The City of Odessa Saves Money with New Program for Part-Time Employees

Categories: Hot Sheets,Texas Developments
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When the City of Odessa wanted to reduce operating costs without impacting services, they turned to PARS and their FICA alternative for part-time, seasonal, and temporary (PST) employees.  PARS Alternate Retirement System (ARS) reduces payroll costs by replacing Social Security with a federally-approved, legally-compliant retirement alternative.  ARS actually provides better benefits for PST employees, while lowering payroll costs.  The City of Odessa chose not to pass up this money-saving solution that over 250 agencies have adopted.

How Payroll Costs Were Reduced for the City of Odessa

Under Social Security, an agency must contribute 12.4% of PST payroll, split equally between employer and employee.  But under the PARS ARS Plan, based on OBRA 90, the total contribution is only 7.5%, and the employer determines the split.  The City of Odessa chose to reduce their contribution from 6.2% to 1.3% for ARS and the employee contributes the same amount as Social Security, 6.2%.  Ultimately this saves the City 4.9% of their total payroll expenses which represents a 79% savings.

Odessa’s Assistant City Manager James Zentner comments, “The opportunity to cut part-time employee payroll costs while giving them a valuable benefit was very appealing.  Now we are able to reduce expenses and maintain high-quality services that makes Odessa a great community.”

Why Employees Prefer PARS ARS

Though the City of Odessa continued the employee contribution of 6.2%, employees’ take-home pay actually increased because the ARS contribution is made with pre-tax dollars, while Social Security is post-tax.  And there are other significant benefits for employees, with no additional costs:

  • Benefits are portable, so employees can take their ARS contributions with them when they move on and choose from cashing out or rolling over funds into an IRA, 401(k), 457, etc.
  • Employees are immediately vested from the first day of ARS participation.
  • Employees get all the money in their PARS account when they retire, not a monthly Social Security allowance based on a set formula.

Why Employers Prefer PARS ARS

Aside from the immediate costs savings from reducing their contributions from 12.4% to 7.5%, Texas public agencies also benefit from PARS personalized customer service.  Once the PARS ARS program is adopted, a Client Services Coordinator is assigned to the agency to coordinate orientation of staff and participants and ensure that plans are running as smoothly and efficiently as possible for the life of the plan.

Join these Texas agencies in a PARS Retirement Plan:

City of Allen – NEW!

City of La Porte

City of Beaumont

City of Longview

City of Coppell

City of Mansfield

City of Duncanville

City of Mesquite

City of Euless

City of North Richland Hills

City of Fort Worth

City of Odessa

City of Garland

City of Rowlett

City of Grand Prairie

City of San Angelo

City of Grapevine

City of Southlake

City of Haltom City

City of Tyler

City of Hurst

City of Watauga

City of Irving

County of Dallas


Call today to discuss how we can help your agency meet your financial and staffing goals.


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