Bill Text: TX HB3397 | 2021-2022 | 87th Legislature | Engrossed

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Bill Title: Relating to contributions to the Employees Retirement System of Texas.

Spectrum: Slight Partisan Bill (Democrat 2-1)

Status: (Engrossed - Dead) 2021-05-10 - Referred to Finance [HB3397 Detail]

Download: Texas-2021-HB3397-Engrossed.html

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87R11015 JCG-D
By: Murphy, et al. H.B. No. 3397

A BILL TO BE ENTITLED
AN ACT
relating to contributions to the Employees Retirement System of
Texas.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 815.402(a), Government Code, is amended
to read as follows:
(a) Except as provided by Section 813.201, each payroll
period, each department or agency of the state shall cause to be
deducted from each member's compensation a contribution of:
(1) 9.5 percent of the compensation if the member is
not a member of the legislature, for service rendered after August
31, 2015, and before September 1, 2017;
(2) for service by a member who is not a member of the
legislature rendered on or after September 1, 2017, and before
September 1, 2021, the lesser of:
(A) 9.5 percent of the [member's annual]
compensation; or
(B) a percentage of the [member's annual]
compensation equal to 9.5 percent reduced by one-tenth of one
percent for each one-tenth of one percent that the state
contribution rate for the fiscal year to which the service relates
is less than the state contribution rate established for the 2017
fiscal year; [or]
(3) 9.5 percent of the compensation if the member is a
member of the legislature, for service rendered before September 1,
2021; or
(4) for service rendered by any member on or after
September 1, 2021, an amount equal to the member contribution rate
adopted by the board of trustees under Section 815.4036 for the
applicable fiscal year multiplied by the member's compensation.
SECTION 2. Section 815.403(a), Government Code, is amended
to read as follows:
(a) During each fiscal year, the state shall contribute to
the retirement system:
(1) for the fiscal year beginning September 1, 2021,
and subsequent fiscal years, an amount equal to the state
contribution rate adopted by the board of trustees under Section
815.4036 for the applicable fiscal year multiplied by [7.4 percent
of] the total compensation of all members of the retirement system
for that year;
(2) money to pay lump-sum death benefits for retirees
under Section 814.501;
(3) an amount for the law enforcement and custodial
officer supplemental retirement fund equal to 2.13 percent of the
aggregate state compensation of all custodial and law enforcement
officers for that year;
(4) money necessary for the administration of the law
enforcement and custodial officer supplemental retirement fund;
and
(5) money for service credit not previously
established, as provided by Section 813.202(c) or 813.302(d).
SECTION 3. Subchapter E, Chapter 815, Government Code, is
amended by adding Section 815.4036 to read as follows:
Sec. 815.4036. ACTUARIALLY DETERMINED STATE AND MEMBER
CONTRIBUTION RATES. (a) For the fiscal year beginning September 1,
2021, and for each subsequent fiscal year:
(1) the actuary designated under Section 815.206
shall:
(A) calculate an actuarially determined
contribution rate for the applicable fiscal year; and
(B) recommend to the board of trustees for review
and adoption the member contribution rate under Section
815.402(a)(4) and the state contribution rate under Section
815.403(a)(1) calculated by apportioning the actuarially
determined contribution rate under Paragraph (A) among members, the
state, and, subject to Section 815.4035(a), employers in a manner
that results in the member contribution rate not exceeding 50
percent of the actuarially determined contribution rate; and
(2) the board shall adopt the contribution rates
recommended by the actuary under Subdivision (1)(B) as the member
contribution rate under Section 815.402(a)(4) and the state
contribution rate under Section 815.403(a)(1).
(b) For purposes of Subsection (a)(1), an actuarially
determined contribution rate is a percentage rate that reflects the
sum of:
(1) the normal cost of projected benefits for the
fiscal year; and
(2) the portion of the total payment toward the
unfunded actuarial accrued liabilities of the retirement system
that is:
(A) attributable to the fiscal year; and
(B) sufficient to amortize the unfunded
actuarial accrued liabilities of the system in a period that does
not exceed 30 years by one or more years.
(c) The actuarially determined contribution rate
recommended by the actuary under Subsection (a)(1) must be based
on:
(1) reasonable actuarial assumptions and methods;
(2) tables adopted by the board under Section 815.105;
and
(3) the funding policy adopted by the board under
Section 802.2011.
SECTION 4. 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.