Agenda Information Sheet
DEPARTMENT: City Manager's Office
CM/ ACM: Bryan Langley
Date: February 14, 2017
SUBJECT
Title
Receive a report, hold a discussion, and give staff direction regarding the Texas Municipal Retirement System and the Denton Firemen's Relief and Retirement Fund.
Body
BACKGROUND
The City Council has requested a briefing on the overall status of the City's pension plans. Therefore, the purpose of this discussion in to provide the City Council with an overview of the funded status and funding progress for the Texas Municipal Retirement System (TMRS) and the Denton Firemen's Relief and Retirement Fund (DFRRF).
The City of Denton participates in two separate pension plans. The DFRRF covers firefighters in the Denton Fire Department. The TMRS plan covers all other City of Denton employees with the exception of temporary positions.
TMRS Overview:
TMRS was created in 1947 by the Texas Legislature. TMRS is a hybrid of a defined benefit and defined contribution plan. Under this approach, contributions are defined until the date of retirement. Upon retirement, the value of these contributions and investment earnings define the benefits for the retiree (also known as a cash balance plan). In this way, the unfunded liabilities associated with many defined benefit plans are minimized.
While TMRS is a state-wide retirement system, the plan does not receive any state funding. Rather, all funding associated with TMRS is provided by employers, employees, and investment earnings of the system. Further, individual cities determine the level of benefits that will be provided to their retirees.
As of December 31, 2015, the TMRS system had 866 cities that participate in the plan. Collectively, these cities have 106,894 active members and 56,481 retirement accounts. Specific information for the City of Denton's TMRS plan is provided in 2015 Actuarial Report which is included as Exhibit 1.
DFRRF Overview:
The Denton Firemen's Relief and Re...
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