| |
| |
|
|
A BILL TO BE ENTITLED
|
|
|
AN ACT
|
|
|
relating to the administration of, contributions to, and benefits |
|
|
under the public retirement systems for police and firefighters in |
|
|
certain municipalities. |
|
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
|
SECTION 1. Section 2.01, Article 6243a-1, Revised Statutes, |
|
|
is amended by adding Subdivision (3-a) to read as follows: |
|
|
(3-a) "Actuarially determined contribution rate" |
|
|
means for any city fiscal year, the city contribution rate: |
|
|
(A) expressed as a percentage of members' |
|
|
projected aggregate computation pay for the fiscal year; and |
|
|
(B) actuarially determined in accordance with |
|
|
Section 4.02 of this article. |
|
|
SECTION 2. Article 6243a-1, Revised Statutes, is amended by |
|
|
adding Section 2.026 to read as follows: |
|
|
Sec. 2.026. ADMINISTRATIVE REQUIREMENTS. (a) As a public |
|
|
retirement system within the meaning of Section 802.001, Government |
|
|
Code, the pension system is subject to and must comply with Chapter |
|
|
802, Government Code. |
|
|
(b) Any plan or rule adopted under former Section 2.025 of |
|
|
this article: |
|
|
(1) may not be implemented; and |
|
|
(2) is unenforceable. |
|
|
SECTION 3. Article 6243a-1, Revised Statutes, is amended by |
|
|
adding Section 3.014 to read as follows: |
|
|
Sec. 3.014. CITY AND BOARD APPROVAL REQUIRED FOR CERTAIN |
|
|
ACTIONS. Notwithstanding any other provision of this article, the |
|
|
following actions must be approved by the board and the city council |
|
|
if, as a result of taking the action, the action will result in an |
|
|
increase in the pension system's liabilities: |
|
|
(1) the settlement of any lawsuit by the board; |
|
|
(2) any proposed increase to benefits by the board, |
|
|
including any adjustment under Section 6.12 of this article; and |
|
|
(3) any changes to actuarial assumptions under Section |
|
|
2.02 of this article, including the current discount rate. |
|
|
SECTION 4. Section 4.02, Article 6243a-1, Revised Statutes, |
|
|
is amended by amending Subsection (d) and adding Subsections (d-1), |
|
|
(e-1), (f), (g), (h), and (h-1) to read as follows: |
|
|
(d) Subject to Section 4.025 of this article, the city shall |
|
|
make contributions to the pension system biweekly using an |
|
|
actuarially determined contribution rate with a five-year step-up |
|
|
period beginning October 2024. Subject to Subsections (e-1) and |
|
|
(f) of this section, the actuarially determined contribution rate |
|
|
for any given city fiscal year is the sum of the following as |
|
|
determined in the actuarial valuation for the plan year preceding |
|
|
the fiscal year: |
|
|
(1) an established 30-year closed amortization amount |
|
|
with five-year step-up and no step-down for the unfunded actuarial |
|
|
accrued liability and administrative expenses, determined based on |
|
|
the January 1, 2023, actuarial valuation, as shown in the following |
|
|
fixed dollar schedule, divided by the members' projected aggregate |
|
|
computation pay for each city fiscal year: |
|
|
| City Fiscal Year |
Amortization of January 1, 2023 Unfunded Actuarial Accrued Liability |
Administrative Expenses |
Total Fixed Dollar Amount |
|
|
|
| Ending |
Amortization of January 1, 2023 Unfunded Actuarial Accrued Liability |
Administrative Expenses |
Total Fixed Dollar Amount |
|
|
|
| September 30 |
Amortization of January 1, 2023 Unfunded Actuarial Accrued Liability |
Administrative Expenses |
Total Fixed Dollar Amount |
|
|
|
| 2025 |
$161,656,000 |
$7,000,000 |
$168,656,000 |
|
|
|
| 2026 |
$179,482,000 |
$7,000,000 |
$186,482,000 |
|
|
|
| 2027 |
$197,889,000 |
$7,000,000 |
$204,889,000 |
|
|
|
| 2028 |
$217,163,000 |
$7,000,000 |
$224,163,000 |
|
|
|
| 2029 |
$237,336,000 |
$7,000,000 |
$244,336,000 |
|
|
|
| 2030 |
