Bill Text: TX HB4290 | 2019-2020 | 86th Legislature | Introduced

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Bill Title: Relating to requiring certain public retirement systems to implement funding soundness plans.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2019-03-25 - Referred to Pensions, Investments & Financial Services [HB4290 Detail]

Download: Texas-2019-HB4290-Introduced.html

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86R7376 TSR-D
By: Flynn H.B. No. 4290

A BILL TO BE ENTITLED
AN ACT
relating to requiring certain public retirement systems to
implement funding soundness plans.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 801.209(a), Government Code, is amended
to read as follows:
(a) For each public retirement system, the board shall post
on the board's Internet website, or on a publicly available website
that is linked to the board's website, the most recent data from
reports received under Sections 802.101, 802.103, 802.104,
802.105, 802.108, 802.2015, [and] 802.2016, and 802.2017.
SECTION 2. Sections 802.002(a) and (c), Government Code,
are amended to read as follows:
(a) Except as provided by Subsection (b), the Employees
Retirement System of Texas, the Teacher Retirement System of Texas,
the Texas County and District Retirement System, the Texas
Municipal Retirement System, and the Judicial Retirement System of
Texas Plan Two are exempt from Sections 802.101(a), 802.101(b),
802.101(d), 802.102, 802.103(a), 802.103(b), 802.2015, 802.2016,
802.2017, 802.202, 802.203, 802.204, 802.205, 802.206, and
802.207. The Judicial Retirement System of Texas Plan One is exempt
from all of Subchapters B and C except Sections 802.104 and 802.105.
The optional retirement program governed by Chapter 830 is exempt
from all of Subchapters B and C except Section 802.106.
(c) Notwithstanding any other law, a defined contribution
plan is exempt from Sections 802.101, 802.1012, 802.1014, 802.103,
802.104, 802.2017, and 802.202(d). This subsection may not be
construed to exempt any plan from Section 802.105 or 802.106(h).
SECTION 3. Subchapter C, Chapter 802, Government Code, is
amended by adding Section 802.2017 to read as follows:
Sec. 802.2017. FUNDING SOUNDNESS PLANS FOR CERTAIN PUBLIC
RETIREMENT SYSTEMS. (a) In this section, "governmental entity"
has the meaning assigned by Section 802.1012.
(b) If, on September 1, 2019, a public retirement system's
most recent actuarial valuation indicates that the system's
amortization period for the system's unfunded actuarial accrued
liability exceeds 30 years but does not exceed 40 years:
(1) the governing body of the system shall notify its
associated governmental entity in writing of that fact; and
(2) the governing body of the system and its
associated governmental entity jointly, or, if the system is
governed by Article 6243i, Revised Statutes, the system's
associated governmental entity solely, shall develop a written plan
that identifies specific measures that the system and its
associated governmental entity shall, in accordance with the
system's governing statute, implement to achieve an amortization
period that is within 30 years not later than the last day of the
system's fiscal year ending in 2022.
(c) If, on or after the date prescribed by Subsection
(b)(2), a public retirement system subject to this section receives
an actuarial valuation indicating that the system's actual
contributions:
(1) are sufficient to amortize the system's unfunded
actuarial accrued liability within 30 years, the system has
satisfied its obligations under this section and shall immediately
notify its associated governmental entity in writing of that fact;
or
(2) are not sufficient to amortize the system's
unfunded actuarial accrued liability within 30 years:
(A) the governing body of the system shall
notify its associated governmental entity in writing of that fact;
and
(B) the governing body of the system and its
associated governmental entity jointly, or, if the system is
governed by Article 6243i, Revised Statutes, the system's
associated governmental entity solely, shall formulate a funding
soundness restoration plan under Subsection (d).
(d) A funding soundness restoration plan formulated under
this section must:
(1) be developed by the public retirement system and
the associated governmental entity jointly, or, if the system is
governed by Article 6243i, Revised Statutes, by the system's
associated governmental entity solely, in accordance with the
system's governing statute; and
(2) be designed to achieve a contribution rate that
will be sufficient to amortize the unfunded actuarial accrued
liability within 30 years not later than the sixth anniversary of
the date on which the final version of a funding soundness
restoration plan is formulated.
(e) A public retirement system and an associated
governmental entity that formulate a funding soundness restoration
plan shall report any updates of progress made by the entities
toward improved actuarial soundness to the board each year.
(f) Each public retirement system and its associated
governmental entity or each associated governmental entity, as
applicable, that formulates a funding soundness restoration plan as
provided by this section shall submit a copy of that plan to the
board not later than the 31st day after the date on which the plan is
formulated.
(g) The board may adopt rules necessary to implement this
section, including rules that allow a public retirement system and
an associated governmental entity to amend a funding soundness
restoration plan formulated under this section.
(h) This section expires September 1, 2029.
SECTION 4. This Act takes effect September 1, 2019.