Relating to the evaluation and reporting of investment practices and performance of certain public retirement systems, the official text

H.B. No. 3474

AN ACT

relating to the evaluation and reporting of investment practices

and performance of certain public retirement systems.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 802.109, Government Code, is amended by

amending Subsections (d), (e), (e-1), (f), and (g) and adding

Subsections (d-1), (d-2), and (j) to read as follows:

(d) In accordance with a schedule of deadlines prescribed by

the board and except as provided by Subsection (e), a [A] public

retirement system shall conduct an [the] evaluation under

[described by] Subsection (a):

(1) once every three years, if the total assets of the

retirement system as of the date [last day] of the preceding

evaluation [fiscal year] were at least $100 million; or

(2) subject to Subsection (d-1), once every six years,

if the total assets of the retirement system as of the date [last

day] of the preceding evaluation [fiscal year] were at least $30

million and less than $100 million.

(d-1) If a public retirement system is conducting

evaluations every six years as required by Subsection (d)(2) and

the system's total pension liability increases to at least $100

million during a fiscal year, the system shall complete the next

evaluation under Subsection (a) by the next appropriate deadline,

as determined by the board, under the evaluation schedule.

(d-2) Subject to Subsection (d-1) and except as provided by

Subsection (e), a public retirement system subject to an evaluation

requirement under Subsection (d)(1) or (2) remains subject to that

same requirement unless both the total assets and the total pension

liability of the system decrease to an amount that is below the

minimum amount prescribed by the applicable requirement.

(e) A public retirement system is not required to conduct an

[the] evaluation under [described by] Subsection (a) if the total

assets of the retirement system were less than $30 million as of the

last day of the [preceding] fiscal year immediately preceding the

next evaluation deadline under the evaluation schedule [were less

than $30 million].

(e-1) An [Not later than the 30th day after the date an]

independent firm that completes an evaluation described by

Subsection (a)[, the independent firm] shall:

(1) submit to the public retirement system for

purposes of discussion and clarification a substantially completed

[preliminary] draft of the evaluation report; and

(2) request in writing that the system[, on or before

the 30th day after the date the system receives the preliminary

draft,] submit to the firm:

(A) a description of any action taken or expected

to be taken in response to a recommendation made in the evaluation;

and

(B) any written response of the system that the

system wants to accompany the final evaluation report.

(f) The independent firm shall file the final evaluation

report, including the evaluation results and any response received

from the public retirement system, with the governing body of the

system[:

[(1) not earlier than the 31st day after the date on

which the preliminary draft is submitted to the system; and

[(2) not later than the later of:

[(A) the 60th day after the date on which the

preliminary draft is submitted to the system; or

[(B) May 1 in the year following the year in which

the system is evaluated under Subsection (a)].

(g) The [Not later than the 31st day after the date the]

governing body of a public retirement system that receives a report

of an evaluation under this section[, the governing body] shall

submit the report to the board.

(j) In this section:

(1) "Evaluation schedule" means the schedule of

deadlines prescribed by the board under Subsection (d).

(2) "Total pension liability" means the portion of the

present value of projected retirement benefit payments to be

provided through the retirement system to active and inactive

members that is attributable to those members' past periods of

service, in compliance with Statement No. 68 of the Governmental

Accounting Standards Board.

SECTION 2. Not later than January 1, 2026, the State Pension

Review Board shall develop the schedule of deadlines required by

Section 802.109(d), Government Code, as amended by this Act.

SECTION 3. This Act takes effect September 1, 2025.

______________________________
______________________________

President of the Senate
Speaker of the House

I certify that H.B. No. 3474 was passed by the House on May 6,

2025, by the following vote: Yeas 147, Nays 0, 1 present, not

voting.

______________________________

Chief Clerk of the House

I certify that H.B. No. 3474 was passed by the Senate on May

19, 2025, by the following vote: Yeas 31, Nays 0.

______________________________

Secretary of the Senate

APPROVED: _____________________

Date

_____________________

Governor