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NOTE 7 — DEFINED BENEFIT PENSION PLAN — STATE-WIDE (CONTINUED) C. Contributions Minnesota Statutes, Chapter 353 sets the rates for employer and employee contributions. Contribution rates can only be modified by the State Legislature. GERF Contributions Coordinated Plan members were required to contribute 6.50 percent of their annual covered salary in fiscal year 2023, and the City was required to contribute 7.50 percent for Coordinated Plan members. The City's contributions to the GERF for the year ended December 31, 2023, were $154,657. The City's contributions were equal to the required contributions as set by state statutes. D. Pension Costs GERF Pension Costs At December 31, 2023, the City reported a liability of $1,409,156 for its proportionate share of the GERF's net pension liability. The City's net pension liability reflected a reduction, due to the state of Minnesota's contribution of $16.0 million. The state of Minnesota is considered a nonemployer contributing entity and the state's contribution meets the definition of a special funding situation. The state of Minnesota's proportionate share of the net pension liability associated with the City totaled $38,854. The net pension liability was measured as of June 30, 2023, 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 the PERA during the measurement period for employer payroll paid dates from July 1, 2022 through June 30, 2023, relative to the total employer contributions received from all of the PERA's participating employers. The City's proportionate share was 0.0252 percent at the end of the measurement period and 0.0233 percent for the beginning of the period. The amount recognized by the City as its proportionate share of the net pension liability, the direct aid, and total portion of the net pension liability that was associated with the City were as follows: City's proportionate share of the net pension liability $ 1,409,156 State's proportionate share of the net pension liability associated with the City 38,854 Total $ 1,448,010 For the year ended December 31, 2023, the City recognized pension expense of $259,313 for its proportionate share of the GERF's pension expense. In addition, the City recognized an additional $175 as pension expense (and grant revenue) for its proportionate share of the state of Minnesota's contribution of $16.0 million to the GERF. 1922