12-07-2020 Council Packet - Laserfiche WebLink

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City of Orono, Minnesota Notes to the Financial Statements December 31, 2019 Note 4: Defined Benefit Pension Plans - Statewide (Continued) At December 31, 2019, the City reported its proportionate share of the Police and Fire Plan’s deferred outflows of resources and deferred inflows of resources, and its contributions subsequent to the measurement date, from the following sources: Deferred Deferred Outflows Inflows of Resources of Resources Differences Between Expected and Actual Economic Experience 117,887$ 406,704$ Changes in Actuarial Assumptions 2,192,325 2,757,309 Net Difference Between Projected and Actual Earnings on Plan Investments - 469,082 Changes in Proportion 1,204,979 100,454 Contributions to PEPFP Subsequent to the Measurement Date 213,635 - Total 3,728,826$ 3,733,549$ The $213,635 reported as deferred outflows of resources related to pensions resulting from the City’s contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2020. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: 981,029$ (347,922) (897,828) 23,784 2023 22,579 2020 2021 2021 2022 E. Actuarial Assumptions The total pension liability in the June 30, 2019 actuarial valuation was determined using the following actuarial assumptions: Inflation 2.50% per year Active Member Payroll Growth 3.25% per year Investment Rate of Return 7.50% Salary increases were based on a service-related table. Mortality rates for active members, retirees, survivors and disabilitants were based on RP-2014 tables for males or females, as appropriate, with slight adjustments to fit PERA’s experience. Cost of living benefit increases after retirement for retirees are assumed to be 1.25 percent per year for General Employees Plan and 1.0 percent per year for Police and Fire Plan. Actuarial assumptions used in the June 30, 2019 valuation were based on the results of actuarial experience studies. The most recent four-year experience study in the General Employees Plan was completed in 2019. The most recent four- year experience study for the Police and Fire Plan was completed in 2016. Economic assumptions were updated in 2018 based on a review of inflation and investment return assumptions. reported as deferredreported as deferred outflows of resources related to pensions resulting from the City’s contributions outflows of resources related to pensions resulting from the City’s contributions to the measurement date will be recognized as a reduction of the net pension liabilityto the measurement date will be recognized as a reduction of the net pension liability in in Other amounts reported as deferred outflows and inflows of resources related to pensions will be Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows:recognized in pension expense as follows: 80