By: West S.B. No. 1527
A BILL TO BE ENTITLED
AN ACT
relating to the administration of, contributions to, and benefits
under the public retirement systems for police and firefighters in
certain municipalities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 2.01, Article 6243a-1, Revised Statutes,
is amended by adding Subdivision (3-a) to read as follows:
(3-a) "Actuarially determined contribution rate"
means for any city fiscal year, the city contribution rate:
(A) expressed as a percentage of members'
projected aggregate computation pay for the fiscal year; and
(B) actuarially determined in accordance with
Section 4.02 of this article.
SECTION 2. Article 6243a-1, Revised Statutes, is amended by
adding Section 2.026 to read as follows:
Sec. 2.026. ADMINISTRATIVE REQUIREMENTS. (a) As a public
retirement system within the meaning of Section 802.001, Government
Code, the pension system is subject to and must comply with Chapter
802, Government Code.
(b) Any plan or rule adopted under former Section 2.025 of
this article:
(1) may not be implemented; and
(2) is unenforceable.
SECTION 3. Article 6243a-1, Revised Statutes, is amended by
adding Section 3.014 to read as follows:
Sec. 3.014. CITY AND BOARD APPROVAL REQUIRED FOR CERTAIN
ACTIONS. Notwithstanding any other provision of this article, the
following actions must be approved by the board and the city council
if, as a result of taking the action, the action will result in an
increase in the pension system's liabilities:
(1) the settlement of any lawsuit by the board;
(2) any proposed increase to benefits by the board,
including any adjustment under Section 6.12 of this article; and
(3) any changes to actuarial assumptions under Section
2.02 of this article, including the current discount rate.
SECTION 4. Section 4.02, Article 6243a-1, Revised Statutes,
is amended by amending Subsection (d) and adding Subsections (d-1),
(e-1), (f), (g), (h), and (h-1) to read as follows:
(d) Subject to Section 4.025 of this article, the city shall
make contributions to the pension system biweekly using an
actuarially determined contribution rate with a five-year step-up
period beginning October 2024. Subject to Subsections (e-1) and
(f) of this section, the actuarially determined contribution rate
for any given city fiscal year is the sum of the following as
determined in the actuarial valuation for the plan year preceding
the fiscal year:
(1) an established 30-year closed amortization amount
with five-year step-up and no step-down for the unfunded actuarial
accrued liability and administrative expenses, determined based on
the January 1, 2023, actuarial valuation, as shown in the following
fixed dollar schedule, divided by the members' projected aggregate
computation pay for each city fiscal year:
City Fiscal Year Amortization of January 1, 2023 Unfunded Actuarial Accrued Liability Administrative Expenses Total Fixed Dollar Amount City Fiscal Year Amortization of January 1, 2023 Unfunded Actuarial Accrued Liability Administrative Expenses Total Fixed Dollar Amount
City Fiscal Year Amortization of January 1, 2023 Unfunded Actuarial Accrued Liability Administrative Expenses Total Fixed Dollar Amount
Ending Amortization of January 1, 2023 Unfunded Actuarial Accrued Liability Administrative Expenses Total Fixed Dollar Amount Ending Amortization of January 1, 2023 Unfunded Actuarial Accrued Liability Administrative Expenses Total Fixed Dollar Amount
Ending Amortization of January 1, 2023 Unfunded Actuarial Accrued Liability Administrative Expenses Total Fixed Dollar Amount
September 30 Amortization of January 1, 2023 Unfunded Actuarial Accrued Liability Administrative Expenses Total Fixed Dollar Amount September 30 Amortization of January 1, 2023 Unfunded Actuarial Accrued Liability Administrative Expenses Total Fixed Dollar Amount
