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HB 2198 calls for the continuation of the State Pension Review Board, and sets its next Sunset Date in 2025. HB 2198 would establish new portions of code that give the board increased educational tools, including online seminars, to train system trustees and administrators. It defines “actuarial experience studies,” and requires public retirement systems to submit these studies from the report, except for five statewide retirement systems, and it requires systems to provide the board with a summary of significant changes to their plans on certain dates. The bill also contains standard Sunset Commission provisions that define and forbid certain conflict of interest situations.
HB 2198 would exempt Defined Contribution plans and certain local volunteer firefighter retirement plans from various reporting requirements including reports on membership, investment policy, actuarial valuations, and financial conditions. HB 2198 also exempts local volunteer firefighter retirement plans from statutory requirements that their accounts be audited annually by a Certified Public Accountant.
HB 2198 would limit government by continuing the State Pension Review Board. This board provides needed oversight to Texas’ public retirement systems and helps to make the finances of local governments more transparent.
HB 2198’s exemption of Defined Contribution pension plans and certain local volunteer firefighter pension plans from reporting requirements, and these volunteer firefighter pension plans from auditing requirements, is also for good reason. These plans pose little to no risk to taxpayers, and because they became prominent after the board was established, reporting and auditing requirements were actually not designed to monitor these plans. Eliminating these reporting requirements will actually help the board focus its energy and resources on public retirement systems that DO pose risk to taxpayers, such as traditional plans with defined benefits that can become actuarially unsound. The Sunset Advisory Commission’s full reasoning on this issue can be found under issue 2 of its review of the board.
For this reason, TPPA recommends legislators vote yes on HB 2198 to continue the State Pension Review Board.