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CITY OF LINO LAKES, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 2023 <br /> <br /> <br /> <br /> <br />2. Public Employees Police and Fire Fund (PEPFF) <br /> <br />The PEPFF, originally established for police officers and firefighters not covered by a local relief association, now <br />covers all police officers and firefighters hired since 1980. Effective July 1, 1999, the PEPFF also covers police officers <br />and firefighters belonging to local relief associations that elected to merge with and transfer assets and administration to <br />PERA. <br /> <br /> <br />B. BENEFITS PROVIDED <br /> <br />PERA provides retirement, disability, and death benefits. Benefit provisions are established by state statute and can only be <br />modified by the state legislature. Vested, terminated employees who are entitled to benefits but are not receiving them yet <br />are bound by the provisions in effect at the time they last terminated their public service. <br /> <br />1. GERF Benefits <br /> <br />Benefits are based on a member’s highest average salary for any five successive years of allowable service, age, and <br />years of credit at termination of service. Two methods are used to compute benefits for PERA’s Coordinated members. <br />Members hired prior to July 1, 1989 receive the higher of Method 1 or Method 2 formulas. Only Method 2 is used for <br />members hired after June 30, 1989. Under Method 1, the accrual rate for Coordinated members is 1.2% for each of the <br />first ten years of service and 1.7% for each additional year. Under Method 2, the accrual rate for Coordinated Plan <br />members is 1.7% for all years of service. For members hired prior to July 1, 1989 a full annuity is available when age <br />plus years of service equal 90 and normal retirement age is 65. For members hired on or after July 1, 1989, normal <br />retirement age is the age for unreduced Social Security benefits capped at 66. <br /> <br />Benefit increases are provided to benefit recipients each January. The postretirement increase is equal to 50% of the <br />cost-of-living adjustment (COLA) announced by the SSA, with a minimum increase of at least 1% and a maximum of <br />1.5%. Recipients that have been receiving the annuity or benefit for at least a full year as of the June 30 before the <br />effective date of the increase will receive the full increase. For recipients receiving the annuity or benefit for at least one <br />month but less than a full year as of the June 30 before the effective date of the increase will receive a reduced prorated <br />increase. In 2023, legislation repealed the statute delaying increases for members retiring before full retirement age. <br /> <br />2. PEPFF Benefits <br /> <br />Benefits for the PEPFF members first hired after June 30, 2010 but before July 1, 2014 vest on a prorated basis from <br />50% after five years up to 100% after ten years of credited service. Benefits for PEPFF members first hired after June <br />30, 2014 vest on a prorated basis from 50% after ten years up to 100% after twenty years of credited service. The <br />annuity accrual rate is 3% of average salary for each year of service. For PEPFF members who were first hired prior to <br />July 1, 1989, a full annuity is available when age plus years of service equal at least 90. <br /> <br />Benefit increases are provided to benefit recipients each January. The postretirement increase is fixed at 1%. Recipients <br />that have been receiving the annuity or benefit for at least 36 months as of the June 30 before the effective date of the <br />increase will receive the full increase. For recipients receiving the annuity or benefit for at least 25 months but less than <br />36 months as of the June 30 before the effective date of the increase will receive a reduced prorated increase. <br /> <br /> <br />63 <br />70