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CITY OF ORONO <br />I NOTES TO FINANCIAL STATEMENTS (Continued) <br />December 31, 1989 <br />Note 10. DEFINED BENEFIT PENSION PLANS - STATEWIDE (continued) <br />Under Method 1, the annuity accrual rate for a Basic member is 2% of <br />the average salary for each ot the first ten years of service and 2.5% <br />for each remaining year. For a Coordinated member, the annuity <br />accrual rate is 1% of the average salary for each of the first ten <br />years and 1.5% for each remaining year. Using Method 2, the annuity <br />accrual rate is 2.5% of the average salary for Basic members and 1.5% <br />for Coordinated members. For PEPFF members, the annuity accrual rate <br />is 2.5% for each of the first 25 years and 2% for each remaining year. <br />For PERF members whose annuity is calculated using Method 1, and for <br />all PEPFF members, a full annuity is available when age plus years of <br />service equal 90. <br />There are different types of annuities available to members upon <br />retirement. A normal annuity is a lifetime annuity that ceases upon <br />the death of the retiree. No survivor annuity is payable. There are <br />also various types of joint and survivor annuity options available <br />which will reduce the monthly normal annuity amount, because the <br />annuity is payable over joint lives. Members may also leave their <br />contributions in the fund upon termination of public service, in order <br />to qualify for a deferred annuity at retirement age. Refunds of <br />contributions are available at any time to members who leave public <br />service, but before retirement benefits begin. <br />B. Contributions Required and Contributions Made <br />Minnesota Statutes Chapter 353 sets the rates for employer and <br />employee contributions. The City makes annual contributions to the <br />pension plans equal to the amount required by State Statutes. <br />According to Minnesota Statutes Chapter 356.215, Subdivision 4(g), the <br />date of full funding required for the PERF and the PEPFF is the year <br />2020. As part of the annual actuarial valuation, PERA's actuary <br />determines the sufficiency of the statutory contribution rates towards <br />meeting the required full funding deadline. The actuary compares the <br />actual contribution rate to a "required” contribution rate. Current <br />combined statutory contribution rates and actuarially required contri­ <br />bution rates for the plans are as follows: <br />-45-