By Kuempel H.B. No. 1765
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to participation and credit in, contributions to, and
1-3 benefits and administration of the Texas County and District
1-4 Retirement System.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 842.005, Government Code, is amended by
1-7 amending Subsection (e) and adding Subsection (g) to read as
1-8 follows:
1-9 (e) Second priority shall be given to prior service credit,
1-10 prior service annuities, multiple matching credit, and multiple
1-11 matching annuities, without differentiation. If the ratio of the
1-12 sum of the available tangible assets for this priority group and
1-13 the available actuarial present value of future subdivision
1-14 contributions in excess of normal costs, if any, to the actuarial
1-15 present value of benefits is less than 1.00, then the annuities and
1-16 credits will have to all be proportionally reduced. If the ratio
1-17 is greater than 1.00, then the annuities and credits will all have
1-18 to be proportionally increased. The ratio will be redetermined
1-19 annually and adjustments made as needed, except as limited by
1-20 Subsection (g).
1-21 (g) If the participating subdivision continues in existence
1-22 or is succeeded by an organization, the annuities and credits
1-23 described by Subsection (e) may not be increased to a level that
2-1 exceeds the greater of the level in effect at the time Subsection
2-2 (e) became applicable or the level in effect on December 31, 1992.
2-3 If the board of trustees determines, on the basis of computations
2-4 made by the actuary, that the available tangible assets are
2-5 materially in excess of the actuarial present value of benefits
2-6 described by Subsection (e), the board may direct that a portion of
2-7 the excess be paid to the subdivision or its successor. When the
2-8 participating subdivision or its successor has no employees who are
2-9 members of the retirement system and has no present or potential
2-10 liabilities resulting from the participation of former employees,
2-11 the subdivision's participation in the retirement system ceases,
2-12 and the system shall repay to the subdivision or its successor the
2-13 amount in the subdivision accumulation fund that is credited to the
2-14 subdivision.
2-15 SECTION 2. Subchapter A, Chapter 842, Government Code, is
2-16 amended by adding Section 842.007 to read as follows:
2-17 Sec. 842.007. SUBDIVISION NOT AGENT OF SYSTEM. Neither a
2-18 subdivision that participates in the retirement system nor any
2-19 employee or officer of a participating subdivision has authority to
2-20 act as an agent of the retirement system. An action or inaction on
2-21 the part of a participating subdivision or its employee or officer
2-22 is not binding on the retirement system.
2-23 SECTION 3. Section 842.103, Government Code, is amended to
2-24 read as follows:
2-25 Sec. 842.103. Credit for Person Who Elects to Become Member.
3-1 A person who becomes a member of the retirement system under
3-2 Section 842.102 may not receive credit for service performed before
3-3 membership except as provided by Section 843.102(a)(2) or 843.204.
3-4 SECTION 4. Section 842.108, Government Code, is amended to
3-5 read as follows:
3-6 Sec. 842.108. Withdrawal of Contributions. (a) A person
3-7 who is not an employee of any participating subdivision and who has
3-8 not retired may, after application, withdraw all of the accumulated
3-9 contributions credited to the person's individual account in the
3-10 employees saving fund, and the retirement system shall close the
3-11 account.
3-12 (b) If a person to whom a withdrawal would be paid under
3-13 this section or Section 844.401 elects to have all or a portion of
3-14 the accumulated contributions paid directly to an eligible
3-15 retirement plan and specifies the eligible retirement plan to which
3-16 the contributions are to be paid on forms approved for that purpose
3-17 by the board of trustees, the retirement system shall make the
3-18 payment in the form of a direct trustee-to-trustee transfer but is
3-19 under no obligation to determine whether the other plan in fact is
3-20 an eligible retirement plan for that purpose.
3-21 SECTION 5. Section 842.110, Government Code, is amended to
3-22 read as follows:
3-23 Sec. 842.110. Resumption of Service by Retiree. (a) A
3-24 person who has retired with a service retirement benefit under this
3-25 subtitle shall, if the person later becomes an employee of any
4-1 participating subdivision, become a member of the system on the
4-2 date of employment, but credits and benefits allowable to the
4-3 person under this subtitle are limited as provided by this section.
4-4 (b) The retirement system shall discontinue and suspend
4-5 payments of each service retirement annuity allowed because of the
4-6 person's previous service beginning with the month following the
4-7 month in which the person again becomes a member under Subsection
4-8 (a). The retirement system may not make payments of the annuity
4-9 for any month during which the person remains an employee of a
4-10 participating subdivision.
4-11 (c) Member contributions under Section 845.403 shall be made
4-12 on all compensation paid to the employee by the subdivision at the
4-13 same rate as required of other employees of the subdivision. The
4-14 contributions shall be deposited by the retirement system on
4-15 receipt in an individual account for the member in the employees
4-16 saving fund and shall be credited with interest annually at the
4-17 same rate and manner as are the accounts of other members. The
4-18 compensation paid to the employee by the subdivision shall be
4-19 included in computing the monthly contributions the subdivision
4-20 makes to the subdivision accumulation fund.
