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CITY OF LAKE ELMO, MINNESOTA NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION DECEMBER 31, 2023 79 NOTE 1 PUBLIC EMPLOYEES RETIREMENT PLAN – GENERAL EMPLOYEES FUND 2023 Changes Changes in Actuarial Assumptions • The investment return assumption and single discount rate were changed from 6.50 percent to 7.00 percent. Changes in Plan Provisions • An additional one-time direct state aid contribution of $170.1 million will be contributed to the Plan on October 1, 2023. • The vesting period of those hired after June 30, 2010 was changed from five years of allowable service to three years of allowable service. • The benefit increase delay for early retirements on or after January 1, 2024 was eliminated. • A one-time, non-compounding benefit increase of 2.50 percent minus the actual 2024 adjustment will be payable in a lump sum for calendar year 2024 by March 31, 2024. 2022 Changes Changes in Actuarial Assumptions • The mortality improvement scale was changed from Scale MP-2020 to Scale MP-2021. Changes in Plan Provisions • There have been no changes in plan provisions since the previous valuation. 2021 Changes Changes in Actuarial Assumptions • The investment return and single discount rates were changed from 7.50 percent to 6.50 percent, for financial reporting purposes. • The mortality improvement scale was changed from Scale MP-2019 to Scale MP-2020. Changes in Plan Provisions • There have been no changes in plan provisions since the previous valuation. 2020 Changes Changes in Actuarial Assumptions • The price inflation assumption was decreased from 2.50 percent to 2.25 percent. • The payroll growth assumption was decreased from 3.25 percent to 3.00 percent. • Assumed salary increase rates were changed as recommended in the June 30, 2019 experience study. The net effect is assumed rates that average 0.25 percent less than previous rates. • Assumed rates of retirement were changed as recommended in the June 30, 2019 experience study. The changes result in more unreduced (normal) retirements and slightly fewer Rule of 90 and early retirements. • Assumed rates of termination were changed as recommended in the June 30, 2019 experience study. The new rates are based on service and are generally lower than the previous rates for years 2-5 and slightly higher thereafter. • Assumed rates of disability were changed as recommended in the June 30, 2019 experience study. The change results in fewer predicted disability retirements for males and females. • The base mortality table for healthy annuitants and employees was changed from the RP-2014 table to the Pub-2010 General Mortality table, with adjustments. The base mortality table for disabled annuitants was changed from the RP- 2014 disabled annuitant mortality table to the PUB-2010 General/Teacher disabled annuitant mortality table, with adjustments. • The mortality improvement scale was changed from Scale MP-2018 to Scale MP-2019. • The assumed spouse age difference was changed from two years older for females to one year older.