1992-10-26 Regular Meeting - Laserfiche WebLink

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e . CURRENT RETIREMENT BENEFITS The City of La Porte is a member of the Texas Municipal Retirement System (TMRS) and all regular, full time employees contribute 7 % of their gross pay to the system and the City matches that amount 2 to 1. In order for an employee to receive any amount of the City's contribution, they must retire and take a monthly annuity check. Any lump sum distribution pays them only their contributions and interest earned on same. When an employee receives a lump sum distribution, the City's contribution for that employee is rolled back into the City's account and evenly distributed to the remaining employees. The 7 % contribution and the 2 to 1 matching are the maximum allowable under the TMRS Act. The City's contribution for calendar year 1992, is 9.38% of total gross earnings, which is approximately $59,000 per month. The TMRS Act provides for updated service credits, annuity increases, and the buying back of former service. Updated service credits allow retirement benefits to be calculated on the previous three years of the employee's annual salary causing the projected annuity payments to be higher. Employees who have already retired will benefit from the annuity increases in that their annuity payments can be increased up to 70% of the change in the Consumer Price Index (CPI-U), less any previously granted increases. The buy back provision allows any employee with forfeited service (they left a TMRS city and took a lump sum distribution) to buy that forfeited service back, plus interest. The City must pass an ordinance and the employee must have worked for the City at least two years before being eligible for this provision. The last ordinance passed was February 15, 1984. Any employee with forfeited service, hired after that date, would not be eligible unless a new ordinance is passed.