Consider and take action on Resolution No. 25-021, authorizing the Mayor to enter into an agreement with Metropolitan Life Insurance Company to replace the current vendor for the Retired Lives Reserve Plan.

The City of Texas City has a Retired Lives Reserve (RLR) Plan with The Standard Insurance Company dating back to August 1, 1993, and prior to that the vendor was Texas Life. The RLR is a benefit that was discontinued for City of Texas City new hires after March 1, 2019. Those eligible for the RLR are employees who retire under Texas Municipal Retirement System (TMRS) at age 60 or older and have at least 10 or more years of service with the City, or an employee who retires under TMRS and has at least 20 years of service with the City at any age. The benefit is a paid-up life insurance policy for the retiree in the amount of $10,000.

In May of 2024, the City received notification from The Standard Insurance Company that they have decided to stop offering services to RLR plans and gave us the option to have the funds returned to the City or to have the funds sent to another financial institution of our choosing. While we did discontinue the benefit for new hires after March 1, 2019, we still have the obligation of a pool of employees that are still eligible or potentially eligible upon their retirement.

Metropolitan Life Insurance Company (Metlife) provided the City with an option to continue the plan for those that are still eligible or potentially eligible upon their retirement. Metlife has a dedicated Post Retirement Benefits team that also provides the related reporting and valuation assistance to plan sponsors in compliance and decision-making related to GASB 74/75. Metlife offers what they call a Guaranteed Life Insurance Funding Account (GLIFA) or a retiree life buyout. To establish the GLIFA, a one-time lump sum payment is sent to Metlife for a select number of RLR eligible employees with pricing based on interest rates, mortality, demographics, coverage amounts, and plan design. The lump sum payment needed to establish the GLIFA is $161,216.00 which is covered by the balance of the RLR Plan from The Standard Insurance Company and can be transferred to Metlife. Additionally, to fund the pool of employees eligible or potentially eligible upon their retirement, Metlife provided the Benefit Funding Solution for Post-Retirement Benefits. A majority of the balance in the RLR Plan from The Standard Insurance Company can be transferred to Metlife and placed in their funding agreement for terms from one year to ten years with guaranteed interest rates for each term. The remaining balance in the RLR Plan from The Standard Insurance Company can be transferred to Metlife and placed into a short-term index or liquidity rate in order to meet current and future cash flow needs associated with the plan.

It is recommended to approve this resolution authorizing the Mayor to enter into this agreement with Metropolitan Life Insurance Company to replace the current vendor for the Retired Lives Reserve Plan.