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A BILL TO BE ENTITLED
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AN ACT
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relating to the evaluation and reporting of investment practices |
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and performance 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 802.109, Government Code, is amended by |
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amending Subsections (d), (e), (e-1), (f), and (g) and adding |
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Subsections (d-1), (d-2), and (j) to read as follows: |
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(d) In accordance with a schedule of deadlines prescribed by |
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the board and except as provided by Subsection (e), a [A] public |
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retirement system shall conduct an [the] evaluation under |
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[described by] Subsection (a): |
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(1) once every three years, if the total assets of the |
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retirement system as of the date [last day] of the preceding |
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evaluation [fiscal year] were at least $100 million; or |
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(2) subject to Subsection (d-1), once every six years, |
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if the total assets of the retirement system as of the date [last |
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day] of the preceding evaluation [fiscal year] were at least $30 |
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million and less than $100 million. |
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(d-1) If a public retirement system is conducting |
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evaluations every six years as required by Subsection (d)(2) and |
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the system's total pension liability increases to at least $100 |
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million during a fiscal year, the system shall complete the next |
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evaluation under Subsection (a) by the next appropriate deadline, |
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as determined by the board, under the evaluation schedule. |
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(d-2) Subject to Subsection (d-1) and except as provided by |
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Subsection (e), a public retirement system subject to an evaluation |
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requirement under Subsection (d)(1) or (2) remains subject to that |
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same requirement unless both the total assets and the total pension |
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liability of the system decrease to an amount that is below the |
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minimum amount prescribed by the applicable requirement. |
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(e) A public retirement system is not required to conduct an |
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[the] evaluation under [described by] Subsection (a) if the total |
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assets of the retirement system were less than $30 million as of the |
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last day of the [preceding] fiscal year immediately preceding the |
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next evaluation deadline under the evaluation schedule [were less |
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than $30 million]. |
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(e-1) An [Not later than the 30th day after the date an] |
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independent firm that completes an evaluation described by |
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Subsection (a)[, the independent firm] shall: |
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(1) submit to the public retirement system for |
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purposes of discussion and clarification a substantially completed |
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[preliminary] draft of the evaluation report; and |
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(2) request in writing that the system[, on or before |
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the 30th day after the date the system receives the preliminary |
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draft,] submit to the firm: |
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(A) a description of any action taken or expected |
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to be taken in response to a recommendation made in the evaluation; |
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and |
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(B) any written response of the system that the |
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system wants to accompany the final evaluation report. |
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(f) The independent firm shall file the final evaluation |
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report, including the evaluation results and any response received |
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from the public retirement system, with the governing body of the |
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system[: |
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[(1) not earlier than the 31st day after the date on |
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which the preliminary draft is submitted to the system; and |
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[(2) not later than the later of: |
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[(A) the 60th day after the date on which the |
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preliminary draft is submitted to the system; or |
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[(B) May 1 in the year following the year in which |
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the system is evaluated under Subsection (a)]. |
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(g) The [Not later than the 31st day after the date the] |
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governing body of a public retirement system that receives a report |
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of an evaluation under this section[, the governing body] shall |
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submit the report to the board. |
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(j) In this section: |
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(1) "Evaluation schedule" means the schedule of |
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deadlines prescribed by the board under Subsection (d). |
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(2) "Total pension liability" means the portion of the |
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present value of projected retirement benefit payments to be |
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provided through the retirement system to active and inactive |
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members that is attributable to those members' past periods of |
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service, in compliance with Statement No. 68 of the Governmental |
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Accounting Standards Board. |
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SECTION 2. Not later than January 1, 2026, the State Pension |
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Review Board shall develop the schedule of deadlines required by |
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Section 802.109(d), Government Code, as amended by this Act. |
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SECTION 3. This Act takes effect September 1, 2025. |