BOROUGH OF SOMERVILLE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2021 AND 2020
Note 7.
PENSION PLANS (CONT’D.)
B. Police and Firemen’s Retirement System (PFRS) (cont’d):

Sensitivity of the Collective Net Pension Liability to Changes in the Discount Rate – The following presents the collective net pension liability of the participating employers as of June 30, 2020, calculated using the discount rate as disclosed above as well as what the collective net pension liability would be if it was calculated using a discount rate that is 1-percentage point lower or 1-percentage-point higher than the current rate:

At 1% decrease
(6.00%)
At current discount rate
(7.00%)*
At 1% increase
(8.00%)
State $ 4,998,864,901 $ 4,299,009,951 $ 3,717,851,603
Local 19,849,370,425 14,926,648,722 10,837,952,259
PFRS Plan Total $24,848,235,326 $19,225,658,673 $14,555,803,862
Borough’s proportionate share
  of the net pension liability
$18,467,930 $13,373,093 $9,141,441
*- Local Share includes $2,005,329,818 of Special Funding Situation allocated to the State of NJ as a non-employer.

Components of Net Pension Liability – The components of the net pension liability for PFRS, including the State of New Jersey, at June 30, 2020 is as follows:

State Local Total
Total Pension Liability $ 5,717,806,071 $40,919,980,447 $46,637,786,518
Plan Fiduciary Net Position 1,418,796,120 25,993,331,725 27,412,127,845
Net PFRS Pension Liability $ 4,299,009,951 $14,926,648,722 $19,225,658,673

At December 31, 2020, the Borough’s deferred outflow of resources and deferred inflow of resources related to PFRS were from the following sources, if GASB 68 was recognized:

Deferred Outflows
Of Resources
Deferred Inflows
Of Resources
Difference between expected and actual experience $134,823 $47,994
Change in assumptions 33,653 3,585,246
Net difference between projected and actual earnings
  On pension plan investments
784,127
Changes in proportion and differences between Borough
  Contributions and proportionate share of contributions
629,429 136,306
Borough contributions subsequent to the
  measurement date
1,075,134
-
Total $2,657,166 $3,769,546
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