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NOTE 10 — DEFINED BENEFIT PENSION PLANS — STATE-WIDE (CONTINUED) G. Discount Rate The discount rate for the GERF used to measure the total pension liability in 2022 was 6.50%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members and employers will be made at rates set in Minnesota Statutes. Based on these assumptions, the fiduciary net positions of GERF was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. In the PEPFF, the fiduciary net position was projected to be available to make all projected future benefit payments of current plan members through June 30, 2060. Beginning in fiscal year ended June 30, 2061 for the PEPFF, projected benefit payments exceed the funds' projected fiduciary net position. Benefit payments projected after were discounted at the municipal bond rate of 3.69% (based on the weekly rate closest to but not later than the measurement date of the Fidelity "20-Year Municipal GO AA Index"). The resulting equivalent single discount rate of 5.40% for the PEPFF was determined to give approximately the same present value of projected benefits when applied to all years of projected benefits as the present value of the project benefits using 6.50% applied to all years of projected benefits through the point of asset depletion and 3.69% thereafter. H. Pension Liability Sensitivity The following presents the City's proportionate share of the net pension liability for all plans it participates in, calculated using the discount rate disclosed in the preceding paragraph, as well as what the City's proportionate share of the net pension liability would be if it were calculated using a discount rate 1 percentage point lower or 1 percentage point higher than the current discount rate: The City's Proportionate Share of the GERF Net Pension Liability: The City's Proportionate Share of the PEPFF Net Pension Liability: 1% Decrease in Current Discount Rate Discount Rate (5.5%) (6.5%) $7,543,595 1% Increase in Discount Rate (7.5%) $4,775,781 $ 2,505,745 1% Decrease in Current 1% Increase in Discount Rate Discount Rate Discount Rate (4.4%) (5.4%) (6.4%) $ 1 6,944,739 I. Pension Plan Fiduciary Net Position $11,196,681 $6,549,718 Detailed information about each pension plan's fiduciary net position is available in a separately -issued PERA financial report that includes financial statements and required supplementary information. That report may be obtained on the internet at www.mnpera.org. 88