2023 Texas Statutes › Vernon's Civil Statutes › Title 109 - Pensions › Article 6243g-4. Police Officers Pension System in Certain Municipalities › Section 9D. City Contribution Rate When Estimated City Contribution Rate Lower Than Corridor Midpoint; Authorization for Certain Adjustments

Sec. 9D.  CITY CONTRIBUTION RATE WHEN ESTIMATED CITY CONTRIBUTION RATE LOWER THAN CORRIDOR MIDPOINT; AUTHORIZATION FOR CERTAIN ADJUSTMENTS.  (a)  This section governs the determination of the city contribution rate applicable in a fiscal year if the estimated city contribution rate is lower than the corridor midpoint.
(b)  If the funded ratio is:
(1)  less than 90 percent, the city contribution rate for the fiscal year equals the corridor midpoint; or
(2)  equal to or greater than 90 percent and the city contribution rate is:
(A)  equal to or greater than the minimum contribution rate, the estimated city contribution rate is the city contribution rate for the fiscal year; or
(B)  except as provided by Subsection (e) of this section, less than the minimum contribution rate for the corresponding fiscal year, the city contribution rate for the fiscal year equals the minimum contribution rate achieved in accordance with Subsection (c) of this section.
(c)  For purposes of Subsection (b)(2)(B) of this section, the following adjustments shall be applied sequentially to the extent required to increase the estimated city contribution rate to equal the minimum contribution rate:
(1)  first, adjust the actuarial value of assets equal to the current market value of assets, if making the adjustment causes the city contribution rate to increase;
(2)  second, under a written agreement between the city and the board entered into under Section 27 of this article not later than April 30 before the first day of the next fiscal year, reduce the assumed rate of return;
(3)  third, under a written agreement between the city and the board entered into under Section 27 of this article no later than April 30 before the first day of the next fiscal year, prospectively restore all or part of any benefit reductions or reduce increased employee contributions, in each case made after the year 2017 effective date; and
(4)  fourth, accelerate the payoff year of the existing liability loss layers, including the legacy liability, by accelerating the oldest liability loss layers first, to an amortization period that is not less than 10 years from the first day of the fiscal year beginning 12 months after the date of the risk sharing valuation study in which the liability loss layer is first recognized.
(d)  If the funded ratio is:
(1)  equal to or greater than 100 percent:
(A)  all existing liability layers, including the legacy liability, are considered fully amortized and paid;
(B)  the applicable fiscal year is the payoff year for the legacy liability; and
(C)  for each fiscal year subsequent to the fiscal year described by Paragraph (B) of this subdivision, the corridor midpoint shall be determined as provided by Section 9B(g) of this article; and
(2)  greater than 100 percent in a written agreement between the city and the pension system under Section 27 of this article, the pension system may reduce member contributions or increase pension benefits if, as a result of the action:
(A)  the funded ratio is not less than 100 percent; and
(B)  the city contribution rate is not more than the minimum contribution rate.
(e)  Except as provided by Subsection (f) of this section, if an agreement under Subsection (d) of this section is not reached on or before April 30 before the first day of the next fiscal year, before the first day of the next fiscal year the board shall reduce member contributions and implement or increase cost of living adjustments, but only to the extent that the city contribution rate is set at or below the minimum contribution rate and the funded ratio is not less than 100 percent.
(f)  If any member contribution reduction or benefit increase under Subsection (e) of this section has occurred within the previous three fiscal years, the board may not make additional adjustments to benefits, and the city contribution rate must be set to equal the minimum contribution rate.