07-26-1999 Council Packet - Laserfiche WebLink

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I CITY OF ORONO, MINNESOTA I I I I I I I I I I I I I I I I I I Notes to Financial Statements (continued) December 31, 1998 NOTE 6 - FLEXIBLE BENEFIT PLAN (CONTINUED) Eligible employees can elect to participate by contributing pre-tax dollars withheld from payroll checks to the plan for health care and dependent care benefits. Payments are made from the plan to participating employees upon submitting a request for reimbursement of eligible expenses actually incurred by the participant. All assets of the plan are held by the City. The plan is administered by an independent contract administrator for child care and medical expense reimbursements, and by the City for health u.'urance premiums. The plan is included in the financial statements as an Expendable Trust Fund, except for health insurance premiums which are accounted for in the General and Enterprise Funds as employee benefits. All plan property and income attributable to that property is solely the property of the City, subject to the claims of the City ’s general creditors. Participants’ rights under the plan are equal to those of general creditors of the City in an amount equal to the eligible health care and dependent care expenses incurred by the participants. The City believes that it is unlikely that it will use the assets to satisfy the claims of general creditors in the future. NOTE 7 - DEFINED BENEFIT PENSION PLANS - STATEWIDE A. Plan Description All full-time and certain part-time employees of the City of Orono 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 th^ 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 are covered by Social Security and Basic Plan members are not. All new members must participate in the Coordinated Plan. All police officers, fire fighters, and peace officers who qualify for membership by statute are 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 years of allowable service, age, and years of credit at termination of service. -42-