Comprehensive Annual Financial Report - Minnesota State ...
Comprehensive Annual Financial Report - Minnesota State ...
Comprehensive Annual Financial Report - Minnesota State ...
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FY12 Contribution Rates<br />
14%<br />
12%<br />
10%<br />
8%<br />
6%<br />
4%<br />
2%<br />
Notes<br />
Coordinated<br />
38<br />
(Continued)<br />
Employee<br />
Employer<br />
Basic<br />
Police & Fire<br />
Correctional<br />
MERF<br />
Administrative<br />
expenses of<br />
PERA are paid during<br />
the year from<br />
the GERF. At year<br />
end, a portion of the<br />
expenses are allocated<br />
to the other<br />
covered funds based<br />
on membership<br />
counts.<br />
Public Employees<br />
Retirement Association<br />
of <strong>Minnesota</strong><br />
payable in FY13 but calculated and billed<br />
in FY12 and each employer’s share of a<br />
$3.9 million annual contribution payable<br />
in FY13 but calculated and billed in FY12.<br />
Contributions in FY12 also include the $27<br />
million employer supplemental contribution<br />
payable in FY13 but calculated and billed in<br />
FY12.<br />
D. NEW RETIREMENT PLANS<br />
The <strong>State</strong>wide Volunteer Firefighter<br />
Retirement Plan (SVF), was created by the<br />
<strong>Minnesota</strong> legislature in 2009 and first<br />
received members and a corresponding<br />
transfer of assets from six relief associations<br />
or entities operating fire departments<br />
on December 31, 2009. Seventeen additional<br />
fire departments joined the plan on<br />
December 30, 2011. The amount of assets<br />
transferred, $3,075,477, is shown as an<br />
“Other Addition” in PERA’s <strong>State</strong>ment of<br />
Changes in Plan Net Assets for FY12. The<br />
plan is an agent lump-sum defined benefit<br />
plan. Each entity has a separate account and<br />
retains its own assets and liabilities.<br />
Four independent police and fire relief<br />
associations were merged into PERA’s<br />
Police & Fire Fund in FY12, including the<br />
Minneapolis Firefighters Relief Association,<br />
the Minneapolis Police Relief Association, the<br />
Virginia Firefighters Relief Association, and<br />
the Fairmont Police Relief Association. All<br />
four relief associations were formed in the<br />
late 1800’s to early 1900’s and all four had<br />
separate Boards and their own benefit provisions.<br />
They were all closed defined benefit<br />
plans. The Minneapolis plans were merged<br />
on December 30, 2011. Virginia Fire was<br />
consolidated as a separate plan on December<br />
30, 2011 and then was merged into the<br />
PEPFF on June 29, 2012. Fairmont Police<br />
was also merged into the PEPFF on June<br />
29, 2012. The amount of assets transferred<br />
into the PEPFF, $487,935,862, is shown as<br />
an “Other Addition” in PERA’s <strong>State</strong>ment of<br />
Changes in Plan Net Assets for FY12. An<br />
additional municipal contribution will be<br />
calculated in FY13 and paid annually over a<br />
specified number of years should there be<br />
an unfunded accrued actuarial liability for<br />
each of those four associations as of June 30,<br />
2012.<br />
E. OTHER NOTES<br />
1. Administrative Expenses<br />
Administrative expenses of the Public<br />
Employees Retirement Association are paid<br />
during the year from the GERF. At year-end,<br />
a portion of the expenses are allocated to<br />
the PEPFF, the PECF and MERF, based on<br />
membership counts. The PEDCP reimburses<br />
the GERF to the extent of fees collected for<br />
recovery of administrative costs. The SVF<br />
reimburses the GERF $30 per firefighter.<br />
The applicable amounts are reported as<br />
expenses of the five funds and reported on<br />
the <strong>State</strong>ment of Plan Net Assets as a payable<br />
to other funds or due from other funds.<br />
Administrative costs are funded from investment<br />
income for the defined benefit plans.<br />
For fiscal year 2012, administrative expenses<br />
allocated to GERF, PEPFF, PECF, MERF, SVF<br />
and PEDCP totaled $9,649,817, $855,176,<br />
$229,322, $171,807, $21,086 and $144,581<br />
respectively.<br />
2. Participating Pension Plan<br />
All employees of the Public Employees<br />
Retirement Association are covered by the<br />
GERF Coordinated Plan and eligible for<br />
the plan provisions described in Note A.4.<br />
<strong>Minnesota</strong> Statute 353.27 sets the rates<br />
for employee and employer contributions.<br />
These statutes are established and amended<br />
by the state legislature. Contribution rates<br />
are shown in Figure 9. Total covered payroll<br />
for PERA employees during fiscal year<br />
2012 was approximately $5.5 million.<br />
Fig. 9 Retirement Plan Contribution Rates<br />
Effective GERF<br />
Date Contributor Basic Coordinated PEPFF PECF MERF<br />
1/1/2011 Member 9.10% 6.25% 9.60% 5.83% 9.75%<br />
Employer 11.78% 7.25% 14.40% 8.75% 12.43%