COLA Information

"COLA" (Cost of Living Adjustment) Questions Received
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Is anyone on your current staff employed in 2009?

There are 782 active full-time employees who were hired in 2009 or prior. The City has a total of 2,050 full-time employees as of June 15th, 2023.    

Can you please explain how this would cost $8 million for a 30% COLA? According to the TMRS website there are 1626 Retirees on Garland’s TMRS roll. If the average increase would only be $89 per person as stated in the email, that only equates to $1.7 million increase. 

Currently, a COLA must be calculated retroactively by looking back to the cumulative change in the Consumer Price Index (CPI) since each retiree’s retirement date, commonly called the “catchup.” The retroactive calculation makes granting a COLA more expensive for cities that have eliminated the COLA option.

The new non-retroactive repeating COLA option eliminates the retroactive calculation by only looking back to the change in the CPI for the one-year period that ends 12 months before the COLA’s effective date (the “New COLA Option”). 

In almost every case, the New COLA Option will be slightly less expensive for a city than a repeating COLA calculated retroactively.  For the City of Garland, TMRS has estimated that the New COLA option will be approximately $3.5 million less than a repeating COLA calculated retroactively.

However, adopting any repeating COLA, with or without the retroactive calculation, is still costly. Even without the retroactive expense, the city still must advance fund all COLAs for both current and future retirees. Currently, we have 1,626 retirees and 2,050 full-time active employees. This portion of the COLA represents $8.0 million for the City of Garland based on most recent data from TMRS.

When employees were advised that the COLA funding was being dropped, we were also advised that the city was working on options that would be more cost effective for the city? Have options actually been explored and are there realistic options for the future?

Since 2009, the City has explored multiple options for our TMRS benefit. Unfortunately, an option has not been found that can reduce the cost of a COLA without reducing other TMRS plan provisions (Updated Service Credits, Supplemental Death Benefits, etc.).  The City has implemented several funding strategies to enhance other areas of our retiree benefits. These programs include an annual City transfer to a trust fund that was established to pre-fund future retiree health insurance cost to ensure this benefit remains sustainable long-term and the implementation of a Retiree Stability Benefit for civil-service employees which provides a City contribution to a 457b retirement plan for eligible civil-service employees.

The signing of HB 2464 by the governor has allowed for the cost of a COLA to be less expensive due to the removal of the catch-up provision on a repeating COLA. However, the implementation of a COLA will still be a significant cost. While the FY 2024 Proposed Budget does not have a mechanism to fund a COLA for 2024, the City Manager has made it a priority to dedicate the time and attention to fully evaluate all options in 2024 before we begin working on the FY 2025 budget.

I live in Garland and concerned about a tax increase to fund this. Therefore, how much will my salary increase vs how much tax increase?

The tax rate and a funding option for the COLA has not been determined and the City Manager is still working through the FY 2023-24 Proposed Budget which will be recommended to City Council on August 1, 2023. 

Hypothetically, if the COLA option was funded entirely through a tax rate increase it is projected that it would require a 2.25 cent per 100 of valuation to fund. For a home valued at $250,000 this would be an increase of $56 annually.

If they should do this, would it be effective immediately or on the beginning of the calendar or budget year as I believe it has been in the past? 

All repeating COLAs adopted using the non-retroactive option must be effective on January 1, 2024, 2025, or 2026. To adopt the New COLA Option, a city must pass an ordinance and provide it to TMRS by the December 31 preceding the January 1 effective date.

Would the enactment of it have any effect on my monthly TMRS payout as it is now?

The New COLA Option is calculated based on the CPI during the year that ends 12 months before the COLA’s effective date. For example, if a city adopts a non-retroactive 30% repeating COLA effective January 1, 2024, each eligible retiree’s benefit increase will be 1.94% (30% of 6.45% inflation during 2022). Therefore, if a retiree has a monthly annuity of $3,000, the increase on January 1, 2024 would be approximately $58.

 How exactly were the numbers (8.4 million) arrived at?) TMRS does not have the 2023 numbers available.

The $8.4 million estimate was provided by TMRS and is based on December 31, 2021 actuarial valuation results. The increase in cost represents the increase that would have been required for 2023 rate changes. Recently, the City received updated information from the December 31, 2022 actuarial valuation results and the estimate is now $8 million if the City enacted a 30% repeating COLA without the catch-up provision on January 1, 2024. It should be noted that the cost of COLA is an on-going cost that could increase or decrease based on changes to economic and demographic actuarial assumptions or actual experience.

In 2008 when the COLA option was elected to be removed from the TMRS plan provisions, it was at 70% of CPI. Why is only a 30% COLA being discussed now?

The New COLA option at 30% is estimated to cost the City approximately $8.0 million annually based on data from TMRS.  The New COLA Option at 70% is estimated to cost the City approximately $20.1 million annually based on data from TMRS.  

What is the basis for the city “expecting the 2024 contribution for a COLA” to be “higher” than what is stated in the email?

