PRB actuarial committee advances draft rules and statutory options to standardize funding-restoration notices and progress updates

The Actuarial Committee of the Pension Review Board reviewed draft rule revisions and statutory recommendations intended to standardize reporting and transparency for systems that trigger Funding Soundness Restoration Plans (FSRPs).

Tamara Aronstein, general counsel for the PRB, told the committee staff would seek a second round of stakeholder feedback in May and present proposed rules to the full board in July, with possible adoption considered in September. "We welcome feedback, discussion, and questions from the committee," Aronstein said when introducing the item.

David Fee, the PRB staff actuary, outlined five categories of draft changes, including mandatory submission of a model inadequate-funding notice to the PRB, a standardized progress-update form and clarifications to several sections of Texas Administrative Code chapter 610. "So we have five categories of changes being considered," Fee said, and listed disclosure of inadequate funding arrangements, progress updates, clarification of FSRP due dates, general language improvements and minor technical corrections.

The proposed model notice would be a one-page disclosure for underfunded systems with funding periods greater than 30 years and include information from the last three actuarial valuations (valuation dates, assets and liabilities, funded percentage and funding period), definitions of key terms, a link to the PRB data center and system administrator contact information. Under the draft rule (610.15C), systems triggering an FSRP would be required to send a copy of that notice to the PRB so staff can monitor compliance.

Staff also proposed a new progress-update form that would summarize recent sponsor-system discussions, list dates and topics of upcoming scheduled discussions and include signatures from both the system and the plan sponsor. The draft would require use of that form under 610.31 to improve consistency; staff said the form could be voluntary in concept but that the current draft makes it mandatory to ensure meaningful updates.

Committee members asked how the PRB would learn of informal sponsor-system communications and how the statutory standard would be enforced. Fee and Aronstein reiterated that statute already requires progress updates and that the form is intended to standardize content and make progress more transparent to staff. One member raised concerns the process could rely on informal, unrecorded conversations and called the current submission standard "somewhat nebulous;" staff said the new form and a requirement to copy the PRB would improve visibility.

Staff walked the committee through proposed edits to TAC chapter 610, including clarifications that voluntary FSRPs apply only to those authorized prior to Sept. 1, 2025 (610.14), clarified corridor/funded-ratio language (610.20 and 610.32), a clarification that systems may submit an FSRP at any time during the two-year valuation window (610.30), and removal of outdated references in 610.31.

The presentation also included two statutory options. Recommendation 1 would grant broader authority to accept alternate documentation in lieu of additional local approvals in certain scenarios; recommendation 1A would narrowly exempt municipal systems that have completed legislative changes from duplicative local public-approval steps. Recommendation 2 would require a compliance report to executive legislative leaders and a progress update to legislative pension committees to increase visibility of noncompliance. Staff emphasized 1A addresses a real-world instance staff encountered and said stakeholders would be asked whether a narrow fix (1A) or broader authority (1) is preferable.

Anumeha Kumar of the Austin Firefighters Retirement Fund provided public comment in support of recommendation 1A, saying the change would eliminate what she called a redundant approval step after a legislative process has addressed benefit and contribution changes. "We appreciate the recommendation a lot," Kumar said, adding that the narrow fix would remove duplication for systems that already went through legislative review.

No board action was taken at the meeting. Staff will send the draft proposed rules, statutory one-pager and guidance materials to stakeholders for feedback and return to the full board in July with draft proposed rules for potential publication.