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 (Continued)

3. Component Unit’s General Employees Fund Pension Costs

At December 31, 2025, the Commission reported a liability of $2,180,765 for its proportionate share of the General Employees Fund's net pension liability. The Commission'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 Commission totaled $52,607. 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 Commission's proportion of the net pension liability was based on the Commission'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 Commission's proportion share was 0.0658% at the end of the measurement period and 0.0677% for the beginning of the period.

Commissions' proportionate share of the net pension liability

$

2,180,765

52,607

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

Total

$

2,233,372

At December 31, 2025, the Commission reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: For the year ended December 31, 2025, the Commission recognized pension expense of $50,899 for its proportionate share of General Employees Fund's pension expense. In addition, the Commission recognized an $10,529 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.

Deferred

Deferred Inflows of Resources

Outflows of Resources

Changes in actuarial assumptions Differences between expected and actual experience

$

207,779

$

-

52,544

501,787

Net difference between projected and actual earnings on pension

plan investments

-

204,585 867,747

Changes in proportion

71,687

Employer contributions subsequent to the measurement date

231,054

-

$

563,064

$ 1,574,119

89