2022-060 – Approving an Agreement with the Paris Firefighters’ Relief and Retirement Fund Pertaining to the General Obligation Pension Bonds, Taxable Series 2022

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:] D E F I N I T I 2201 Timberloch Place, Suite 150 1 (800)822-4026 The Woodlands, TX 77380 definiti.com July 14, 2022 Mr. Bob Rast 144 N. Main St., Box 300 Paris, TX 75460-2652 Re: Freezing the Firefighter's Relief& Retirement Fund Dear Bob, This letter contains actuarial estimates of the Unfunded Actuarial Accrued Liability(UAAL)assuming the plan is frozen effective June 30, 2022 based on the draft amendment provided by ERISA counsel and replaces the results provided May 16, 2022. These estimates are part of the Board's considerations regarding the potential transition of the Paris Firefighters from the existing Texas Local Firefighters Retirement Act (TLFFRA) Fund to the Texas Municipal Retirement System (TMRS). However, there are other legal and administrative issues that the Board will need to consider that are beyond the scope of the actuarial information contained herein. Current Situation Paris firefighters currently contribute 16% of pay and accrue benefits in the Paris Firefighter's Relief& Retirement Fund ("Fund"). The Fund has a number of challenges including low funded status, high member contributions, and relatively low benefits compared to other TLFFRA Funds. City of Paris Strategy Based on discussions with the City of Paris management, they are aware of the situation. Rather than funnel a considerable amount of money into the Fund and continue with the separate TLFFRA Fund, the City wants to work with the Board and its members to freeze the benefits in the existing Fund, and transition future benefits to the Texas Municipal Retirement System (TMRS)where other City employees earn their retirement benefits. That is, the retirement benefit in the Fund would be frozen at current levels for active members and future retirement benefits would begin to be earned in TMRS. Since member contributions would cease, the City will be responsible for the existing Unfunded Actuarial Accrued Liability (UAAL). The City intends to improve the funded status by issuing a pension obligation bond and depositing the proceeds into the Fund's trust. We estimated the June 30, 2022 UAAL at several discount rates. 6/30/2022 7.25% 6.75% AAL $15,500,QOQ $16,34Q,Q.00; MVA $4,150,000 $4,150,000 UAAL $11,350,000 $12,150,000