September 30 Amortization of January 1, 2023 Unfunded Actuarial Accrued Liability Administrative Expenses Total Fixed Dollar Amount
2025 $161,656,000 $7,000,000 $168,656,000 2025 $161,656,000 $7,000,000 $168,656,000
2025 $161,656,000 $7,000,000 $168,656,000
2026 $179,482,000 $7,000,000 $186,482,000 2026 $179,482,000 $7,000,000 $186,482,000
2026 $179,482,000 $7,000,000 $186,482,000
2027 $197,889,000 $7,000,000 $204,889,000 2027 $197,889,000 $7,000,000 $204,889,000
2027 $197,889,000 $7,000,000 $204,889,000
2028 $217,163,000 $7,000,000 $224,163,000 2028 $217,163,000 $7,000,000 $224,163,000
2028 $217,163,000 $7,000,000 $224,163,000
2029 $237,336,000 $7,000,000 $244,336,000 2029 $237,336,000 $7,000,000 $244,336,000
2029 $237,336,000 $7,000,000 $244,336,000
2030 $242,341,000 $7,000,000 $249,341,000 2030 $242,341,000 $7,000,000 $249,341,000
2030 $242,341,000 $7,000,000 $249,341,000
2031 $248,399,000 $7,000,000 $255,399,000 2031 $248,399,000 $7,000,000 $255,399,000
2031 $248,399,000 $7,000,000 $255,399,000
2032 $254,609,000 $7,000,000 $261,609,000 2032 $254,609,000 $7,000,000 $261,609,000
2032 $254,609,000 $7,000,000 $261,609,000
2033 $260,975,000 $7,000,000 $267,975,000 2033 $260,975,000 $7,000,000 $267,975,000
2033 $260,975,000 $7,000,000 $267,975,000
2034 $267,499,000 $7,000,000 $274,499,000 2034 $267,499,000 $7,000,000 $274,499,000
2034 $267,499,000 $7,000,000 $274,499,000
2035 $274,186,000 $7,000,000 $281,186,000 2035 $274,186,000 $7,000,000 $281,186,000
2035 $274,186,000 $7,000,000 $281,186,000
2036 $281,041,000 $7,000,000 $288,041,000 2036 $281,041,000 $7,000,000 $288,041,000
2036 $281,041,000 $7,000,000 $288,041,000
2037 $288,067,000 $7,000,000 $295,067,000 2037 $288,067,000 $7,000,000 $295,067,000
2037 $288,067,000 $7,000,000 $295,067,000
2038 $295,269,000 $7,000,000 $302,269,000 2038 $295,269,000 $7,000,000 $302,269,000
2038 $295,269,000 $7,000,000 $302,269,000
2039 $302,650,000 $7,000,000 $309,650,000 2039 $302,650,000 $7,000,000 $309,650,000
2039 $302,650,000 $7,000,000 $309,650,000
2040 $310,217,000 $7,042,000 $317,259,000 2040 $310,217,000 $7,042,000 $317,259,000
2040 $310,217,000 $7,042,000 $317,259,000
2041 $317,972,000 $7,218,000 $325,190,000 2041 $317,972,000 $7,218,000 $325,190,000
2041 $317,972,000 $7,218,000 $325,190,000
2042 $325,921,000 $7,399,000 $333,320,000 2042 $325,921,000 $7,399,000 $333,320,000
2042 $325,921,000 $7,399,000 $333,320,000
2043 $334,069,000 $7,584,000 $341,653,000 2043 $334,069,000 $7,584,000 $341,653,000
2043 $334,069,000 $7,584,000 $341,653,000
2044 $342,421,000 $7,773,000 $350,194,000 2044 $342,421,000 $7,773,000 $350,194,000
2044 $342,421,000 $7,773,000 $350,194,000
2045 $350,982,000 $7,967,000 $358,949,000 2045 $350,982,000 $7,967,000 $358,949,000
2045 $350,982,000 $7,967,000 $358,949,000
2046 $359,756,000 $8,167,000 $367,923,000 2046 $359,756,000 $8,167,000 $367,923,000
2046 $359,756,000 $8,167,000 $367,923,000
2047 $368,750,000 $8,371,000 $377,121,000 2047 $368,750,000 $8,371,000 $377,121,000
2047 $368,750,000 $8,371,000 $377,121,000
2048 $377,969,000 $8,580,000 $386,549,000 2048 $377,969,000 $8,580,000 $386,549,000
2048 $377,969,000 $8,580,000 $386,549,000
2049 $387,418,000 $8,795,000 $396,213,000 2049 $387,418,000 $8,795,000 $396,213,000
2049 $387,418,000 $8,795,000 $396,213,000
2050 $397,104,000 $9,014,000 $406,118,000 2050 $397,104,000 $9,014,000 $406,118,000
2050 $397,104,000 $9,014,000 $406,118,000
2051 $407,031,000 $9,240,000 $416,271,000 2051 $407,031,000 $9,240,000 $416,271,000
2051 $407,031,000 $9,240,000 $416,271,000
2052 $417,207,000 $9,471,000 $426,678,000 2052 $417,207,000 $9,471,000 $426,678,000
2052 $417,207,000 $9,471,000 $426,678,000
2053 $427,637,000 $9,708,000 $437,345,000 2053 $427,637,000 $9,708,000 $437,345,000
