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HomeMy WebLinkAboutO-1993-1875-IORDINANCE N0. a~01~' ~~5~~ AN ORDINANCE AMENDING ORDINANCE 1875, AN ORDINANCE AUTHORIZING AND ALLOWING, UNDER THE ACT GOVERNING THE TEXAS MUNICIPAL RETIREMENT SYSTEM, "UPDATED SERVICE CREDITS" IN SAID SYSTEM FOR SERVICE PERFORMED BY QUALIFYING MEMBERS OF SUCH SYSTEM WHO PRESENTLY ARE IN THE EMPLOYMENT OF THE CITY OF LA PORTE; PROVIDING FOR INCREASED ANNUITIES FOR RETIREES OF THE CITY OF THE CITY OF LA PORTE; FINDING COMPLIANCE WITH THE OPEN MEETINGS LAW; AND PROVIDING AN EFFECTIVE DATE HEREOF. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LA PORTE: (a) On the terms and conditions set out in Sections 853.401 through 853.403 of Subtitle G of Title 8, V.T.C.A., Govemment Code, as amended (hereinafter referred to as the 'TMRS Act"), each member of the Texas Municipal Retirement System (hereinafter referred to as the "System") who has current service credit or prior service credit in the System in force and effect on the 1st day of January of the calendar year preceding such allowance, by reason of service in the employment of the City, and on such date has at least 36 months of credited service with the System, shall be and is hereby allowed "Updated Service Credit" (as that term is defined in subsection (d) of Section 853.402 of said title) in an amount that is 100% 'of the "base Updated Service Credit" of the member (calculated as provided in subsection (c) of Section 853.402 of said title). The Updated Service Credit hereby allowed shall replace any Updated Service Credit, prior service credit, special prior service credit, or antecedent service credit previously authorized for part of the same service. (b) On the terms and conditions set out in Section 853.601 of said title, any member of the System who is eligible for Updated Service Credits on the basis of service with this City, and who has unforfeited credit for prior service and/or current service with another participating municipality or municipalities by reason of previous service, and was a contributing member on the 1st day of January of the calendar year preceding such allowance, shall be credited with Updated Service Credits pursuant to, calculated in accordance with, and subject to adjustment as set forth in said 853.601. (c) In accordance with the provisions of subsection (d) of Section 853.401 of said title, the deposits required to be made to the System by employees of the several participating departments on account of current service shall be calculated from and after the date aforesaid on the full amount of such person's earnings as an employee of the City. (a) On terms and conditions set out in Section 854.203 of Subtitle G of Title 8, V.T.C.A., Govemment Code, as amended, the City hereby elects to allow and to provide for payment of the increases below stated in monthly benefits payable by the System to retired employees and to beneficiaries of deceased employees of this City under current service annuities and prior service annuities arising from service by such employees to this City. An annuity increased under this Section replaces any annuity or increased annuity previously granted to the same person. (b) The amount of annuity increase under this Section is computed as the sum of the prior and current service annuities on the effective date of retirement of the person on whose service the annuities are based, multiplied by ZS2°ln of the percentage change in Consumer Price Index for All Urban Consumers, from December of the year immediately preceding the effective date of the person's retirement to the December that is 13 months before the effective date of this ordinance. i • ORDINANCE NO. PAGE 2 (c) An increase in an annuity that was reduced because of an option selection is reducible in the same proportion and in the same manner that the original annuity was reduced. (d) If a computation hereunder does not result in an. increase in the amount of an annuity, the amount of the annuity will not be changed hereby. , (e) The amount by which an increase under this Section exceeds all previously granted increases to an annuitant is an obligation of this City and of its account in the municipality accumulation fund of the System. Section 3_ The City Council finds, determines, recites and declares that a sufficient written notice of the date, 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 ordinance 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 Subject to approval by the Board of Trustees of Texas Municipal Retirement System, the updated service credits and increases in retirement annuities granted hereby shall be and become effective on the 1st day of January 2002. PASSED AND APPROVED, this the 10~' day of December, 2001. ATTEST: Martha Gillett City Secretary APPR D: ~ CITY OF LA PORTE B N rman L. Malone, Mayor Knox W. Askins City Attorney • • ~QM, AEJ~ ~~ y f ~utnx'~ UPDATED SERVICE CREDIT AND ANNUITY INCREASE STUDY EXPLANATION OF PLANS TMRS member cities have the opportunity to annually adopt Updated Service Credit and Annuity Increases, improving retirement benefits for both active employees and retirees who are currently receiving a monthly retirement benefit from the System. Section I If the City adopts 100% Updated Service Credit effective January 1, 2002, a member's updated service credit will be calculated based on the member's average monthly salary for the three- ear eriod f 1998 1999 and 2000, assuming the member had always earned that average salary an made contributions to the System, matched by the City on the basis of the three-year average salary, and had earned 3% annual interest. In other words, a member's retirement benefits are "updated" based on the wages earned in recent years (granted a credit if the updated service credit calculation is greater than the actual amount from all sources in the member's account). In addition, if the City has increased the employee deposit rate and/or the City's matching ratio, the new Updated Service Credit will reflect those changes. If the City adopts Updated Service Credit of less than 100%, the percentage adopted will be used in calculating the member's credit. The "Proposed Plans" on the Updated Service Credit and Annuity Increase Study (Section I) are prepared as follows: 1. The first plan includes Updated Service Credit, along with the Senate Bill 505 provisions if the City has not previously adopted these provisions. If your City has adopted the Annually Repeating Updated Service Credit and Annuity Increases, this plan indicates the separate cost of the update. 2. If your City has a matching ratio other than 2 to 1, or an employee deposit rate other than 7%, additional proposed plans will be shown with a higher matching ratio or a higher employee deposit rate, as well as Updated Service Credit. These plans will also include the optional provisions of Senate Bill 505 if the City has not previously adopted these provisions. 3. If your City requested any specific plans, these plans will also be shown. Section II The City also has the option to adopt increases in the monthly annuities being paid to retirees. Most cities adopt annuity increases each year along with the Updated Service Credit. The increase that can be granted to retirees is calculated based on a maximum of 70% of the change in the Consumer Price Index (CPI-U), less any previously granted increases. The change in the CPI is measured from the December preceding the individual's actual retirement date through December 2000. Proposed Plans "A" through "C" (Section II) indicate the cost of the various levels of annuity increases. The rate shown under one of these proposed plans must be added to the rate of a Proposed Plan in Section I to yield the City's total contribution rate. The City can adopt Updated Service Credit and Annuity Increases by adoption of an ordinance each year, or by adopting the annually repeating provision whereby the City is not required to adopt an ordinance each year. By adopting Updated Service Credit and Annuity Increases regularly, the City will be providing a retirement program that keeps benefits in line with increases in employees' salaries, in addition to protecting retirees' monthly retirement annuities for the effects of inflation.