2025 Annual Comprehensive Financial Report

CITY OF SHAKOPEE

NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2025

NOTE 14 – PENSION PLANS (CONTINUED)

Public Employees' Retirement Association (Continued)

D. Pension Costs

1. General Employees Fund Pension Costs

At December 31, 2025 the City reported a liability of $3,822,240 for its proportionate share of the General Employees Fund’s net pension liability. The City’s net pension liability reflected a reduction due to the State of Minnesota’s contribution of $16 million. The State of Minnesota is considered a non-employer 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 $92,204.

State of Minnesota's proportionate share of the net pension liability associated with the City City's proportionate share of the net pension liability

$

3,822,240

92,204

Total

$

3,914,444

The net pension liability was measured as of June 30, 2025, 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 PERA during the measurement period for employer payroll paid dates from July 1, 2024 through June 30, 2025 relative to the total employer contributions received from all of PERA’s participating employers. The City’s proportion was 0.1153%, which was an increase of 0.0005% at the end of the measurement period and 0.1148% for the beginning of the period. For the year ended December 31, 2025, the City recognized pension expense of $145,235 for its proportionate share of General Employees Plan's pension expense. In addition, the City recognized an additional $14,143 as pension expense (and grant revenue) for its proportionate share of the State of Minnesota’s contribution of $16 million to the General Employees Fund.

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