The Facts
* Twelve local retirement systems in Texas have their contribution and benefit levels defined in state statute. These systems are located in Austin, Dallas, El Paso, Fort Worth, Galveston, Houston, and San Antonio.
* Texans living in municipalities whose pensions are defined by statute have no local control over major elements of their plans, which include contribution rates and benefit levels. Instead, important plan changes must be at state legislature which is complicated by the state’s biennial system.
* Ten of 12 local retirement systems governed by the state have unfunded liabilities totaling more than $100 million.
* Two-thirds of the local retirement systems governed by the state have funded ratios below 80%, which is an indicator that the plans could be fiscally unsound.
Recommendations
* The Legislature should remove from state statute all state mandates over local retirement systems and allow municipalities to have control of them.
* The Legislature should not place any new retirement systems not presently in the statute under state control.