The Texas Municipal Retirement System is a statewide retirement system that provides retirement, disability, and death benefits for employees of participating Texas municipalities. TMRS was established in 1947 by Texas state law and is administered in accordance with the Texas Municipal Retirement System Act. Although established under state law, TMRS receives no state funding. The System offers a choice of benefits so that each participating city can design a plan to suit its needs and budget. Each city's plan is funded independently by that city. Retirement benefits for employees of participating cities are paid from the employees’ contributions, city contributions, and the System's investment income.
TMRS administers a program for 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 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. 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 of TMRS, as a system, was 87.4% as of 12/31/2017. This funded ratio has trended upward over the past few years.
Investments
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
Exceed an appropriate benchmark reflective of asset class participation over rolling five-year periods
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 of the CAFR.
Governance
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:
Bill Philibert, Chair. Director of Human Resources and Risk Management, City of Deer Park
David Landis, Vice Chair, City Manager, City of Perryton
Julie Oakley, Assistant City Manager, City of Lakeway
Jim Parrish, Deputy City Manager – Administrative Services. City of Plano
Location
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.
