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PRB: number of Texas plans with funding periods over 30 years falls as many complete FSRPs
Summary
PRB staff actuary reported a substantial drop in plans exceeding 30-year funding periods after multiple systems completed Funding Soundness Restoration Plans; some systems remain at-risk and the board flagged immediate-trigger rules for new valuations.
A PRB staff actuary told the Pension Review Board on Wednesday that the number of Texas public retirement systems with funding periods above 30 years has fallen sharply after several systems completed Funding Soundness Restoration Plans (FSRPs).
"The counter systems greater than 30 years has decreased substantially from 26 in November '23 down to 18 systems today," the staff actuary said. He said, after accounting for recent FSRPs and follow-up notes, the working list of high-risk systems is effectively down to nine that remain subject or at risk under PRB rules.
PRB staff listed several systems that have completed FSRPs or otherwise moved off the high-risk lists in recent months, including Austin Fire, Beaumont Fire, Sweetwater Fire, Midland Fire, Wichita Falls Fire and Nacogdoches Memorial Hospital. The staff presentation also highlighted improvements across multiple system types and said 38 systems are now beneath the PRB's 15-year funding-period target for 2040.
The actuary stressed the importance of assumptions and monitoring. He reiterated a statutory rule that valuations dated on or after Sept. 1, 2025, that show a funded ratio below 65 percent and a funding period greater than 30 years will trigger an immediate FSRP. Staff warned systems with older or delayed valuation reports to expedite completion so they have time to plan if an FSRP is triggered.
The presentation covered trend charts showing how funded ratios, funding periods and unfunded liabilities typically improve over time once systems adopt consistent contributions and structural changes. Staff noted that many systems are now closer to targets, but a small number remain at long funding periods or low funded ratios and will need continued sponsor action.
PRB staff said the overall statewide picture has improved compared with prior years, but that continued attention is required for systems with low funded ratios or valuation dates that are out of date.
