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NOTE 8 — DEFINED BENEFIT PENSION PLANS — STATE-WIDE (CONTINUED) 2. PEPFF Pension Costs At December 31, 2020, the City reported a liability of $3,159,502 for its proportionate share of the PEPFF's net pension liability. The net pension liability was measured as of June 30, 2020, and the total pension liability used to calculate the net pension liability was deteiniined by an actuarial valuation as of that date. The City's proportionate share of the net pension liability was based on the City's contributions received by PERA during the measurement period for employer payroll paid dates July 1, 2019, through June 30, 2020, relative to the total employer contributions received from all of PERA's participating employers. At June 30, 2020, the City's proportion was 0.2397% which was an increase of 0.0066% from its proportionate share measured as of June 30, 2019. The State of Minnesota also contributed $13.5 million to the PEPFF in the plan fiscal year ended June 30, 2020. The contribution consisted of $4.5 million in direct state aid that does meet the definition of a special funding situation and $9.0 million in fire state aid that does not meet the definition of a special funding situation. The $4.5 million of direct state was paid on October 1, 2019. Thereafter, by October 1 of each year, the state will pay $9 million to the Police and Fire Fund until funding is reached by July 1, 2048, whichever is earlier. The $9 million in fire state aid will continue until the fund is 90 percent funded, or until the State Patrol Plan (administered by the Minnesota Retirement System) is 90% funded, whichever occurs later. As a result, the State of Minnesota is included as a non -employer contributing entity in the PEPFF Schedule of Employer Allocations and Schedule of Pension Amounts by Employer, Current Reporting Period Only (pension allocation schedules) for the $4.5 million in direct state aid. PEPFF employers need to recognize their proportionate share of the State of Minnesota's pension expense (and grant revenue) under GASB 68 special funding situation accounting and financial reporting requirements. The State of Minnesota's proportionate share of the net pension liability associated with the City totaled $74,418. For the year ended December 31, 2020, the City recognized pension expense of $454,010 for its proportionate share of the PEPFF's expense. In addition, the City recognized an additional $22,895 as pension expense (and grant revenue) for its proportionate share of the State of Minnesota's contribution of $4.5 million to the PEPFF. The State of Minnesota is not included as a non -employer contributing entity in the PEPFF allocation schedules for the $9 million in fire state aid. The City also recognized $21,573 for the year ended December 31, 2020 as revenue and an off -setting reduction of net pension liability for its proportionate share of the State of Minnesota's on -behalf contributions to the PEPFF. At December 31, 2020, the City reported its proportionate share of the PEPFF's deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Outflows of Inflows of Resources Resources Differences between expected and actual economic experience $ 133,833 $ 130,198 Changes in actuarial assumptions 918,788 1,805,829 Difference between projected and actual investment earnings 139,088 Changes in proportion 326,576 21,470 Contributions paid to the PERA subsequent to the measurement date 247,807 Total $1.766,092 $1.957,497 83