5.1. ERMUSR 04-13-2010 - Laserfiche WebLink

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ELK RIVER MUNICIPAL UTILITIES ELK RIVER, MINNESOTA NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2009 AND 2008 Note 3; DE~`INNED BEI~EI`~T PENSY®N PLA~1S -STATEWIDE A. Plan description Allfull-time and certain part-time employees of the Utilities are covered by defined benefit plans administered by the Public Employees Retirement Association a£ Minnesota OPERA}. PERA administers the Public Employees Retirement Fund ~PERF}, which is acost-sharing, multiple-employer retirement plan. This plan is established and administered in accordance with Minnesota statutes, chapters 3 S 3 and 3 5 6. PERF members belong to either the Coardinated Plan or the Basic Plan, Coordinated Plan members are cavered by Social Security and Basic Plan members are not, All new members must participate in the Coordinated Plan. PERA provides retirement benefits as well as disability benefits to members, and benef is to survivors upon death of eligible Xnembers. Benefits are established by Minnesota statute, and vest after three years of credited service. The defined ~•etirement benefits are based on a member's highest average salary far any five successive years of allowable service, age and years of credit at termination of service. Two methods are used to compute benefits for PERA's Coordinated and Basic Plan members. The retiring member receives the higher ofstep-rate benefit accl•ual formula Method 1) or a level accrual formula Method 2}. Under Method 1, the annuity accrual rate for a Basic Plan member is 2.2 percent of average salary for each of the first 10 years of service and 2.7 percent far each remaining year. The annuity accrual rate for a Coordinated Plan member is 1.2 percent of average salary for each of the fast 10 years and 1.7 percent for each remaining year. Under Method 2, the annuity accrual rate is 2.7 percent al' average salary for Basic Plan members and 1.7 percent for Coordinated Plan members for each yeaz• of service. For all PERF members hired prior to July 1,1989 whose annuity is calculated using Method 1, a full annuity is available when age plus years of service equal 90. NoX•~nal retll~ement age is 65 for Basic and Coordinated members hired prior to July 1,1989. Normal retirement age is the age far unreduced Social Security benefits capped at 66 far Coordinated members hired on or after July 1,1989. A reduced retirement annuity is also available to eligible members seeking early retirement. There are different types of annuities available to members upon retirement, A single-life alrnuity is a lifetime annuity that ceases upon death of the retiz~ee--no survivor annuity is payable, There are also various types of joint and survivor arnluity options available which will be payable over j oint lives. Members may also leave their contributions in the fund upon termination of public service, in order to qualify for a deferred annuity at retirement age. Refunds of cont~•ibutions are available at any time to members who leave public service, but before retirement benefits begin. The benefit provisions stated in the previous paragraphs of this section are cul•~~ent provisions and apply to active plan pa~•ticipants. Vested, terminated employees who are entitled to benefits but are not receiving them yet, are bound by the provisions in effect at the time they last terminated their public service, PERA issues a publicly available fn~ancial report that includes frnancial statements and required supplementary infoi~natian far PERF. That report maybe obtained on the Internet at www.rnnpera.org, by w~.~iting to PERA, b4 Empire Drive #200, St. Paul, Minnesota, 55103-2088 or by calling (651} 296-7460 or 1-800-652-9026. -43 _