Bill Text: TX HB2955 | 2015-2016 | 84th Legislature | Introduced


Bill Title: Relating to certain public retirement systems.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2015-03-16 - Referred to Pensions [HB2955 Detail]

Download: Texas-2015-HB2955-Introduced.html
  84R10080 SGA-D
 
  By: Klick H.B. No. 2955
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to certain public retirement systems.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 802.002(a), Government Code, is amended
  to read as follows:
         (a)  Except as provided by Subsection (b), the Employees
  Retirement System of Texas, the Teacher Retirement System of Texas,
  the Texas County and District Retirement System, the Texas
  Municipal Retirement System, the Texas Emergency Services
  Retirement System, and the Judicial Retirement System of Texas Plan
  Two are exempt from Sections 802.101(a), 802.101(b), 802.101(d),
  802.102, 802.103(a), 802.103(b), 802.202, 802.203, 802.204,
  802.205, 802.206, and 802.207, and from all of Subchapter E. The
  Judicial Retirement System of Texas Plan One is exempt from all of
  Subchapters B and C except Sections 802.104 and 802.105. The
  optional retirement program governed by Chapter 830 is exempt from
  all of Subchapters B and C except Section 802.106.
         SECTION 2.  Chapter 802, Government Code, is amended by
  adding Subchapter E to read as follows:
  SUBCHAPTER E. ADDITIONAL PROVISIONS APPLICABLE TO CERTAIN
  ACTUARIALLY FUNDED PUBLIC RETIREMENT SYSTEMS
         Sec. 802.401.  AMORTIZATION OF UNFUNDED LIABILITY. (a)  A
  governing body of a public retirement system that receives an
  actuarial valuation conducted in accordance with Section 802.101
  indicating an infinite amortization period shall notify the board
  and the governing body of the plan sponsor of the determination in
  writing not later than the 30th day after the date the valuation is
  received.
         (b)  Following notice described by Subsection (a), the
  public retirement system is granted a period of six fiscal years to
  take corrective action without further reporting requirements. If
  by the expiration of the sixth fiscal year the system has not
  received a valuation conducted in accordance with Section 802.101
  indicating that the system is able to amortize unfunded liability
  over a finite period, the governing body of the retirement system
  shall consult with the plan sponsor and prepare a written
  corrective action plan detailing actions to be taken by the public
  retirement system and plan sponsor to achieve:
               (1)  a funded ratio of not less than 80 percent; and
               (2)  an amortization period that does not exceed 30
  years.
         (c)  The corrective action plan described by Subsection (b)
  must be signed by the governing body of the public retirement system
  and by the governing body of the plan sponsor and shall be submitted
  to the board not later than the 270th day after the expiration of
  the six-fiscal-year period described by that subsection. If the
  governing body of the retirement system and the governing body of
  the plan sponsor do not jointly approve a single corrective action
  plan, the governing body of the retirement system and the governing
  body of the plan sponsor may submit separate corrective action
  plans.
         (d)  The corrective action plan described by Subsection (b)
  shall be updated and resubmitted to the board every third year until
  the public retirement system receives an actuarial valuation
  conducted in accordance with Section 802.101 indicating that the
  system funding meets the targets described by Subsections (b)(1)
  and (2).
         Sec. 802.402.  ACTION INCREASING AMORTIZATION PERIOD. A new
  monetary benefit payable by the public retirement system may not be
  established, and the determination of the amount of a monetary
  benefit from the system may not be increased, if, as a result of the
  action, the time required to amortize the unfunded actuarial
  liabilities of the retirement system would be increased to a period
  that exceeds 30 years by one or more years, as determined by an
  actuarial valuation.
         Sec. 802.403.  CONTRIBUTIONS. (a) The plan sponsoring
  entity contributions and employee contributions to a public
  retirement system, as applicable, should be made at regular
  intervals with at least one payment being made each fiscal year.
         (b)  The allocation of the normal cost portion of
  contributions under this section must be level or declining as a
  percentage of payroll over all generations of employees of the
  sponsoring entity, calculated according to applicable actuarial
  standards.
         Sec. 802.404.  ADDITIONAL STUDIES AND REPORTS. (a) Except
  as otherwise provided by this chapter, this section applies only to
  a public retirement system with total assets the book value of
  which, as of the last day of the preceding fiscal year, is greater
  than or equal to $100 million.
         (b)  In addition to the requirements of Subchapter B, the
  governing body of a public retirement system to which this
  subchapter applies shall, at reasonable intervals not to exceed
  five years, conduct or arrange to have conducted:
               (1)  an actuarial experience study in which actuarial
  assumptions are reviewed in light of relevant experience factors,
  important trends, and economic projections with the purpose of
  determining whether actuarial assumptions require adjustment; and
               (2)  a study of the public retirement system's assets
  and liabilities for use in reviewing asset allocations.
         Sec. 802.405.  ETHICAL STANDARDS. The governing body of a
  public retirement system shall adopt ethical standards and
  conflict-of-interest policies. Policies adopted under this
  section must include a provision requiring trustees to report any
  potential conflicts of interest and must be consistent with and not
  less restrictive than Section 802.203.
         SECTION 3.  Chapter 810, Government Code, is amended by
  adding Section 810.003, to read as follows:
         Sec. 810.003.  REORGANIZATION OF PENSION SYSTEMS PROVIDING
  RETIREMENT BENEFITS FOR FIRE, POLICE, OR OTHER EMPLOYEES OF CERTAIN
  MUNICIPALITIES. (a) This section applies only to a pension system
  that, before September 1, 2017, operated under a statute repealed
  by Section 4 of the Act enacting this section.
         (b)  In this section:
               (1)  "Board of trustees" means the board created to
  administer a pension system.
               (2)  "Employee committee" means a group of at least
  five active employees selected by a governing body and approved by a
  majority vote of all employees eligible for membership in a pension
