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A BILL TO BE ENTITLED
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AN ACT
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relating to the funding policies, actuarial valuations, and |
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reporting requirements of certain public retirement systems. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 802.002(a), Government Code, is amended |
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to read as follows: |
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(a) Except as provided by Subsection (b), the Employees |
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Retirement System of Texas, the Teacher Retirement System of Texas, |
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the Texas County and District Retirement System, the Texas |
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Municipal Retirement System, and the Judicial Retirement System of |
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Texas Plan Two are exempt from Sections 802.101(a), 802.101(b), |
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802.101(d), 802.102, 802.103(a), 802.103(b), 802.2015, 802.202, |
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802.203, 802.204, 802.205, 802.206, and 802.207. The Judicial |
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Retirement System of Texas Plan One is exempt from all of |
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Subchapters B and C except Sections 802.104 and 802.105. The |
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optional retirement program governed by Chapter 830 is exempt from |
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all of Subchapters B and C except Section 802.106. |
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SECTION 2. Section 802.101(a), Government Code, is amended |
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to read as follows: |
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(a) The governing body of a public retirement system shall |
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employ an actuary, as a full-time or part-time employee or as a |
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consultant, to make a valuation at least once every three years of |
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the assets and liabilities of the system on the basis of assumptions |
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and methods that are reasonable in the aggregate, considering the |
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experience of the program and reasonable expectations, and that, in |
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combination, offer the actuary's best estimate of anticipated |
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experience under the program. The valuation must include an |
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actuarially determined contribution. |
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SECTION 3. Section 802.1014(b), Government Code, is amended |
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to read as follows: |
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(b) Except as provided by Subsection (c), a public |
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retirement system that has assets of at least $100 million shall |
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conduct once every five years [conducts] an actuarial experience |
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study and shall submit to the board a copy of the actuarial |
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experience study before the 31st day after the date of the study's |
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adoption. |
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SECTION 4. Subchapter B, Chapter 802, Government Code, is |
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amended by adding Section 802.2015 to read as follows: |
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Sec. 802.2015. FUNDING POLICY. (a) In this section, |
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"governmental entity" has the meaning assigned by Section 802.1012. |
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(b) The governing body of a public retirement system and the |
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associated governmental entity shall cooperate in formulating and |
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adopting a funding policy for the retirement system to enable the |
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retirement system to achieve and maintain actuarial soundness. |
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(c) A funding policy adopted under this section must |
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establish a funding level based on the actuarially determined |
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contribution. The public retirement system and the governmental |
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entity, in consultation with the system's actuary, shall develop |
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the actuarially determined contribution needed to achieve and |
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maintain an amortization period that is in accordance with the |
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board's Guidelines for Actuarial Soundness. |
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(d) Each public retirement system shall adopt a funding |
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policy as provided by this section and submit a copy of that policy |
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to the board. A public retirement system shall provide the board |
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with a copy of any change to the adopted policy not later than the |
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31st day after the date on which the change is adopted. |
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(e) A public retirement system shall notify the associated |
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governmental entity in writing if the retirement system receives an |
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actuarial valuation indicating that the system's actual |
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contributions are not sufficient to achieve and maintain the |
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amortization period applicable to the retirement system as |
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established in the retirement system's adopted funding policy. |
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(f) If a public retirement system receives three |
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consecutive annual actuarial valuations, or two consecutive |
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actuarial valuations in the case of a system that conducts the |
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valuations every two or three years, indicating that the funding |
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level is not sufficient to meet the requirements of the system's |
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funding policy, the retirement system and the associated |
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governmental entity shall develop a written plan with specific |
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measures reasonably designed to restore funding to a level adequate |
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to achieve and maintain the amortization period applicable to the |
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retirement system as established in the retirement system's adopted |
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funding policy. The public retirement system shall submit a copy of |
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the plan developed under this subsection to the board. |
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SECTION 5. A public retirement system subject to Section |
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802.2015, Government Code, as added by this Act, and the associated |
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governmental entity, as defined by that section, shall adopt a |
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funding policy based on the most recent actuarial valuation study |
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conducted under Section 802.101, Government Code, not later than |
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November 1, 2016. The first actuarial valuation study that is |
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conducted for or by a public retirement system on or after the date |
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the retirement system adopts its funding policy must include an |
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actuarially determined contribution rate. |
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SECTION 6. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2015. |