Bill Text: TX HB51 | 2013 | 83rd Legislature 1st Special Session | Introduced
Bill Title: Relating to the liabilities of, contributions to, and the administration of certain public retirement systems.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2013-06-10 - Filed [HB51 Detail]
Download: Texas-2013-HB51-Introduced.html
| 83S10176 TJS-F | ||
| By: Callegari | H.B. No. 51 | |
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| relating to the liabilities of, contributions to, and the | ||
| administration of certain public retirement systems. | ||
| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
| SECTION 1. 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, the Texas Emergency Services | ||
| 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, [ |
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| The optional retirement program governed by Chapter 830 is exempt | ||
| from all of Subchapters B, [ |
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| SECTION 2. 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. AMORTIZATION OF UNFUNDED LIABILITY. (a) If | ||
| the governing body of a public retirement system receives an | ||
| actuarial valuation conducted in accordance with Section 802.101 | ||
| indicating an infinite amortization period, the governing body | ||
| shall notify the board and the governing body of the plan sponsor of | ||
| that determination in writing not later than the 30th day after the | ||
| date the valuation is received. | ||
| (b) Following the provision of notice under Subsection (a), | ||
| the public retirement system has six fiscal years to take | ||
| corrective action without additional reporting requirements. If by | ||
| the expiration of the sixth fiscal year the system has not received | ||
| an actuarial valuation conducted in accordance with Section 802.101 | ||
| indicating that the system is able to amortize unfunded liability | ||
| over a finite period, the governing body of the system shall prepare | ||
| a written corrective action plan detailing actions to be taken by | ||
| the public retirement system and plan sponsor to achieve a funded | ||
| ratio of not less than 80 percent and an amortization period that | ||
| does not exceed 30 years. | ||
| (c) The corrective action plan described by Subsection (b) | ||
| 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 270th day after the expiration of | ||
| the six-fiscal-year period described by that subsection. If the | ||
| governing body of the public retirement system and the governing | ||
| body of the plan sponsor do not jointly approve a single corrective | ||
| action plan, the two governing bodies may submit separate | ||
| corrective action plans. | ||
| (d) The corrective action plan described by Subsection (b) | ||
| must be updated and resubmitted to the board every third year until | ||
| the public retirement system receives an actuarial valuation | ||
| conducted in accordance with Section 802.101 indicating that the | ||
| system has achieved a funded ratio of not less than 80 percent and | ||
| an amortization period that does not exceed 30 years. | ||
| Sec. 802.402. ACTION INCREASING AMORTIZATION PERIOD. A new | ||
| monetary benefit payable by the public 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 30 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 of at least one payment during each fiscal year. | ||
| (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 not to exceed | ||
| five years, 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 the actuarial assumptions require adjustment; | ||
| and | ||
| (2) a study of the public retirement system's assets | ||
| and liabilities for use in reviewing asset allocations. | ||
| Sec. 802.405. 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 3. (a) Notwithstanding Section 802.401, Government | ||
| Code, as added by this Act, a public retirement system that receives | ||
| an actuarial valuation indicating an infinite amortization period | ||
| as described by that section on or after the effective date of this | ||
| Act is entitled to the six-fiscal-year period described by that | ||
| section to take corrective action described by that section | ||
| regardless of whether the public retirement system received a | ||
| previous actuarial valuation indicating an infinite amortization | ||
| period before the effective date of this Act. | ||
| (b) Section 802.402, Government Code, as added by this Act, | ||
| applies only to a new monetary benefit granted under a statute | ||
| enacted, or a contract entered into or renewed, on or after the | ||
| effective date of this Act. A monetary benefit granted under a | ||
| statute enacted, or a contract entered into or renewed, before the | ||
| effective date of this Act is governed by the law in effect | ||
| immediately before that date, and the former law is continued in | ||
| effect for that purpose. | ||
| 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 February 1, 2014. | ||
| SECTION 5. This Act takes effect on the 91st day after the | ||
| last day of the legislative session. | ||
