City of Abernathy

P.O. Box 310
Abernathy, TX 79311
806-298-2546
 
     

 
 
 
 
 
 
 
 

 

PENSION INFORMATION
 
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Pension Links
Financial Reports
 
 
 TMRS Rate Letters
 With Supporting
Data
 
 TMRS Rate Letter 2014
  TMRS Rate Letter 2015
  TMRS Rate Letter 2016
  TMRS Rate Letter 2017
  TMRS Rate Letter 2018
 Also Available From this Link
 
 
 
 
 
 
 
 
 
 
 

 
The City's Pension Plan
 
The City of Abernathy 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. Abernathy has chosen from a menu of plan options as authorized by the TMRS statute. Abernathys plan provides the following benefit level:

 
 Employee contribution rate: 5% of pay
 Matching ratio (city to employee): 1 to 1
 Years required for vesting: 5
 Service retirment eligibility Vested age 60 or 20 years and any age
 Updated Service Credits: 100% repeating, transfers
 Cost of Living Adjustments: 30% of CPI, repeating
 Military Service Credit Not Elected
 Restricted Prior Service Credit Yes
 Buy Back Otion Not Elected
 Supplemental Death Benefit (employees) Yes
 Supplemental Death Benefit (Retirees) $7,500
 
 Actuarial Information as of December 31, 2016

 
 Actuarial accrued liability (AAL)  $1,294,367
 Actuarial value of assets (AVA)  $1,150,974
 Unfunded actuarial accrued liability (UAAL)  $143,393
 Funded Ratio (AVA/AAL)   88.9%
 Equivalent Single Amortization Period 24.0 years
   
 Assumed rate of return  7.00%
   
  Valuation Payroll  $623,666
  UAAL as a percent of covered payroll   22.99%
 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.

 

 Click on table for larger View
 
The following documents can be found under the Financial Reports link at the left
- Actuarial valuations for at least the past 5 years.
- Annual Reports for at least the past 5 years.
 
 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). At its meeting on July 30, 2015, the TMRS Board approved a new portfolio target allocation. 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 % Long-Term Expected Real Rate of Return
(Arithmetic)
 U.S. equities  17.5%  4.55%
 International equities  17.5%  6.10%
 Core fixed income  10.0%  1.00%
 Non-core fixed income  20.0%  3.65%
 Real estate  10.0%  4.03%
 Real return  10.0%  5.00%
 Absolute return  10.0%  4.00%
 Private equity   5.0%  8.00%
 Cash equivalents   0.0%  0.00%
 
 Historical Investment Returns
 

 
 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.
 

 Actuarilly Determined Contributions
(as a % of pay)
 

 
 

 2014

2015

2016

 2017

 2018
 Employee

 5%

 5%

5%

5%

5%
 Employer

4.10%

 3.98%

3.46% 

 3.54%

 4.22%
 Total Required Contributions

9.10%

 8.98%

 8.46%

 8.54%

 9.22%
 

 

  Click on table for larger View