Pension Plans

METRO has three pension plans which consist of two defined benefit pension plans and one defined contribution pension plan. Contributions for all three plans are authorized annually by METRO’s Board of Directors during the annual budgeting process.

The Government Finance Officers Association (GFOA) has regularly awarded METRO a certificate of achievement for excellence in financial reporting for our two defined benefit pension plans. And we’ve earned the highest grade available from the Texas Comptroller's Office.

Transparency Star for Public Pensions from the Texas Comptroller's Office

Definitions

The Non-Union Pension Plan is a noncontributory, single-employer, defined-benefit plan and was closed to new participants on October 1, 2007.

METRO makes monthly contributions to this plan which are authorized annually by METRO’s Board of Directors during the annual budgeting process.

Funding policy for the defined benefit pension plans is to contribute each year the independently calculated, actuarially determined contribution in equal payments over a 12-month period using the key assumptions provided in the actuarial methodology tab below.

The Transport Workers Union Pension Plan (Union Plan) is a contributory (effective October 1, 2018), single-employer, defined-benefit pension plan and was closed to new participants on October 1, 2012. Employees in the Union Plan contribute $3 each week through payroll deductions. Employees not eligible for the defined benefit pension plans are placed into the defined contribution plan.

METRO makes monthly contributions to this plan which are authorized annually by METRO’s Board of Directors during the annual budgeting process.

Funding policy for the defined benefit pension plans is to contribute each year the independently calculated, actuarially determined contribution in equal payments over a 12-month period using the key assumptions provided in the actuarial methodology tab below.

METRO’s monthly contributions to the defined contribution plan equals 2% of the employees’ annual salary with METRO matching up to an additional 4% of the employee’s 457(b) Deferred Compensation Plan contributions.

METRO makes weekly contributions to the defined contribution plan, which are authorized annually by METRO’s Board of Directors during the annual budgeting process.

METRO’s contributions are placed into a third-party trust account with employees’ vesting rates equally 40 percent after the second year with an additional 20 percent vesting occurring each of the next three years.

Funding policy for the defined benefit pension plans is to contribute each year the independently calculated, actuarially determined contribution in equal payments over a 12-month period using the following key assumptions:

  • Actuarial cost method – Entry age normal
  • Amortization method – Level percentage of payroll, closed
  • Asset valuation method – five-year smoothed market value
  • Inflation – 2.30%
  • Salary increases – 3.00% compensation increase
  • Actuarial assumed rate of return 6.25% is a net of an explicit assumption for expected administrative expense
  • Mortality

The mortality assumption is updated annually and is currently using the Pub-2010 General Employee / Healthy Retiree Mortality Tables for M/F projected forward (fully generational) with MP-2021 with separate tables for contingent survivors and disabled participants. This reflects the most current mortality experience published by the Society of Actuaries for public plans. This assumption includes a margin for future improvements in longevity.

Public Pension Summary

The following table shows financial information for the public pension summary and defined benefit plans as of Dec. 31, 2021.

InformationUnionNon-Union
Funded ratio70.5%64.5%
Remaining Amortization period21 year21 year
Rate of return*  
1 Year11.7%11.8%
3 Year13.6%
13.3%
5 Year9.8%
9.6%
10 Year8.8%8.6%
Assumed rate of return6.25%
6.25%
Actuarially Determined Contribution (ADC) amount$15,165,514
$12,852,876
Actual Employer Contribution amount$16,000,322$13,447,958
Unfunded Actuarial Accrued Liability (UAAL)$135,234,937$107,619,754
UAAL as a percent of covered payroll170.5%334.6%


* The investment returns are calculated using the geometric method and are presented net of fees.

Union Plan


Actuarial Value of Assets Versus Actuarial Accrued Liabilities (In Millions)


Fiscal YearValue of AssetsAccrued Liabilities
2017$267.40$403.70
2018$273.20$436.90
2019$284.20$442.80
2020$302.60$447.00
2021$323.60$458.90

The investment returns are calculated using the geometric method and are presented net of fees.

