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CITY OF ORONO <br />NOTES TO BASIC FINANCIAL STATEMENTS <br />DECEMBER 31, 2015 <br /> <br /> <br />(47) <br /> <br />NOTE 8 DEFINED BENEFIT PENSION PLANS – STATE-WIDE <br />A. Plan Description <br />The City of Orono participates in the following cost-sharing multiple-employer defined <br />benefit pension plans administered by the Public Employees Retirement Association of <br />Minnesota (PERA). PERA’s defined-benefit pension plans are established and <br />administered in accordance with Minnesota Statutes, Chapters 353 and 356. PERA’s <br />defined-benefit pension plans are tax qualified plans under Section 401 (a) of the <br />Internal Revenue Code. <br /> <br />1. General Employees Retirement Fund (GERF) <br />All full-time and certain part-time employees of the City are covered by the General <br />Employees Retirement Fund (GERF). GERF members belong to either the <br />Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by <br />Social Security and Basic Plan members are not. The Basic Plan was closed to new <br />members in 1967. All new members must participate in the Coordinated Plan. <br /> <br />2. Public Employees Police and Fire Fund (PEPFF) <br />The PEPFF, originally established for police officers and firefighters not covered by a <br />local relief association, now covers all police officers and firefighters hired since 1980. <br />Effective July 1, 1999, the PEPFF also covers police officers and firefighters <br />belonging to a local relief association that elected to merge with and transfer assets <br />and administration to PERA. <br /> <br />B. Benefits Provided <br />PERA provides retirement, disability, and death benefits. Benefit provisions are <br />established by state statute and can only be modified by the state legislature. <br /> <br />Benefit increases are provided to benefit recipients each January. Increases are related <br />to the funding ratio of the plan. Members in plans that are at least 90 percent funded for <br />two consecutive years are given 2.5% increases. Members in plans that have not <br />exceeded 90% funded, or have fallen below 80%, are given 1% increases. <br /> <br />The benefit provisions stated in the following paragraphs of this section are current <br />provisions and apply to active plan participants. Vested, terminated employees who are <br />entitled to benefits but are not receiving them yet are bound by the provisions in effect at <br />the time they last terminated their public service.