870173 TMRS CAFR new8 fix 049-081.qxd - Texas Municipal ...

CONTRIBUTION RATE INFORMATION
CONTINUED
COMPARISON OF THE RATE CALCULATED IN THE VALUATION TO THE RATE
FOR THE SAME PLAN OF BENEFITS BASED ON THE VALUATION FOR THE PREVIOUS YEAR
NUMBER OF CITIES
VALUATION
DATE
DECREASE OF
0.50% OR MORE
DECREASE OR INCREASE
OF LESS THAN 0.50%
INCREASE OF
0.50% OR MORE TOTAL
12/31/1999
12/31/2000
12/31/2001
12/31/2002
12/31/2003(O)
12/31/2003(N)
12/31/2004
104
87
98
91
68
48
176
523
548
556
536
542
370
517
98
104
99
142
179
371
104
725
739
753
769
789
789
797
The financing objective for each TMRS plan is to finance long-term benefit promises through contributions
that remain approximately level from year to year as a percent of the city's payroll. To test how well the
financing objective is being achieved, an actuarial valuation is made each year to determine the city's contribution
rate for the calendar year beginning one year after the valuation date.
Another important test is made every five years to evaluate the actuarial assumptions used to calculate each
city's contribution rate. As a result of the 1998-2002 study of actuarial experience, new actuarial assumptions
were adopted by the Board of Trustees, effective with the December 31, 2003 valuation. In order to prevent
burdensome cost increases as a consequence of the revisions in actuarial assumptions, an optional five-year
phase-in of the increase attributable to assumption changes was implemented.
The line above indicated as 12/31/2003(O) shows a summary of what the changes in the cities' contribution
rates from 2004 to 2005 would have been if the old assumptions had been used. Line 12/31/2003(N) shows
the changes with the new assumptions. Eight cities elected to phase-in the change. The phase-in rates are
reflected in the 12/31/2004 line.
The table above shows that for the 1999 to 2004 valuations, the change in the city's rate from one year to the
next was less than 0.50% of payroll for a large majority of participating cities.
T M R S COMPREHENSIVE ANNUAL FINANCIAL REPORT 2004
101