Pension Information

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The City's Pension Plan

The City of Carrollton is a member of Texas Municipal Retirement System (TMRS) a statewide, multiple employer agent plan.

In an agent plan, each participating government’s pension is centrally administered and governed by state statutes but the assets and related pension liabilities for each government are accounted for separately and any unfunded liabilities are solely the obligation of that government.

Upon retirement, the employee account balance including interest is combined with the employer match to price a lifetime annuity based on the employee’s age at retirement.

Plan Provisions Summary

The City of Carrollton has chosen from a menu of plan options as authorized by the TMRS statute.

Carrollton’s plan provides the following benefit level:

Employee Contributions:	7% of pay
Employer Match at Retirement:	2x employee account balance
Updated Service Credits:	75% (100% is maximum)
Cost of Living Adjustments:	50% of CPI (70% is maximum)
Vesting of Benefits:	5 years
Transfers Credits:	None Provided
Death Benefits:	None Provided

Digging Deeper into Pension Numbers

To understand the pension commitments made by the City government to its employees and how successful it has been in funding those commitments to date, it is important to know the following terms:

Investments (TMRS Responsibility)
How the money is managed and invested
Actuarial valuations (TMRS Responsibility)
How the costs of the promised pensions are calculated
Funding (City Responsibility)
How the City contributes money to pay for the pensions

Investments

Information on investment strategies and results are available in the investment section of the TMRS’s Annual Comprehensive Financial Report (ACFR).

If TMRS does not earn its projected rate of return, assets will be less than expected and the City will have to make up the shortfall through increased contributions.

Actuarial Valuations

TMRS employs two separate actuarial valuations:

Funding Valuation: Used to calculate the City’s actuarially determined contribution.
Governmental Accounting Standards Board (GASB) Valuation (GASB 68): Used for financial reporting purposes and is reported in the City’s Annual Comprehensive Financial Report (ACFR).

The primary difference between the two valuations is that the funding valuation uses a smoothed actuarial value of assets and the GASB 68 valuation utilizes fiduciary net position based on a market value of assets on the reporting date.

Smoothed Actuarial Value: The average of assets over time
Fiduciary Net Position: The exact amount at a specific moment (market value)

Additional information on actuarial policies including valuations and experience studies validating assumptions used can also be found on the TMRS Annual Comprehensive Financial Report (pages 4-80).

If unrealistic actuarial assumptions or methodology are used, actual liabilities could be higher than projected and the City would be required to make up the shortfall with additional contributions.

Actuarial Value of Assets vs. Actuarial Accrued Liabilities (5 Year Comparison)

Bar chart comparing actuarial assets and accrued liabilities from 2021 to 2025, showing liabilities higher each year. Data described below.

View Downloadable Data (xlsx,)

Bar chart titled “Actuarial Assets vs Accrued Liabilities” comparing total actuarial accrued liability and actuarial value of assets from 2021 through 2025. The y-axis ranges from $0 to $600,000,000 in $100,000,000 increments.

For each year, liabilities (dark red bars) are higher than assets (olive green bars).

2021: Liabilities $466,999,463; assets about $452,176,561.
2022: Liabilities about $492,353,030; assets about $477,686,020.
2023: Liabilities about $515,220,132; assets about $493,679,920.
2024: Liabilities about $534,793,431; assets about $514,099,018.
2025: Liabilities about $560,829,234; assets about $538,916,813.

Both liabilities and assets increase steadily over the five-year period, with a consistent gap of roughly $15–20 million where liabilities exceed assets each year.

Funding

Information on the City’s commitment to fund its pension liabilities and funded status of those liabilities is provided on our Accounting webpage and in the City’s ACFR.

Contributions

The City of Carrollton has a long history of always contributing its actuarially determined contribution and will often contribute more than this amount as it eliminates future interest costs, improves funding percentages, and provides a cushion of protection against rate volatility.

Actuarially Determined Contribution vs.
Actual Total Contribution Rate Over Time
(Fiscal Year 2025)*

Line graph showing actuarially determined contributions and actual contributions rising from 2021 to 2025

Line chart showing contributions from 2021 through 2025. The vertical axis ranges from $6,000,000 to $11,000,000 in $500,000 increments. The horizontal axis lists the years 2021, 2022, 2023, 2024, and 2025.

