Texas 2015 - 84th Regular

Texas House Bill HB2955 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	84R10080 SGA-D
2	2	By: Klick H.B. No. 2955
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to certain public retirement systems.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Section 802.002(a), Government Code, is amended
10	10	to read as follows:
11	11	(a) Except as provided by Subsection (b), the Employees
12	12	Retirement System of Texas, the Teacher Retirement System of Texas,
13	13	the Texas County and District Retirement System, the Texas
14	14	Municipal Retirement System, the Texas Emergency Services
15	15	Retirement System, and the Judicial Retirement System of Texas Plan
16	16	Two are exempt from Sections 802.101(a), 802.101(b), 802.101(d),
17	17	802.102, 802.103(a), 802.103(b), 802.202, 802.203, 802.204,
18	18	802.205, 802.206, and 802.207, and from all of Subchapter E. The
19	19	Judicial Retirement System of Texas Plan One is exempt from all of
20	20	Subchapters B and C except Sections 802.104 and 802.105. The
21	21	optional retirement program governed by Chapter 830 is exempt from
22	22	all of Subchapters B and C except Section 802.106.
23	23	SECTION 2. Chapter 802, Government Code, is amended by
24	24	adding Subchapter E to read as follows:
25	25	SUBCHAPTER E. ADDITIONAL PROVISIONS APPLICABLE TO CERTAIN
26	26	ACTUARIALLY FUNDED PUBLIC RETIREMENT SYSTEMS
27	27	Sec. 802.401. AMORTIZATION OF UNFUNDED LIABILITY. (a) A
28	28	governing body of a public retirement system that receives an
29	29	actuarial valuation conducted in accordance with Section 802.101
30	30	indicating an infinite amortization period shall notify the board
31	31	and the governing body of the plan sponsor of the determination in
32	32	writing not later than the 30th day after the date the valuation is
33	33	received.
34	34	(b) Following notice described by Subsection (a), the
35	35	public retirement system is granted a period of six fiscal years to
36	36	take corrective action without further reporting requirements. If
37	37	by the expiration of the sixth fiscal year the system has not
38	38	received a valuation conducted in accordance with Section 802.101
39	39	indicating that the system is able to amortize unfunded liability
40	40	over a finite period, the governing body of the retirement system
41	41	shall consult with the plan sponsor and prepare a written
42	42	corrective action plan detailing actions to be taken by the public
43	43	retirement system and plan sponsor to achieve:
44	44	(1) a funded ratio of not less than 80 percent; and
45	45	(2) an amortization period that does not exceed 30
46	46	years.
47	47	(c) The corrective action plan described by Subsection (b)
48	48	must be signed by the governing body of the public retirement system
49	49	and by the governing body of the plan sponsor and shall be submitted
50	50	to the board not later than the 270th day after the expiration of
51	51	the six-fiscal-year period described by that subsection. If the
52	52	governing body of the retirement system and the governing body of
53	53	the plan sponsor do not jointly approve a single corrective action
54	54	plan, the governing body of the retirement system and the governing
55	55	body of the plan sponsor may submit separate corrective action
56	56	plans.
57	57	(d) The corrective action plan described by Subsection (b)
58	58	shall be updated and resubmitted to the board every third year until
59	59	the public retirement system receives an actuarial valuation
60	60	conducted in accordance with Section 802.101 indicating that the
61	61	system funding meets the targets described by Subsections (b)(1)
62	62	and (2).
63	63	Sec. 802.402. ACTION INCREASING AMORTIZATION PERIOD. A new
64	64	monetary benefit payable by the public retirement system may not be
65	65	established, and the determination of the amount of a monetary
66	66	benefit from the system may not be increased, if, as a result of the
67	67	action, the time required to amortize the unfunded actuarial
68	68	liabilities of the retirement system would be increased to a period
69	69	that exceeds 30 years by one or more years, as determined by an
70	70	actuarial valuation.
71	71	Sec. 802.403. CONTRIBUTIONS. (a) The plan sponsoring
72	72	entity contributions and employee contributions to a public
73	73	retirement system, as applicable, should be made at regular
74	74	intervals with at least one payment being made each fiscal year.
75	75	(b) The allocation of the normal cost portion of
76	76	contributions under this section must be level or declining as a
77	77	percentage of payroll over all generations of employees of the
78	78	sponsoring entity, calculated according to applicable actuarial
79	79	standards.
