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CITY OF PARIS, TEXAS Notes to Financial Statements (Continued) September 30, 2025 IV. Detailed Notes on All Activities and Funis (Continued) F. Employee Retirement Systems and Pians (Continued) 1. Texas Municipal Retirement System (Continued) Prior service credit is a monetary credit that a city may grant to eligible employees when the City joins TMRS. The credit is used in calculating the employee's retirement benefit and is based on compensation they earned while working for the City before the City joined TMRS. Current service credit is a monetary credit for service performed by a member after a city joins TMRS and is based on a city's matching ratio (100%, 150%, or 200%) of the member's total contributions and interest. A change in a city's matching ratio is applied prospectively. Update service credit (USC) is a monetary credit a city may grant to active members. The USC calculation is performed annually on a member's account and may grant supplemental financial credits. The USC calculation considers a member's salary history and the City's plan changes and may increase the value of a member's benefit at retirement. The plan provisions are adopted by the governing body of the City, within the options available in the state statutes governing TMRS. Plan provisions for the City were as follows: Plan Year 2024 Employee Deposit Rate 7% Matching Ratio (City to Employee) 2 to 1 Years Required for Vesting 5 Years Retirement Eligibility (Age/Service) 60/5,0/20 Updated Service Credit 0% Retiree Cost of Living Adjustment 0% of CPI Employees Covered by„Beneft Terms. At the December 31, 2024, valuation and measurement date, the following employees were covered by the benefit terms: Inactive Employees or Beneficiaries Currently Receiving Benefits 251 Inactive Employees Entitled to but not yet Receiving Benefits 195 Active Employees 299 Total 745 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 withholds the member's contribution from wages on a pre-tax basis and sends it to TMRS monthly. The City's contribution rate is determined annually using the Entry Age Normal actuarial cost method that develops the annual cost of the City's retirement plan in two parts: that attributable to benefits accruing in the current year, known as the normal cost, and that attributable to benefits earned prior to the current year, known as prior service cost. Both are 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 5.36% and 11.14% in calendar years 2024 and 2025, respectively. The City's contributions to TMRS for the year ended September 30, 2025, were $1,918,317 and were equal to the required contributions. 52