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CITY OF ST. ANTHONY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2019 CONTRIBUTIONS Minnesota Statutes Chapter 69.772 sets the minimum contribution requirement for the City and State aid on an annual basis. These statutes are established and amended by the state legislature. The Relief is comprised of volunteers; therefore, members have no contribution requirements. The City receives the State aid contribution and is required by state statutes to pass this through as payment to the Relief. The City’s contributions to the Relief for the year ended December 31, 2019 were $6,000. The City’s contributions met the required contribution amount as set by state statute. State aid contributions for the year ended December 31, 2019 were $54,716. NET PENSION LIABILITY The City’s net pension liability (asset) was measured as of December 31, 2019, and the total pension liability used to calculate the net pension liability (asset) was determined by an actuarial valuation as of that date. ACTUARIAL ASSUMPTIONS The total pension liability in the December 31, 2019 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Investment rate of return 5.25% Projected salary increases N/A Inflation 2.75% Cost-of-living adjustments None Age of service retirement 50 Post retirement benefit increase None The expected investment rate of return and discount rate for 2019 was 5.25%, a decrease of .50% from 2018. Also, the benefit level increased from $3,500 to $3,800 in 2019. Mortality assumptions for pre-retirement, post-retirement and disability are as follows: Healthy pre-retirement – RP 2014 employee generational mortality projected with mortality improvement scale MP-2018, from a base year of 2006. Healthy post-retirement – RP 2014 annuitant generational mortality projected with mortality improvement scale MP-2018 from a base year of 2006. Male rates adjusted by a factor of 0.96. Disabled – RP 2014 annuitant generational mortality table projected with mortality improvement scale MP-2018 from a base year of 2006. Male rates are adjusted by a factor of 0.96. The long-term expected rate of return on pension plan investments was determined using a building- block method in which best-estimates of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These asset class estimates are combined to produce the portfolio long-term expected rate of return by weighting the expected future real rates of return by the current asset allocation percentage (or target allocation, if available) and by adding expected inflation. All results are then rounded to the nearest quarter percentage point. 73