80	80	Sec. 802.404. ADDITIONAL STUDIES AND REPORTS. (a) Except
81	81	as otherwise provided by this chapter, this section applies only to
82	82	a public retirement system with total assets the book value of
83	83	which, as of the last day of the preceding fiscal year, is greater
84	84	than or equal to $100 million.
85	85	(b) In addition to the requirements of Subchapter B, the
86	86	governing body of a public retirement system to which this
87	87	subchapter applies shall, at reasonable intervals not to exceed
88	88	five years, conduct or arrange to have conducted:
89	89	(1) an actuarial experience study in which actuarial
90	90	assumptions are reviewed in light of relevant experience factors,
91	91	important trends, and economic projections with the purpose of
92	92	determining whether actuarial assumptions require adjustment; and
93	93	(2) a study of the public retirement system's assets
94	94	and liabilities for use in reviewing asset allocations.
95	95	Sec. 802.405. ETHICAL STANDARDS. The governing body of a
96	96	public retirement system shall adopt ethical standards and
97	97	conflict-of-interest policies. Policies adopted under this
98	98	section must include a provision requiring trustees to report any
99	99	potential conflicts of interest and must be consistent with and not
100	100	less restrictive than Section 802.203.
101	101	SECTION 3. Chapter 810, Government Code, is amended by
102	102	adding Section 810.003, to read as follows:
103	103	Sec. 810.003. REORGANIZATION OF PENSION SYSTEMS PROVIDING
104	104	RETIREMENT BENEFITS FOR FIRE, POLICE, OR OTHER EMPLOYEES OF CERTAIN
105	105	MUNICIPALITIES. (a) This section applies only to a pension system
106	106	that, before September 1, 2017, operated under a statute repealed
107	107	by Section 4 of the Act enacting this section.
108	108	(b) In this section:
109	109	(1) "Board of trustees" means the board created to
110	110	administer a pension system.
111	111	(2) "Employee committee" means a group of at least
112	112	five active employees selected by a governing body and approved by a
113	113	majority vote of all employees eligible for membership in a pension
114	114	system to represent the interests of all employees eligible for
115	115	membership in the pension system.
116	116	(3) "Governing body" means the governing body of a
117	117	sponsoring municipality.
118	118	(4) "Pension system" means a pension system described
119	119	by Subsection (a).
120	120	(5) "Retiree committee" means a group of at least five
121	121	retirees nominated by a board of trustees and approved by a majority
122	122	vote of all retirees to represent the interest of all retirees of a
123	123	pension system.
124	124	(6) "Sponsoring municipality" means a municipality
125	125	whose eligible employees are members of a pension system.
126	126	(7) "Stakeholder group" means a group with a legal
127	127	interest in a pension system, including, for each pension system,
128	128	the applicable governing body, the board of trustees, the retiree
129	129	committee, and the employee committee.
130	130	(c) Not later than June 1, 2017, each pension system shall
131	131	be renegotiated by the stakeholders for that system including:
132	132	(1) the applicable board of trustees;
133	133	(2) the governing body;
134	134	(3) the retiree committee; and
135	135	(4) the employee committee.
136	136	(d) The negotiations conducted under Subsection (c) must
137	137	produce a proposal containing a revised set of rules and procedures
138	138	that address all of the issues underlying the provisions of the
139	139	pension system as it existed on September 1, 2015, including:
140	140	(1) contributions made by members of the system and
141	141	sponsoring municipality;
142	142	(2) eligibility for membership, service credit, and
143	143	retirement or other benefits;
144	144	(3) the types and amounts of benefits to be provided;
145	145	and
146	146	(4) the administration of benefits and the pension
147	147	system's assets.
148	148	(e) The proposal produced under Subsection (d) containing
149	149	the revised set of rules and procedures applicable to a pension
150	150	system must be approved by all of that pension system's stakeholder
151	151	groups. Each stakeholder group shall provide notice to the members
152	152	of that group of a vote to be held not later than August 1, 2017, on
153	153	whether to adopt the proposal. All stakeholder groups shall vote on
154	154	the same day. If approved by a majority of the members of each
155	155	stakeholder group, the proposal for the pension system takes effect
156	156	immediately. If a proposal for a pension system is not approved
157	157	under this section, the pension system continues to operate under
158	158	the rules and procedures that were in effect before the vote was
159	159	taken.
