1985-09-23 Regular Meeting - Laserfiche WebLink

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+ , r ~ • '. ~, RET,y'F ,v ~ ~~~ .i1 ~~~.~ TEXAS MUNICIPAL RETIREMENT SYSTEM 1200 NORTH INTERSTATE 35, AC 512/476-7577 POST OFFICE BOX 2225 AUSTIN, TEXAS 78768 August 8, 1985 Mr. Richard T. Hare Assistant City Manager City of La Porte P. O. Box 1115 La Porte, Texas 77571 Dear Richard: I am writing as a follow up to your recent letter, regarding probationary periods for new employees, and whether or not new employees should be enrolled in TMRS when they are employed, or upon the completion of their six-month probationary period. As you know, the TMRS Act requires that employees become members of TMRS as a condition of their employment, with the following exceptions: 1) Employees who work less than 1,000 hours per year. 2) Temporary employees. 3) Employees who are 60 years of age or older when employed. In the past, many cities did not consider a person an "employee" until they completed a probationary period, and consequently did not enroll new employees in TMRS until that time. In the case of the City of La Porte, the disadvantages of not enrolling employees during the first six months of employment are as follows: 1) If an employee dies prior to becoming a member of TMRS, no Supplemental Death Benefit (equal to one-year's salary) would be paid to the beneficiary. 2) If an employee became disabled in the line of duty prior to becoming a member of the System, they would not be entitled to receive a monthly disability annuity. If the employee was a member in the System, their monthly disability annuity as a result of aservice-connected injury would be one-half of their monthly salary. 3) If an employee is not a member of TMRS during their first six months of employment, and they receive a pay increase of less than 796 upon completion of their probationary period, they will actually see a decrease in their take home pay because of the required 796 TMRS contribution. Conversely, if new employees are enrolled in TMRS when employed, and begin making TMRS contributions at that time, they would actually see an increase in their take home pay if they receive a pay increase upon completion of their probationary period. From a personnel standpoint, I think it is certainly advantageous and equitable for all employees, regardless of length of employment, to be provided the same benefits, including retirement. If a new employee does not complete the required probationary period, they would be refunded the money they have contributed to TMRS while they were employed by the City. Most member cities of TMRS have discontinued the policy of not enrolling employees in TMRS until they complete a probationary period, and enroll new employees on their date of employment.