Two lines are displayed: an olive-green line representing the Actuarially Determined Contribution (ADC) and a dark red line representing the Actual Contribution in relation to the ADC.

Approximate values are as follows:

2021: ADC $8.0 million; Actual $8.5 million.
2022: ADC $7.2 million; Actual $7.8 million.
2023: ADC $7.5 million; Actual $8.2 million.
2024: ADC $8.8 million; Actual $9.6 million.
2025: ADC $9.9 million; Actual $10.7 million.

Both measures decline from 2021 to 2022, then increase steadily through 2025. The actual contribution exceeds the actuarially determined contribution in each year shown.

*This information comes from RSI section in ACFR report

Actuarial

Total Pension Liability (same for funding & reporting): $560,829,234	Funded Ratio (Funding Valuation): 96.1%
Actuarial Value of Assets (Funding Valuation): $538,916,813	Funded Ratio (GASB 68 Valuation): 98.8%
GASB 68 Valuation (Market of Assets): $452,150,500	UAAL (Funding Valuation) as a percent of Covered Payroll: 28.15%
Covered Payroll: $77,838,038	Unfunded Amount (GASB 68 Valuation) as a percent of Covered Payroll: 8.6%
Amortization Period (Yrs): 6	Active Members: 889
Unfunded Liability Funding Valuation: $21,912,421	Inactive Members: 850
Unfunded Liability per Member: $8,438	Annuitants: 858
Unfunded Liability GASB 68: $6,742,318	Actuarial Determined Contribution Rate: 12.20%
GASB 68 Unfunded Liability per Member: $2,596	Total Contribution Rate: 13.13%

Carrollton-Specific Citations of TMRS documents

TMRS Annual Comprehensive Financial Report: Plan Provisions Chosen (pages 110-111)

Changes in Fiduciary Net Position (pages 12-13)

5 Year Carrollton History of Net Position (Downloadable Data)

2022 TMRS Funding Valuation (page 151 of PDF)

FY2024 GASB 68 Valuation for Carrollton

5 Most Recent Actuarial Valuations

5 Most Recent Statements of Fiduciary Net Position

5 Most Recent Statements of Changes in Fiduciary Net Position

Contributions

Actuarially Determined Contributions (as a % of pay)*

Year	2024	2023	2022	2021
Employee	7%	7%	7%	7%
Employer	12.20%	12.13%	11.62%	10.84%
Total Required Contributions	19.20%	19.13%	18.62%	17.84%

*This information comes from the CAFR Statistical Section - Table 20.

Employer Contributions Made as a Percent of Payroll vs TMRS Minimum Required Contribution (Fiscal Year 2025)

Bar and line graph showing actual contribution rates versus TMRS minimum rates from 2016 to 2025

View Downloadable Data (xlsx, 24KB)

Combined bar and line chart showing contribution rates from 2016 through 2025. The vertical axis displays percentages from 0.0% to 16.0% in 2% increments. The horizontal axis lists the years 2016 through 2025.

Dark red bars represent the Actual Contribution Rate. An olive-green line represents the TMRS Required Minimum Rate.

Approximate values are as follows:

2016: Actual 13.8%; Required 11.5%.
2017: Actual 13.6%; Required 12.4%.
2018: Actual 12.8%; Required 12.6%.
2019: Actual 10.8%; Required 12.0%.
2020: Actual 13.2%; Required 12.1%.
2021: Actual 13.3%; Required 11.8%.
2022: Actual 11.8%; Required 10.8%.
2023: Actual 12.1%; Required 11.6%.
2024: Actual 13.4%; Required 12.1%.
2025: Actual 13.9%; Required 12.2%.

The required minimum rate generally trends downward over the period, while the actual contribution rate fluctuates, reaching a low in 2019 before increasing again. The actual rate is at or above the required rate in most years shown.

As illustrated above, the City has a long history of always contributing its actuarially determined contribution and will often contribute more than this amount as it eliminates future interest costs, improves funding percentages and provides a cushion of protection against rate volatility.

Financials

Bar charts showing pension additions and deductions, including contributions, investment income, and benefit payments

Graphic showing two horizontal stacked bar charts summarizing financial activity.

Left chart titled “Total Additions: $68,601,736.” The bar is divided into: Investment Income $53,105,396 (77.41%), Employer Contributions $9,966,192 (14.53%), Employee Contributions $5,530,148 (8.06%), and Other Investment Income $0 (0%). Investment income represents the largest portion.

