By: Huffman, et al. S.B. No. 936     (Flynn, Paul)           A BILL TO BE ENTITLED   AN ACT   relating to the creation of a joint interim committee to undertake a   study of the public retirement systems of this state.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  DEFINITION.  In this Act, "public retirement   system" has the meaning assigned by Section 802.001, Government   Code.          SECTION 2.  CREATION OF JOINT INTERIM COMMITTEE. (a)  A   joint interim committee is created to study and assess each public   retirement system of this state and report on the issues described   by Section 3 of this Act.          (b)  The joint interim committee shall be composed of three   senators appointed by the lieutenant governor and three members of   the house of representatives appointed by the speaker of the house   of representatives.          (c)  The lieutenant governor and speaker of the house of   representatives shall each designate a co-chair from among the   joint interim committee members.          (d)  The joint interim committee shall convene at the joint   call of the co-chairs.          (e)  The joint interim committee has all other powers and   duties provided to a special or select committee by the rules of the   senate and house of representatives, by Subchapter B, Chapter 301,   Government Code, and by policies of the senate and house committees   on administration.          SECTION 3.  INTERIM STUDY REGARDING PUBLIC RETIREMENT   SYSTEMS. The joint interim committee created by Section 2 of this   Act shall:                (1)  review and assess:                      (A)  the different types of retirement system   plans, including:                            (i)  defined contribution plans;                            (ii)  defined benefit plans;                            (iii)  hybrid public pension plans; and                            (iv)  cash balance pension plans;                      (B)  the actuarial assumptions used in making   actuarial valuations and analyses of public retirement systems and   the consequences of amending an assumption rate; and                      (C)  the effect that local agreements, including   meet and confer agreements, have on the sustainability of this   state's public retirement systems;                (2)  study:                      (A)  the potential for allowing public retirement   systems to pool their assets for the purposes of taking advantage of   economies of scale and reducing costs; and                      (B)  the governance policies of this state's   public retirement systems and the effect of imposing more formal   requirements on governance, including a requirement that the   retirement systems and their associated governmental entities   jointly develop written funding, investment, and benefits policies   that have goals and objectives that reference one another, are   coordinated, and promote transparency;                (3)  consider enhancing fee disclosures, specifically   the disclosure of fees that are related to alternative investment   vehicles;                (4)  consider requiring:                      (A)  additional actuarial analyses, including a   discount rate sensitivity analysis and risk assessments; and                      (B)  additional disclosures, including disclosure   of:                            (i)  the sustained differences between the   actual and assumed rate of return on assets;                            (ii)  projected cash flows;                            (iii)  risks; and                            (iv)  the potential impact of actual future   measurements differing significantly from expected future   measurements; and                (5)  study the public retirement systems' valuation   methodology for the illiquid asset class, including the   effectiveness of and compliance with the fair value measurement   requirement under the Governmental Accounting Standards Board   Statement No. 72.          SECTION 4.  COMMITTEE FINDINGS AND RECOMMENDATIONS.     (a)  Not later than January 15, 2019, the joint interim committee   shall report the committee's findings and recommendations to the   lieutenant governor, the speaker of the house of representatives,   and the governor. The joint interim committee shall include in its   recommendations specific statutory and regulatory changes that   appear necessary from the results of the committee's study under   Section 3 of this Act.          (b)  Not later than the 60th day after the effective date of   this Act, the lieutenant governor and the speaker of the house of   representatives shall appoint the members of the joint interim   committee created under Section 2 of this Act in accordance with   that section.          SECTION 5.  ABOLITION OF COMMITTEE. The joint interim   committee created by this Act is abolished and this Act expires   January 20, 2019.          SECTION 6.  EFFECTIVE DATE.  This Act takes effect   immediately if it receives a vote of two-thirds of all the members   elected to each house, as provided by Section 39, Article III, Texas   Constitution.  If this Act does not receive the vote necessary for   immediate effect, this Act takes effect September 1, 2017.