87R3246 BDP-D
By: Schwertner S.B. No. 482
A BILL TO BE ENTITLED
AN ACT
relating to a biennial study and report by the Employees Retirement
System of Texas and Teacher Retirement System of Texas on
converting to a defined contribution plan.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter F, Chapter 815, Government Code, is
amended by adding Section 815.5105 to read as follows:
Sec. 815.5105. BIENNIAL STUDY AND REPORT ON CONVERTING TO
DEFINED CONTRIBUTION PLAN. (a) Not later than January 1 of each
odd-numbered year, the retirement system shall:
(1) conduct a study to evaluate the cost and
feasibility of converting from providing benefits to members
primarily under a defined benefit plan to providing benefits to
members primarily under a defined contribution plan; and
(2) submit a written report to each member of the
legislature containing the findings of the study.
(b) The report required under this section must:
(1) evaluate the following two conversion scenarios:
(A) a conversion under which all persons who are
members of the system as of January 1 of the next odd-numbered year
are required to transition to a defined contribution plan; and
(B) a conversion under which only employees or
officers initially hired, appointed, or elected on or after January
1 of the next odd-numbered year are required to participate in a
defined contribution plan; and
(2) include:
(A) a broad description of how each conversion
scenario described by Subdivision (1) would be achieved, including
a projected timeline for the various stages of conversion;
(B) a detailed estimate of the costs to the state
associated with each conversion scenario, including a detailed
estimate of the costs to the state associated with maintaining the
defined benefit plan for retirees and beneficiaries entitled to
benefits under that plan;
(C) a summary of the assumptions and methods used
to estimate costs under Paragraph (B);
(D) recommendations for legislation the system
determines would be necessary to accomplish conversion under each
conversion scenario; and
(E) any additional information the system
determines appropriate.
(c) The report required by this section may be combined with
any other report required by law.
SECTION 2. Subchapter B, Chapter 825, Government Code, is
amended by adding Section 825.1085 to read as follows:
Sec. 825.1085. BIENNIAL STUDY AND REPORT ON CONVERTING TO
DEFINED CONTRIBUTION PLAN. (a) Not later than January 1 of each
odd-numbered year, the retirement system shall:
(1) conduct a study to evaluate the cost and
feasibility of converting from providing benefits to members
primarily under a defined benefit plan to providing benefits to
members primarily under a defined contribution plan; and
(2) submit a written report to each member of the
legislature containing the findings of the study.
(b) The report required under this section must:
(1) evaluate the following two conversion scenarios:
(A) a conversion under which all persons who are
members of the system as of January 1 of the next odd-numbered year
are required to transition to a defined contribution plan; and
(B) a conversion under which only employees
initially hired on or after January 1 of the next odd-numbered year
are required to participate in a defined contribution plan; and
(2) include:
(A) a broad description of how each conversion
scenario described by Subdivision (1) would be achieved, including
a projected timeline for the various stages of conversion;
(B) a detailed estimate of the costs to the state
associated with each conversion scenario, including a detailed
estimate of the costs to the state associated with maintaining the
defined benefit plan for retirees and beneficiaries entitled to
benefits under that plan;
(C) a summary of the assumptions and methods used
to estimate costs under Paragraph (B);
(D) recommendations for legislation the system
determines would be necessary to accomplish conversion under each
conversion scenario; and
(E) any additional information the system
determines appropriate.
(c) The report required by this section may be combined with
any other report required by law.
SECTION 3. This Act takes effect September 1, 2021.