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(a) In addition to other powers and duties it may have under state or federal law, the board shall have the power and duty to:
(1) administer the retirement fund in accordance with this chapter for the exclusive purposes of providing benefits to members, inactive members, retirees, and their beneficiaries and defraying reasonable expenses of administering the fund;
(2) adopt rules and regulations not inconsistent with this chapter and the constitution and laws of this state;
(3) invest, reinvest, alter, and change the funds of the retirement fund with the care, skill, prudence, and diligence under the prevailing circumstances that a prudent person acting in like capacity and familiar with matters of the type would use in the conduct of an enterprise with a like character and like aims;
(4) diversify the investments of the fund to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so;
(5) pay for professional services out of investments of the retirement fund when it is actuarially determined that the payments will not have an adverse effect on payment of benefits and when in the judgment of the board the services are necessary;
(6) appoint an administrator and authorize employees to carry out the business of the board;
(7) establish rates of compensation for employees of the retirement fund, subject to the approval of the city council and in accordance with civil service rules of the city;
(8) correct administrative errors and remedy any effects of those errors;
(9) make a final determination of the eligibility of a member, inactive member, retiree, or beneficiary for a normal, early, service, or disability pension or death benefits;
(10) issue subpoenas for the attendance of witnesses and the production of records, papers, or other objects, administer oaths to witnesses, and examine witnesses on any matter relating to the payment of benefits of the retirement fund;
(11) determine the time, method, and manner of election to the board;
(12) prepare and adopt a budget;
(13) pay for fiduciary insurance out of investments of the retirement fund when it is actuarially determined that the payments will not have an adverse effect on payment of benefits and when in the judgment of the board the services are necessary;
(14) pay for the costs of administration out of investments of the retirement fund when it is actuarially determined that the payments will not have an adverse effect on payment of benefits and when in the judgment of the board the costs are necessary;
(15) sue and be sued in the name of the fund;
(16) appoint an actuary and adopt actuarial assumptions for the fund;
(17) appoint such other professionals as it deems appropriate and necessary;
(18) interpret this chapter as necessary to resolve any problems created by any ambiguities, inconsistencies, or omissions that might be found in this chapter;
(19) direct the fund's actuarial firm to perform an annual experience review of assumptions as part of its annual actuarial valuation;
(20) direct the fund's actuarial firm to perform a complete analysis of actuarial assumptions as frequently as the board deems necessary, but not less frequently than every five years; and
(21) engage a second actuarial firm to perform an actuarial peer review/audit as the board deems necessary.
(b) The board may not cause the fund to engage in a transaction if the board knows or should know that the transaction directly or indirectly constitutes a prohibited transaction under Section 503(b) of the Internal Revenue Code.
(c) No expenditures may be made from the retirement fund without the approval of the board by resolution or by adoption of its budget.
(d) The board shall adopt the actuarially required contribution rate, the current adjusted total obligation rate, the current total obligation rate, and the pension obligation bond credit rate for each fiscal year no later than June 1 of the preceding fiscal year, and shall promptly notify the city manager of the adoption.
(e) At least every five plan years, or in accordance with state law, whichever is sooner, the board shall provide 60 days' notice to the city manager:
(1) that the board intends to engage a second actuarial firm to perform an actuarial peer review/audit; and
(2) the name of the actuarial firm the board intends to engage.
If, within the 60 days, the city manager objects to the actuarial firm selected, the board shall seek another actuarial firm to perform the peer review/audit and re-notify the city manager. This process shall repeat until the city manager no longer objects to the actuarial firm the board intends to engage. The board shall then engage such actuarial firm for such purpose. If the process described in Section 40A-7.1 is used, the requirements of this subsection shall be satisfied for the plan year in which the process concludes.
(f) The board shall meet at any time after posting timely notice as required by law. Four members of the board constitute a quorum. The approval of four members of the board is necessary for any motion of the board to carry.
(g) The board is not liable for its acts and conduct or any losses incurred in the administration of the retirement fund, the management of the assets of the fund, or the investment of the fund if the board has met the standards set forth in Subsections (a) and (b) of this section and in Sections 40A-4.1 and 40A-4.2.
(h) If the board, in good faith, is in doubt as to the construction or interpretation of any provision of this chapter, or has any other question that may arise during the administration of the retirement fund, the board may resolve all such doubts and questions without obtaining a judicial construction. All constructions and interpretations made by the board are binding and conclusive.
