CSHB 1070 would amend Chapter 802, Government Code, by adding the definition of “plan year” to section 802.1012(a). Currently, the term “fiscal year” is used to identify the date that a plan would use to gauge the dates that reports are due to the Pension Review Board. The definition of “plan year” clarifies that the fiscal year used should be that of the affected pension plan of a public retirement system.

Currently, pension plans with a book value of total assets over $100 million are required to have their actuarial valuations audited every five years. CSHB 1070 would add a due date to 802.1012(c), making the audit due to the PRB no later than six months after the end of the retirement system’s plan year.

CSHB 1070 would take effect September 1, 2009. Those governmental entities that have already initiated an audit before the effective date of the Act are not required to initiate another audit before September 1, 2013. Governmental entities that are required but have not initiated an audit before the effective date of the Act are to initiate the audit no later than March 1, 2010.

The bill, if enacted, will not have a significant actuarial effect because it does not propose to change the funding or obligations of any public retirement system.