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CITY OF LAKE ELMO, MINNESOTA <br />NOTES TO THE BASIC FINANCIAL STATEMENTS <br />DECEMBER 31, 2024 <br /> <br /> <br />69 <br />NOTE 5 POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS (Continued) <br /> <br />Net OPEB Liabilities, OPEB Expense, and Deferred Outflows/Inflows of Resources <br /> <br />At December 31, 2024, the City reported a net OPEB liability of $61,992 for the City’s plan. The net OPEB liability was <br />measured as of December 31, 2023, based on an actuarial valuation as of December 31, 2023. <br /> <br />For the year ended December 31, 2024, the City recognized OPEB expense of negative $27,133. <br /> <br />In accordance with the Alternative Measurement Method, gains and losses due to experience and assumption changes are <br />recognized immediately. In addition, there were no contributions between the measurement date and reporting date because <br />the City has no retirees and no active employees who were expected to retire during 2024. Therefore, there are no deferred <br />outflows or inflows of resources related to OPEB as of December 31, 2024. <br /> <br />Changes in the Net OPEB Liability <br /> <br />The following table summarizes changes in the net OPEB liability for the year ended December 31, 2024: <br /> <br />Changes in Total OPEB Liability (TOL) <br />Balance at January 1st 89,125$ <br />Service Cost 11,395 <br />Interest Cost 3,919 <br />Changes in Assumptions (56,222) <br />Differences between Expected and Actual Experience 21,261 <br />Benefit Payments (7,486) <br />Balance at December 31st 61,992$ <br /> <br />Actuarial Assumptions <br /> <br />The following is a summary of pertinent actuarial assumptions and methods utilized, applied to all periods included in the <br />measurement, unless otherwise specified: <br /> <br /> Key Methods and Assumptions Used in Valuation of Total OPEB Liability <br /> <br /> Actuarial Information: <br /> Valuation Date December 31, 2023 <br /> Measurement Date December 31, 2023 <br /> Actuarial Cost Method Entry Age Normal level percentage of pay <br /> Actuarial Assets None <br /> <br /> Actuarial Assumptions: <br /> Discount Rate 3.77% <br /> Inflation 2.50% <br /> Bond Yield 3.77% <br /> Medical Trend Rate 6.90% for FY2024, gradually decreasing over several decades <br />to an ultimate rate of 3.90% in FY2075 and later years <br /> Dental Trend Rate None <br /> <br />Mortality rates were based on the Pub-2010 General mortality tables with projected mortality improvements based on scale <br />MP-2021, and other adjustments. <br />