By: Lambert H.B. No. 3474
A BILL TO BE ENTITLED
AN ACT
relating to the evaluation and reporting of investment practices
and performance of certain public retirement systems.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 802.109, Government Code, is amended by
amending Subsections (d), (e), (e-1), (f), and (g) and adding
Subsections (d-1) and (d-2) to read as follows:
(d) The Pension Review Board shall establish a schedule to
ensure that [A] public retirement systems [shall] conduct the
evaluation described by Subsection (a):
(1) once every three years, if the total assets of the
retirement system are [as of the last day of the preceding fiscal
year were] at least $100 million; or
(2) once every six years, if the total assets of the
retirement system are [as of the last day of the preceding fiscal
year were] at least $30 million and less than $100 million.
(d-1) If a public retirement system's total assets increase
in a fiscal year to above the threshold specified in Subsection
(d)(1) or (d)(2), the public retirement system shall complete the
evaluation by the next appropriate due date specified in the
schedule established by the Pension Review Board pursuant to
Subsection (d).
(d-2) A public retirement system that has completed an
evaluation pursuant to the requirements of this Section remains
subject to the requirement based on total pension liability and
shall complete subsequent evaluations:
(1) once every three years, if the total pension
liability of the retirement system is at least $100 million; or
(2) once every six years, if the total pension
liability of the retirement system is at least $30 million and less
than $100 million.
(e) A public retirement system is not required to conduct
the evaluation described by Subsection (a) if the total assets of
the retirement system as of the last day of the [preceding] fiscal
year immediately preceding the next evaluation deadline were less
than $30 million.
(e-1) An [Not later than the 30th day after the date an]
independent firm that completes an evaluation described by
Subsection (a)[, the independent firm] shall:
(1) submit to the public retirement system for
purposes of discussion and clarification a substantially completed
preliminary draft of the evaluation report; and
(2) request in writing that the system[, on or before
the 30th day after the date the system receives the preliminary
draft,] submit to the firm:
(A) a description of any action taken or expected
to be taken in response to a recommendation made in the evaluation;
and
(B) any written response of the system that the
system wants to accompany the final evaluation report.
(f) The independent firm shall file the final evaluation
report, including the evaluation results and any response received
from the public retirement system, with the governing body of the
system[:]
[(1) not earlier than the 31st day after the date on
which the preliminary draft is submitted to the system; and
(2) not later than the later of:
(A) the 60th day after the date on which the
preliminary draft is submitted to the system; or
(B) May 1 in the year following the year in which
the system is evaluated under Subsection (a)].
(g) The [Not later than the 31st day after the date the]
governing body of a public retirement system that receives a report
of an evaluation under this section[, the governing body] shall
submit the report to the board.
(h) A governmental entity that is the employer of active
members of a public retirement system evaluated under Subsection
(a) may pay all or part of the costs of the evaluation. The public
retirement system shall pay any remaining unpaid costs of the
evaluation.
(i) The board shall submit an investment performance report
to the governor, the lieutenant governor, the speaker of the house
of representatives, and the legislative committees having
principal jurisdiction over legislation governing public
retirement systems in the biennial report required by Section
801.203. The report must compile and summarize the information
received under this section by the board during the preceding two
fiscal years.
(j) Repealed by Acts 2021, 87th Leg., R.S., Ch. 141
(H.B. 1585), Sec. 20(1), eff. May 26, 2021.
(k) The following reports may be used by the applicable
public retirement systems to satisfy the requirement for a report
of an evaluation under this section:
(1) an investment report under Section 10A, Article
6243g-4, Revised Statutes;
(2) an investment report under Section 2D, Chapter 88
(H.B. 1573), Acts of the 77th Legislature, Regular Session, 2001
(Article 6243h, Vernon's Texas Civil Statutes); and
(3) a report on a review conducted on the retirement
system's investments under Section 2B, Article 6243e.2(1), Revised
Statutes.
(l) The board may adopt rules necessary to implement this
section.
SECTION 2. Notwithstanding Section 802.109(d), Government
Code, as added by this Act, a report of the first evaluation of a
public retirement system, as required by Section 802.109,
Government Code, as amended by this Act, must be filed with the
Pension Review Board not later than September 1, 2026.
SECTION 3. The Pension Review Board shall establish the
schedule required by Section 802.109(d), Government Code, as
amended by this Act, not later than January 1, 2026.
SECTION 4. This Act takes effect September 1, 2025.