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CITY OF ARDEN HILLS <br /> <br />Notes to Required Supplementary Information <br />December 31, 2019 <br /> <br /> <br /> <br />-50- <br />NOTE 1 – LEGAL COMPLIANCE – BUDGETS <br /> <br />The General Fund budget is legally adopted on a basis consistent with accounting principles generally <br />accepted in the United States of America. The legal level of budgetary control is at the fund level. <br />Budgeted appropriations lapse at year-end. <br /> <br /> <br />NOTE 2 – PERA – GENERAL EMPLOYEES RETIREMENT FUND <br /> <br />2019 CHANGES IN ACTUARIAL ASSUMPTIONS <br /> <br />• The mortality projection scale was changed from MP-2017 to MP-2018. <br /> <br />2019 CHANGES IN PLAN PROVISIONS <br /> <br />• The employer supplemental contribution was changed prospectively, decreasing from <br />$31.0 million to $21.0 million per year. The state’s special funding contribution was changed <br />prospectively, requiring $16.0 million due per year through 2031. <br /> <br />2018 CHANGES IN ACTUARIAL ASSUMPTIONS <br /> <br />• The mortality projection scale was changed from MP-2015 to MP-2017. <br /> <br />• The assumed benefit increase was changed from 1.00 percent per year through 2044, and <br />2.50 percent per year thereafter, to 1.25 percent per year. <br /> <br />2018 CHANGES IN PLAN PROVISIONS <br /> <br />• The augmentation adjustment in early retirement factors is eliminated over a five-year period <br />starting July 1, 2019, resulting in actuarial equivalence after June 30, 2024. <br /> <br />• Interest credited on member contributions decreased from 4.00 percent to 3.00 percent, <br />beginning July 1, 2018. <br /> <br />• Deferred augmentation was changed to zero percent, effective January 1, 2019. <br />Augmentation that has already accrued for deferred members will still apply. <br /> <br />• Contribution stabilizer provisions were repealed. <br /> <br />• Post-retirement benefit increases were changed from 1.00 percent per year with a provision to <br />increase to 2.50 percent upon attainment of 90.00 percent funding ratio to 50.00 percent of <br />the Social Security Cost of Living Adjustment, not less than 1.00 percent and not more than <br />1.50 percent, beginning January 1, 2019. <br /> <br />• For retirements on or after January 1, 2024, the first benefit increase is delayed until the <br />retiree reaches normal retirement age; does not apply to Rule of 90 retirees, disability benefit <br />recipients, or survivors. <br /> <br />• Actuarial equivalent factors were updated to reflect revised mortality and interest <br />assumptions.