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CITY OFELK RIVER, MINNESOTA <br />NOTES TOFINANCIAL STATEMENTS <br />DECEMBER 31.200D <br />Note11: DEFINED BENEFIT PENSION PLAN -STATEWIDE –CONTINUED <br />Two methods are used to compute benefits for PERF'aCoordinated and Basic Plan members. <br />The retiring member receives the higher ofastep-rate benefit accrual funmu|a(Method1)oro <br />level accrual formula (Method 2). Under Method 1.the annuity accrual rate for gBasic Plan <br />member is 2.2 percent of average salary for each of the first 10 years of service and 2.7 percent <br />for each remaining year. The annuity accrual rate for oCoordinated Plan member ia1.2percent mf <br />average salary for each of the first 10 years and 1.7 percent for each remaining year. Under <br />Method 2, the annuity accrual rate is 2.7 percent of average salary for Basic Plan members and <br />17percent for Coordinated Plan members for each year ofservice. For PEPFFmembers, the <br />annuity accrual rate ie3Opercent for each year otservice. For all PEPFFand PERF members <br />whose annuity iocalculated using Method 1`afull annuity is available when age plus years cf <br />service equal AQ. Aneduoed retirement annuity is also available to eligible members seeking early <br />retirement. <br />There are different types of annuities available to members upon retirement. A normal annuity is <br />lifetime annuity that ceases upon the death of the retiree—no survivor annuity is payable. There <br />are also various types mfjoint and survivor annuity options available which will reduce the monthly <br />normal annuity amount, because the annuity is payable over joint lives. Members may also leave <br />their contributions in the fund upon termination of public service in order toqualify for a deferred <br />annuity etretirement age. Refunds ofcontributions are available at any time tumembers who <br />leave public service, but before retirement benefits begin. <br />The benefit provisions stated in the previous paragraphs of this section are current provisions and <br />apply to active plan participants. Veated, terminated employees who are entitled to benefits but <br />are not receiving them yet are bound by the provisions in effect atthe time they last terminated <br />their public service. <br />PEFlA issues a publicly available financial report that includes financial statements and required <br />supplementary information for PERF and PEPFF That report may be obtained by writing to <br />PERA. 514 St. Peter Street #200. St. Pau|, Minnesota, 55102orby calling (651) 296-7460 or <br />1-800-652-0026. <br />Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. Theme <br />statutes are established and amended by the state legislature. The City makes annual <br />contributions tothe pension plans equal tothe amount required bystate statutes. PERF Basic <br />Plan members and Coordinated Plan members are required to contribute 8.7596 and 4 7596. <br />respectively, oftheir annual covered salary. PEPFFmembers are required tocontribute 8.2O%Vf <br />their annual covered salary. The City ierequired tVcontribute the following percentages ofannual <br />covered payro8� 11.4396 for Basic Plan PERF members, 5.1896for Coordinated Pian PERF <br />members, and S.3O%for PEPFF members, and 8.7696for L<3CGF<F members. The City's <br />contributions b»the Public Employees Retirement Fund for the years ending December 31.2OOD, <br />1998.1g88were $192.683.$1HS.64O.and $158,180, respectively. The City's contributions tothe <br />Public Employees Police & Fire Fund for the years ending December 31.2QOO.1989.and 199O. <br />were $132,102,$135.8S2,and $13S,3O4.respectively. The City's contributions were equal tothe <br />contractually required contributions for each year as set by state statute. <br />N9 <br />