160	160	(f) A revised set of rules and procedures approved under
161	161	Subsection (e) may not reduce the service credit accrued by an
162	162	employee of a sponsoring municipality under the applicable pension
163	163	system or reduce the benefits of a person receiving retirement
164	164	benefits under the system.
165	165	(g) A pension system operating under a revised set of rules
166	166	and procedures or under the rules and procedures that were in effect
167	167	for the pension system before the vote was held under Subsection (e)
168	168	is not required to comply with the provisions of Chapter 802 except
169	169	for those in Subchapter E and the sections in Subchapter B that
170	170	relate to reports required to be filed with the Pension Review
171	171	Board.
172	172	SECTION 4. (a) The following statutes are repealed:
173	173	(1) Article 6243a-1, Revised Statutes;
174	174	(2) Chapter 101 (H.B. 31), Acts of the 43rd
175	175	Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's
176	176	Texas Civil Statutes);
177	177	(3) Chapter 183 (S.B. 598), Acts of the 64th
178	178	Legislature, Regular Session, 1975 (Article 6243e.1, Vernon's
179	179	Texas Civil Statutes);
180	180	(4) Article 6243e.2(1), Revised Statutes;
181	181	(5) Article 6243g-4, Revised Statutes;
182	182	(6) Chapter 88 (H.B. 1573), Acts of the 77th
183	183	Legislature, Regular Session, 2001 (Article 6243h, Vernon's Texas
184	184	Civil Statutes);
185	185	(7) Article 6243i, Revised Statutes;
186	186	(8) Chapter 451 (S.B. 737), Acts of the 72nd
187	187	Legislature, Regular Session, 1991 (Article 6243n, Vernon's Texas
188	188	Civil Statutes);
189	189	(9) Chapter 452 (S.B. 738), Acts of the 72nd
190	190	Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's
191	191	Texas Civil Statutes);
192	192	(10) Chapter 824 (S.B. 817), Acts of the 73rd
193	193	Legislature, Regular Session, 1993 (Article 6243o, Vernon's Texas
194	194	Civil Statutes); and
195	195	(11) Chapter 325 (H.B. 2259), Acts of the 75th
196	196	Legislature, Regular Session, 1997 (Article 6243p, Vernon's Texas
197	197	Civil Statutes).
198	198	(b) This section takes effect September 1, 2017.
199	199	SECTION 5. (a) Notwithstanding Section 802.401, Government
200	200	Code, as added by this Act, a public retirement system that receives
201	201	an actuarial valuation indicating an infinite amortization period
202	202	as described by that section on or after the effective date of this
203	203	Act is entitled to the six-fiscal-year period described by that
204	204	section to take corrective action described by that section
205	205	regardless of whether the public retirement system received a
206	206	previous actuarial valuation indicating an infinite amortization
207	207	period before the effective date of this Act.
208	208	(b) Section 802.402, Government Code, as added by this Act,
209	209	applies only to a new monetary benefit granted under a statute
210	210	enacted, or a contract entered into or renewed, on or after the
211	211	effective date of this Act. A monetary benefit granted under a
212	212	statute enacted, or a contract entered into or renewed, before the
213	213	effective date of this Act is governed by the law in effect
214	214	immediately before that date, and the former law is continued in
215	215	effect for that purpose.
216	216	SECTION 6. A pension system described by Section 810.003,
217	217	Government Code, as added by this Act, shall:
218	218	(1) not later than October 1, 2015, notify its members
219	219	and retirees of the pending renegotiation of the rules and
220	220	procedures that govern the system and invite the members and
221	221	retirees to participate in any way, including by nominating a
222	222	person to serve on the employee or retiree committee required to be
223	223	established under that section; and
224	224	(2) not later than January 1, 2016, establish the
225	225	employee and retiree committees required under that section.
226	226	SECTION 7. The governing body of a public retirement system
227	227	to which Subchapter E, Chapter 802, Government Code, as added by
228	228	this Act, applies shall adopt rules or procedures necessary to
229	229	implement that subchapter as soon as practicable after the
230	230	effective date of this Act, but not later than January 1, 2016.
231	231	SECTION 8. This Act takes effect September 1, 2015.