Chairman Flynn Files Pensions Soundness Bill HB 2434 

Texas Insider Report: AUSTIN Texas   Chairman Dan Flynn (R-Van) responded Monday to the growing number of pension plans in Texas that are not actuarially sound with the filing of House Joint Resolution 85 and House Bill 2434.  These bills will direct those plans in the poorest shape to work out their issues locally and submit plans to the state that would bring them in line with a strict set of requirements. These plans if left uncorrected  have the potential to cause extensive damage across the state if  local and State of Texas bond ratings are downgraded  as this would cost the state of Texas millions of dollars. Out of the total 93 plans that exist in Texas there are 36 pension plans that are not actuarially sound. Chairman Flynn filed House Joint Resolution 85 which addresses the states responsibility to bail out pension funds by stating that the state is not responsible and will not bail out those funds in the future. The fix must be local.  In conjunction with HJR 85 Chairman Flynn has also filed House Bill 2434 that addresses the 66 billion dollars the state is short in regarding pension fund obligations and requires actuarial soundness of the remaining pension plans that currently do not meet actuarial soundness standards.

 I have filed these pieces of  legislation to ensure all pension plans have to work out their own problems or the state will have to act to ensure plans are protected for all Texans.The cascade effect of these plans failing will cause reduced bond ratings for the cities and consequently have the potential to lower the bond ratings of the State of Texas which is not acceptable. The state will not be in the business of solving cities financial problems and will consequently not engage in the state bailout of pension plans.