73R6347 SOS-F
By Conley H.B. No. 2066
Substitute the following for H.B. No. 2066:
By McCoulskey C.S.H.B. No. 2066
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the retirement system for fire fighters and police
1-3 officers in certain municipalities.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 ARTICLE 1. GENERAL PROVISIONS
1-6 SECTION 1.01. PURPOSE. The purpose of the fund is to
1-7 provide for the protection of pensions in a municipality to which
1-8 this Act applies for fire fighters and police officers and their
1-9 beneficiaries because of the hazardous nature of the professions of
1-10 fire fighting and law enforcement.
1-11 SECTION 1.02. DEFINITIONS. In this Act:
1-12 (1) "Board" means the board of trustees of a fund to
1-13 which this Act applies.
1-14 (2) "Fund" means the fire fighters and police officers
1-15 pension fund of a municipality to which this Act applies.
1-16 (3) "Retirement annuity" means monthly pension
1-17 benefits.
1-18 (4) "Surviving spouse" means a widow or a widower.
1-19 SECTION 1.03. APPLICABILITY. This Act applies to paid fire
1-20 and police departments of a municipality with a population between
1-21 750,000 and 1,000,000, according to the most recent federal census.
1-22 SECTION 1.04. STATUTORY TRUST. (a) The fund is a statutory
1-23 trust and is not a subdivision of government.
1-24 (b) The board shall hold in trust the assets of the fund for
2-1 the benefit of the members and retirees of the fund and their
2-2 beneficiaries and for defraying reasonable administrative expenses
2-3 of the fund.
2-4 (c) The fund may not be diverted, transferred, or used for
2-5 any purpose inconsistent with this Act and with the instruments
2-6 governing the fund.
2-7 (d) A public or private agency or authority may not alter or
2-8 impair any contract made by the board or under the authority or
2-9 direction of the board.
2-10 SECTION 1.05. EXEMPTIONS. A retirement annuity from the
2-11 fund is exempt from garnishment, assignment, attachment, judgments,
2-12 other legal process, and inheritance or other taxes established by
2-13 this state.
2-14 SECTION 1.06. OTHER PENSION SYSTEM ESTABLISHED BY STATE LAW.
2-15 Notwithstanding any other law, if the employees of the fire or
2-16 police department who have been members of the fund are included in
2-17 another pension system established by state law, the board shall
2-18 act for any similar board created by that law with regard to the
2-19 receipt and payment of amounts owed to the employees under this
2-20 Act. Employees of a department who are members of the fund and are
2-21 not included in the other pension system may not participate in any
2-22 payment under this section.
2-23 ARTICLE 2. ADMINISTRATIVE PROVISIONS
2-24 SECTION 2.01. BOARD OF TRUSTEES. (a) The fund is governed
2-25 by a board of trustees consisting of the following nine members:
2-26 (1) the mayor of a municipality to which this Act
2-27 applies;
3-1 (2) two members of the governing body of a
3-2 municipality to which this Act applies, appointed by that governing
3-3 body;
3-4 (3) two active fire fighters below the rank of fire
3-5 chief, elected by secret ballot by majority vote of the members of
3-6 the fire department who are contributing members of the fund;
3-7 (4) two active police officers below the rank of
3-8 police chief, elected by secret ballot by majority vote of the
3-9 members of the police department who are contributing members of
3-10 the fund;
3-11 (5) a retiree or beneficiary representative of the
3-12 fire department, elected by secret ballot by majority vote of the
3-13 retirees, or the surviving spouses of the retirees, from the fire
3-14 department; and
3-15 (6) a retiree or beneficiary representative of the
3-16 police department, elected by secret ballot by majority vote of the
3-17 retirees, or the surviving spouses of the retirees, from the police
3-18 department.
3-19 (b) The board, through its secretary, shall administer the
3-20 required elections of the retiree or beneficiary representatives by
3-21 mailing ballots to out-of-town retirees or beneficiaries. Only
3-22 retirees and surviving spouses of members properly enrolled on the
3-23 pension rolls are eligible to be elected as retiree or beneficiary
3-24 representatives.
3-25 (c) The fund is independent of the control of a municipality
3-26 to which this Act applies.
3-27 SECTION 2.02. TERMS OF TRUSTEES. (a) The mayor of a
4-1 municipality to which this Act applies serves on the board for the
4-2 term of the mayor's office.
4-3 (b) The two members of the municipal governing body serve on
4-4 the board for the term of the office to which they are elected.
