2021 Annual Comprehensive Financial Report

CITY OF SHAKOPEE NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2021

NOTE 15 – POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS (CONTINUED) D. Changes in the Total OPEB Liability (Continued) Since the prior measurement date, the following benefit terms changed: The discount rate was changed from 2.75% as of 12/31/2019 to 2.00% as of 12/31/2020 based on updated 20-year municipal bond rates as of each measurement date. The discount rate was changed from 3.71% as of 12/31/2018 to 2.75% as of 12/31/2019 based on updated 20-year municipal bond rates as of each measurement date. E. Sensitivity of the Total OPEB Liability The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using a discount rate that is 1-percentage point lower (1 percent) or 1-percentage- point higher (3 percent) than the current discount rate: Since the prior measurement date, the following benefit terms changed:

1% Decrease

Current (2%)

1% Increase (3%)

(1%)

$

3,495,308

$

3,178,694

$

2,895,789

The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using a Healthcare Cost Trend Rates that is 1-percentage point lower (5.20 percent decreasing to 3.00 percent) or 1-percentage-point higher (7.20 percent decreasing to 5.00 percent) than the current discount rate:

Healthcare Cost Trend Rates (6.2% Decreasing to 4%)

1% Decrease

1% Increase (7.2% Decreasing to 5%)

(5.2% Decreasing

to 3%)

$

2,727,296

$

3,178,694

$

2,895,789

93