Defined Contribution Plans
The Defined Contribution Plans (DCP) administered by PERA is exclusively for physicians, elected local governmental officials, city managers, and governmental volunteer ambulance service personnel.
Members of the DCP designate a percentage of total contributions to be placed in one or more of seven accounts of the Minnesota Supplemental Investment Fund. Employee and employer contributions are combined and used to purchase shares in the accounts selected by the employee. Upon termination of service, a DCP member is entitled to a lump-sum payment of the values of shares held, with interest or dividends that have accrued. No monthly retirement benefits are available.
PERA’s Defined Contribution Plans are tax-qualified plans under Section 401(a) of the Internal Revenue Code. As a result, federal and state taxes on DCP contributions are deferred until the member withdraws the funds.
Public officials contribute 5% of their elective salary, and their employers pay an equal contribution. Participation in the plan is voluntary, and there is no minimum salary requirement. Elected officials can also discontinue participation at any time.
City managers/administrators and physicians entering public service in Minnesota have the alternative of coverage under two distinctly different retirement plans administered by PERA —the Defined Contribution Plan (DCP) and the Coordinated Plan.
Any public ambulance service may elect to participate in the DCP. Once a service chooses to join the program, individual participation in the plan is entirely voluntary, and there is no minimum salary requirement.