86R7345 TSR-D
By: Flynn H.B. No. 2657
A BILL TO BE ENTITLED
AN ACT
relating to the funding soundness restoration plans required for
certain public retirement systems.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 802.2015(c), (d), and (e), Government
Code, are amended to read as follows:
(c) A public retirement system shall notify the associated
governmental entity in writing if the retirement system receives an
actuarial valuation indicating that the system's actual
contributions are not sufficient to amortize the unfunded actuarial
accrued liability within 30 [40] years. If a public retirement
system's actuarial valuation shows that the system's amortization
period has exceeded 30 [40] years for three consecutive annual
actuarial valuations, or two consecutive actuarial valuations in
the case of a system that conducts the valuations every two or three
years, the governing body of the public retirement system and the
associated governmental entity shall formulate a funding soundness
restoration plan under Subsection (e) in accordance with the
system's governing statute.
(d) The governing body of a public retirement system and the
associated governmental entity that have formulated a funding
soundness restoration plan under Subsection (e) shall formulate a
revised funding soundness restoration plan under that subsection,
in accordance with the system's governing statute, if the system
conducts an actuarial valuation showing that:
(1) the system's amortization period exceeds 30 [40]
years; and
(2) the previously formulated funding soundness
restoration plan has not been adhered to.
(e) A funding soundness restoration plan formulated under
this section must:
(1) be developed by the public retirement system and
the associated governmental entity in accordance with the system's
governing statute; and
(2) be designed to achieve a contribution rate that
will be sufficient to amortize the unfunded actuarial accrued
liability within 30 [40] years not later than the 10th anniversary
of the date on which the final version of a funding soundness
restoration plan is agreed to.
SECTION 2. Sections 802.2016(c), (d), and (e), Government
Code, are amended to read as follows:
(c) A public retirement system shall notify the associated
governmental entity in writing if the retirement system receives an
actuarial valuation indicating that the system's actual
contributions are not sufficient to amortize the unfunded actuarial
accrued liability within 30 [40] years. If a public retirement
system's actuarial valuation shows that the system's amortization
period has exceeded 30 [40] years for three consecutive annual
actuarial valuations, or two consecutive actuarial valuations in
the case of a system that conducts the valuations every two or three
years, the associated governmental entity shall formulate a funding
soundness restoration plan under Subsection (e) in accordance with
the public retirement system's governing statute.
(d) An associated governmental entity that has formulated a
funding soundness restoration plan under Subsection (e) shall
formulate a revised funding soundness restoration plan under that
subsection, in accordance with the public retirement system's
governing statute, if the system conducts an actuarial valuation
showing that:
(1) the system's amortization period exceeds 30 [40]
years; and
(2) the previously formulated funding soundness
restoration plan has not been adhered to.
(e) A funding soundness restoration plan formulated under
this section must:
(1) be developed in accordance with the public
retirement system's governing statute by the associated
governmental entity; and
(2) be designed to achieve a contribution rate that
will be sufficient to amortize the unfunded actuarial accrued
liability within 30 [40] years not later than the 10th anniversary
of the date on which the final version of a funding soundness
restoration plan is formulated.
SECTION 3. A public retirement system and an associated
governmental entity subject to Section 802.2015, Government Code,
as amended by this Act, or a governmental entity subject to Section
802.2016, Government Code, as amended by this Act, shall formulate
a funding soundness restoration plan, if required to do so under the
applicable section, based on the most recent actuarial valuation
study conducted under Section 802.101, Government Code, not later
than November 1, 2020.
SECTION 4. This Act takes effect September 1, 2019.