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City of Orono, Minnesota
<br />Required Supplementary Information (Continued)
<br />For the Year Ended December 31, 2023
<br />Notes to the Required Supplementary Information - Police and Fire Fund (Continued)
<br />2015 - The assumed post-retirement benefit increase rate was changed from 1.0 percent per year through 2030 and 2.5
<br />percent per year thereafter to 1.0 percent per year through 2037 and 2.5 percent per year thereafter.
<br />Changes in Plan Provisions
<br />2023 - Additional one-time direct state aid contribution of 19.4 million will be contributed to the Plan on October 1, 2023.
<br />Vesting requirement for new hires after June 30, 2014, was changed from a graded 20-year vesting schedule to a graded
<br />10-year vesting schedule, with 50 percent vesting after five years, increasing incrementally to 100% after 10 years. A one-
<br />time, non-compounding benefit increase of 3.0 percent will be payable in a lump sum for calendar year 2024 by March 31,
<br />2024. Psychological treatment is required effective July 1, 2023, prior to approval for a duty disability benefit for a
<br />increased, effective July 1, 2023.
<br />2022 - There were no changes in plan provisions since the previous valuation.
<br />2021 - There were no changes in plan provisions since the previous valuation
<br />2020 - There were no changes in plan provisions since the previous valuation
<br />2019 - There were no changes in plan provisions since the previous valuation
<br />2018 - As set by statute, the assumed post-retirement benefit increase was changed from 1.0 percent per year through
<br />2064 and 2.5 percent per year, thereafter, to 1.0 percent for all years, with no trigger. An end date of July 1, 2048 was
<br />added to the existing $9.0 million state contribution. New annual state aid will equal $4.5 million in fiscal years 2019 and
<br />2020, and $9.0 million thereafter until the plan reaches 100 percent funding, or July 1, 2048, if earlier. Member
<br />contributions were changed from 10.80 percent to 11.30 percent of pay, effective January 1, 2019 and 11.80 percent of
<br />pay, effective January 1, 2020. Employer contributions were changed from 16.20 percent to 16.95 percent of pay,
<br />effective January 1, 2019 and 17.70 percent of pay, effective January 1, 2020. Interest credited on member contributions
<br />decreased from 4.00 percent to 3.00 percent, beginning July 1, 2018. Deferred augmentation was changed to 0.00
<br />percent, effective January 1, 2019. Augmentation that has already accrued for deferred members will still apply.
<br />Actuarial equivalent factors were updated to reflect revised mortality and interest assumptions.
<br />2017 - Assumed salary increases were changed as recommended in the June 30, 2016 experience study. The net effect is
<br />proposed rates that average 0.34 percent lower than the previous rates. Assumed rates of retirement were changed,
<br />resulting in fewer retirements. The combined service annuity (CSA) load was 30.00 percent for vested and non-vested,
<br />deferred members. The CSA has been changed to 33.00 percent for vested members and 2.00 percent for non-vested
<br />members. The base mortality table for healthy annuitants was changed from the RP-2000 fully generational table to the
<br />RP-2014 fully generational table (with a base year of 2006), with male rates adjusted by a factor of 0.96. The mortality
<br />improvement scale was changed from Scale AA to Scale MP-2016. The base mortality table for disabled annuitants was
<br />changed from the RP-2000 disabled mortality table to the mortality tables assumed for healthy retirees. Assumed
<br />termination rates were decreased to 3.00 percent for the first three years of service. Rates beyond the select period of
<br />three years were adjusted, resulting in more expected terminations overall. Assumed percentage of married female
<br />members was decreased from 65.00 percent to 60.00 percent. Assumed age difference was changed from separate
<br />assumptions for male members (wives assumed to be three years younger) and female members (husbands assumed to
<br />be four years older) to the assumption that males are two years older than females. The assumed percentage of female
<br />members electing joint and survivor annuities was increased. The assumed postretirement benefit increase rate was
<br />changed from 1.00 percent for all years to 1.00 percent per year through 2064 and 2.50 percent thereafter. The single
<br />discount rate was changed from 5.60 percent per annum to 7.50 percent per annum.
<br />2016 - There were no changes in plan provisions since the previous valuation
<br />2015 - The post-retirement benefit increase to be paid after attainment of the 90 percent funding threshold was changed,
<br />from inflation up to 2.5 percent, to a fixed rate of 2.5 percent.
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<br />There were no changes in plan provisions since the previous valuationThere were no changes in plan provisions since the previous valuation
<br />As set by statute, the assumed postAs set by statute, the assumed post-retirement benefit increase was changed from 1.0 percent per year through retirement benefit increase was changed from 1.0 percent per year through
<br />2064 and 2.5 percent per year, thereafter, to 1.0 percent for all years, with no trigger. An end date of July 1, 2048 was 2064 and 2.5 percent per year, thereafter, to 1.0 percent for all years, with no trigger. An end date of July 1, 2048 was
<br />added to the exiadded to the existing $9.0 million state contribution.sting $9.0 million state contribution.New annual state aid will equal $4.5 million in fiscal years 2019 and New annual state aid will equal $4.5 million in fiscal years 2019 and
<br />2020, and $9.0 million thereafter until the plan reaches 100 percent funding, or July 1, 2048, if earlier.2020, and $9.0 million thereafter until the plan reaches 100 percent funding, or July 1, 2048, if earlier. Member Member
<br />contributions were changed fromcontributions were changed from 10.80 percent to 11.30 percent of pay, effective January 1, 2019 and 11.80 percent of 10.80 percent to 11.30 percent of pay, effective January 1, 2019 and 11.80 percent of
<br />pay, effective January 1, 2020.pay, effective January 1, 2020.Employer contributions were changed from 16.20 percent to 16.95 percent of pay, Employer contributions were changed from 16.20 percent to 16.95 percent of pay,
<br />effective January 1, 2019 and 17.70 percent of pay, effective January 1, 2020.effective January 1, 2019 and 17.70 percent of pay, effective January 1, 2020.Interest credited on member contributions Interest credited on member contributions
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