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Item 4BITEM 4B Ordinance No. 913 1st Reading: Affecting participation of city employees in the Texas Municipal Retirement System (TMRS) – adopting a 20-year/any age service retirement option; and prescribing an effective date Background Qualified retirement plan under IRS Code, section 401 Established under Texas Government Code Plan is city specific within general framework Service retirement option: Any age with at least 20 / 25* years of service. *(Southlake at higher service requirement) Background Supports Strategic Objective L3: Attract, develop and retain a skilled workforce Benchmark group: only one other city requires 25 years of service Dallas region: 7 of 32 cities* require 25 years Fort Worth region: 2 of 26 cities* require 25 years *(cities with 100 or more employees) Cost of implementation for FY 2008: $43,063 20-year rate 0.29% TMRS total rate 12.71% Effects of changing from 25 years to 20 years Personnel Other cities experience: TMRS: actual less than predicted; rates reduced 50% three years after 1996 adoption Effects of changing from 25 years to 20 years Cost TMRS: Southlake historical data suggests minimal future impact Ordinance No. 913 Adopts 20-year service retirement as provided under Title 8, Texas Government Code Effective Date of October 1, 2007 Actuarial study completed Public Hearing Required: 2nd reading: September 18, 2007 QUESTIONS? Contact Kevin Hugman