2053 $427,637,000 $9,708,000 $437,345,000
2054 $438,328,000 $9,950,000 $448,278,000 2054 $438,328,000 $9,950,000 $448,278,000
2054 $438,328,000 $9,950,000 $448,278,000
(2) normal cost; and
(3) subject to Subsection (d-1) of this section, new
amortization layers as necessary to amortize the difference between
the expected remaining balance of all previous years' layers and
the actual unfunded actuarial accrued liability for the given
valuation [in an amount equal to the sum of:
[(1) the greater of:
[(A) 34.5 percent of the aggregate computation
pay paid to members during the period for which the contribution is
made; or
[(B) the applicable amount set forth below:
[(i) $5,173,000 for the biweekly pay
periods beginning with the first biweekly pay period that begins
after September 1, 2017, and ends on the last day of the first
biweekly pay period that ends after December 31, 2017;
[(ii) $5,344,000 for the 26 biweekly pay
periods immediately following the last biweekly pay period
described by Subparagraph (i) of this paragraph;
[(iii) $5,571,000 for the 26 biweekly pay
periods immediately following the last biweekly pay period
described by Subparagraph (ii) of this paragraph;
[(iv) $5,724,000 for the 26 biweekly pay
periods immediately following the last biweekly pay period
described by Subparagraph (iii) of this paragraph;
[(v) $5,882,000 for the 26 biweekly pay
periods immediately following the last biweekly pay period
described by Subparagraph (iv) of this paragraph;
[(vi) $6,043,000 for the 26 biweekly pay
periods immediately following the last biweekly pay period
described by Subparagraph (v) of this paragraph;
[(vii) $5,812,000 for the 26 biweekly pay
periods immediately following the last biweekly pay period
described by Subparagraph (vi) of this paragraph;
[(viii) $6,024,000 for the 26 biweekly pay
periods immediately following the last biweekly pay period
described by Subparagraph (vii) of this paragraph through the
biweekly pay period that ends after December 31, 2024; and
[(ix) $0 for each subsequent biweekly pay
period beginning with the first biweekly pay period following the
last biweekly pay period described by Subparagraph (viii) of this
paragraph; and
[(2) except as provided by Subsection (e) of this
section, an amount equal to 1/26th of $13 million].
(d-1) For purposes of Subsection (d)(3) of this section, new
amortization layers must be amortized over a closed amortization
period of 20 years or until January 1, 2053, whichever is later. If
the actuarial assets of the fund exceed the actuarial liabilities
for a given valuation, the outstanding layers may be collapsed into
a single layer with a closed amortization period of 20 years or
until January 2, 2053, whichever is later.
(e-1) Before July 1 of each year, the pension system's
qualified actuary and the city's actuary shall respectively
calculate and recommend an actuarially determined contribution
rate for the following city fiscal year. If the difference between
the recommended rates is:
(1) three percent or less, the actuarially determined
contribution rate shall be the rate recommended by the pension
system's qualified actuary; or
(2) greater than three percent, the board and the city
council shall engage in a 30-day reconciliation period:
(A) during which, if the pension system's
qualified actuary and the city's actuary reconcile their respective
calculations, the reconciled rate shall be the actuarially
determined contribution rate; or
(B) at the conclusion of which, if the pension
system's qualified actuary and the city's actuary do not reconcile
their respective calculations, the average of the rates recommended
by each actuary under this section shall be the actuarially
determined contribution rate.
