18 - Firefighters Relief & Retirement Fund -Pursue a Pension Bond - Freeze Fire Pension - Transfer Employees to TMRS

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of the Pension. If managed correctly, this funding would serve the life of the Pension and, in time, when the last existing beneficiary passes away, the Pension would cease to exist. For existing employees, when they retire, they would have a Pension account and a TMRS account. The two combined should equate to something greater than what the current Pension would pay. In the meantime, the employee will keep more of their paycheck (16% - 7% = 9%), which they could, in turn, invest in a private retirement on the side (the city would not contribute towards that). It must also be noted that the City of Paris maintains a State of Texas Section 218 Agreement (with some amendments) for Social Security payments. This agreement from 1956 (with amendments in 1965 and 1983) brought in all employees in to Social Security, excluding "emergency services", "elective positions", and "fee basis positions". It should be noted that "police" was added in 1965 while other emergency services remained excluded and EMS did not start until later, but they were brought straight in to Social Security. To the point, the Fire Department is currently excluded from Social Security. We are currently seeking legal confirmation, but it is our understanding at this time that whatever is done to the Fire Pension in this process has no bearing on whether or not the City and employee contributes to Social Security, until this agreement is ever amended. At this time, we are not recommending this. If that were to occur, then the employee and City would have to contribute the social security rate. The Board of Trustees' actuary has opined that an approximate amount of $12 million will be needed in a bond to fund the Pension. He has also determined that the TMRS retirement benefit is more advantageous than the Pension retirement benefit for the employee. Unfortunately, TMRS is not as direct and simple as a $94 multiplied by your number of years of service, per month, calculation, so we cannot predict the final benefit for individual employees. We have, however, created test cases which reasonably show that employees should have a greater return on investment if converted to TMRS. TMRS has made it plain that they will not touch the Pension itself; the Pension will forever be the responsibility of the city and Board of Trustees. They, however, will onboard all the fire department employees as if they were brand new employees in any other department. They would be starting with a zero balance in their TMRS account, but that would grow with their contributions. Their benefit would also be commensurate to their pay. The more they make, the greater their retirement benefit will be. With the revamped pay schedule and a move to TMRS, the desire to make a career with the City of Paris Fire Department and even to promote to a higher rank should be more financially appealing than it was two years ago. Along with the city's financial advisor and bond counsel, we are working out the needed steps to issue a 20 year pension bond under state law. As a disclaimer, we can find no other precedent of other communities having 1) taken out a pension bond, while simultaneously: 2) freezing their fire pension, and 3) moving their employees to TMRS, so we have reached out to the Attorney General to see if there are any additional steps they are going to ask of us. Our legal counsel feels quite confident we have a way forward, but until that is ironed out, nothing is a guarantee. In addition, we are working with the Board of Trustee legal counsel regarding pension -specific statutory