House Pensions, Investments & Financial Service Committee Holds First Hearing
The House Pensions, Investments & Financial Services Committee held its first “organizational” hearing on Wednesday, February 13, 2019. The Pension Review Board and the five statewide retirement systems were invited to testify. View TMRS’s presentation.
Pension Oversight Committee Members Appointed
Lt. Governor Dan Patrick reappointed Senator Joan Huffman (Houston) as the Senate State Affairs Committee chair and Senator Bryan Hughes (Mineola) as the vice chair. The Committee welcomed two new members, Senator Bob Hall (Canton) and Senator Pat Fallon (Frisco), to the Committee. The full committee membership is posted on the Texas Senate website.
Speaker of the House Dennis Bonnen made his committee appointments on January 23, 2019. The House Pensions Committee was combined with the Investments and Financial Services Committee to reform the Pensions, Investments and Financial Services Committee. Speaker Bonnen named Representative Jim Murphy (Houston) as chair and Representative Hubert Vo (Houston) as vice chair. The size of the committee increased to 11 members.
86th Legislative Session Begins
The Texas Senate and House of Representatives gaveled in the 86th Legislative Session on January 8, 2019. The Session will last for 140 days. Lt. Governor Dan Patrick will preside over the Texas Senate, and Representative Dennis Bonnen (Angleton) was chosen as Speaker by the membership of the House of Representatives.
TMRS Board Decides to Propose Legislative Changes
At their December 6-7, 2018 meeting, the TMRS Board of Trustees unanimously decided to propose nine administrative and operational statutory changes for consideration in the 86th Legislative Session. The Board, with input from the Advisory Committee on Benefit Design, studied but declined to propose any benefit design changes.
The Board also approved a legislative resolution for the 86th Session. The resolution encourages members of the Texas Legislature to support TMRS and the cash balance plan design, local decision-making for determining individual plan benefits, and the administrative changes that are being proposed during the 86th Session.
Board Resolution on Legislation
At its final meeting of 2018 in Austin on December 6–7, the TMRS Board of Trustees adopted a resolution regarding legislation in the upcoming session.
The Senate State Affairs Committee and the House Pensions Committee have concluded their oversight hearings for the 85th Legislative interim period. Both Committees had specific charges to fulfill prior to the start of the next legislative session in January 2019. These charges included oversight of the statewide retirement systems, including TMRS. The Committees will now prepare their reports on their interim findings. The TMRS Board and staff appreciate the continued interest and support of TMRS by both Committees.
TMRS Board Deliberating Over the Need for Legislation in 2019
The TMRS Board of Trustees has spent considerable time this year reviewing suggestions to modify TMRS’ governing statutes. The suggestions are the result of a multi-year project to identify plan and operational improvements that could require statutory changes. The process has resulted in the Board focusing its efforts on three potential benefit design-related changes and nine other changes that are operational or administrative in nature.
The three benefit design-related changes that are being considered include:
Modifying the TMRS’s cost-of-living adjustments (COLAs) to provide cities with a new option that would allow them to provide a repeating or ad-hoc COLA that does not include the current “retroactive catch-up” provision; i.e., a COLA based only on a percentage of a one-year change in the consumer price index.
Allowing a TMRS member who has had a bona fide termination of service and has been separated from service for one year or longer since their most recent retirement from the city to return to the city from which he or she retired without a suspension of the monthly benefit.
Increase the amount of the Supplemental Death Benefit payable to the survivor of an eligible retiree from $7,500 to $10,000.
At the September meeting, the Board directed these three benefit design proposals to be reviewed by the Advisory Committee on Benefit Design. This meeting is scheduled to be held at TMRS headquarters on November 15, 2018.
The proposed changes to the nine administrative topics would generally clarify or modernize provisions of the law. The Board's Legislative Committee will review the administrative topics with staff and report back to the Board for further discussion and determination at their October meeting.
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Legislative Sessions Archive
85th Legislative Session
85th Special Session Ends
On August 16, 2017, the First Called Special Session of the 85th Legislature concluded. The Legislature passed 10 of the 20 issues placed on the call by Governor Greg Abbott. The topic of pensions was not included on the call.
