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O-1993-1875-J
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O-1993-1875-J
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11/2/2016 3:38:53 PM
Creation date
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Legislative Records
Legislative Type
Ordinance
Date
12/8/2003
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<br />. <br /> <br />. <br /> <br /> <br />PLAN IMPROVEMENT STUDY <br />EXPLANATION OF PLANS <br /> <br />TMRS member cities have the opportunity to annually adopt Updated Service Credit and Annuity Increases; improving <br />retirement benefits for both active employees and retirees who are currently receiving a monthly retirement benefit from <br />the System. <br /> <br />Section I {Proposed Plans "1" through "5"} <br /> <br />If the City adopts 1 00% Updated Service Credit effective January 1, 2004, a member's updated service credit will be <br />calculated based on the member's average monthly salary for the three-year period of 2000, 2001 and 2002, assuming <br />the member had always earned that average salary and made contributions to the System, matched by the City on the <br />basis of the three-year average salary, and had earned 3% annual interest. In other words, a member's retirement <br />benefits are "updated" based on the wages earned in recent years {granted a credit if the updated service credit <br />calculation is greater than the actual amount from all sources in the member's account}. In addition, if the City has <br />increased the employee deposit rate and/or the City's matching ratio, the new updated service credit will reflect those <br />changes. If the City adopts an Updated Service Credit of less than 100%, the percentage adopted will be used in <br />calculating the member's credit. <br /> <br />The "Proposed Plans" on the Plan Improvement Study {Section I} are prepared as follows: <br /> <br />1. The first plan includes Updated Service Credit, along with the Senate Bill 505 provisions if the City has not <br />previously adopted these provisions. If your City has adopted the Annually Repeating Updated Service <br />Credit and Annuity Increases, this plan indicates the separate cost of the update. <br /> <br />2. If your City has a matching ratio other than 2 to 1, or an employee deposit rate other than 7%, additional <br />proposed plans will be shown with a higher matching ratio or a higher employee deposit rate, as well as <br />Updated Service Credit. These plans will also include the optional provisions of Senate Bill 505 if the City <br />has not previously adopted these provisions. <br /> <br />Section II {Proposed Plans "A" through "C"} <br /> <br />The City also has the option to adopt increases in the monthly annuities being paid to retirees. Most cities adopt <br />annuity increases each year along with the Updated Service Credit. The increase that can be granted to retirees is <br />calculated based on a maximum of 70% of the change in the Consumer Price Index {CPI-U}, less any previously <br />granted increases. The change in the CPI is measured from the December preceding the individual's actual retirement <br />date through December 2002. Proposed Plans "A" through "C'" indicate the cost of the various levels of annuity <br />increases. The rate shown under one of these proposed plans must be added to the rate of a Proposed Plan in Section <br />I to yield the City's total contribution rate. <br /> <br />The City can adopt Updated Service Credit and Annuity Increases by adoption of an ordinance each year, or by <br />adopting the annually repeating provision whereby the City is not required to adopt an ordinance each year. By <br />adopting Updated Service Credit and Annuity Increases regularly, the City will be providing a retirement program that <br />keeps benefits in line with increases in employees' salaries, in addition to protecting retirees' monthly retirement <br />annuities for the effects of inflation. <br />
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