Agenda - Council Work Session - 06/10/2025

Home

NOTE 10 — DEFINED BENEFIT PENSION PLANS — STATE-WIDE (CONTINUED) At December 31, 2024, the City reported 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 $ 226,400 $ - Changes in actuarial assumptions 10,884 885,794 Net difference between projected and actual earnings on pension plan investments - 741,808 Changes in proportion 270,379 14,945 Contributions paid to the PERA subsequent to the measurement date 233,756 Total $ 741,419 $1,642,547 The $233,756 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, 2025. Other amounts reported as deferred outflows and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year ended December 31: Pension Expense Amount 2025 $ (664,722) 2026 (51,562) 2027 (229,205) 2028 (189,395) Total $ (1,134,884) 2. PEPFF Pension Costs At December 31, 2024, the City reported a liability of $3,348,488 for its proportionate share of the PEPFF's net pension liability. The net pension liability was measured as of June 30, 2024, and the total pension liability used to calculate the net pension liability was determined 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, 2023, through June 30, 2024, relative to the total employer contributions received from all of PERA's participating employers. The City's proportionate share was 0.2545% at the end of the measurement period and 0.2407% for the beginning of the period. The State of Minnesota contributed $37.4 million to the PEPFF in the plan fiscal year ended June 30, 2024. The contribution consisted of $9 million in direct state aid that meets the definition of a special funding situation, additional one-time direct state aid contribution of $19.4 million, and $9 million in supplemental state aid that does not meet the definition of a special funding situation. Additionally, $9 million supplemental state aid was paid on October 1, 2024. Thereafter, by October 1 of each year, the state will pay $9 million to the PEPFF until full funding is reached or July 1, 2048, whichever is earlier. The $9 million in supplemental state aid will continue until the fund is 90% funded, or until the State Patrol Plan (administered by the Minnesota State Retirement System) is 90% funded, whichever occurs later. The State of Minnesota's proportionate share of the net pension liability associated with the City totaled $127,643. 85