In response to your request for an Actuarial Impact Statement on HB 246 (relating to the eligibility for service retirement annuities of certain elected officials convicted of certain crimes) within the Employees Retirement System of Texas (ERS) the Pension Review Board has determined the following:

ACTUARIAL EFFECTS:

According to the actuarial analysis, benefits could only decrease under the proposed legislation, and the changes in the bill could decrease the cost of the plan, but would have no material impact on Employee Retirement System of Texas (ERS).

SYNOPSIS OF PROVISIONS:

HB 246 would add Section 814.1021 to Chapter 814 of the Government Code, so that certain elected class members if convicted of a qualifying felony on or after September 1, 2011, will not be eligible to receive a service retirement annuity from the retirement system. The proposed section would apply only to members of the legislature and statewide elected officials (except JRS I or JRS II members), as members of the elected class of the ERS. A qualifying felony is defined as any felony involving bribery; embezzlement, extortion, or other theft of public money; perjury; or conspiracy or the attempt to commit any of the aforementioned crimes arising directly from the official duties of such elected office.  Payments, including suspended payments with interest, will resume if the member has the conviction overturned on appeal or meets the requirements for innocence under Section 103.001(a)(2) of the Civil Practice Remedies Code. The provisions of this bill are effective September 1, 2011.

FINDINGS AND CONCLUSIONS:

According to the actuarial analysis, benefits could only decrease under the proposed legislation, and the changes in the bill could decrease the cost of the plan, but would have no material impact on ERS. The actuarial review states that the proposed bill would potentially impact a small number of ERS members based on their conviction of a qualifying felony; hence, there is no cost increase, and no material cost decrease due to the bill. Additionally, based on the information provided by the ERS, HB 246 would have no significant fiscal impact on the ERS.  

SOURCES:  

Actuarial Analysis by Richard A. Mackesey & R. Ryan Falls, Actuaries, Buck Consultants, March 4, 2011.

Actuarial Review by Mr. Daniel P. Moore, Staff Actuary, Pension Review Board, March, 25, 2011.