$242,341,000 |
$7,000,000 |
$249,341,000 |
|
|
|
| 2031 |
$248,399,000 |
$7,000,000 |
$255,399,000 |
|
|
|
| 2032 |
$254,609,000 |
$7,000,000 |
$261,609,000 |
|
|
|
| 2033 |
$260,975,000 |
$7,000,000 |
$267,975,000 |
|
|
|
| 2034 |
$267,499,000 |
$7,000,000 |
$274,499,000 |
|
|
|
| 2035 |
$274,186,000 |
$7,000,000 |
$281,186,000 |
|
|
|
| 2036 |
$281,041,000 |
$7,000,000 |
$288,041,000 |
|
|
|
| 2037 |
$288,067,000 |
$7,000,000 |
$295,067,000 |
|
|
|
| 2038 |
$295,269,000 |
$7,000,000 |
$302,269,000 |
|
|
|
| 2039 |
$302,650,000 |
$7,000,000 |
$309,650,000 |
|
|
|
| 2040 |
$310,217,000 |
$7,042,000 |
$317,259,000 |
|
|
|
| 2041 |
$317,972,000 |
$7,218,000 |
$325,190,000 |
|
|
|
| 2042 |
$325,921,000 |
$7,399,000 |
$333,320,000 |
|
|
|
| 2043 |
$334,069,000 |
$7,584,000 |
$341,653,000 |
|
|
|
| 2044 |
$342,421,000 |
$7,773,000 |
$350,194,000 |
|
|
|
| 2045 |
$350,982,000 |
$7,967,000 |
$358,949,000 |
|
|
|
| 2046 |
$359,756,000 |
$8,167,000 |
$367,923,000 |
|
|
|
| 2047 |
$368,750,000 |
$8,371,000 |
$377,121,000 |
|
|
|
| 2048 |
$377,969,000 |
$8,580,000 |
$386,549,000 |
|
|
|
| 2049 |
$387,418,000 |
$8,795,000 |
$396,213,000 |
|
|
|
| 2050 |
$397,104,000 |
$9,014,000 |
$406,118,000 |
|
|
|
| 2051 |
$407,031,000 |
$9,240,000 |
$416,271,000 |
|
|
|
| 2052 |
$417,207,000 |
$9,471,000 |
$426,678,000 |
|
|
|
| 2053 |
$427,637,000 |
$9,708,000 |
$437,345,000 |
|
|
|
| 2054 |
$438,328,000 |
$9,950,000 |
$448,278,000 |
|
|
|
(2) normal cost; and |
|
|
(3) subject to Subsection (d-1) of this section, new |
|
|
amortization layers as necessary to amortize the difference between |
|
|
the expected remaining balance of all previous years' layers and |
|
|
the actual unfunded actuarial accrued liability for the given |
|
|
valuation [in an amount equal to the sum of: |
|
|
[(1) the greater of: |
|
|
[(A) 34.5 percent of the aggregate computation |
|
|
pay paid to members during the period for which the contribution is |
|
|
made; or |
|
|
[(B) the applicable amount set forth below: |
|
|
[(i) $5,173,000 for the biweekly pay |
|
|
periods beginning with the first biweekly pay period that begins |
|
|
after September 1, 2017, and ends on the last day of the first |
|
|
biweekly pay period that ends after December 31, 2017; |
|
|
[(ii) $5,344,000 for the 26 biweekly pay |
|
|
periods immediately following the last biweekly pay period |
|
|
described by Subparagraph (i) of this paragraph; |
|
|
[(iii) $5,571,000 for the 26 biweekly pay |
|
|
periods immediately following the last biweekly pay period |
|
|
described by Subparagraph (ii) of this paragraph; |
|
|
[(iv) $5,724,000 for the 26 biweekly pay |
|
|
periods immediately following the last biweekly pay period |
|
|
described by Subparagraph (iii) of this paragraph; |
|
|
[(v) $5,882,000 for the 26 biweekly pay |
|
|
periods immediately following the last biweekly pay period |
|
|
described by Subparagraph (iv) of this paragraph; |
|
|
[(vi) $6,043,000 for the 26 biweekly pay |
|
|
periods immediately following the last biweekly pay period |
|
|
described by Subparagraph (v) of this paragraph; |
|
|
[(vii) $5,812,000 for the 26 biweekly pay |
|
|
periods immediately following the last biweekly pay period |
|
|
described by Subparagraph (vi) of this paragraph; |
|
|
[(viii) $6,024,000 for the 26 biweekly pay |
|
|
periods immediately following the last biweekly pay period |
|
|
described by Subparagraph (vii) of this paragraph through the |
|
|
biweekly pay period that ends after December 31, 2024; and |
|
|
[(ix) $0 for each subsequent biweekly pay |
|
|
period beginning with the first biweekly pay period following the |
|
|
last biweekly pay period described by Subparagraph (viii) of this |
|
|
paragraph; and |
|
|
[(2) except as provided by Subsection (e) of this |
|
|
section, an amount equal to 1/26th of $13 million]. |
|
|
