The URL can be used to link to this page

Home My WebLink AboutPO 6359: TMRS PLANS OF THE CITY OF PORT ARTHUR AND THE PLEASURE ISLAND COMMISSION City of Port Arthur Memorandum TO: Mayor and City Council DATE: 12/03/13 FROM: Floyd T. Johnson, City M ager RE: P. 0.6359 — An Ordin e Combining the TMRS Plans of the City of Port Arthur and the Pleasure Island Commission COMMENT RECOMMENDATION: It is recommended that the City Council adopt P. 0. 6359 an ordinance which combines the TMRS retirement plan of the former Pleasure Island Commission employees with the TMRS retirement plan of the City of Port Arthur. BACKGROUND: The voters of Port Arthur, through a General and Special Election held in May, 2013, decided the Pleasure Island Commission should be a department of the City of Port Arthur. Pursuant to TMRS guidelines such a department cannot have a plan separate and apart from the TMRS Retirement Plan approved by the governing body for employees of the municipality. This ordinance completes the actions necessary for the full transition of the employees of the Pleasure Island Commission into employees of the City of Port Arthur with all the privileges and benefits of such employment. BUDGETARY/FISCAL EFFECT: Funding is available, and budgeted, for the provision of retirement contributions on behalf of City employees. The actuarial analysis indicates that the addition of the Pleasure Island Commission employees will not require additional funding. EMPLOYEE /STAFF EFFECT: The former Pleasure Island Commission employees will become participating members of the City of Port Arthur TMRS retirement plan the same as all other participating City department employees. SUMMARY: It is recommended that the City Council adopt P. 0. 6359 an ordinance which combines the TMRS retirement plan of the former Pleasure Island Commission employees with the TMRS retirement plan of the City of Port Arthur. P.O. No. 6359 11/26/2013.att ORDINANCE NO. AN ORDINANCE AFFECTING PARTICIPATION OF EMPLOYEES OF THE PORT ARTHUR PLEASURE ISLAND COMMISSION IN THE TEXAS MUNICIPAL RETIREMENT SYSTEM ( "TMRS ") AND GRANTING ADDITIONAL RIGHTS; ELECTING TO REQUEST A SINGLE COMPOSITE PARTICIPATION DATE FOR ALL DEPARTMENTS OF THE CITY OF PORT ARTHUR PARTICIPATING IN TMRS TO BE USED FOR CALCULATION OF NORMAL AND PRIOR SERVICE CONTRIBUTION RATES AND FOR DETERMINATION OF FUNDING PERIODS OF CERTAIN OBLIGATIONS TO TMRS; RATIFYING THE DESIGNATION OF THE CITY OF PORT ARTHUR PLEASURE ISLAND COMMISSION (THE "DEPARTMENT ") AS A CITY DEPARTMENT FOR PURPOSES OF PARTICIPATION IN TMRS; ELECTING TO COMBINE THE DEPARTMENT'S TMRS PLAN ACCOUNT INTO THE CITY OF PORT ARTHUR'S TMRS PLAN ACCOUNT; ELECTING TO AMEND THE CITY OF PORT ARTHUR'S TMRS PLAN PROVISIONS TO PRESERVE THE BENEFITS ACCRUED UNDER THE DEPARTMENT'S PLAN SELECTIONS TO THE DATE OF COMBINATION; AND PRESCRIBING THE EFFECTIVE DATE FOR THE ORDINANCE. WHEREAS, Subtitle G of Title 8 of the Texas Government Code, as amended (herein after referred to as the "TMRS Act "), relating to the Texas Municipal Retirement System (the "System" or "TMRS "), authorizes the governing body of each incorporated city or town in Texas (a "municipality ") to elect, at its option, to have one or more of the municipality departments (as defined in the TMRS Act) participate in such System; and, WHEREAS, the City Council of the City of Port Arthur, Texas, has previously found that it was in the public interest for the City to have the employees of the City of Port Arthur Pleasure Island Commission (the "Department ") participate in the System as a department separate and apart from the municipality; and, WHEREAS, pursuant to a General and Special Election held by the City in May • 2013, the City Council of the City of Port Arthur, Texas has previously adopted Ordinance No. 13 -27, whereby the Department was designated as an advisory board of the City and a P.O. No. 6359 11 /26/2013.att subcomponent of City government under the jurisdiction and supervision of the City Manager; and, WHEREAS, the City Council of the City of Port Arthur, Texas, now finds that it will be in the public interest for the City to have all of its employees, including the employees of the Department, participate in the System on the same terms and conditions on a going forward basis and as a single municipality using a single composite participation date as hereinafter provided; now, therefore, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR: That the facts and opinions in the preamble are true and correct. That the City of Port Arthur, Texas ( "City ") hereby acknowledges, agrees, ratifies, and affirms that the City of Port Arthur Pleasure Island Commission has previously been and continues to be designated by the City Council of the City as a participating department of the City for purposes of the Department's participation in the System under the TMRS Act. That the City of Port Arthur, Texas hereby acknowledges, agrees, ratifies, and affirms that effective December 31, 2013, the employees of the Department will participate in the System, on a going forward basis, based on the same TMRS plan selections made by the City for the other employees of the City, as may be amended by the City from time to time. That without limiting the foregoing, the City acknowledges and agrees that, effective December 31, 2013, the employees of the Department will be subject to the following current City plan selections applicable to the other employees of the City which are different from the P.O. No. 6359 1 1 /26/2013 .att Department's existing plan selections and are subject to amendment by the City from time to time: (i) for each month of current