Annual_Report_1993_001 - Laserfiche WebLink

Home

CITY OF ROSEVILLE NOTES TO fINANCtAL STATEMENTS DECEMBER 31. 1993 Note 7 - Long-Term Debt (Continued) ObLigation State Highuay Bonds are considered to be defeased and the liability for those bonds has been removed from the generet tong-term debt account group. On February 11, 1993, the City issued 51,975,000 of general obtigation improvement bonds uith an average interest rate of 4.49 percent to refund E1,975,000 of Generat Obligation Improvement Bonds Series 12 with an average interest rate of 8.17 percent. The net proreeds of 51.972,709 (after payment of issuance costs of 52,297) plus an additionat 52,297 of funds on hand uere used tb currently refund the debt outstanding. As a resutt, the Series 12 bonds are considered paid and the liability for those bonds has been removed fran the generat tong term debt account group. The City refunded the Series 12 issue to reduce its totat debt service payments over the next 10 years by 5419,832 and to obtain an economic gain (difference between che present value of the debt service payments on the old and new debt) of E367,540. Note B- Defined Benefit Pension Plans - Statewide A. Plan Description AIt futl-time and certain part-time employees of the City are covered by defined benefit pension ptans administered by the Pubtic Emptoyees Retirement Association ot Minnesota (PERA). PERA administers the Public Employees Retirement Fund (PERF) and the Pubic Employers Police and Fire fund (PEPfF) uhich are cost sharing muttiple-emptoyer public employee retirement plans. PERF members beLong to either the Coordinated Ptan or the 8asic Ptan. Coordinated mem6ers are covered by Social Security and 8asic members are not. Alt neu members must participate in the Coordinated Ptan. All police officers, fire fighters and peace officers uho qualify for membership by statute are covered by the PEPFF. The payroll for emptoyees covered by PERF and PEPFF for the year ended December 31, 7993, uas 83,034,055 and 52,000,565 respectively; the City's total payroll uas 55,888,903. Pera provides retirement benefits as uetl as disability benefits to members, and benefits to survivors upon death of etigibte members. Benefits are established by State Statute, and vest after three years of credited service. The defined retirement benefits are based on member's average salary for any five successive years of allouable service, age, and years of credit at termination of service. Tuo methods are used to compute benefits tor Coordinated and easic members. The retiring member receives the higher of step-rate benefit accruat formula (Method 1) or a levet accrual formula (Method 2). Under Method 7, the annuity accrual rate for a Basic member is 2 percent of average satary for each of the tirst 10 years of service and 2.5 percent for each remaining year. For a Coordinated member, the annuity accrual rate is 1 percent of average satary for each of the first 10 years and 7.5 percent for each remaining year. Using Method 2, the annuity accrual rate is 2.5 percent of average salary for Basic members and 1.5 percent for Coordinated members. For PEPFF members, the annuity accruat rate is 2.5 percent for each year of service through June 30, 1993. (Effective July 1, 7993, the annual accrual rate for PEPFF is 2.65 percent.) For PERP members uhose annuity is calcutated using Method 1, and for aLL PEPFF members, a fult annuity is available when age plus years of service equat 90. There are different 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 payable. There are also various types of joint and survivor annuity options available uhich uitl reduce the monthly normal annuity amount, because the annuity is payable over joint lives. Members may atso Leave their contributions in the fund upon termination of public service, in order to qualify for a deferred annuity et retirement age. Refunds of contributions are available at any time to members uho teave pubtic service, but betore retirement benefits begin. B. Contributions Required and Contributions Made Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. The City makes annuat contributions to the pension ptans equat to the artwunt required by siate statues. According to Minnesota Statues Chapter 356.215, Sud. 4(g) the date of tull 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 contribution rates touards meeting the required full funding deadline. The actuary compares the actual contribution rate to a"required" contribution rate. Current combined statutory contribution rates and actuarially required contribution rates for the plans are as follows: Statutorv Rates Required EmploYee EmploYer Rates* PERF: Basic and Coordinated Plans 4.39% 4.67% 9.95Y, VEPFF: 8� 12k 78.6% *7he recommended retes scheduled above represent the required rates for fiscal year 1993 contributions as reported in the July 1, 7992, actuariat vaWation reports. 40