PART 17. STATE PENSION REVIEW BOARD
CHAPTER 607. PUBLIC RETIREMENT SYSTEM MINIMUM EDUCATIONAL TRAINING PROGRAM
The Texas Pension Review Board (Board) adopts the repeal of 40 TAC Chapter 607 pertaining to the Minimum Educational Training program. This repeal is in conjunction with the adoption of new rules in Chapter 607, also published in this issue of the Texas Register. The rules are adopted without changes to the proposed text as published in the August 9, 2024, issue of the Texas Register (49 TexReg 5921) and will not be republished.
BACKGROUND AND JUSTIFICATION
The Board adopts the repeal of its existing rules in Chapter 607 in order to adopt new, updated rules in Chapter 607 that increase clarity of the rules, streamline training cycles to improve compliance with the training requirements, increase the efficiency of program tracking and reporting, and strengthen agency oversight for accredited training activities.
PUBLIC COMMENTS
The agency did not receive any comments on the proposed repeal during the public comment period.
SUBCHAPTER A. GENERAL PROVISIONS
40 TAC §§607.101, 607.103 - 607.105, 607.107
STATUTORY AUTHORITY
The repeal is adopted under Government Code §801.211(e), which authorizes the Board to adopt rules necessary to implement the Minimum Educational Training program.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on September 26, 2024.
TRD-202404644
Tamara Aronstein
General Counsel
State Pension Review Board
Effective date: October 16, 2024
Proposal publication date: August 9, 2024
For further information, please call: (512) 463-1736
STATUTORY AUTHORITY
The repeal is adopted under Government Code §801.211(e), which authorizes the Board to adopt rules necessary to implement the Minimum Educational Training program.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on September 26, 2024.
TRD-202404645
Tamara Aronstein
General Counsel
State Pension Review Board
Effective date: October 16, 2024
Proposal publication date: August 9, 2024
For further information, please call: (512) 463-1736
40 TAC §§607.120, 607.122, 607.124, 607.126, 607.128, 607.130
STATUTORY AUTHORITY
The repeal is adopted under Government Code §801.211(e), which authorizes the Board to adopt rules necessary to implement the Minimum Educational Training program.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on September 26, 2024.
TRD-202404646
Tamara Aronstein
General Counsel
State Pension Review Board
Effective date: October 16, 2024
Proposal publication date: August 9, 2024
For further information, please call: (512) 463-1736
STATUTORY AUTHORITY
The repeal is adopted under Government Code §801.211(e), which authorizes the Board to adopt rules necessary to implement the Minimum Educational Training program.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on September 26, 2024.
TRD-202404647
Tamara Aronstein
General Counsel
State Pension Review Board
Effective date: October 16, 2024
Proposal publication date: August 9, 2024
For further information, please call: (512) 463-1736
The Texas Pension Review Board (Board) adopts new rules in 40 TAC Chapter 607 relating to the Minimum Educational Training program for public retirement system trustees and administrators.
The Board adopts the new rules in §§607.101, 607.103 - 607.105, 607.107, 607.113, 607.120, 607.122, 607.124, 607.126, 607.128, 607.130, 607.140, and 607.142 without changes to the proposed text published in the August 9, 2024, issue of the Texas Register (49 TexReg 5923), and the rules will not be republished.
The Board adopts the new rule in §607.110 with a change to the proposed text published in the August 9, 2024, issue of the Texas Register (49 TexReg 5923), and the rule will be republished. The change makes a minor, technical change to §607.110(i) to correct a reference to another subsection within §607.110.
EXPLANATION OF AND JUSTIFICATION FOR THE RULES
Section 801.211, Texas Government Code requires the Board to develop and administer an educational training program for trustees and administrators, and Section 801.211(e), Texas Government Code authorizes the Board to adopt rules to implement this requirement. The new rules clarify and improve the Minimum Educational Training program in conjunction with the repeal of the rules under separate action.
SECTION-BY-SECTION SUMMARY
The adopted rules in 40 TAC §607.101 provide the authority to adopt these rules.