  system to represent the interests of all employees eligible for
  membership in the pension system.
               (3)  "Governing body" means the governing body of a
  sponsoring municipality.
               (4)  "Pension system" means a pension system described
  by Subsection (a).
               (5)  "Retiree committee" means a group of at least five
  retirees nominated by a board of trustees and approved by a majority
  vote of all retirees to represent the interest of all retirees of a
  pension system.
               (6)  "Sponsoring municipality" means a municipality
  whose eligible employees are members of a pension system.
               (7)  "Stakeholder group" means a group with a legal
  interest in a pension system, including, for each pension system,
  the applicable governing body, the board of trustees, the retiree
  committee, and the employee committee.
         (c)  Not later than June 1, 2017, each pension system shall
  be renegotiated by the stakeholders for that system including:
               (1)  the applicable board of trustees; 
               (2)  the governing body; 
               (3)  the retiree committee; and 
               (4)  the employee committee.
         (d)  The negotiations conducted under Subsection (c) must
  produce a proposal containing a revised set of rules and procedures
  that address all of the issues underlying the provisions of the
  pension system as it existed on September 1, 2015, including:
               (1)  contributions made by members of the system and
  sponsoring municipality;
               (2)  eligibility for membership, service credit, and
  retirement or other benefits;
               (3)  the types and amounts of benefits to be provided;
  and 
               (4)  the administration of benefits and the pension
  system's assets.
         (e)  The proposal produced under Subsection (d) containing
  the revised set of rules and procedures applicable to a pension
  system must be approved by all of that pension system's stakeholder
  groups. Each stakeholder group shall provide notice to the members
  of that group of a vote to be held not later than August 1, 2017, on
  whether to adopt the proposal. All stakeholder groups shall vote on
  the same day. If approved by a majority of the members of each
  stakeholder group, the proposal for the pension system takes effect
  immediately. If a proposal for a pension system is not approved
  under this section, the pension system continues to operate under
  the rules and procedures that were in effect before the vote was
  taken.
         (f)  A revised set of rules and procedures approved under
  Subsection (e) may not reduce the service credit accrued by an
  employee of a sponsoring municipality under the applicable pension
  system or reduce the benefits of a person receiving retirement
  benefits under the system.
         (g)  A pension system operating under a revised set of rules
  and procedures or under the rules and procedures that were in effect
  for the pension system before the vote was held under Subsection (e)
  is not required to comply with the provisions of Chapter 802 except
  for those in Subchapter E and the sections in Subchapter B that
  relate to reports required to be filed with the Pension Review
  Board.
         SECTION 4.  (a)  The following statutes are repealed:
               (1)  Article 6243a-1, Revised Statutes;
               (2)  Chapter 101 (H.B. 31), Acts of the 43rd
  Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
  Texas Civil Statutes);
               (3)  Chapter 183 (S.B. 598), Acts of the 64th
  Legislature, Regular Session, 1975 (Article 6243e.1, Vernon's
  Texas Civil Statutes);
               (4)  Article 6243e.2(1), Revised Statutes;
               (5)  Article 6243g-4, Revised Statutes;
               (6)  Chapter 88 (H.B. 1573), Acts of the 77th
  Legislature, Regular Session, 2001 (Article 6243h, Vernon's Texas
  Civil Statutes);
               (7)  Article 6243i, Revised Statutes;
               (8)  Chapter 451 (S.B. 737), Acts of the 72nd
  Legislature, Regular Session, 1991 (Article 6243n, Vernon's Texas
  Civil Statutes);
               (9)  Chapter 452 (S.B. 738), Acts of the 72nd
  Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's
  Texas Civil Statutes);
               (10)  Chapter 824 (S.B. 817), Acts of the 73rd
  Legislature, Regular Session, 1993 (Article 6243o, Vernon's Texas
  Civil Statutes); and
               (11)  Chapter 325 (H.B. 2259), Acts of the 75th
  Legislature, Regular Session, 1997 (Article  6243p, Vernon's Texas
  Civil Statutes).
         (b)  This section takes effect September 1, 2017.
         SECTION 5.  (a)  Notwithstanding Section 802.401, Government
  Code, as added by this Act, a public retirement system that receives
  an actuarial valuation indicating an infinite amortization period
  as described by that section on or after the effective date of this
  Act is entitled to the six-fiscal-year period described by that
  section to take corrective action described by that section
  regardless of whether the public retirement system received a
  previous actuarial valuation indicating an infinite amortization
  period before the effective date of this Act.
         (b)  Section 802.402, Government Code, as added by this Act,
  applies only to a new monetary benefit granted under a statute
  enacted, or a contract entered into or renewed, on or after the
  effective date of this Act. A monetary benefit granted under a
  statute enacted, or a contract entered into or renewed, before the
  effective date of this Act is governed by the law in effect
  immediately before that date, and the former law is continued in
  effect for that purpose.
         SECTION 6.  A pension system described by Section 810.003,
  Government Code, as added by this Act, shall:
               (1)  not later than October 1, 2015, notify its members
  and retirees of the pending renegotiation of the rules and
  procedures that govern the system and invite the members and
  retirees to participate in any way, including by nominating a
  person to serve on the employee or retiree committee required to be
  established under that section; and
               (2)  not later than January 1, 2016, establish the
  employee and retiree committees required under that section.
         SECTION 7.  The governing body of a public retirement system
  to which Subchapter E, Chapter 802, Government Code, as added by
  this Act, applies shall adopt rules or procedures necessary to
  implement that subchapter as soon as practicable after the
  effective date of this Act, but not later than January 1, 2016.
         SECTION 8.  This Act takes effect September 1, 2015.
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