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O-92-2609 - 12/10/1992ORDINANCE NO. a 69 O 9 AN ORDINANCE AUTHORIZING AND ALLOWING, UNDER THE ACT GOVERNING THE TEXAS MUNICIPAL RETIREMENT SYSTEM, "UPDATED SERVICE CREDITS" IN SAID SYSTEM ON AN ANNUAL BASIS FOR SERVICE PERFORMED BY QUALIFYING MEMBERS OF SUCH SYSTEM WHO AT THE EFFECTIVE DATE OF THE ALLOWANCE ARE IN THE EMPLOYMENT OF THE CITY OF ROUND ROCK; PROVIDING FOR INCREASED PRIOR AND CURRENT SERVICE ANNUITIES FOR RETIREES AND BENEFICIARIES OF DECEASED RETIREES OF THE CITY; AND ESTABLISHING AN EFFECTIVE DATE FOR THE ORDINANCE; AND PROVIDING FOR INCREASED MUNICIPAL CONTRIBUTIONS TO THE CURRENT SERVICE ANNUITY RESERVE AT RETIREMENT OF THE EMPLOYEES OF THE CITY OF ROUND ROCK, TEXAS; PROVIDING FOR A SAVINGS CLAUSE AND REPEALING CONFLICTING ORDINANCES OR RESOLUTIONS. BE IT ORDAINED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS, THAT: I. AUTHORIZATION OF UPDATED SERVICE CREDITS (a) On the terms and conditions set out in Sections 853.401 through 853.404 of Subtitle G of Title 8, V.T.C.A., Government Code, as amended (hereinafter referred to as the "TMRS ACT"), each member of the Texas Municipal Retirement System (hereinafter referred to as the "System") who has current service credit or prior service credit in the System in force and effect on the 1st day of January of the calendar year preceding such allowance by reason of service in the employment of the City, and on such date had at least 36 months of credited service with the System, shall be and is hereby allowed "Updated Service Credit" (as that term is defined in subsection (d) of Section 853.402 of the TMRS Act). (b) On the terms and conditions set out in Section 853.601 of the TMRS Act, any member of the System who is eligible for Updated Service Credits on the basis of service with this City, who has unforfeited credit for prior service and/or current service with another participating municipality or municipalities by reason of previous service and was a contributing member on the 1st day of January of the calendar year preceding such allowance, shall be credited with Updated Service Credits pursuant to, calculated in accordance with, and subject to adjustment as set forth in said Section 853.601, both as to the initial grant hereunder and all future grants under this ordinance. OR12102E (c) The Updated Service Credit hereby allowed and provided for shall be 100% of the "base Updated Service Credit" of the member (calculated as provided in subsection (c) of Section 853.402 of the TMRS Act). (d) Each Updated Service Credit allowed hereunder shall replace any Updated Service Credit, prior service credit, special prior service credit, or antecedent service credit previously authorized for part of the same service. (e) In accordance with the provisions of subsection (d) of Section 853.401 of the TMRS Act, the deposits required to be made to the System by employees of the several participating departments on account of current service shall be calculated from and after the effective date of this ordinance on the full amount of such person's compensation as an employee of the City. II. INCREASE IN RETIREMENT ANNUITIES (a) On terms and conditions set out in Section 854.203 of the TMRS Act, the City hereby elects to allow and to provide for payment of the increases below stated in monthly benefits payable by the System to retired employees and to beneficiaries of deceased employees of the City under current service annuities arising from service by such employees to the City. An annuity increased under this Section replaces any annuity or increased annuity previously granted to the same person. (b) The amount of the annuity increase under this Section is computed as the sum of the prior service and current service annuities on the effective date of retirement of the person on whose service the annuities are based, multiplied by 70% of the percentage change in Consumer Price Index for All Urban Consumers, from December of the year immediately preceding the effective date of the person's retirement to the December that is 13 months before the effective date of this Section. (c) An increase in an annuity that was reduced because of an option selection is reducible in the same proportion and in the same manner that the original annuity was reduced. (d) If a computation hereunder does not result in an increase in the amount of an annuity, the amount of the annuity will not be changed hereunder. (e) The amount by which an increase under this Section exceeds all previously granted increases to an annuitant is an obligation of the City and of its account in the municipality accumulation fund of the System. 