Bill Text: TX HB3685 | 2021-2022 | 87th Legislature | Introduced
Bill Title: Relating to the creation of a work group to undertake a study of the Employees Retirement System of Texas.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2021-04-13 - Withdrawn from schedule [HB3685 Detail]
Download: Texas-2021-HB3685-Introduced.html
87R11631 BDP-D | ||
By: Capriglione | H.B. No. 3685 |
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relating to the creation of a work group to undertake a study of the | ||
Employees Retirement System of Texas. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. DEFINITION. In this Act, "retirement system" | ||
means the Employees Retirement System of Texas. | ||
SECTION 2. CREATION OF WORK GROUP. (a) A work group is | ||
created to study and assess the retirement system and report on the | ||
issues described by Section 3 of this Act. | ||
(b) The work group shall be composed of: | ||
(1) three senators appointed by the lieutenant | ||
governor; | ||
(2) three members of the house of representatives | ||
appointed by the speaker of the house of representatives; | ||
(3) two members of the public who are appointed by the | ||
lieutenant governor; and | ||
(4) two members of the public who are appointed by the | ||
speaker of the house of representatives. | ||
(c) The lieutenant governor and speaker of the house of | ||
representatives shall jointly designate a presiding officer from | ||
among the members of the work group. | ||
(d) The work group shall convene at the call of the | ||
presiding officer. | ||
SECTION 3. INTERIM STUDY REGARDING RETIREMENT SYSTEM. The | ||
work group created by Section 2 of this Act shall: | ||
(1) review and assess: | ||
(A) the different types of retirement system | ||
plans, including: | ||
(i) defined contribution plans; | ||
(ii) defined benefit plans; | ||
(iii) hybrid public pension plans; and | ||
(iv) cash balance pension plans; and | ||
(B) the actuarial assumptions used in making | ||
actuarial valuations and analyses of the retirement system and the | ||
consequences of amending an assumption rate; | ||
(2) study: | ||
(A) the potential for allowing the retirement | ||
system to pool assets with other systems for the purposes of taking | ||
advantage of economies of scale and reducing costs; and | ||
(B) the governance policies of the retirement | ||
system and the effect of imposing more formal requirements on | ||
governance; | ||
(3) consider enhancing fee disclosures, specifically | ||
the disclosure of fees that are related to alternative investment | ||
vehicles; | ||
(4) consider requiring: | ||
(A) additional actuarial analyses, including a | ||
discount rate sensitivity analysis and risk assessments; and | ||
(B) additional disclosures, including disclosure | ||
of: | ||
(i) the sustained differences between the | ||
actual and assumed rate of return on assets; | ||
(ii) projected cash flows; | ||
(iii) risks; and | ||
(iv) the potential impact of actual future | ||
measurements differing significantly from expected future | ||
measurements; and | ||
(5) study the retirement system's valuation | ||
methodology for the illiquid asset class, including the | ||
effectiveness of and compliance with the fair value measurement | ||
requirement under the Governmental Accounting Standards Board | ||
Statement No. 72. | ||
SECTION 4. WORK GROUP FINDINGS AND RECOMMENDATIONS. | ||
(a) Not later than January 15, 2023, the work group shall report | ||
the work group's findings and recommendations to the lieutenant | ||
governor, the speaker of the house of representatives, and the | ||
governor. The work group shall include in its recommendations | ||
specific statutory and regulatory changes that appear necessary | ||
from the results of the work group's study under Section 3 of this | ||
Act. | ||
(b) Not later than the 60th day after the effective date of | ||
this Act, the lieutenant governor and the speaker of the house of | ||
representatives shall appoint the members of the work group created | ||
under Section 2 of this Act in accordance with that section. | ||
SECTION 5. ABOLITION OF WORK GROUP. The work group created | ||
by this Act is abolished and this Act expires January 20, 2023. | ||
SECTION 6. 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. |