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City of Pearland’s Pension Plan

The City of Pearland is a member of Texas Municipal Retirement System (TMRS) a statewide, multiple employer agent plan. In an agent plan, each participating government’s pension is centrally administered and governed by state statutes but the assets and related pension liabilities for each government are accounted for separately and any unfunded liabilities are solely the obligation of that government. Pearland has chosen from a menu of plan options as authorized by the TMRS statute. Pearland’s plan provides the following benefit level:

Employee Deposit Rate:

7% of pay

Matching Ration (City to Employee):

2 to 1

Service Retirement Eligibility

5 years at the age of 60 and above, 20 years at any age

Updated Service Credits:

100%T

Cost of Living Adjustments:

70%

Years Required for Vesting:

5 years

Supplemental Death Benefits:

Yes

Upon retirement the employee account balance including interest is combined with the employer match to price a lifetime annuity based on the employee’s age at retirement.  

Employees Covered by Benefit Terms

At the December 31, 2016 valuation and measurement date, the following employees were covered by the benefit terms:

Active Members

647

Retirees and Beneficiaries

188

Inactive Members

268

Total

1,103

 

 

 

 


 

Pension Summary

TMRS provides each of its member cities with two slightly different actuarial valuations which are both reflected below as of December 31, 2016. The first is the smoothed valuation used to calculate the City of Pearland’s actuarially determined contribution (ADC) to the plan. The second valuation is provided for Governmental Accounting Standards Board (GASB) Pronouncement 68 financial reporting purposes and reflects the City of Pearland’s fiduciary net position based on the market value of its assets.

Equivalent Single Amortization Period - 27 years

Covered Payroll - $39,282,225

Funding Valuation (Smoothed Value)

12/31/2016

Total Actuarial Accrued Liability

132,258,772

Actuarial Value of Assets

109,106,922

Unfunded Actuarial Accrued Liability (UAAL)

23,151,850

Funded Ratio

82.5%

UAAL as a percentage of covered payroll

58.9%

GASB 68 Valuation (Market Value)

12/31/2016

Total Pension Liability

132,258,772

Plan Fiduciary Net Position

107,020,843

Net Pension Liability

25,237,929

Funded Ratio

80.92%

NPL as a percentage of covered payroll

64.25%

 

Year

Total Actuarial Accrued Liability

Actuarial Value of Assets (funded)

Unfunded Actuarial Accrued Liability

Funded Ratio

Unfunded Ratio

2012

85,022,771

69,800,322

15,222,449

82.1%

17.9%

2013

98,960,025

78,831,539

20,128,486

79.7%

20.3%

2014

108,601,188

88,635,488

19,965,700

81.6%

18.4%

2015

119,050,823

97,624,734

21,426,089

82.0%

18.0%

2016

132,258,772

109,106,922

23,151,850

82.5%

17.5%

 

Contributions

Employees for the City of Pearland are required to contribute 7% of their annual gross earnings based on the City’s plan provisions. Contribution rates for the City of Pearland for calendar years 2013 through 2017 are listed below.

 

Fiscal Year

 

 

Actuarially Determined Contribution Rate

Employee Contribution

 

Total Contribution Rate

2013

12.79%

7.00%

19.79%

2014

13.04%

7.00%

20.04%

2015

13.53%

7.00%

20.53%

2016

13.49%

7.00%

20.49%

2017

13.73%

7.00%

20.73%

 

 

 

 

 

 

 

Investments

More detailed information regarding investment objectives, policies, and performance of the TMRS pension system can be found at https://www.tmrs.org/investments.php or in the TMRS Comprehensive Annual Financial Report (CAFR).

 

TMRS Current Assumed Rate of Return = 6.75%

2016 Investment Results

(TMRS Total Fund Return)

1 Year

7.42%

3 Year

4.54%

5 Year

6.65%

10 Year

6.09%

 

Source: TMRS 2016 Comprehensive Annual Financial Report (CAFR) Rates of return presented are calculated using a time-weighted rate of return methodology based upon market values, and are presented gross of investment management fees.

graph 1 assets-vs-liabilities

 

graph 2 assets-versus-acrued-liabilities-

 

table 1

 

2014 GASB Valuation

2015 GASB Valuation

2016 GASB Valuation

Comprehensive Annual Financial Report (CAFR) - Fiscal Year 2017 Comprehensive Annual Financial Report

The CAFR is the annual financial audits of the City, conducted by external auditors and approved by Pearland City Council.

Archived: 2016  2015 2014 2013 2012 2011

 

Texas Transparency Organization

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