Title
Consideration of and action on a resolution maintaining the City of Deer Park's contribution rate to the Texas Municipal Retirement System (TMRS) at the obligated 15.52% for 2026 and not prefunding the City's Unfunded Actuarial Accrued Liability.
Body
Summary:
The City's contribution rate to the Municipal Retirement System (TMRS) for our employees' retirement was 14.10 percent for 2019. The actuarially determined contribution rate for 2020 was lowered to 13.78 percent. In 2020, the City proposed maintaining the rate at 14.10 percent in 2020 instead of lowering it to prefund the City's Unfunded Actuarial Accrued Liability (UAAL). Maintaining the contribution rate at 14.10 could potentially save over $1.55 million in future contributions and pay off the UAAL 7 years sooner (20 years vs. 27 years) based on the estimates and assumptions at that time. For 2021, the actuarially determined contribution rate was lowered to 13.58, for 2022 it was 13.70, and for 2023 it was 13.57 percent. For 2024, the actuarially determined contribution rate was adjusted to 14.41 percent. In 2025, the rate was again adjusted to 14.65 percent. Due to rates reaching over 14 percent again, City staff did not recommend prefunding the City's Unfunded Actuarial Accrued Liability (UAAL) in the 2025 fiscal year due to cost. For 2026, the rate has been set at 15.52 percent, a .87 percent increase from the prior fiscal year. For 2026 staff is again not recommending prefunding the City's UAAL due to the high percentage already being paid by the City. The following table shows the proposed vs. the actuarially determined rate for the periods referenced:
Fiscal Year Total Retirement Rate (TMRS) Total Retirement Rate (Budget)
18-19 14.10% 14.10%
19-20 13.78% 14.10%
20-21 13.58% 14.10%
21-22 13.70% 14.10%
22-23 13.57% 14.00%
23-24 14.41% 14.91%
24-25 14.65% 14.65%
25-26 15.52% 15.52%
Fiscal/Budgetary Impac...
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