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2201 "'1 "'hurl i Hll�aamlh II°Ince, �� dte 150 1 (800) 822 ��� �4����u <br />July 14, 2022 <br />Mr. Bob Rast <br />144 N. Main St., Box 300 <br />Paris, TX 75460-2652 <br />Re: Freezing the Firefighter's Relief & Retirement Fund <br />Dear Bob, <br />This letter contains actuarial estimates of the Unfunded Actuarial Accrued Liability (UAAL) assuming the <br />plan is frozen effective June 30, 2022 based on the draft amendment provided by ERISA counsel and <br />replaces the results provided May 16, 2022. These estimates are part of the Board's considerations <br />regarding the potential transition of the Paris Firefighters from the existing Texas Local Firefighters <br />Retirement Act (TLFFRA) Fund to the Texas Municipal Retirement System (TMRS). However, there are <br />other legal and administrative issues that the Board will need to consider that are beyond the scope of the <br />actuarial information contained herein. <br />Current Situation <br />Paris firefighters currently contribute 16% of pay and accrue benefits in the Paris Firefighter's Relief & <br />Retirement Fund ("Fund"). The Fund has a number of challenges including low funded status, high <br />member contributions, and relatively low benefits compared to other TLFFRA Funds. <br />City of Paris Strategy <br />Based on discussions with the City of Paris management, they are aware of the situation. Rather than <br />funnel a considerable amount of money into the Fund and continue with the separate TLFFRA Fund, the <br />City wants to work with the Board and its members to freeze the benefits in the existing Fund, and <br />transition future benefits to the Texas Municipal Retirement System (TMRS) where other City employees <br />earn their retirement benefits. That is, the retirement benefit in the Fund would be frozen at current levels <br />for active members and future retirement benefits would begin to be earned in TMRS. <br />Since member contributions would cease, the City will be responsible for the existing Unfunded Actuarial <br />Accrued Liability (UAAL). The City intends to improve the funded status by issuing a pension obligation <br />bond and depositing the proceeds into the Fund's trust. We estimated the June 30, 2022 UAAL at <br />several discount rates. <br />6/30/2022 7.25% 6.75% <br />AAL .� $15,500,000 $16 300,000 <br />MVA $4,150,000 $4,150,000 <br />i <br />UAAL i $11,3501000 $12,150,000 <br />