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1 1 CITY OF ST. ANTHONY NOTES TO FINANCIAL STATEMENTS DECEMBER 31 , 1999 Note 10. Litigation and Other 1 The City has the usual and customary type of legal claims pending at year end. Al- though the outcome of these lawsuits is not presently determinable, City's manage- ment believes the City .will not incur any material loss resulting from these claims. No loss has been recorded in the City's financial statements related to any claims. Amounts recorded as revenues from federal and state agencies are subject to audit ' and adjustment by the granting agencies. No provision .for any possible adjustments, if any, has been provided for, since the amounts which may be disallowed can not be determined at this time, and management has determined the amounts, if any, ' would not be significantly material . Note 11 . Defined Benefit Pension Plans - Statewide 1 For the year ended December 31 , 1998,. the City has adopted GASB Statement No. 27, Accounting for Pensions by State and Local Government Employers, for the Public ' Employees Retirement Association. This implementation establishes standards for the measurement, recognition, and display of pension expense and related liabilities, assets, and note disclosures in the financial reports of state and local government 1 employers. Adoption of this statement had no financial impact on the City. Note disclosures for other pension plans are in accordance with GASB Statement No. 5, Disclosure of Pension Information by Public Employee Retirement Systems and State and Local Government Employers. 1 A. Plan Description 1 All full-time and certain part-time employees of the City of St. Anthony are covered by defined benefit pension plans administered by the -Public Employees Retirement Association of Minnesota (PERA). PERA administers the Public Employees Retirement 1 Fund (PERF) and the Public Employees Police and Fire Fund (PEPFF) , which are cost- sharing, multiple-employer retirement plans. These plans are established and admini- stered in. accordance with Minnesota Statutes, 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 1 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 retire- 1 ment 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. Two methods are used to compute benefits for PERF's Coordinated and Basic Plan members. The retiring member receives the higher of a step-rate benefit accrual formula (Meth- 1 od 1) or a level accrual formula (Method 2). Under Method 1 , the annuity accrual rate for a Basic Plan member who retired before July 1 , 1997 is. 2% of average salary for 1 each of the first ten years of service and 2.5% for each remaining year. The annuity accrual rate for Basic members who retire on or after July 1 , 1997 is 2.2% of average salary for each of the first ten years of serv.ice and 2.7% for each remaining year. -29- 1