Pension

Pensions Transparency Award

Hutto Fire Rescue Recognized is the latest local
government entity to achieve a Transparency Star as recognition of excellence in Public
Pensions.

Public Pension System

Williamson County Emergency Services District #3, a State of Texas Special Purpose District, has participated in the Texas County and District Retirement System (TCDRS) since 2010. TCDRS was created by the Texas Legislature in 1967. TCDRS helps more than 360,000 Texans plan for their future through partnerships with counties and districts to provide retirement, disability and survivor benefits. TCDRS serves 253 Texas counties and 595 diverse districts — such as Williamson County Emergency Services District #3. Providing attractive retirement benefits helps Williamson County Emergency Services District #3 competitively hire and retain talented staff.

Since TCDRS was created, they have grown into a financially strong, multi-billion-dollar trust with nearly 850 participating employers such as Williamson County Emergency Services District #3. TCDRS employers advance fund their plans over the length of their employees’ careers so their employees can count on their benefits when they are ready to retire. TCDRS is considered one of the best-funded retirement plans in the nation; they do not receive state funding. Each plan is funded by investment earnings (74%), the employer (15%) and its employees (11%). Benefits are responsibly funded, which means costs are not pushed to future generations. TCDRS consistently exceeds their portfolio benchmark. For example, a 35-year return at 8.6% for the period ending Dec. 31, 2021.

Williamson County Emergency Services District #3 retirement plan through TCDRS is built-in on three features that make it financially strong.

1 – SAVINGS-BASED: Williamson County Emergency Services District #3 employees save for their own retirement over the length of their careers. The TCDRS benefit is based on the final savings balance and employer matching. This is contrary to a traditional pension based on final salary where a late-career promotion or excessive overtime can increase employer costs beyond expectations.

2 – RESPONSIBLE FUNDING: Williamson County Emergency Services District #3 pays 100% of their required contribution every year. This ensures that the necessary funds will be there when the time comes to pay benefits upon separation from the organization.

3 – FLEXIBILITY AND LOCAL CONTROL: Williamson County Emergency Services District #3 can adjust benefit levels to meet workforce needs and budgets. This level of flexibility is not standard in most traditional pension plans.

As of Dec. 31, 2022 TCDRS’ net assets were $42 billion. Their portfolio is constructed to achieve their long-term return goal within acceptable levels of risk. By meeting their goals, they help employers provide meaningful, secure benefits to their employees and retirees at reasonable, predictable costs. TCDRS investment returns and net of all fees include the following:

ANNUALIZED RETURN

2022

RETURN

RETURNS AS OF DEC. 31, 2022

YEAR

Total Fund

-5.8%

7.8%

8.3%

7.8%

7.6%

9.0%

Policy Benchmark Portfolio

-8.8%

6.1%

6.8%

6.9%

6.5%

7.8%

Effective March 2023 the TCDRS investment portfolio provided broad diversity to reduce their total exposure to losses from any single asset class or investment.

In 2022, TCDRS paid $2.1 billion in benefits to retirees and former members, and 96% of that money stayed in Texas.

Williamson County Emergency Services District #3 most recently completed fiscal year for which data is available: 2022

- Williamson County Emergency Services District #3 funded ratio from most recent actuarial valuation: 71.0
- Williamson County Emergency Services District #3 amortization period from most recent actuarial valuation: 16.10
- Williamson County Emergency Services District #3 one-, three- and 10-year rates of return, with link to basic explanation of methodology employed:
  - One-year rate: -5.80%
  - Three-year rate: explanation: 8.29%
  - Ten-year rate: 8.27%
- Williamson County Emergency Services District #3 assumed rate of return: 7.50%
- Williamson County Emergency Services District #3 Actuarially Determined Contribution (ADC) Rate from most recent actuarial valuation: 14.36%
- Williamson County Emergency Services District #3 current total Contribution Rate from most recent actuarial valuation: 14.43%
- Williamson County Emergency Services District #3 Unfunded Actuarial Accrued Liability (UAAL) as percent of covered payroll from most recent actuarial valuation: 3.64%