Pension Review Board committee begins four‑year review of FSRP rules, flags member communications and unilateral‑submission concerns

Pension Review Board staff on Monday opened a formal four‑year review of rules governing Funding Soundness Restoration Plans (FSRPs), laying out potential administrative changes and several statutory recommendations and inviting stakeholder feedback ahead of board consideration.

Tamara Ehrenstein, PRB general counsel (staff attorney), told the committee the review aims to determine whether the FSRP rules adopted in 2022 still fulfill their original purpose and to identify changes that should be made in rule or recommended to the Legislature. "We'll provide some initial concepts for potential rule and statute changes," Ehrenstein said, and asked the committee and stakeholders to provide input as staff develops draft rules.

A staff presenter identified in the record as Ignatius summarized four focal areas: deadlines and triggers, periodic progress updates, member communications, and the FSRP submission form. He reported that "we've had 12 systems complete FSRPs under the new statute, and we had 2 more that were due by September 1," and said no systems had yet triggered FSRPs with valuation dates after 09/01/2025. Staff recommended clarifying administrative‑code language on definitions, applicability, disclosure obligations, submission and completion criteria, and progress‑update requirements to reduce ambiguity for systems and sponsors.

Staff described three key changes under the revised statute that took effect 09/01/2025: an immediate trigger where the funding period exceeds 30 years and the funded ratio is below 65 percent; the expiration of most voluntary FSRP eligibility (one voluntary FSRP remains); and a shift in the required full‑funding date from a fixed 09/01/2055 deadline to a deadline within two years of a plan's triggering evaluation date. Staff said these changes warrant plain‑language clarifications so actuaries and sponsors understand what analyses must demonstrate.

On member communications, staff noted progress updates and disclosure letters currently vary in format and detail and proposed that rules could require systems to provide documentation to the PRB showing communications to plan members, together with guidance or sample language. "There is some room for improvement" in how member communications are documented, the presenter said.

A committee member raising procedural concerns urged caution on a potential statutory change to allow unilateral submissions. "I would prefer to see that we do not go with unilateral submission for that reason," the member said, explaining a fund could otherwise adopt unilateral benefit changes (for example, lower benefit formulas for new hires) to meet FSRP requirements without joint sponsor approval. The member urged continued emphasis on joint submissions and collaboration between funds and plan sponsors.

Chair acknowledged the concerns and said staff and the committee will continue work over the coming months, including stakeholder outreach. Staff outlined a rulemaking timetable that begins with full‑board consideration of a notice of proposed rule review at the February board meeting, a 30‑day formal comment period, a return to the committee in April with detailed proposals, draft rules to the full board in July (another 30‑day comment period), and possible adoption at the September board meeting.

No formal board action on FSRP rule changes or statutory recommendations was taken at the meeting. The committee approved the prior meeting minutes by voice vote earlier in the session. The committee is scheduled to meet next on 04/30/2026; the full board is scheduled to meet Feb. 25 at 10:00 a.m., location TBD.