Bill Text: TX HB3310 | 2015-2016 | 84th Legislature | Enrolled
Bill Title: Relating to the funding policies, actuarial valuations, and reporting requirements of certain public retirement systems.
Spectrum: Partisan Bill (Republican 5-0)
Status: (Passed) 2015-06-18 - Effective immediately [HB3310 Detail]
Download: Texas-2015-HB3310-Enrolled.html
| H.B. No. 3310 | ||
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| relating to the funding policies, actuarial valuations, and | ||
| reporting requirements of certain public retirement systems. | ||
| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
| SECTION 1. Section 801.209(a), Government Code, is amended | ||
| to read as follows: | ||
| (a) For each public retirement system, the board shall post | ||
| on the board's Internet website, or on a publicly available website | ||
| that is linked to the board's website, the most recent data from | ||
| reports received under Sections 802.101, 802.103, 802.104, | ||
| 802.105, [ |
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| SECTION 2. Section 802.002(a), Government Code, is amended | ||
| to read as follows: | ||
| (a) Except as provided by Subsection (b), the Employees | ||
| Retirement System of Texas, the Teacher Retirement System of Texas, | ||
| the Texas County and District Retirement System, the Texas | ||
| Municipal Retirement System, and the Judicial Retirement System of | ||
| Texas Plan Two are exempt from Sections 802.101(a), 802.101(b), | ||
| 802.101(d), 802.102, 802.103(a), 802.103(b), 802.2015, 802.2016, | ||
| 802.202, 802.203, 802.204, 802.205, 802.206, and 802.207. The | ||
| Judicial Retirement System of Texas Plan One is exempt from all of | ||
| Subchapters B and C except Sections 802.104 and 802.105. The | ||
| optional retirement program governed by Chapter 830 is exempt from | ||
| all of Subchapters B and C except Section 802.106. | ||
| SECTION 3. Section 802.101(a), Government Code, is amended | ||
| to read as follows: | ||
| (a) The governing body of a public retirement system shall | ||
| employ an actuary, as a full-time or part-time employee or as a | ||
| consultant, to make a valuation at least once every three years of | ||
| the assets and liabilities of the system on the basis of assumptions | ||
| and methods that are reasonable in the aggregate, considering the | ||
| experience of the program and reasonable expectations, and that, in | ||
| combination, offer the actuary's best estimate of anticipated | ||
| experience under the program. The valuation must include a | ||
| recommended contribution rate needed for the system to achieve and | ||
| maintain an amortization period that does not exceed 30 years. | ||
| SECTION 4. Section 802.1014, Government Code, is amended by | ||
| adding Subsection (b-1) to read as follows: | ||
| (b-1) Except as provided by Subsection (c), a public | ||
| retirement system that has assets of at least $100 million shall | ||
| conduct once every five years an actuarial experience study and | ||
| shall submit to the board a copy of the actuarial experience study | ||
| before the 31st day after the date of the study's adoption. | ||
| SECTION 5. Subchapter C, Chapter 802, Government Code, is | ||
| amended by adding Sections 802.2015 and 802.2016 to read as | ||
| follows: | ||
| Sec. 802.2015. FUNDING SOUNDNESS RESTORATION PLAN. (a) In | ||
| this section, "governmental entity" has the meaning assigned by | ||
| Section 802.1012. | ||
| (b) This section applies to a public retirement system and | ||
| its associated governmental entity other than a public retirement | ||
| system and its associated governmental entity subject to Section | ||
| 802.2016. | ||
| (c) A public retirement system shall notify the associated | ||
| governmental entity in writing if the retirement system receives an | ||
| actuarial valuation indicating that the system's actual | ||
| contributions are not sufficient to amortize the unfunded actuarial | ||
| accrued liability within 40 years. If a public retirement system's | ||
| actuarial valuation shows that the system's amortization period has | ||
| exceeded 40 years for three consecutive annual actuarial | ||
| valuations, or two consecutive actuarial valuations in the case of | ||
| a system that conducts the valuations every two or three years, the | ||
| governing body of the public retirement system and the associated | ||
| governmental entity shall formulate a funding soundness | ||
| restoration plan under Subsection (e) in accordance with the | ||
| system's governing statute. | ||
| (d) The governing body of a public retirement system and the | ||
| associated governmental entity that have formulated a funding | ||
| soundness restoration plan under Subsection (e) shall formulate a | ||
| revised funding soundness restoration plan under that subsection, | ||
| in accordance with the system's governing statute, if the system | ||
| conducts an actuarial valuation showing that: | ||
| (1) the system's amortization period exceeds 40 years; | ||
| and | ||
| (2) the previously formulated funding soundness | ||
| restoration plan has not been adhered to. | ||
| (e) A funding soundness restoration plan formulated under | ||
| this section must: | ||
| (1) be developed by the public retirement system and | ||
| the associated governmental entity in accordance with the system's | ||
| governing statute; and | ||
| (2) be designed to achieve a contribution rate that | ||
| will be sufficient to amortize the unfunded actuarial accrued | ||
| liability within 40 years not later than the 10th anniversary of the | ||
| date on which the final version of a funding soundness restoration | ||
| plan is agreed to. | ||
| (f) A public retirement system and the associated | ||
| governmental entity that formulate a funding soundness restoration | ||
| plan shall report any updates of progress made by the entities | ||
