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County pension consultant outlines cost of raising employer match for Van Zandt County employees
Summary
A TCDRS account manager told Van Zandt County commissioners that raising the employer match from the county's current level would increase the required contribution rate from about 7.34'7.40% to roughly 8.56% (for a 200% match future-only), with an estimated budget impact of roughly $130,000'$145,000 per percentage point on a $13 million payroll. Commissioners requested comparative county data and payroll worksheets to guide decisions.
Bernardo Tagon, an account manager with the Texas County & District Retirement System (TCDRS), presented an overview of Van Zandt County's retirement plan and modeled the budgetary impact of possible increases to the county's employer match during a commissioners court workshop.
Tagon told the court the core design of the plan is that employees contribute 7% of payroll into individual accounts and the county provides a match that converts to a lifetime benefit at retirement. "At currently the match is $1.75 for every dollar contributed," Tagon said, describing how the match is applied when a participant vests and retires.
Why it matters: commissioners said they are weighing recruitment and retention benefits of a higher match against potential fiscal pressure on the county's budget. Tagon said raising the match to 200% on a future-only basis would push the county's required contribution rate to about 8.56% (an increase of roughly 122 basis points), and a 225% future-only scenario would raise it further.
Tagon explained the actuarial process that produces the required rate: an annual December 31 snapshot by independent actuaries, demographic assumptions about hires, terminations and retirements, and a 20-year amortization of liabilities. Under the current 175% baseline the county's plan was cited as about 95% funded with an unfunded liability on the order of $2.3 million.
Commissioners pressed for concrete dollar figures. Using the county's projected payroll (just north of $13 million for members), participants estimated each percentage-point change in the employer rate would equal roughly $130,000'$145,000 in annual cost. "So, 1% right? ... like 130 145,000," one commissioner said while discussing how basis points translate to real dollars.
Tagon said the system can display multiple scenarios in the plan customizer and offered to supply detailed county-by-county comparisons and a salary worksheet so commissioners can see the exact dollar effect on Van Zandt County's budget. He also noted counties may adopt a change as "future only" (affecting deposits beginning in the chosen year) or make the change retroactive, which would substantially increase initial county liability.
The court did not take action at the workshop. Commissioners asked county staff to circulate the TCDRS comparative report and payroll worksheets before formal budget decisions or a possible ordinance/tax-rate discussion.
The court recessed for a brief break and scheduled follow-up modeling and comparison data for a future budget workshop.
