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CITY OF LITTLE CANADA, MINNESOTA <br />NOTES TO BASIC FINANCIAL STATEMENTS <br />DECEMBER 31, 2022 <br /> <br /> <br /> <br />(56) <br /> <br />NOTE 8 DEFINED BENEFIT PENSION PLANS – STATE-WIDE <br />A. Plan Description <br />The City of Little Canada participates in the following cost-sharing multiple-employer <br />defined benefit pension plans administered by the Public Employees Retirement <br />Association of Minnesota (PERA). PERA’s defined-benefit pension plans are established <br />and administered in accordance with Minnesota Statutes, Chapters 353 and 356. <br />PERA’s defined-benefit pension plans are tax-qualified plans under Section 401(a) of the <br />Internal Revenue Code. <br /> <br />1. General Employees Retirement Plan <br />All full-time and certain part-time employees of the City are covered by the General <br />Employees Plan. General Employees Plan members belong to the Coordinated Plan. <br />Coordinated Plan members are covered by Social Security. <br /> <br />B. Benefits Provided <br />PERA provides retirement, disability, and death benefits. Benefit provisions are <br />established by state statute and can only be modified by the state Legislature. Vested, <br />terminated employees who are entitled to benefits, but are not receiving them yet, are <br />bound by the provisions in effect at the time they last terminated their public service. <br /> <br />1. General Employees Retirement Plan Benefits <br />General Employees Plan benefits are based on a member’s highest average salary for <br />any five successive years of allowable service, age, and years of credit at termination of <br />service. Two methods are used to compute benefits for PERA's Coordinated Plan <br />members. Members hired prior to July 1, 1989, receive the higher of Method 1 or <br />Method 2 formulas. Only Method 2 is used for members hired after June 30, 1989. <br />Under Method 1, the accrual rate for Coordinated members is 1.2 percent for each of the <br />first 10 years of service and 1.7 percent for each additional year. Under Method 2, the <br />accrual rate for Coordinated members is 1.7 percent for all years of service. For <br />members hired prior to July 1, 1989 a full annuity is available when age plus years of <br />service equal 90 and normal retirement age is 65. For members hired on or after July 1, <br />1989, normal retirement age is the age for unreduced Social Security benefits capped at <br />66.