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A BILL TO BE ENTITLED
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AN ACT
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relating to the creation of a joint interim committee to undertake a |
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study of the public retirement systems of this state. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. DEFINITION. In this Act, "public retirement |
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system" has the meaning assigned by Section 802.001, Government |
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Code. |
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SECTION 2. CREATION OF JOINT INTERIM COMMITTEE. (a) A |
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joint interim committee is created to study and assess each public |
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retirement system of this state and report on the issues described |
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by Section 3 of this Act. |
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(b) The joint interim committee shall be composed of three |
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senators appointed by the lieutenant governor and three members of |
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the house of representatives appointed by the speaker of the house |
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of representatives. |
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(c) The lieutenant governor and speaker of the house of |
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representatives shall each designate a co-chair from among the |
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joint interim committee members. |
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(d) The joint interim committee shall convene at the joint |
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call of the co-chairs. |
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(e) The joint interim committee has all other powers and |
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duties provided to a special or select committee by the rules of the |
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senate and house of representatives, by Subchapter B, Chapter 301, |
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Government Code, and by policies of the senate and house committees |
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on administration. |
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SECTION 3. INTERIM STUDY REGARDING PUBLIC RETIREMENT |
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SYSTEMS. The joint interim committee created by Section 2 of this |
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Act shall: |
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(1) review and assess: |
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(A) the different types of retirement system |
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plans, including: |
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(i) defined contribution plans; |
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(ii) defined benefit plans; |
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(iii) hybrid public pension plans; and |
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(iv) cash balance pension plans; |
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(B) the actuarial assumptions used in making |
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actuarial valuations and analyses of public retirement systems and |
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the consequences of amending an assumption rate; and |
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(C) the effect that local agreements, including |
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meet and confer agreements, have on the sustainability of this |
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state's public retirement systems; |
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(2) study: |
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(A) the potential for allowing public retirement |
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systems to pool their assets for the purposes of taking advantage of |
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economies of scale and reducing costs; and |
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(B) the governance policies of this state's |
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public retirement systems and the effect of imposing more formal |
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requirements on governance, including a requirement that the |
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retirement systems and their associated governmental entities |
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jointly develop written funding, investment, and benefits policies |
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that have goals and objectives that reference one another, are |
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coordinated, and promote transparency; |
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(3) consider enhancing fee disclosures, specifically |
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the disclosure of fees that are related to alternative investment |
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vehicles; |
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(4) consider requiring: |
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(A) additional actuarial analyses, including a |
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discount rate sensitivity analysis and risk assessments; and |
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(B) additional disclosures, including disclosure |
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of: |
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(i) the sustained differences between the |
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actual and assumed rate of return on assets; |
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(ii) projected cash flows; |
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(iii) risks; and |
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(iv) the potential impact of actual future |
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measurements differing significantly from expected future |
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measurements; and |
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(5) study the public retirement systems' valuation |
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methodology for the illiquid asset class, including the |
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effectiveness of and compliance with the fair value measurement |
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requirement under the Governmental Accounting Standards Board |
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Statement No. 72. |
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SECTION 4. COMMITTEE FINDINGS AND RECOMMENDATIONS. |
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(a) Not later than January 15, 2019, the joint interim committee |
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shall report the committee's findings and recommendations to the |
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lieutenant governor, the speaker of the house of representatives, |
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and the governor. The joint interim committee shall include in its |
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recommendations specific statutory and regulatory changes that |
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appear necessary from the results of the committee's study under |
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Section 3 of this Act. |
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(b) Not later than the 60th day after the effective date of |
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this Act, the lieutenant governor and the speaker of the house of |
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representatives shall appoint the members of the joint interim |
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committee created under Section 2 of this Act in accordance with |
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that section. |
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SECTION 5. ABOLITION OF COMMITTEE. The joint interim |
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committee created by this Act is abolished and this Act expires |
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January 20, 2019. |
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SECTION 6. EFFECTIVE DATE. This Act takes effect |
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immediately if it receives a vote of two-thirds of all the members |
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elected to each house, as provided by Section 39, Article III, Texas |
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Constitution. If this Act does not receive the vote necessary for |
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immediate effect, this Act takes effect September 1, 2017. |