08-14-1991 Council Agenda - Laserfiche WebLink

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1 1 1 1 11 1 1 1 1 1 1 1 1 1 1 1 LITTLE CANADA FIREMENS RELIEF ASSOCIATION NOTES TO FINANCIAL STATEMENTS December 31, 1990 Note 7 PENSION PLAN (Continued) BENEFIT PROVISIONS Page 6 of 8 Twenty Year Service Pension Each member who is at least 50 years of age; has retired from the Little Canada Fire Department, has served at least twenty (20) years of active service with such department before retirement; and, has been a member of the Association in good standing at least 10 years prior to such retirement; shall be entitled to a Lump sum service pension in the amount of $1,800 for each year of service but not exceeding the maximum amount per year of service allowed by law for the minimum average amount of available financing per firefighter as prescribed by law. Members with 10 years of service receive partial vesting at 50% of the 20 year rate and 5% added for every one year of service beyond ten years up to 20 years. Disability Benefits After 26 weeks of a disability and upon submission of proof from a reliable physician, that the disability is permanent, and upon approval by the Board of Trustees a member will receive a lump- sum payment equal to his or her accrued service pension. Death Benefits Upon the death of an active or deferred member, the beneficiaries of deceased members, shall be paid a death benefit out of the Special Fund in an amount equivalent to the accrued service pension. Minnesota Statutes Section 424A.10 provides for the payment of a supplemental benefit equal to ten percent of a regular lump sum distribution up to a maximum of $1,000. The supplemental benefit is in Lieu of a State income tax exclusion for lump sum distributions and will no longer be available if State tax law is modified to exclude lump sum distributions from State income tax. The Little Canada Firemen's Relief Association qualifies for these benefits. FUNDING REQUIREMENTS The Volunteer Firefighter's Relief Association Financing Guidelines Act of 1971 (Chapter 261 as amended by Chapter 509 of Minnesota Statutes 1980) specifies minimum contributions required on an annual basis. The minimum contribution from the City of Little Canada is determined as follows: Normal Cost + Amortization Payment on Unfunded Actuarial Liability Prior to Any Change + Amortization Contribution on Unfunded Actuarial Liability Attributed to Any Change - Anticipated State Aid - Projected Investment Earnings @ 5% Total Contribution Required Page 72