(i) The board may consult with an actuary, attorney, physician, or accountant, who may also be employed by the city. The board is not liable for any act or conduct that was performed in good faith reliance on the opinion of an actuary, attorney, physician, or accountant with respect to an actuarial, legal, medical, or accounting matter, respectively. (Ord. Nos. 15414; 17713; 18181; 19470; 20960; 21582; 22345; 25695; 30162)
(a) The board may appoint investment managers for the fund by contracting for professional investment management services with one or more organizations, which may include a bank if it has a trust department, that are in the business of managing investments.
(b) To be eligible for appointment under this section, an investment manager must be:
(1) an organization registered under the Investment Advisors Act of 1940 (15 U.S.C. Section 80b-1 et seq.);
(2) a bank as defined by that Act; or
(3) an insurance company qualified to perform investment services under the laws of more than one state.
(c) In a contract made under this section, the board shall specify any policies, requirements, or restrictions, including criteria for determining the quality of investments and for the use of standard rating services, that the board may adopt for investment of the fund.
(d) In choosing and contracting for professional investment management services and in continuing the use of an investment manager, the board must act prudently and in the interest of the members, inactive members, retirees, and their beneficiaries.
(e) The board is not liable for the acts or omissions of an investment manager appointed under this section, nor is the board obligated to invest or otherwise manage any asset of the fund subject to management by the investment manager.
(f) An investment manager appointed under this section shall acknowledge in writing the manager's fiduciary responsibilities to the fund, which include the same duties assigned to the board in Section 40A-4(a)(1), (3), and (4).
(g) The investment standards provided by Section 40A-4(a) and (b) and the policies, requirements, and restrictions adopted under this section are the only standards, policies, requirements, and restrictions governing the investment of funds of the retirement fund by an investment manager or by the board during a 90-day interim between professional investment management services. Any other standard, policy, requirement, or restriction provided by law is suspended and not applicable during a time, and for 90 days after a time, in which an investment manager is responsible for investment of fund assets. If an investment manager has not begun managing investments before the 91st day after the date of termination of the services of a previous investment manager, the standards, policies, requirements, and restrictions otherwise provided by law are applicable until the date professional investment management services are resumed. (Ord. Nos. 21582; 30162)
(a) If the board contracts for professional investment management services, it also shall enter into an investment custody account agreement designating one or more banks, depository trust companies, or brokerage firms meeting the requirements under Section 802.205(d) of the Texas Government Code, as amended, to serve as custodian for the assets allocated to or generated under the contract.
(b) Under an investment custody account agreement, the board shall require the designated custodian to perform the duties and assume the responsibilities for funds under the contract for which the agreement is established that are performed and assumed, in the absence of a contract, by the custodian of system funds. (Ord. Nos. 21582; 30162)
(a) The administrator of the retirement fund shall carry out the business of the board and keep a record of the proceedings of the board.
(b) The administrator, in accordance with civil service rules of the city, may appoint and hire deputies and other employees.
(c) The administrator shall serve at the will of the board.
(d) The administrator is the "plan administrator," as that term is defined in 26 U.S.C. 414(g).
(e) Whenever the term "executive director" is used in relation to the retirement fund in any plan documents, contracts, resolutions, or other documents generated by the board or the fund, or in any city
ordinances, resolutions, or contracts related to the fund, that term will mean "administrator." (Ord. Nos. 15414; 19470; 20960; 21582; 30162)
(a) Members. Every employee must be a member of the fund except:
(1) a retiree re-employed by the city, who may elect not to contribute to the fund under Section 40A-20; or
(2) a leased employee who is not eligible to contribute to the fund.
(b) Contribution amount.
(1) For each pay period ending during a transition year, each member shall contribute to the retirement fund an amount equal to 37 percent times the current total obligation rate for that fiscal year times the member’s wages for the pay period.
(2) For each pay period ending during a fiscal year other than a transition year, each member shall contribute to the retirement fund an amount equal to 37 percent times the current adjusted total obligation rate for that fiscal year times the member’s wages for the pay period.
(c) Deductions. The contributions by each member receiving compensation from the city will normally be made by means of deduction on each payday.
(d) Discontinuing contributions.
(1) No member may discontinue contributions to the retirement fund unless the member is on:
(A) unpaid leave for military active duty; or
(B) a leave of absence.
(2) A member who discontinues contributions to the retirement fund under Subsection (d)(1)(B) will have any retirement or death benefits computed based on credited service established at the date of discontinuance. (Ord. Nos. 15414; 17713; 19470; 20960; 21582; 25695; 30162)
(a) Contribution amount.
(1) For each pay period ending during a transition year, the city shall contribute to the retirement fund an amount equal to:
(A) 63 percent times the current total obligation rate for that fiscal year times the members' wages for the pay period, minus
(B) the pension obligation bond credit rate for that fiscal year times the members' wages for the pay period.
