Relating to member contributions to the Texas Municipal Retirement System.

Contracts

• Collective Bargaining Agreements (CBAs): For municipalities with Meet and Confer or Collective Bargaining (Police/Fire), adopting the 8% rate constitutes a change in benefits. You must review existing agreements to determine if this triggers a mandatory reopening of negotiations.
• Payroll Vendor Service Level Agreements (SLAs): Municipalities must verify that third-party payroll providers (ADP, Tyler Tech, etc.) are contractually obligated to update deduction codes to accommodate the 8% tier without additional "custom programming" fees.

Hiring/Training

• HR Onboarding: Recruitment materials and offer letters must be updated to reflect the new 8% deduction for net-pay calculations.
• Fiduciary Training: City Managers and Finance Directors must be briefed on the specific actuarial impact of this rate change before presenting it to City Council, as the increased employee contribution increases the corpus of funds the city must match.

Reporting & Record-Keeping

• Ordinance Filing: The specific ordinance adopting the 8% rate must be certified and filed with the TMRS Board of Trustees.
• Payroll Coding: A new deduction code or updated logic for the existing TMRS code is required. Do not override the 7% hard-stop manually; system-wide validation rules must be patched.

Fees & Costs

• Employer Matching Liability: This is the primary cost driver. If a city matches employee contributions at a 2:1 ratio, an increase in employee contribution from 7% to 8% automatically increases the city's liability.
• Actuarial Valuation: Adopting this rate will alter the city's Unfunded Actuarial Accrued Liability (UAAL). Expect a "negative actuarial impact" as noted by the Legislative Budget Board, requiring potential budget adjustments to maintain solvency ratios.