The adopted rules in 40 TAC §607.103 provide the purpose of the rules, to ensure that trustees and administrators of Texas public retirement systems have the pension education needed to successfully discharge their duties.
The adopted rules in 40 TAC §607.104 provide definitions pertinent to the rules for the Minimum Educational Training program.
The adopted rules in 40 TAC §607.105 provide the applicability of the rules, which apply to trustees, except in certain cases, statutorily authorized designees, and administrators of public retirement systems.
The adopted rules in 40 TAC §607.110 provide the Minimum Educational Training program requirements for trustees and administrators in their first year of service and each calendar year thereafter. Trustees and administrators must complete seven credit hours of core training in the first year of service and two credit hours of training for continuing education each calendar year thereafter. The proposed rules create a one-time extension application process for the first year of service training requirement. The proposed rules specify that continuing education hours completed in excess of the annual requirement may not be carried over to a subsequent calendar year. The proposed rules provide for the transition from current requirements, proposed for repeal under separate action, to the new requirements effective January 1, 2025.
The adopted rules in 40 TAC §607.113 specify that trustees and administrators reappointed to, re-elected to, or rehired by a public retirement system are not required to repeat the first year of service training requirement unless more than five years have passed since the last date of the most recent term of service or employment.
The adopted rules in 40 TAC §607.120 provide program standards for training providers offering Minimum Educational Training activities, such as compliance with program requirements and the Board's curriculum guide, method of delivery for training activities, and verification of attendance for online training.
The adopted rules in 40 TAC §607.122 detail the computation of credit hours by training providers. Credit hours are based on net actual instruction time for all activities, with additional parameters provided for both digital and in-person activities.
The adopted rules in 40 TAC §607.124 provide for the accreditation of training providers by the Board. Training providers must conform with Board standards outlined in rule, conduct its business lawfully, and follow the application process provided in rule. This rule also creates a process for complaints regarding training providers and the Board's authority if a training provider is noncompliant with training program standards or Board rules.
The adopted rules in 40 TAC §607.126 create several requirements for accredited training providers, including recordkeeping, allowing review by the Board, and providing participants a certificate of completion.
The adopted rules in 40 TAC §607.128 allow for accreditation of training activities by a non-accredited training provider through a case-by-case application process outlined in the rule. Such activities, once approved, may be offered through repeat presentations for 36 months without requiring a new application.
The adopted rules in 40 TAC §607.130 provide details on accreditation of in-house training activities offered by a public retirement system for its own trustees and/or administrators. In-house training must meet all standards for training providers included in Chapter 607, except that in-house training is exempted from certain requirements listed in the rule.
The adopted rules in 40 TAC §607.140 pertain to Minimum Educational Training program reporting requirements, creating an annual April 1 deadline for two reports to be submitted by public retirement systems to provide the Board information on trustees and administrators and the training they completed during the preceding calendar year. This section also includes a requirement for the Board to report annually on the noncompliance status of trustees and administrators, as reported to the Board pursuant to this section.
The adopted rules in 40 TAC §607.142 create recordkeeping requirements for public retirement systems, which must retain records detailed in the rule for five years from the date a training activity is completed, and provide a copy of these records to the Board upon request.
PUBLIC COMMENTS
The agency did not receive any comments on the proposed rules during the public comment period.
BOARD ACTION
The Board met on July 25, 2024, to discuss the proposed rules. The Board recommended the proposed rules be published in the Texas Register. At its meeting on September 25, 2024, the Board adopted the rules as published in the Texas Register, with one change to §607.110 as discussed above.
SUBCHAPTER A. GENERAL PROVISIONS
40 TAC §§607.101, 607.103 - 607.105, 607.107
STATUTORY AUTHORITY
The rules are adopted under Government Code §801.211 (e), which authorizes the Board to adopt rules necessary to implement the Government Code §801.211 educational training requirement.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on September 26, 2024.
TRD-202404648
Tamara Aronstein
General Counsel
State Pension Review Board
Effective date: October 16, 2024
Proposal publication date: August 9, 2024
For further information, please call: (512) 463-1736
STATUTORY AUTHORITY
The rules are adopted under Government Code §801.211(e), which authorizes the Board to adopt rules necessary to implement the Government Code §801.211 educational training requirement.
