By: Huffman, et al. S.B. No. 936
(Flynn, Paul)
A BILL TO BE ENTITLED
AN ACT
relating to the creation of a joint interim committee to undertake a
study of the public retirement systems of this state.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. DEFINITION. In this Act, "public retirement
system" has the meaning assigned by Section 802.001, Government
Code.
SECTION 2. CREATION OF JOINT INTERIM COMMITTEE. (a) A
joint interim committee is created to study and assess each public
retirement system of this state and report on the issues described
by Section 3 of this Act.
(b) The joint interim committee shall be composed of three
senators appointed by the lieutenant governor and three members of
the house of representatives appointed by the speaker of the house
of representatives.
(c) The lieutenant governor and speaker of the house of
representatives shall each designate a co-chair from among the
joint interim committee members.
(d) The joint interim committee shall convene at the joint
call of the co-chairs.
(e) The joint interim committee has all other powers and
duties provided to a special or select committee by the rules of the
senate and house of representatives, by Subchapter B, Chapter 301,
Government Code, and by policies of the senate and house committees
on administration.
SECTION 3. INTERIM STUDY REGARDING PUBLIC RETIREMENT
SYSTEMS. The joint interim committee created by Section 2 of this
Act shall:
(1) review and assess:
(A) the different types of retirement system
plans, including:
(i) defined contribution plans;
(ii) defined benefit plans;
(iii) hybrid public pension plans; and
(iv) cash balance pension plans;
(B) the actuarial assumptions used in making
actuarial valuations and analyses of public retirement systems and
the consequences of amending an assumption rate; and
(C) the effect that local agreements, including
meet and confer agreements, have on the sustainability of this
state's public retirement systems;
(2) study:
(A) the potential for allowing public retirement
systems to pool their assets for the purposes of taking advantage of
economies of scale and reducing costs; and
(B) the governance policies of this state's
public retirement systems and the effect of imposing more formal
requirements on governance, including a requirement that the
retirement systems and their associated governmental entities
jointly develop written funding, investment, and benefits policies
that have goals and objectives that reference one another, are
coordinated, and promote transparency;
(3) consider enhancing fee disclosures, specifically
the disclosure of fees that are related to alternative investment
vehicles;
(4) consider requiring:
(A) additional actuarial analyses, including a
discount rate sensitivity analysis and risk assessments; and
(B) additional disclosures, including disclosure
of:
(i) the sustained differences between the
actual and assumed rate of return on assets;
(ii) projected cash flows;
(iii) risks; and
(iv) the potential impact of actual future
measurements differing significantly from expected future
measurements; and
(5) study the public retirement systems' valuation
methodology for the illiquid asset class, including the
effectiveness of and compliance with the fair value measurement
requirement under the Governmental Accounting Standards Board
Statement No. 72.
SECTION 4. COMMITTEE FINDINGS AND RECOMMENDATIONS.
(a) Not later than January 15, 2019, the joint interim committee
shall report the committee's findings and recommendations to the
lieutenant governor, the speaker of the house of representatives,
and the governor. The joint interim committee shall include in its
recommendations specific statutory and regulatory changes that
appear necessary from the results of the committee's study under
Section 3 of this Act.
(b) Not later than the 60th day after the effective date of
this Act, the lieutenant governor and the speaker of the house of
representatives shall appoint the members of the joint interim
committee created under Section 2 of this Act in accordance with
that section.
SECTION 5. ABOLITION OF COMMITTEE. The joint interim
committee created by this Act is abolished and this Act expires
January 20, 2019.
SECTION 6. EFFECTIVE DATE. This Act takes effect
immediately if it receives a vote of two-thirds of all the members
elected to each house, as provided by Section 39, Article III, Texas
Constitution. If this Act does not receive the vote necessary for
immediate effect, this Act takes effect September 1, 2017.