Texas 2013 - 83rd Regular

Texas House Bill HB3356 Compare Versions

The same version is selected twice. Please select two different versions to compare.

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	By: Callegari, et al. H.B. No. 3356
2	2	Substitute the following for H.B. No. 3356:
3	3	By: Callegari C.S.H.B. No. 3356
4	4
5	5
6	6	A BILL TO BE ENTITLED
7	7	AN ACT
8	8	relating to contributions to, benefits from, and the administration
9	9	of certain public retirement systems.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Section 802.001, Government Code, is amended by
12	12	adding Subdivision (1-a) to read as follows:
13	13	(1-a) "Defined contribution plan" means a plan
14	14	provided by the governing body of a public retirement system that
15	15	provides for an individual account for each participant and for
16	16	benefits based solely on the amount contributed to the
17	17	participant's account, and any income, expenses, gains and losses,
18	18	and forfeitures of accounts of other participants that may be
19	19	allocated to the participant's account.
20	20	SECTION 2. Section 802.002, Government Code, is amended by
21	21	amending Subsection (a) and adding Subsections (c) to read as
22	22	follows:
23	23	(a) Except as provided by Subsection (b), the Employees
24	24	Retirement System of Texas, the Teacher Retirement System of Texas,
25	25	the Texas County and District Retirement System, the Texas
26	26	Municipal Retirement System, and the Judicial Retirement System of
27	27	Texas Plan Two are exempt from Sections 802.101(a), 802.101(b),
28	28	802.101(d), 802.102, 802.103(a), 802.103(b), 802.202, 802.203,
29	29	802.204, 802.205, 802.206, and 802.207, and from all of Subchapter
30	30	E. The Judicial Retirement System of Texas Plan One is exempt from
31	31	all of Subchapters B and C except Sections 802.104 and 802.105. The
32	32	optional retirement program governed by Chapter 830 is exempt from
33	33	all of Subchapters B and C except Section 802.106.
34	34	(c) Notwithstanding any other law, a defined contribution
35	35	plan, or a retirement system that is organized under the Texas Local
36	36	Fire Fighters Retirement Act (Article 6243e, Vernon's Texas Civil
37	37	Statutes), for a fire department consisting exclusively of
38	38	volunteers, as defined by that Act, is exempt from Subchapter E.
39	39	SECTION 3. Chapter 802, Government Code, is amended by
40	40	adding Subchapter E to read as follows:
41	41	SUBCHAPTER E. ADDITIONAL PROVISIONS APPLICABLE TO CERTAIN
42	42	ACTUARIALLY FUNDED PUBLIC RETIREMENT SYSTEMS
43	43	Sec. 802.401. FUNDING POLICY. (a) The governing body of a
44	44	public retirement system shall adopt a funding policy designed to
45	45	achieve and maintain a minimum funded ratio of 100 percent. The
46	46	policy must follow guidelines for actuarial soundness adopted by
47	47	the board. At a minimum, the funding policy must provide for
48	48	contributions that are sufficient to pay normal cost and to
49	49	amortize any unfunded actuarial accrued liabilities that exist over
50	50	a period not to exceed 25 years. If a public retirement system has
51	51	no unfunded actuarial accrued liabilities, contributions must be
52	52	sufficient to pay the full normal cost.
53	53	(b) A funding policy based on a total contribution amount
54	54	that can be shown to meet or exceed the minimum funding requirements
55	55	of Subsection (a) meets the requirements of this section.
56	56	(c) If the governing body of a public retirement system
57	57	receives an actuarial valuation conducted in accordance with
58	58	Section 802.101 indicating that system funding is insufficient to
59	59	meet the requirements of the funding policy adopted in accordance
60	60	with Subsection (a), the governing body shall notify the board and
61	61	the governing body of the plan sponsor of the determination in
62	62	writing not later than the 30th day after the date the valuation is
63	63	received.
64	64	(d) Following notice to the board and the plan sponsor, the
65	65	public retirement system is granted a period of six fiscal years to
66	66	regain compliance with Subsection (a) without further reporting
67	67	requirements. If by the expiration of the sixth fiscal year, the
