87R20704 KFF-F
By: Gates, Capriglione, Parker, Stephenson H.B. No. 4534
Substitute the following for H.B. No. 4534:
By: Anchia C.S.H.B. No. 4534
A BILL TO BE ENTITLED
AN ACT
relating to a study by the Employees Retirement System of Texas of
certain state retirement system reforms.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. INTERIM STUDY. (a) The Employees Retirement
System of Texas shall conduct a study to evaluate potential reforms
designed to improve the financial health of the retirement system,
including the feasibility and anticipated financial impact of
implementing the following reforms:
(1) transitioning from providing retirement benefits
to members of the system under a defined benefit plan to providing
those benefits under:
(A) a defined contribution plan;
(B) a hybrid pension plan that combines elements
of a defined contribution plan and a defined benefit plan;
(C) a cash balance pension plan that provides
individual accounts for plan members; and
(D) another retirement plan commonly used by
other states;
(2) adopting changes to the existing defined benefit
plan that are designed to reduce the unfunded actuarial accrued
liabilities of the system and achieve actuarial soundness,
including:
(A) increasing the state contribution rate;
(B) changing the minimum age at which members are
eligible to retire;
(C) changing the formula used to calculate
annuities provided under the plan; and
(D) reducing the amount of benefits provided
under the plan, including the potential of offering members the
option to receive partial lump sum payments in lieu of a portion of
the member's annuity in a manner that ensures the amount of the lump
sum payment is less than the actuarial present value of the portion
of the annuity forfeited by the member; and
(3) implementing a pension revenue enhancement plan
under which a life insurance policy or other financial product or
benefit is purchased under the plan for members and annuitants of
the Employees Retirement System of Texas who are eligible for and
elect to enroll in the plan.
(b) In conducting the study required by this section, the
Employees Retirement System of Texas shall review and evaluate the
retirement plans and systems established in other states for best
practices and financial outcomes, taking into consideration:
(1) the overall performance of other states' plans
based on the unfunded liability balances, if any, of those plans;
and
(2) the strengths and weaknesses of other states'
plans in attracting and maintaining a competitive workforce.
(c) The Employees Retirement System of Texas may consult
with anyone the system determines appropriate to conduct the study
and prepare the report required by this section, including outside
experts and other state agencies, including the State Pension
Review Board, the Legislative Budget Board, and the Texas
Department of Insurance.
SECTION 2. FINDINGS AND RECOMMENDATIONS. Not later than
September 1, 2022, the Employees Retirement System of Texas shall
report the system's findings and recommendations to the governor,
the lieutenant governor, the speaker of the house of
representatives, and each member of the legislature. The system
shall include in its recommendations specific statutory and
regulatory changes that the system determines necessary or
appropriate to implement its recommendations.
SECTION 3. EXPIRATION OF ACT. This Act expires September
15, 2022.
SECTION 4. 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, 2021.