The City 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 (ACFR) that is available here.
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 - 7% of pay
- Matching Ratio (City to Employee) - 2:1
- 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
- Supplemental Death Benefits - Yes
- Death Benefits to retirees - Yes
Employees Covered by Benefit Terms
At the December 31, 2020, valuation and measurement date, the following employees were covered by the benefit terms:
- Inactive employees or beneficiaries currently receiving benefits - 257
- Inactive employees entitled to but not yet receiving benefits - 307
- Active employees - 554
- Total - 1,118
TMRS provides each of its member cities with two slightly different actuarial valuations which are both reflected below as of December 31, 2020. The first is a smoothed valuation used to calculate the City of League City’s actuarially determined contribution (ADC) to the plan. The second valuation is provided for Governmental Accounting Standard Board (GASB) Pronouncement 68 financial reporting purposes and reflects the City of League City’s fiduciary net position based on the market value of its assets.
- Equivalent Single Amortization Period - 17.5 years
- Covered Payroll - $36,729,902
|Funding Valuation (Smoothed Value)
|Total Actuarial Accrued Liability
|Actuarial Value of Assets
|Unfunded Actuarial Accrued Liability (UAAL)
|UAAL as a percentage of covered payroll
|Net Pension Liability (NPL)
|Total Pension Liability
|Plan Fiduciary Net Position
|Net Pension Liability (NPL)
|NPL as a percentage of covered payroll
|Development of Single Discount Rate
|Single Discount Rate
|Long-term Expected Rate of Return
|Long-term Municipal Bond Rate*
*The rate is based on the Fidelity 20-year Municipal GO AA Index daily rate closest to but not later than the Measurement Date.
Expected rate of return - 6.75%
|Historical Investment Returns
Employees for the City of League City are required to contribute 7% of the annual gross earnings based on the City’s plan provisions. Contribution rates for the City of League City for fiscal years 2016 through 2022 are listed below.
||Actuarially Determined Contribution Rate
||Total Contribution Rate
Detailed information regarding investment objectives, policies, and performance of the TMRS pension system can be found with TMRS.
Actuarial valuations and rate letters are produced by TMRS on a calendar year basis. Because the City operates on a fiscal year ending September 30th, valuations and TMRS contribution rates for a given year are used in the following year’s Annual Comprehensive Financial Report.