(1) Restrict PERA Membership By Increasing The Threshold Salary Amount. If the threshold salary amount for PERA membership, currently $425 in any calendar month, was increased, the number of potential short-service PERA deferred annuitants could be reduced.

(2) Expand PERA Membership By Eliminating The Threshold Salary Amount. If the current $425 in any calendar month threshold salary limitation on PERA membership were eliminated, matching the lack of minimum salary requirements in either the General State Employees Retirement Plan of the Minnesota State Retirement System (MSRS-General) or the Teachers Retirement Association (TRA), the potential future PERA turnover gain may be increased.

(3) Reduce PERA Membership By Transferring School District Employees to TRA or to a Separate Pension Plan. A review of PERA�s membership apparently indicates that school district employees produce a higher pension cost than county or city employees. If school district employees were transferred to the Teachers Retirement Association (TRA), the teacher retirement plan, or to a separate pension plan, the resulting PERA contribution requirement would likely be reduced.

(1) Prorate Service Credit. PERA currently distinguishes between full-time and less than full-time employees only by salary credit, not service credit. Service credit for benefit computation could be credited based on its relation to full-time employment.

(2) Eliminate Grant of One Year of Service Credit For Medical Leaves. PERA currently provides one year of service credit for a medical leave without requiring any member or employer contributions. This service credit grant could be replaced by a more customary leave of absence contributory service credit provision.

(3) Increase Vesting Requirement To Five Years. PERA currently requires a member to gain credit for three years of service in order to obtain a vested (non-forfeitable) right to a retirement annuity. This service credit vesting requirement could be increased to five years of service.

(4) Reduced Deferred Annuity Augmentation Rate. PERA currently provides an annual increase in deferred retirement annuities at a rate of three percent before age 56 and at a rate of five percent after age 55. The post-age-55 deferred annuity augmentation rate could be reduced to three percent.

(1) Member Contribution Increase. The current member contribution rates (8.75 percent for Basic members and 4.75 percent for Coordinated members) could be increased, either in one increase or phased in over two or more steps.

(2) Employer Contribution Increase. The current employer contribution rates (11.43 percent on behalf of Basic members and 5.18 percent on behalf of Coordinated members) could be increased, again either in one increase or phased in over two or more steps.

(3) Additional State Funding/State Aid. The ongoing state aid to PERA-covered municipalities enacted in 1997 could be increased.

(4) One-Time Lump Sum State Appropriation. A state appropriation to PERA could be used to buy down a substantial portion of what otherwise would be the future annual funding requirement shortfall.

(5) Reshuffle Other Funding Support. As the Legislature did in 1997, when financial support sufficiencies in MSRS-General and TRA were redirected to PERA and to the first class city teacher retirement plans, the current MSRS-General, TRA, or Public Employees Police and Fire Plan (PERA-P&F) financial support sufficiencies could be redirected in whole or in part to PERA.

(1) Extension of Amortization Target Date. The current amortization target date for PERA is 2020, reflecting a 30-year amortization period from the 1989 benefit increases. The amortization period could be extended to 2031, a new 30-year period, which would reduce the amortization contribution requirement.

(2) Increase Preretirement Interest Rate. The interest rate assumption determines the portion of actual pension plan cost that will be paid from investment income and an increase in the current PERA preretirement interest rate from 8.5 percent would reduce the portion of actual pension plan cost calculated in the actuarial valuations to be paid by contributions.

(3) Other Actuarial Method Or Assumption Changes. Other actuarial method or assumption changes, such as redefining the actuarial value of assets at market value or increasing the Minnesota Post Retirement Investment Fund (MPRIF) postretirement interest rate, also would reduce the recognition of the portion of the actuarial cost calculated to be borne by contributions. Because the MPRIF postretirement adjustment is based in part on investment performance in excess of an actuarial assumption, this change, however, also involves a benefit reduction.

(1) Plan Consolidation. The consolidation of a pension plan with actual or potential funding problems with a pension plan with funding strengths, such as the consolidation of PERA with MSRS-General, would produce an average total cost for the resulting plan that may be more manageable.

(2) Fund Consolidation. The consolidation of the fund supporting a pension plan with actual or potential funding problems with a fund supporting a pension plan with funding strengths can postpone or eliminate any potential for a benefit payment default, such as the merger of the PERA retirement fund with the PERA-P&F retirement fund.

(3) Administrative Consolidation. The consolidation of the administration of one pension plan with the administration of another pension plan can save administrative expenses through the elimination of administrative duplications and the acquisition of greater economics of scale, such as the merger of the PERA and MSRS administration.