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Pension Information
GAINESVILLE'S PENSION PLAN
The City and one component participate with provision for an agent multiple-employer defined benefit 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's five most recent annual comprehensive financial reports (ACFR) can be found at http://tmrs.com/financial_reports.php , and its five most recent actuarial valuations can be found at http://tmrs.com/actuarial_reports.php .
Benefits ProvideD
TMRS provides retirement, disability, and death benefits. Benefit provisions are adopted by the governing body of the City, within the options available in the state statutes governing TMRS. A summary of plan provisions for the City are as follows:
| Employee Deposit Rate: | 6% of pay |
| Matching Ratio (City to Employee): | 1.5 to 1 |
| Vesting of Benefits: | 5 years |
| Service retirement eligibility: | 20 years at any age, 5 years at the age of 60 and above |
| Updated Service Credit: | 100% Repeating Transfers |
| Annuity Increases (to retirees): | 70% of CPI Repeating |
| Death Benefits: | Yes |
(Beginning January 1, 2019, the employee contribution rate was increased to 6%, and the City’s matching contribution was also increased accordingly. The City has budgeted paying the full matching rate for TMRS in its annual budget for the years ended after September 30, 2018.)
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 | 150 |
| Inactive employees entitled to but not yet receiving benefits | 141 |
| Active employees | 216 |
| Total | 507 |
Pension Summary
TMRS provides each of its member cities with two slightly different actuarial valuations which are both reflected below as of December 31, 2021. The first is a smoothed valuation used to calculate the City of Gainesville’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 Gainesville’s fiduciary net position based on the market value of its assets.
Equivalent Single Amortization Period 16.2 years
Covered Payroll $12,770,933
| Funding Valuation (Smoothed Value) | 12/31/2021 |
|---|---|
| Total Actuarial Accrued Liability | $57,176,081 |
| Actuarial Value of Assets | $49,325,183 |
| Unfunded Actuarial Accrued Liability (UAAL) | $7,850,898 |
| Funded Ratio | 86.3% |
| UAAL as a percentage of covered payroll | 61.5% |
| GASB 68 Valuation (Market Value) | 12/31/2021 |
|---|---|
| Total Pension Liability | $57,176,081 |
| Plan Fiduciary Net Position | $53,516,947 |
| Net Pension Liability (NPL) | $3,659,134 |
| Funded Ratio | 93.60% |
| NPL as a percentage of covered payroll | 28.65% |
Sources: TMRS GASB Employer Reporting Packages for years shown.
Sources: TMRS GASB Employer Reporting Packages for years shown.
Sources: TMRS GASB Employer Reporting Packages for years shown.
Contributions
Employees are required to contribute 6% of their annual gross earnings based on the City’s plan provisions. Beginning in 2009, certain eligible member cities could elect to contribute a minimum amount equal to their ADC less a “Phase In” of the increase resulting from a change in the TMRS actuarial cost method in the 2007 valuation. The phase-in period was for eight years; however, the City of Gainesville began contributing the full ADC after 2014.
| Actuarially Determined Contributions (as a % of pay) | |||||
|---|---|---|---|---|---|
Year | 2022 | 2021 | 2020 | 2019 | 2018 |
| Employee Rate | 6.0% | 6.0% | 6.0% | 6.0% | 5.0% |
| Employer ADC Rate | 10.65% | 11.71% | 11.85% | 9.19% | 9.58% |
| Total ADC Contributions | 16.65% | 17.71% | 17.85% | 15.19% | 14.58% |
| Minimum Employer Phase-In Rate | n/a | n/a | n/a | n/a | n/a |
|
Source: TMRS Rate letters available at https://www.tmrs.org/rate_letters/2022/00492.pdf
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 .
TMRS Current Assumed Rate of Return = 6.75% (letter dated June 7, 2022 to Board of Trustees).
| 2021 Investment Results (TMRS Total Fund Return) | |||
|---|---|---|---|
| 1 Year | 3 Years | 5 Years | 10 Years |
| 12.86% | 12.08% | 9.28% | 7.82% |
Source: TMRS 2021 Annual Comprehensive Financial Report (ACFR). 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. 2021 TMRS ACFR (page 57)
Reference Documents
Actuarial Valuations – Gainesville Specific
Current Year's Rate Letter (2023 Funding Valuation Summary)
Current Year's GASB 68 Valuation for City of Gainesville
Prior Year's TMRS Rate Letters (Funding Valuations)
Prior Year's GASB 68 Actuarial Valuations for City of Gainesville
TMRS System Documents (Gainesville specific citations)
2021 TMRS Annual Comprehensive Financial Report
2021 Schedule of Changes in Fiduciary Net Position (pages 22-23)
2021 TMRS Funding Valuation (Section 9, page 20 of 65)
Links to Other Information
Texas Transparency Information to Texas Comptroller’s website
TMRS Prior Years Comprehensive Annual Financial Reports
View information on investment strategies and results are available in the investment section of
TMRS's Comprehensive Annual Financial Report (pages 52-63)
View this information related to the City's participation in the
Texas Municipal Retirement System (search "Gainesville")
Additional information on the City's plan and investment results and commitment to fund its pension liabilities can be found in the City of Gainesville Annual Comprehensive Financial Report (ACFR) (PDF)