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.
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 FY22|
|Funded Ratio **
|One Year Rate of Return *
|Three Year Rate of Return *
|Ten Year Rate of Return *
|Assumed Rate of Return
|Actuarially Determined Contribution
|Total Current Contributions
|Unfunded Actuarial Accrued Liability **
|Unfunded Actuarial Accrued Liability as a percent of covered payroll **||
* Rates of return are calculated using a time-weighted rate of return methodology based on December 31, 2021 fair values.
** Data obtained from TMRS 2023 Rate Letter.
Past Adoption of Optional Benefits
The Town provides Updated Service Credits (USC) and Cost of Living Adjustments (COLA) on an ad hoc basis.
|Updated Service Credit|
|Cost of Living Adjustment|
(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, 2021 valuation and measurement date, the following employees were covered by the benefit terms:
|Inactive employees or beneficiaries currently receiving benefits:||133|
|Inactive employees entitled to but not yet receiving benefits:||43|
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.
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.
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.
- 2023 Rate Letter (2021 Funding Valuation Summary) PDF
- 2022 GASB 68 Valuation for Town of Highland Park PDF
- Prior Years TMRS Rate Letters – (Funding Valuations)
TMRS System Documents - Town of Highland Park specific citations
- 2021 Schedule of Changes in Fiduciary Net Position (pages 26-27)
Links to Other Information
- Texas Transparency - Texas Comptroller’s website
- Public Pension Search Tool - Texas Comptroller’s website
- TMRS Prior Years Annual Comprehensive Financial Reports (ACFR)
- TMRS Actuarial Valuation Reports