06-24-2024 CC Agenda Packet - Laserfiche WebLink

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City of Orono, Minnesota Required Supplementary Information (Continued) For the Year Ended December 31, 2023 Notes to the Required Supplementary Information - General Employees Fund Changes in Actuarial Assumptions 2023 - The investment return assumption and single discount rate were changed from 6.5 percent to 7.00 percent. 2022 - The mortality improvement scale was changed from Scale MP-2020 to Scale MP-2021. 2021 - The investment return and single discount rates were changed from 7.50 percent to 6.50 percent, for financial reporting purposes. The mortality improvement scale was changed from Scale MP-2019 to Scale MP-2020. 2020 - The price inflation assumption was decreased from 2.50% to 2.25%. The payroll growth assumption was decreased from 3.25% to 3.00%. Assumed salary increase rates were changed as recommended in the June 30, 2019 experience study. The net effect is assumed rates that average 0.25% less than previous rates. Assumed rates of retirement were changed as recommended in the June 30, 2019 experience study. The changes result in more unreduced (normal) retirements and slightly fewer Rule of 90 and early retirements. Assumed rates of termination were changed as recommended in the June 30, 2019 experience study. The new rates are based on service and are generally lower than the previous rates for years 2-5 and slightly higher thereafter. Assumed rates of disability were changed as recommended in the June 30, 2019 experience study. The change results in fewer predicted disability retirements for males and females. The base mortality table for healthy annuitants and employees was changed from the RP-2014 table to the Pub-2010 General Mortality table, with adjustments. The base mortality table for disabled annuitants was changed from the RP- 2014 disabled annuitant mortality table to the PUB-2010 General/Teacher disabled annuitant mortality table, with adjustments. The mortality improvement scale was changed from Scale MP-2018 to Scale MP-2019. The assumed spouse age difference was changed from two years older for females to one year older. The assumed number of married male new retirees electing the 100% Joint & Survivor option changed from 35% to 45%. The assumed number of married female new retirees electing the 100% Joint & Survivor option changed from 15% to 30%. The corresponding number of married new retirees electing the Life annuity option was adjusted accordingly. 2019 - The mortality projection was changed from MP-2017 to MP-2018 2018 - The mortality projection scale was changed from MP-2015 to MP-2017. The assumed benefit increase was changed from 1.00 percent per year through 2044 and 2.50 percent per year thereafter to 1.25 percent per year. 2017 - The Combined Service Annuity (CSA) loads were changed from 0.8 percent for active members and 60 percent for vested and non-vested deferred members. The revised CSA loads are now 0.0 percent for active member liability, 15.0 percent for vested deferred member liability and 3.0 percent for non-vested deferred member liability. The assumed post- retirement benefit increase rate was changed from 1.0 percent per year for all years to 1.0 percent per year through 2044 and 2.5 percent per year thereafter. 2016 - The assumed post-retirement benefit increase rate was changed from 1.0 percent per year through 2035 and 2.5 percent per year thereafter to 1.0 percent per year for all future years. The assumed investment return was changed from 7.9 percent to 7.5 percent. The single discount rate was changed from 7.9 percent to 7.5 percent. Other assumptions were changed pursuant to the experience study dated June 30, 2015. The assumed future salary increases, payroll growth and inflation were decreased by 0.25 percent to 3.25 percent for payroll growth and 2.50 percent for inflation. 2015 - The assumed post-retirement benefit increase rate was changed from 1.0 percent per year through 2030 and 2.5 percent per year thereafter to 1.0 percent per year through 2035 and 2.5 percent per year thereafter. 85 General Mortality table, with adjustments. The base mortality table for disabled annuitants was changed from the RPGeneral Mortality table, with adjustments. The base mortality table for disabled annuitants was changed from the RP 2014 disabled annuitant mortality table to the PUB2014 disabled annuitant mortality table to the PUB-2010 General/Teacher disabled annuitant mortality table, with 2010 General/Teacher disabled annuitant mortality table, with tments. The mortality improvement scale was changed from Scale MPtments. The mortality improvement scale was changed from Scale MP-2018 to Scale MP2018 to Scale MP-2019. The assumed 2019. The assumed spouse age difference was changed from two years older for females to one year older. The assumed number of married spouse age difference was changed from two years older for females to one year older. The assumed number of married male new retirees electing the 100% Joimale new retirees electing the 100% Joint & Survivor option changed from 35% to 45%. The assumed number of married nt & Survivor option changed from 35% to 45%. The assumed number of married female new retirees electing the 100% Joint & Survivor option changed from 15% to 30%. The corresponding number of female new retirees electing the 100% Joint & Survivor option changed from 15% to 30%. The corresponding number of married new retirees electing the Life annuity option was adjustemarried new retirees electing the Life annuity option was adjuste d accordingly.d accordingly. The mortality projection was changed from MPThe mortality projection was changed from MP--2017 to MP2017 to MP-20182018 120