Annual Financial Report 12/31/1988

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CITY OF LINO LAKES, MINNESOTA Page 13 of 19 NOTES TO FINANCIAL STATEMENTS December 31, 1988 NOTE 2 DETAIL NOTES ON ALL FUND AND ACCOUNT GROUPS (Continued) RETIREMENT - MULTIPLE EMPLOYER PERS The City participates in the Public Employees Retirement Fund and the Police and Fire Fund Pension Plans as administered by the Public Employees Retirement Association (PERA) under Minnesota Statutes Chapters 353 and 356, which is a cost sharing multiple - employer Public Employee Retirement System (PERS). This plan covers substantially all employees except those qualifying as temporary or seasonal employees. The City's current year covered payroll and total current year payroll for all employees is $705,314 and $739,919 respectively. A summary of plan eligibility requirements is available at PERA. Such retirement terms are governed by State Statute. In general, the Association provides defined retirement benefits based on a member's average salary for any five successive years of allowable service, age, and years of credit at termination of service. In addition, the retirement program provides benefits to members upon disability and to survivors upon death of eligible members. Retirees have a variety of annuity options available for payment of benefits. The amounts of annuity (retirement benefits) are based on the following formulas: Basic Members - 2% of the average salary over the highest five successive years on which deductions were paid for each of the first 10 years and 2 -1/2% of said "average salary" for the period thereafter. Coordinated Members - 1% of the average salary over the highest five successive years on which deductions were paid for each of the first 10 years and 1 -1!2% of said "average salary" for the period thereafter. Police and Fire Members - 2 -1/2% of the average salary over the highest five successive years on which deductions were paid for each of the first 25 years and 2% of said "average salary" for the period thereafter. PERA also provides death and disability benefits. Pension benefits are funded from member and employee contributions and income from investment of fund assets. Public Employees Retirement Fund members belong to either the Basic or Coordinated Plan. Coordinated members are covered by Social Security and Basic members are not. All new members of the Public Employees Retirement Fund must participate in the Coordinated Plan. Current contribution rates for the funds are as follows: Public Employees Retirement Fund: Basic Plan Coordinated Plan Public Employees Police and Fire Fund Employee Employer 8.00% 10.50% 4.00% 4.25% 8.00% 12.00% Upon termination, regardless of years of service, if not rehired in a PERA covered position, all salary deductions will be refunded, with interest at 5% compounded annually.