active employees 46 <br />Inactive employees or beneficiaries <br />currently receiving benefits 6 <br />Total 52 <br /> <br />D. TOTAL OPEB LIABILITY AND CHANGES IN TOTAL OPEB LIABILITY <br /> <br />The City’s total OPEB liability of $746,540 was measured as of December 31, 2017, and was <br />determined by an actuarial valuation as of January 1, 2017. Changes in the total OPEB liability during <br />2017 were: <br /> <br />Balance - beginning of year $789,627 <br />Changes for the year: <br />Service cost 16,990 <br />Interest 22,542 <br />Changes of benefit terms - <br />Differences between expected and actual experience (51,083) <br />Changes in assumptions - <br />Benefit payments (31,536) <br />Net changes (43,087) <br />Balance - end of year $746,540 <br /> <br />E. ACTUARIAL ASSUMPTIONS AND OTHER INPUTS <br /> <br />The total OPEB liability in the January 1, 2017 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 3.50% <br />Salary increases 3.50% <br />Discount rate 2.85% <br />Investment rate of return 2.85% <br />Healthcare cost trend rates 8.00% for 2017, decreasing 1.00% per year to <br />an ultimate rate of 3.00% for 2022 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 <br />return was based on the 20 year AA rated municipal bond rate as of November 22, 2017, obtained from <br />www.fmsbonds.com/market-yields. <br /> <br />Mortality rates were based on the SOA RP-2014 Total Dataset Mortality tables with Scale MP-2014 and <br />Improvement Scale BB. <br />76