(2) For each pay period ending during a fiscal year other than a transition year, the city shall contribute to the retirement fund an amount equal to:
(A) 63 percent times the current adjusted total obligation rate for that fiscal year times the members' wages for the pay period, minus
(B) the pension obligation bond credit rate for that fiscal year times the members' wages for the pay period.
(b) The city shall provide for costs of administration of the retirement fund, if the board determines that payment of the costs by the retirement fund will have an adverse effect on payment of benefits and that the costs are necessary. The city may modify any budget provision for administrative costs that it is being asked to fund under this subsection.
(c) The total contributions of the employees and the city must be forwarded by the city to the retirement fund not later than the end of each week for all contributions made as to the pay period ending in that week.
(d) The city may not contribute to the retirement fund for an employee on leave of absence or unpaid leave for military active duty.
(e) The city may not withdraw its contribution previously made to the retirement fund. Nothing in this subsection prohibits the administrative adjustment of future contributions for erroneously made prior contributions, if the adjustment is made within 60 days after the error is made or discovered, whichever occurs later.
(f) All payments and benefits provided for in this chapter must be made from the retirement fund. There is no obligation on the part of the city, the board, or the employees to provide for payment of benefits from any other source, nor is there any liability on the city or the employees to make any contribution other than those specified in this section and Section 40A-6. (Ord. Nos. 15414; 18181; 19470; 20960; 21582; 25695; 30162)
(a) Notwithstanding the provisions of Sections 40A-4(d), 40A-6, and 40A-7, for any fiscal year in which the prior adjusted total obligation rate does not equal the current adjusted total obligation rate, the city may, within 45 days after receiving notice of the rates adopted by the board under Section 40A-4(d), retain at its complete discretion its own actuary who shall calculate member and city contributions to the fund based on the methods, assumptions, projections, and calculations determined by the actuary employed by the city; provided, however, that the actuarial assumptions must be consistent with the terms of this chapter. If the city's actuary agrees with the board's actuary, the determinations of the board's actuary shall be used to determine member and city contributions to the fund for the fiscal year.
(b) If there is a dispute between the actuary employed by the board and the actuary employed by the city with respect to the required member and/or city contributions to the fund for a fiscal year, the two actuaries shall attempt to resolve their differences. If the two actuaries resolve their differences, they shall sign a document setting forth the underlying actuarial methods, assumptions, projections, and calculations, and the resulting actuarially required contribution rate, current adjusted total contribution rate, current total obligation rate, and pension obligation bond credit rate, all of which shall be adopted by the board and used to determine member and city contributions to the fund for the fiscal year if the dispute is resolved prior to the commencement of the fiscal year; unless the board determines, in its discretion, that the conclusions agreed to by the two actuaries are not actuarially sound, in which case the board shall adopt sound actuarial assumptions and the resulting actuarially required contribution rate, current adjusted total obligation rate, current total obligation rate, and pension obligation bond credit rate.
(c) If the differences between the two actuaries cannot be resolved within 90 days after the appointment of the second actuary, the board shall retain a third actuary based upon the joint recommendation of the other two actuaries. The third actuary shall review and calculate member and city contributions to the fund based on the methods, assumptions, projections, and calculations determined by the third actuary; provided, however, that the actuarial assumptions must be consistent with the terms of this chapter. The board, the city, and their respective actuaries shall cooperate with the third actuary and promptly provide such information as the third actuary reasonably requests. The three actuaries shall confer regarding the actuarial dispute between the city's and the board's actuaries, and shall attempt to resolve their differences. If any two of the three actuaries agree regarding the underlying actuarial methods, assumptions, projections, and calculations, and the resulting actuarially required contribution rate, current adjusted total obligation rate, current total obligation rate, and pension obligation bond credit rate, such joint determinations shall be communicated in writing to the board and adopted by the board and used in establishing the member and city contributions to the fund for the fiscal year if the dispute is resolved prior to the commencement of the fiscal year; unless the board determines, in its discretion, that the conclusions agreed upon are not actuarially sound, in which case the board shall adopt sound actuarial assumptions and the resulting actuarially required contribution rate, current adjusted total obligation rate, current total obligation rate, and pension obligation bond credit rate.
(d) If a dispute described in this Section 40A-7.1 is not resolved prior to the commencement of the fiscal year, the member and city contributions to the fund for such fiscal year (as a percentage of wages) shall be the same as the prior fiscal year.
(e) Notwithstanding Section 40A-1(37), for any fiscal year in which the process described in this Section 40A-7.1 results in a change in the current adjusted total obligation rate, then the prior adjusted total obligation rate for the succeeding fiscal year shall be deemed to be the current adjusted total obligation rate determined by the board through the process described in this section. (Ord. Nos. 25695; 30162)
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