(d-1) For purposes of Subsection (d)(3) of this section, new |
|
|
amortization layers must be amortized over a closed amortization |
|
|
period of 20 years or until January 1, 2053, whichever is later. If |
|
|
the actuarial assets of the fund exceed the actuarial liabilities |
|
|
for a given valuation, the outstanding layers may be collapsed into |
|
|
a single layer with a closed amortization period of 20 years or |
|
|
until January 2, 2053, whichever is later. |
|
|
(e-1) Before September 1 of each year, the pension system's |
|
|
qualified actuary and the city's actuary shall respectively |
|
|
calculate and recommend an actuarially determined contribution |
|
|
rate for the following city fiscal year. If the difference between |
|
|
the recommended rates is: |
|
|
(1) three percent or less, the actuarially determined |
|
|
contribution rate shall be the rate recommended by the pension |
|
|
system's qualified actuary; or |
|
|
(2) greater than three percent, the board and the city |
|
|
council shall engage in a 30-day reconciliation period: |
|
|
(A) during which, if the pension system's |
|
|
qualified actuary and the city's actuary reconcile their respective |
|
|
calculations, the reconciled rate shall be the actuarially |
|
|
determined contribution rate; or |
|
|
(B) at the conclusion of which, if the pension |
|
|
system's qualified actuary and the city's actuary do not reconcile |
|
|
their respective calculations, the average of the rates recommended |
|
|
by each actuary under this section shall be the actuarially |
|
|
determined contribution rate. |
|
|
(f) If in any plan year the actuarially determined |
|
|
contribution rate, excluding the amounts provided under Subsection |
|
|
(d)(1) of this section, is outside of the minimum or maximum rates |
|
|
shown in the following schedule, the difference between the |
|
|
actuarially determined contribution rate and the minimum or |
|
|
maximum, as applicable, will be amortized over a closed period of 20 |
|
|
years or until January 1, 2053, whichever is later: |
|
|
| Plan Year |
City Fiscal Year Ending September 30 |
Minimum Rate |
Maximum Rate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(g) If the city council determines that the fund is |
|
|
projected to be fully funded in over 30 years, the city council may, |
|
|
in its sole discretion, waive the requirements of Subsection (f) of |
|
|
this section. The board may recommend to the city council that the |
|
|
city council waive the requirements of Subsection (f) of this |
|
|
section. |
|
|
(h) Notwithstanding Subsection (d) or any other provision |
|
|
of this section, for the city's fiscal years ending September 30, |
|
|
2025, through September 30, 2029, the city contribution amount may |
|
|
not under any circumstances exceed the sum of: |
|
|
(1) the applicable fixed dollar amount under |
|
|
Subsection (d)(1) of this section; and |
|
|
(2) the maximum percentage provided under Subsection |
|
|
(f) of this section multiplied by the members' projected aggregate |
|
|
computation pay for the applicable city fiscal year. |
|
|
(h-1) This subsection and Subsection (h) of this section |
|
|
expire October 1, 2029. |
|
|
SECTION 5. Section 3.014, Article 6243a-1, Revised |
|
|
Statutes, as added by this Act, applies only to an action taken on |
|
|
or after the effective date of this Act. |
|
|
SECTION 6. The following provisions of Article 6243a-1, |
|
|
Revised Statutes, are repealed: |
|
|
(1) Section 2.025; and |
|
|
(2) Section 4.02(e). |
|
|
SECTION 7. This Act takes effect immediately if it receives |
|
|
a vote of two-thirds of all the members elected to each house, as |
|
|
provided by Section 39, Article III, Texas Constitution. If this |
|
|
Act does not receive the vote necessary for immediate effect, this |
|
|
Act takes effect September 1, 2025. |