C.A.F.R., FY 2019-20 with continuing disclosure tables

Home Browse Search

CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2020 IV. Detailed Notes on All Activities and Funds (Continued) F. Employee Retirement Systems and Plans (Continued) 1. Texas Municipal Retirement System (Continued) Benefits Provided TMRS provides retirement, disability, and death benefits. Benefit provisions are adopted by the governing body of the City, within the options available in the state statutes governing TMRS. At retirement, the benefit is calculated as if the sum of the employee's contributions, with interest, and the city -financed monetary credits with interest were used to purchase an annuity. Members may choose to receive their retirement benefit in one of seven payments options. Members may also choose to receive a portion of their benefit as a Partial Lump Sum Distribution in an amount equal to 12, 24, or 36 monthly payments, which cannot exceed 75% of the member's deposits and interest. Upon retirement, benefits depend on the sum of the employee's contributions, with interest, and the City - financed monetary credits, with interest. City -financed monetary credits are composed of three sources: prior service credits, current service credits, and updated service credits. At the inception of the plan, the City granted monetary credits for service rendered before the plan began (or prior service credits) of a theoretical amount at least equal to two times what would have been contributed by the employee, with interest, prior to establishment of the plan. Monetary credits for service since the plan began (or current service credits) are 150% of the employee's accumulated contributions. In addition, the City can grant, either annually or on an annually repeating basis, another type of monetary credit referred to as Updated Service Credit. This monetary credit is determined by hypothetically recomputing the member's account balance by assuming that the current member deposit rate of the City has always been in effect. The computation also assumes that the member's salary has always been the member's average salary — using a salary calculation based on the 36 -month period ending a year before the effective date of calculation. This hypothetical account balance is increased by 3% each year, not the actual interest credited to member accounts in previous years, and increased by the City match currently in effect. The resulting sum is then compared to the member's actual account balance increased by the actual City match and actual interest credited. If the hypothetical calculation exceeds the actual calculation, the member is granted a monetary credit (or Updated Service Credit) equal to the difference between the hypothetical calculation and the actual calculation times the percentage adopted. At retirement, the benefit is calculated as if the sum of the employee's contributions, with interest, and the City -financed monetary credits, with interest, were used to purchase an annuity. The plan provisions are adopted by the governing body of the City, within the options available in the state statutes governing TMRS. Plan provisions for the City were as follows: Plan Year 2020 Employee Deposits Rate 6% Matching Ratio (City to Employee) 2 to 1 A Member is Vested After 5 Years Service Retirement Eligibility (Expressed As Age/Years of Service) 60/5,0/20 Updated Service Credit 0% Annuity Increase to (Retirees) 0% of CPI 42