Agenda Packets - 2025/05/11 - Laserfiche WebLink

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CITY OF MOUNDS VIEW Notes to Required Supplementary Information December 31,2025 PERA—GENERAL EMPLOYEES RETIREMENT FUND 2025 CHANGES IN ACTUARIAL ASSUMPTIONS • The combined service annuity loading factors increased from 15.00 percent to 19.00 percent for vested terminated members and from 3.00 percent to 44.00 percent for nonvested, terminated members. • The assumed post-retirement benefit increase changed from 1.25 percent to 1.50 percent. 2025 CHANGES IN PLAN PROVISIONS • The post-retirement benefit increase formula changed to 100.00 percent of the Social Security annual increase, between 1.00 percent and 1.75 percent , beginning January 1, 2026. If the funded ratio (on a market value of assets basis) is less than 85.00 percent for the last two consecutive annual valuations or is less than 80.00 percent in the most recent actuarial valuation, the maximum is reduced to 1.50 percent. Previously, the benefit increase was 50.00 percent of the Social Security annual increase,between 1.00 percent and 1.50 percent. • The 1.00 percent additional employer contribution is eliminated when the plan reaches 98.00 percent funded status (on an actuarial value of assets basis); this contribution was previously scheduled to stop when the plan reached 100.00 percent funded status. 2024 CHANGES IN ACTUARIAL ASSUMPTIONS • Rates of merit and seniority were adjusted,resulting in slightly higher rates. • Assumed rates of retirement were adjusted as follows: increase the rate of assumed unreduced retirements, slight adjustments to Rule of 90 retirement rates, and slight adjustments to early retirement rates for Tier 1 and Tier 2 members. • Minor increase in assumed withdrawals for males and females. • Lower rates of disability. • Continued use of Pub-2010 General Mortality Table, with slight rate adjustments as recommended in the most recent experience study. • Minor changes to form of payment assumptions for male and female retirees. • Minor changes to assumptions made with respect to missing participant data. 2024 CHANGES IN PLAN PROVISIONS • The workers' compensation offset for disability benefits was eliminated. The actuarial equivalent factors were updated to reflect the changes in assumptions. 2023 CHANGES IN ACTUARIAL ASSUMPTIONS • The investment return assumption and single discount rate were changed from 6.50 percent to 7.00 percent. 2023 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. -69-