4-21 (d) After termination of employment with all participating
4-22 subdivisions and after filing of an application for resumption of
4-23 retirement with the board of trustees, a person described by
4-24 Subsection (a) is entitled to receive future payments of the
4-25 suspended annuity, as provided by Subsection (e), and to the
5-1 additional benefits as provided by Subsections (f) and (g).
5-2 (e) Monthly payments of the suspended annuity shall be
5-3 resumed in the month following the month in which employment is
5-4 terminated with all participating subdivisions, without change in
5-5 the amount except for any increase allowed under Section 844.208 or
5-6 the duration of or other condition pertaining to the suspended
5-7 benefit. Payment of the resumed benefit may not be made for any
5-8 month during which the payment was suspended under this section.
5-9 (f) If a person with credited service under this section
5-10 dies before a payment under Subsection (g) is made, the person's
5-11 beneficiary, or if there is no beneficiary surviving, the executor
5-12 or administrator of the person's estate, may elect payment as
5-13 provided by Section 844.105(c).
5-14 (g) The additional service retirement benefit allowable to a
5-15 person to whom this section applies is, at the option of that
5-16 person, either a refund of accumulated contributions made since
5-17 reemployment plus any accrued interest on the accumulated
5-18 contributions allowed by the retirement system or a benefit
5-19 consisting of a basic annuity actuarially determined from the sum
5-20 of the member's deposits made and accumulated since the date of
5-21 last becoming a member and current service credit computed on the
5-22 amount of the deposits and a supplemental annuity actuarially
5-23 determined from the multiple matching credit applicable to the
5-24 amount of contributions made and accumulated with interest in the
5-25 person's individual account since last becoming a member. The
6-1 additional benefit is payable as a standard service retirement
6-2 benefit or, at the election of the member, any optional benefit
6-3 authorized under this subtitle that is the actuarial equivalent of
6-4 the standard retirement benefit. The first benefit payment date
6-5 under this section is the end of the month following the last month
6-6 of employment if the person files an application not less than 60
6-7 days before the payment date and has not resumed employment with
6-8 any participating subdivision in a position that would make the
6-9 person an employee.
6-10 (h) If a person becomes an employee of any participating
6-11 subdivision within one calendar month after that person's effective
6-12 date of retirement, the person is considered not to have retired,
6-13 and the person's membership shall be restored. The retirement
6-14 system shall deduct the sum of one-half of the basic annuity
6-15 payments made before the membership is restored from the person's
6-16 individual account in the employees saving fund and shall transfer
6-17 that amount to the current service annuity reserve fund. The
6-18 retirement system shall reduce the person's maximum prior service
6-19 credit by an amount equal to the sum of the prior service annuity
6-20 payments made before the membership is restored, divided by the
6-21 product of the subdivision's allocated prior service credit
6-22 percentage multiplied by the interest factor for interest from the
6-23 subdivision's participation date to the person's effective
6-24 retirement date, both of which were used in computing the amount of
6-25 the prior service annuity. <A person who has retired under this
7-1 subtitle because of service may not rejoin the retirement system or
7-2 earn additional retirement benefits by reason of subsequent
7-3 employment.>
7-4 SECTION 6. Section 843.203, Government Code, is amended to
7-5 read as follows:
7-6 Sec. 843.203. Adjustment of Obligations Between Successive
7-7 Employers. (a) The governing body of a subdivision that has taken
7-8 over the facilities of a hospital, utility, or other public
7-9 facility formerly operated by another participating subdivision may
7-10 assume in whole or in part the obligations that the former employer
7-11 had undertaken under this subtitle by reason of service performed
7-12 by members of the system who become employees of the subdivision
7-13 seeking to participate in the system. A subdivision participating
7-14 in the system that could have assumed the obligations of another
7-15 subdivision had this section been in effect at time of
7-16 participation may assume in whole or in part the obligations that
7-17 the subdivision that was the first employer had undertaken by
7-18 reason of service rendered by members who became employees of the
7-19 subdivision that is the second employer. Assumptions under this
7-20 section shall be by written agreement between the affected
7-21 subdivisions and are subject to approval of the board of trustees.
7-22 (b) If the board of trustees determines, on the basis of
7-23 computations made by the actuary, that the tangible assets made
7-24 available by the successor subdivision to assume the obligations
7-25 that the first employer had undertaken are materially in excess of
8-1 the assumed obligation, the board may direct that a portion of the
8-2 excess be transferred from the account of the first employer in the
8-3 subdivision accumulation fund to the account of the successor
8-4 subdivision in that fund.
8-5 SECTION 7. Subchapter C, Chapter 843, Government Code, is
8-6 amended by adding Section 843.204 to read as follows:
8-7 Sec. 843.204. PREMEMBERSHIP CREDIT FOR OVERAGE EMPLOYEES.
8-8 (a) The governing body of a participating subdivision by order or
8-9 resolution may authorize the establishment of current service
8-10 credit in the retirement system for any member for service
8-11 performed for the subdivision before the date of the person's
8-12 membership if the person was employed by the subdivision before
8-13 September 1, 1987, and at the time of employment was older than the
8-14 maximum age for required membership. The member may deposit to the
8-15 member's individual account in the employees saving fund with the
8-16 retirement system for each month of premembership service for which
8-17 current service credit is authorized, an amount not exceeding the
8-18 deposit for that month that the person would have made had the
8-19 person then been a member of the system.
