By: Callegari, et al. (Senate Sponsor - Duncan) H.B. No. 13
(In the Senate - Received from the House April 18, 2013;
April 24, 2013, read first time and referred to Committee on State
Affairs; April 29, 2013, reported favorably by the following vote:
Yeas 8, Nays 0; April 29, 2013, sent to printer.)
A BILL TO BE ENTITLED
AN ACT
relating to the State Pension Review Board and public retirement
systems; authorizing a fee.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 801.001, Government Code, is amended by
adding Subdivisions (1-a), (3), and (4) to read as follows:
(1-a) "Governing body of a public retirement system"
has the meaning assigned by Section 802.001.
(3) "System administrator" means a person designated
by the governing body of a public retirement system to supervise the
day-to-day affairs of the public retirement system.
(4) "Trustee" means a member of the governing body of a
public retirement system.
SECTION 2. Subchapter C, Chapter 801, Government Code, is
amended by adding Sections 801.209, 801.210, and 801.211 to read as
follows:
Sec. 801.209. PUBLIC RETIREMENT SYSTEM REPORTS AND
INFORMATION. (a) For each public retirement system, the board
shall post on the board's Internet website, or on a publicly
available website that is linked to the board's website, the most
recent data from reports received under Sections 802.101, 802.103,
802.104, 802.105, and 802.108.
(b) On the 60th day after the date a report or information
required by this chapter or Chapter 802 is due to the board, the
board shall post on the board's website a list of public retirement
systems that have not submitted the required reports or
information.
(c) For each public retirement system included on the list
posted under Subsection (b), the board shall notify:
(1) the governor and the Legislative Budget Board
regarding the lack of a timely submission by 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, or the Judicial Retirement System of Texas Plan
Two; or
(2) the governing body of the political subdivision of
which members of the public retirement system are employees
regarding the lack of a timely submission by a public retirement
system other than a system listed in Subdivision (1).
Sec. 801.210. MODEL ETHICAL STANDARDS AND
CONFLICT-OF-INTEREST POLICIES. (a) The board shall develop and
make reasonably accessible on the board's Internet website model
ethical standards and model conflict-of-interest policies,
including disclosure requirements, for voluntary use by a public
retirement system.
(b) A public retirement system is not required to adopt a
standard or policy based on the model developed under this section.
Sec. 801.211. PUBLIC RETIREMENT SYSTEM EDUCATIONAL
TRAINING PROGRAM. (a) The board shall develop and administer an
educational training program for trustees and system
administrators.
(b) The curriculum of the educational training program must
include minimum training requirements for trustees and system
administrators. The board shall develop a system to track
compliance with the minimum training requirements by trustees and
system administrators and shall report the level of compliance in
the biennial report required by Section 801.203.
(c) The curriculum of the educational training program
under this section may include optional training classes for
trustees, system administrators, and other employees of public
retirement systems.
(d) To the extent practicable, the board shall make training
classes reasonably accessible to trustees and system
administrators of public retirement systems on an Internet website
maintained for that purpose.
(e) The board may adopt rules and appropriate fees to
administer and provide educational training programs under this
section. The fees set by the board must be reasonable to pay the
actual costs incurred by the board to conduct the training classes.
The fees must be paid from a source considered appropriate by the
governing body of the public retirement system. A public retirement
system may provide its own educational training to its trustees and
system administrators if the board determines that the system's
training meets or exceeds the minimum training requirements
established by the board. A trustee or system administrator who
participates in that approved educational training fulfills the
minimum training requirements established by the board.
SECTION 3. Section 802.001, Government Code, is amended by
adding Subdivision (4) to read as follows:
(4) "System administrator" means a person designated
by the governing body of a public retirement system to supervise the
day-to-day affairs of the public retirement system.
SECTION 4. The heading to Section 802.107, Government Code,
is amended to read as follows:
Sec. 802.107. GENERAL PROVISIONS RELATING TO REPORTS AND
CONTACT INFORMATION.
SECTION 5. Section 802.107, Government Code, is amended by
adding Subsections (c), (d), and (e) to read as follows:
(c) A public retirement system shall post on a publicly
available Internet website:
(1) the name, business address, and business telephone
number of a system administrator of the public retirement system;
and
(2) a copy of the most recent edition of each report
and other written information that is required by this chapter or
Chapter 801 to be submitted to the board.
