transparency

Houston Municipal Employees Pension System

Overview

Contact Information:
1201 Louisiana
Suite 900
Houston, TX 77002
http://www.hmeps.org
Phone: (713) 595-0100
Fax: (713) 650-1961

Classification: Muni
Year Created: 1943
Fiscal Year-End Month: 6

Total Members : 30,686

  Active Members: 11,579
  Inactive Members : 7,626
  Total Annuitants: 11,481
  (Effective Date: 7/1/2021)

Financials

(Effective Date: 6/30/2022)

Total Net Assets: $3,952,350,770

Total Assets : $4,006,588,457
Total Liabilities : $54,237,687
Total Additions : $429,019,779
Employer Contributions:
$197,340,533
46.00%
Employee Contributions:
$32,654,590
7.61%
Other Contributions:
$0
0.00%
Investment Income:
$198,558,708
46.28%
Other Income:
$465,948
0.11%

Total Deductions  : $343,755,678
Benefit Payments:
Benefit Tier Details
$1,132,782
0.33%
Withdrawals:
$327,772,923
95.35%
Administrative Expenses:
$5,680,931
1.65%
Investment Expenses:
$9,169,042
2.67%
Other Expenses:
$0
0.00%
Total Contribution Rate: 30.18%
(Effective Date: 7/1/2021)
Employer: 3.00%
Employee: 33.18%

Historical Investment Returns

(Report Date: 6/30/2022)
—  Assumed Rate of Return 7.00%
  • 1-Year Return: 5.00%
  • 3-Year Return: 12.88%
  • 10-Year Return: 10.00%
  • 30-Year Return: 8.81%
  • Note: Rates of return are reported net of fees.
  • Investment Policy Details
  • Assumed Rate of Return : 7.00%

Actuarial

(Effective Date: 7/1/2021)
Actuarial Value of Assets : $3,867,087,000
Actuaries often select an asset valuation method that smooth the effects of short‐term volatility in the market value of assets. The actuarial value of assets is intended to give fund managers a more accurate picture of the fund’s ability to cover its liabilities.
Market Value of Assets: $3,322,651,000
Actuarial Assumption Details

Actuarial Funded Ratio : 62.81%

Market Funded Ratio: 73.10%

Amortization Period (Yrs) : 26.1
Unfunded Liability : $1,967,282,000
Unfunded Liability per Member: $64,110

Benefit Tier Details

Tier:
Group A
Eligible Members:
Hired before 9/1/1981, or btwn 9/1/1999 & 1/1/2008, or former member of Group B or C who elected to join Group A
Vesting:
5 YCS
Age/YCS:
62/5 or Rule of 75 with > = 50 years or 70 if met Rule of 68 before 1/1/2005
Benefit Formula:
(Accrued benefit before 1/1/2005) + Years of Credited Service after 1/1/2005 x 2.50% (First 20 YCS) then 3.25% (>20 YCS) x Final Average Salary; max 90% of FAS
Final Average Salary:
Highest 78 biweekly pay periods
Automatic COLA:
50% of rolling 5-year net return minus 5%. Min 0%, Max 2%. No COLA in DROP accounts of active employees under age 62.
Benefit Tier Options:
Forward DROP, no max. Interest credit: 50% rolling 5-yr net investment return (min 2.5%, max 7.5%). COLA credited after 1/1/2018 if member > 62 years. Eff. 1/1/2005, employee contributions not credited.
Social Security:
Yes
Tier:
Group B
Eligible Members:
Hired btwn 9/1/1981 & 9/1/1999 and did not elect to become a Group A member
Vesting:
5 YCS
Age/YCS:
62/5 or Rule of 75 with > = 50 years or 70 if met Rule of 68 before 1/1/2005
Benefit Formula:
(Accrued benefit before 1/1/2005) + Years of Credited Service after 1/1/2005 x 1.75% (First 10 YCS) then 2.0% (10 to 20 YCS) then 2.5% (>20 YCS) x Final Average Salary; max 90% of FAS
Final Average Salary:
Highest 78 biweekly pay periods
Automatic COLA:
50% of rolling 5-year net return minus 5%. Min 0%, Max 2%. No COLA in DROP accounts of active employees under age 62.
Benefit Tier Options:
Forward DROP, no max. Interest credit: 50% rolling 5-yr net investment return (min 2.5%, max 7.5%). COLA credited after 1/1/2018 if member > 62 years. Eff. 1/1/2005, employee contributions not credited.
Social Security:
Yes
Tier:
Group D
Eligible Members:
Hired on/after 1/1/2008
Vesting:
5 YCS
Age/YCS:
62/5
Benefit Formula:
Years of Credited Service x 1.80% (First 25 YCS) then 1.0% (>25 YCS) x Final Average Salary; max 90% of FAS
Final Average Salary:
Highest 78 biweekly pay periods
Automatic COLA:
50% of rolling 5-year net return minus 5%. Min 0%, Max 2%.
Benefit Tier Options:
None
Social Security:
Yes
Note:
Group D members participate in a cash balance hybrid component that became effective as of the first pay period in January 2018.

Investment Policy Details

Effective Date: 10/1/2017

Asset Class:
Fixed Income
Minimum Allocation:
6%
Maximum Allocation:
20%
Target Allocation:
10%
Asset Class:
Real Estate
Minimum Allocation:
8%
Maximum Allocation:
18%
Target Allocation:
13%
Asset Class:
Equities
Minimum Allocation:
22%
Maximum Allocation:
42%
Target Allocation:
33%
Asset Class:
Alternative Investments
Minimum Allocation:
20%
Maximum Allocation:
70%
Target Allocation:
45%
Asset Class:
Cash
Minimum Allocation:
0%
Maximum Allocation:
10%
Target Allocation:
0%