Comprehensive Annual Financial Report 12/31/1997

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CITY OF LINO LAKES, i1IIINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1997 Note 6 DEFINED BENEFIT PENSION PLANS - STATEWIDE A. PLAN DESCRIPTION All full -time and certain part-time employees of the City of Lino Lakes are covered by defined benefit plans administered by the Public Employees Retirement Association of Minnesota (PERA). PERA administers the Public Employees Retirement Fund (PERF) and the Public Employees Police and Fire Fund (PEPFF) which are cost - sharing, multiple- employer retirement plans. These plans are established and administered in accordance with Minnesota Statute, Chapters 353 and 356. PERF members belong to either the Coordinated Plan or the Basic Plan. Coordinated Plan members are covered by Social Security and Basic Plan members are not. All new members must participate in the Coordinated Plan. All police officers, firefighters and peace officers who qualify for membership by statute are covered by the PEPFF. PERA provides retirement benefits as well as disability benefits to members, and benefits to survivors upon death of eligible members. Benefits are established by State Statute, and vest after three years of credited service. The defined retirement benefits are based on a member's highest average salary for any five successive years of allowable service, age, and years of credit at termination of service. PERA issues a publicly available financial report that includes fmancial statements and required supplementary information for PERF and PEPFF. That report may be obtained by writing to PERA, 514 St. Peter Street #200, St. Paul, Minnesota, 55102 or by calling (612)296 -7460 or 1- 800 -652 -9026. B. FUNDING POLICY Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. These statutes are established and amended by the state legislature. The City makes annual contributions to the pension plans equal to the amount required by state statutes. PERF Basic Plan members and Coordinated Plan members are required to contribute 8.23% and 4.23 %, respectively, of their annual covered salary. PEPFF members are required to contribute 7.60% of their annual covered salary. The City of Lino Lakes is required to contribute the following percentages of annual covered payroll: 10.73% for Basic Plan PERF members, 4.48% for Coordinated Plan PERF members, and 11.40% for PEPFF members. The City's contributions for the three years ending June 30, 1997, 1996, and 1995 which were equal to the contractually required contributions for each year as set by state statute are as follows: Year Ended PERF PEPFF 6/30/95 $51,169 $61,611 6/30/96 55,923 69,007 6/30/97 60,677 87,604 Note 7 METROPOLITAN COUNCIL ENVIRONMENTAL SERVICES During 1971, the Metropolitan Waste Control Commission (MWCC) was organized to provide for consolidation of the sanitary sewer collection, treatment and disposal in the seven county metropolitan area surrounding Minneapolis and St. Paul. Previously, these operations were maintained by the city governments on an individual or collective basis. The MWCC merged with the Metropolitan Council during 1994 to form Metropolitan Council Wastewater Services (MCWS) and is now called the Metropolitan Council Environmental Services (MCES). 44