06-02-25 - Council Work Session Agenda

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CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2024 F. DISCOUNT RATE The discount rate used to measure the total pension liability in 2024 was 7.00%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members and employers will be made at rates set in Minnesota Statutes. Based on these assumptions, the fiduciary net position of the General Plan and Police and Fire Plan were projected to be available to make all projected future benefit payments of current plan 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. G. PENSION LIABILITY SENSITIVITY The following presents the City's proportionate share of the net pension liability, calculated using the discount rate disclosed in the preceding paragraph, as well as what the City's proportionate share of the net pension liability would be if it were calculated using a discount rate one percentage point lower (6.00%) or one percentage point higher (8.00%) than the current discount rate: 1% Decrease in Current 1% Increase in Discount Rate Discount Rate Discount Rate Proportionate share of the General Plan net pension liability $3,937,925 $1,802,947 $46,732 Proportionate share of the Police and Fire Plan net pension liability $7,014,474 $2,968,216 ($354,609) H. PENSION PLAN FIDUCIARY NET POSITION Detailed information about each pension plan's fiduciary net position is available in a separately -issued PERA financial report that includes financial statements and required supplementary information. That report may be obtained at www.mnpera.org. I. PENSION EXPENSE Pension expense recognized by the City for the year ended December 31, 2024 is as follows: General Plan $300,969 Police and Fire Plan 508,209 Fire Relief (Note 8) (2,968) Total $806,210 72