The bill would amend the Government Code to include provisions relating to disclosure of certain potential conflicts of interest, standards of conduct, acceptance of benefits, and civil penalty for theft or breach of fiduciary duty applicable to members of a governing body of a public retirement system or certain investment managers, consultants or advisors providing services relating to the management of retirement system assets. CSHB 2432 would also require local retirement systems to file annual reports regarding certain annuity payments with their sponsoring authority. This report would be required to contain certain information regarding annuities paid including the benefit calculation methodology and the use of overtime pay in the calculation of the benefit amount.  

Additionally, the bill would amend the Government Code to require the Pension Review Board (PRB) to adopt rules by January 1, 2014 to provide guidelines relating to the disclosure of potential conflicts of interest and the procurement of investment managers and advisors by retirement systems. The bill would also allow the PRB to review the contracts of retirement systems with investment managers.

The bill would take effect September 1, 2013.

The bill, if enacted, will not have an actuarial effect on any public retirement system because it does not propose to change their benefit structure, funding or obligations.