6.2 SR 06-03-2024 - Laserfiche WebLink

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91 City of Elk River Notes to Basic Financial Statements NOTE 12 – PENSION PLANS (CONTINUED) Public Employees Defined Contribution Plan (Defined Contribution Plan) Three council members of the City of Elk River are covered by the Defined Contribution Plan, a multiple employer deferred compensation plan administered by PERA. The Defined Contribution Plan is a tax qualified plan under Section 401(a) of the Internal Revenue Code and all contributions by or on behalf of employees are tax deferred until time of withdrawal. The defined contribution plan consists of individual accounts paying a lump-sum benefit. Plan benefits depend solely on amounts contributed to the plan plus investment earnings, less administrative expenses; therefore, there is no future liability to the City. Minnesota Statutes Chapter 353D.03, specifies plan provisions, including the employee and employer contribution rates for those qualified personnel who elect to participate. An eligible elected official who decides to participate contributes 5% of salary which is matched by the elected official's employer. For ambulance service personnel, employer contributions are determined by the employer, and for salaried employees must be a fixed percentage of salary. Employer contributions for volunteer personnel may be a unit value for each call or period of alert duty. Employees who are paid for their services may elect to make member contributions in an amount not to exceed the employer share. Employer and employee contributions are combined and used to purchase shares in one or more of the seven accounts of the Minnesota Supplemental Investment Fund. For administering the plan, PERA receives 2% of employer contributions and twenty-five hundredths of 1% (.25%) of the assets in each member's account annually. Pension expense for the year is equal to the contributions made. Total contributions made by the City during fiscal year 2023 were: Contribution Amount Percentage of Covered Payroll Employee Employer Employee Employer Required Rate 850$ 850$ 5% 5% 5% Defined Benefit Pension Plan – Volunteer Firefighter's Relief Association A. Plan Description The Elk River Firefighter's Relief Association is the administrator of a single employer defined benefit pension plan established to provide benefits for members of the Elk River Fire Department per Minnesota State Statutes. B. Benefits Provided Volunteer firefighters of the City are members of the Elk River Firefighter's Relief Association. Full retirement benefits are payable to members who have reached age 50 and have completed 20 years of service for lump sum service pensions. Partial benefits are payable to members who have reached 50 and have completed 5 years of service. Disability benefits and widow and children's survivor benefits are also payable to members, or their beneficiaries based upon requirements set forth in the bylaws. These benefit provisions and all other requirements are consistent with enabling state statutes. Page 212 of 464