8-20 (b) The governing body of a subdivision may adopt the
8-21 provisions of this section:
8-22 (1) on the terms provided by Subchapter H of Chapter
8-23 844; or
8-24 (2) if the board of trustees determines that,
8-25 according to the computations of the actuary approved by the board
9-1 of trustees, the adoption would not impair the ability of the
9-2 subdivision to fund all obligations against its account in the
9-3 subdivision accumulation fund before the 25th anniversary of the
9-4 subdivision's most recent actuarial valuation date.
9-5 SECTION 8. Section 844.003, Government Code, is amended by
9-6 amending Subsections (a) and (c) and adding Subsection (d) to read
9-7 as follows:
9-8 (a) Except as provided by Subsections <Subsection> (b) and
9-9 (d), the effective date of a member's service retirement is the
9-10 date the member designates at the time the member applies for
9-11 retirement under Section 844.101, but the date must be the last day
9-12 of a calendar month and may not precede the date the member
9-13 terminates employment with all participating subdivisions.
9-14 (c) Except as provided by Subsections <Subsection> (b) and
9-15 (d), the effective date of a member's disability retirement is the
9-16 date designated on the application for retirement filed by or for
9-17 the member as provided by Section 844.301, but the date may not
9-18 precede the date the member terminates employment with all
9-19 participating subdivisions.
9-20 (d) If a person who has attained age 70-1/2 terminates
9-21 covered employment without applying for retirement, the retirement
9-22 system shall attempt to notify that person in writing and advise
9-23 the person that the person is required to retire. If, before the
9-24 91st day after the date the retirement system sends the notice, the
9-25 person has not filed an application with the board for retirement,
10-1 the person is considered to have retired on the last day of the
10-2 month in which the person terminated employment with all
10-3 participating subdivisions and:
10-4 (1) to have elected to receive an annuity under
10-5 Section 844.103, if the person did not have a spouse on the date of
10-6 employment termination; or
10-7 (2) if the person had a spouse on the date of
10-8 employment termination, to have elected to receive an annuity under
10-9 Section 844.104(c)(1) and to have designated the person's spouse as
10-10 the beneficiary under the annuity.
10-11 SECTION 9. Section 844.006, Government Code, is amended by
10-12 amending Subsections (a) and (c) and adding Subsections (d) and (e)
10-13 to read as follows:
10-14 (a) A retiree who is receiving payments of a standard
10-15 service or disability retirement annuity or of an annuity for the
10-16 retiree's life but with payments to continue after the retiree's
10-17 death until a determined number of payments have been made may<,
10-18 with the consent of the retiree's spouse if there is one,> revoke
10-19 any existing selection and designation of beneficiary nominated to
10-20 receive any <monthly> payments that may become due under the
10-21 annuity after the retiree's death and may select a new beneficiary
10-22 to whom <monthly> payments may be made.
10-23 (c) Any selection and designation of beneficiary under
10-24 Subsection (a) or (b) <this section> must be in writing on forms
10-25 prescribed by the board of trustees and becomes effective on filing
11-1 with the director.
11-2 (d) If a qualified domestic relations order, as that term is
11-3 defined by Section 804.001, so provides, the benefit payable to a
11-4 retiree who is receiving payments of an annuity for the retiree's
11-5 life with payments to continue after the retiree's death until the
11-6 death of another person under Option 1, 2, 4B, or 4C, as defined by
11-7 Section 103.2, Title 34, Texas Administrative Code, may be divided
11-8 by the retirement system into two annuities if:
11-9 (1) the person who was designated to receive the
11-10 continued payment after the retiree's death is the same person as
11-11 the alternate payee;
11-12 (2) the domestic relations order specifies that one of
11-13 the two annuities is payable over the remaining life of the
11-14 retiree, with no payments to be made under that annuity after the
11-15 death of the retiree;
11-16 (3) the domestic relations order specifies that the
11-17 annuity payable to the alternate payee is payable over the
11-18 remaining life of that person, with no payments to be made under
11-19 that annuity after the death of the alternate payee named in the
11-20 order; and
11-21 (4) the domestic relations order specifies that the
11-22 portion of the benefit payable to the alternate payee is stated as
11-23 a fixed percentage of the present benefit payable to the retiree,
11-24 which percentage may not exceed, as applicable:
11-25 (A) 25 percent of an Option 4B benefit;
12-1 (B) 50 percent of an Option 2 benefit; or
12-2 (C) 75 percent of an Option 4C benefit.
12-3 (e) The division of an annuity under Subsection (d) is
12-4 effective when the order is determined by the retirement system to
12-5 be a qualified domestic relations order, and the amount of each of
12-6 the two annuities shall be computed by the retirement system at
12-7 that time, based on tables that have been adopted by the retirement
12-8 system and in effect at that time, so that the two annuities are
12-9 actuarially equivalent at the time of division to the annuity being
12-10 divided.