This statement was provided to us by TMRS and was based on preliminary data. In particular, they assumed the upcoming COLA (which is based on CPI “inflation rate”) will be higher than the actuarial assumed rate of 2.5%.  When actual experience deviates from the actuarial assumptions, TMRS cities contribution rates are adjusted to accommodate this difference between actuarial assumptions and actual experience.  

Is the city concerned with the prospective damage being done to its reputation in regard to hiring, good government employment and trust of its employees or prospective employees?

The City is very concerned with how we compare to other Cities in the metroplex as it pertains to compensation and benefits, as it is essential to retaining and recruiting employees. The reinstatement of a COLA is a significant financial decision for the City of Garland that will impact the City’s financial situation, and more importantly, our retirees and employee’s financial situation. This decision, as well as all other compensation and benefit decisions, is a City priority that deserves proper evaluation to ensure the City makes an informed decision.

 Paying a larger share of the retired employees insurance plans or improving the benefits provided by the insurance plans is an alternative to contributing to the COLA plan, has the COG given any consideration of options in that regard?  Forty-year inflation rates, large hits to Deferred Comp plans and increased in employee insurance contributions simply compound the problems created by no COLA in the retirement plan.  Are their more affordable approaches, as an alternative to the formal COLA plan?

In addition to retirement benefits paid through TMRS, eligible retirees receive group health and dental insurance benefits. These benefits are commonly referred to as Other Post-Employment Benefits (OPEB). The City established an irrevocable trust to begin advance funding the actuarial determined OPEB obligation, which is the amount the City would need to set aside each year to address this Unfunded Liability. In general, the City makes contributions to a qualified trust which invest the contributions. Retiree benefit cost are reimbursed from the trust to the City, and excess contributions and earnings accumulate in the trust and are used to pay future retiree OPEB cost. A long-term funding strategy was implemented in FY 2018-19 to increase the annual contribution to this trust with a goal of fully funding the annual OPEB obligation by 2028. In the FY 2022-23 Adopted Budget this contribution was $1.7 million. This funding strategy was implemented to ensure that retiree health benefits remain financially sustainable for both the City and retirees.

Has the COG asked and received from TMRS for the cost (percent increase of payroll that would be due TMRS for a 30%, 50%, and 70% repeating COLA?

Below is a table outlining the change in the retirement rate for a 30%, 50%, and 70% for both a retroactive and non-retroactive repeating COLA received from TMRS. 



30% COLA

50% COLA

70% COLA












 What is the payroll for the civilian employees of the COG for the budget years of 2021 and 2022?

Below is a table identifying the total actual earnings for non-civil service employees in FY 2021 and FY 2022. 


FY 2021

FY 2022

Total Non-Civil Service Earnings




What was the total dollar contribution to SSA by the COG for the civilian employees for the budget year of 2021 and 2022? This should not include any contribution for Medicare benefits.  

Below is a table identifying the total amount recorded in the General Ledger for Social Security (FICA) not including Medicare.


FY 2021

FY 2022

Total City Social Security Payment




What was the total dollar contribution (for the Retirement Stability Benefit) by the COG  to Lincoln Financial to the accounts for the COG civil servant employees for the budget years of 2021 and 2022?  

Below is a table identifying the total amount recorded in the General Ledger for the employer portion of the RSB.


FY 2021

FY 2022

Total City RSB Payment




 What was the total dollar contribution by the COG, to subsidize the COG retiree health care plan for the budget years of 2021 and 2022?

Below is a table identifying the total amount recorded in the General Ledger for the employer portion of Retiree Health Insurance. 


FY 2021

FY 2022

Total City Retiree Health Insurance Contribution 




Does the COG budget and/or HR department know the total dollars and percent of payroll the COG contributed to retiree benefits (total of TMRS, SS, Civil Servant Retirement Stability Benefit) for the budget years of 2021 and 2022?


FY 2021 

FY 2022 

Total City TMRS, SS, RSB contributions 



Total as a Percentage of Payroll 



 *The above figures only include TMRS, FICA, and RSB contributions provided by the City. 


Has the COG reached the 3% match for the Civil Servant Retirement Stability plan?

In 2023, the City of Garland’s contribution to the Retiree Stability Benefit is 2% of gross income for civil service employees. This benefit is only received by a civil service employees if they elect to contribute 2.5% or more of gross income to the plan. The Budgeted contribution by the City for this benefit in FY 2023 is $1,323,780. The long-term strategy is to increase this contribution by .25% each year until the City reaches a contribution level of 3% and the employee contribution reaches 4%. Therefore, based on this current strategy, the City contribution will reach 3% in 2027. 


Has the COG polled our peer cities to determine the average TMRS COLA provided to retirees of our peer cities?

Below is a list of area cities that participate in TMRS and the TMRS plan design offerings at each city.   


Repeating COLA %  

Updated Service Credit  

Supplemental Death  

















Grand Prairie   
















 Information related to all TMRS participating cities is available at 


Does COG subsidize retirees health care for those retirees that retire before their are eligible for Medicare? 

Yes, for 2023 the city contributed $501.81 per month per retiree.

Does the COG subsidize retirees health care for retirees that retire after they become eligible for Medicare at the age of 65?

Yes, for 2023 the city contributed $501.81 per month per retiree.