HomeMy WebLinkAboutO-2001-2522
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ORDINANCE NO. 2001-~S,,;J-
AN ORDINANCE ELECTING TO NOT PROVIDE FIVE-YEAR VESTING FOR
EMPLOYEES OF THE CITY OF LA PORTE WHO ARE MEMBERS OF THE TEXAS
MUNICIPAL RETIREMENT SYSTEM, RESERVING THE RIGHT TO REVOKE THIS
ELECTION, FINDING COMPLIANCE WITH THE OPEN MEETINGS LAW, AND
PROVIDING AN EFFECTIVE DATE HEREOF.
WHEREAS, the City of La Porte has elected to participate in
the Texas Municipal Retirement System (the "System") pursuant to
the provisions of Subtitle G of the Government Code, as amended
(the "TMRS Act"); and
WHEREAS, Section 854.205 of the TMRS Act, as amended effective
September 1, 2001, provides that unless a participating
municipality's governing board files with the Board of Trustees of
the System before December 31, 2001, an election to not provide
five-year vesting for its employees who are members of the System,
such employees may, if they have at least five years of credited
service with cities that do provide five-year vesting, terminate
covered employment and remain eligible to retire and receive a
service retirement annuity when they have attained an applicable
retirement age as provided by law; and
WHEREAS, the City Council of the City of La Porte finds that
it will be in the public interest to elect not to provide for such
five-year vesting;
NOW THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF LA PORTEs
Section 1. The City Council of the City of La Porte elects
not to provide five-year vesting under Section 854.205 of the TMRS
Act, and the City Secretary of the City of La Porte is hereby
authorized and directed to file notice of this election with the
Board of Trustees of the System before December 31, 2001.
Section 2. Pursuant to Section 854.205 of the TMRS Act, the
City Council of the City of La Porte reserves the right to revoke
the election created by this Ordinance, by sending notice to the
Board of Trustees of the System to provide for five-year vesting.
Section 3. The City Council officially finds, determines,
recites, and declares that a sufficient written notice of the date,
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hour, place and subject of this meeting of the City Council was
posted at a place convenient to the public at the City Hall of the
City for the time required by law preceding this meeting, as
required by the Open Meetings Law, Chapter 551, Texas Government
Code; and that this meeting has been open to the public as required
by law at all times during which this resolution and the subject
matter thereof has been discussed, considered and formally acted
upon. The City Council further ratifies, approves and confirms
such written notice and the contents and posting thereof.
Section 4. This Ordinance shall be effective from and after
its passage and approval.
PASSED AND APPROVED this 22nd day of October, 2001.
~ITY F LA PORTE
By' 1.~/ AA L
. N mIK('%~~, Mayor
ATTEST:
~1iAf:h, (j.~
Mar ha A. Gille t
City Secretary
OwuJ
Knox W. Askins
City Attorney
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APPROVED:
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REQUEST FOR CITY COUNCIL AGENDA ITEM
Agenda Date Requ....d: ~n1..~. 2001
Requested By: Carnl Buttler ~
Department: A dmiailltntiyc S~n'iC~ll
Allpropriation
Source of Funds:
Account Number:
Report:
Resolution:
Ordinance: X
Amount Budgeted:
Exhibits:
Attached Ordinance
Amount Requested:
Exhibits:
Correspondence from TML-IRP
Budgeted Item: YES NO
Exhibits:
SUMMARY & RECOMMENDATION
The Governor signed Senate Bill 522 to become effective January 1, 2002, which makes several
changes to Texas Municipal Retirement System (TMRS) benefits.. One of the benefits the new
legislation provides is an option to change 10-year vesting to 5-year vesting. Aily participating
TMRS city that prefers to keep 10-year vesting must approve an ordinance, between
September 1, 2001, and December 31, 2001, opting out of the 5-year vesting.
Any city that opts out of the 5-year' vesting may reconsider this benefit at a future date.
However, once 5-year vesting is selected, this benefit may not be revoked.
Recommendation
Staff recommends the City opt out of 5-year vesting, at this time, reservIng the right to
reconsider this benefit at a future date.
Action Reauired bv Council: '
Approve the attached Ordinance, opting out of the 5-year vesting, reserving the right to
reconsider at a future date.
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TML Board Communication
INl'ERGOVERNMENTAL RISK POOL
October 13, 2001
Continuation of 10 Year Ves.ting with TMRS
Senate Bill 522, amending the Texas Municipal Retirement Act, passed both houses of
the Texas legislature and has' been signed into law by Governor Perry. This bill makes
numerous changes to the Texas Municipal Retirement System. Among the major
amendments are provisions for a five year vesting alternative to the existing ten year
vesting requirement. The five year option means that after five years of service a TMRS
member will have earned the right, upon termination of employment, to choose to leave .
the member's deposits and interest in TMRS, and, upon reaching age 60, apply for
retirement. The provisions ofSB 522 take effect January 1,2002.
Participating members of TMRS have from September I, 200 I, through December 31,
2001, to opt out of this new five-year vesting provision. The Texas Municipal League
and the Texas Municipal League Intergovernmental Employee Benefits Pool have chosen
to opt out of this provision and remain at 10-year vesting. It is recommended that the
Pool opt out of the five year vesting provision. The 10-year vesting schedule has
benefited the Pool in retaining qualified staff. The five year option increases the
likelihood of losing skilled staff since employees would be eligible to leave the Pool after
only five years of service and retain their earned retirement bene~t.
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The cost for the current year,to incorporate the five year vesting is minimal (0.14%). But
this cost is expected to grow as wi ever-increasing number of employees reach the five
year vesting mark and become eligible to receive credit for the Pool's matching
contributions.
Recommendation: The Pool continue the 10-year vesting requirement that is ,currently
in place. Further, the attached resolution be adopted to comply with the State law
requirement that members opt out of the five year vesting provisions between September
1,2001, and December 31, 2001.'
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'/ Allan J. Romer
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JR. Marv' Townsend