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Council hears proposal to add restricted prior service credit to TMRS; staff says change would be time-only and cost neutral
Summary
Human resources staff asked the council to authorize an ordinance adding restricted prior service credit under the Texas Municipal Retirement System (TMRS). Staff said the credit is time-only (no monetary value), is intended to aid recruitment—particularly lateral police and fire hires—and would be implemented by ordinance and TMRS plan update.
Jeffrey Ross, director of human resources, told the Farmers Branch City Council that staff will ask the council to adopt an ordinance to add restricted prior service credit to the city’s Texas Municipal Retirement System (TMRS) plan.
Ross described restricted prior service credit as “time only credit” for previous public-service employment outside TMRS that counts toward retirement eligibility here but carries no monetary value. He said employees must apply to TMRS and have prior service certified by their former employer; the credit is not automatic. Ross said there is no limit to the amount of prior service time that can be credited under TMRS rules, but the credit affects only eligibility (years of service), not pension pay-outs from Farmers Branch.
“Even the TMRS form itself…says it in big capital bold letters, no monetary value, time credit only,” Ross said. He told the council that North Texas peer cities including Carrollton, Addison, Coppell, Grapevine and Irving already offer restricted prior service credit and that Farmers Branch is among the few in the metroplex that do not.
Ross said adopting restricted prior service credit is commonly used to improve recruitment and retention—especially for lateral hires in police and fire who already hold certifications and require less onboarding time. He described the change as cost neutral for the city because Farmers Branch would only carry pension liability for the years an employee actually serves in Farmers Branch; for example, a lateral hire with 15 prior years and 5 city years would create a liability for the five city years worked, not the full 20 years.
On implementation, Ross said the ordinance must be adopted by the council and then submitted to TMRS for plan updates; staff would notify employees and TMRS would provide education sessions. He said the change could be effective March 1 if adopted and that TMRS representatives would meet with staff and employees to explain eligibility and application procedures. Ross noted a five-year vesting requirement in TMRS rules: an employee must accrue five years with the city to be guaranteed a monthly benefit.
Council members asked how many current employees might become immediately eligible for retirement if the change is applied retroactively; Ross said he did not have an exact number and did not expect the small time-only credits alone to create a rush of retirements because the city only becomes liable for years actually worked in Farmers Branch. Several council members expressed support for the ordinance and asked staff to bring a formal ordinance for adoption at a future meeting. No formal vote was taken during the discussion.
