C.A.F.R., FY 2005-06 - Laserfiche WebLink

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City of Paris, Texas Notes to Financial Statements September 30, 2006 V. Other Information (Continued G. Postemployment Benefits Other Than Pensions The City has in effect a plan adopted by City Council resolution whereby persons who retire before age sixty-five will be provided health care coverage until they become sixty-five. The City's contributions are financed on a pay-as-you-go basis and for the year ended September 30, 2006, the cost was approximately $118,000 for 35 retired employees. An additional 14 employees were eligible for this benefit. H. Deferred Compensation Plan The City offers its employees two deferred compensation plans created in accordance with Internal Revenue Code Section 457. I. Employee Retirement Systems and Plans The City maintains a non-traditional defined benefit retirement plan for all full-time employees except for firefighters and a single-employer, defined benefit plan for firefighters. 1. Texas Municipal Retirement System Plan Description The City provides pension benefits for all of its full-time employees (except firefighters) through a non-traditional, joint contributory, hybrid defined benefit plan in the state-wide Texas Municipal Retirement System (TMRS), one of 811 currently administered by TMRS, an agent multiple-employer public employee retirement system. Benefits Benefits depend upon the sum of the employee's contributions to the plan with interest, and the City-financed monetary credits with interest. At the date the plan began, the City granted monetary credits for service rendered before the plan began of a theoretical amount at least equal to two times what would have been contributed by the employee with interest, prior to establishment of the plan. Monetary credits for service since the plan began are a percent (150%) of the employee's accumulated contributions. In addition, the City can grant, as often as annually, another type of monetary credit referred to as an updated service credit which is a theoretical amount which, when added to the employee's accumulated contributions and the monetary credits for service since the plan began, would be the total monetary credits and employee contributions accumulated with interest if the current employee contribution rate and City matching percent had always been in existence and if the employee's salary had always been the average of his salary in the last three years that are one year before the effective date. At retirement, the benefit is calculated as if the sum of the employee's accumulated contributions with interest and the employer-fmanced monetary credits with interest were used to purchase an annuity. 48