6.6. SR 06-04-2018 - Laserfiche WebLink

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CITY OF ELK RIVER, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2017 58 NOTE 9: DEFINED BENEFIT PENSION PLANS – STATE-WIDE - CONTINUED B.Benefits Provided (Continued) 2.PEPFF Benefits Benefits for the PEPFF members first hired after June 30, 2010, but before July 1, 2014, vest on a prorated basis from 50% after five years up to 100% after ten years of credited service. Benefits for PEPFF member first hired after June 30, 2014, vest on a prorated basis from 50% after ten years up to 100% after twenty years of credited service. The annuity accrual rate is 3% of average salary for each year of service. For PEPFF members who were first hired prior to July 1, 1989, a full annuity is available when age plus years of service equal at least 90. C.Contributions Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. Contribution rates can only be modified by the state legislature. 1. GERF Contributions Basic Plan members and Coordinated Plan members were required to contribute 9.10% and 6.50%, respectively, of their annual covered salary in calendar year 2017. The City was required to contribute 11.78% of pay for Basic Plan members and 7.50% for Coordinated Plan members in calendar year 2017. The City and HRA contributions to the GERF for the year ended December 31, 2017 were $713,412 and $4,494, respectively. Both the City and HRA contributions were equal to the required contributions set by state statute. 2.PEPFF Contributions Plan members were required to contribute 10.8% of their annual covered salary in calendar year 2017. The City was required to contribute 16.20% of pay for members in calendar year 2017. The City contributions to the PEPFF for the year ended December 31, 2017 were $508,774. The City contributions were equal to the required contributions set by state statute. D.Pension Costs 1. GERF Pension Costs At December 31, 2017, the City and HRA reported liabilities of $9,611,075 and $60,586, respectively, for its proportionate share of the GERF’s net pension liability. The net pension liability reflected a reduction due to the State of Minnesota’s contribution of $6 million to the fund in 2017. The State of Minnesota is considered a non-employer contributing entity and the state’s contribution meets the definition of a special funding situation. The State of Minnesota’s proportionate share of the net pension liability associated with the City and the HRA totaled $120,413 and $1,170, respectively. The net pension liability was measured as of June 30, 2017 and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City and HRA’s proportions of the net pension liability was based on their respective contributions received by PERA during the measurement period for employer payroll paid dates from July 1, 2016 through June 30, 2017 relative to the total employer contributions received from all of PERA’s participating employers. At June 30, 2017 the City and HRA’s combined proportion was .1515%, an increase of .008% from its proportion measured as of June 30, 2016.