Pension Plan

The City participates in the nontraditional, joint contributory, hybrid defined benefit agent multiple employer pension planTransparency Star Public Pensions 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.

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 - 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, 2019, 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

Pension Summary

TMRS provides each of its member cities with two slightly different actuarial valuations which are both reflected below as of December 31, 2019. 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 - 18.5 years
  • Covered Payroll - $34,479,004
Funding Valuation (Smoothed Value)
12/31/2019
Total Actuarial Accrued Liability
$162,606,132
Actuarial Value of Assets
138,725,298
Unfunded Actuarial Accrued Liability (UAAL)
23,880,834
Funded Ratio
85.31%
UAAL as a percentage of covered payroll
69.26%
Net Pension Liability (NPL)
12/31/2019
Total Pension Liability
$162,606,132
Plan Fiduciary Net Position
142,468,137
Net Pension Liability (NPL)
20,137,995
Funded Ratio
87.62%
NPL as a percentage of covered payroll
58.41%
Graphic Actuarial Value of assets and actuarial accrued liabilities chart.

Expected rate of return - 6.75%

Development of Single Discount Rate
 
Single Discount Rate
6.75%
Long-term Expected Rate of Return
6.75%
Long Term Municipal Bond Rate*
2.00%

*The rate is based on the Fidelity 20-year Municipal GO AA Index daily rate closest to but not later than the Measurement Date.

Graphic pie chart of net investment income and employer contributions. text additions.
Graphic pie chart of retirement benefits and refunds of contributions. text deductions.

Pension Plan Calendar Year 2019 Additions and Deductions (PDF)

Contributions

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 2020 are listed below.

Contribution Rates

Fiscal Year
Actuarially Determined Contribution Rate
Employee Contribution
Total Contribution Rate
2016 14.99% 7.00% 21.99%
2017 15.26% 7.00% 22.26%
2018 15.53% 7.00% 22.53%
2019 15.22% 7.00% 22.22%
2020 14.86% 7.00% 21.89%
Graphic actuarial determined contribution rate versus actual total contribution rate chart.

Contribution Rates (PDF)

Investments

Detailed information regarding investment objectives, policies, and performance of the TMRS pension system can be found with TMRS.

Actuarial Valuations 

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 rates for a given year are used in the following year’s Annual Comprehensive Financial Report. 

Reference Documents