12-11 SECTION 10. The section heading to Section 844.006,
12-12 Government Code, is amended to read as follows:
12-13 Sec. 844.006. CHANGE OF BENEFICIARY OR DIVISION OF BENEFIT
12-14 FOR CERTAIN PERSONS RECEIVING MONTHLY BENEFITS <OF GUARANTEED-TERM
12-15 ANNUITY>.
12-16 SECTION 11. Subchapter A, Chapter 844, Government Code, is
12-17 amended by adding Section 844.008 to read as follows:
12-18 Sec. 844.008. LIMITATION ON PAYMENT OF BENEFITS. (a) In
12-19 this section:
12-20 (1) "Annual benefit" means the total of all annuity
12-21 payments by the retirement system to an annuitant during a calendar
12-22 year, including any distributive benefit payments.
12-23 (2) "Compensation" has the meaning assigned by Section
12-24 415, Internal Revenue Code, and the regulations adopted under that
12-25 section, not to exceed the limitations provided by Section
13-1 401(a)(17) of that code, instead of the meaning assigned by
13-2 Section 841.001.
13-3 (3) "Highest average annual compensation" means the
13-4 average compensation for the three consecutive calendar years of
13-5 service that produces the highest average.
13-6 (4) "Internal Revenue Code" means the Internal Revenue
13-7 Code of 1986 (Title 26, United States Code).
13-8 (b) If the amount of any benefit payment under this subtitle
13-9 would exceed the limitations provided by this section, the
13-10 retirement system shall reduce the amount of the benefit in
13-11 accordance with this section.
13-12 (c) Except as otherwise provided by this section, a benefit
13-13 is adjusted to an actuarially equivalent straight life annuity for
13-14 the purpose of determining limitations under this section. An
13-15 actuarial adjustment to a benefit is not required for the value of
13-16 a qualified joint and survivor annuity and the value of
13-17 postretirement cost-of-living increases made in accordance with
13-18 Section 415, Internal Revenue Code.
13-19 (d) Except as provided by Subsections (f), (h), and (i), an
13-20 annual benefit payable by the retirement system may not exceed the
13-21 lesser of:
13-22 (1) $112,221, or another amount as adjusted each
13-23 January 1 by the secretary of the treasury under Section 415 of the
13-24 Internal Revenue Code for cost-of-living increases after January 1,
13-25 1992; or
14-1 (2) 100 percent of the former member's highest average
14-2 annual compensation.
14-3 (e) If payment of a benefit begins before a member attains
14-4 age 62, the dollar limitation is the actuarial equivalent of an
14-5 annual benefit beginning at age 62 as described by Subsection
14-6 (d)(1) for a person at age 62. A reduction under this subsection
14-7 may not reduce the dollar limitation below $75,000 if the benefit
14-8 begins at or after age 55 or, if the benefit begins before age 55,
14-9 the actuarial equivalent of a $75,000 limitation beginning at age
14-10 55.
14-11 (f) If payment of a benefit begins after the member attains
14-12 age 65, the dollar limitation is the actuarial equivalent of an
14-13 annual benefit beginning at age 65 as described by Subsection
14-14 (d)(1).
14-15 (g) To determine actuarial equivalence, the interest rate
14-16 assumption under Subsection (c) or (e) is the greater of the rate
14-17 specified by Section 845.314(a) or five percent, and the interest
14-18 rate assumption under Subsection (f) is the lesser of those rates.
14-19 (h) The limitations provided by Subsections (d), (e), and
14-20 (f) do not apply to any portion of an annual benefit payable by the
14-21 retirement system that is paid from the balance in the member's
14-22 individual account in the employees saving fund as of December 31,
14-23 1985, or from interest credited to the member's account after
14-24 December 31, 1985, as a result of deposits before that date.
14-25 (i) This section may not be applied to reduce the annual
15-1 benefit payable to any person who retired under the retirement
15-2 system before January 1, 1994, or to reduce the vested accrued
15-3 benefit as of December 31, 1993, of any person who was a member of
15-4 the retirement system on that date.
15-5 (j) If the Internal Revenue Code is amended in such a manner
15-6 that limitations similar to those provided by this section are not
15-7 required of governmental retirement plans to constitute qualified
15-8 plans, the board of trustees may by rule eliminate all or any
15-9 portion of the limitations provided by this section.
15-10 (k) An employer may not provide employee retirement or
15-11 deferred benefits to the extent that, when considered together with
15-12 the benefits authorized by this subtitle as required by the
15-13 Internal Revenue Code, would result in the failure of the
15-14 retirement system's plan to meet federal qualification standards as
15-15 applied to governmental retirement plans.
15-16 SECTION 12. Section 844.104, Government Code, is amended by
15-17 redesignating Subsections (d), (e), and (f) as Subsections (i),
15-18 (j), and (k), redesignating and amending Subsection (g) as
15-19 Subsection (l), and adding new Subsections (d)-(h) and (m)-(n) to
15-20 read as follows:
15-21 (d) If a person selects, or if a person's death before
15-22 retirement results in the payment of, an optional annuity providing
15-23 for payment of a fixed number of monthly payments to the person's
15-24 beneficiary or estate if the person dies before the total number of
15-25 payments has been completed, the option is limited as provided by
16-1 Subsections (e), (f), (g), and (h).
