City of Andrews, TX

Pension Information



The City's Pension Plan
The City of Andrews is a member of Texas Municipal Retirement System (TMRS) a statewide, multiple employer agent plan. In an agent plan, each participating government’s pension is centrally administered and governed by state statutes but the assets and related pension liabilities for each government are accounted for separately and any unfunded liabilities are solely the obligation of that government. Andrews has chosen from a menu of plan options as authorized by the TMRS statute. Andrews’ plan provides the following benefit level:

          Employee contribution rate: 7% of pay
  Matching ratio (city to employee):     2 to 1
  Years required for vesting: 10
  Service retirement eligibility (age/years of service):       60/10, 0/25
  Updated Service Credits: 100% repeating, transfers 
  Cost of Living Adjustments: 70% of CPI, repeating




 


Upon retirement the employee account balance including interest is combined with the employer match to price a lifetime annuity based on the employee’s age at retirement.  


Actuarial Information as of December 31, 2020

          Actuarial accrued liability (AAL)  $30,150,8834
  Actuarial value of assets (AVA)        $25,951,761
  Unfunded actuarial accrued liability (UAAL)   $4,199,122
  Funded Ratio (AVA/AAL)   86.1%
  Equivalent Single Amortization Period            16 years
     
  Assumed rate of return 6.75%
     
  Valuation Payroll $5,219,923
  UAAL as a percent of covered payroll 80.44%


Equivalent single amortization period - The weighted average of all amortization periods used when components of the total unfunded actuarial accrued liability are separately amortized and the average is calculated in accordance with the parameters.
                                                       
The following documents can be found under the Financial Reports tab at http://www.tmrs.com/publications.php
          -   Actuarial valuations for at least the past 5 years.
          -   Annual Reports for at least the past 5 years.

Historical Rate of Return

1-Year Return: 14.70% 
3-Year Return: 8.40%
5-Year Return: 6.40%
10-Year Return: 6.90%
Report Date: 12/31/2019

Portfolio Management Strategy
Plan assets are managed on a total return basis with an emphasis on both capital appreciation as well as the production of income, in order to satisfy the short-term and long-term funding needs of TMRS. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. In determining their best estimate of a recommended investment return assumption under the various alternative asset allocation portfolios, GRS focused on the area between (1) arithmetic mean (aggressive) without an adjustment for time (conservative) and (2) the geometric mean (conservative) with an adjustment for time (aggressive). The target allocation and best estimates of real rates of return for each major asset class are summarized in the following table: 

Asset Class    Target %   
Global equities  35.0%
Core Fixed Income  10.0%
Non-core fixed income     20.0%
Real estate  10.0%
Real return   10.0%
Absolute return  10.0%
Private equity  5.0% 
Cash equivalents  0.0% 

 Contributions
Actuarially Determined Contribution (ADC) rate A target or recommended contribution to a defined benefit pension plan for the reporting period, determined in conformity with Actuarial Standards of Practice based on the most recent measurement available when the contribution for the reporting period was adopted.

Actuarily Determined Contributions
(as a % of pay)
  2018 2019 2020 2021 2022
Employee 7.00% 7.00% 7.00% 7.00% 7.00%
Employer 15.91% 15.97% 15.98% 16.18% 15.61%
Total Required Contributions 22.91% 22.97% 22.98% 23.18% 22.61%



Table

Table2

Click Here for Downloadable Data Including Pension Data and an AVA vs AAL comparison

Important Links:

Texas Transparency Organization
Link to the Texas Comptroller’s website about transparency in government.  

Public Pension Search Tool

Public Information Request

City Council Contact Information

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