By: Callegari, et al.	H.B. No. 3356
	Substitute the following for H.B. No. 3356:
	By:  Callegari	C.S.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 that
	provides for an individual account for each participant and for
	benefits based solely on the amount contributed to the
	participant's account, and any income, expenses, gains and losses,
	and forfeitures of accounts of other participants that may be
	allocated to the participant's account.
	SECTION 2.  Section 802.002, Government Code, is amended by
	amending Subsection (a) and adding Subsections (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.  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 governing body of a
	public retirement system shall adopt a funding policy designed to
	achieve and maintain a minimum funded ratio of 100 percent. The
	policy must follow guidelines for actuarial soundness adopted by
	the board. At a minimum, the funding policy must provide for
	contributions that are sufficient to pay normal cost and to
	amortize any unfunded actuarial accrued liabilities that exist over
	a period not to exceed 25 years. If a public retirement system has
	no unfunded actuarial accrued liabilities, contributions must be
	sufficient to pay the full normal cost.
	(b)  A funding policy based on a total contribution amount
	that can be shown to meet or exceed the minimum funding requirements
	of Subsection (a) meets the requirements of this section.
	(c)  If the governing body of a public retirement system
	receives an actuarial valuation conducted in accordance with
	Section 802.101 indicating that system funding is insufficient to
	meet the requirements of the funding policy adopted in accordance
	with Subsection (a), the governing body shall notify the board and
	the governing body of the plan sponsor of the determination in
	writing not later than the 30th day after the date the valuation is
	received.
	(d)  Following notice to the board and the plan sponsor, the
	public retirement system is granted a period of six fiscal years to
	regain compliance with Subsection (a) without further reporting
	requirements. If by the expiration of the sixth fiscal year, the
	system has not received a valuation indicating that the system is
	compliant with the requirements of the funding policy adopted in
	accordance with Subsection (a), the governing body of the public
	retirement system shall prepare a written corrective action plan
	detailing actions to be taken by the public retirement system and
	plan sponsor to ensure that the amortization period of the public
	retirement system does not exceed 25 years. The corrective action
	plan must be signed by the governing body of the public retirement
	system and by the governing body of the plan sponsor and must be
	submitted to the board not later than the 180th day after the
	expiration of the retirement system's six fiscal year period to
	regain compliance.
	(e)  The corrective action plan must be updated and
	resubmitted to the board every three years until the public
	retirement system receives an actuarial valuation conducted in
	accordance with Section 802.101 indicating that the system funding
	meets the requirements of the funding policy adopted in accordance
	with Subsection (a).
	(f)  The board shall publish on its Internet website a copy
	of each corrective action plan received. The board may adopt rules
	to implement the requirements of this section.
	Sec. 802.402.  ACTION INCREASING AMORTIZATION PERIOD. A new
	monetary benefit payable by the retirement system may not be
	established, and the determination of the amount of a monetary
	benefit from the system may not be increased, if, as a result of the
	action, the time required to amortize the unfunded actuarial
	liabilities of the retirement system would be increased to a period
	that exceeds 25 years by one or more years, as determined by an
	actuarial valuation.
	Sec. 802.403.  CONTRIBUTIONS. (a) The plan sponsoring
	entity contributions and employee contributions to a public
	retirement system, as applicable, should be made at regular
	intervals and should be sufficient to comply with the funding
	policy established by Section 802.401.
	(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. 802.404.  ADDITIONAL STUDIES AND REPORTS. (a) Except
	as otherwise provided by this chapter, 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 greater
	than or equal to $100 million.
	(b)  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 include a provision requiring trustees to report any
	potential conflicts of interest and must be consistent with and not
	less restrictive than Section 802.203.
	SECTION 4.  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 5.  This Act takes effect September 1, 2013.