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Ord 41-2025 Approving Funding Soundness Restoration Plan of WFFRRF 08/05/2025 Ordinance No. 41-2025 Ordinance approving the Funding Soundness Restoration Plan for the Wichita Falls Firemen's Relief and Retirement Fund (WFFRRF) and increasing the City's contribution rate to the fund from 17.5% to 18.0% as of January 1, 2026 WHEREAS, the City of Wichita Falls and the firefighters contribute to the WFFRRF as a pension fund for firefighters; and, WHEREAS, the WFFRRF is a plan that operates under the Texas Local Fire Fighters Retirement Act (TLFFRA) and the Texas legislature has established the requirement for a Funding Soundness Restoration Plan (FSRP) in Section 802.2015 for plans whose expected funding period is higher than 30 years; and, WHEREAS, the Pension Review Board (PRB) provides Pension Funding Guidelines to public retirement systems and their sponsoring governmental entities in meeting their long-term pension obligations including development of FSRPs; and, WHEREAS, an increase in contribution rate from 17.5% to 18.0% on January 1 , 2026 helps to improve the financial soundness of the plan; and, WHEREAS, the FSRP includes additional increases of 0.5% in the City's contribution each subsequent year up to 20.0% as needed will reduce the funding period to less than 30 years. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF WICHITA FALLS, TEXAS, THAT: The Funding Soundness Restoration Plan has been approved and the City's contribution rate to the fund will be increased from 17.5% to 18.0% as of January 1 , 2026. PASSED AND APPROVED this the 5th day of August 2025. MAYOR ATTEST: lqakc.v & City Clerk Funding Soundness Restoration Plan Wichita Falls Firemen's Relief and Retirement Fund (WFFRRF) City of Wichita Falls This Funding Soundness Restoration Plan (FSRP)is being provided to the Texas Pension Review Board (PRB) to demonstrate compliance with the Texas Government Code and Texas Administrative Code guidelines for public retirement systems. In August of 2024, the PRB provided notice that our system was required to provide a new FSRP. We are submitting this FSRP before September 1, 2025 in order to be eligible for the Revised FSRP Exemption under Section 802.2015(d-1) of the Texas Government Code. Since we received that letter the City of Wichita Falls made a one-time contribution of$1,000,000 to the retirement fund and increased future contributions to the plan from 16.5% to 17.5%. The WFFRRF board then engaged Foster& Foster Actuaries and Consultants to provide an actuarial valuation as of January 1, 2025 which showed that the amortization period had been reduced from 56.7 years to 36.7 years. The WFFRRF board also requested that Foster & Foster provide special actuarial analysis to determine the impact of potential contribution and benefit changes. The board considered those options with PRB Guideline 7 which states that "benefit decreases and contribution increases should not be adopted without studying how the resulting normal costs compare to the contribution rates of each tier, and board discussion of whether members in each tier will receive a benefit that is worth more than their contributions." After reviewing the results of the actuarial study, the board did not feel comfortable asking members in Tier 2 to increase their contributions to a level that would be above the worth of the benefit. After reviewing potential reductions in benefits, the board did not feel comfortable reducing any benefits as well for similar reasons. Each year going forward, the board will review updated actuarial reports and reconsider benefit changes that would help improve the funding soundness while maintaining a reasonable benefit for its members. The board appreciates the City's commitment to helping restore the funds soundness and has requested the City increase its contribution rate by .5% each year until the 30 year amortization is achieved up to 20% if needed. The board expects the contribution increases to reduce the amortization period to less than 30 years. The City commits to increase its contribution rate from 17.5% to 18.0% as of January 1, 2026 and commits to increasing its contribution rate by .5% each year up as needed to achieve an amortization period that is less than 30 years. This commitment extends up to 20.0% starting January 1, 2030 if needed based on annual actuarial valuation results. Based upon the board's recommendations, the City Council of the City of Wichita Falls approved this plan and an increase of its contribution at its regular meeting on August 5, 2025 and approved this Funding Soundness Restoration Plan. In developing this plan, the board has consulted with its actuaries at Foster & Foster and they have confirmed that the plan results in an amortization period of 29.6 years which is within the guidelines for our plan at this time. We appreciate the Pension Review Board and its oversight role in regard to actuarial soundness and compliance with state reporting requirements. Please let us know if you need any additional information or have any questions related to our updated plan.