By: Callegari	H.B. No. 3356

	A BILL TO BE ENTITLED
	AN ACT
	relating to contributions to, benefits from, and the administration
	of certain public retirement systems.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 802.001, Government Code, is amended by
	adding Subdivision (1-a) to read as follows:
	(1-a)  "Defined contribution plan" means a plan
	provided by the governing body of a public retirement system in
	which contributions are made to the individual account of an
	officer or employee during the officer's or employee's service or
	employment, and any benefit on death, disability, or retirement
	consists solely of contributions and investment income, if any,
	including interest, dividends, and capital gains.  A defined
	contribution plan is not actuarially funded and does not guarantee
	a specific monthly benefit.  The term includes a plan described by
	Section 401(a), 401(k), 403(b), or 457, Internal Revenue Code of
	1986.
	SECTION 2.  Section 802.002, Government Code, is amended by
	amending Subsection (a) and adding Subsection (c) 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), 802.202, 802.203,
	802.204, 802.205, 802.206, and 802.207, and from all of Subchapter
	E. 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.
	(c)  Notwithstanding any other law, a defined contribution
	plan, or a retirement system that is organized under the Texas Local
	Fire Fighters Retirement Act (Article 6243e, Vernon's Texas Civil
	Statutes), for a fire department consisting exclusively of
	volunteers, as defined by that Act, is exempt from Subchapter E.
	SECTION 3.  Section 802.1012(e), Government Code, is amended
	to read as follows:
	(e)  Before beginning an audit under this section, the
	independent actuary must meet with the manager of the pension fund
	for the public retirement system to discuss the appropriate
	assumptions to use in conducting the audit, and the governing body
	of the public retirement system must expressly approve, in writing,
	the assumptions to be considered. At a minimum, the independent
	actuary and the manager shall consider, and the governing body
	shall review, assumptions relating to long-term returns on
	investments, salary growth, inflation, mortality tables, age of
	eligibility, and any anticipated changes in the covered population
	of members.
	SECTION 4.  Chapter 802, Government Code, is amended by
	adding Subchapter E to read as follows:
	SUBCHAPTER E. ADDITIONAL PROVISIONS APPLICABLE TO CERTAIN
	ACTUARIALLY FUNDED PUBLIC RETIREMENT SYSTEMS
	Sec. 802.401.  FUNDING POLICY. (a)  The public retirement
	system shall achieve and maintain a minimum funded ratio of 100
	percent no later than the public retirement system's fiscal year
	beginning in 2045.  Any unfunded liability generated after fiscal
	year 2045 must be amortized over a closed period no greater than 15
	years.
	Sec. 802.402.  CONTRIBUTIONS. (a)  In any year or other
	applicable funding cycle in which contributions to a public
	retirement system fall below normal cost, the governing body of the
	public retirement system shall promptly prepare a report containing
	an analysis of the effect the underfunding is reasonably projected
	to have on the system and shall distribute the report to all plan
	members and beneficiaries, the plan sponsoring entity, and the
	board.
	(b)  The allocation of the normal cost portion of
	contributions under this section must be level or declining as a
	percentage of payroll over all generations of employees of the
	sponsoring entity, calculated according to applicable actuarial
	standards.
	Sec. 802.403.  ADDITIONAL STUDIES AND REPORTS.
	(a)  Except as provided by Subsection (b), this section
	applies only to a public retirement system with total assets the
	book value of which, as of the last day of the preceding fiscal
	year, is at least $100 million.
	(b)  This section does not apply to the Employees Retirement
	System of Texas, the Teacher Retirement System of Texas, the Texas
	County and District Retirement System, the Texas Municipal
	Retirement System, or the Judicial Retirement System of Texas Plan
	Two.
	(c)  In addition to the requirements of Subchapter B, the
	governing body of a public retirement system to which this
	subchapter applies shall, at reasonable intervals, conduct or
	arrange to have conducted:
	(1)  an actuarial experience study in which actuarial
	assumptions are reviewed in light of relevant experience factors,
	important trends, and economic projections with the purpose of
	determining whether actuarial assumptions require adjustment; and
	(2)  a study of the public retirement system's assets
	and liabilities for use in reviewing asset allocations.
	Sec. 802.406.  ETHICAL STANDARDS. The governing body of a
	public retirement system shall adopt ethical standards and
	conflict-of-interest policies.  Policies adopted under this
	section must be consistent with and not less restrictive than
	Section 802.203 or any applicable law governing the fiduciary
	duties of the governing body.
	SECTION 5.  The governing body of a public retirement system
	to which Subchapter E, Chapter 802, Government Code, as added by
	this Act, applies shall adopt rules or procedures necessary to
	implement that subchapter as soon as practicable after the
	effective date of this Act, but not later than January 1, 2014.
	SECTION 6.  This Act takes effect September 1, 2013.