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CITY OF ROSEVILLE, MINNESOTA NOTES TO fINANCiAL STATEMENTS - (CONTINUED) DECEMBER 31,�989 Not i1 Defined Benefit Pen ion Pta s- Statewide (Continued) either the Coordinated Ptan or the Basic Ptan. Coordinated members are covered by SociaL Security and 6asic mem6ers are not. ALt new memhers must participate in the Coordinated Plan. All potice officers, fire fighters and peace officers who qualify for membership by statute are covered 6y the PEPFF. 7he payro�l for employees covered 6y PERF AND PEPFF �for the year ended December 31, 1989, was 82,511,531 and 81,513,452 respectivety ; the Ciiy's total payroll was 54,389,715. PERA provides retirement 6enefits as well as disa6iLity 6enefits to memhers, and 6enefits to survivor upon .-. death of eLigi6le memhers. Benefits are esta6Lished by State Statute, and vest after three years of credit- ed service. The defined retirement henefits are 6ased on mem6er's average salary for any five sucressive years of aLtowable service, age, and years of credit at termination of service. Two methods are used to compute benefits for Coordinated and 9asic mem6ers. The retiring mem6er receives the higher of step-rete benefit accruat formula (Method �) or a LeveL accrual formula (Method 2). �nder Method 1, the annuity accrual rate for a easic member is 2 percent of average saLary tor each of the first 10 years ot service and 2.5 percent for each remaining yean For a Coordinated member, the annulty accrual rate is 1 percent of average satary for each of the fiirst 10 years and 1.5 percent for each remaining year. Using Method 2, the annuity accrual rate is 2.5 percent of average saLary tor Basic members and 1.5 percent for Coordioated mem6ers. For PEPfF members, the annuity accrual rate is 2.5 per<ent of average saLary for each of the first 25 years a�d 2 percent for each remaining year. Por hoth PERF members whose annuity is catculated using Method 1, and for atL PEPFF mem6ers, a futl annuity is available when age plus years ofi service equal 90. There are difterent types of annuities avaiLahLe to members upon retirement. A normal annuity is a lifetime annuity that ceases upon the death of the retiree. No survivor annuity is paya6Le. There are also various types ot joint and survivor an�uity opiions availahte which uilt reduce the monthty normal annuity amount, because�the annuity is paya6le over )oint Lives. Members may atso teave their contri6utions in the fund upon termination of pubtic service, in order to quatify for a deferred annuity at retirement age. Refunds of contrihutions are avaiLabte at any time to memhers uho Leave puhLic service, but before retirement 6ene- fits begin. B. Contributions Required a�d Contributions Made Minnesota Siatues Chapter 353 sets the rates for employer and employee contribuTions. The City makes annual . contributions to the pension plans equal to the amount required by state statues. According to Minnesota Statues Chapter 356.215, Sud. 4(g) the date of futt funding required for PERF and PEPFF is the year 2020. As part of the annual actuarial vaLuation, PERA's actuary determines the sufficiency of the statutory coniri- bution rates towards meeting the required futl funding deadline. The actuary compares The actual mntribu- tion rate to a"required' contributiom rate. Current statutory contri6ution rates and actuarialLy required contribution retes for the ptans are as foLLows: --- a;'.,�. 42