Right chart titled “Total Deductions: $26,665,320.” The bar is divided into: Service Retirement Benefits $25,667,696 (96.26%), Refunds of Contributions $648,356 (2.43%), Administrative Expenses $341,286 (1.28%), Other Activity $7,982 (0.03%), Disability Retirement Benefits $0 (0%), and Partial Lump Sum Distributions $0 (0%). Service retirement benefits account for nearly all deductions.

***This comes from the additions and deductions worksheet, which is populated with data from the "Schedule of Changes in Fiduciary Net Position (by participating Municipality) TMRS report***

***Report is from TMRS website***

Funding Valuation

	Actuarially Determined Contribution	Contribution in relation to the Actuarially Determined Contribution
2006	$5,016,572	$5,016,572	100.0%
2007	$5,478,548	$5,478,548	100.0%
2008	$5,763,976	$6,443,981	89.4%
2009	$7,555,564	$7,510,874	100.6%
2010	$7,797,214	$8,055,207	96.8%
2011	$7,807,248	$7,960,494	98.1%
2012	$6,544,714	$6,530,161	100.2%
2013	$6,444,731	$6,547,839	98.4%
2014	$6,480,879	$6,755,754	95.9%
2015	$6,329,810	$6,982,334	90.7%
2016	$6,108,431	$7,256,852	84.2%
2017	$6,527,064	$7,072,321	92.3%
2018	$6,563,597	$7,233,075	90.7%
2019	$5,979,381	$6,310,121	94.8%
2020	$7,397,973	$7,763,315	95.3%
2021	$8,045,686	$8,554,378	94.1%
2022	$7,239,953	$7,867,711	92.0%
2023	$7,532,281	$8,227,783	91.5%
2024	$8,892,594	$9,601,862	92.6%
2025	$9,952,862	$10,781,624	92.3%

Historical Investment Returns

Bar chart showing 1, 3, 5, and 10 year returns compared to a 6.75% assumed return line

Bar chart showing investment returns compared to an assumed rate of return of 6.75%, indicated by a horizontal gold line across the chart. The vertical axis is labeled “Rate of Return” and ranges from 0% to 12%.

Four red bars display:

1-Year Return: approximately 10.5%, above the assumed rate
3-Year Return: approximately 4.5%, below the assumed rate
5-Year Return: approximately 6.8%, slightly above the assumed rate
10-Year Return: approximately 6.6%, slightly below the assumed rate

Overall, short-term performance (1-year) exceeds the assumption, while longer-term returns are near the 6.75% benchmark, with the 3-year return notably lower.

1-Year Return	10.41%
3-Year Return	4.53%
5-Year Return	6.82%
10-Year Return	6.62%

Assumed Rate of Return: 6.75%*

*Information comes from the TMRS CAFR - Investment Section "Report on Investment Activity" wording

To accomplish the rate of return, TMRS employs the following asset allocation:

Asset Class Policy Benchmarks

Asset Class	Asset Class Benchmarks	Strategic Target Allocation Index
Core fixed income	Bloomberg Barclays U.S. Aggregate Bond Index	6%
Non-core fixed income	CS Leveraged Loan Index (50%) + ICE BofA US HY Constrained Index (50%)	6%
Global public equity	MSCI All Country World Investable Market Index, Net	35%
Real estate	NCREIF-ODCE Index, Net	12%
Infrastructure	Cambridge Infrastructure Fund Index	6%
Private debt	CS Leveraged Loan Index + 100 bps	12%
Other public & private markets	MSCI All Country World Investable Market Index, Net	4%
Hedge funds	HFRI Asset Weighted Composite Index	5%
Private equity	Cambridge U.S. All Private Equity Index	13%
Cash equivalents	FTSE 1-Month U.S. T-Bill Index	0%

The Board of Trustees recognizes that the most important determinant of long-term return and risk is the asset allocation decision. The Board's strategic target allocation is intended to reflect, and be consistent with, the return objective and risk tolerance expressed in the Investment Policy Statement (IPS). It is designed to meet or exceed the Board's objectives at a controlled level of risk and liquidity that is acceptable to the Board.

In establishing its risk tolerance, the Board considers its ability to withstand short and intermediate=term volatility in investment performance and fluctuations in the financial condition of the fund.