Honorable Craig Eiland, Chair, House Committee on Pensions & Investments
FROM:
John S. O'Brien, Deputy Director, Legislative Budget Board
IN RE:
SB262 by Williams (Relating to benefits from the Employees Retirement System of Texas for law enforcement officers commissioned by the Texas State Board of Pharmacy.), As Engrossed
The bill would change the definition of law enforcement officer to exclude those commissioned by the State Board of Pharmacy who begin employment on or after September 1, 2005. As a result, such individuals will benefit only under ERS and not under LECOSRF.
The bill, if enacted, would not affect any current members of the ERS or LECOSRF. It would reduce the number of future members eligible for the retirement eligibility and supplemental benefits available to law enforcement officers. The ERS has stated that the number of law enforcement positions with the State Board of Pharmacy is a relatively small percentage of the total number of enforcement officers. ERS is currently inadequately financed by member and state contributions. LECOSRF is expected to become inadequately financed in fiscal year 2007. Since the proposal does not materially change the actuarial cost of ERS or LECOSRF, additional State contributions are not required under applicable funding rules.
The ERS actuary certifies that the changes in this bill would not require an increase in the State contribution to the ERS or LECOSRF to comply with the requirements of Texas Government Code, Section 811.006, because the bill does not materially change the actuarial cost of the ERS or the LECOSRF. This certification complies with the Rules adopted by the State Legislature.
The analysis was developed assuming that no other legislative changes are adopted which affect this Fund. In some cases, when several bills are adopted, they compound each other resulting in a total cost that is greater than the sum of each bill considered independently.
The PRB actuary stated the analysis considers only those changes contained in the proposal and cautions that the combined economic impact of several proposals currently under consideration could exceed the economic impact of each such proposal considered individually. The conclusions contained in the analysis seem reasonable.
All actuarial projections have a degree of uncertainty because they are based on the probability of occurrence of future contingent events. Accordingly, actual results will be different from the results contained in the analysis to the extent actual future experience varies from the experience implied by the assumptions.