Annual_Report_1995_001 - Laserfiche WebLink

Home

• Iti �]:iZIT.Y:N/1�11� � • m • � . � � : u � � u : 'r' 2�Iute_7�ong-Term Deht - cpntinped The City defeased several debt issues in 1990 and called two issues; one in 1990 and one in 1991. The balance of defeased debt outstanding as of December 31, 1995 is $241,000. Total assets in the escrow as of December 31, 1995 have a book value of $274,749. It is expected that interest eamings on the assets combined with the principal will provide more than sufficient revenue for the life of [he escrow. � .. I�'ote_8__DefinedBenefitPensio�Plaas- Statewide A. PIan Descrip[ion All full-time and cenain part-time employees of the Ciry are covered by defined benefit pension plans administered by the Public ' Employees Retirement Association of Minnesota (PERA). PERA administers the Public Employees Retirement Fund (PERF) and the ' Pubic Employees Police and Fire Fund (PEPFF) which aze cost shazing, multiple-employer retirement plans. 'fhese plans ue established and admuustered in accordance with Minnesota Statues, chapters 353 and 356. ', PERF members belong ro either the Coordinated Plan or the Basic Plan. Coordinated Plan members aze covered by Social Security and Basic Plan members aze not. ,411 new members must patticipate in the Coordinated Plan. Al( police officers, fire fighters and peace officers who qualify for membership by statute are covered by the PEPFF. The payroll for employees covered by PERF and PEPFF ' for the year ended December 31, 1995, was $ 3,411,360 and $ 2,124,318 respectively; the Ciry's total payroll was $ 5,893,330. PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of eligible members. Benefits aze established by State Statute, and vest afrer three years of credited service. The defined retirement benefits aze based on a member's hiehest average salary for any five successive yeazs of allowable service, age, and years of credit at termination of service. Two methods are used to compu[e benefiu for Coordinated and Basic 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 accmal rate for a Buic i member is 2 percent of average salary for each of the first 10 years of service and 2.5 percent for each remaining yeaz. For a Coordinated member, the annuiry accrual rate is 1 percent of average salary for each of the first 10 years and 1.5 percent for each remaining year. Using Method 2, the annuiry accrual rate is 2.5 percent of average salary for Basic members and 1.5 percent for Coordinated members. For PEPFF members, the annuiry accrual rate is 2.65 percent for each yeaz of service. For PERF members whose aruiuiry is calculated using Method 1, and for all PEPFF members, a fiill annuiry is available when age plus yeazs of service equal 90. A reduced retirement annuiry is also available to eligible members seeking eazly retirement. There are differenc types of annuities available to members upon retirement. A norma] annuiry is a lifetime annuity that ceases upon the death of the retiree. No survivor annuiry is payable. There are also various types of joint and survivor annuiry options available which will reduce the monthly normal annuiry amount, because the annuity is payable over joint lives. Members may also leave their ' contributions in the fund upon termination of public service, in order to qualify for a deferred annuiry at retirement age. Refunds of con[ributions are available at any time to members who leave public service, but before retirement benefits begin. The benefit provisions stated in the previous paragraphs of this section are cunent provisions and apply to active plan participan[s. Vested, terminated employees who are entided to benefits but are not receiving them yet, are bound by [he provisions in effect at the time they last terminated their public service. ', B. Contributions Required and Contributions Made Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. The Ciry makes annual contributions to the pension plans equal to the amount required by state stamtes. According to Minnesota Statutes Chapter 356.215, Sud. 4(g), the date of fult funding required for the PERF and the PEPFF is July 1, 2020. As part of the annual actuarial valuation, PERA's actuary determines the sufficiency of the stamrory contribution rates rowazds meeting the required full funding deadline. The ac[uary compazes the actual ' contribu[ion rate to a"required" con[ribution rate. The required con[ribution rate consists of (a) normal wsts based on entry age normal CS�]