85th Regular Legislative Session Ends
The 85th Regular Legislative Session ended on May 29, 2015. Before adjourning, the Senate elected Senator Robert Nichols as President Pro Tempore for the interim period, making him third in line to the Governorship. A number of bills were passed by the Legislature that affect TMRS and other public pension plans. Please see the bill list for a summary of these bills.
84th Legislative Session
84th Regular Legislative Session Ends
The 84th Regular Legislative Session ended on June 1, 2015. None of the bills that proposed changes to the TMRS plan design passed the Legislature. However, legislation did pass that affected local pension plans and other statewide systems and that became law. Please see the bill list for a summary of these bills.
83rd Legislative Session
83rd Special Legislative Sessions End
The Third Special Session of the 83rd Legislature ended on August 5, 2013 after passing transportation funding legislation. This session followed a first and second special session which involved redistricting and other additional topics. Even though pensions was not on the call of any of the three special sessions, certain pension-related bills were filed. However, none were passed in any of the three special sessions.
83rd Regular Legislative Session Ends
The 83rd Regular Legislative Session ended on May 27, 2013. A number of bills were passed by the Legislature that affect TMRS and other public pension plans. Please see the bill list for a summary of the bills passed during the regular session.
The Special Session of the 82nd Legislature ended on June 29, 2013. This session involved redistricting and other additional topics. Pensions was not an issue that was placed on the call, thus no pension-related bills were considered.
82nd Regular Legislative Session Ends
The 84th Legislative Session ended on May 30, 2011. A number of pension-related bills were proposed and passed by the Texas Legislature including Senate Bill 350, TMRS’s Fund Restructuring Proposal. SB 350 authored by Senator Tommy Williams (House sponsor Representative Vicki Truitt), proposed the internal fund restructuring that was recommended by the TMRS external actuary and endorsed by TMRS Board of Trustees and the TMRS Advisory Committee on Retirement Matters. Please see the bill list for a summary of SB 350 and other legislation affecting TMRS and other Texas public pension systems.
TMRS Legislation Passes - HB 360 "relating to the crediting and charging of investment gains and losses on the assets held in trust by the Texas Municipal Retirement System and providing a guaranteed minimum credit to employee accounts," passed the Texas House and Texas Senate unanimously. The bill now goes to the Governor for the final measure before it becomes law.
TMRS thanks everyone involved in helping move HB 360 forward. We are particularly grateful to the primary sponsor, House Chairman Edmund Kuempel, co-authors Representatives Abel Herrero and Solomon Ortiz, Jr., and Senate sponsor Senator Tommy Williams and their staffs. Thanks also to the TMRS Board of Trustees for their leadership and the TMRS Legislative Stakeholder Group (now the TMRS Advisory Committee) for their role in preparing for this session.
TMRS' Board and Staff wish Chairman Kuempel's family well and hope Representative Kuempel has a speedy recovery.
Summary of the 81st Session
The 81st Legislature enacted HB 360 by Kuempel, co–authored by Herrero (Senate sponsor Williams) which was signed into law by Governor Perry on May 26, 2009. Provisions of HB 360 included:
Minimum 5% interest guarantee to members
Minimum 5% discount rate in annuity purchase rate
City accounts permitted to receive interest at a rate different from the rate received by members
Passage of HB 360:
Made the “soft target” of 5% for the member interest and annuity purchase discount rate into a statutory minimum
Allowed TMRS to continue with investment diversifaction
Helped mitigate increases in city contribution rates and provided potential relief for higher future rates
Allowed TMRS to begin building a reserve for years when investment returns fall below the assumed rate of 7%
Following the interim work of the TMRS Stakeholder Group in 2008, the TMRS Advisory Committee was expanded to include members of the Stakeholder Group.
80th Legislative Session
The TMRS Bill, HB 1244, was signed by Governor Perry. In addition, HB 3392, the “Laredo bill” was signed by the Governor. HB 3392, filed on behalf of Laredo municipal employees, has an immediate effective date. If your city has ever privatized part of its workforce, and later reversed the action, this provision may apply to some of your city's retirees. Please contact TMRS if you think this provision applies to your city.