Senate Finance met on April 7 to take up a number of bills. This report covers discussions concerning SB 202 (Schwertner), SB 288 (Seliger et al.), and SB 1372 (Huffman et al.). Part one of the hearing can be found here and part two can be found here.
This report is intended to give you an overview and highlight of the discussions on the various topics taken up. It is not a verbatim transcript of the discussions but is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.
SB 202 (Schwertner) – Relating to the payment of certain employer contributions for employed retirees of the Teacher Retirement System of Texas
- Campbell – Clarifies employer contributions are a burden on the employer, not the employee
SB 202 voted out of committee (9-0)
SB 288 (Seliger et al.) (CS) – Relating to preventing the loss of benefits by certain retirees of the Teacher Retirement System of Texas who resume service
- Seliger – Under current law, retirees have three options to come back to work that include penalties for those who work over the half-day limit on the first offense
- Provides an anecdote of a half-day retiree who lost a full month of annuity after getting caught in a snow storm
- Bill creates a three-strike system; warning, pay TRS back for the time paid, current law would then apply
- CS has clean up language by TRS that addresses these issues for retire/rehire including for school districts who need the personnel
- Bettencourt – A person who was stranded in the snow, lost a whole month of their annuity; is no administrative penalties?
- Not in current law
Brock Gregg, Retired Teachers Association – For
- Have heard from many members have similar stories to the one Seliger told
- Provides another story about a member who inadvertently did not follow the rules and ended up getting a bill from TRS
- Agreed with the statute in 2005 and do not want people to game the system, but want to ensure it is fair
- Is something needed especially because we need more retirees more than ever
- Lucio – Did the member pay the TRS?
- Is required, you can appeal, but you end up paying; can pay all at once or pay out over your lifetime
- Lucio – Would be in favor of something that would retroactively help those who have been hit by current statute
- Seliger – If we advance this bill, can work with TRS on something like that
CSSB 288 voted out of committee (9-0)
SB 1372 (Huffman et al.) (CS) – Relating to the evaluation and reporting of investment practices and performance of certain public retirement systems
- Huffman – Previously SB 322 established reporting requirements of retirement systems of at least $30 million; bill builds upon SB 322
- CS requires evaluations of public pension systems to include the independent firms to acknowledge any existing relationship with the system, any compensation they received, etc.
- Requires a formal review/comment process before the final evaluation report
- Allows, not requires, the governmental entities to pay for a part or all costs of the evaluation; the retirement system must pay for remaining costs
- CS removes section of the bill that made it easier on reporting entities
Anu Kumar, Pension Review Board – Neutral
- Huffman – Could you explain what is included in the investment performance report established last session
- Agency received 55 evaluations performed by certain retirement systems
- Evaluations spoke to investment operations/programs administered
- Received 200 recommendations included in the evaluations; including importance of investment fee review and documentation
- Huffman – Do you feel like what you came up with is a valuable asset?
- Bill allows us to look at the investment programs more wholistically; will be able to review how programs are administered
- Huffman – Bill will build upon the evaluation already
- Yes, bill clarifies requirements moving forward concerning transparency
- Huffman – Of all those required to perform the evaluations, did all comply?
- Expected to receive 56 evaluations; one system is performing the evaluation now, and the other has not submitted their evaluation to the PRB
- Huffman – The one who did not submit, are they currently in violation of the law? Who are they?
- Yes, and is Midland Fire
- Bettencourt – Have one noncompliant group, do we need to add teeth to this bill?
- Under governing stature, PRB can petition for a writ of mandamus to ensure compliance; or subpoena
- Bettencourt – Can I get a breakdown of who is a part of the under $30 million or above $30 million?
- Under $30 million group is very small; majority of systems are covered in the over $30 million
- Will get a breakdown to you
CSSB 1372 voted out of committee (11-0)