06-23-2025 Agenda Packet Cc - Regular Meeting

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City of Orono, Minnesota Notes to the Financial Statements December 31, 2024 Note 4: Defined Benefit Pension Plans - Statewide (Continued) Police and Fire Plan Benefits C. Contributions General Employees Fund Contributions Police and Fire Fund Contributions D. Pension Costs General Employees Fund Pension Costs At December 31, 2024, the City reported a liability of $1,228,966 for its proportionate share of the General Employees pension liability associated with the City totaled $31,779. Benefit increases are provided to benefit recipients each January. The postretirement increase is equal to 50 percent of the cost-of-living adjustment (COLA) announced by the SSA, with a minimum increase of at least 1 percent and a maximum of 1.5 percent. The 2024 annual increase was 1.5 percent. Recipients that have been receiving the annuity or benefit for at least a full year as of the June 30 before the effective date of the increase will receive the full increase. Recipients receiving the annuity or benefit for at least one month but less than a full year as of the June 30 before the effective date of the increase will receive a prorated increase. Benefits for Police and Fire Plan members hired before July 1, 2010, are vested after three years of service. Members hired on or after July 1, 2010, are 50 percent vested after five years of service and 100 percent vested after ten years. After five years, vesting increase by 10 percent each full year of service until members are 100 percent vested after ten years. Police and Fire Plan members receive 3 percent of highest average salary for all years of service. Police and Fire Plan members receive a full retirement benefit when they are age 55 and vested, or when their age plus their years of service equals 90 or greater if they were first hired before July 1, 1989. Early retirement starts at age 50, and early retirement benefits are reduced by 0.417 percent each month members are younger than age 55. Benefit increases are provided to benefit recipients each January. The postretirement increase is fixed at 1 percent. Recipients that have been receiving the annuity or benefit for at least 36 months as of the June 30 before the effective date of the increase will receive the full increase. Recipients receiving the annuity or benefit for at least 25 months but less than 36 months as of the June 30 before the effective date of the increase will receive a reduced prorated increase. Minnesota Statutes chapters 353, 353E, 353G and 356 set the rates for employer and employee contributions. Contribution rates can only be modified by the state Legislature. General Plan members were required to contribute 6.50 percent of their annual covered salary in fiscal year 2024 and the Employees Fund for the years ending December 31, 2024, 2023 and 2022, were $224,067, $203,588 and $178,034, Police and Fire Plan members were required to contribute 11.80 percent of their annual covered salary in fiscal year 2024 Police and Fire Fund for the years ending December 31, 2024, 2023 and, 2022 were $597,752, $546,390 and $460,205, 74 101