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CITY OF ARDEN HILLS Notes to Required Supplementary Information December 31, 2022 -51- NOTE 1 – LEGAL COMPLIANCE – BUDGETS The General Fund budget is legally adopted on a basis consistent with accounting principles generally accepted in the United States of America. The legal level of budgetary control is at the fund level. Budgeted appropriations lapse at year-end. NOTE 2 – PERA – GENERAL EMPLOYEES RETIREMENT FUND 2022 CHANGES IN ACTUARIAL ASSUMPTIONS •The mortality improvement scale was changed from Scale MP-2020 to Scale MP-2021. 2021 CHANGES IN ACTUARIAL ASSUMPTIONS •The investment return and single discount rates were changed from 7.50 percent to 6.50 percent, for financial reporting purposes.•The mortality improvement scale was changed from Scale MP-2019 to Scale MP-2020. 2020 CHANGES IN ACTUARIAL ASSUMPTIONS •The price inflation assumption was decreased from 2.50 percent to 2.25 percent.•The payroll growth assumption was decreased from 3.25 percent to 3.00 percent.•Assumed salary increase rates were changed as recommended in the June 30, 2019 experience study. The net effect is assumed rates that average 0.25 percent less than previous rates.•Assumed rates of retirement were changed as recommended in the June 30, 2019 experience study. The changes result in more unreduced (normal) retirements and slightly fewer Rule of 90 and early retirements.•Assumed rates of termination were changed as recommended in the June 30, 2019 experience study. The new rates are based on service and are generally lower than the previous rates for years two through five, and slightly higher thereafter. •Assumed rates of disability were changed as recommended in the June 30, 2019 experience study. The change results in fewer predicted disability retirements for males and females. •The base mortality table for healthy annuitants and employees was changed from the RP-2014 Table to the Pub-2010 General Mortality Table, with adjustments. The base mortality table for disabled annuitants was changed from the RP-2014 Disabled Annuitant Mortality Table to the Pub-2010 General/Teacher Disabled Annuitant Mortality Table, with adjustments.•The mortality improvement scale was changed from MP-2018 to MP-2019. •The assumed spouse age difference was changed from two years older for females to one year older. •The assumed number of married male new retirees electing the 100.00 percent joint and survivor option changed from 35.00 percent to 45.00 percent. The assumed number of married female new retirees electing the 100.00 percent joint and survivor option changed from 15.00 percent to 30.00 percent. The corresponding number of married new retirees electing the life annuity option was adjusted accordingly. 2020 CHANGES IN PLAN PROVISIONS •Augmentation for current privatized members was reduced to 2.00 percent for the period July 1, 2020 through December 31, 2023, and zero percent thereafter. Augmentation was eliminated for privatizations occurring after June 30, 2020.