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CITY OF ST. ANTHONY, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 2015 <br /> <br /> <br /> <br /> Best estimates of geometric real and nominal rates of return for each major asset class included in <br />the pension plan’s asset allocation as of the measurement date are summarized in the following <br />table: <br /> <br />Long-Term Expected <br />Asset Class Real Rate of Return <br />Domestic equity 5.25% <br />International equity 5.25% <br />Fixed income 1.75% <br />Real estate and alternatives 3.75% <br />Cash and equivalents 0.25% <br />Total (weighted ave, rounded to 1/4%) 4.25% <br /> <br />DISCOUNT RATES <br /> <br /> The discount rate used to measure the total pension liability was 4.25%. The liability discount rate <br />was developed using the alternative method described in paragraph 43 of GASB 67, which states <br />that “if the evaluations required by paragraph 41 can be made with sufficient reliability without a <br />separate projection of cash flows into and out of the pension plan, alternative methods may be <br />applied in making the evaluations.” The determination of the discount rate assumed that the plan’s <br />current overfunded status, combined with Minnesota statutory funding requirements, provide <br />sufficient reliability that projected plan assets will be adequate to pay future retiree benefits. <br />Therefore, the plan’s long-term expected return on plan investments was applied to all periods of <br />projected benefit payments to determine the total pension liability. <br /> <br />CHANGES IN THE NET PENSION LIABILITY <br /> <br />Total Pension Plan Fiduciary Net Pension <br />Liability Net Position Liability (Asset) <br />(a)(b)(a) - (b) <br />Balance at December 31, 2014 $692,393 $897,780 ($205,387) <br />Changes for the year: <br />Service cost 44,095 44,095 <br />Interest 30,759 30,759 <br />Differences between expected and actual experience - - <br />Contributions - employer 6,000 (6,000) <br />On behalf contributions - State of MN 48,725 (48,725) <br />Contributions - employee - - <br />Net investment income (23,129) 23,129 <br />Benefit payments, including refunds of employee <br /> contributions (25,472) (25,472) <br />Administrative expense (10,561) 10,561 <br />Other changes - - <br />Net changes 49,382 (4,437) 53,819 <br />Balance at December 31, 2015 $741,775 $893,343 ($151,568) <br />Increase (Decrease) <br /> <br />74