Texas Municipal Retirement System

TMRS administers a program for (currently) 883 cities, providing retirement, disability, and survivor benefits to active and retired municipal employees. Distinguishing features of the System are:

• TMRS is a statewide retirement system that cities may elect to join
• TMRS is a “hybrid”cash-balance defined benefit retirement plan rather than a traditional, formula-based defined benefit plan
• TMRS does not receive any state funds and does not administer a health care plan
• Benefits are based on a member’s account balance at retirement. The retirement benefit is funded through mandatory employee deposits, city contributions, and investment income
• For a maximum benefit TMRS plan, investment income provides as much as 80% of a 20-year employee’s benefit

As of December 31, 2017, TMRS had 110,208 employee accounts and 62,776 retirement accounts. TMRS paid $1.25 billion in benefits in 2017, up from $1.16 billion in 2016.[1]

Conservative Plan Features - TMRS’ Investment Return Assumption is currently 6.75%. Each city's unfunded liability is amortized over a closed period of no more than 30 years. Each member's benefits are advance funded over the member's working career. Contribution “holidays” are not allowed; every city must pay its required contribution.

Funded Status - The funded status (ratio) of TMRS, as a system, was 87.4% as of 12/31/2017. This funded ratio has trended upward over the past few years.

TMRS administered $28.9 billion in assets as of December 31, 2017. The Investments Department at TMRS follows these Total Portfolio Performance Objectives:

• Achieve a Total Rate of Return, over rolling five-year periods, consistent with the assumed long-term rate of return on TMRS assets adopted by the board (currently 6.75%)
• Exceed an appropriate benchmark reflective of asset class participation over rolling five-year periods (i.e., Policy Index)

Diversification has been, and continues to be, implemented through a deliberate multi-year process. The current asset allocation strategy is expected to meet the long-term total return objective of 6.75%, consistent with the actuarial interest rate assumption for the plan. The overall one-year gross rate of return for 2017 on the investment portfolio was 14.27%. A detailed summary of investment operations during 2017, including performance of different asset classes and diversification progress, is found in the Investment Section [2] of the CAFR.

The TMRS Act provides that the administration of TMRS is entrusted to a six-member Board of Trustees, appointed by the Governor with the advice and consent of the Texas Senate. Board members serve on a volunteer basis and are employed by a TMRS-participating city. Per the Texas Constitution, Trustees continue to perform the duties of their office until a successor has been duly qualified. Board members serve staggered, six-year terms. The Board oversees the administration of TMRS and exercises fiduciary responsibility for investments.

The TMRS Board and officers for FY 2019 are:[3]

• Bill Philibert, Chair. Director of Human Resources and Risk Management, City of Deer Park
• David Landis, Vice Chair, City Manager, City of Perryton
• Jesús A. Garza, City Managerm, City of Kingsville
• Jim Jeffers, City Manager, City of Nacogdoches
• Julie Oakley, Assistant City Manager, City of Lakeway
• Jim Parrish, Deputy City Manager – Administrative Services. City of Plano

TMRS is headquartered at 1200 North Interstate 35 in Austin, Texas. Business hours are 8:00 a.m. to 5:00 p.m., Monday - Friday. Its Phone Center number is 800-924-8677.

• Official website
• 2017 Comprehensive Annual Financial Report
• Investment Section, 2017 CAFR