For the first time since the Texas Legislature instituted Funding Soundness Restoration Plans (FSRP) in 2015, the Pension Review Board learned in July that no Texas public pension system is currently subject to an active FSRP.
PRB Actuary David Fee made this announcement at their July 23 meeting by saying, “My notes say to pause for thunderous applause.” PRB Member Christopher Zook obliged. “Amen, way to go!,” he said.
The achievement reflects years of coordinated effort among pension boards, their sponsoring government bodies, actuaries, and PRB staff. It also signals that Texas systems have steadily strengthened their funding positions and modernized their return assumptions, key efforts in ensuring the systems’ long‑term sustainability for their members' retirements.
A Decade of Work Culminates in a Clean Slate
FSRPs were created to ensure that governing sponsors were aware when their pension system, whether for district and municipal employees, or police and firefighters, had become financially distressed. The Legislature requested, and the Pension Review Board delivered, statutory thresholds for amortization periods and funded ratios, requiring reports and plans to improve struggling systems. The actions were a response to the havoc in investment returns caused by the Great Financial Crisis of 2008-09, when long-term investing plans took it on the chin. TEXPERS played a key role in those days, performing research, informing its pension members of the proposed legislative changes, and engaging in conversations with officials.
The FSRPs’ triggers were originally set at 40 years, meaning that the system and sponsor would need to submit a formal plan to achieve that amortization period. In the early 2020s, that was tightened to 30 years. At one point, more than a dozen systems had triggered the requirement. Others were struggling with sponsor negotiations or market volatility.
But as of July 2026, Fee reported that every system previously subject to an FSRP has either completed its plan, improved its funding period sufficiently, or otherwise met compliance corridors. Dallas Police & Fire, Garland Fire, San Benito Fire, and Harlingen Fire were all removed from the list since the February 2026 meeting.
Only one legacy FSRP remains — Plainview Fire — but even that system is expected to exit the list soon due to positive investment returns.
Fee, though, was cautious, noting that despite the overwhelmingly good news, two systems remain “at risk” of triggering an FSRP: the San Angelo Firefighters Relief and Retirement Fund and the Texarkana Firefighters Relief and Retirement Fund. He noted optimistically that both have active discussions underway with their sponsors, and Texarkana already has an agreement in place that avoids triggering.
The Bigger Story: Many Funding Periods Are Falling Also
The disappearance of active FSRPs reflects a statewide trend toward stronger funding from sponsoring entities.
In his comprehensive Actuarial Valuation report, Fee said that 44 systems now have funding periods under 15 years, double the number from 2020. The Pension Review Board has been encouraging Texas systems to achieve 15-year amortization by 2040, but Fee said that nearly half of all Texas systems are already there.
Meanwhile, systems with funding periods over 30 years have decreased in number from 35 in 2020 to just 10 today. Fee noted that only three have not yet made contributions or benefit changes to address their long amortization periods.
Assumption Modernization Is Accelerating
Another driver of improvement is the steady modernization of actuarial assumptions. At one point in the mid-2010s, most pensions expected annual investment returns exceeding 8 percent. Those great expectations were at odds with various capital market projections that long-term averages would decline toward 6-7 percent. Pension Review Board members, including actuary Marcia Dush and Vice Chair Keith Brainard, took a stance encouraging pension funds to align their targets with the reduced projections. The difficulty was that reducing targets required more money in contributions from sponsoring entities.
Fee highlighted that 27 TLFFRA systems have reduced their expected returns by at least 25 basis points, and many municipal systems (like those for Houston, Dallas, El Paso, San Antonio, and Austin) have made similar moves. Only two firefighter systems governed by the Texas Local Fire Fighters Retirement Act (TLFRRA) remain above 7.5%. Systems such as Atlanta Fire, Harlingen Fire, and San Benito Fire all lowered their rates this year.
Sponsor Engagement Is Strengthening
Fee reported that the PRB was receiving positive feedback from a March 2026 letter they sent to TLFFRA sponsors, urging consideration of Actuarially Determined Contributions and Social Security participation. ADCs can fluctuate higher at times, requiring more money from a sponsoring entity. But the fixed contribution rates that pushed many TLFRRA plans into FSRPs were not working well as a public policy before the Legislature took action. Fee said that sponsors are beginning to recognize that firefighter plans have different cost structures and require different funding strategies than those used by the Texas Municipal Retirement System for smaller-city police officers and municipal employees.
A Moment Worth Marking
Sherry Mose, the president of the Board for the Texas Association of Public Employee Retirement Systems, commended the achievement.
“We know that the PRB’s work often involves technical details, statutory corridors, amortization math, and careful monitoring of dozens of systems,” she said. “Wins are incremental, and progress can be slow to achieve, but this milestone of zero active FSRPs statewide is certainly worth celebrating.
“While challenges remain, particularly for systems that are right now around the 30‑year threshold, Texas Legislators can point to a very successful collaboration between a state agency, the entities they monitor, and our association.”
About the Author: Joe Gimenez is a public relations specialist in pension fund communications. He assists TEXPERS and several Texas retirement systems in public affairs.