TX Civ Stat § 3.091 (2021)
2021 Texas Statutes|Vernon's Civil Statutes|Title 109 - Pensions|Article 6243n-1. Police Officers Retirement System in Municipalities of 460,000 to 500,000|Article III.|Section 3.091. Process for Experience Studies and Changes to Actuarial Assumptions

Sec. 3.091.  PROCESS FOR EXPERIENCE STUDIES AND CHANGES TO ACTUARIAL ASSUMPTIONS.  (a)  At least once every five years, the police retirement board shall have the system's actuary designated under Section 3.09 of this Act conduct an experience study to review the actuarial assumptions and methods adopted by the board for the purposes of determining the actuarial liabilities and actuarially determined contribution rates of the system.  The system shall notify the city at the beginning of an upcoming experience study by the system's actuary.(b)  In connection with the system's experience study,  the city will inform the system if it will:(1)  conduct the city's own experience study using the city's own actuary;(2)  have the city's actuary review the experience study of the system's actuary; or(3)  accept the experience study of the system's actuary.(c)  If the city chooses to:(1)  have the city's own experience study performed under Subsection (b)(1) of this section, the city must complete the study not later than three months after the date the system notified the city of the system's intent to conduct an experience study; or(2)  have the city's actuary review the system's experience study under Subsection (b)(2) of this section, the city must complete the review not later than one month after the date the preliminary results of the experience study are presented to the board.(d)  If the city chooses to have the city's own experience study performed under Subsection (b)(1) of this section, or to have the city's actuary review the system's experience study under Subsection (b)(2) of this section, the system's actuary and the city's actuary shall determine what the hypothetical city contribution rate would be using the proposed actuarial assumptions from the experience studies and data from the most recent actuarial valuation.(e)  If the difference between the hypothetical city contribution rates determined by the system's actuary and the city's actuary under Subsection (d) of this section:(1)  is less than or equal to two percent of pensionable payroll, then no further action is needed and the board shall use the experience study performed by the system's actuary in determining assumptions; or(2)  is greater than two percent of pensionable payroll, then the system's actuary and the city's actuary shall have 20 business days to reconcile the difference in actuarial assumptions or methods causing the different hypothetical city contribution rates, and:(A)  if, as a result of the reconciliation efforts under this subdivision, the difference between the city contribution rates determined by the system's actuary and the city's actuary is reduced to less than or equal to two percentage points, then no further action is needed and the board shall use the experience study performed by the system's actuary in determining actuarial assumptions; or(B)  if, after 20 business days, the system's actuary and the city's actuary are not able to reach a reconciliation that reduces the difference in the hypothetical city contribution rates to an amount less than or equal to two percentage points, a third-party actuary shall be retained to opine on the differences in the assumptions made and actuarial methods used by the system's actuary and the city's actuary.(f)  The independent third-party actuary retained in accordance with Subsection (e)(2)(B) of this section shall be chosen by the city from a list of three actuarial firms provided by the system.(g)  If a third-party actuary is retained under Subsection (e)(2)(B) of this section, the third-party actuary's findings will be presented to the board along with the experience study conducted by the system's actuary and, if applicable, the city's actuary.  If the board adopts actuarial assumptions or methods contrary to the third-party actuary's findings:(1)  the system shall provide a formal letter describing the rationale for the board's action to the city council and State Pension Review Board; and(2)  the system's actuary and executive director shall be made available at the request of the city council or the State Pension Review Board to present in person the rationale for the board's action.(h)  If the board proposes a change to actuarial assumptions or methods that is not in connection with an experience study described in Subsection (a) of this section, the system and the city shall follow the same process prescribed by this section with respect to an experience study in connection with the proposed change.