Agenda - Council - 06/14/2022 - Laserfiche WebLink

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NOTE 9—DEFINED BENEFIT PENSION PLANS—STATE-WIDE (CONTINUED) 2. PEPFF Benefits Benefits for the PEPFF members first hired after June 30, 2010, but before July 1, 2014, vest on a prorated basis from 50% after five years up to 100% after ten years of credited service. Benefits for PEPFF members first hired after June 30,2014,vest on a prorated basis from 50%after ten years up to 100% after twenty years of credited service. The annuity accrual rate is 3%of average salary for each year of service. A full, unreduced pension is earned when members are age 55 and vested, or for members who were first hired prior to July 1, 1989, when age plus years of service equal at least 90. Benefit increases are provided to benefit recipients each January. The post-retirement increase is fixed at 1.00%. Recipients that have been receiving the annuity or benefit for at least 36 months as of the June 30 before the effective date of the increase,will receive the full increase. Recipients receiving the annuity or benefit for at least 25 months,but less than 36 months as of the June 30 before the effective date of the increase, will receive a reduced prorated increase. C. Contributions Minnesota Statutes Chapter 353 sets the rates for employer and employee contributions. Contribution rates can only be modified by the state legislature. 1. GERF Contributions Coordinated Plan members were required to contribute 6.50% of their annual covered salary in fiscal year 2021 and the City was required to contribute 7.50% for Coordinated Plan members. The City's contributions to the GERF for the year ended December 31, 2021, were $3 3 0,724. The City's contributions were equal to the required contributions as set by state statute. 2. PEPFF Contributions Plan members were required to contribute 11.80% of their annual covered salary in fiscal year 2021 and the City was required to contribute 17.70% for Police and Fire Plan members. The City's contributions to the PEPFF for the year ended December 31, 2021, were $541,368. The City's contributions were equal to the required contributions as set by state statute. D. Pension Costs 1. GERF Pension Costs At December 31, 2021, the City reported a liability of$2,634,866 for its proportionate share of the GERF's net pension liability. The City's net pension liability reflected a reduction due to the State of Minnesota's contribution of$16 million to the fund in 2021. The State of Minnesota is considered a non-employer contributing entity and the state's contribution meets the definition of a special funding situation. The State of Minnesota's proportionate share of the net pension liability associated with the City totaled$80,483. The net pension liability was measured as of June 30,2021,and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. 81