2022 Annual Comprehensive Financial Report

CITY OF SHAKOPEE NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2022

Public Employees' Retirement Association (Continued) NOTE 13 – PENSION PLANS (CONTINUED)

D. Pension Costs 1. General Employees Fund Pension Costs

The net pension liability was measured as of June 30, 2022, 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, 2021 through June 30, 2022 relative to the total employer contributions received from all of PERA’s participating employers. The City’s proportion was 0.1199 percent, which was an increase of percent at the end of the measurement period and 0.1142 percent for the beginning of the period. At December 31, 2022 the City reported a liability of $9,496,121 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 $278,364.

$

9,496,121 278,364

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

$

9,774,485

Total

For the year ended December 31, 2022, the City recognized pension expense of $1,579,521 for its proportionate share of General Employees Fund’s pension expense. In addition, the City recognized an additional $41,594 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. At December 31, 2022, the City reported its proportionate share of the General Employees Plan's deferred outflows of resources and deferred inflows of resources, related to pensions from the following

Deferred

Inflows of Deferred Resources

Outflows of Resources

$

80,935 2,149,144

Differences between expected and actual experience

$

259,786 41,800

Changes in actuarial assumptions

Net difference between projected and actual earnings on plan

investments Changes in proportion

333,800 337,080 245,930

- - -

Contributions to GERF subsequent to the measurement date

$ 3,146,889

$

301,586

77