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A BILL TO BE ENTITLED
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AN ACT
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relating to the funding soundness restoration plans required for |
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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. Sections 802.2015(c), (d), and (e), Government |
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Code, are amended to read as follows: |
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(c) 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 amortize the unfunded actuarial |
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accrued liability within 30 [40] years. If a public retirement |
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system's actuarial valuation shows that the system's amortization |
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period has exceeded 30 [40] years for three consecutive annual |
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actuarial valuations, or two consecutive actuarial valuations in |
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the case of a system that conducts the valuations every two or three |
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years, the governing body of the public retirement system and the |
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associated governmental entity shall formulate a funding soundness |
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restoration plan under Subsection (e) in accordance with the |
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system's governing statute. |
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(d) The governing body of a public retirement system and the |
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associated governmental entity that have formulated a funding |
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soundness restoration plan under Subsection (e) shall formulate a |
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revised funding soundness restoration plan under that subsection, |
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in accordance with the system's governing statute, if the system |
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conducts an actuarial valuation showing that: |
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(1) the system's amortization period exceeds 30 [40] |
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years; and |
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(2) the previously formulated funding soundness |
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restoration plan has not been adhered to. |
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(e) A funding soundness restoration plan formulated under |
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this section must: |
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(1) be developed by the public retirement system and |
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the associated governmental entity in accordance with the system's |
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governing statute; and |
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(2) be designed to achieve a contribution rate that |
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will be sufficient to amortize the unfunded actuarial accrued |
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liability within 30 [40] years not later than the 10th anniversary |
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of the date on which the final version of a funding soundness |
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restoration plan is agreed to. |
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SECTION 2. Sections 802.2016(c), (d), and (e), Government |
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Code, are amended to read as follows: |
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(c) A public retirement system shall notify the associated |
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governmental entity in writing if the retirement system receives an |
|
actuarial valuation indicating that the system's actual |
|
contributions are not sufficient to amortize the unfunded actuarial |
|
accrued liability within 30 [40] years. If a public retirement |
|
system's actuarial valuation shows that the system's amortization |
|
period has exceeded 30 [40] years for three consecutive annual |
|
actuarial valuations, or two consecutive actuarial valuations in |
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the case of a system that conducts the valuations every two or three |
|
years, the associated governmental entity shall formulate a funding |
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soundness restoration plan under Subsection (e) in accordance with |
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the public retirement system's governing statute. |
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(d) An associated governmental entity that has formulated a |
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funding soundness restoration plan under Subsection (e) shall |
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formulate a revised funding soundness restoration plan under that |
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subsection, in accordance with the public retirement system's |
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governing statute, if the system conducts an actuarial valuation |
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showing that: |
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(1) the system's amortization period exceeds 30 [40] |
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years; and |
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(2) the previously formulated funding soundness |
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restoration plan has not been adhered to. |
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(e) A funding soundness restoration plan formulated under |
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this section must: |
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(1) be developed in accordance with the public |
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retirement system's governing statute by the associated |
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governmental entity; and |
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(2) be designed to achieve a contribution rate that |
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will be sufficient to amortize the unfunded actuarial accrued |
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liability within 30 [40] years not later than the 10th anniversary |
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of the date on which the final version of a funding soundness |
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restoration plan is formulated. |
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SECTION 3. A public retirement system and an associated |
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governmental entity subject to Section 802.2015, Government Code, |
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as amended by this Act, or a governmental entity subject to Section |
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802.2016, Government Code, as amended by this Act, shall formulate |
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a funding soundness restoration plan, if required to do so under the |
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applicable section, based on the most recent actuarial valuation |
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study conducted under Section 802.101, Government Code, not later |
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than November 1, 2020. |
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SECTION 4. This Act takes effect September 1, 2019. |