Bill Text: TX HB4534 | 2021-2022 | 87th Legislature | Engrossed
Bill Title: Relating to a study by the Employees Retirement System of Texas of certain state retirement system reforms.
Spectrum: Partisan Bill (Republican 4-0)
Status: (Engrossed - Dead) 2021-05-06 - Received from the House [HB4534 Detail]
Download: Texas-2021-HB4534-Engrossed.html
87R20704 KFF-F | ||
By: Gates, Capriglione, Parker, Stephenson | H.B. No. 4534 |
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relating to a study by the Employees Retirement System of Texas of | ||
certain state retirement system reforms. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. INTERIM STUDY. (a) The Employees Retirement | ||
System of Texas shall conduct a study to evaluate potential reforms | ||
designed to improve the financial health of the retirement system, | ||
including the feasibility and anticipated financial impact of | ||
implementing the following reforms: | ||
(1) transitioning from providing retirement benefits | ||
to members of the system under a defined benefit plan to providing | ||
those benefits under: | ||
(A) a defined contribution plan; | ||
(B) a hybrid pension plan that combines elements | ||
of a defined contribution plan and a defined benefit plan; | ||
(C) a cash balance pension plan that provides | ||
individual accounts for plan members; and | ||
(D) another retirement plan commonly used by | ||
other states; | ||
(2) adopting changes to the existing defined benefit | ||
plan that are designed to reduce the unfunded actuarial accrued | ||
liabilities of the system and achieve actuarial soundness, | ||
including: | ||
(A) increasing the state contribution rate; | ||
(B) changing the minimum age at which members are | ||
eligible to retire; | ||
(C) changing the formula used to calculate | ||
annuities provided under the plan; and | ||
(D) reducing the amount of benefits provided | ||
under the plan, including the potential of offering members the | ||
option to receive partial lump sum payments in lieu of a portion of | ||
the member's annuity in a manner that ensures the amount of the lump | ||
sum payment is less than the actuarial present value of the portion | ||
of the annuity forfeited by the member; and | ||
(3) implementing a pension revenue enhancement plan | ||
under which a life insurance policy or other financial product or | ||
benefit is purchased under the plan for members and annuitants of | ||
the Employees Retirement System of Texas who are eligible for and | ||
elect to enroll in the plan. | ||
(b) In conducting the study required by this section, the | ||
Employees Retirement System of Texas shall review and evaluate the | ||
retirement plans and systems established in other states for best | ||
practices and financial outcomes, taking into consideration: | ||
(1) the overall performance of other states' plans | ||
based on the unfunded liability balances, if any, of those plans; | ||
and | ||
(2) the strengths and weaknesses of other states' | ||
plans in attracting and maintaining a competitive workforce. | ||
(c) The Employees Retirement System of Texas may consult | ||
with anyone the system determines appropriate to conduct the study | ||
and prepare the report required by this section, including outside | ||
experts and other state agencies, including the State Pension | ||
Review Board, the Legislative Budget Board, and the Texas | ||
Department of Insurance. | ||
SECTION 2. FINDINGS AND RECOMMENDATIONS. Not later than | ||
September 1, 2022, the Employees Retirement System of Texas shall | ||
report the system's findings and recommendations to the governor, | ||
the lieutenant governor, the speaker of the house of | ||
representatives, and each member of the legislature. The system | ||
shall include in its recommendations specific statutory and | ||
regulatory changes that the system determines necessary or | ||
appropriate to implement its recommendations. | ||
SECTION 3. EXPIRATION OF ACT. This Act expires September | ||
15, 2022. | ||
SECTION 4. 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. |