16-2 (e) If the joint life expectancy of the person making the
16-3 selection and of the designated beneficiary, according to mortality
16-4 tables adopted by the Internal Revenue Service, at the time of the
16-5 person's retirement is less than the minimum period that monthly
16-6 payments would be required under the option selected, the person
16-7 must select another option so that the minimum period that monthly
16-8 payments would be required does not exceed the joint life
16-9 expectancy of the person making the selection and of the designated
16-10 beneficiary.
16-11 (f) If the life expectancy according to mortality tables
16-12 adopted by the Internal Revenue Service of a person to whom a
16-13 benefit will be paid as the result of a member's death before
16-14 retirement is less at the time of the member's death than the
16-15 minimum period that monthly payments would be required under the
16-16 option selected, the retirement system shall adjust the minimum
16-17 period that monthly payments will be required to a period that is
16-18 not less than 60 months and that is the greatest multiple of 12
16-19 months that does not exceed the life expectancy of the person to
16-20 whom the benefit will be paid. The amount of the monthly payment
16-21 shall be adjusted to the actuarial equivalent of the payments that
16-22 would be made for the greater number of months.
16-23 (g) If the person making the selection designates the
16-24 person's estate as beneficiary and if the life expectancy according
16-25 to mortality tables adopted by the Internal Revenue Service of that
17-1 person is less than the minimum period that monthly payments would
17-2 be required under the option selected, the person must select
17-3 another option so that the minimum period that monthly payments
17-4 would be required does not exceed the person's life expectancy at
17-5 the time of the person's retirement.
17-6 (h) If an estate will be paid monthly benefits as the result
17-7 of a member's death before retirement for a period that would
17-8 exceed 60 months, the period for which the payments will be made
17-9 shall be reduced to 60 months, and the amount of the monthly
17-10 payment to the estate is the actuarial equivalent of the payments
17-11 that would have been made for the greater number of months.
17-12 (i) To select an optional service retirement annuity, a
17-13 member or retiree must make the selection and designate a
17-14 beneficiary on a form prescribed by and filed with the board of
17-15 trustees before the 31st day after the effective date of
17-16 retirement.
17-17 (j) <(e)> A retiree who dies before the 31st day after the
17-18 effective date of service retirement and who did not select an
17-19 optional service retirement annuity before death is considered to
17-20 have selected an optional annuity under Subsection (c)(4).
17-21 Alternatively, the decedent's beneficiary may elect to receive a
17-22 refund of the decedent's accumulated contributions under Section
17-23 844.401, in which case the decedent will be considered to have been
17-24 a contributing member at the time of death.
17-25 (k) <(f)> If monthly payments of an optional service
18-1 retirement annuity cease before the sum of all of the monthly
18-2 payments equals or exceeds the amount of accumulated contributions
18-3 in the individual account in the employees saving fund at the time
18-4 of retirement of the member on whose service the annuity was based,
18-5 a lump-sum benefit equal to the amount by which the accumulated
18-6 contributions exceed the sum of all monthly payments made under the
18-7 annuity is payable:
18-8 (1) to the designated beneficiary, if living, or if
18-9 not living, to the estate of the designated beneficiary, if the
18-10 designated beneficiary survived the retiree; or
18-11 (2) to the estate of the retiree, if the designated
18-12 beneficiary predeceased the retiree.
18-13 (l) <(g)> The benefit provided by Subsection (k) <(f)> is
18-14 payable from the current service annuity reserve fund and the
18-15 subdivision accumulation fund in the ratio described by Section
18-16 844.402(c).
18-17 (m) If a retiring member selects an optional annuity under
18-18 Subsection (c) that is payable after the retiree's death throughout
18-19 the life of a beneficiary who is not the retiree's spouse, payments
18-20 to the beneficiary after the retiree's death may not exceed the
18-21 applicable percentage of the annuity payment that would have been
18-22 payable to the retiree using the following table:
18-23 Excess of age of retiree Applicable
18-24 over age of beneficiary: percentage:
18-25 less than 11 years 100 percent
19-1 at least 11 years but less than 20 years 75 percent
19-2 20 years or more 50 percent
19-3 (n) Unless the retiree's spouse is the designated
19-4 beneficiary of an optional annuity under Subsection (c) that
19-5 guarantees a fixed number of monthly payments, the guaranteed
19-6 number of payments may not exceed the applicable period using the
19-7 following table:
19-8 Maximum number
19-9 of guaranteed
19-10 Age of retiree: monthly payments:
19-11 less than 84 180
19-12 at least 84 but less than 91 120
19-13 91 or more 60
19-14 SECTION 13. Section 844.209, Government Code, is amended by
19-15 amending Subsection (b) and adding Subsection (e) to read as
19-16 follows:
19-17 (b) If a member who has sufficient credited service
19-18 performed for subdivisions that have adopted or are subject to this
19-19 section to entitle the member to withdraw from service, to leave on
19-20 deposit with the retirement system the member's accumulated
19-21 contributions, and, on attainment of an age prescribed by this
19-22 subtitle, to retire with a service retirement benefit dies before
19-23 becoming eligible for deferred service retirement and leaves
19-24 surviving a person whom the member has designated as beneficiary
19-25 entitled to payment of the member's accumulated contributions if
20-1 the member dies before retirement, the surviving beneficiary may by
20-2 written notice filed with the board elect to <leave the accumulated
20-3 deposits with the retirement system subject to this section. If
20-4 the accumulated deposits have not been withdrawn before the time
20-5 the member, if living, would have become entitled to service
20-6 retirement, the surviving beneficiary may elect to> receive, in
20-7 lieu of the accumulated deposits, an annuity payable during the
20-8 lifetime of the surviving beneficiary in the amount that would have
20-9 been payable to the surviving beneficiary had the member <lived
20-10 and> retired on the last day of the month preceding the month in
20-11 which death occurred <at that date> under an optional annuity
20-12 described by Section 844.104(c)(1).
