07-10-1995 Council Packet - Laserfiche WebLink

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I I I I I I I I I I I I I I I I I 9 I CITY OF ORONO. MINNESOTA Notes to Financial Statements (continued) December 31, 1994 NOTE 8 - DEFINED BENEHT PENSION PLANS - STATEWIDE (CONTINTED) Using Method 2. the annuity accrual rate is 2.5% of the average salary for Basic members and 1.5% for Ciwrdinated members. For PEPFF members, the annuity accrual rate is 2.5% for each year of service through June 30, 1993. Effective July 1, 1993, the annual accrual rate for PtPFF is 2.65%. For PERF members whose annuity is calculated usinp Method 1, and for all PEPFF members, a full annuity is available when age plus years of service equal 90. There are different types of annuities available to members upon retirement. A normal annuity is a lifetime annuity that ceases upon the death of the retiree. No surv ivor annuity is payable. There are also variiHJs types of joint and survivor annuity options available which will reduce the monthly normal annuity 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 annuity at retirement age. Refunds of contributions are available at any time to members who leave public service, but before retirement benefits begin. B.Contributions Required and Contributions Made Minnesota Statutes 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 statutes. According to Minnesota Statutes Chapter 356.215, Subd 4(g), the date of lull funding required lor the PERF and the PEPFF is the year 2020. As part of the annual actuarial valuation, PERA's actuary determines the sufficiency of the statutory contributiim rates towards meeting the required full funding deadline. The actuary compares the actual contribution rate to a "required" contribution rate. Current combined statutiiry contribution rates and actuarially required contribution rates for the plans are as 1\»llows: Statutorv Rates Employees Employer Required Rates * PERF (Basic and Coordinated Plans) PEPFF 4.30% 7.90% 4.60% 11.70% 9.58% 17.45% *The recommended rates scheduled above represent the required rates for fiscal year 1994 contributions as reported in the July 1, 1993 actuarial valuation reports. Total contributions made by the City during fiscal year 1994 were: Amounts Percentage of Covered Payroll Employees Employer Employees Employer PERF PEPFF S .39.522 $ 41.858 .54..321 81.481 4.23 % 7.58% 4.48% 11.36% S 93.843 $ 123.3.39 -48- ■