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CITY OF LAKE ELMO, MINNESOTA NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION DECEMBER 31, 2024 83 NOTE 2 PUBLIC EMPLOYEES RETIREMENT PLAN – POLICE AND FIRE FUND 2024 Changes Changes in Actuarial Assumptions • There were no changes in actuarial assumptions since the previous valuation. Changes in Plan Provisions • The State contribution of $9.0 million per year will continue until the earlier of 1) both the Police & Fire Plan and the State Patrol Retirement Fund attain 90 percent funded status for three consecutive years (on an actuarial value of assets basis) or 2) July 1, 2048. The contribution was previously due to expire after attaining a 90 percent funded status for one year. • The additional $9.0 million contribution will continue until the Police & Fire Plan is fully funded for a minimum of three consecutive years on an actuarial value of assets basis, or July 1, 2048, whichever is earlier. This contribution was previously due to expire upon attainment of fully funded status on an actuarial value of assets basis for one year (or July 1, 2048 if earlier). 2023 Changes Changes in Actuarial Assumptions • The investment return assumption was changed from 6.50 percent to 7.00 percent. • The single discount rate changed from 5.40 percent to 7.00 percent. Changes in Plan Provisions • Additional one-time direct state aid contribution of $19.4 million will be contributed to the Plan on October 1, 2023. • Vesting requirement for new hires after June 30, 2014, was changed from a graded 20-year vesting schedule to a graded 10-year vesting schedule, with 50.00 percent vesting after five years, increasing incrementally to 100.00 percent after 10 years. • A one-time, non-compounding benefit increase of 3.00 percent will be payable in a lump sum for calendar year 2024 by March 31, 2024. • Psychological treatment is required effective July 1, 2023, prior to approval for a duty disability benefit for a psychological condition relating to the member’s occupation. • The total and permanent duty disability benefit was increased, effective July 1, 2023. 2022 Changes Changes in Actuarial Assumptions • The mortality improvement scale was changed from Scale MP-2020 to Scale MP-2021. • The single discount rate changed from 6.50 percent to 5.40 percent. Changes in Plan Provisions • There were 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 inflation assumption was changed from 2.50 percent to 2.25 percent. • The payroll growth assumption was changed from 3.25 percent to 3.00 percent. • The base mortality table for healthy annuitants and employees was changed from the RP-2014 table to the Pub-2010 Public Safety Mortality table. The mortality improvement scale was changed from MP-2019 to MN-2020.