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18 - Firefighters Relief & Retirement Fund -Pursue a Pension Bond - Freeze Fire Pension - Transfer Employees to TMRS
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18 - Firefighters Relief & Retirement Fund -Pursue a Pension Bond - Freeze Fire Pension - Transfer Employees to TMRS
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No. 18 <br />1 <br />TO: Mayor, Mayor Pro Tem & City Council <br />FROM: Grayson Path, City Manager <br />Gene Anderson, Finance Director <br />Thomas McMonigle, Fire Chief <br />SUBJECT: PARIS FIREFIGHTERS RELIEF AND RETIREMENT FUND <br />PURSUE A PENSION BOND <br />FREEZE FIRE PENSION <br />TRANSFER EMPLOYEES TO TMRS <br />DATE: June 13, 2022 <br />BACKGROUND: <br />The City of Paris provides two separate retirement programs for its employees: 1) Texas Municipal <br />Retirement System (TMRS) for non -fire department personnel, and 2) Paris Firefighters' Relief <br />and Retirement Fund ("Pension") for fire department personnel. The Pension was created circa <br />1941, is regulated under the Texas Local Fire Fighters Retirement Act (TLFFRA), and is managed <br />by a local Board of Trustees. <br />In August 2020, it was brought to my attention that an article appeared in a Dallas newspaper <br />discussing the various TLFFRA funds throughout the state and their individual funded status. <br />According to this article, the Paris Pension was the least funded TLFFRA fund in the state of <br />Texas. It stated that we were 30% funded, but many of our sister cities were not much better. The <br />main point of the article was that this is an issue that cities all over the state were facing and very <br />few of those cities had found a way to address the problem. It is a growing problem for both the <br />employees served by the pension as well as the taxpayers responsible for funding it. <br />Having been spurred by the information in the article, I began investigating our Pension. Through <br />this process, I learned that our Pension would become "fully funded" in approximately 30 years <br />under our current contribution and payout formula. I also learned that this has been the expectation <br />for the previous approximately 40 years. In other words, changes in legislation, the economy, and <br />the benefit payout itself have all acted to make the "fully funded" goal a moving goal post. This <br />situation carries the ever present danger that the fund could eventually run out and/or be so far <br />behind that any hope of catching up would become highly improbable. Each of us have heard of <br />
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