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Actuarially Determined Contribution Amount Versus Actual Total Contribution Amount Fiscal Year 2017-2021 (In Thousands)


Fiscal YearDetermined ContributionActual Contribution
2017$15,414$15,414
2018$15,631$15,681
2019$17,806$17,806
2020$17,079$17,079
2021$15,166$16,000

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Actuarially Determined Contribution Rate Versus Actual Total Contribution Rate Fiscal Year 2017-2021


Fiscal YearDetermined ContributionActual Contribution
201716.4%16.4%
201816.5%16.6%
201919.7%19.7%
202021.0%21.0%
202119.1%20.2%

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Transport Workers Union Pension Plan, Local 260, AFL-CIO For Five Years Ended December 31 for the following years:


Additions20212020201920182017
Employer contributions$15,836,027$17,805,961$17,805,961$15,631,361$15,413,823
Pick-up contributions$16,4295$184,148$199,644$49,546 
Investment income / (loss)     
Interest and dividends$3,874,488$3,821,788$2,175,848$2,296,629$1,671,687
Net appreciation / (depreciation) on investments$34,202,401$30,524,776$43,137,051-$20,344,177$39,154,613
Investment income / (loss)$38,076,889$34,346,564$45,312,899-$18,047,548$40,826,300
Less investment expenses$712,658$679,664$817,445$469,031$456,670
Net investment income / (loss)$37,364,231$33,666,900$44,495,454-$18,516,579$40,369,630
Total Additions$53,364,553$50,929,731$62,501,059-$2,835,762$55,783,453

Deductions20212020201920182017
Paid to Plan members and beneficiaries$24,083,715$23,306,331$21,934,190$19,795,197$18,799,540
Administrative services$417,525$388,021$337,196$326,240$314,986
Total Deductions$24,501,240$23,694,352$22,271,386$20,121,437$19,114,526

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Non-Union Plan


Actuarial Value of Assets Versus Actuarial Accrued Liabilities (In Millions)


Fiscal YearValue of AssetsAccrued Liabilities
2017$171.60$261.80
2018$175.40$284.10
2019$181.40$300.00
2020$193.50$307.70
2021$195.30$302.90

The investment returns are calculated using the geometric method and are presented net of fees.

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Actuarially Determined Contribution Amount Versus Actual Total Contribution Amount Fiscal Year 2017-2021 (In Thousands)


Fiscal YearDetermined ContributionActual Contribution
2017$11,307$11,307
2018$11,061$11,073
2019$12,629$12,647
2020$14,218$14,237
2021$12,853$13,448

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Actuarially Determined Contribution Rate Versus Actual Total Contribution Rate Fiscal Year 2017-2021


Fiscal YearDetermined ContributionActual Contribution
201727.1%27.1%
201827.1%27.2%
201932.4%32.4%
202037.4%37.4%
202140.0%41.8%

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Non-Union Pension Plan For Five Years Ended December 31


Additions20212020201920182017
Employer contributions$13,447,958 $14,236,592$12,647,252$11,073,255$11,181,136
Investment income     
Interest and dividends$1,455,245$960,902$857,051$665,810$336,686
Net appreciation / (depreciation) on investments$21,752,092$20,373,224$26,730,303-$11,885,822$25,006,009
Investment income / (loss)$23,207,337$21,334,126$27,587,354-$11,220,012$25,342,695
Less investment expenses$507,884$451,839$538,659$328,255$312,845
Net investment income / (loss)$22,699,453$20,882,287$27,048,695-$11,548,267$25,029,850
Total Additions$36,147,411$35,118,879$39,695,947-$475,012$36,337,125

Deductions20212020201920182017
Paid to Plan members and beneficiaries$29,179,951$16,899,341$15,335,194$12,735,227$13,179,671
Administrative services$324,750$351,276$280,381$241,979$243,606
Total Deductions$29,504,701$17,250,617$15,615,575$12,977,206$13,423,277

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