Enrolled Bill Summary

            Senate Bill 1128 amends provisions relating to service credit, changes in beneficiaries, annuity amounts, and new programs administered by the Teacher Retirement System of Texas (TRS). The act requires TRS to contract to provide optional permanent life insurance, long-term health care insurance, and disability insurance to members. The act requires bidding for such contracts to be competitive, authorizes TRS to adopt rules relating to criteria for determining qualified carriers, and creates the school district employees and retirees optional insurance trust fund for the purpose of funding these programs. The full cost of premiums in such plans is to be paid entirely by the enrollees.

            Senate Bill 1128 also increases the standard service retirement annuity from two percent to 2.2 percent, expands the annuity payment options for beneficiaries of certain disability retirees, creates a partial lump-sum distribution option for certain members, and permits a member to discontinue participation in the deferred retirement option plan. The act authorizes, subject to Internal Revenue Service plan qualification guidelines, that certain retirees who return to work as classroom teachers on as much as a full-time basis in an acute shortage area in which they are certified may not have their monthly benefit payments withheld. The act also provides that a beneficiary is eligible to receive a lump-sum death benefit payment of $160,000 if the member dies as a result of an on-duty physical assault.

            Senate Bill 1128 prohibits a member from purchasing more than five years of permissive service credit for nonqualified service, including military service or certain service for a different political subdivision, and requires the member to have at least five years of membership service credit before purchasing service credit for nonqualified service. The act also prohibits a member from establishing service credit for any period when the member was participating in the optional retirement program, allows a member of the retirement system who has terminated employment to reinstate certain service credit, and authorizes the board to enter into a reciprocal agreement with another state or territory for the transfer of a member's contributions made in that state or territory to TRS.

            The act grants TRS the authority to select financial institutions other than a custodian of TRS securities to lend the securities and clarifies the definition of "securities" in relation to the board's investment of retirement system assets. The act also specifies certain information about member positions to be acquired at least annually and maintained by TRS and specifies the type of nonprofit association for which a retiree may have membership dues withheld from a monthly annuity payment. Finally, the act requires school districts to submit reports about health insurance coverage to TRS every two years, rather than annually, and changes the deadlines for submission of the reports.