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CITY OF CENTERVILLE, MINNESOTA <br />NOTES TO THE FINANCIAL STATEMENTS <br />DECEMBER 31, 2015 <br />Note 4: DEFINED BENEFIT PENSION PLANS - STATEWIDE - CONTINUED <br />At December 31, 2015, the City reported its proportionate share of GERF's deferred outflows of resources and deferred <br />inflows of resources, and its contributions subsequent to the measurement date, from the following sources: <br />Differences between expected and <br />actual experience <br />Changes in actuarial assumptions <br />Net difference between projected and <br />actual earnings on plan investments <br />Changes in proportion <br />Contributions to GERF subsequent <br />to the measurement date <br />Total <br />Deferred Deferred <br />Outflows Inflows <br />of Resources of Resources <br />4,470 $ 21,687 <br />26,308 - <br />38,291 <br />40,579 <br />19,923 - <br />$ 50,701 $ 100,557 <br />Deferred outflows of resources totaling $19,923 related to pensions resulting from the City's contributions to GERF <br />subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended <br />December 31, 2016. Other amounts reported as deferred outflows and inflows of resources related to GERF pensions <br />will be recognized in pension expense as follows: <br />2016 <br />$ (21,524) <br />2017 <br />(21,542) <br />2018 <br />(36,913) <br />2019 <br />10,180 <br />2020 <br />- <br />Thereafter <br />- <br />E. Actuarial assumptions <br />The total pension liability in the June 30, 2015 actuarial valuation was determined using the following actuarial <br />assumptions: <br />Inflation <br />Active member payroll growth <br />Investment rate of return <br />2.75% per year <br />3.50% per year <br />7.90% <br />Salary increases were based on a service -related table. Mortality rates for active members, retirees, survivors and <br />disabilitants were based on RP -2000 tables for males or females, as appropriate, with slight adjustments. Cost of living <br />benefit increases for retirees are assumed to be: 1 percent effective every January 1" until 2034, then 2.5 percent for <br />GERF and PEPFF. <br />Actuarial assumptions used in the June 30, 2015 valuation were based on the results of actuarial experience studies. The <br />experience study in the GERF was for the period July 1, 2004 through June 30, 2008, with an update of economic <br />assumptions in 2014. The experience study for PEPFF was for the period July 1, 2004, through June 30, 2009. <br />Experience studies have not been prepared for PERA's other plans, but assumptions are reviewed annually. <br />There were no changes in actuarial assumptions in 2015. <br />-64- <br />