09-11-1989 - Agenda Packet City Council - regular meeting

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CITY OF URUNU NOIES Tc FINANCIAL STATEMENTS (Continued) 0,-cembar JI, 1988 CITY OF ult'Ai NOTES TO FINANCIAL STATEMENTS (Continued) December 31. 1998 Note l0. DB►1NED BENEFIT PENSION PLANS - STATEWIDE Note 1U. DE►INED BENEFIT PENSION PLANS - STATEWIDE (continued) A. Plan De scri ptimt mula for determining the date of full funding for the PERF and it,,- PEPFF. Those dates are 2UIU and 2016. respectively. A, ;trt ,.I the All full-time and certain part -titre employees of the City of Orono ate annual act wrial valuation, PERA's actuary determines the sutticlency covered by defined benefit pension plans adminiatereJ by the Public of U.e statutory contribution rate$ towards meeting the required full Employees' Retirement Association of Minnesota (PERA). FERA admin- funding deadline. The actuary compares the actual contribution rate asters the Public Employees' Retirement Fund (PERF) and the Public to a "required" contribution rate. Current statutory contribution Employees' Police and Fire Fund (PEPFF) which are cn:•r-sharinR, rates and actuarially required contribution rate. for the plan-. or.- as multiple -employer retirement plans. PERF members belong to either the toll.w.: Coordinated Plan or the Basic Plan. Coordinated members are covered by Social Security and Basle meabera are not. All new membrrr must Statutory Rates Req.:tred participate in the Coordinated Plan. tit poll.e officers, fir.- F-m?losses EmpinYer Rates fighters, and peace officers who gual.fy ...r me-bership by - -.• ate PERF: covered by the PEPFF. The payroll for employees covered by PERF and Baalr Plan 8.002 10.50 9.462 PEPFF for the year ended December 31. 1988, was $590.848 and $557,188. Coordinated Plan L 002 4.252 5.112 respectively; the City's total payroll was $1,251,78A. PEPFF 8.UU2 12.UU? 15.972 PERA provides retirement benefits as well as disability benefits to Total contributions made by the City during fiscal year 1988 were: ' members and benefits to survivors upon the death of ellRlble member. Benetica are established by State Statute and vest after five years of I Percentage of fr credited service. The defined retirement benefits are based on 0- Covered Payrull ►e member's average salary for any five successive year% of allowable _Amounts Employees Employer Employees Employer service, age, and years of credit at termination if service. The PERF: annuity accrual rates for a Basic member are 22 of the average salary Coordinated Plan $23,629 $ 25,106 4.002 4.252 for each of the first ten years of service and 2.5Z for each remaining PEPF► 44,575 66,661 8.002 12.002 year. for a Coordinated member, the annuity accrucl is It of the average salary for each of the first ten years of service and 1.52 for 6; 8,2(A �91,96A each remain.ng year. For PEPFF members, the annuity accrual rate Is 2.52 of the average salary for each of the first 25 years and 22 for The City'■ contribution for the year ended December 31, 1988, to the each remaining year. For bott: PERF and PEPFF, members are eligible PERF represented 0.062 of total contributions required of all par - for a ful: annuity when age plum years of service equal 90. ticlpating entities. For the PEPFF, contributions for the Year ended There are different types of annuities available to ownhers upon December 31, 1988. represented 0.552 of total contributions required retirement. A normal annuity IS a lifetime annuity that craws upon of all participating entitiea. the death of the retiree. No survivor annuity is payable. There are C. Fuudl_n� Status and Progress also various types of Joint and Survivor annuity opti.•n% ivallablo --- which will reduce the monthly normal annuity amount because the 1. Pension Benefit Obligation annuity to payable over joint lives. Members say als.. (rave their contributions in the fund upon iernlnatlon of public In order The "pension benefit obligation" In a standardized dl.►clneure to qualify for a deferred annuity at retirement age. Rrtunds of measure of t:le present value of pension benefits, adj..rted for contributions are available at any flow to members who leave public the effects of projected salary Increases and step -rate bene- service, but before retirement benefits begin. fits, estimated to be payable in the future as a result of B. Contributions Relulred and Contributions Made employee service to date. The measure, which is the — --— actuarial resent value of credited p projected benefits, 1s and Minnesota Statutes Chapter Jseem the %errs for rmpns intended to help users assess PERA's funding status on a employee contributions. The City makes annual contributions to to the going -concern basis, .$seas progress made In accumulating suf- pension plans equal to :he amount required by State Statutes. ficient assets to pay benefits when due, and make comparisons Minnesota Statutes Chapter 356,215. Subdivision 4(g) provides the for- r