Local 34 members are a part of the Public Employees Retirement Association (PERA) defined benefit pension fund, specifically, the ‘Coordinated Plan’ for County and State employees. Currently, Local 34 members contribute 6.5% of their gross wages per pay period, with the Employer making a matching contribution of 7.5%. After five years, employees become vested, meaning they are eligible to receive the both their contribution and the employer’s upon retirement. The overall benefit amount is calculated based on years of service, retirement age and the worker’s five highest years of earning (“high five”).
Established in 1931, PERA administers three statewide retirement plans providing defined benefit plan (DBP) coverage to employees of local governments and school districts. These programs are qualified retirement plans under Section 401(a) of the Internal Revenue Code.
In 1931, with the economy still reeling from the Great Crash of 1929, and New Deal programs like Social Security and the Works Progress Administration years away, a group of public employees asked the state of Minnesota for legislation authorizing a retirement association for all public employees not covered by the state’s newly created (1929) retirement plan. Although there were a few public employee retirement groups providing benefits, most of them did not operate successfully, and not many public employees could count on any sort of pension after retirement.
The state legislature decided that a large retirement association would be able to operate more economically and efficiently and on April 24, 1931 they established the Public Employees Retirement Association of Minnesota, which officially began operations a few months later on July 1.
(This page borrows heavily from various portions of the PERA MN website. Please visit their excellent website for more information. Create an account to see a detailed Account Balance and Benefit Estimate based on your planned retirement date.)