Public Pensions

Texas Municipal Retirement System

The Town of Highland Park participates in the nontraditional, joint contributory, hybrid defined benefit agent multiple-employer pension plan administered by the Texas Municipal Retirement System (TMRS). 

TMRS, an agency created by the State of Texas and administered in accordance with the TMRS Act, Subtitle G, Title 8, Texas Government Code (the TMRS Act), is an agent multiple-employer retirement system for municipal employees in the State of Texas. The TMRS Act places the general administration and management of the System with a six-member Board of Trustees. Although the Governor, with the advice and consent of the Senate, appoints the Board, TMRS is not fiscally dependent on the State of Texas. 

TMRS’s defined benefit pension plan is a tax-qualified plan under Section 401(a) of the Internal Revenue Code. TMRS issues a publicly available annual comprehensive financial report

Benefits Provided

TMRS provides retirement, disability and death benefits. Benefit provisions are adopted by the governing body of the Town, within the options available in the state statutes governing TMRS. The Town provides retirement benefits only.

Pension Summary Table FY23  
Funded Ratio **
91.7%
Amortization Period
20 Years
One Year Rate of Return *
-7.35%
Three Year Rate of Return *
4.10%
Ten Year Rate of Return *
5.98%
Assumed Rate of Return
6.75%
Actuarially Determined Contribution
$ 1,734,466
Total Current Contributions
$ 1,917,466
Unfunded Actuarial Accrued Liability **
$ 8,001,016
Unfunded Actuarial Accrued Liability as a percent of covered payroll **
55.3%

* Rates of return are calculated using a time-weighted rate of return methodology based on December 31, 2022 fair values.
** Data obtained from TMRS 2024 Rate Letter.

Plan Provisions Summary
 
Employee Deposit Rate:
7% of pay
Matching Ration (City to Employee):
2 to 1
Vesting of Benefits:
5 years
Service Retirement Eligibility:
20 years at any age,
5 years at the age of 60
Updated Service Credit:
50% (ad hoc)
Annuity Increases (to retirees):
50% of CPI (ad hoc)
Death Benefits:
No

Past Adoption of Optional Benefits 

The Town provides Updated Service Credits (USC) and Cost of Living Adjustments (COLA) on an ad hoc basis.  

Year
1993
2000
2004
2008
2020
2023
Updated Service Credit
100% (T)
100%100%100%75% (T)50%







Cost of Living Adjustment
30%

50%

50%

(T) = Transfer Credits.  Transfer credit is another optional benefit that can be provided with Updated Service Credits that recognizes an employee’s service in other cities.

Employees Covered by Benefit Terms

At the December 31, 2022 valuation and measurement date, the following employees were covered by the benefit terms:

Inactive employees or beneficiaries currently receiving benefits:142
Inactive employees entitled to but not yet receiving benefits:  51
Active employees:123
TOTAL:316

Pension Summary

To understand the pension commitments made by the government to its employees and how successful it has been in funding those commitments to date, it is important to understand the following:

  • Investments - management of the assets / TMRS responsibility.
  • Actuarial valuations - calculation of the cost of benefits earned to date / TMRS responsibility.
  • Funding - the Town’s commitment to make contributions to fund the benefits earned to date/city responsibility.

Information on investment strategies and results are available in the investment section of TMRS’s Annual Comprehensive Financial Report (ACFR) If TMRS does not earn its projected rate of return, assets will be less than expected and the Town will have to make up the shortfall through increased contributions.

Additional information on actuarial policies including valuations and experience studies validating assumptions used can also be found on pages 61-80 of the ACFR. If unrealistic actuarial assumptions or methodology are used, actual liabilities could be higher than projected and the Town would be required to make up the shortfall with additional contributions.

Actuarial Value of Assests vs Liabilities

Downloadable Data - Excel spreadsheet

Contributions

Employees are required to contribute 7% of their annual gross earnings based on the city’s plan provisions.  The Town matches this contribution at a rate of 2 to 1.  Below is a table showing the actuarially determined contribution rate as it relates to the rate of contribution the Town actually made each year.  The years presented in the table below correspond to the above table showing the actuarially determined value of assets and liabilities that the contribution rate is based on.  In other words, the asset and liability data used to calculate the current year contribution rate tracks two calendar years behind the calendar year the contribution rate applies to.

bar chart of financial data

Downloadable Data - Excel Spreadsheet


Investments

View more detailed information about investment objectives, policies and performance of the TMRS pension system or view the TMRS Annual Comprehensive Financial Report (ACFR) PDF



Reference Documents

Actuarial Valuations


TMRS System Documents - Town of Highland Park specific citations

bar chart of financial data

Downloadable Data - Excel Spreadsheet


Links to Other Information