4-5 (c) The two active fire fighters below the rank of fire
4-6 chief serve on the board for staggered four-year terms, with one
4-7 member's term expiring every two years.
4-8 (d) The two active police officers below the rank of police
4-9 chief serve on the board for staggered four-year terms, with one
4-10 member's term expiring every two years.
4-11 (e) The retiree or beneficiary representatives serve on the
4-12 board for staggered four-year terms, with one member's term
4-13 expiring every two years.
4-14 SECTION 2.03. REMOVAL OF TRUSTEES. (a) The members of the
4-15 board who are fire fighters or police officers may be removed by a
4-16 vote of the membership of their respective departments.
4-17 (b) The members of the board who are retiree or beneficiary
4-18 representatives may be removed by a vote of the group eligible to
4-19 elect them.
4-20 (c) A petition for removal under this section must be filed
4-21 with the board within 45 days after the date the first signature on
4-22 the petition has been obtained. A signature is invalid if it is
4-23 not dated.
4-24 (d) A removal election under this section must be held
4-25 within 30 days after the date the board certifies that a proper
4-26 petition for a removal election has been signed by at least 20
4-27 percent of the membership from which the trustee was elected. A
5-1 trustee's term of service ends on the entry of an order by the
5-2 board declaring the results of a removal election under this
5-3 section to favor removal.
5-4 (e) On the date the board enters an order under Subsection
5-5 (d) of this section, the board shall call a special election to be
5-6 held not less than 20 nor more than 30 days after that date to fill
5-7 the vacancy for the unexpired term of the trustee who was removed.
5-8 The trustee who was removed is not eligible to run in the special
5-9 election but is eligible to run in all subsequent board elections
5-10 for the category in which the trustee was removed.
5-11 SECTION 2.04. OFFICERS. (a) The board shall elect a
5-12 chairman, a vice-chairman, and a secretary.
5-13 (b) The treasurer of the board is the treasurer of a
5-14 municipality to which this Act applies.
5-15 SECTION 2.05. EMPLOYEES. The board may employ an executive
5-16 director and staff as needed to administer the fund.
5-17 SECTION 2.06. MEETINGS. The board shall hold regular
5-18 monthly meetings and special meetings at the call of the chairman
5-19 or on written demand by a majority of the members of the board.
5-20 SECTION 2.07. COMMITTEES OF BOARD. (a) The chairman of the
5-21 board may appoint committees that report to the board.
5-22 (b) Only members of the board may be appointed to committees
5-23 under this section.
5-24 (c) Committees shall be composed of not fewer than three nor
5-25 more than five members of the board, except as otherwise
5-26 specifically provided by the board.
5-27 (d) Only members of committees may vote as committee
6-1 members.
6-2 (e) The board may direct staff and advisors to assist the
6-3 committees.
6-4 (f) All members of the board may attend committee meetings.
6-5 (g) Members of committees serve at the pleasure of the
6-6 board.
6-7 (h) Permanent or standing committees may not be appointed.
6-8 ARTICLE 3. GENERAL POWERS AND DUTIES OF BOARD
6-9 SECTION 3.01. GENERAL POWERS AND DUTIES OF BOARD. (a) The
6-10 board has complete authority and power to:
6-11 (1) administer the fund;
6-12 (2) order payments from the fund as required by this
6-13 Act; and
6-14 (3) control the fund independently.
6-15 (b) The board shall adopt rules relating to:
6-16 (1) the disbursement of the fund's assets;
6-17 (2) the designation of beneficiaries of the fund; and
6-18 (3) the name of the board and the fund.
6-19 (c) The board shall report annually to the governing body of
6-20 the municipality regarding the condition of the fund and the
6-21 receipts and disbursements of the fund.
6-22 SECTION 3.02. APPLICATIONS; HEARINGS. (a) The board shall
6-23 consider all cases for membership in the fund and for the
6-24 retirement and benefits of the members of the fund and all
6-25 applications for benefits by surviving spouses, children, and
6-26 dependent parents.
6-27 (b) The board shall give notice to persons asking for
7-1 membership in the fund or for a benefit to appear before the board
7-2 and offer sworn evidence.
7-3 (c) Any contributing member of the fund who is in good
7-4 standing in the fire or police department may:
7-5 (1) appear in person or by attorney to contest the
7-6 application for membership participation in the fund or for an
7-7 annuity or benefit by any person claiming to be entitled to an
7-8 annuity or benefit, either as a member or beneficiary; and
7-9 (2) offer supporting testimony.
