83S10176 TJS-F
	By: Callegari	H.B. No. 51

	A BILL TO BE ENTITLED
	AN ACT
	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, [and] C, and E except Sections 802.104 and 802.105.
	The optional retirement program governed by Chapter 830 is exempt
	from all of Subchapters B, [and] C, and E except Section 802.106.
	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.