06-02-25 - Council Work Session Agenda

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CITY OF LINO LAKES, MINNESOTA REQUIRED SUPPLEMENTARY INFORMATION NOTES TO RSI December 31, 2024 2019 Changes in Actuarial Assumptions: • The mortality projection scale was changed from MP-2017 to MP-2018. 2018 Changes in Actuarial Assumptions: • The mortality projection scale was changed from MP-2016 to MP-2017. 2017 Changes in Actuarial Assumptions: • The single discount rate was changed from 5.6% to 7.5%. • Assumed salary increases were changed as recommended in the June 30, 2016 experience study. The net effect is proposed rates that average 0.34% lower than the previous rates. • Assumed rates of retirement were changed, resulting in fewer retirements. • The Combined Service Annuity (CSA) load was 30% for vested and non -vested deferred members. The CSA has been changed to 33% for vested members and 2 percent for non -vested members. • The base mortality table for healthy annuitants was changed from the RP-2000 fully generational table to the RP-2014 fully generational table (with a base year of 2006), with male rates adjusted by a factor of 0.96. The mortality improvement scale was changed from Scale AA to Scale MP-2016. The base mortality table for disabled annuitants was changed from the RP-2000 disabled mortality table to the mortality tables assumed for healthy retirees. • Assumed termination rates were decreased to 3% for the first three years of service. Rates beyond the select period of three years were adjusted, resulting in more expected terminations overall. • Assumed percentage of married female members was decreased from 65% to 60%. • Assumed age difference was changed from separate assumptions for male members (wives assumed to be three years younger) and female members (husbands assumed to be four years older) to the assumption that males are two years older than females. • The assumed percentage of female members electing Joint and Survivor annuities was increased. • The assumed post -retirement benefit increase rate was changed from 1.00% for all years to 1.00% per year through 2064 and 2.50% thereafter. 2016 Changes in Actuarial Assumptions: • The assumed post -retirement benefit increase rate was changed from 1.0% per year through 2037 and 2.5% per year thereafter to 1.0% per year for all future years. • The assumed investment return was changed from 7.9% to 7.5%. The single discount rate changed from 7.9% to 5.6%. • The assumed future salary increases, payroll growth, and inflation were decreased by 0.25% to 3.25% for payroll growth and 2.50% for inflation. Single Employer — Fire Division During 2021, the benefit level per year of service increased from $5,000 to $7,000. There have been no other factors, such as changes to assumptions, that affect trends in the amounts reported since the Fire Division was created. 106