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A0~41NISTRAT[ON: (512) 476-7577 ORTOU.-FREE (877) 634-8595 · FAX: (512) 476-2903 HEt4BER SERVICES: TOLL-FRE~ (800) g24-8677 · FAX: (512) 476-5576 / -/ May 25, 2001 Mr. W. E. Anderson Director of Finance City of Paris P.O. Box 9037 Paris, Texas 75461-9037 RE: 2002 MUNICIPAL CONTRIBUTION RATE AND UPDATED SERVICE CREDIT STUDY Dear Gene: Based on the plan of benefits in effect January 1, 2001, the City's Municipal Contribution Rate that will become effective January 1,2002,'will be: Normal Cost: 6.79% Prior Service: 2.80% Retirement Cost: 9.59% Supplemental Death: 0.27% Total Rate: 9.86% The 2002 municipal contribution rate includes recent changes adopted by the Texas Legislature, including 5-Year Vesting, the cost of which is shown in the tables below. Your City will automatically be covered by 5-Year Vesting unless an ordinance is adopted prior to December 31,2001, declining this benefit. Five-Year Vesting brings TMRS in line with the other public retirement systems in Texas, as well as public plans in other states. The following data provides a detailed statement of changes in the retirement portion of the City's contribution rate. This analysis breaks down the change in the retirement portion of the City contribution rate from 2001 to 2002. This data does not reflect any change in the cost of the Supplemental Death Benefit, if adopted by the City. Any changes in the cost of the Supplemental Death Benefit are a function of the average age of the City's employee group, and the number of covered retirees. Chan in the Normal CoSt contribution rate: Change due to termination of status as a contributing member: 0.18 Change in service and salary characteristics of contributing members: -0.33 Change due to increased age of contributing members: 0.43 Change due to phasing in cost from actuarial assumption changes: 0.00 '~ha~ge due to other factors: 0.01 Total Change in Normal Cost included in above rate: 0.36 the Prior Service contribution rate: Change due to adoption of annually repeating Updated Service Credits and Annuity Increases: 0.14 Change due to payroll experience: -0.05 Change due to actuarial gains, inconsistent contributions, or other actuarial factors: 0.06 Change due to phasing in cost from actuarial assumption changes: 0.00 Change due to affect of Statutory Maximum and/or conservative funding: 0.00 ~'t~i-change in Prior Service included in above rate: 0.16