87R7543 JCG-D
By: Longoria H.B. No. 4163
A BILL TO BE ENTITLED
AN ACT
relating to a funding soundness restoration plan for certain public
retirement systems.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 28(h), Texas Local Fire Fighters
Retirement Act (Article 6243e, Vernon's Texas Civil Statutes), is
amended to read as follows:
(h) A retirement system established under this Act is exempt
from Subchapter C, Chapter 802, Government Code, except Sections
802.2017, 802.202, 802.205, and 802.207.
SECTION 2. Section 802.2015(b), Government Code, is amended
to read as follows:
(b) This section applies to a public retirement system and
its associated governmental entity other than a public retirement
system and its associated governmental entity subject to Section
802.2016 or 802.2017.
SECTION 3. Subchapter C, Chapter 802, Government Code, is
amended by adding Section 802.2017 to read as follows:
Sec. 802.2017. FUNDING SOUNDNESS RESTORATION PLAN FOR
CERTAIN PUBLIC RETIREMENT SYSTEMS FOR FIRE FIGHTERS. (a) In this
section:
(1) "Funded ratio" has the meaning assigned by Section
802.2011.
(2) "Governmental entity" has the meaning assigned by
Section 802.1012.
(b) This section applies only to a public retirement system
governed by the Texas Local Fire Fighters Retirement Act (Article
6243e, Vernon's Texas Civil Statutes), and its associated
governmental entity.
(c) A public retirement system shall notify the associated
governmental entity in writing if the system receives an actuarial
valuation indicating that the system's actual contributions are not
sufficient to amortize the unfunded actuarial accrued liability
within 30 years. The governing body of the public retirement system
and the governing body of the associated government entity shall
jointly formulate a funding soundness restoration plan under
Subsection (e) if:
(1) the system's actuarial valuation shows that the
system's amortization period exceeds:
(A) 40 years; or
(B) 30 years and:
(i) the funded ratio of the system is less
than 65 percent; or
(ii) the funded ratio of the system is 65
percent or greater and the system receives:
(a) if the system receives an annual
actuarial valuation, two more consecutive actuarial valuations
that show the funded ratio of the system is 65 percent or greater;
or
(b) if the system receives actuarial
valuations every two or three years, one more consecutive actuarial
valuation that shows the funded ratio of the system is 65 percent or
greater;
(2) except as provided by Subsection (d), a funding
soundness restoration plan formulated under Subsection (e) or
Section 802.2015 is not already in effect; and
(3) the board has not exempted the system from the
requirement to formulate a funding soundness restoration plan in
accordance with the rules adopted under Subsection (h).
(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
if, based on the most recent actuarial valuation, the board
determines that 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 years not later than the 10th anniversary of the
date on which the final version of a funding soundness restoration
plan is agreed to.
(f) A public retirement system and the associated
governmental entity that formulate a funding soundness restoration
plan shall report any updates of progress made by the entities
toward improved actuarial soundness to the board every two years.
(g) Each public retirement system that formulates a funding
soundness restoration plan as provided by this section shall submit
a copy of that plan to the board and any change to the plan not later
than the 31st day after the date on which the plan or the change is
agreed to.
(h) The board shall adopt rules for the administration of
this section, including a procedure for a public retirement system
subject to the requirement to formulate a funding soundness
restoration plan under this section to request from the board an
exemption from the requirement based on:
(1) the system's adoption of actuarially determined
contribution rates; and
(2) one or more actuarial valuations of the system
showing the system's amortization period is projected to become
within a reasonable period an amortization period not exceeding 30
years.
SECTION 4. As soon as practicable after the effective date
of this Act, the State Pension Review Board shall adopt the rules
required by Section 802.2017(h), Government Code, as added by this
Act.
SECTION 5. A public retirement system is not required to
formulate a funding soundness restoration plan under Section
802.2017, Government Code, as added by this Act, based on an
actuarial valuation made before the effective date of this Act.
SECTION 6. This Act takes effect September 1, 2021.