20-13 (e) The benefit payable under Subsection (b) is payable as
20-14 if the member had retired on the later of December 31, 1993, or the
20-15 last day of the month preceding the month in which death occurred.
20-16 Any benefit payments under this section must begin within one year
20-17 after the later of December 31, 1993, or the last day of the month
20-18 preceding the month in which death occurred. A benefit payable
20-19 under Subsection (b) because of the death of a person who died
20-20 before January 1, 1994, is computed based on the benefit that would
20-21 have been payable if the death had occurred on January 1, 1994.
20-22 SECTION 14. Section 844.305, Government Code, is amended by
20-23 redesignating Subsections (d), (e), (f), and (g) as Subsections
20-24 (g), (h), (i), and (j), redesignating and amending Subsection (h)
20-25 as Subsection (k), and adding new Subsections (d)-(f) and (l)-(m)
21-1 to read as follows:
21-2 (d) If a person selects an optional annuity providing for
21-3 payment of a fixed number of monthly annuity payments to the
21-4 person's beneficiary or estate if the person dies before the total
21-5 number of payments has been completed, the option is limited as
21-6 provided by Subsections (e) and (f).
21-7 (e) If the joint life expectancy of the person making the
21-8 selection and of the designated beneficiary according to mortality
21-9 tables adopted by the Internal Revenue Service at the time of the
21-10 person's retirement is less than the minimum period that monthly
21-11 payments would be required under the option selected, the person
21-12 must select another option so that the minimum period that monthly
21-13 payments would be required does not exceed the joint life
21-14 expectancy of the person making the selection and of the designated
21-15 beneficiary.
21-16 (f) If the person making the selection designates the
21-17 person's estate as beneficiary and if the life expectancy according
21-18 to mortality tables adopted by the Internal Revenue Service of that
21-19 person is less than the minimum period that monthly payments would
21-20 be required under the option selected, the person must select
21-21 another option so that the minimum period that monthly payments
21-22 would be required does not exceed the person's life expectancy at
21-23 the time of the person's retirement.
21-24 (g) To select an optional disability retirement annuity, a
21-25 member or retiree must make the selection and designate a
22-1 beneficiary on a form prescribed by and filed with the board of
22-2 trustees before the 31st day after the effective date of
22-3 retirement.
22-4 (h) <(e)> A retiree who dies before the 31st day after the
22-5 effective date of disability retirement and who did not select an
22-6 optional disability retirement annuity before death is considered
22-7 to have selected an optional annuity under Subsection (c)(4).
22-8 Alternatively, the decedent's beneficiary may elect to receive a
22-9 refund of the decedent's accumulated contributions under Section
22-10 844.401, in which case the decedent will be considered to have been
22-11 a contributing member at the time of death.
22-12 (i) <(f)> If a person's disability retirement annuity is
22-13 discontinued under Section 844.307 or 844.308, the person's
22-14 selection of any optional annuity under this section becomes void.
22-15 (j) <(g)> If monthly payments of an optional disability
22-16 retirement annuity cease before the sum of all of the monthly
22-17 payments equals or exceeds the amount of accumulated contributions
22-18 in the individual account in the employees saving fund at the time
22-19 of retirement of the member on whose service the annuity was based,
22-20 a lump-sum benefit equal to the amount by which the accumulated
22-21 contributions exceed the sum of all monthly payments made under the
22-22 annuity is payable:
22-23 (1) to the designated beneficiary, if living, or if
22-24 not living, to the estate of the designated beneficiary, if the
22-25 designated beneficiary survived the retiree; or
23-1 (2) to the estate of the retiree, if the designated
23-2 beneficiary predeceased the retiree.
23-3 (k) <(h)> The benefit provided by Subsection (j) <(g) of
23-4 this section> is payable from the current service annuity reserve
23-5 fund and the subdivision accumulation fund in the ratio described
23-6 by Section 844.402(c).