§607.110.Minimum Educational Training Requirements.
(a) First year of service. A new trustee and a new system administrator shall complete at least seven (7) credit hours of training in the core content areas within the first year of service. The seven credit hours shall include training in all of the core content areas. A trustee or system administrator must earn no less than half a credit hour in each content area. No more than two credit hours earned in any one core content area shall be applied toward meeting the 7-hour minimum requirement contained in this subsection. The core content areas are:
(1) fiduciary matters;
(2) governance;
(3) ethics;
(4) investments;
(5) actuarial matters;
(6) benefits administration; and
(7) risk management.
(b) A new trustee or system administrator may submit to the Board an application for a one-time extension period of three months to complete the first year of service core training requirement, which the Board may approve in exceptional circumstances. The request for extension must be approved by the chair of the PRS' board, or, for an extension request by the PRS board chair, approved by the vice chair of the PRS' board or its administrator. The application must be submitted to the Board on a form prescribed by the Board and must include an explanation of the circumstances necessitating the extension.
(c) Subsequent years of service. A trustee and a system administrator shall complete at least two (2) credit hours of continuing education in either the core content areas in subsection (a) of this section, continuing education content areas, or any combination thereof, within each calendar year after the first year of service as a new trustee or new system administrator. The continuing education content areas include:
(1) compliance;
(2) legal and regulatory matters;
(3) pension accounting;
(4) custodial issues;
(5) plan administration;
(6) Texas Open Meetings Act; and
(7) Texas Public Information Act.
(d) A trustee or administrator may not carry over continuing education credit hours earned in excess of the requirement under subsection (c) of this section to a subsequent calendar year.
(e) MET completed up to six months before the trustee's date of assuming position on the PRS board or system administrator's hiring date may be counted for the first-year-of-service requirement in subsection (a) of this section.
(f) A trustee serving concurrently on multiple PRS boards and a system administrator employed concurrently by multiple PRSs shall only be required to complete the MET requirements in this section for service with one PRS, so long as the concurrent service or employment is reported to the Board pursuant to §607.140(b)(3) of this chapter.
(g) Credit hours for attending MET activities shall be based on net actual instruction time. Credit hours for viewing or listening to audio, video, or digital media shall be based on the running time of the recordings, and credit hours for attending in-person educational programs shall be based on actual instruction time.
(h) A trustee or administrator may gain credit for teaching an accredited MET activity. Credit hours shall be based on net actual presentation time, but may not include repeated presentations of the same activity in a single calendar year.
(i) The Board hereby adopts by reference the Curriculum Guide for Minimum Educational Training to provide further direction on core and continuing education content areas as contained in subsections (a) and (c) of this section. Trustees and system administrators are encouraged to review the Curriculum Guide for content area guidance.
(j) The Board shall make the Curriculum Guide for Minimum Educational Training available to the PRSs. A PRS can obtain the most current version of the Curriculum Guide for Minimum Educational Training from the offices of the State Pension Review Board and from its website at http://www.prb.texas.gov.
(k) The 2025 calendar year training cycle for trustees and administrators shall be based on their MET compliance status on December 31, 2024, as detailed below. This subsection expires on December 31, 2025.
(1) Trustees and administrators within their first year of service on December 31, 2024 who have completed by that date the training required by subsection (a) of this section shall begin their first continuing education cycle in calendar year 2025.
(2) Trustees and administrators within their first year of service on December 31, 2024 who have not completed by that date the training required by subsection (a) of this section shall complete the first year of service training in calendar year 2025.
(3) Trustees and administrators who began a continuing education cycle, as required by subsection (c) of this section, in calendar year 2024 may carry over any hours completed in that year to the calendar year 2025 continuing education cycle. If a trustee or administrator completed more than two continuing education hours, those hours will not carry over to calendar year 2026.
(4) Trustees and administrators who began a continuing education cycle, as required by subsection (c) of this section, in calendar year 2023 will begin a new continuing education cycle on January 1, 2025. Trustees and administrators who did not complete the training hours required in previous cycles will remain noncompliant and must complete all outstanding required credit hours.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on September 26, 2024.
