Agenda Packets - 2024/05/13 - Laserfiche WebLink

Home Browse Search

NOTE 9 — DEFINED BENEFIT PENSION PLANS — STATE-WIDE (CONTINUED) The following changes in actuarial assumptions and plan provisions occurred in 2023: 1. GERF 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, noncompounding 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. 2. PEPFF 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, noncompounding 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. G. Discount Rate The discount rate used to measure the total pension liability in 2023 was 7.00 percent. 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 Employees Fund and the Police and Fire Fund 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. sire