25.1 - ACFR 9-30-2022 with Continuing Disclosure Tables

Home Browse Search

CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2022 IV. Detailed Notes on All Activities and Funds (Continued) F. Employee Retirement Systems and Plans (Continued) 1. Texas Municipal Retirement System (Continued) Contributions The contribution rates for employees in TMRS are either 5%, 6%, or 7% of an employee's gross earnings, and the City matching percentages are either 100%, 150%, or 200%, both as adopted by the governing body of the City. Under the state law governing TMRS, the contribution rate for each city is determined annually by the actuary, using the Entry Age Normal (EAN) actuarial cost method. The actuarially determined rate is the estimated amount necessary to finance the cost of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. Employees for the City were required to contribute 7% of their annual gross earnings during the fiscal year. The contribution rates for the City were 6.78% and 6.45% in calendar years 2021 and 2022, respectively. The City's contributions to TMRS for the year ended September 30, 2022, were $972,171 and were equal to the required contributions. Net Pension Liability The City's Net Pension Liability was measured as of December 31, 2021, and the Total Pension Liability (TPL) used to calculate the Net Pension Liability was determined by an actuarial valuation as of that date. Actuarial Assumptions The Total Pension Liability in the December 31, 2021, actuarial valuation was determined using the following actuarial assumptions: Inflation 2.5% per year Overall Payroll Growth 3.5% to 11.5%, including inflation Investment Rate of Return 6.75% Salary increases were based on a service -related table. For calculating the actuarial liability and the retirement contribution rates, the gender -distinct 2019 Municipal Retirees of Texas mortality tables are used. The rates are projected on a fully generational basis by scale UMP to account for future mortality improvements. Based on the size of the city, rates are multiplied by an additional factor of 100%. For disabled annuitants, the mortality tables for healthy retirees are used with a 4 -year set -forward for males and a 3 -year set -forward for females. In addition, a 3.5% and 3% minimum mortality rate is applied to reflect the impairment for younger members who become disabled for males and females, respectively. The rates are projected on a fully generational basis by scale UMP to account for future mortality improvements subject to the floor. The actuarial assumptions were developed from the actuarial investigation of the experience of TMRS over the four year period from December 31, 2014 to December 31, 2018. They were adopted in 2019 and first used in the December 31, 2019 valuation. 50