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CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2023 IV. Detailed Notes on All Activities and Funds (Continued) F. Employee Retirement Systems and Plans (Continued) 1. Texas Municipal Retirement System (Continued) Contributions Active member contribution rates are adopted by the City and may be either 5%, 6%, or 7% of an employee's total compensation. The City's contribution rate is determined annually by TMRS using the Entry Age Normal actuarial cost method based on the liabilities created from the City's benefit options and any changes in benefits or actual experience over time. The City's contribution rate consists of the normal cost contribution rate and the prior service contribution rate, which is calculated as a level percent of the City's reported payroll. 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 6.45% and 4.59% in calendar years 2022 and 2023, respectively. The City's contributions to TMRS for the year ended September 30, 2023, were $947,941 and were equal to the required contributions. Net Pension Liabiliv�, The City's Net Pension Liability was measured as of December 31, 2022, and the Total Pension Liability (TPL) used to calculate the Net Pension Liability was determined by an actuarial valuation as of that date. Actuarial Assumlitions The Total Pension Liability in the December 31, 2022, 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 primarily 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. 51