Pensions

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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. Benefit options are adopted by the governing body of the City, within the options available in the state statues governing TMRS.  Pearland has chosen from a menu of plan options as authorized by the TMRS statute. 

Summary of Benefit Provisions

Employee Deposit Rate:

7%

Matching Ration (City to Employee):

2 to 1

Retirement Eligibility (Age/Service)

60/5, 0/20

Updated Service Credits:

100% Repeating Transfers

Annuity Increase (to retirees)

70% of CPI Repeating

Years Required for Vesting:

5

Supplemental Death Benefits to Active Employees:

Yes

Supplemental Death Benefits to Retirees 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, 2018 valuation and measurement date, the following employees were covered by the benefit terms:

Inactive Employees or Beneficiaries currently receiving benefits

225

Inactive Employees entitled to but not yet receiving benefits

317

Active Employees

681

Total

1,223

 

 

Pension Summary

At the December 31, 2018 valuation and measurement date, the pension summary is as follows:

Covered Payroll - $445,939,075

Net Pension Liability

 

Total Pension Liability

158,296,499

Plan Fiduciary Net Position

127,961,360

Net Pension Liability/(Asset)

30,335,139

Planned Fiduciary Net Position as a Percentage of Total Pension Liability

80.84%

Net Pension Liability/(Asset) as a Percentage of Covered Payroll

66.03%

Development of the Single Discount Rate

 

Single Discount Rate

6.75%

Long-term Expected Rate of Return

6.75%

Long-term Municipal Bond Rate*

3.71%

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 fiscal years 2013 through 2022 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%

2018

 13.67%

 7.00%

 20.67%

2019

 13.42%

 7.00%

 20.42%

2020

 12.26%

 7.00%

 20.26%

 

 

 

 

 

 

 

 

 

 

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).

 

15-19

 

millions

Actuarial Valuation

Actuarial valuations are produced by TMRS on a calendar year basis and used to determine the amount that, when combined with investment ratings, should be considerably deposited into a retirement fund to ensure sufficient funds to pay promised benefits in full and over the long term.  Because the City operates on a fiscal year ending 9/30, valuations for a given year are used in the following year's Comprehensive Annual Financial Report (CAFR). For example, the 2018 valuation was produced during the City's 2020 fiscal year and was used in preparing the City's 2019 CAFR. The 2018 contribution letters set the contribution rate for use in the fiscal year 2019.

 

Texas Transparency Organization

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