HomeMy WebLinkAboutO-2008-3117 authorizing the City to impose its own TMRS contribution rate/begin paying 14.71% for TMRS contributions
15
REQUEST FOR CITY COUNCIL AGENDA ITEM
Agenda Date Requested:
September 22.2008
Amount Budl!eted
Requested By: Michael Dolby, CPA Director of Finance
Source of Funds: nla
Account Number:
Department: FINANCE
Amount Budgeted:
nla
Report:
Resolution:
Ordinance: xx
nla
Amount Requested:
Budgeted Item:
nla
YES NO
Exhibits: Letter from TMRS
Exhibits:
Effective January 1, 2009. the City of La Porte will begin paying 14.71 % for TMRS contributions. However,
this rate exceeds the maximum contribution rate a city can pay under state law. Consequently, TMRS
suggested that we adopt an ordinance that would allow us to impose our own "limit" on the contribution rate by
using our own discretion in determining which potential plan improvements to adopt, or not adopt based on the
calculated contribution rate. Furthermore, if we do not take this action by December 31, 2008; our annual cost
of living allowances and updated service credits will be terminated.
Present this evening we have Mr. Antony Mills with TMRS to explain this action and answer any questions
you may have.
Action Reauired bv Council:
pp ve Ordinance authorizing the City to impose its own limit on the TMRS contribution rate.
:J~ ~'i
ORDINANCE NO. 08- 3/ J 7
AN ORDINANCE ELECTING FOR THE CITY OF LAPORTE, TEXAS TO
MAKE CURRENT SERVICE AND PRIOR SERVICE CONTRIBUTIONS TO THE
CITY'S ACCOUNT IN THE MUNICIPAL ACCUMULATION FUND OF THE
TEXAS MUNICIPAL RETIREMENT SYSTEM AT THE ACTUARIALL Y
DETERMINED RATE OF TOTAL EMPLOYEE COMPENSATION.
WHEREAS, the City of La Porte (the "City"), is a participating municipality in the Texas
Municipal Retirement System (the "System"), and has undertaken to provide certain retirement,
death and disability benefits to its employees pursuant to Subtitle G, Title 8, Government Code,
(hereinafter, the "TMRS Act"); and
WHEREAS, the City Council desires to authorize funding of such benefits as herein provided;
now therefore,
BE IT ORDAINED BY THE CITY COUNCIL OF LA PORTE, TEXAS:
Section 1. Pursuant to Section 855.407(g) of the TMRS Act, the City hereby elects to
make future normal and prior service contributions to its account in the municipal accumulation
fund of the System at such combined rate of the total compensation paid by the City to
employees who are members of the System, as the System's actuary shall annually determine
as the rate necessary to fund, within the amortization period determined as applicable to the
City under the TMRS Act, the costs of all benefits which are or may become chargeable to or
are to be paid out of the City's account in said accumulation fund, regardless of other provisions
of the TMRS Act limiting the combined rate of City contributions.
q ~ec;ti~n 2. The ppbvisions of the ordinance shall become effective on the first day of
do{ , 200~.
ATTEST:
APPROVED:
~1/;t(~AkXk;
City Secretary or Clerk
~:v~
Mayor
l~p r -/I~/j
C;-/;J A -/1-0 r VI rJ--:J
7
RS
August 18, 2008
VIAE-MAIL
Mr. Michael Dolby
Assistant Finance Director
City of La Porte
604 West Fairmont Parkway
La Porte, TX 77572
Dear Michael:
We are pleased to enclose a model ordinance for city to:
Remove the statutory maximum contribution rate limit
By adopting this ordinance, your city is agreeing to fully fund the costs of the pension benefits
included in the City's plan.
This ordinance will allow your city to impose its own "limit" on the contribution rate by using its
discretion in determining which potential plan improvements to adopt, or not adopt, based on
the calculated contribution rate. The TMRS actuary will calculate the cost of future adoptions
and valuation studies each year and forward this rate to your City.
With the removal of the statutory rate limit your city's full contribution rate for 2009 will be
19.42% and the phase in rate will be 14.71%.
We would appreciate receiving a copy of this ordinance as soon as possible after adoption.
If you have any questions or need additional assistance, please do not hesitate to contact me at
1-800-924-8677.
~ely,
C~~
Eric W. Davis
Deputy Executive Director
Enclosure
TMRS
P.o. Box 149153
AUSTIN, TExAs 78714-9153
www.TMRS.COM
512.476.7577
Tau-FREE 800.924.8677
FAX 512.476.5576
Plan Provisions
Deposit Rate
Matching Ratio
Updated Service Credit
Transfer USC **
Annuity Increase
Buyback Provision
20 Year/Any Age Ret.
Vesting
Contribution Rates
Normal Cost Rate
Prior Service Rate
Retirement Rate
Supplemental Death Rate
Total Rate
Unfunded Actuarial Liability
Amortization Period
Funded Ratio
Phase-In Total Rate
RS
Prior Methods
7.00%
2 to 1
100% (Repeating)
Yes
70% (Repeating)
No
Yes
10 years
2009
9.90%
3.94%
13.84%
0.20% (A & R)
14.04%
$12,541,455
25 years
79.7%
Plan ChangeStud~
00728 La Porte
PUC I New Assumptions
FOr Informational Purposes Ollly
Effective Date - January 1, 2009
Report Date - August 18, 2008
Proposed Plans
Preliminary
7.00%
2 to 1
100% (Repeating)
Yes
70% (Repeating)
No
Yes
10 years
2009
11.87%
8.15%
20.02%
0.20% (A & R)
20.220/0
$20,474,255
25 years
70.6%
Adjusted
7.00%
2 to 1
100% (Repeating)
Yes
70% (Repeating)
No
Yes
10 years
2009
11.87%
7.35%
19.220/0
0.20% (A & R)
19.42%
$20,474,255
30 years
70.6%
14.71%
1
7.00%
2 to 1
100% (Repeating)
Yes
70% (Repeating)
No
Yes
10 years
2009
11.87%
7.35%
19.22%
0.20% (A & R)
19.42% /
$20,474,255
30 yeats
70.6%
14.710/0 ~
** This is the addition to the Initial Prior Service Rate for USC for transfers. There were 35 eligible transfer employees on the valuation date.