Comprehensive Annual Financial Report - Minnesota State ...

Summary
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(Continued)
* Automatic lifetime
Survivor Benefits are
also available to the
spouse of Police and
Fire members who
suffer total and permanent
duty disability.
Survivor benefits for
other disabled members
are only available
if the member chooses
a Survivor Option to
their disability benefit.
** Survivor benefits are
immediately suspended
for any survivor
charged with causing
the death of an association
member. The
benefit is permanently
revoked upon conviction
of such a crime.
This is a summary
of the laws, regulations,
and administrative
rules governing
the Public
Employees Retirement
Association and
should not be interpreted
as a comprehensive
explanation
thereof. If there is any
discrepancy between
this summary and the
actual law, the provisions
of the law will
govern.
Public Employees
Retirement Association
of Minnesota
years of service if disabled outside the
line of duty. If disabled in the line of duty,
there is no minimum service requirement.
MERF disability benefits are based
upon the capability of performing a member's
ordinary duties and require that the
member be under age 60. If the disability
is not duty related, a member must have
a minimum of five years of public service
The benefit formula is essentially the
same as the retirement formula at age 60
using the actual number of years worked
with the additional years the member
would have worked to reach age 60.
There is a maximum of 22 years of total
service unless the member has earned
more than 22 years of service on the job.
Neither the Defined Contribution Plan
nor the Statewide Volunteer Firefighter
Retirement Plan have specific disability
benefits. However, the DCP does allow
for monthly benefit payments until the
account balance is exhausted.
Survivor Benefits
PERA also provides survivor (death)
benefits for families of members who
qualify for such coverage should they die
before commencing retirement benefit
payments. The qualifications and types of
benefits vary with each plan.
A Lifetime Survivor Benefit is available
to the surviving spouse of a Coordinated,
Correctional, or Police and Fire member.
For Police and Fire members, this benefit
is based on either 50 percent of the
member’s average salary during the six
months prior to death or a formula using
the member’s total years of service, highfive
salary, age at death and age of the
spouse. The surviving spouse benefit for
Coordinated and Correctional members
is only based on the formula. This benefit
is payable to the spouse of a deceased
member for life, even upon remarriage.*
For the surviving spouse of a
Coordinated or Correctional member,
there are alternative term-certain benefits
of 10, 15, or 20 years duration. The
monthly payment, however, may not
exceed 75 percent of the member’s average
high five-year salary.**
Dependent children of active or disabled
Police and Fire members are eligible
for benefits until age 18, or age
23 if full-time students. In this case, the
maximum family benefit is 70 percent of
the member’s average monthly salary. If
a Coordinated or Correctional member
dies and there is no surviving spouse, any
children under age 20 qualify to receive a
monthly term-certain benefit.
Instead of a monthly benefit, the surviving
spouse, if a designated beneficiary, may
elect a refund of any remaining employee
contributions in the account, plus 6 percent
interest compounded annually. However,
a refund may not be elected if there are
dependent children who are eligible for
benefits.
The surviving spouse of a MERF member
with 20 or more years of service qualifies
for the actuarial equivalent of the member's
retirement benefit. If less than 20 years of
service were earned, the spouse benefit is
30 percent of the member's average salary
over the six months preceding death, with
10 percent of that salary for dependent children.
The Statewide Volunteer Firefighter
Retirement Plan provides for payment of
the member's accrued benefits to a surviving
spouse or, if none, to minor children or,
finally, the member's estate, based on retirement
at age 50.
Similarly, the Defined Contribution Plan
provides for payment of the account balance
to beneficiaries.
Refunds
Refunds of contributions are available
at any time to members who leave public
service and have not yet begun receiving
a pension. The refund includes employee
contributions plus 4 percent interest, compounded
annually.
A refund of member contributions plus
interest may also be elected by the designated
beneficiary of a member or former
member who dies before reaching retirement.
If there is no beneficiary, payment is
made to the surviving spouse or, if none, to
the estate of the deceased member or former
member.
If a retiree and designated survivor, if any,
die before all employee contributions are
paid in the form of a pension or benefits,
the remaining balance would be paid in the
same manner outlined for beneficiaries.
No interest is paid to beneficiaries on the
balance in an account if the member was
receiving retirement benefits.