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e . TEXAS MUNICIPlll RETIREMENT SYSTEM 1200 NORTH It'-JTERSTATE 35 POST OFFICE BOX 2225 AUSTIN. TEXAS 78768 July 20,1992 AC 512'476-7577 Mr. Louis Rigby Ii uman Resources ~~anager Ci ty of LaPorte P. O. Box 1115 LaPorte, Texas 77572 Dear Louis: The Updated Service Credit and Annuity Increases study for the City has been completed. Enclosed you will find the specifications used in computing the retirement and annuity increase estimates and in calculating the City's contribution rate under the proposed plans of Updated Service Credit and Annuity Increases. Also, we have enclosed benefit estimates for both active employees and retirees under the various proposed plans. In looking at the various proposed plans, you will note that under Plan 1, the City can adopt 100% Updated Service Credit, including the Updated Service Credit for 21 transfer member(s) with unforfeited credit in other TMRS member cities. In addition, the City could adopt Plan A under Annuity Increases, which would grant each retiree an increase equal to 70% of the change in the Consumer Price Index, less previously granted increases. If the benefits of Plan 1 (Updated Service Credit) and Plan A (Annuity Increases) are adopted, the City's 1993 contribution rate will be 8.77% - which is less than the City's 1992 rate under the present plan; this is due to a new 25 year period in which to amortize the additional cost. The majority of TMRS member cities have been adopting Updated Service Credits/Annuity Increases on an annual basis, and recent amendments to the T~\RS Act will allow TMRS cities, beginning effective January 1, 1992, to adopt an ordinance which will provide for annual repeating calculations of Updated Service Credits/Annuity Increases. By adopting this ordinance, the City will not have to adopt an ordinance each year to re-authorize calculations of these benefits, and the Updated Service Credit/Annuity Increase will remain in effect for future years until such time as it is discontinued by an ordinance adopted by the City Council, the City adopts a change in either the employee contribution rate or City matching ratio, or the City is not able to fund its retirement obligations over a 2.5-year period. We feel sure that your City will want to adopt the annual repeating calculation of Updated Service Credits/ Annuity Increases, and we will be sending you a model ordinance in the near future. Should you have any questions regarding the study, please feel free to contact our office. We look forward to working with you in providing increased retirement benefits for your employees and retirees. Sincerely, Eric W. Davis Coordinator, \lember Relations EWd/pjh Enclosures