2022 CAFR - Laserfiche WebLink

Home

NOTE 10 — DEFINED BENEFIT PENSION PLANS — STATE-WIDE (CONTINUED) At December 31, 2022, 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 $ 667,726 $ - Changes in actuarial assumptions 6,476,614 60,583 Net collective difference between projected and actual investment earnings 281,022 - Changes in proportion 220,561 6,526 Contributions paid to the PERA subsequent to the measurement date 277,786 - Total $7,923,709 $67,109 A total of $277,786 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending December 31, 2023. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense as follows: Year ended December 31: Pension Expense Amount 2023 $ 1,493,433 2024 1,499,366 2025 1,334,450 2026 2,303,767 2027 947,798 Total $ 7,578,814 E. Long -Term Expected Return on Investments The Minnesota State Board of Investment, which manages the investments of the PERA, prepares an analysis of the reasonableness on a regular basis of the long-term expected rate of return using a building-block method in which best -estimate ranges of expected future rates of return are developed for each major asset class. These ranges are combined to produce an expected long-tenn rate of return by weighting the expected future rates of return by the target assess allocation percentages. The target allocation and best -estimates of geometric real rates of return for each major asset class are summarized in the following table: Asset Class Target Allocation Domestic Equity 33.50% International Equity 16.50% Fixed Income 25.00% Private Markets 25.00% Total 100.00% Long -Term Expected Real Rate of Return 5.10% 5.30% 0.75% 5.90% 86