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City of Centerville, Minnesota <br />Notes to the Financial Statements <br />December 31, 2021 <br /> <br />Note 4: Defined Benefit Pension Plans - Statewide (Continued) <br />City's Proportionate Share of the Net Pension Liability$ 388,611 <br />State of Minnesota's Proportionate Share of the Net Pension <br />Liability Associated with the City 11,895 <br />Total$ 400,506 <br /> <br />For the year ended December 31, 2021, the City recognized pension expense of $26,774 for its proportionate share of the <br />General Employees PlanIn addition, the City recognized $960 as pension expense (and grant revenue) <br />16 million to the General Employees Fund. <br /> <br />At December 31, 2021, the City reported its proportionate share of the General Employees Plan <br />resources and deferred inflows of resources, related to pensions from the following sources: <br /> <br />The $24,280 reported as deferred outflows of resources <br />GERF subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended <br />December 31, 2022. Other amounts reported as deferred outflows and inflows of resources related to pensions will be <br />recognized in pension expense as follows: <br />2022 <br />$ 4,380 <br />2023 <br /> 8,642 <br />2024 <br /> (3,896) <br />2025 <br /> (91,796) <br /> <br />E. Actuarial Assumptions <br />The total pension liability in the June 30, 2021 actuarial valuation was determined using an individual entry-age normal <br />actuarial cost method. The long-term rate of return on pension plan investments used in the determination of the total <br />liability is 6.5 percent. This assumption is based on a review of inflation and investments return assumptions from a <br />number of national investment consulting firms. The review provided a range of return investment return rates deemed to <br />be reasonable by the actuary. An investment return of 6.5 percent was deemed to be within that range of reasonableness <br />for financial reporting purposes. <br />Inflation is assumed to be 2.25 percent for the General Employees Plan. Benefit increases after retirement are assumed to <br />be 1.25 percent for the General Employees Plan. <br />62 <br /> <br />