Proposed Rules Title 34

TITLE 34. PUBLIC FINANCE

Part 5. TEXAS COUNTY AND DISTRICT RETIREMENT SYSTEM

Chapter 101. PRACTICE AND PROCEDURE REGARDING CLAIMS

34 TAC §101.8, §101.10

The Texas County and District Retirement System proposes amendments to §101.8 and §101.10, concerning the reporting of retirement benefits approved by the director. The proposed amendments to the rules change the basis for reporting benefits to the board from an automatic action to an action based upon the request of the chairman or vice-chairman.

Tom Harrison, Deputy Director and General Counsel of the Texas County and District Retirement System, has determined that for the first five-year period the amendments are in effect there will be no fiscal implications for state or local governments.

Mr. Harrison has also determined that for each year of the first five years the amendments are in effect the public benefit anticipated as a result of administering the amended rules will be the greater security of member information made confidential by law. A member's retirement information includes personal information protected under §845.115, Texas Government Code, and routine reports become public records where a greater opportunity exits for that confidentiality to be compromised. These changes do not diminish the board's authority to review any or all of the retirement benefits approved by the director but merely changes a regular report to an exception report where greater security measures may be implemented. There will be no costs to small businesses. There are no anticipated economic costs to persons who are required to comply with the amendments as proposed.

Comments on the proposed amendments may be submitted to Tom Harrison, Deputy Director and General Counsel, Texas County and District Retirement System, P.O. Box 2034, Austin, Texas 78768-2034.

The amendments are proposed under the Texas Government Code, §845.102, which provides the board of trustees of the Texas County and District Retirement System with the authority to adopt rules and perform reasonable activities necessary or desirable for the efficient administration of the system.

No other statute, article, or code is affected by the proposed amendments.

§101.8.Service Retirement Benefits Approved by Director.

If the director finds from the records of the system and from the documents supporting the application that the applicant is entitled to a service retirement benefit, unless a contest has been filed under §101.12 of this title (relating to Contest of Application: Form and Content), the director may approve the retirement, calculate the amount of the benefit and place it into effect without further hearing. On the request of the chairman or vice-chairman, any benefit [ ~~All benefits~~ ] approved by the director shall be reported to the board.

§101.10.Disability Retirement Benefits Approved by Director.

If the findings and conclusions of the medical board, as stated in its report, are such as in the director's opinion entitle the member under the terms of the Act to the disability retirement benefit applied for, the director may approve the retirement, calculate the amount of the benefit, and place it into effect without further hearing. On the request of the chairman or vice-chairman, any benefit [ ~~All benefits~~ ] approved by the director shall be reported to the board.

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 April 27, 2007.

TRD-200701598

Tom Harrison

Deputy Director and General Counsel

Texas County and District Retirement System

Earliest possible date of adoption: June 10, 2007

For further information, please call: (512) 637-3230

Chapter 107. MISCELLANEOUS RULES

34 TAC §107.4

The Texas County and District Retirement System proposes an amendment to §107.4, concerning the amortization period for the funding of benefits by a subdivision participating under the Annually Determined Contribution Rate Plan. The proposed amendment to the rule changes the amortization period for an unfunded actuarial accrued liability from an open 20-year period to a closed 15-year period. The amortization period for an overfunded actuarial accrued liability remains unchanged as an open 30-year period.

Tom Harrison, Deputy Director and General Counsel of the Texas County and District Retirement System, has determined that for the first five-year period the amendment is in effect there will be no fiscal implications for state government and only a minor fiscal implication for a participating local government as a result of enforcing or administering the amended rule. The amended rule will not increase the costs of pension benefits promised by a participating local governmental entity but will require the participating entity to fund its pension liabilities over a shorter period.

Mr. Harrison has also determined that for each year of the first five years the amendment is in effect the public benefit anticipated as a result of administering the amended rule will be the greater likelihood that the pension benefits promised an employee will be fully funded over the working career of that employee rather than over the employee's retirement. This supports pension security and produces greater intergenerational equity among local taxpayers. There will be no costs to small businesses. There are no anticipated economic costs to persons who are required to comply with the amendment as proposed.

Comments on the proposed amendment may be submitted to Tom Harrison, Deputy Director and General Counsel, Texas County and District Retirement System, P.O. Box 2034, Austin, Texas 78768-2034.

The amendment is proposed under the Texas Government Code, §844.703(f), which provides the board of trustees of the Texas County and District Retirement System with the authority to adopt amortization periods and establish criteria for renewing, extending, or shortening any closed period.

No other statute, article, or code is affected by the proposed amendment.

§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, 2007 [ ~~1998~~ ], based on actuarial valuations on and after December 31, 2006 [ ~~1997~~ ].

(1) The prior service contribution rate prescribed by §844.703(b) shall be based on a closed [ ~~an open~~ ] amortization period of 15 [ 20 ] 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.