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A BILL TO BE ENTITLED
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AN ACT
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relating to an optional service retirement annuity that provides an |
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increasing annuity under the Employees Retirement System of Texas. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter B, Chapter 814, Government Code, is |
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amended by adding Section 814.110 to read as follows: |
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Sec. 814.110. INCREASING ANNUITY OPTION. (a) A member who |
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is eligible for a service retirement annuity not reduced because of |
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age may select a standard retirement annuity or an optional service |
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retirement annuity described by Section 814.108 together with the |
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option for an increasing annuity as described by this section. |
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(b) The retirement system shall provide the increasing |
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annuity option by reducing the member's annuity for an appropriate |
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implementation period beginning immediately after the member's |
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retirement and annually increasing the amount of the annuity by two |
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percent or by another percentage rate, as determined by the system |
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under Subsection (c), for each year during the applicable |
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implementation period. |
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(c) The retirement system may offer other increasing |
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annuity options similar to the option described by Subsection (b), |
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including increasing annuity options providing a different |
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percentage rate of increase or a different implementation period. |
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(d) If a member elects to receive an increasing annuity |
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option under this section, the member's annuity must be calculated |
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to reflect the option selected and be actuarially equivalent to a |
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standard or optional service retirement annuity, as applicable, |
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that the member would have been entitled to had the member not |
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elected to receive the option. The annuity must be computed to |
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result in no actuarial loss to the retirement system. |
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(e) The increasing annuity option under this section may be |
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elected only once by a member and may not be elected by a retiree. A |
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member retiring under the proportionate retirement program under |
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Chapter 803 is not eligible for the option. |
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(f) This section does not apply to: |
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(1) a disability retirement annuity; or |
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(2) an annuity based on service credited in the |
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elected class. |
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(g) Before a retiring member selects an increasing annuity |
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option under this section, the retirement system must provide a |
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written notice to the member of the amount by which the member's |
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annuity will be reduced and the implementation period applicable |
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because of that selection. The retirement system shall maintain a |
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copy of the notice required under this subsection that is signed by |
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the member. |
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(h) The board of trustees may adopt rules for the |
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implementation of this section. |
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SECTION 2. Section 814.110, Government Code, as added by |
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this Act, applies only to a retirement that occurs on or after |
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January 1, 2024. |
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SECTION 3. This Act takes effect September 1, 2023. |