68	68	system has not received a valuation indicating that the system is
69	69	compliant with the requirements of the funding policy adopted in
70	70	accordance with Subsection (a), the governing body of the public
71	71	retirement system shall prepare a written corrective action plan
72	72	detailing actions to be taken by the public retirement system and
73	73	plan sponsor to ensure that the amortization period of the public
74	74	retirement system does not exceed 25 years. The corrective action
75	75	plan must be signed by the governing body of the public retirement
76	76	system and by the governing body of the plan sponsor and must be
77	77	submitted to the board not later than the 180th day after the
78	78	expiration of the retirement system's six fiscal year period to
79	79	regain compliance.
80	80	(e) The corrective action plan must be updated and
81	81	resubmitted to the board every three years until the public
82	82	retirement system receives an actuarial valuation conducted in
83	83	accordance with Section 802.101 indicating that the system funding
84	84	meets the requirements of the funding policy adopted in accordance
85	85	with Subsection (a).
86	86	(f) The board shall publish on its Internet website a copy
87	87	of each corrective action plan received. The board may adopt rules
88	88	to implement the requirements of this section.
89	89	Sec. 802.402. ACTION INCREASING AMORTIZATION PERIOD. A new
90	90	monetary benefit payable by the retirement system may not be
91	91	established, and the determination of the amount of a monetary
92	92	benefit from the system may not be increased, if, as a result of the
93	93	action, the time required to amortize the unfunded actuarial
94	94	liabilities of the retirement system would be increased to a period
95	95	that exceeds 25 years by one or more years, as determined by an
96	96	actuarial valuation.
97	97	Sec. 802.403. CONTRIBUTIONS. (a) The plan sponsoring
98	98	entity contributions and employee contributions to a public
99	99	retirement system, as applicable, should be made at regular
100	100	intervals and should be sufficient to comply with the funding
101	101	policy established by Section 802.401.
102	102	(b) The allocation of the normal cost portion of
103	103	contributions under this section must be level or declining as a
104	104	percentage of payroll over all generations of employees of the
105	105	sponsoring entity, calculated according to applicable actuarial
106	106	standards.
107	107	Sec. 802.404. ADDITIONAL STUDIES AND REPORTS. (a) Except
108	108	as otherwise provided by this chapter, this section applies only to
109	109	a public retirement system with total assets the book value of
110	110	which, as of the last day of the preceding fiscal year, is greater
111	111	than or equal to $100 million.
112	112	(b) In addition to the requirements of Subchapter B, the
113	113	governing body of a public retirement system to which this
114	114	subchapter applies shall, at reasonable intervals, conduct or
115	115	arrange to have conducted:
116	116	(1) an actuarial experience study in which actuarial
117	117	assumptions are reviewed in light of relevant experience factors,
118	118	important trends, and economic projections with the purpose of
119	119	determining whether actuarial assumptions require adjustment; and
120	120	(2) a study of the public retirement system's assets
121	121	and liabilities for use in reviewing asset allocations.
122	122	Sec. 802.406. ETHICAL STANDARDS. The governing body of a
123	123	public retirement system shall adopt ethical standards and
124	124	conflict-of-interest policies. Policies adopted under this
125	125	section must include a provision requiring trustees to report any
126	126	potential conflicts of interest and must be consistent with and not
127	127	less restrictive than Section 802.203.
128	128	SECTION 4. The governing body of a public retirement system
129	129	to which Subchapter E, Chapter 802, Government Code, as added by
130	130	this Act, applies shall adopt rules or procedures necessary to
131	131	implement that subchapter as soon as practicable after the
132	132	effective date of this Act, but not later than January 1, 2014.
133	133	SECTION 5. This Act takes effect September 1, 2013.