TRD-202404649
Tamara Aronstein
General Counsel
State Pension Review Board
Effective date: October 16, 2024
Proposal publication date: August 9, 2024
For further information, please call: (512) 463-1736
40 TAC §§607.120, 607.122, 607.124, 607.126, 607.128, 607.130
STATUTORY AUTHORITY
The rules are adopted under Government Code §801.211(e), which authorizes the Board to adopt rules necessary to implement the Government Code §801.211 educational training requirement.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on September 26, 2024.
TRD-202404650
Tamara Aronstein
General Counsel
State Pension Review Board
Effective date: October 16, 2024
Proposal publication date: August 9, 2024
For further information, please call: (512) 463-1736
STATUTORY AUTHORITY
The rules are adopted under Government Code §801.211(e), which authorizes the Board to adopt rules necessary to implement the Government Code §801.211 educational training requirement.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on September 26, 2024.
TRD-202404651
Tamara Aronstein
General Counsel
State Pension Review Board
Effective date: October 16, 2024
Proposal publication date: August 9, 2024
For further information, please call: (512) 463-1736
The Texas Pension Review Board (Board) adopts amendments to 40 TAC §609.105, Definitions, and §609.111, Investment Expense Reporting Structure and the repeal of 40 TAC §609.109, regarding the initial investment expense reporting period.
The Board adopts the amendments and repeal without changes to the proposed text published in the August 9, 2024, issue of the Texas Register (49 TexReg 5930), and the rules will not be republished.
EXPLANATION OF AND JUSTIFICATION FOR THE RULES
Government Code §802.103(e) authorizes the Board to adopt rules necessary to implement the Government Code §802.103(a)(3) investment expense reporting requirement.
The purpose of the amendments is to clarify the provisions in the current rule for ease of reference and understanding by the public and improve consistency and accuracy of investment expense reports to improve transparency for the public, members of the systems, and policymakers.
SECTION-BY-SECTION SUMMARY
The rules in 40 TAC §609.105 pertain to definitions for investment expense reporting. The rule is modified to specify that "direct and indirect fees and commissions" include "fees netted from returns," which is defined in the previously existing rule language. The amendments also specifies that "investment service" includes "in-house investment staff."
The rules in 40 TAC §609.111 pertain to the investment expense reporting structure. The amendments clarify that direct and indirect fees and commissions must be reported by type of fee and commission, and specify the types as defined in 40 TAC §609.105(4), as the definition is amended by this rulemaking. The amendments also specify that investment expense information may be reported in an unaudited supplemental schedule within the public retirement system's annual financial report.
The rules in 40 TAC §609.109 pertain to the initial investment expense reporting period, which has already passed. The rule expressly states this section expired on April 1, 2022. The repeal will remove this obsolete provision from the rules.
PUBLIC COMMENTS
The agency did not receive any comments on the proposed amendments or repeal during the public comment period.
BOARD ACTION
The Board met on July 25, 2024, to discuss the proposed amendments and repeal. The Board recommended the proposed amendments be published in the Texas Register. At its meeting on September 25, 2024, the Board adopted the proposed amendments and repeal as published in the Texas Register.
STATUTORY AUTHORITY
The amendments are adopted under Government Code §802.103(e), which authorizes the Board to adopt rules necessary to implement the Government Code §802.103(a)(3) investment expense reporting requirement.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on September 26, 2024.
TRD-202404652
Tamara Aronstein
General Counsel
State Pension Review Board
Effective date: October 16, 2024
Proposal publication date: August 9, 2024
For further information, please call: (512) 463-1736
STATUTORY AUTHORITY
The repeal is adopted under Texas Government Code §801.201, which authorizes the Board to adopt rules and Texas Government Code §802.103(e), which authorizes the Board to adopt rules for investment expense reporting and other annual financial report requirements.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on September 26, 2024.
TRD-202404653
Tamara Aronstein
General Counsel
State Pension Review Board
Effective date: October 16, 2024
Proposal publication date: August 9, 2024
For further information, please call: (512) 463-1736