Special Called TMRS Advisory Committee Meeting – Austin, Tx – November 15, 2018


The TMRS Board of Trustees (Board) directed the Chair of the Advisory Committee on Benefit Design to call a meeting of the Committee to provide an overview of the recent Board decisions pertaining to the 86th Legislative Session.

The purpose of the meeting was two-fold:

  1. To provide an overview of the benefit design suggestions that were proposed and the Board’s decisions regarding each of those proposals, and
  2. To provide an informational briefing on the administrative/organizations suggestions the Board has decided to propose as legislation during the session and the purpose of those changes.

Over the course of the last few regularly scheduled TMRS Board Meetings, the TMRS Act Review Project has been discussed in-depth.  The purpose was to review the TMRS Act and Rules to identify the need for possible statutory or rule changes to improve TMRS’ plan design and operations.  The Board was briefed on the status beginning at the February, 2018 meeting.  Suggestions were made to 170 sections of the Act and 142 were researched and prioritized.  Nineteen (19) priority statutory suggestions were presented at the June and August meetings.  At the direction of the Board, draft bill language for 3 Benefit Design and 9 highest priority Administrative/Operational Proposals were provided at the September meeting.  At the October meeting, the Board made preliminary decisions about whether to proceed with legislation for the 86th Session.

More importantly, the following 3 legislative proposals that involve potential benefit design changes were discussed:


  1. Cost of Living Adjustments (COLA’s):  At the September meeting, staff proposed to retain the 30%, 50% and 70% CPI-based structure for both repeating and ad-hoc COLA’s.  Also, make the retroactive “catch-up” feature optional when increasing or decreasing the amount of a COLA benefit.  Finally, allow a city to switch back and forth between a retro and a non-retro COLA.  Overall observations included an unknown impact of fiscal pressures and other state/local issues on cities.  Also, observed was a limited interest from cities for change.  The TMRS Board decided not to propose legislation and would re-visit if a COLA Bill was filed during the 86th Session. 
  2. Return to Work:  At the September meeting, staff proposed that a member could retire and return to work at the same city and continue to receive their annuity, if they met certain conditions.  Also, a “bona fide” termination (no pre-arranged agreement to return to work) would be required.  A break in service of at least 1 full year would be required.  If a member did not meet these conditions, their annuity would be suspended and suspended payments forfeited.  Also, it would grandfather 8-year gap retirees who returned to work at the same city.  Finally, it would allow retirees who have already returned to work at the same city a 1-year break to have their annuities unsuspended.  Overall observations included a 1-year break in service can be a sign of a “bona fide” termination and would not materially change retirement patterns.  Also, reduced inequity between returning to work at another city versus city of last employment.  Finally, proposed transition for both 1-year and 8-year break in service retirees was fair and reasonable.  The TMRS Board decided not to propose legislation and would revisit if a RTW Bill was filed during the 86th Session. 
  3. Retiree Supplemental Death:  At the September meeting, staff proposed to increase the retiree supplemental death benefit from the current $7,500 to $10,000.  Overall observations included that due to the significant reserve in the Supplement Death Benefit Fund, the contribution rate for retiree coverage is currently only one-third of the total term cost.  Also, this funding policy is not sustainable over the long-term.  GASB 75 reporting would be improved by basing the retiree portion of the Supplement Death Benefit Fund cost on the full $7,500 benefit amount.  More study is needed before any proposed changes are made to the retiree benefit.  The TMRS Board decided not to propose legislation and instead decided to have the funding of the current retiree benefit and the appropriate level of the Supplement Death Benefit Fund assets reviewed in the 2019 Experience Study.


Discussion of these 3 Benefit Design Legislative Proposals was the primary purpose of the meeting and consumed most of the meeting time.  The gist of the meeting was to get input from all Advisory Committee members on these 3 proposals.  In addition to these 3 Benefit Design Legislative Proposals, TMRS staff did briefly go over the 9 Legislative Proposals (5 Board Governance & Legal Proposals and 4 City-Related and Administration Proposals) that the TMRS Board has identified as “priority items”.

Topics of the 5 Board Governance & Legal Proposals:

  1. Board Meetings
  2. Immunity and Liability Protection
  3. Legal Advisor
  4. Confidential Information/Audit Working Papers
  5. Investment of Assets – Definition of Security

Topics of the 4 City-Related and Administrative Proposals:

  1. Amortization Periods
  2. Prior Service Credit and Updated Service Credit
  3. Providing Information Electronically
  4. Occupational Disability


Next TMRS Board Meeting:  December 6-7, 2018.  I plan on attending this meeting.

Casey Srader