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<br />. <br /> <br />, <br /> <br />1 <br /> <br />J <br /> <br />r <br />I <br />'e <br />i <br />I <br /> <br />. <br /> <br />CITY OF ELK RIVER FIRE RELIEF ASSOCIATION <br />NOTES TO FINANCIAL STATEMENTS <br />DECEMBER 31, 1992 <br /> <br />Note 5: PLAN DESCRIPTION AND UNFUNDED ACCRUED LIABILITY <br /> <br />A. Plan Description <br /> <br />The Elk River Fire Relief Association is the administrator of a single <br />employer public employee retirement system (PERS) established to provide <br />benefits for members of the Elk River Fire Department. <br /> <br />B. <br /> <br />The Fire Relief Association maintains a separate Special Fund to <br />accumulate assets to fund the retirement benefits earned by the Fire <br />Department's membership. Funding for the relief association is derived <br />primarily from a fire insurance premium tax in accordance with the <br />Volunteer Firefighter's Relief Association Financing Guidelines Act of <br />1971 (Chapter 261 as amended by Chapter 509 of Minnesota Statutes 1980.) <br /> <br />Contributions Required and Contributions Made <br /> <br />The financial requirements of the Special Fund are determined in <br />accordance with Section 69.772 of the Minnesota Statutes, which requires <br />the payment of pension benefits in a lump sum or optionally in annual <br />installments. The Association benefits are payable in a lump sum after <br />age 50, 20 years of service, or upon death. Benefits are accumulated at <br />$1,900 and $1,850 per year of active service for 1992 and 1991, <br />respectively. The accrued liability for these accumulated benefits is <br />computed using increasing percentages based on years of service in <br />accordance with subdivision 2 of Section 69.772. At 20 years of service, <br />the liability is equal to the number of years of service times benefits <br />per year. Association members are vested after 5 years. <br /> <br />The total contribution, which was not actuarially determined, in 1992 <br />amounted to $58,590 of which $19,000 was contributed by a City tax levy <br />and $39,590 was from State of Minnesota Aid. <br /> <br />The accrued liability as of December 31, 1992 was $636,918. The fund <br />balance reserve on December 31, 1992 was $21,707. This is a increase of <br />$21,032 from the December 31, 1991 fund balance reserve of $675. <br /> <br />-6- <br />