| toward improved actuarial soundness to the board every two years. | ||
| (g) Each public retirement system that formulates a funding | ||
| soundness restoration plan as provided by this section shall submit | ||
| a copy of that plan to the board and any change to the plan not later | ||
| than the 31st day after the date on which the plan or the change is | ||
| agreed to. | ||
| Sec. 802.2016. FUNDING SOUNDNESS RESTORATION PLAN FOR | ||
| CERTAIN PUBLIC RETIREMENT SYSTEMS. (a) In this section, | ||
| "governmental entity" has the meaning assigned by Section 802.1012. | ||
| (b) This section applies only to a public retirement system | ||
| that is governed by Article 6243i, Revised Statutes. | ||
| (c) A public retirement system shall notify the associated | ||
| governmental entity in writing if the retirement system receives an | ||
| actuarial valuation indicating that the system's actual | ||
| contributions are not sufficient to amortize the unfunded actuarial | ||
| accrued liability within 40 years. If a public retirement system's | ||
| actuarial valuation shows that the system's amortization period has | ||
| exceeded 40 years for three consecutive annual actuarial | ||
| valuations, or two consecutive actuarial valuations in the case of | ||
| a system that conducts the valuations every two or three years, the | ||
| associated governmental entity shall formulate a funding soundness | ||
| restoration plan under Subsection (e) in accordance with the public | ||
| retirement system's governing statute. | ||
| (d) An associated governmental entity that has formulated a | ||
| funding soundness restoration plan under Subsection (e) shall | ||
| formulate a revised funding soundness restoration plan under that | ||
| subsection, in accordance with the public retirement system's | ||
| governing statute, if the system conducts an actuarial valuation | ||
| showing that: | ||
| (1) the system's amortization period exceeds 40 years; | ||
| and | ||
| (2) the previously formulated funding soundness | ||
| restoration plan has not been adhered to. | ||
| (e) A funding soundness restoration plan formulated under | ||
| this section must: | ||
| (1) be developed in accordance with the public | ||
| retirement system's governing statute by the associated | ||
| governmental entity; and | ||
| (2) be designed to achieve a contribution rate that | ||
| will be sufficient to amortize the unfunded actuarial accrued | ||
| liability within 40 years not later than the 10th anniversary of the | ||
| date on which the final version of a funding soundness restoration | ||
| plan is formulated. | ||
| (f) An associated governmental entity that formulates a | ||
| funding soundness restoration plan shall report any updates of | ||
| progress made by the public retirement system and associated | ||
| governmental entity toward improved actuarial soundness to the | ||
| board every two years. | ||
| (g) An associated governmental entity that formulates a | ||
| funding soundness restoration plan as provided by this section | ||
| shall submit a copy of that plan to the board and any change to the | ||
| plan not later than the 31st day after the date on which the plan or | ||
| the change is formulated. | ||
| SECTION 6. A public retirement system subject to Section | ||
| 802.2015, Government Code, as added by this Act, or a governmental | ||
| entity subject to Section 802.2016, Government Code, as added by | ||
| this Act, shall formulate a funding soundness restoration plan, if | ||
| required to do so under the applicable section, based on the most | ||
| recent actuarial valuation study conducted under Section 802.101, | ||
| Government Code, as amended by this Act, not later than November 1, | ||
| 2016. The first actuarial valuation study that is conducted for or | ||
| by a public retirement system on or after the effective date of this | ||
| Act must include a recommended contribution rate. | ||
| SECTION 7. (a) Except as provided by Subsection (b) of this | ||
| section, a public retirement system subject to Section | ||
| 802.1014(b-1), Government Code, as added by this Act, shall conduct | ||
| the first actuarial experience study required by Section | ||
| 802.1014(b-1), Government Code, as added by this Act, not later | ||
| than September 1, 2016. | ||
| (b) A public retirement system subject to Section | ||
| 802.1014(b-1), Government Code, as added by this Act, that | ||
| conducted an actuarial experience study after August 31, 2011, and | ||
| on or before the effective date of this Act, shall conduct the first | ||
| actuarial experience study required by Section 802.1014(b-1), | ||
| Government Code, as added by this Act, not later than the fifth | ||
| anniversary of the date of that preceding study. | ||
| SECTION 8. This Act takes effect immediately if it receives | ||
| a vote of two-thirds of all the members elected to each house, as | ||
| provided by Section 39, Article III, Texas Constitution. If this | ||
| Act does not receive the vote necessary for immediate effect, this | ||
| Act takes effect September 1, 2015. | ||
| ______________________________ | ______________________________ | |
| President of the Senate | Speaker of the House | |
| I certify that H.B. No. 3310 was passed by the House on May 7, | ||
| 2015, by the following vote: Yeas 142, Nays 0, 2 present, not | ||
| voting; and that the House concurred in Senate amendments to H.B. | ||
| No. 3310 on May 29, 2015, by the following vote: Yeas 143, Nays 2, | ||
| 2 present, not voting. | ||
| ______________________________ | ||
| Chief Clerk of the House | ||
| I certify that H.B. No. 3310 was passed by the Senate, with | ||
| amendments, on May 27, 2015, by the following vote: Yeas 31, Nays | ||
| 0. | ||
| ______________________________ | ||
| Secretary of the Senate | ||
| APPROVED: __________________ | ||
| Date | ||
| __________________ | ||
| Governor | ||
