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I CITY OF ST. ANTHONY, MINNESOTA NOTES TO FINANCIAL STATEMENTS rDecember 31, 2008 I 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 were required to contribute 9.10% and 6.0%, respectively, of their annual covered salary in 2008. PEPFF members were required to contribute 8.6% of their annual covered salary in 2008. That rate will increase to 9.4% in 2009. The City is required to contribute the following percentages of annual covered payroll: 11.78% for Basic Plan PERF members, 6.5% for Coordinated Plan PERF members, and 12.9% for PEPFF members. Employer contribution rates for the Coordinated Plan and PEPFF will increase to 6.75% and 14. 1% respectively, effective January 1, 2009. The City's contributions to the Public Employees Retirement Fund for the years ending December 31, 2008, 2007 and 2006 were $106,534, $96,724 and $83,480, respectively. The City's contributions to the Public Employees Police and Fire Fund for the years ending December 31, 2008, 2007 and 2006 were $272,527, $235,132 and $187,461, respectively. The City's contributions were equal to the contractually required contributions for each year as set by state statute. C. PUBLIC EMPLOYEES RETIREMENT ASSOCIATION (PERA) - DEFINED CONTRIBUTION PLAN DESCRIPTION Five council members of the City are covered by the Public Employees Defined Contribution Plan (PEDCP), a multiple -employer deferred compensation plan administered by the Public Employees Retirement Association of Minnesota (PERA). The PEDCP is a tax qualified plan under Section 401(a) of the Internal Revenue Code and all contributions by or on behalf of employees are tax deferred until time of withdrawal. Benefit Provisions and Contribution Rates Plan benefits depend solely on amounts contributed to the plan plus investment earnings, less administrative expenses. Minnesota Statutes, Chapter 353D.03, specifies plan provisions, including the employee and employer contribution rates for those qualified personnel who elect to participate. Plan provisions are established and can be amended by State Statutes. An eligible elected official who decides to participate contributes 5 percent of salary which is matched by the elected official's employer. Employer and employee contributions are combined and used to purchase shares in one or more of the seven accounts of the Minnesota Supplemental Investment Fund. For administering the plan, PERA receives 2 percent of employer contributions and four -tenths of one percent of the assets in each member's account annually. Plan benefits depend solely on amounts contributed to the plan plus investment earnings, less administrative expenses. 67 L.