Texas House Bill HB3356

Texas 2013 - 83rd Regular

Caption

Relating to contributions to, benefits from, and the administration of certain public retirement systems.

Impact

The bill mandates that public retirement systems adopt funding policies that are not only actuarially sound but also capable of addressing any unfunded liabilities within a maximum period of 25 years. By instituting these requirements, HB3356 seeks to promote a proactive approach to pension management, potentially averting scenarios where retirement systems face insolvency or insufficient funding due to under-financing or unexpected expenditures. The periodic actuarial studies required under the bill will further contribute to informed decision-making regarding fund allocations and requirements.

Summary

House Bill 3356 aims to revise provisions related to public retirement systems in Texas, emphasizing improved financial stability and transparency. The bill introduces several amendments to the Government Code, notably defining 'defined contribution plans' and establishing rigorous funding policies for the state’s public retirement systems. The proposed changes are intended to ensure that retirement funds are able to meet their obligations to current and future beneficiaries by maintaining a minimum funded ratio of 100%. This legislative effort highlights an intent to safeguard public retirement systems against financial shortfalls.

Contention

Notably, the bill has generated discussions around the balance between state oversight and local control of retirement funds. Proponents argue that a standardized approach is critical to ensure comprehensive coverage and viability of public retirement systems, while critics express concern that excessive regulatory controls could limit the flexibility that local retirement plans need to remain responsive to the specific needs of their member populations. The requirement for detailed corrective action plans in response to non-compliance raises questions about the administrative burden this might place on retirement system governing bodies.