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CITY OF ROSEVILLE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2001 NOTE 5 - OTHER INFORMATION (Continued) C. Employee retirement systems and pension plans 1. Defined benefit pension plans - statewide employees plan a. Plan Description All full-time and certain part-time employees of the City of Roseville are covered by defined benefit plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the Public Employees Retirement Fund (PERF) and the Public Employees Police and Fire Fund (PEPFF) which are cost-sharing, multiple-employer retirement plans. These plans are established and administered in accordance with Minnesota Statutes, chapters 353 and 356. PERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members aze covered by Social Security and Basic Plan members aze not. All new members must participate in the Coordinated Plan. All police officers, fire fighters, and peace officers who qualify for membership by statute aze covered by the PEPFF. PERA provides retirement benefits as well as disability benefits to members and benefits to survivors upon death of eligible members. Benefits are established by State Statute, and vest after three years of credited service. The defined retirement benefits are based on a member's highest average salary for any five successive yeazs of allowable service, age, and yeazs of credit at termination of service. Two methods are used to compute benefits for PERFs Coordinated and Basic Plan members. The retiring member receives the higher of step-rate benefit accrual formula (Method 1) or a level accrual formula (Method 2). Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2 percent of average salary for each of the first 10 years of service and 2.7 percent for each remaining yeaz. The annuity accrual rate for a Coordinated Plaxi member is 1.2 percent of average salary for each of the first 10 years and 1.7 percent for each remaining year. Under Method 2, the annuity accrual rate is 2.7 percent for Basic Plan members and 1.7 percent for PEPFF members; the annuity accrual rate is 3.0 percent for each yeaz of service. For all PEPFF members and for a11 PERF members whose annuity is calculated using Method 1, a full annuity is available when age plus yeazs of service equal 90. A reduced retirement annuity is also available to eligible members seeking eazly retirement. 57