23-7 (l) If a retiring member selects an optional annuity under
23-8 Subsection (c) that is payable after the retiree's death throughout
23-9 the life of a beneficiary who is not the retiree's spouse, payments
23-10 to the beneficiary after the retiree's death may not exceed the
23-11 applicable percentage of the annuity payment that would have been
23-12 payable to the retiree using the following table:
23-13 Excess of age of retiree Applicable
23-14 over age of beneficiary: percentage:
23-15 less than 11 years 100 percent
23-16 at least 11 but less than 20 years 75 percent
23-17 20 years or more 50 percent
23-18 (m) Unless the retiree's spouse is the designated
23-19 beneficiary of an optional annuity under Subsection (c) that
23-20 guarantees a fixed number of monthly payments, the guaranteed
23-21 number of payments may not exceed the applicable period using the
23-22 following table:
23-23 Maximum number
23-24 of guaranteed
23-25 Age of retiree: monthly payments:
24-1 less than 84 180
24-2 at least 84 but less than 91 120
24-3 91 or more 60
24-4 SECTION 15. Section 844.607, Government Code, is amended by
24-5 redesignating and amending Subsection (b) as Subsection (c) and
24-6 adding a new Subsection (b) to read as follows:
24-7 (b) If the governing body of the subdivision does not adopt
24-8 an order or resolution described by Subsection (c) effective on the
24-9 first day of the first calendar year that begins after the date of
24-10 the notice under Subsection (a), the actuary shall make new
24-11 determinations, provided for by Sections 844.601(b) and 844.606(b),
24-12 based on the most recent actuarial valuation. The actuary shall
24-13 give written notice of these determinations to the director, who
24-14 shall give a second written notice to the governing body of the
24-15 subdivision.
24-16 (c) The lower percentage to be used for multiple matching
24-17 credits of future member contributions as determined by the actuary
24-18 based on the most recent actuarial valuation and specified in the
24-19 second notice to the governing body becomes effective as to all
24-20 members who perform current service for the affected subdivision on
24-21 or after the first day of the second calendar year that begins
24-22 after the date of the notice under Subsection (a) and is not
24-23 earlier than January 1, 1993, unless before the effective date, the
24-24 governing body of the subdivision adopts an order or resolution,
24-25 approved by the board of trustees, authorizing additional
25-1 subdivision contributions under Section 844.605 or authorizing a
25-2 reduction in multiple matching credits under Section 844.606 or
25-3 authorizing both additional contributions and a reduction in
25-4 multiple matching credits.
25-5 SECTION 16. Section 844.702, Government Code, is amended to
25-6 read as follows:
25-7 Sec. 844.702. Member Contributions. The governing body of
25-8 the subdivision may designate the rate of member contributions for
25-9 employees of the subdivision to take effect beginning on the
25-10 effective date of adoption of the plan provisions of this
25-11 subchapter. The subdivision may elect a rate of four, five, six,
25-12 or seven percent of the current service compensation of its
25-13 employees. The governing body of the subdivision may thereafter
25-14 increase or decrease the contribution rate to take effect on the
25-15 next January 1 after the date of adoption of the increase or
25-16 decrease, <but may reduce the rate of member contributions only
25-17 after the existing rate has been in effect for five years,>
25-18 notwithstanding the provisions of Sections 845.402(c) and (d).
25-19 SECTION 17. Sections 844.703(b), (d), and (g), Government
25-20 Code, are amended to read as follows:
25-21 (b) Each subdivision adopting the plan provisions of this
25-22 subchapter shall pay to the subdivision accumulation fund, as its
25-23 prior service contribution, an amount equal to a percentage of the
25-24 compensation of members employed by the subdivision for that month.
25-25 The rate of contribution is the rate determined annually by the
26-1 actuary and approved by the board of trustees as being the rate
26-2 required to fund all unfunded obligations charged against the
26-3 subdivision's account in the subdivision accumulation fund within
26-4 the subdivision's amortization period without probable future
26-5 depletion of that account or, if there are no unfunded obligations,
26-6 the rate required to amortize any overfunded obligations in
26-7 perpetuity.
26-8 (d) The actuary annually shall determine the subdivision
26-9 normal contribution rate and the prior service contribution rate
26-10 for subdivisions adopting the plan provisions of this subchapter
26-11 from the most recent data available at the time of determination.
26-12 Before January 1 of each year, the board of trustees shall certify
26-13 the rates of each subdivision that has adopted the plan provisions
26-14 of this subchapter. If the combined rates of the subdivision's
26-15 normal contributions and prior service contributions under this
26-16 subchapter exceed the rate prescribed by Subsection (c), the rate
26-17 for prior service contributions must be reduced to the rate that
26-18 equals the difference between the maximum rate prescribed by
26-19 Subsection (c) and the normal contribution rate. If for any year
26-20 the combined rates of a subdivision's normal contribution rate and
26-21 its prior service contribution rate as determined under Subsections
26-22 (a) and (b) are less than the subdivision's employee contribution
26-23 rate, the governing body of the subdivision may elect that the
26-24 subdivision make normal contributions and prior service
26-25 contributions for that year at a combined rate equal to the
27-1 employee contribution rate for that year.