2. III. DATES OF ALLOWANCES AND INCREASES The initial allowance of Updated Service Credit and increase in retirement annuities hereunder shall be effective on January 1, 1993, subject to approval by the Board of Trustees of the System. An allowance of Updated Service Credits and an increase in retirement annuities shall be made hereunder on January 1 of each subsequent year until this ordinance ceases to be in effect under subsection (e) of Section 853,404 of the TMRS Act, provided that, as to such subsequent year, the actuary for the System has made the determination set forth in subsection (d) of Section 853.404 of the TMRS Act. W. EFFECTIVE DATE Subject to approval by the Board of Trustees of the System, this ordinance shall be and become effective on the 1st day of January 1993. BE IT FURTHER ORDAINED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS: That effective January 1, 1993, for each month of current service thereafter rendered by each of its employees who are members of the Texas Municipal Retirement System, the City will contribute to the current service annuity reserve of each such member at the time of his or her retirement, a sum that is 200% of such member's accumulated deposits for such month of employment; and said sum shall be contributed from the City's account in the municipality accumulation fund. 3. V. A. All ordinances, parts of ordinances, or resolutions in conflict herewith are expressly repealed. B. The invalidity of any section or provision of this ordinance shall not invalidate other sections or provisions thereof. Alternative 1. By motion duly made, seconded and passed with an affirmative vote of all the Council members present, the requirement for reading this ordinance on two separate days was dispensed with. READ, PASSED, and ADOPTED on first reading this day of , 1992. Alternative 2. f,/'1 READ and APPROVED on first reading this the int)) day of laiickrYLiktLi , 1992. READ, APPROVED and ADOPTED on second reading this the day of WL , 1992. ATTEST: 441-t-kJOQ9a'niit NE LAND, City Secretary 4,‘ MIKE ROBINSON, Mayor City of Round Rock, Texas 4. TEXAS MUNICIPAL RETIREMENT SYSTEM TM12S-C/T-R/TMRS-F AN ORDINANCE AUTHORIZING AND ALLOWING, UNDER THE ACT GOVERNING THE TEXAS MUNICIPAL RETIREMENT SYSTEM, "UPDATED SERVICE CREDITS" IN SAID SYSTEM ON AN ANNUAL BASIS FOR SERVICE PERFORMED BY QUALIFYING MEMBERS OF SUCH SYSTEM WHO AT THE EFFECTIVE DATE OF THE ALLOWANCE ARE IN THE EMPLOYMENT OF THE CITY OF ROUND ROCK; PROVIDING FOR INCREASED PRIOR AND CURRENT SERVICE ANNUITIES FOR RETIREES AND BENEFICIARIES OF DECEASED RETIREES OF THE CITY; AND ESTABLISHING AN EFFECTIVE DATE FOR THE ORDINANCE; AND PROVIDING FOR INCREASED MUNICIPAL CONTRIBUTIONS TO THE CURRENT SERVICE ANNUITY RESERVE AT RETIREMENT OF THE EMPLOYEES OF THE CITY OF ROUND ROCK, TEXAS. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF ROUND ROCK, TEXAS: Section 1. Authorization of Updated Service Credits. (a) On the terms and conditions set out in Sections 853.401 through 853.404 of Subtitle G of Title 8, V.T.C.A., Government Code, as amended (hereinafter referred to as the "TMRS ACT"), each member of the Texas Municipal Retirement System (hereinafter referred to as the "System") who has current service credit or prior service credit in the System in force and effect on the 1st day of January of the calendar year preceding such allowance, by reason of service in the employment of the City, and on such date had at least 36 months of credited service with the System, shall be and is hereby allowed "Updated Service Credit" (as that term is defined in subsection (d) of Section 853.402 of the TMRS Act). (b) On the terms and conditions set out in Section 853.601 of the TMRS Act, any member of the System who is eligible for Updated Service Credits on the basis of service with this City, who has unforfeited credit for prior service and/or current service with another participating municipality or municipalities by reason of previous service, and was a contributing member on the 1st day of January of the calendar year preceding such allowance, shall be credited with Updated Service Credits pursuant to, calculated in accordance with, and subject to adjustment as set forth in said Section 853.601, both as to the initial grant hereunder and all future grants under this ordinance. (c) The Updated Service Credit hereby allowed and provided for shall be 100% of the "base Updated Service Credit" of the member (calculated as provided in subsection (c) of Section 853.402 of the TMRS Act). (d) Each Updated Service Credit allowed hereunder shall replace any Updated Service Credit, prior service credit, special prior service credit, or antecedent service credit previously authorized for part of the same service. (e) In accordance with the provisions of subsection (d) of Section 853.401 of the TMRS Act, the deposits required to be made to the System by employees of the several participating departments on account of current service shall be calculated from and after the effective date of this ordinance on