| |
| |
|
|
A BILL TO BE ENTITLED
|
|
|
AN ACT
|
|
|
relating to a funding soundness restoration plan for certain public |
|
|
retirement systems. |
|
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
|
SECTION 1. Section 28(h), Texas Local Fire Fighters |
|
|
Retirement Act (Article 6243e, Vernon's Texas Civil Statutes), is |
|
|
amended to read as follows: |
|
|
(h) A retirement system established under this Act is exempt |
|
|
from Subchapter C, Chapter 802, Government Code, except Sections |
|
|
802.2017, 802.202, 802.205, and 802.207. |
|
|
SECTION 2. Section 802.2015(b), Government Code, is amended |
|
|
to read as follows: |
|
|
(b) This section applies to a public retirement system and |
|
|
its associated governmental entity other than a public retirement |
|
|
system and its associated governmental entity subject to Section |
|
|
802.2016 or 802.2017. |
|
|
SECTION 3. Subchapter C, Chapter 802, Government Code, is |
|
|
amended by adding Section 802.2017 to read as follows: |
|
|
Sec. 802.2017. FUNDING SOUNDNESS RESTORATION PLAN FOR |
|
|
CERTAIN PUBLIC RETIREMENT SYSTEMS FOR FIRE FIGHTERS. (a) In this |
|
|
section: |
|
|
(1) "Funded ratio" has the meaning assigned by Section |
|
|
802.2011. |
|
|
(2) "Governmental entity" has the meaning assigned by |
|
|
Section 802.1012. |
|
|
(b) This section applies only to a public retirement system |
|
|
governed by the Texas Local Fire Fighters Retirement Act (Article |
|
|
6243e, Vernon's Texas Civil Statutes), and its associated |
|
|
governmental entity. |
|
|
(c) A public retirement system shall notify the associated |
|
|
governmental entity in writing if the system receives an actuarial |
|
|
valuation indicating that the system's actual contributions are not |
|
|
sufficient to amortize the unfunded actuarial accrued liability |
|
|
within 30 years. The governing body of the public retirement system |
|
|
and the governing body of the associated government entity shall |
|
|
jointly formulate a funding soundness restoration plan under |
|
|
Subsection (e) if: |
|
|
(1) the system's actuarial valuation shows that the |
|
|
system's amortization period exceeds: |
|
|
(A) 40 years; or |
|
|
(B) 30 years and: |
|
|
(i) the funded ratio of the system is less |
|
|
than 65 percent; or |
|
|
(ii) the funded ratio of the system is 65 |
|
|
percent or greater and the system receives: |
|
|
(a) if the system receives an annual |
|
|
actuarial valuation, two more consecutive actuarial valuations |
|
|
that show the funded ratio of the system is 65 percent or greater; |
|
|
or |
|
|
(b) if the system receives actuarial |
|
|
valuations every two or three years, one more consecutive actuarial |
|
|
valuation that shows the funded ratio of the system is 65 percent or |
|
|
greater; |
|
|
(2) except as provided by Subsection (d), a funding |
|
|
soundness restoration plan formulated under Subsection (e) or |
|
|
Section 802.2015 is not already in effect; and |
|
|
(3) the board has not exempted the system from the |
|
|
requirement to formulate a funding soundness restoration plan in |
|
|
accordance with the rules adopted under Subsection (h). |
|
|
(d) The governing body of a public retirement system and the |
|
|
associated governmental entity that have formulated a funding |
|
|
soundness restoration plan under Subsection (e) shall formulate a |
|
|
revised funding soundness restoration plan under that subsection |
|
|
if, based on the most recent actuarial valuation, the board |
|
|
determines that the previously formulated funding soundness |
|
|
restoration plan has not been adhered to. |
|
|
(e) A funding soundness restoration plan formulated under |
|
|
this section must: |
|
|
(1) be developed by the public retirement system and |
|
|
the associated governmental entity in accordance with the system's |
|
|
governing statute; and |
|
|
(2) be designed to achieve a contribution rate that |
|
|
will be sufficient to amortize the unfunded actuarial accrued |
|
|
liability within 30 years not later than the 10th anniversary of the |
|
|
date on which the final version of a funding soundness restoration |
|
|
plan is agreed to. |
|
|
(f) A public retirement system and the associated |
|
|
governmental entity that formulate a funding soundness restoration |
|
|
plan shall report any updates of progress made by the entities |
|
|
toward improved actuarial soundness to the board every two years. |
|
|
(g) Each public retirement system that formulates a funding |
|
|
soundness restoration plan as provided by this section shall submit |
|
|
a copy of that plan to the board and any change to the plan not later |
|
|
than the 31st day after the date on which the plan or the change is |
|
|
agreed to. |
|
|
(h) The board shall adopt rules for the administration of |
|
|
this section, including a procedure for a public retirement system |
|
|
subject to the requirement to formulate a funding soundness |
|
|
restoration plan under this section to request from the board an |
|
|
exemption from the requirement based on: |
|
|
(1) the system's adoption of actuarially determined |
|
|
contribution rates; and |
|
|
(2) one or more actuarial valuations of the system |
|
|
showing the system's amortization period is projected to become |
|
|
within a reasonable period an amortization period not exceeding 30 |
|
|
years. |
|
|
SECTION 4. As soon as practicable after the effective date |
|
|
of this Act, the State Pension Review Board shall adopt the rules |
|
|
required by Section 802.2017(h), Government Code, as added by this |
|
|
Act. |
|
|
SECTION 5. A public retirement system is not required to |
|
|
formulate a funding soundness restoration plan under Section |
|
|
802.2017, Government Code, as added by this Act, based on an |
|
|
actuarial valuation made before the effective date of this Act. |
|
|
SECTION 6. This Act takes effect September 1, 2021. |