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A BILL TO BE ENTITLED
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AN ACT
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relating to requiring certain public retirement systems to adopt a |
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funding plan to achieve actuarial soundness. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 801.209(a), Government Code, is amended |
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to read as follows: |
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(a) For each public retirement system, the board shall post |
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on the board's Internet website, or on a publicly available website |
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that is linked to the board's website, the most recent data from |
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reports received under Sections 802.101, 802.103, 802.104, |
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802.105, 802.108, 802.2015, [and] 802.2016, and 802.2017. |
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SECTION 2. Sections 802.002(a) and (c), Government Code, |
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are amended 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, 802.2016, |
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802.2017, 802.202, 802.203, 802.204, 802.205, 802.206, and |
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802.207. The Judicial Retirement System of Texas Plan One is exempt |
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from all of Subchapters B and C except Sections 802.104 and 802.105. |
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The optional retirement program governed by Chapter 830 is exempt |
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from all of Subchapters B and C except Section 802.106. |
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(c) Notwithstanding any other law, a defined contribution |
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plan is exempt from Sections 802.101, 802.1012, 802.1014, 802.103, |
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802.104, 802.2017, and 802.202(d). This subsection may not be |
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construed to exempt any plan from Section 802.105 or 802.106(h). |
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SECTION 3. Subchapter C, Chapter 802, Government Code, is |
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amended by adding Section 802.2017 to read as follows: |
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Sec. 802.2017. PLANS TO RESTORE FUNDING FOR CERTAIN |
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RETIREMENT SYSTEMS. (a) In this section, "governmental entity" has |
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the meaning assigned by Section 802.1012. |
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(b) This section does not apply to a public retirement |
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system and its associated governmental entity if the retirement |
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system and governmental entity have already developed and are |
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adhering to, as determined by the board, a funding soundness |
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restoration plan under Section 802.2015 or 802.2016. |
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(c) If, on March 1, 2018, the most recent actuarial study or |
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separate report filed with the board by the governing body of a |
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public retirement system under Section 802.101 or other law under |
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this title or under Title 109, Revised Statutes, indicates that the |
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retirement system's funding level is not sufficient to achieve and |
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maintain an amortization period that does not exceed 30 years, on |
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receipt of a notice to that effect from the board, the governing |
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body of the public retirement system and the associated |
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governmental entity shall immediately: |
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(1) notwithstanding any other law and to the extent |
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necessary to achieve the funding level described by this |
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subsection, as appropriate: |
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(A) suspend any increases in the pay or salaries |
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of the governmental entity's officers or employees who are active |
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members of the retirement system; |
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(B) seek to issue a bond or other obligation |
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under Chapter 107, Local Government Code; |
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(C) increase the contribution rates of the |
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governmental entity and the active members of the retirement |
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system; and |
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(D) discontinue the provision of cost-of-living |
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adjustments; and |
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(2) jointly develop a written plan that identifies |
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specific measures that the retirement system and its associated |
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governmental entity shall implement to restore funding to a level |
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adequate to achieve and maintain an amortization period that does |
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not exceed 30 years and prescribes a schedule for implementation of |
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those measures. |
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(d) The public retirement system shall submit a copy of the |
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plan to restore funding developed under Subsection (c) to the |
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board. |
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(e) If the board determines that implementation of the plan |
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will restore funding to a level adequate to achieve and maintain an |
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amortization period that does not exceed 30 years, the board shall |
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approve the plan. The board may require that the retirement system |
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provide the board with an actuarial analysis of a plan for purposes |
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of making a determination under this section. |
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(f) Not later than the 30th day after the date on which the |
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board receives a plan under Subsection (d) or (h), the board shall |
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inform the public retirement system and the retirement system's |
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associated governmental entity whether the plan is approved. |
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(g) If a plan to restore funding is approved under this |
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section, the public retirement system and its associated |
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governmental entity shall implement the plan and are released from |
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taking the actions required by Subsection (c)(1) to the extent that |
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an action is not included in the plan. |
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(h) If the board does not approve a plan to restore funding |
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under Subsection (e): |
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(1) the board shall provide recommendations to the |
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public retirement system and its associated governmental entity |
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regarding changes to the plan that would result in the board's |
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approval; and |
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(2) the public retirement system and its associated |
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governmental entity may submit amended or alternative plans in a |
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manner prescribed by the board until the entities receive the |
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board's approval of a plan. |
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(i) To the extent of a conflict between a provision of a plan |
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to restore funding that has been approved by the board under this |
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section and any other law, including Title 109, Revised Statutes, |
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the plan prevails. |
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(j) A public retirement system and its associated |
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governmental entity that implement a plan to restore funding under |
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this section shall annually report to the board regarding any |
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progress made by the system and entity toward improved actuarial |
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soundness under the plan. |
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(k) The board may adopt rules necessary to implement this |
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section, including rules that allow a public retirement system and |
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its associated governmental entity to amend an approved plan to |
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restore funding. |
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SECTION 4. This Act takes effect September 1, 2017. |