PART 17. STATE PENSION REVIEW BOARD
CHAPTER 605. STANDARDIZED FORM
40 TAC §605.1, §605.3
The State Pension Review Board (the "Board"), adopts amendments to §605.1, concerning Adoption of Standard Forms, and §605.3, concerning Submission of Forms, without changes to the proposed text as published in the September 27, 2013, issue of the Texas Register (38 TexReg 6564). The rules will not be republished.
SUMMARY OF AMENDMENTS
The amendment to §605.1 removes Form PRB-500 from the Board's adopted series of forms and adopt a new PRB standardized form, PRB-1000.
The amendment to §605.3 removes submission requirements relating to Form PRB-500 and adds submission requirements for Form PRB-1000, including exemption of volunteer firefighter's retirement systems created under the Texas Local Fire Fighters' Retirement Act (TLFFRA) and defined contribution plans.
BACKGROUND AND PURPOSE
The Sunset Advisory Commission (the "Commission") directed the PRB to no longer require public retirement systems to submit quarterly financial data. Additionally, the 83rd Texas Legislature enacted House Bill (HB) 13 that amended the Texas Government Code by adding §802.108 requiring Texas public retirement systems to submit Investment Returns and Assumptions Report to the PRB. In response to the Commission's directive and HB 13, the Board proposed to amend §605.1 and §605.3 by deleting Form PRB-500, relating to the quarterly plan report, and adoption of a new PRB standardized form, PRB-1000, relating to the Investment Returns and Assumptions Report. The recommendation to adopt a new PRB form was proposed in accordance with Texas Government Code, §801.201(c), which authorizes the Board to adopt standardized forms to assist the Board in determining the actuarial soundness and current financial condition of public retirement systems.
Also, the Board proposed to amend §605.3 to create an exemption for volunteer TLFFRA and defined contribution plans from filing Form PRB-1000. Based on the deference given to the Board's expertise, the Board determined that actuarial principles do not apply to volunteer TLFFRA or defined contribution plans. Additionally, Senate Bill 200 (PRB Sunset Legislation), enacted by the 83rd Texas Legislature, amended the Texas Government Code by adding §802.002(c) and (d) to explicitly exempt these plans from preparing actuarial valuations. This actuarial valuation exemption makes it unfeasible for volunteer TLFFRA and defined contribution plans to complete the Investment Returns and Assumptions Report because the relevant information required for this new report is derived from the exempted actuarial valuation report. Based on the Board's determination above and the statutory exemption of these plans, the Board interpreted that it is necessarily implied that Texas Government Code, §802.002(c) and (d) include an exemption from Texas Government Code, §802.108 requiring an Investment Returns and Assumptions Report. Likewise, it is necessarily implied that the new reporting requirement provision of §802.108, added by HB 13 to the Texas Government Code, does not apply to volunteer TLFFRA and defined contribution plans.
The proposed amendments were published in the Texas Register on September 27, 2013. The 30-day public comment period closed on October 28, 2013. The Board did not receive any public comments regarding the amendments during the 30-day public comment period.
The amendments are authorized by the Texas Government Code, §801.201(a), which grants specific authority to the Board to adopt rules for the conduct of its business.
The amendments affect the Texas Government Code Chapters 801 and 802.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on November 18, 2013.
State Pension Review Board
Effective date: December 8, 2013
Proposal publication date: September 27, 2013
For further information, please call: (512) 463-1736