(f) If in any plan year the actuarially determined
contribution rate, excluding the amounts provided under Subsection
(d)(1) of this section, is outside of the minimum or maximum rates
shown in the following schedule, the difference between the
actuarially determined contribution rate and the minimum or
maximum, as applicable, will be amortized over a closed period of 20
years or until January 1, 2053, whichever is later:
Plan Year City Fiscal Year Ending September 30 Minimum Rate Maximum Rate Plan Year City Fiscal Year Ending September 30 Minimum Rate Maximum Rate
Plan Year City Fiscal Year Ending September 30 Minimum Rate Maximum Rate
2023 2025 6.78% 6.78% 2023 2025 6.78% 6.78%
2023 2025 6.78% 6.78%
2024 2026 6.66% 6.66% 2024 2026 6.66% 6.66%
2024 2026 6.66% 6.66%
2025 2027 6.57% 6.57% 2025 2027 6.57% 6.57%
2025 2027 6.57% 6.57%
2026 2028 6.51% 6.51% 2026 2028 6.51% 6.51%
2026 2028 6.51% 6.51%
2027 2029 6.45% 6.45% 2027 2029 6.45% 6.45%
2027 2029 6.45% 6.45%
2028 2030 1.39% 11.39% 2028 2030 1.39% 11.39%
2028 2030 1.39% 11.39%
2029 2031 1.34% 11.34% 2029 2031 1.34% 11.34%
2029 2031 1.34% 11.34%
2030 2032 1.29% 11.29% 2030 2032 1.29% 11.29%
2030 2032 1.29% 11.29%
2031 2033 1.25% 11.25% 2031 2033 1.25% 11.25%
2031 2033 1.25% 11.25%
2032 2034 1.21% 11.21% 2032 2034 1.21% 11.21%
2032 2034 1.21% 11.21%
2033 2035 1.17% 11.17% 2033 2035 1.17% 11.17%
2033 2035 1.17% 11.17%
2034 2036 1.14% 11.14% 2034 2036 1.14% 11.14%
2034 2036 1.14% 11.14%
2035 2037 1.12% 11.12% 2035 2037 1.12% 11.12%
2035 2037 1.12% 11.12%
2036 2038 1.09% 11.09% 2036 2038 1.09% 11.09%
2036 2038 1.09% 11.09%
2037 2039 1.06% 11.06% 2037 2039 1.06% 11.06%
2037 2039 1.06% 11.06%
2038 2040 1.03% 11.03% 2038 2040 1.03% 11.03%
2038 2040 1.03% 11.03%
2039 2041 0.99% 10.99% 2039 2041 0.99% 10.99%
2039 2041 0.99% 10.99%
2040 2042 0.97% 10.97% 2040 2042 0.97% 10.97%
2040 2042 0.97% 10.97%
2041 2043 0.95% 10.95% 2041 2043 0.95% 10.95%
2041 2043 0.95% 10.95%
2042 2044 0.94% 10.94% 2042 2044 0.94% 10.94%
2042 2044 0.94% 10.94%
2043 2045 0.95% 10.95% 2043 2045 0.95% 10.95%
2043 2045 0.95% 10.95%
2044 2046 0.96% 10.96% 2044 2046 0.96% 10.96%
2044 2046 0.96% 10.96%
2045 2047 0.96% 10.96% 2045 2047 0.96% 10.96%
2045 2047 0.96% 10.96%
2046 2048 0.96% 10.96% 2046 2048 0.96% 10.96%
2046 2048 0.96% 10.96%
2047 2049 0.96% 10.96% 2047 2049 0.96% 10.96%
2047 2049 0.96% 10.96%
2048 2050 0.96% 10.96% 2048 2050 0.96% 10.96%
2048 2050 0.96% 10.96%
2049 2051 0.96% 10.96% 2049 2051 0.96% 10.96%
2049 2051 0.96% 10.96%
2050 2052 0.96% 10.96% 2050 2052 0.96% 10.96%
2050 2052 0.96% 10.96%
2051 2053 0.96% 10.96% 2051 2053 0.96% 10.96%
2051 2053 0.96% 10.96%
2052 2054 0.96% 10.96% 2052 2054 0.96% 10.96%
2052 2054 0.96% 10.96%
(g) If the city council determines that the fund is
projected to be fully funded in over 30 years, the city council may,
in its sole discretion, waive the requirements of Subsection (f) of
this section. The board may recommend to the city council that the
city council waive the requirements of Subsection (f) of this
section.