(d) A public retirement system that maintains a website or
for which a website is maintained shall prominently post a link on
that website to the information required by Subsection (c). All
other public retirement systems shall:
(1) prominently post the information required by
Subsection (c) on a website that is maintained by the governing body
of the political subdivision of which members of the public
retirement system are officers or employees; or
(2) post the information required by Subsection (c) on
a publicly available website that is maintained by a state agency.
(e) A report or other information posted under Subsection
(c) must remain posted until replaced with a more recently
submitted edition of the report or information.
SECTION 6. Subchapter B, Chapter 802, Government Code, is
amended by adding Section 802.108 to read as follows:
Sec. 802.108. REPORT OF INVESTMENT RETURNS AND ASSUMPTIONS.
(a) A public retirement system shall, before the 211th day after
the last day of its fiscal year, submit to the board an investment
returns and actuarial assumptions report that includes:
(1) gross investment returns and net investment
returns for each of the most recent 10 fiscal years;
(2) the rolling gross and rolling net investment
returns for the most recent 1-year, 3-year, and 10-year periods;
(3) the rolling gross and rolling net investment
return for the most recent 30-year period or the gross and net
investment return since inception of the system, whichever period
is shorter;
(4) the assumed rate of return used in the most recent
actuarial valuation; and
(5) the assumed rate of return used in each of the most
recent 10 actuarial valuations.
(b) For purposes of this section, "net investment return"
means the gross investment return minus investment expenses. The
net investment return may be calculated as the money-weighted rate
of return as required by generally accepted accounting principles.
The period basis for each report of investment returns under this
section must be the fiscal year of the public retirement system
submitting the report.
(c) If any information required to be reported by a public
retirement system under Subsection (a) is unavailable, the
governing body of the public retirement system shall, before the
211th day after the last day of the public retirement system's
fiscal year, submit to the board a letter certifying that the
information is unavailable, providing a reason for the
unavailability of the information, and agreeing to timely submit
the information to the board if it becomes available.
SECTION 7. (a) In this section:
(1) "Governing body of a public retirement system" and
"public retirement system" have the meanings assigned by Section
802.001, Government Code.
(2) "Pension review board" means the State Pension
Review Board established under Chapter 801, Government Code.
(b) The pension review board shall conduct a study of the
financial health of public retirement systems in this state,
including each system's ability to meet its long-term obligations
taking into account the contributions made to, benefits paid by,
and investments made by the public retirement system. The pension
review board may adopt rules to define the scope of the study under
this subsection.
(c) Each public retirement system shall fully cooperate
with the pension review board in conducting the study required
under Subsection (b) of this section and timely respond to requests
for information made by the board for the purpose of performing the
study. Confidential information as described by Section
552.0038(c), Government Code, that is provided by a public
retirement system under this subsection remains confidential and
may not be disclosed by the board.
(d) Not later than September 1, 2014, the pension review
board shall prepare a written report containing the findings of the
study conducted under this section, including the board's
recommendations regarding how a public retirement system may
mitigate its risk of not meeting its long-term obligations.
(e) The pension review board shall provide each public
retirement system covered in the report prepared under Subsection
(d) of this section a reasonable opportunity to review the portion
of the report and the recommendations applicable to that retirement
system and an opportunity to submit a response to the board. The
board may revise its report after considering a response. Not later
than December 31, 2014, the board shall submit to the legislature
the final written report, including the board's recommendations,
and a copy of the responses provided by the public retirement
systems under this subsection.
SECTION 8. (a) The State Pension Review Board shall
develop and publish the model ethical standards and
conflict-of-interest policies required by Section 801.210,
Government Code, as added by this Act, as soon as practicable after
the effective date of this Act, but not later than December 31,
2013.
(b) The State Pension Review Board shall adopt rules to
implement the educational training program required by Section
801.211, Government Code, as added by this Act, as soon as
practicable after the effective date of this Act, but not later than
necessary to begin providing training classes on or before
September 1, 2014.
(c) For purposes of reporting the level of compliance with
the minimum training requirements of the educational training
program as required by Section 801.211(b), Government Code, as
added by this Act, the State Pension Review Board may only evaluate
compliance with the minimum training requirements by trustees and
administrators of public retirement systems on or after January 1,
2015.
SECTION 9. 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, 2013.
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