The City of Van 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 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.
Plan Provisions Summary
Employee Deposit Rate:
7% of pay
Matching Ratio (City to Employee):
2 to 1
Vesting of Benefits:
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
Employees Covered by Benefit Terms
At the December 31, 2021 valuation and measurement date, the following employees were covered by benefit terms:
Inactive employees or beneficiaries currently receiving benefits 00
Inactive employees entitled to but not yet receiving benefits 00
Active employees ___00
To understand the pension commitments made by government to its employees and how successful it has been in funding those commitments to date, it is important to understand the following:
Investments – management of the assets/TMRS responsibility.
Actuarial valuations – calculation of the cost of benefits earned to date/TMRS responsibility.
Funding – the city’s commitment to make contributions to fund the benefits earned to date/city responsibility.
Information on investment strategies and results are available in the investment section of TMRS’s Annual Comprehensive Financial Report, pages 51-59. If TMRS does not earn its projected rate of return, assets will be less than expected and the city will have to make up the shortfall through increased contributions.
Additional information on actuarial policies including valuations and experience studies validating assumptions used can also be found on pages 62-79 of the Annual Comprehensive Financial Report. If unrealistic assumptions or methodology are used, actual liabilities could be higher than projected and the city would be required to make up the shortfall with additional contributions.
Interested parties should note that TMRS employs two separate actuarial valuations:
A funding valuation to calculate the city’s actuarial determined contribution.
Similar in many ways, the primary difference between the two valuations is that the funding valuation uses a smoothed actuarial value of assets and the GASB 68 valuation uses fiduciary net position based on a market value of assets on the reporting date.
Equivalent Single Amortization Period: ###
Covered Payroll: $####
Employees are required to contribute 7% of their annual gross earning based on the city’s plan provisions.