Consider and take appropriate action on the following regarding Travis County’s contributions for Plan Year 2027 for the Texas County and District Retirement System (TCDRS):
Staff Report & Agenda Item Details
The Texas County and District Retirement System (TCDRS) requires that each jurisdiction confirm the provisions of its plan for the next plan year. This confirmation is submitted electronically via the Plan Customizer, an online tool on the TCDRS website. This notice is due no later than December 15, 2026.<br><br>TCDRS has notified Travis County that the County’s required employer contribution rate is 15.46 percent of salaries. However, the Planning and Budget Office (PBO) has budgeted retirement contributions at 17.65 percent since FY 2023 and has not adjusted it since then to maintain budget flexibility in the event TCDRS requires future rate increases and also to help increase the County’s funded ratio which compares plan assets to total liabilities. The County’s current funded ratio is 87.2%. PBO’s recommendation is to notify TCDRS of the County’s intent to maintain the amount of 17.65 percent of salaries for plan Year 2027 as included in the FY 2027 Preliminary Budget. <br><br>However, since the required employer contribution rate of 15.46% of salaries is 2.19 percentage points higher than the FY 2027 budgeted rate of 17.65%, there is flexibility within the budgeted rate for Commissioners Court to consider a Cost of Living Adjustment (COLA) for Calendar Year 2027 for individuals who are retired as of December 31, 2025 per TCDRS requirements for retiree COLAs. The last time Commissioners Court awarded a retiree COLA was for Plan Year 2023, which was a 3% adjustment. Below is a historical list of recent retiree COLAs or CPI adjustments which were previously approved:<br><br><br><br><table border="1" cellspacing="0" cellpadding="0" width="483" style="border-style: solid; float: left; height: 191px;" data-pasted="true" class="cp-border-all-cells"><tbody><tr style="height: 35px;"><td valign="top" style="width: 29.6066%; vertical-align: top; text-align: center;"><strong>Year</strong></td><td valign="top" style="width: 35.8178%; vertical-align: top; text-align: center;"><strong>Percentage</strong></td><td valign="top" style="width: 34.5756%; vertical-align: top; text-align: center;"><strong>Adjustment Type</strong></td></tr><tr style="height: 30px;"><td valign="top" style="width: 29.6066%; vertical-align: top; text-align: center;">2023</td><td valign="top" style="width: 35.8178%; vertical-align: top; text-align: center;">3.0%</td><td valign="top" style="width: 34.5756%; vertical-align: top; text-align: center;">COLA</td></tr><tr style="height: 30px;"><td valign="top" style="width: 29.6066%; vertical-align: top; text-align: center;">2019</td><td valign="top" style="width: 35.8178%; vertical-align: top; text-align: center;">50.0%</td><td valign="top" style="width: 34.5756%; vertical-align: top; text-align: center;">CPI</td></tr><tr style="height: 30px;"><td valign="top" style="width: 29.6066%; vertical-align: top; text-align: center;">2016</td><td valign="top" style="width: 35.8178%; vertical-align: top; text-align: center;">50.0%</td><td valign="top"