05-28-2025 Council Packet - Laserfiche WebLink

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SECTION 17 - PERA P HASED RETIREMENT OPTION (PRO) PERA’s Phased Retirement Option (PRO) program creates a flexible environment where members can transition into retirement, and employers can provide the necessary knowledge transfer. This program allows employees to start their PERA retirement benefit without terminating their public service position. Employees must be age 62 or older to be eligible. Participating in the PRO is at the discretion of the employer whether to offer the PRO to each employee. The city will need to evaluate the specific job duties of the employee requesting to participate in the PRO, and if the adopted budget can support participation in the PRO at the time. The City Council must approve each employee’s participation in the PRO and will re- evaluate the participation annually. Participation in the PRO requires employees to reduce their work hours by at least 25% and work no more than 1,044 in a one-year period (average of 20.07 hours per week). Payout of PTO, Deferred Sick and Sick Time hours If working less than 20 hours per week: An employee who participates in the PRO and opts to work less than 20 hours per week on average is no longer eligible to accrue PTO. At the start of the employee’s participation in the PRO, the employee will be paid for their remaining PTO, Deferred Sick and Sick Time hours based on the adopted pay-out maximums for each balance. If working 20 or more hours per week: An employee who participates in the PRO and opts to work 20 or more hours per week, will be paid for their remaining PTO, Deferred Sick and Sick Time hours at the time of full separation from city employment or if the average number of hours is reduced to less than 20 hours per week. The payout of PTO, Deferred Sick and Sick Time hours will be paid by the city to the employee’s Post Employment Health Care Savings Plan, 457b retirement account, cash payout, or a combination of the three options based on the employee’s preference. The amounts paid to the Post Employment Health Care Savings Plan or 457b retirement account are subject to election requirements of the plan or IRS contribution limits. All employees participating in the PRO will accrue ESST hours in accordance with Minnesota State Statute. ESST hours will not be paid out at separation.