27-2 (g) If the combined rates of the subdivision's normal
27-3 contributions and prior service contributions under this subchapter
27-4 exceed the maximum rate prescribed by Subsection (c) before the
27-5 adjustment prescribed by Subsection (d), the actuary shall
27-6 determine what lower percentage for determining multiple matching
27-7 credits of future member contributions is necessary to make the
27-8 combined rates of the subdivision not exceed the maximum rate
27-9 prescribed by Subsection (c). The actuary shall give written
27-10 notice of the determination to the director, who shall give written
27-11 notice to the governing body of the subdivision. The lower
27-12 percentage determined by the actuary and specified in the notice to
27-13 the governing body becomes effective as to all members who perform
27-14 current service for the affected subdivision on or after the first
27-15 day of the first <second> calendar year that begins after the date
27-16 of the notice, unless before the effective date, the governing body
27-17 of the subdivision adopts an order or resolution, approved by the
27-18 board of trustees, authorizing a reduction in the percentage used
27-19 in determining multiple matching credits in accordance with Section
27-20 844.704(a).
27-21 SECTION 18. Section 844.704(a), Government Code, is amended
27-22 to read as follows:
27-23 (a) On the adoption of the plan provisions of this
27-24 subchapter, the governing body of the subdivision shall select a
27-25 percentage for determining multiple matching credits under Section
28-1 843.403. The governing body shall select a percentage of 0, 25,
28-2 50, 75, 100, 125, or 150 percent, or it may select the multiple
28-3 matching percentage that the subdivision has in effect on the date
28-4 of its adoption of the plan provisions of this subchapter. If a
28-5 subdivision has a current service credit percentage in excess of
28-6 100 percent, the governing body of the subdivision may elect a
28-7 percentage under this section that, when added to the current
28-8 service credit percentage, is a multiple of 25 percent, except that
28-9 the combined percentages may not exceed 250 percent. The governing
28-10 body may thereafter increase the percentage used in determining
28-11 multiple matching credits under Section 843.403 to one of the
28-12 percentages specified in this subsection, to take effect on the
28-13 next January 1 after the date of the increase. However, the sum of
28-14 the percentage for current service credits under Section 843.403
28-15 and the percentage for multiple matching credits may not exceed 250
28-16 percent. The governing body also may thereafter reduce the
28-17 percentage used in determining multiple matching credits for
28-18 contributions made after the effective date of the reduction to one
28-19 of the percentages specified in this subsection, to take effect on
28-20 the next January 1 after the date of the reduction.
28-21 SECTION 19. Section 845.206(d), Government Code, is amended
28-22 to read as follows:
28-23 (d) On the basis of tables and rates adopted by the board,
28-24 the actuary shall:
28-25 (1) compute the current interest rate in accordance
29-1 with Section 845.314; and
29-2 (2) <certify the amount of each annuity and benefit
29-3 granted by the board; and>
29-4 <(3)> make an annual valuation of the assets and
29-5 liabilities of the funds of the retirement system.
29-6 SECTION 20. Section 845.301, Government Code, is amended to
29-7 read as follows:
29-8 Sec. 845.301. Investment of Assets. The board of trustees
29-9 shall invest and reinvest the assets of the retirement system
29-10 without distinction as to their source in:
29-11 (1) interest-bearing bonds or other evidences of
29-12 indebtedness of this state, a county, school district, city, or
29-13 other municipal corporation of this state, the United States, or an
29-14 authority or an agency of the United States;
29-15 (2) securities for which the United States or any
29-16 authority or agency of the United States guarantees the payment of
29-17 principal and interest;
29-18 (3) interest-bearing bonds, notes, or other evidences
29-19 of indebtedness that are issued by a company:
29-20 (A) incorporated in the United States and that
29-21 are rated "A" or better by one or more nationally recognized rating
29-22 agencies approved by the board; or
29-23 (B) in whose stock the retirement system may
29-24 invest as provided by Subdivision (4);
29-25 (4) common or preferred stocks of a company
30-1 incorporated in the United States that has paid cash dividends on
30-2 its common stock for 10 consecutive years immediately before the
30-3 date of purchase and, unless the stocks are bank or insurance
30-4 stocks, that is listed on an exchange registered with the
30-5 Securities and Exchange Commission or its successor; <or>
30-6 (5) obligations issued, assumed, or guaranteed by the
30-7 Inter-American Development Bank, the International Bank for
30-8 Reconstruction and Development (the World Bank), the African
30-9 Development Bank, the Asian Development Bank, and the International
30-10 Finance Corporation; or
30-11 (6) real estate mortgage investment conduit securities
30-12 (REMICs) or other participation certificates issued by the Federal
30-13 National Mortgage Corporation or by the Federal Home Loan Mortgage
30-14 Corporation, evidencing an undivided beneficial interest in pools
30-15 of real estate mortgage notes that are guaranteed as to payment of
30-16 principal and interest by the issuer, or by any agency, authority,
30-17 or instrumentality of the United States, and that are to be held in
30-18 trust by the issuer for the benefit of the certificate holder.
30-19 SECTION 21. This Act takes effect January 1, 1994.
30-20 SECTION 22. The importance of this legislation and the
30-21 crowded condition of the calendars in both houses create an
30-22 emergency and an imperative public necessity that the
30-23 constitutional rule requiring bills to be read on three several
30-24 days in each house be suspended, and this rule is hereby suspended.