2018 City of Shakopee Comprehensive Annual Financial Report

CITY OF SHAKOPEE NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2018

NOTE 14 – POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS (CONTINUED) D. Changes in the Total OPEB Liability Total OPEB Liability (a)

Balances at December 31, 2017

1,985,761 $

Changes for the Year: Service cost

143,652 79,747 81,560 (72,637) 232,322

Interest

Changes in assumptions or other inputs

Benefit payments

Net Changes

Balances at December 31, 2018

2,218,083 $

In 2018, the following benefit changes occurred:

 The discount rate was changed from 3.81% as of 12/31/2016 to 3.31% as of 12/31/2017 based on updated 20-year municipal bond rates as of each measurement date. Since the prior measurement date, the following benefit terms changed:  The discount rate was changed from 3.50% to 3.81% based on updated measurement dates and GASB 75 requirements.  Healthcare trend rates were reset to reflect updated const increase expectations, including an adjustment to reflect the impact of the Affordable Care Act's Excise Tas on high-cost health insurance plans.  Medical per capita claims costs were updated to reflect recent experience and new plan offerings.  Withdrawal, retirement, mortality and salary increase rates were updated from the rates used in the 7/1/2015 PERA General and Police & Fire Employees Retirement Plan to the rates used in the 7/1/2018 valuation.  The percent of future regular retirees assumed to elect coverage at retirement changed from 50% to 30% to reflect recent plan experience.  The inflation assumption was changed from 2.75% to 2.50% based on an updated historical analysis of inflation rates and forward looking market expectations.

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