service thereafter. rendered by each of the employees of the Department who are members of TMRS, 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 benefit accumulation fund; (ii) retired employees of the Department and the beneficiaries of deceased employees of the Department will be entitled to receive annuity increases, if any, elected by the City from time to time; and (iii) any employee of the Department who is a member of the System is eligible to retire and receive a service retirement annuity if the member has at least 20 years of credited service in the System performed for one or more municipalities that have adopted a like provision under Section 854.202(g) of the TMRS Act. The City also acknowledges and agrees that, although the City's plan selections provide for vesting after 10 years of credited service while the Department's plan selections provide for vesting after 5 years of credited service, the City has confirmed that all of the current employees of the Department who are TMRS members have already vested, and therefore this difference in plan selections will not affect such Department employees. That pursuant to §855.407(d) of the TMRS Act, the City of Port Arthur, Texas hereby elects to adopt a single composite participation date for, and to submit a request to the System to have, all of its city departments now participating in the Texas Municipal Retirement System, including without limitation the Department, hereafter be treated and considered effective as of December 31, 2013, for the purpose of determining normal and prior service contribution rates to the Texas Municipal Retirement System, and for the purpose of determining any period within which the municipality must fund the obligations charged P.O. No. 6359 11/26/2013.att against its account in the Benefit Accumulation Fund, as having a single composite participation date, which composite participation date shall be determined by the actuary of the Texas Municipal Retirement System in the manner prescribed by the TMRS Act. That the City of Port Arthur, Texas hereby acknowledges and agrees that, pursuant to TMRS Rule §125.4- (Title 34, Part 6, Chapter 125, Rule §125.4 of the Texas Administrative Code), although normal and prior service contribution rates will be determined. as described above, accumulated prior service credit determined under the TMRS Act will remain based on actual participating dates and periods of current service. That the City of Port Arthur, Texas hereby elects and authorizes (i) to combine the Department's TMRS plan accounts (including all assets and liabilities) into the City of Port Arthur's plan accounts in TMRS effective as of December 31, 2013 (the "Combination Date "), and (ii) to amend the City of Port Arthur's TMRS plan provisions to provide that benefits accrued under the Department's TMRS plan selections in place prior to the Combination Date are preserved up to the Combination Date, and that on and after the Combination Date the Department's benefits under the System will accrue in accordance with the City of Port Arthur's TMRS plan selections, as may be amended by the City from time to time. That the TMRS retirement plans of the City of Port Arthur and the Pleasure Island Commission be; and hereby are, combined pursuant to the Statute of TMRS ad the actuarial analysis of the plan combination included herewith, and made part hereof, as Attachment "A ". That this being an Ordinance amending an Ordinance which does not carry a penalty, and does not require publication shall take effect immediately upon passage. That a copy of the caption of this Ordinance be spread upon the Minutes of the City Council of the City of Port Arthur. P.O. No. 6359 11 /26/2013.att READ, ADOPTED, AND APPROVED on this day of A.D., 2013, at a Regular Council Meeting of the City Council of the City of Port Arthur, Texas, by the following vote: AYES: Mayor City Council NOES: Deloris Prince, Mayor ATTEST: APPROVED TO FORM: 0/ E ) Sherri Bellard, City Secretary . Tzeno, C,� Attorney APPROVED FOR ADMINISTRATION: APPROVED AVAILIABILTY OF FUNDS: Floyd T. Johnson, City Manager Deborah E. Echols, Director of Finance / / I • `Jlrr. A 4 ert T. h' gpen, Direct. of H4 an Resources Aid', 1 N ] W H 3VL LV G 1 (� Gabriel Roeder Smith & Company 5605 N. MacArthur Blvd. 469 524.0000 phone J Consultants 8c Actuaries Suite 870 469.524.0003 fax Irving, TX 7503$ -2631 wwwgahrielroedezcom November 15, 2013 Mr. Eric Davis Deputy Executive Director Texas Municipal Retirement System P.O. Box 149153 1200 North Interstate 35 Austin, TX 78701 Re: Plan Combination Analysis Dear Eric: Per your request, we have completed an analysis on the impact to the City of Port Arthur TMRS plan ( #11016) with the plan for the Port Arthur Pleasure Island Commission ( #21016). We have assumed the effective date for the combination would be December 1, 2013 and the members in the Port Arthur Pleasure Island Commission would immediately have the levels of benefits currently effective in the City's plan. The following exhibit provides retirement contribution rate, the supplemental death rate, and the • participation date for each of the Plans, including the composite participation date for the combined plan as cited in TMRS Act Section 855.407(d). Participation Date Retirement Rate Supplemental Death City of Port Arthur 7/1/1949 14.71% 0.24% Port Arthur PIC 8/1/1986 20.20% 0.41% Combined Plan 7/1/1950 14.72% 024% If you have any questions, or require any additional clarifying information, please do not hesitate to the undersigned. Respectfully submitted, Gabriel Roeder Smith & Company Joseph P. Newton, MAAA, FSA, EA Senior Consultant