HBA-SEB H.B. 3667 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3667 By: Burnam Pensions and Investments 4/6/1999 Introduced BACKGROUND AND PURPOSE Currently, pension systems for municipal employees are regulated by either state law or local city ordinance. The governing body of a municipality, rather than the pension board of trustees, regulates those pension plans that are controlled exclusively by city ordinance. H.B. 3667 places a municipal pension plan under the control of a local pension board if the municipality has a population of 400,000 or more. It also establishes the conditions that must be met in order for a board to make a change in the pension system's administrative rules and regulations, including approval by the governing body of the municipality in some cases. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. DEFINITIONS. (a) Defines "administrative rules and regulations" as the documents adopted by the governing body of a municipality or public retirement system to which this Act applies and that govern the participation in and administration of contributions to and benefits from the public retirement system. (b) Defines "change in the administrative rules and regulations" to mean an addition, amendment, repeal, partial deletion, or modification of administrative rules and regulations. (c) Provides that "public retirement system" has the meaning assigned by Section 801.001, Government Code (a continuing, organized program of service retirement, disability retirement, or death benefits for officers or employees of the state or a political subdivision, or of an agency or instrumentality of the state or a political subdivision). SECTION 2. APPLICABILITY. Provides that this Act applies only to municipalities with a population of 400,000 or more in which a single public retirement system has been established for employees of all departments of the municipality. SECTION 3. BOARD OF TRUSTEES. Establishes that a public retirement system to which this Act applies is administered by a board of trustees (board) as provided by the administrative rules and regulations. SECTION 4. POWERS AND DUTIES. Requires the board to have the powers and duties that are provided in the administrative rules and regulations and that are not inconsistent with this Act. SECTION 5. CHANGE IN ADMINISTRATIVE RULES AND REGULATIONS INVOLVING MUNICIPAL CONTRIBUTIONS. Authorizes a change in the administrative rules and regulations that includes a change in the formula or factors for determining contributions to or benefits from the public retirement system to be made only in specific circumstances. Authorizes a change if the board, by a majority vote, places the change on the ballot of a special election or of an election for employee trustees in which all participating members of the public retirement system are eligible to vote, if a majority of the voting participating members of the public retirement system votes in favor of the change by secret ballot at an election in which a majority of participating members votes, if the governing body of the municipality does not reject the change within a specific time frame, and if a qualified actuary selected by the board performs an actuarial analysis of the change. Sets forth the qualifications for a qualified actuary. SECTION 6. OTHER CHANGES IN ADMINISTRATIVE RULES AND REGULATIONS. Authorizes the administrative rules and regulations to be changed in any manner, except as provided by SECTION 5, if the board approves the change by a majority vote, the governing body of the municipality approves the change, the change applies to all current and future participating members of the retirement system, and the change does not deprive a vested member of a right to receive benefits from the retirement system without the member's written consent. Establishes that for the purposes of this section and SECTION 5, a participating member is a person making contributions to the public retirement system on the date of election. Provides that a change under this section or SECTION 5 applies to former participating members who are either receiving or entitled to receive benefits under the public retirement system only if that application is specified in the proposed change. SECTION 7. EFFECT OF AN ACT ON ADMINISTRATIVE RULES AND REGULATIONS. Establishes that this Act supercedes the administrative rules and regulations that conflict with this Act. Requires the administrative rules and regulations for a public retirement system to which this Act applies to be the administrative rules and regulations in effect for the public retirement system on _________, notwithstanding any change in such administrative rules and regulations made after such date and before the effective date of this Act. SECTION 8. Effective date: September 1, 1999. SECTION 9. Emergency clause.