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)

2. Police and Fire Fund Pension (PEPFF) Costs (Continued)

At December 31, 2025, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: The State of Minnesota is not included as a non-employer contributing entity in the Police and Fire Pension Plan pension allocation schedules for the $9 million in supplemental state aid because this contribution was not considered to meet the definition of a special funding situation. The City recognized $48,109 for the year ended December 31, 2025 as revenue and an offsetting reduction of net pension liability for its proportionate share of the State of Minnesota’s on-behalf contributions to the Police and Fire Fund.

Deferred

Resources Inflows of Deferred

Resources Outflows of

Differences between expected and actual experience

$ 2,893,714

$

-

Changes in actuarial assumptions

4,749,377

7,847,302

Net difference between projected and actual earnings on pension

plan investments

-

2,795,273

Changes in proportion

1,070,076

324,786

Employer contributions subsequent to the measurement date

850,414

-

$ 9,563,581

$ 10,967,361

The $850,414 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended December 31, 2026. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in pension expense on the following page.

Year Ending December 31,

Pension Expense

Amount

2027 2026 2028 2030 2029

$

1,568,067 (1,221,143) (2,954,346)

(902)

354,130

Total

$

(2,254,194)

88