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 comprehensive annual financial reports (CAFR) 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 .

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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, 2020 valuation and measurement date, the following employees were covered by the benefit terms:

Inactive employees or beneficiaries currently receiving benefits153
Inactive employees entitled to but not yet receiving benefits142
Active employees214
Total509


Pension Summary

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 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   16.6 years

Covered Payroll                                           $12,252,735

Funding Valuation (Smoothed Value)12/31/2020
Total Actuarial Accrued Liability$53,925,032
Actuarial Value of Assets$44,499,458
Unfunded Actuarial Accrued Liability (UAAL)$9,425,574
Funded Ratio82.5%


UAAL as a percentage of covered payroll76.9%


GASB 68 Valuation (Market Value)12/31/2020
Total Pension Liability$53,925,032
Plan Fiduciary Net Position$45,983,384
Net Pension Liability (NPL)$7,941,648
Funded Ratio85.27%


NPL as a percentage of covered payroll64.82%




 



Sources: TMRS GASB Employer Reporting Packages for years shown.

Downloadable Data

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Sources: TMRS GASB Employer Reporting Packages for years shown.


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Sources: TMRS GASB Employer Reporting Packages for years shown.


Downloadable Data

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
20212020201920182017
Employee Rate6.0%6.0%6.0%5.0%
 5.0%
Employer ADC Rate11.71%11.85%9.19%9.58%9.59%
Total ADC Contributions17.71%17.85%15.19%14.58%14.59%






Minimum Employer Phase-In Raten/an/an/an/an/a


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TMRS Contribution Rates








Year201320142015201620172018201920202021
Normal Cost6.29%6.65%4.52%4.49%4.69%4.61%5.53%5.42%5.37%
Prior Service4.12%3.89%5.19%4.82%4.90%4.97%6.55%6.43%6.34%
Decrease due in Phase-In-0.27%0.18%






Retirement Plan Contribution10.14%10.36%9.71%9.31%9.59%9.58%12.08%11.85%11.71%
Supplemental Death Benefit0.21%0.23%0.24%0.21%0.20%0.21%0.21%0.27%0.29%
Total Rate:10.35%10.59%9.95%9.52%9.79%9.79%12.29%12.12%12.00%
Phase-In Extra0.27%0.18%






Employer Contribution Rate 10.43%10.46%10.62%9.52%9.79%9.79%12.29%12.1212.00%

Source: TMRS Rate letters available at https://www.tmrs.org/rate_letters/2021/00492.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 May 24, 2021 to Board of Trustees).

2020 Investment Results
(TMRS Total Fund Return)



1 Year3 Years5 Years10 Years
7.65%6.46%7.99%6.74%

Source: TWRM 2020 Comprehensive Annual Financial Report (CAFR). 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. 2020 TMRS CAFR (page 61)

Reference Documents 

Actuarial Valuations – Gainesville Specific

Current Year's Rate Letter (2020 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)

2020 TMRS Comprehensive Annual Financial Report: Plan Provision (pages 106-107)

2020 Schedule of Changes in Fiduciary Net Position (pages 22-23)

2020 TMRS Funding Valuation  (Section 9, page 20 of 65)

Links to Other Information

Texas Transparency Information to Texas Comptroller’s website

Public Pension Search Tool 

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 51-64)

View this information related to the City's participation in the 

Texas Municipal Retirement System (page 28 of 90)

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 Comprehensive Annual Financial Report (CAFR) (PDF)