11-13-2018 Council Meeting Packet

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- 24 - Employee Pensions All full-time and certain part-time employees of the City are covered by defined benefit pension plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the General Employees Retirement Fund (GERF) and the Public Employees Police and Fire Fund (PEPFF), which are cost-sharing multiple-employer retirement plans. GERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated members are covered by Social Security and Basic members are not. All new members must participate in the Coordinated Plan. All police officers, fire fighters and peace officers who qualify for membership by statute are covered by the PEPFF. The City’s contributions to GERF and PEPFF are equal to the contractually required contributions for each year as set by State Statute, and are as follows for the past five years: GERF PEPFF 2017 $192,510 $416,665 2016 193,684 424,970 2015 182,102 393,560 2014 162,934 314,426 2013 160,392 290,737 Lino Lakes Fire Division Volunteer firefighters of the City’s Public Safety Department – Fire Division are eligible for pension benefits through membership in the Statewide Volunteer Firefighter Retirement Plan (SFV), an agent multiple-employer, lump-sum defined benefit pension plan administered by PERA. The plan is established and administer in accordance with Minnesota Statutes, Chapter 353G. A member who has completed five or more years of service in the fire department shall at age 50 be entitled to a lump-sum benefit. Plan provisions include a pro-rated vesting schedule that increase from 5 years at 40% through 20 years at 100%. State aids, investment earnings and City contributions fund the plan. The City’s contributions to the SFV for the past two years are as follows*: City’s Contributions 2017 $58,800 2016 44,394 * The City created its fire department in 2016, therefore information prior to 2016 is unavailable . For more information regarding the liability of the City with respect to its employees, please reference “Note 8, Defined Benefit Pension Plans - PERA” and “Note 9, Defined Benefit Pension Plans - Fire Division” of the City’s Comprehensive Annual Financial Report for fiscal year ended December 31, 2017, an excerpt of which is included as Appendix IV of this Official Statement. Sources: City’s Comprehensive Annual Financial Reports. GASB 68 The Government Accounting Standards Board (GASB) has issued Statement No. 68, Accounting and Financial Reporting for Pensions (GASB 68) and related GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date-an amendment to GASB 68, which revised existing standards for measuring and reporting pension liabilities for pension plans provided to City employees and require recognition of a liability equal to the City’s proportionate share of net pension liability, which is measured as the total pension liability less the amount of the pension plan's fiduciary net position.