2024-030 - Authorizing (1) Non-Retroactive Repeating COLAs for Retirees and their Beneficiaries under TMRS Act Section 853.404(f) and (f-1) and (2) Annual Accruing Updated Service CreditsORIDINANCE NO. 2024-030
AN ORDINANCE REGARDING THE CITY OF PARIS, TEXAS MUNICIPAL
RETIREMENT SYSTEM BENEFITS AND AUTHORIZING: (1) NON -RETROACTIVE
REPEATING COLAS FOR RETIREES AND THEIR BENEFICIARIES UNDER TMRS
ACT §853.404(f) and (f-1); AND (2) ANNUALLY ACCRUING UPDATED SERVICE
CREDITS.
WHEREAS, the City of Paris, Texas (the "City"), elected to participate in the Texas Municipal
Retirement System (the "System" or "TMRS") pursuant to Subtitle G of Title 8, Texas Government
Code, as amended (which subtitle is referred to as the "TMRS Act"); and
WHEREAS, each person who is or becomes an employee of the City on or after the effective
date of the City's participation in the System in a position that normally requires services of 1,000
hours or more per year ("Employee") shall be a member of the System ("Member") as a condition
of their employment; and
WHEREAS, House Bill 2464, 88th Texas Legislature, R.S., 2023 ("HB 2464"), added
Subsections 853.404(o and (f-1) to the TMRS Act and authorized cities participating in the System
to provide certain retirees and their beneficiaries with an annually accruing ("repeating") annuity
increase (also known as a cost of living adjustment, or "COLA") based on the change in the Consumer
Price Index for All Urban Consumers for the one-year period that ends 12 months before the January
1 effective date of the applicable COLA (a "non -retroactive repeating COLA"); and
WHEREAS, new TMRS Act §853.404(f) and (f-1) allow participating cities to elect to provide
non -retroactive repeating COLAs under certain circumstances, as further described by this
Ordinance, by adopting an ordinance to be effective January 1 of 2024, 2025 or 2026, in accordance
with TMRS Act §854.203 and §853.404; and
WHEREAS, TMRS Act §853.404(f-1) provides the non -retroactive repeating COLA option
applies only to a participating city that, as of January 1, 2023, either (1) has not passed an annually
repeating COLA ordinance under TMRS Act §853.404(c) or had previously passed a repeating COLA
ordinance and then, before January 1, 2023, passed an ordinance rescinding such repeating COLA,
or (2) does provide an annually repeating COLA under §853.404(c) and elects to provide a non -
retroactive repeating COLA under §853.404(f) for purposes of maintaining or increasing the
percentage amount of the COLA; and
WHEREAS, the City Council acknowledges that the City meets the above-described criteria
under §853.404(f-1) and is eligible to elect a non -retroactive repeating COLA under §853.404(f)
and that such election must occur before January 1, 2026, and that after that date future benefit
changes approved by the City may require reversion to a retroactive repeating COLA; and
WHEREAS, the City Council finds that it is in the public interest to: (1) adopt annually
accruing non -retroactive COLAs for retirees and their beneficiaries under TMRS Act §853.404(o
and (f-1); and (2) in accordance with TMRS Act §853.404 and §854.203(h), authorize annually
accruing Updated Service Credits, now:
NOW THEREFORE BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PARIS,
TEXAS:
Section 1. That the findings set out in the preamble to this ordinance are hereby in all things
approved and incorporated herein for all purposes.
Section 2. Adoption of Non -Retroactive Repeating COLAs.
(a) On the terms and conditions set out in TMRS Act §854.203 and §853.404, the City authorizes
and provides for payment of the increases described by this Section to the annuities paid to retired
City Employees and beneficiaries of deceased City retirees (such increases also called COLAs). An
annuity increased under this Section replaces any annuity or increased annuity previously granted
to the same person.
(b) The amount of the annuity increase under this Section is computed in accordance with TMRS
Act §853.404(o as the sum of the prior service and current service annuities, as increased in
subsequent years under TMRS Act §854.203 or TMRS Act §853.404(c), of the person on whose
service the annuities are based on the effective date of the annuity increase, multiplied by 30% of
the percentage change in the Consumer Price Index for All Urban Consumers during the 12 -month
period ending in December of the year that is 13 months before the effective date of the increase
under this Section.
(c) An increase in an annuity that was reduced because of an option selection is reducible in the
same proportion and in the same manner that the original annuity was reduced.
(d) If a computation under this Section does not result in an increase in the amount of an annuity,
the amount of the annuity will not be changed under this Section.
(e) In accordance with TMRS Act §853.404(f-1)(2), an increase under this Section only applies
with respect to an annuity payable to a TMRS Member, or their beneficiary(ies), which annuity is
based on the service of a TMRS Member who retired, or who is deemed to have retired under TMRS
Act §854.003, not later than the last day of December of the year that is 13 months before the
effective date of the increase under this Section.
(0 The amount of an increase under this Section is an obligation of this City and of its account
in the benefit accumulation fund of the System.
(g) The initial increase in annuities authorized by this Section shall be effective on January 1
immediately following the year in which this Ordinance is approved, subject to receipt by the
System prior to such January I and approval by the Board of Trustees of the System ("Board").
Pursuant to TMRS Act §853.404, an increase in retirement annuities shall be made on January 1 of
each subsequent year, provided that, as to such subsequent year, the actuary for the System has
made the determination set forth in TMRS Act §853.404(d), until this Ordinance ceases to be in
effect as provided in TMRS Act §853.404(e).
Section 3. Authorization of Annually Accruing Updated Service Credits.
(a) As authorized by TMRS Act §854.203(h) and §853.404, and on the terms and conditions set
out in TMRS Act §§853.401 through 853.404, the City authorizes each Member who on the first day
of January of the calendar year immediately preceding the January 1 on which the Updated Service
Credits will take effect (i) has current service credit or prior service credit in the System by reason
of service to the City, (ii) has at least 36 months of credited service with the System, and (iii) is a
TMRS-contributing Employee of the City, to receive "Updated Service Credit," as that term is defined
and calculated in accordance with TMRS Act §853.402.
(b) The Updated Service Credit authorized and provided under this Ordinance shall be 50% of
the "base Updated Service Credit" of the TMRS Member calculated as provided in TMRS Act
§853.402.
(c) If the City previously adopted an ordinance authorizing Updated Service Credit for
unforfeited prior service credit and/or current service credit with another System participating
municipality (also known as "Transfer USC"), the calculations and adjustments set forth in TMRS
Act §853.601 apply to any such prior Transfer USC.
(d) Each Updated Service Credit authorized and provided by this Ordinance shall replace any
Updated Service Credit, prior service credit, special prior service credit, or antecedent service credit
previously authorized for part of the same service.
(e) The initial Updated Service Credit authorized by this Section shall be effective on January 1
immediately following the year in which this Ordinance is approved, subject to receipt by the
System prior to such January 1 and approval by the System's Board. Pursuant to TMRS Act §853.404,
the authorization and grant of Updated Service Credits in this Section shall be effective on January
I of each subsequent year, using the same percentage of the "base Updated Service Credit" stated in
Subsection (b) in computing Updated Service Credits for each future year, provided that, as to such
subsequent year, the actuary for the System has made the determination set forth in TMRS Act
§853.404(d), until this Ordinance ceases to be in effect as provided in TMRS Act §853.404(e).
PASSED AND APPROVED this 9t" day of September, 2024.
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ATTEST:
Ellis
e Ellis, J c, City ClerkTEI�,
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Mihir PaAaj, Mayor
APPROVVD AS TO FORM:
H. Harris, City Attorney