C.A.F.R., FY 2011-12 - Laserfiche WebLink

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City of Paris, Texas Notes to Financial Statements September 30, 2012 V. Other Information (Continued) I. Employee Retirement Systems and Plans (Continued) l. Texas Municipal Retirement System (Continued) Schedule of Fundin� Progress (Continued) During the year 2011, state law changed the fund structure of TMRS and a reserve fund previously not included in the calculation of the funded ratio or calculated contributions was combined with other funds to form one Benefit Accumulation Fund. As allowed by the new law, the Actuarial Valuation as of December 31, 2010 reflects the combination of funds and any other effects of the law. Restructuring TMRS accounts produces a more efficient funding structure that: Reduces year-to-date volatility in city contribution rates. Eliminates the leverage that existed in the former three-fund structure. Reduces the downside risk of adverse investment returns on city accounts. Removes the need to maintain a substantial percentage of assets as a reserve. Results in lower contribution rates for most cities. Improves actuarial funding rations for most cities. TMRS issues a publicly available comprehensive annual fmancial report that includes financial statements and required supplementary information (RSI) for TMRS; the report also provides detailed explanations of the contributions, benefits, and actuarial methods and assumptions used by the system. This report may be obtained from TMRS' website at www.TMRS.com. Su�plemental Death Benefits The City also participates in the cost sharing multiple-employer defined benefit group-term life insurance plan operated by the TMRS known as the Supplemental Death Benefits Fund. The City elected, by ordinance, to provide group-term life insurance coverage to both current and retired employees. The City may terminate coverage under and discontinue participation by adopting an ordinance before November 1 of any year to be effective the following January 1. The death benefit for active employees provides a lump-sum payment approximately equal to the employee's annual salary (calculated based on the employee's actual earnings, for the 12- month period preceding the month of death); retired employees are insured for $7,500; this coverage is an "other postemployment benefit." The City contributes to the Supplemental Death Benefits Fund at a contractually required rate as determined by an annual actuarial valuation. The rate is equal to the cost of providing one-year term life insurance. The funding policy for the program is to assure that adequate resources are available to meet all death benefit payments for the upcoming year; the intent is not to pre-fund retiree term life insurance during employees' entire careers. The City contributed 100% of its required contribution for the last three calendar years at the annual required contribution rate of .08% (2010), .08% (2011), and .07% (2012). 53