§802.2011, Texas Government Code, requires the governing body of a public retirement system and, if the system is not a statewide retirement system, its associated governmental entity shall to jointly develop and adopt a written funding policy that details a plan for achieving a funded ratio equal to or greater than 100%.
The policy shall be timely revised to reflect any significant changes to the policy, including changes required as a result of formulating and implementing a funding soundness restoration plan (FSRP), including a revised FSRP.
The written funding policy must outline any automatic contribution or benefit changes designed to prevent having to formulate a revised FSRP, including any automatic risk-sharing mechanisms that have been implemented, the adoption of an actuarially determined contribution structure, and other adjustable benefit or contribution mechanisms.
In 2019, the PRB published an interim study on funding policies for fixed-rate plans which concluded with the recommendation for plans to adopt formal funding policies.
To assist with the development of funding policies, the PRB has issued guidance and an example policy.
View example policy: Word Document | PDF
In November 2020, the PRB compiled a report detailing all received funding policies.