File #: RES 21-201    Version: 1 Name:
Type: Resolution Status: Agenda Ready
File created: 7/13/2021 In control: City Council Workshop
On agenda: 9/21/2021 Final action:
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 14.10% for 2022 instead of 13.58% in order to prefund the City's Unfunded Actuarial Accrued Liability.
Attachments: 1. Resolution - TMRS Rate (FY20-21), 2. TMRS prefunding, 3. TMRS - Rate Letter FY20-21, 4. TMRS - Rate Letter FY19-20
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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 14.10% for 2022 instead of 13.58% in order to prefund 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 percent while the rate for 2022 is 13.70%. City staff are again recommending the rate be maintained at 14.10 percent to prefund the City’s Unfunded Actuarial Accrued Liability (UAAL) for future savings.  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%

 

 Fiscal/Budgetary Impact: 

The proposed FY 2021-2022 Budget maintains the current funding for the 14.10% contribution.

Recommended action

Approve the resolution.