Honorable Jim Murphy, Chair, House Committee on Pensions, Investments & Financial Services
John McGeady, Assistant Director Sarah Keyton, Assistant Director
Legislative Budget Board
SB1337 by Huffman (relating to credit in, benefits from, and administration of the Texas Municipal Retirement System.), Committee Report 2nd House, Substituted
The bill would make several updates to the Texas Municipal Retirement System (TMRS) governing statute relating to credit in, benefits from, and administration of TMRS.
The actuarial analysis (AA) provided by the TMRS actuary, Gabriel Roeder Smith & Company, focuses on three main changes that could potentially impact the actuarial results of the System:
Amortization periods - The bill would clarify that the maximum amortization period for a city's actuarial accrued liability is 30 years in all cases, while adding language to clarify the Board's authority concerning setting the actual funding policy. According to the AA, the Board's current funding policy is already stronger than the maximums described in the proposed bill and thus this is not anticipated to have any actuarial impact.
Prior Service Credit (PSC) - The bill would decrease the minimum allowable PSC to 0% (from the current 10%) in certain situations and eliminates use of PSC in the ongoing Update Service Credit calculation for TMRS members receiving the 0% PSC. According to the AA, the change would only impact future entities joining TMRS. Therefore, this change would have no actuarial impact.
Occupational Disability - The bill would update provisions relating to post-disability evaluations, most specifically removing any earnings tests. According to the AA, due to the immateriality of the disability benefit in the TMRS cost structure, TMRS already values the plan assuming no reduction in benefit for the earnings limit. Therefore, there is no actuarial impact from this provision.
The bill would take effect January 1, 2020.
Actuarial Analysis by Mark R. Randall, MAAA, FCA, EA,and Joseph P. Newton, MAAA, FSA, EA, Gabriel, Roeder, Smith and Company, March 21, 2019.
338 Pension Review Board