Comprehensive Annual Financial Report - Minnesota State ...

Retirement System
Plan Summary
Note: * A listing of employers
participating in
PERA can be found
in the Statistical
Section of this
report.
Public Employees Retirement Association of Minnesota
** PERA's Basic Plan
was closed to
new membership
in 1968 with the
creation of the
Coordinated Plan.
At that time, Basic
members had the
option of remaining
in that plan or
transferring to the
new Coordinated
Plan. Today, fewer
than 12 Basic members
remain active
public employees.
Because of the
small number in
this sub-group of
the General Fund,
the remainder of
the plan summary
will only address
the Coordinated
Plan and the
Minneapolis
Employees
Retirement Fund
Division of the
General Fund.
12
Public Employees
Retirement Association
of Minnesota
Purpose
Established by the Minnesota Legislature
in 1931, the Public Employees Retirement
Association (PERA) of Minnesota administers
pension funds that serve approximately
284,000 county, school and local
public employees, benefit recipients, their
survivors, and dependents.
Funds administered by the Association
provide a variety of retirement pensions,
and survivor and disability benefits. In the
case of the Coordinated and Correctional
plans, these benefits are in addition to
those provided by Social Security.
PERA’s Board of Trustees is responsible
for administering these funds in
accordance with statutes passed by the
Minnesota Legislature and has a fiduciary
obligation to PERA's members, their governmental
employers, the state, and its
taxpayers.
Administration
PERA’s Board of Trustees is composed of
11 members. The State Auditor is a member
by statute. Five trustees are appointed
by the Governor. Serving four-year terms,
these five trustees represent cities, counties,
school boards, retired annuitants, and
the general public, respectively.
The remaining five board members are
elected by the PERA membership at large
to serve four-year terms. Three trustees
represent the general active membership,
one represents Police and Fire Fund members,
and one represents annuitants and
benefit recipients. The latest trustee election
was in January 2011.
The board appoints an executive director
to serve as chief administrative officer
of PERA. With approval of the board, the
director develops the annual administrative
budget, determines staffing requirements,
contracts for actuarial and other
services, and directs the day-to-day operations
of the Association. The director also
serves as a member of the State Investment
Advisory Council, which advises the
Minnesota State Board of Investment on
the management and investment of public
pension funds and other assets.
Multi-Employer
Participation
Approximately 2,100 separate units of
government in Minnesota participate in
the PERA-administered retirement system.
These units include counties, cities, townships,
and school districts*.
Employee Membership
PERA has approximately 160,000 active
members. With certain statutory exceptions,
an employee performing personal
services for a governmental employer
whose salary is paid, in whole or in part,
from revenues derived from taxation, fees,
assessments, or other sources, is a member
of PERA. Plan participation is dependent
on the occupation of the member.
Funds
PERA administers six separate funds.
Each has specific membership, contribution,
benefit, and pension provisions.
The General Employees Retirement
Fund encompasses two retirement plans
— the PERA Coordinated Plan and the
PERA Basic plan, as well as a separate
division for the Minneapolis Employees
Retirement Fund (MERF).
The Coordinated Plan, created in 1968,
provides retirement and other benefits
in addition to those supplied by Social
Security. Established in 1931, the Basic
Plan was PERA’s original retirement plan
and is not coordinated with the federal
program.**
MERF was made part of the General
Fund in June 2010. A traditional defined
benefit plan, MERF is not coordinated
with Social Security and was closed to
new membership in 1979. It encompasses
employees of the City of Minneapolis, nonteaching
personnel at Minneapolis schools
and some employees of the Minnesota
State Colleges and Universities and the
Metropolitan Airports Commission.
Because its funding includes annual state
subsidies and is required to remain selfsustaining,
it is accounted for separately in
this report.