From
Cathy DiMaggio
Title
Public hearing and ordinance adopting the 20-Year Any Age Service retirement eligibility provision of the Texas Municipal Retirement System effective January 1, 2019
Presenter
Lisa Norris, Human Resources Director
Recommended Action
Approve
Analysis
The City of Grand Prairie currently has adopted a 25 Year TMRS retirement option. This means in order to retire from the City of Grand Prairie, current employees must have 25 years of eligible TMRS service or be age 60 with 5 years of eligible TMRS service.
Grand Prairie is an outlier compared to our 11 survey cities. Ten of the eleven comparably sized cities have the 20-year TMRS retirement option. This puts Grand Prairie at a competitive disadvantage when recruiting for staff, including police and fire personnel.
When recruiting we have faced the situation of some candidates not willing to transition to a higher retirement requirement of 25 years. The 20-year TMRS retirement option will allow current and future employees the option to retire if they have 20 years of eligible TMRS service or are age 60 with 5 years of eligible TMRS.
The effective date of the TMRS change will be January 1, 2019.
Financial Consideration
The City’s TMRS Rate will increase from 16.09% to 17.05%.
The cost impact of adopting the 20 year TMRS retirement option for Fiscal Year 2019 (9 month funding) is $688,912. The Fiscal year 2020 (3 month funding) is $229,637. The total estimated cost for 12 month funding is $918,549.
The long-term cost will be mitigated in the future when tenured, higher paid employees retire and are replaced with newer lower paid employees.
Body
AN ORDINANCE OF THE CITY OF GRAND PRAIRIE, TEXAS, AFFECTING PARTICIPATION OF CITY EMPLOYEES IN THE TEXAS MUNICIPAL RETIREMENT SYSTEM GRANTING THE ADDITIONAL RIGHTS AUTHORIZED BY SECTION 854.202(g) OF TITLE 8, TEXAS GOVERNMENT CODE, AS AMENDED, (20-YEAR RETIREMENT OPTION) AND PRESCRIBING THE EFFECTIVE DATE FOR THE ORDINANCE
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF Grand Prairie, TEXAS:
Section 1. Pursuant to the provisions of Section 854.202(g) of Subtitle G of Title 8, Texas Government Code, as amended, which Subtitle shall herein be referred to as the “TMRS Act,” the City of Grand Prairie, Texas, adopts the following provisions affecting participation of its employees in the Texas Municipal Retirement System (herein referred to as the “System”):
(a) Any employee of the City who is a member of the System is eligible to retire and receive a service retirement annuity if the member has at least 20 years of credited service in the System performed for one or more municipalities that have adopted a like provision under Section 854.202(g) of the TMRS Act.
(b) Prior to adopting this ordinance, the governing body of the City has: (1) prepared an actuarial analysis of member retirement annuities at 20 years of service; and (2) held a public hearing pursuant to the notice provisions of the Texas Open Meetings Act, Chapter 551, Texas Government Code.
(c) The rights hereinabove authorized shall be in addition to the plan provisions heretofore adopted and in force at the effective date of this ordinance pursuant to the TMRS Act.
Section 2. This ordinance shall become effective on the first day of January, 2019.
PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF GRAND PRAIRIE, TEXAS, SEPTEMBER 18, 2018.