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Elgin approves 1 percentage‑point TMRS employee contribution increase, selects non‑retro COLA option
Summary
Council adopted an ordinance to raise mandatory TMRS employee contributions from 7% to 8% effective Jan. 1, 2026, and approved a non‑retroactive repeating COLA option designed to limit long‑term liabilities while improving recruitment and retention.
The Elgin City Council approved an ordinance on Nov. 18 to increase the mandatory employee contribution rate to the Texas Municipal Retirement System (TMRS) from 7% to 8% effective Jan. 1, 2026, and to authorize non‑retroactive repeating cost‑of‑living adjustments for retirees.
Pamela Sanders, the city's human resources director, said the 8% contribution level is a newly available option for participating TMRS cities and is intended as a recruitment and retention tool. Sanders recommended the "non‑retro" COLA treatment — which limits lookback calculations to the last 12 months rather than full retroactivity — because it reduces long‑term amortization costs compared with the fully retroactive option.
Staff provided a budget estimate for the partial fiscal period (Jan. 1 through Sept. 30), stating the combined citywide cost across general, utility and EDC funds would be about $8,339.07. Sanders said the city receives a favorable state match under TMRS and noted staff polled full‑time employees: 66 respondents (43% of full‑time staff) participated; 51 favored the increase and 15 opposed.
Council members asked for clarification on costs, staff participation rates and the tradeoffs between retroactive and non‑retroactive COLA options. The ordinance as adopted includes three actions tucked into a single ordinance: raising the employee contribution rate to 8%, authorizing the non‑retroactive repeating COLA for retirees and reauthorizing annual accrual of updated service and transfer credits under the TMRS act.
Council approved the ordinance by voice/roll call. Staff said the change would be phased in via amortization schedules over 20 years and presented comparative data showing neighboring jurisdictions’ approaches to COLAs and military service recognition.
Next steps: staff will implement the change for payroll and return with any technical adjustments needed for the FY2026 budget.
