Texas Statutes
Article VIII.
Section 8.03. Initial Risk Sharing Valuation Study

Sec. 8.03. INITIAL RISK SHARING VALUATION STUDY. (a) The police retirement system shall cause the system's actuary to prepare an initial risk sharing valuation study that is dated as of December 31, 2020, in accordance with this section.
(b) The initial risk sharing valuation study must:
(1) except as otherwise provided by this section, be prepared in accordance with the requirements of Section 8.04 of this Act;
(2) be based on the actuarial assumptions that were used by the system's actuary in the valuation completed for the year ended December 31, 2020;
(3) project the corridor midpoint for the next 30 calendar years beginning with the calendar year that begins on January 1, 2022; and
(4) include a schedule of city legacy contribution amounts for 30 calendar years beginning with the calendar year that begins on January 1, 2022.
(c) For purposes of Subsection (b)(4) of this section, the schedule of city legacy contribution amounts must be determined in such a manner that the total annual city legacy contribution amount for the first three calendar years will result in a phase-in of the anticipated increase in the city's contribution rate from the calendar year that begins on January 1, 2021, in accordance with Subsection (a) of this section, to the rate equal to the sum of the estimated contribution rate for the calendar year that begins on January 1, 2022, and the rate of pensionable payroll equal to the city legacy contribution amount for January 1, 2022, determined as if there was no phase-in of the increase to the city legacy contribution amount. The phase-in must reflect approximately one-third of the increase each year over the three-year phase-in period. The city's contribution under Section 8.02 of this Act for:
(1) the calendar years that begin on January 1, 2022, January 1, 2023, and January 1, 2024, must be adjusted to reflect the impact of the phase-in prescribed by this section; and
(2) each calendar year that begins on January 1, 2025, through January 1, 2051, must reflect a city legacy contribution amount that is three percent greater than the city legacy contribution amount for the preceding calendar year.
(d) The estimated city contribution rate for the calendar year that begins on January 1, 2022, must be based on the projected pensionable payroll, as determined under the initial risk sharing valuation study required by this section, assuming a payroll growth rate of three percent.

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