the full amount of such person's compensation as an employee of the City. Updated Service Credit/Annuity Increase/Increased City Matching Ordinance ..: (continued) Section 2. Increase in Retirement Annuities. (a) On terms and conditions set out in Section 854.203 of the TMRS Act, the City hereby elects to allow and to provide for payment of the increases below stated in monthly benefits payable by the System to retired employees and to beneficiaries of deceased employees of the City under current service annuities and prior service annuities arising from service by such employees to the City. An annuity increased under this Section replaces any annuity or increased annuity previously granted to the same person. (b) The amount of the annuity increase under this Section is computed as the sum of the prior service and current service annuities on the effective date of retirement of the person on whose service the annuities are based, multiplied by 70% of the percentage change in Consumer Price Index for All Urban Consumers, from December of the year immediately preceding the effective date of the person's retirement to the December that is 13 months before the effective date of this Section. (c) An increase in an annuity that was reduced because of an option selection is reducible in the same proportion and in the same manner that the original annuity was reduced. (d) If a computation hereunder does not result in an increase in the amount of an annuity, the amount of the annuity will not be changed hereunder. (e) The amount by which an increase under this Section exceeds all previously granted increases to an annuitant is an obligation of the City and of its account in the municipality accumulation fund of the System. Section 3. Dates of Allowances and Increases. The initial allowance of Updated Service Credit and increase in retirement annuities hereunder shall be effective on January 1, 1993, subject to approval by the Board of Trustees of the System. An allowance of Updated Service Credits and an increase in retirement annuities shall be made hereunder on January 1 of each subsequent year until this ordinance ceases to be in effect under subsection (e) of Section 853.404 of the TMRS Act, provided that, as to such subsequent year, the actuary for the System has made the determination set forth in subsection (d) of Section 853.404 of the TMRS Act. Section 4. Effective Date. Subject to approval by the Board of Trustees of the System, this ordinance shall be and become effective on the 1st day of January 1993. BE IT FURTHER ORDAINED BY THE CITY COUNCIL OF ROUND ROCK, TEXAS: That effective January 1, 1993, for each month of current service thereafter rendered by each of its employees who are members of the Texas Municipal Retirement System, the City will contribute to the current service annuity reserve of each such member at the time of his or her retirement, a sum that is 200% of such member's accumulated deposits for such month of employment; and said sum shall be contributed from the City's account in the municipality accumulation fund. Passed and approved this the day of ATTEST: APPROVED: , 19 . City Secretary or Clerk Mayor DATE: December ' 18, 1992 SUBJECT: City Council Meeting, December 22,1992 ITEM: B.A. Consider an ordinance authorizing changes to the Texas Municipal Retirement System (TMRS) pension plan for City employees. (Second Reading) STAFF RESOURCE PERSONS: David Kautz / Linda Gunther / The Benefits Team STAFF RECOMMENDATION: The City has an opportunity to improve the pension plan offered to City employees as highlighted below: Current Plan Proposed Upgrade 5% Employee Contribution 1.5 to 1 City Matching Ratio Updated Service Credit(1990) 5% Employee Contribution 2 to 1 City Matching Ratio Updated Service Credit(1992;Renewable) Cost of the Upgrade: A budget increase of approximately $52,000 annually. (Funded through the health plan cost savings) Reasons for the proposed upgrade: a) A well—structured pension plan that is competitive with plans offered by similar employers is an effective employee recruitment and retention tool. This issue is becoming increasingly important as the City competes for qualified, experienced employees and as the population ages. b) The plan proposed above is offered by 46% of the more than 600 cities participating in the TMRS. Out of 59 cities possessing similar characteristics to Round Rock, 55 of them offer the plan proposed above. This information is provided in the attached statistical information. c) The relatively young age of current City employees and few retirees make the proposed upgrades more affordable than they would be in the future as the staff ages. Additionally, the average cost to cities offering this plan is 8.1% of payroll. The cost to Round Rock would be 5.83% of payroll, a direct result of the City's current average employee age.