Texas House Bill HB2955

Texas 2015 - 84th Regular

Caption

Relating to certain public retirement systems.

Impact

By legislating changes in how public retirement systems handle their assets and liabilities, HB2955 aims to bolster the security of pension plans for employees of municipal services such as fire and police departments. The bill mandates that governing bodies develop corrective action plans to ensure that their retirement systems achieve a minimum funding ratio and maintain amortization periods that do not exceed a specified timeframe. This legislative reform may lead to more robust oversight and management of retirement systems, helping to safeguard the financial futures of many public sector employees and retirees.

Summary

House Bill 2955 seeks to amend and provide additional provisions for certain public retirement systems in Texas. The legislation introduces a new subchapter to Chapter 802 of the Government Code that governs the management and regulation of public retirement systems. Notably, it includes criteria for handling actuarial valuations of retirement systems and sets forth requirements for corrective actions when a public retirement system faces an infinite amortization period. The objective is to improve the financial sustainability of these systems by establishing clearer guidelines for managing unfunded liabilities.

Contention

Key points of contention surrounding HB2955 may stem from the changes it imposes on existing pension systems, particularly regarding the negotiation processes and the governance of these retirement packages. The requirement for stakeholder groups—including active employees and retirees—to approve modifications to pension systems and the establishment of various committees could be seen as a potential bureaucratic hurdle. Furthermore, concerns could arise over the implications of stringent financial requirements, which some believe may inadvertently reduce the benefits available to future retirees, particularly if the systems struggle to meet rigorous funding standards.