Title
Consider/Discuss/Act on an Ordinance Electing for the City of McKinney to Make Current Service and Prior Service Contributions to the City’s Account in the Municipal Accumulation Fund of the Texas Municipal Retirement System
Summary
MEETING DATE: December 6, 2011
DEPARTMENT: Human Resources
CONTACT: Tadd Phillips, Director
RECOMMENDED CITY COUNCIL ACTION:
• Approve Ordinance
ITEM SUMMARY:
• This ordinance will allow the City to continue to properly fund TMRS benefits for City employees.
• This ordinance will have no effect on City employee benefits.
• An existing ordinance sets maximum contribution rate of 13.50% of salaries for eligible employees. That number is less than is actuarially required to fund current and future benefits starting in 2012.
• This ordinance will set the maximum contribution rate to 15.50% of salaries for eligible employees. This number is a “ceiling” for future year contribution rates. The 2012 contribution rate is below that “ceiling.”
• Actual 2012 City of McKinney TMRS contribution phase-in rate is 13.97% of salaries for eligible employees. That rate is based on actuarial analysis that considers costs of employee benefits payable from, or chargeable to, the City. This rate is included in the currently approved City budget.
BACKGROUND INFORMATION:
• All 10 of our comparison cities participate in TMRS. Participation in TMRS is a useful recruitment and retention tool.
• McKinney’s full rate is 14.84%, a comparable rate to that of our ten comparison cities (average 14.47%).
• TMRS system-wide funded ratio was 83% as of December 31, 2010. Current contribution rates, phasing, investment strategy, and actuarial assumptions are driving that ratio in a positive direction.
FINANCIAL SUMMARY:
• This ordinance has no direct financial impact. The 2012 TMRS contribution rate is included in the currently approved City budget.
BOARD OR COMMISSION RECOMMENDATION: N/A