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CITY OF ROSEVILLE, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2021 E.Net Pension Liability The City's net pension liability was measured as of December 31, 2021and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. Actuarialassumptions: The total pension liability in the December 31, 2021actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement: Inflation 2.25% Per year Active member payroll growth 6.00% percent average, including inflation Investment rate of return 6.00% percent, net of pension plan investment expense including inflation The value of death benefits is similar to the value of the retirement pension. Because of low retirement ages, the plan assumes no pre-retirement mortality. Post-retirement mortality does not apply as the benefit structure and form of payment do not reflect lifetime benefits. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimates of expected future real rates of return (expected returns, net of pension plan investment expense and inflation)are developed for each major asset class. These asset class estimates are combined to produce the portfolio long-term expected rate of return by weighting the expected future real rates of return by the current asset allocation percentage (or target allocation, if available) and by adding expected inflation. All results are then rounded to the nearest quarter percent and are summarized in the following table. Allocation atLong-TermLong-Term Measurement Expected Real Expected Nominal Asset ClassDateRate of ReturnRate of Return Domestic equity75.33%4.42%6.67% International equity0.00%4.91%7.16% Fixed income21.69%1.00%3.25% International equity - emergimg0.00%3.98%6.23% Cash and equivalents2.98%-0.33%1.92% Total100%6.01% Reduced for assumed investment expense-0.10% Net assumed investment return (rounded to quarter percent)6.00% Discountrate: The discount rate used to measure the total pension liability was 6.00%. Assets were projected using expected benefit payments and expected asset returns. Expected benefit payments by year were discounted using the expected asset return assumption for years in which the assets were sufficient to pay all benefit payments. Any remaining benefit payments after the trust fund is exhausted are discounted at the municipal bond rate. The equivalent single rate is the discount rate. 72