AT THE CAPITOL

Texas State Legislation & TCDRS

TheThe 85th Legislature ended on May 29, 2017. The Governor has called a special session to begin on July 18. The call includes 20 items, and pensions are not currently on the list.

 
We will monitor the special session for any legislation that may impact TCDRS, and we will continue to post updates on this web page and @TCDRS on Twitter!

Bills that passed during the regular session

Senate Bill 500

Sponsor: Sen. Van Taylor

TCDRS impact: TCDRS members who hold elected office and who are convicted of certain felonies while in office and related to their official duties would be ineligible to receive an annuity from TCDRS.

Bill Status: This bill was signed by the Governor on June 6, and it goes into effect immediately.

SB 500 was one of several bills that was included in a package of ethics-related bills. 

 

Bills That Did Not Pass 

Senate Bill 509

Sponsor: Sen. Joan Huffman

TCDRS impact: The bill would have required TCDRS to have an independent investment firm review and evaluate investment practices and performance every three years. TCDRS is already largely in compliance with SB 509’s requirements. 

Bill Status: A committee substitute bill was passed by the full Senate on April 10, and received by the House. It was reported favorably without amendment out of the House Pensions Committee on May 17. It was sent to the House Calendars committee on May 19, but never received a reading on the House floor. 

 

House Bill 632

Sponsor: Rep. Pat Fallon

TCDRS impact: The annuity for new members of any Texas public retirement system could be no higher than certain federal salaries.

Bill Status: The bill was heard by the Pensions Committee on March 13, and left pending in committee. 

 

House Bill 737

Sponsor: Rep. Matt Shaheen

TCDRS impact: This bill related to the eligibility to serve as a member of the TCDRS Board of Trustees

Bill status: On April 24, Rep. Shaheen testified about the bill before the committee (beginning at the 11-minute-37-second mark). The bill was left pending in committee.

The Texas Association of Appraisal Districts, the Texas Association of County Auditors, the Tax Assessor-Collectors Association of Texas, the County Treasurers Association of Texas, and the Harris County Appraisal District all submitted letters to the Pensions Committee opposing the bill. Also, several county and district officials who were at the Capitol on April 24 signed up to testify as witnesses “against” the bill. There were no witnesses “for” the bill.

 

Senate Bill 936

Sponsor: Sen. Joan Huffman

TCDRS impact: This bill would have created a joint interim committee to review, assess and make recommendations regarding state public retirement systems.

Bill Status: SB 936 was passed favorably out of the Senate Committee on State Affairs on March 20, and passed by the full Senate on April 3. It reported favorably without amendment by the House Pensions Committee. The bill was sent to the House Local & Consent Calendar, but never received a vote on the House floor.

 

Senate Bill 1751

Sponsor: Sen. Paul Bettencourt

TCDRS impact: None. This bill would have only applied to the Employees Retirement System of Texas (ERS) and the Teacher Retirement System of Texas (TRS).

Bill Status: SB 1751 was filed on March 9, and referred to the Senate Committee on State Affairs on March 23, but was never voted out of committee. 

TCDRS was not included in this bill. SB 1751 would have authorized ERS and TRS to establish alternative retirement plans for newly hired employees, which would provide retirement benefits under defined contribution or hybrid retirement plans instead of the existing defined benefit plans. 

 

House Bill 4203

Sponsor: Rep. Valoree Swanson

TCDRS impact: If passed, this bill would have required that the TCDRS board adopt rules no later than Dec. 31, 2017 that would authorize TCDRS to split a divorced member’s account into two separate benefit accounts based on the amount awarded in a qualified domestic relations order.

Bill status: HB 4203 was heard by the Pensions Committee on April 24. Testimony from Rep. Swanson and TCDRS General Counsel Ann McGeehan was heard (starting at the 5-minute-9-second mark). The committee substitute bill, which included the language TCDRS requested, was voted favorably out of committee on May 4. The bill was sent to the House Local & Consent Calendar, but never received a vote on the House floor.

In cases of divorce where a TCDRS member’s benefit is divided, the non-TCDRS member of the divorced couple becomes the alternate payee. At their regular April 2017 meeting, the TCDRS Board of Trustees adopted administrative rules to implement the same process as HB 4203. These rules would only apply to qualified domestic relations orders (QDROs) entered or amended on or after Jan. 1, 2018. TCDRS staff worked with Rep. Swanson’s office to add language to the bill to clarify that the rule passed by the board in April would have remained in effect.


