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CITY OF HUGO, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS (CONTINUED) <br />4. <br />X <br />Other Information (Continued) <br />Pension Plans (Continued) <br />2. Hugo Firefighter's Relief Association <br />G. Pension Liability Sensitivity <br />The following presents the City's net pension asset for the Association's plan, calculated using <br />the discount rate disclosed in the preceding paragraph, as well as what the City's net pension <br />asset would be if it were calculated using a discount rate 1% lower or 1% higher than the <br />current discount rate: <br />1 % Decrease 1% Increase in <br />in Discount Discount Rate Discount Rate <br />Rate (5.50%) (6.50%) (7.50%) <br />Net pension liability (asset) $ (491,961) $ (511,851) $ (530,740) <br />H. Plan Investments <br />1. Investment Policy <br />All investments undertaken by the plan are governed by the prudent person rule and other <br />standards codified in Minnesota Statutes, Chapter 11A and Chapter 356A. <br />Within the requirements defined by state law, the Plan establishes investment policy for all <br />funds under its control. These investment policies are tailored to the particular needs of <br />each fund and specify investment objectives, risk tolerance, asset allocation, investment <br />management structure and specific performance standards. Studies guide the ongoing <br />management of the funds and are updated periodically. <br />65 <br />