(h) Notwithstanding Subsection (d) or any other provision
of this section, for the city's fiscal years ending September 30,
2025, through September 30, 2029, the city contribution amount may
not under any circumstances exceed the sum of:
(1) the applicable fixed dollar amount under
Subsection (d)(1) of this section; and
(2) the maximum percentage provided under Subsection
(f) of this section multiplied by the members' projected aggregate
computation pay for the applicable city fiscal year.
(h-1) This subsection and Subsection (h) of this section
expire October 1, 2029.
SECTION 5. Section 3.014, Article 6243a-1, Revised
Statutes, as added by this Act, applies only to an action taken on
or after the effective date of this Act.
SECTION 6. The following provisions of Article 6243a-1,
Revised Statutes, are repealed:
(1) Section 2.025; and
(2) Section 4.02(e).
SECTION 7. 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, 2025.
City Fiscal Year Amortization of January 1, 2023 Unfunded Actuarial Accrued Liability Administrative Expenses Total Fixed Dollar Amount
Ending Amortization of January 1, 2023 Unfunded Actuarial Accrued Liability Administrative Expenses Total Fixed Dollar Amount
September 30 Amortization of January 1, 2023 Unfunded Actuarial Accrued Liability Administrative Expenses Total Fixed Dollar Amount
2025 $161,656,000 $7,000,000 $168,656,000
2026 $179,482,000 $7,000,000 $186,482,000
2027 $197,889,000 $7,000,000 $204,889,000
2028 $217,163,000 $7,000,000 $224,163,000
2029 $237,336,000 $7,000,000 $244,336,000
2030 $242,341,000 $7,000,000 $249,341,000
2031 $248,399,000 $7,000,000 $255,399,000
2032 $254,609,000 $7,000,000 $261,609,000
2033 $260,975,000 $7,000,000 $267,975,000
2034 $267,499,000 $7,000,000 $274,499,000
2035 $274,186,000 $7,000,000 $281,186,000
2036 $281,041,000 $7,000,000 $288,041,000
2037 $288,067,000 $7,000,000 $295,067,000
2038 $295,269,000 $7,000,000 $302,269,000
2039 $302,650,000 $7,000,000 $309,650,000
2040 $310,217,000 $7,042,000 $317,259,000
2041 $317,972,000 $7,218,000 $325,190,000
2042 $325,921,000 $7,399,000 $333,320,000
2043 $334,069,000 $7,584,000 $341,653,000
2044 $342,421,000 $7,773,000 $350,194,000
2045 $350,982,000 $7,967,000 $358,949,000
2046 $359,756,000 $8,167,000 $367,923,000
2047 $368,750,000 $8,371,000 $377,121,000
2048 $377,969,000 $8,580,000 $386,549,000
2049 $387,418,000 $8,795,000 $396,213,000
2050 $397,104,000 $9,014,000 $406,118,000
2051 $407,031,000 $9,240,000 $416,271,000
2052 $417,207,000 $9,471,000 $426,678,000
2053 $427,637,000 $9,708,000 $437,345,000
2054 $438,328,000 $9,950,000 $448,278,000
Plan Year City Fiscal Year Ending September 30 Minimum Rate Maximum Rate
2023 2025 6.78% 6.78%
2024 2026 6.66% 6.66%
2025 2027 6.57% 6.57%
2026 2028 6.51% 6.51%
2027 2029 6.45% 6.45%
2028 2030 1.39% 11.39%
2029 2031 1.34% 11.34%
2030 2032 1.29% 11.29%
2031 2033 1.25% 11.25%
2032 2034 1.21% 11.21%
2033 2035 1.17% 11.17%
2034 2036 1.14% 11.14%
2035 2037 1.12% 11.12%
2036 2038 1.09% 11.09%
2037 2039 1.06% 11.06%
2038 2040 1.03% 11.03%
2039 2041 0.99% 10.99%
2040 2042 0.97% 10.97%
2041 2043 0.95% 10.95%
2042 2044 0.94% 10.94%
2043 2045 0.95% 10.95%
2044 2046 0.96% 10.96%
2045 2047 0.96% 10.96%
2046 2048 0.96% 10.96%
2047 2049 0.96% 10.96%
2048 2050 0.96% 10.96%
2049 2051 0.96% 10.96%
2050 2052 0.96% 10.96%
2051 2053 0.96% 10.96%
2052 2054 0.96% 10.96%