TCDRS PRESENTS SYSTEM OVERVIEW TO PENSIONS COMMITTEE

On Feb. 27, TCDRS Director Amy Bishop provided members of the House Pensions Committee an overview of our system at their initial hearing. Bishop provided information on the unique features that make TCDRS financially strong, including the savings-based benefits, responsible plan funding, and the local control and flexibility of the plan. In addition, Bishop covered TCDRS’ investment performance and how benefits return value to local communities. The committee members had no additional questions about TCDRS. Employees Retirement System of Texas, Teacher Retirement System of Texas, and Texas Municipal Retirement System also presented overviews of their systems.

The meeting video is available in the House broadcast archives. TCDRS testimony begins at the 1-hour, 30-minute mark of the Feb. 27 Pensions Committee meeting.

TCDRS did not testify at the March 13 Pensions Committee meeting.  


House Pensions Committee

On Feb. 9, Speaker of the House Joe Straus named members to the Pensions Committee. The committee is charged with jurisdiction over all matters related to public retirement systems and is the House committee with oversight of TCDRS and other Texas public pensions. 

  • Chair: Rep. Dan Flynn (R) District 2: Hopkins, Hunt and Van Zandt counties
  • Rep. Cole Hefner (R) District 5: Camp, Morris, Raines, Smith (partial), Titus, Wood counties

During committee hearings, TCDRS provides testimony to help educate the committee members about our system, as well as answer any questions they may have. We will post a link to any broadcast of the committee hearing when it becomes available. 


Senate Committee on State Affairs

The Senate Committee on State Affairs holds hearings on bills that affect public pension plans in Texas (such as TCDRS).

Lt. Gov. Dan Patrick has appointed the committee members for the 85th Legislative Session, naming Sen. Joan Huffman (District 17, R-Houston) as chair and Sen. Bryan Hughes (District 1, R-Mineola) as vice chair. A full list of committee members is available on the committee's web page.


Pensions Committee Interim Report Released

On Dec. 5, 2016, Chairman Dan Flynn and committee members of the House Committee on Pensions issued their Interim Report to the 85th Legislature. None of the recommendations in the report impact TCDRS.

Speaker of the House Joe Straus gave the committee six interim charges. TCDRS staff attended all the interim committee hearings and TCDRS Director Amy Bishop provided testimony at two interim committee hearings held last spring. During the first hearing on March 30, Bishop presented an overview of TCDRS to the committee, including discussion of key aspects of the system, the system funded ratio and long-term investment return. At the second meeting on April 13, Bishop answered committee member questions about TCDRS investments, investment advisors and global investments, as well as the due diligence with which we select and monitor our investment managers. (You can view both Pensions Committee hearings from the House of Representatives’ broadcast archives. TCDRS’ March 30 testimony begins just after the 1 hour 23 minute mark. Our April 13 testimony begins after the 46 minute 30 second mark.)

The remaining interim committee hearings mostly concerned the three plans in the City of Houston (Municipal, Fire and Police), the City of Fort Worth Employees Plan, the City of Dallas Employees Plan, and the City of Dallas Fire and Police Plan. Interim Charge 6 asked the committee to conduct legislative oversight and monitor the implementation of legislation passed in the 84th Legislature. The committee report discussed HB 3310 from the 84th Legislature, which required certain disclosures and reporting requirements of public plans in Texas. TCDRS complies with all the requirements of HB 3310.

As the hearings were mainly concerned with city public pension plans, the recommendations of the committee were written with a focus on those plans. There is no mention of the TCDRS plan in the report.


Previous Legislation

You can read summaries of the most recent changes to the Act here:


2015 TCDRS Legislation Summary


2013 TCDRS Legislation Summary



2011 TCDRS Legislation Summary



Copies of bills, as well as tracking information, may be found on the Texas Legislature's website. You can use the "Search Legislation" tool to find specific bills by keyword or bill number.


Pension Review Board Documentation

The Pension Review Board (PRB) oversees all Texas public retirement systems. One of the requirements of the PRB is that we create and publish an Investment Return and Assumptions Report (PRB-1000). The report shows our actual rate of investment return and our assumed rate of return over the 10 most recent fiscal years, as well as our annualized rolling rate of return. This report is updated annually. We also provide the PRB with our Investment Policy and Comprehensive Annual Financial Report (CAFR).


External Links

House Pensions Committee hearings

Broadcasts of the committee hearings are available in the committee’s broadcast archives.

These websites are included for informational purposes only. The inclusion of links on this website does not constitute endorsement of information or opinions of other organizations.

 

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