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CITY OF PARIS, TEXAS <br />Notes to Financial Statements (Continued) <br />September 30, 2021 <br />IV. Detailed Notes on All Activities and Funds (Continued) <br />F. Employee Retirement Systems and Plans (Continued) <br />1. Texas Municipal Retirement System (Continued) <br />Benefits Provided <br />TMRS provides retirement, disability, and death benefits. Benefit provisions are adopted by the governing <br />body of the City, within the options available in the state statutes governing TMRS. <br />At retirement, the employee's retirement benefits are calculated based the sum of the employee's <br />contributions, with interest, and the city -financed monetary credits, with interest. Employees may choose to <br />receive their retirement benefit in one of seven payments options. Employees may also choose to receive a <br />portion of their benefit as a lump sum distribution in an amount equal to 12, 24, or 36 monthly payments <br />calculated using the retiree life only option, but this lump sum cannot exceed 75% of the member's <br />contributions and interest. <br />City -financed monetary credits are composed of three sources: prior service credits, current service credits, <br />and updated service credits. Prior service credit is granted when joining TMRS. It includes a montearty <br />credit equal to the accumulated value of the percentage of prior service credit selected by the City (from <br />10% to 1000/6), multipled by an employee's contributions that would have been made, based on the average <br />salary prior to TMRS participation, for the number of months the employee was employed by that city <br />before joining TMRS, accruing 3% annual interest and including the matching ratio adopted by the City. <br />Current service credit is a monetary credit for service performed by an employee and is based on a percent <br />(100%, 150%, or 200%) of the employee's total contributions and interest credits (commonly referred to as <br />the City's Matching Ratio). The City designates the rate of their employee contributions (5%, 6%, or 7% of <br />gross compensation) and interest is credited on contribution balances annually at a guaranteed minimum <br />5% rate. A change in the City's matching ratio is applied prospectively. Updated service credit is an <br />optional monetary credit that the City may grant annually or on an ad hoc or repeating basis, and it may <br />increase an employee's monthly retirement benefit. In calculating the updated service credit, TMRS looks <br />at the changes in the employee's salary over their career and any changes the City has made to its TMRS <br />plan, such as the employee contribution rate or the City's matching ratio. Although the updated service <br />credit may increase the employee's retirement benefit, the updated service credit does not affect the amount <br />of contributions in an employee's account or the amount an employee will receive if they refund. <br />The plan provisions are adopted by the governing body of the City, within the options available in the state <br />statutes governing TMRS. Plan provisions for the City were as follows: <br />Plan Year 2020 <br />Employee Deposits Rate <br />6% <br />Matching Ratio (City to Employee) <br />2 to 1 <br />A Member is Vested After <br />5 Years <br />Service Retirement Eligibility (Expressed <br />As Age/Years of Service) <br />60/5,0/20 <br />Updated Service Credit <br />0% <br />Annuity Increase to (Retirees) <br />0% of CPI <br />43 <br />