85R1807 TSR-D
By: Flynn H.B. No. 2434
A BILL TO BE ENTITLED
AN ACT
relating to requiring certain public retirement systems to adopt a
funding plan to achieve actuarial soundness.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 801.209(a), Government Code, is amended
to read as follows:
(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, 802.108, 802.2015, [and] 802.2016, and 802.2017.
SECTION 2. Sections 802.002(a) and (c), Government Code,
are amended to read as follows:
(a) Except as provided by Subsection (b), the Employees
Retirement System of Texas, the Teacher Retirement System of Texas,
the Texas County and District Retirement System, the Texas
Municipal Retirement System, and the Judicial Retirement System of
Texas Plan Two are exempt from Sections 802.101(a), 802.101(b),
802.101(d), 802.102, 802.103(a), 802.103(b), 802.2015, 802.2016,
802.2017, 802.202, 802.203, 802.204, 802.205, 802.206, and
802.207. The Judicial Retirement System of Texas Plan One is exempt
from all of Subchapters B and C except Sections 802.104 and 802.105.
The optional retirement program governed by Chapter 830 is exempt
from all of Subchapters B and C except Section 802.106.
(c) Notwithstanding any other law, a defined contribution
plan is exempt from Sections 802.101, 802.1012, 802.1014, 802.103,
802.104, 802.2017, and 802.202(d). This subsection may not be
construed to exempt any plan from Section 802.105 or 802.106(h).
SECTION 3. Subchapter C, Chapter 802, Government Code, is
amended by adding Section 802.2017 to read as follows:
Sec. 802.2017. PLANS TO RESTORE FUNDING FOR CERTAIN
RETIREMENT SYSTEMS. (a) In this section, "governmental entity" has
the meaning assigned by Section 802.1012.
(b) This section does not apply to a public retirement
system and its associated governmental entity if the retirement
system and governmental entity have already developed and are
adhering to, as determined by the board, a funding soundness
restoration plan under Section 802.2015 or 802.2016.
(c) If, on March 1, 2018, the most recent actuarial study or
separate report filed with the board by the governing body of a
public retirement system under Section 802.101 or other law under
this title or under Title 109, Revised Statutes, indicates that the
retirement system's funding level is not sufficient to achieve and
maintain an amortization period that does not exceed 30 years, on
receipt of a notice to that effect from the board, the governing
body of the public retirement system and the associated
governmental entity shall immediately:
(1) notwithstanding any other law and to the extent
necessary to achieve the funding level described by this
subsection, as appropriate:
(A) suspend any increases in the pay or salaries
of the governmental entity's officers or employees who are active
members of the retirement system;
(B) seek to issue a bond or other obligation
under Chapter 107, Local Government Code;
(C) increase the contribution rates of the
governmental entity and the active members of the retirement
system; and
(D) discontinue the provision of cost-of-living
adjustments; and
(2) jointly develop a written plan that identifies
specific measures that the retirement system and its associated
governmental entity shall implement to restore funding to a level
adequate to achieve and maintain an amortization period that does
not exceed 30 years and prescribes a schedule for implementation of
those measures.
(d) The public retirement system shall submit a copy of the
plan to restore funding developed under Subsection (c) to the
board.
(e) If the board determines that implementation of the plan
will restore funding to a level adequate to achieve and maintain an
amortization period that does not exceed 30 years, the board shall
approve the plan. The board may require that the retirement system
provide the board with an actuarial analysis of a plan for purposes
of making a determination under this section.
(f) Not later than the 30th day after the date on which the
board receives a plan under Subsection (d) or (h), the board shall
inform the public retirement system and the retirement system's
associated governmental entity whether the plan is approved.
(g) If a plan to restore funding is approved under this
section, the public retirement system and its associated
governmental entity shall implement the plan and are released from
taking the actions required by Subsection (c)(1) to the extent that
an action is not included in the plan.
(h) If the board does not approve a plan to restore funding
under Subsection (e):
(1) the board shall provide recommendations to the
public retirement system and its associated governmental entity
regarding changes to the plan that would result in the board's
approval; and
(2) the public retirement system and its associated
governmental entity may submit amended or alternative plans in a
manner prescribed by the board until the entities receive the
board's approval of a plan.
(i) To the extent of a conflict between a provision of a plan
to restore funding that has been approved by the board under this
section and any other law, including Title 109, Revised Statutes,
the plan prevails.
(j) A public retirement system and its associated
governmental entity that implement a plan to restore funding under
this section shall annually report to the board regarding any
progress made by the system and entity toward improved actuarial
soundness under the plan.
(k) The board may adopt rules necessary to implement this
section, including rules that allow a public retirement system and
its associated governmental entity to amend an approved plan to
restore funding.
SECTION 4. This Act takes effect September 1, 2017.