34 TAC §107.4
The Texas County and District Retirement System proposes
new §107.4, concerning the establishment of rules for determining the
amortization period for the funding of prior service credit. The proposed
rule proceeds from the specific authority granted to the board of trustees
to establish rules for determining the amortization period as set forth in
the Government Code, Chapter 844, Subchapter H, §844.703(f). The rule
is being proposed to assist in providing a funding mechanism that is appropriate
for the current benefit plan design and budgetary considerations of subdivisions
participating in the Texas County and District Retirement System.
Terry Horton, Director of the Texas County and District Retirement System,
has determined that for the first five-year period the rule is in effect there
will be no fiscal implications for state or local government as a result of
enforcing or administering the rule.
Mr. Horton also has determined that for each year of the first five years
the rule is in effect the anticipated public benefit will be a more orderly
and consistent funding of pension benefits which in turn produces a more predictable
and consistent pension liability. There will be no effect on small businesses.
There are no anticipated economic costs to persons who are required to comply
with the rule as proposed.
Comments on the proposal may be submitted to Terry Horton, Director, Texas
County and District Retirement System, P.O. Box 2034, Austin, Texas 78768-2034.
This new section is proposed under the Government Code, Chapter
845, Subchapter B, §845.102 which provides the board of trustees with
the authority to adopt rules necessary or desirable for the effective administration
of the System.
The Government Code, Chapter 844, Subchapter H, §844.703 is affected
by this proposed new rule.
§107.4.Amortization Period.
In accordance with Government Code, Chapter 844, Subchapter H, §844.703(f),
for purposes of determining the amortization period for annually determined
contribution rate (ADCR) plans, the following rules are effective for plan
years beginning after December 31, 1998 based on actuarial valuations on and
after December 31, 1997.
(1)
The prior service contribution rate prescribed by §844.703(b)
shall be based on an open amortization period of 30 years.
(2)
If a subdivision has an overfunded obligation instead
of an unfunded obligation in its plan, the negative prior service contribution
rate prescribed by §844.703(b) shall be based on an open amortization
period of 30 years.
(3)
If the governing body of a subdivision has adopted
an ADCR plan and has also elected to contribute at a higher integer contribution
rate as allowed by §844.703(d), the amortization period for the actuarially
determined contribution rate shall be determined from one of the two rules
stated above. The amortization period for the higher integer contribution
rate shall be calculated in each annual actuarial valuation as the number
of years required to amortize the unfunded obligation in that actuarial valuation,
assuming that the employer contribution rate available to amortize the unfunded
obligation shall be equal each year in the future, beginning one year after
the actuarial valuation date, to the excess of the higher integer contribution
rate over the normal cost contribution rate determined in that actuarial valuation.
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of the Secretary of State, on
January 26, 1998.
TRD-9801121
Terry Horton
Director
Texas County and District Retirement System
Proposed date of adoption: March 12, 1988
For further information, please call: (512) 328-8889