2011S0657-1 03/09/11

By: Ogden S.B. No. 1612

A BILL TO BE ENTITLED

AN ACT

relating to the monitoring, oversight, and funding of certain public retirement systems.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subsections (c) and (e), Section 801.113, Government Code, are amended to read as follows:

(c) The governing board of a [any] public retirement system shall [may vote to] make an annual contribution to the State Pension Review Board in an amount equal [not] to [exceed] 50 cents for each active member and annuitant of the retirement system as of September 1 of the year for which the contribution is made. The contribution is payable in a lump sum.

(e) The board is authorized to conduct training sessions, schools, or other educational activities for trustees and administrators of public retirement systems. The board may also furnish other appropriate services such as actuarial studies or other requirements of systems and may establish appropriate fees for these activities and services. [The fees may be based on whether or not the trustees, administrators, or systems contribute to the State Pension Review Board fund under Subsection (c) of this section.] The net proceeds of these fees shall be deposited in the fund.

SECTION 2. Subsection (b), Section 801.201, Government Code, is amended to read as follows:

(b) For the purpose of performing its duties under Section 801.202(1) or (2), the board by rule may require clarification of information provided by a public retirement system in a report that is required by law and is required to be filed with the board. [A rule adopted under this subsection may not be enforced against a public retirement system if compliance with the rule would cause the system to incur a major expense.]

SECTION 3. Section 801.203, Government Code, is amended by adding Subsections (c), (d), and (e) to read as follows:

(c) The board shall prepare an annual report relating to the performance of each public retirement system that administers a defined benefit plan and has total assets the book value of which, as of the last day of the preceding fiscal year, is at least $100 million. The report required under this section must include:

(1) each system's investment allocations and practices during the preceding fiscal year;

(2) the rate of return on the investment of each system's cash and securities during the preceding fiscal year;

(3) a description of the extent to which, during the preceding fiscal year, each system complied with:

(A) the reporting requirements under this chapter and Chapter 802; and

(B) the system's investment strategy;

(4) alternative rate of return projections for the current fiscal year; and

(5) solvency and cash flow projections for the current fiscal year.

(d) The board shall:

(1) prepare the report required under Subsection (c) in two parts, with the first part posted on the board's Internet website not later than March 1 of each year and the second part posted on the board's Internet website not later than September 1 of each year, and shall include the information required for a public retirement system in one of the two parts based on the date the system's fiscal year ends; and

(2) immediately notify the governor and all members of the legislature when the report, or part of the report, is available for viewing on the board's Internet website.

(e) The board shall include in any report to the governor or members of the legislature:

(1) a description of any information that was not provided by a public retirement system pursuant to a requirement of this chapter or Chapter 802 or pursuant to a request by the board;

(2) details regarding the circumstances of the requirement or request described in Subdivision (1), including the identification of the public retirement system, the requirement or request, and any response provided by the public retirement system; and

(3) the effect of the lack of the information on the board's ability to meet the duties and reporting requirements in this chapter or Chapter 802.

SECTION 4. Subchapter B, Chapter 802, Government Code, is amended by adding Section 802.1013 to read as follows:

Sec. 802.1013. ACTUARIAL EXPERIENCE STUDIES. (a) In this section, "plan year" means the 12-month accounting period of the affected pension plan of a public retirement system subject to this section.

(b) Subject to Subsection (c), the board may require a public retirement system with total assets the book value of which, as of the last day of the preceding plan year, is at least $100 million to conduct an actuarial experience study. A public retirement system shall provide to the board any actuarial experience study conducted by or for the public retirement system.

(c) The board may not require a public retirement system to conduct more than one actuarial experience study every five years.

(d) The board may adopt rules to implement this section.

SECTION 5. Chapter 107, Local Government Code, is repealed.

SECTION 6. The governing board of a public retirement system shall make the initial contribution required under Subsection (c), Section 801.113, Government Code, as amended by this Act, to the State Pension Review Board fund as required by that section on or before September 1, 2011.

SECTION 7. The repeal of Chapter 107, Local Government Code, by this Act does not:

(1) affect the validity of an obligation issued under that chapter before the effective date of this Act; or

(2) diminish or impair the rights of a holder of an obligation of a municipality issued for the purpose authorized by that chapter before the effective date of this Act.

SECTION 8. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect on the 91st day after the last day of the legislative session.