Ord 1993-037 - Laserfiche WebLink

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, 'Ll1 DJV\ City of San Marcos, Texas Exhibit 6 Notes to General Purpose Financial Statements (continued) September 30, 1992 . 4. Retirement Plan (continued) Members may retire at ages 60 and above with 10 or more years of service or with 25 years of service regardless of age. The plan also provides death and disability benefits. A member is vested after 10 years, but he must leave his accumulated contributions in the plan. If a member withdraws his own money. he is not entitled to the employer-financed monetary credits, even if he was vested. The plan provisions are adopted by the City Council, within the options available in State statutes governing TMRS and within the actuarial constraints also in the statutes. Contributions The contribution rate for the employees is 5%, and the City matching percent is currently 150% of that amount, both as adopted by the City Council. .. Under the State law governing TMRS, the City contribution rate is annually determined by the actuary. This rate consists of the normal cost contribution rate and the prior service contribution rate, both of which are calculated to be a level percent of payroll from year to year. The normal cost contribution rate finances the currently accruing monetary credits due to City matching percent, which are the obligation of the City as of an employee's retirement date, not at the time the employee's contributions are made. The normal cost contribution rate is the acruarially detennined percent of payroll necessary to satisfy the obligation of the City to each employee at the time his retirement becomes effective. The prior service contribution rate amofÙzes the unfunded actuarial liability over the remainder of the plan's 25-year amortization' period. When the City periodically adopts updated service credits and increases in annuities in effect, the increased unfunded actuarial liability is to be amortized over a new 25-year period. Currently, the unfunded actuarial liability is being amortized over the 25-year period which began January 1991. The unit credit actuarial cost method is used for determining the City contribution rate. Contributions are made monthly by both the employees and the City. Since the City must know its contribution rate in advance to budget for it, there is a one-year lag between the actuarial valuation that is the basis for the rate and the calendar year in which the rate goes into effect. The City's payroll for the year ended September 30, 1992 totaled approximately $8,246,876 and the City's contributions were based on a payroll of approximately $8,107,564. Both the City and the covered employees made the required contributions, -23-