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<br />L <br /> <br />i~ <br /> <br /> <br />ii <br />n <br />7 <br /> <br />J <br /> <br /> <br />i <br /> <br /> <br /> <br /> <br />L <br />CITY OF ELK RIVER, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />DECEMBER 31, 2010 <br />Note 4: OTHER INFORMATION -CONTINUED <br />Total contributions made by the City of Elk River during fiscal year 2010 were: <br />Contribution Amount Percentage of Covered Payroll Required <br />Employee Employer Employee Employer Rates <br />$1,470 $1,470 5.0% 5.0% 5.0% <br />2. Volunteer Fire Department Relief Association <br />a. Plan Description <br />The Elk River Fire Relief Association is the administrator of a single employer public employee defined benefit <br />retirement system (PERS) established to provide benefits for members of the Elk River Fire Department. <br />The Fire Relief Association maintains a separate Special fund to accumulate assets to fund the retirement <br />benefits earned by the Fire Department's membership. Funding for the relief association is derived primarily <br />from an insurance premium tax in accordance with the Volunteer Firefighter's Relief Association Financing <br />Guidelines Act of 1971 (Chapter 261 as amended by Chapter 509 of Minnesota Statutes 1980). <br />The Fire Relief Association issues a publicly available fmancial report that includes financial statements and <br />required supplementary information. The report may be obtained by writing to the Elk River Fire Department <br />Relief Association, 13073 Orono Parkway, Elk River, MN 55330. <br />b. Funding Policy <br />The fmancial requirements of the Special fund are determined in accordance with Section 69.772 of the <br />Minnesota Statutes, which requires the payment of pension benefits in a lump sum or optionally in annual <br />installments. The Association is comprised of volunteers and therefore members have no contribution <br />requirements. During the year, the City recognized as revenue and as expenditure on-behalf payments of <br />$101,255 made by the State of Minnesota for the Fire Relief Association. The following summarizes the City's <br />annual pension cost and other related information for the current year: <br />Annual Pension Cost $131,255 <br />Contributions Made: <br />City $30,000 <br />State Aid $101,255 <br />Actuarial Valuation Date 12/31/10 <br />Actuarial Cost Method Entry age normal <br />Amortization Method Level dollar closed <br />Remaining Amortization Period: <br />Normal cost 20 years <br />Prior service cost 5 years <br />Asset valuation method Market <br />Actuarial Assumptions <br />Investment rate of return 5% <br />Projected salary increases N/A <br />Inflation rate N/A <br />Cost of living adjustments None <br />59 <br />