7-10 (d) The chairman of the board may issue process for
7-11 witnesses, administer oaths to those witnesses, and examine any
7-12 witness in any manner affecting retirement or a benefit under this
7-13 Act. The process for witnesses may be served on any member of the
7-14 fire or police department. On the failure of any witness to attend
7-15 and testify, that person may be compelled to attend and testify as
7-16 in any judicial proceeding, according to the practice in a justice
7-17 court.
7-18 SECTION 3.03. ORDERS FOR DISBURSEMENTS. (a) The board
7-19 shall issue orders for disbursements signed by the chairman or
7-20 vice-chairman of the board and the secretary of the board to the
7-21 appropriate persons. The order shall state the purposes for the
7-22 payments. The board shall keep a record of those orders.
7-23 (b) At each monthly board meeting, the board shall send to
7-24 the treasurer of the board a written list of persons entitled to
7-25 the payment from the fund, stating the amount and reason for
7-26 payment. The list must be certified and signed by the chairman or
7-27 vice-chairman of the board and the secretary of the board.
8-1 (c) The fund may not be disbursed without a record vote of
8-2 the board.
8-3 (d) A quorum of the board is five members. When a quorum is
8-4 present, action of the board that requires a vote may be taken by a
8-5 majority of the members present.
8-6 ARTICLE 4. MEMBERSHIP AND CONTRIBUTIONS
8-7 SECTION 4.01. MEMBERSHIP. (a) A person becomes a member of
8-8 the fund as a condition of employment if the person:
8-9 (1) has been properly appointed and enrolled as a fire
8-10 fighter or police officer of a municipality to which this Act
8-11 applies in a position or office established and classified by
8-12 municipal ordinance;
8-13 (2) has served the probationary period for the
8-14 position;
8-15 (3) has served for six months as a fire fighter or
8-16 police officer of the municipality; and
8-17 (4) was not younger than 18 and had not attained the
8-18 age of 36 at the time of appointment.
8-19 (b) The drawing of compensation by an officer or employee in
8-20 the fire or police department for service in that department does
8-21 not of itself make that person a member of the fund.
8-22 (c) The regularity of an appointment as a fire fighter or
8-23 police officer of a municipality to which this Act applies may not
8-24 be presumed from the serving of the full probationary period, if
8-25 any. The service of the probationary period by an officer or
8-26 employee as a fire fighter or police officer of a municipality to
8-27 which this Act applies does not constitute the creation of a
9-1 position or office to which a proper appointment has been made for
9-2 purposes of this Act.
9-3 SECTION 4.02. REINSTATEMENT. A former fund member who has
9-4 reentered the fire or police department may not be barred from
9-5 membership in the fund because of age as long as the member can
9-6 qualify for a 30-year pension on or before the member's 65th
9-7 birthday.
9-8 SECTION 4.03. MILITARY SERVICE. (a) A member of the fund
9-9 who enters active military service may not:
9-10 (1) be required to make the monthly payments into the
9-11 fund provided by this Act as long as the member is engaged in
9-12 active military service; or
9-13 (2) lose any seniority rights or retirement benefits
9-14 provided by this Act by virtue of that military service.
9-15 (b) Not later than the 90th day after the date of the
9-16 member's reinstatement to an active status in the fire or police
9-17 department, the member must file with the secretary of the board a
9-18 written statement of intent to pay into the fund an amount equal to
9-19 what the member would have paid if the member had remained on
9-20 active status in the department during the period of the member's
9-21 absence in military service.
9-22 (c) The member must make the payment described by Subsection
9-23 (b) of this section in full within an amount of time after the
9-24 member's return that is equal to twice the amount of time the
9-25 member was absent, except that the maximum period for payment may
9-26 not exceed four years.
9-27 (d) Except as provided by Subsection (f) of this section, if
10-1 the member does not comply with Subsections (b) and (c) of this
10-2 section, the member shall lose all credit toward the member's
10-3 retirement annuity for the length of time the member was engaged in
10-4 active military service.
10-5 (e) The amount of credit purchased under this section may
10-6 not exceed the length of the active military service authorized by
10-7 law.
10-8 (f) If a member does not make the payment required under
10-9 Subsection (c) of this section within the required amount of time
10-10 and the member is eligible for credit under federal law, the member
10-11 shall also pay interest, compounded annually, on the then current
10-12 rate of a member's contribution from the date the payment was
10-13 required to the date the payment was made. The board shall set the
10-14 rate of interest.
10-15 (g) A disability resulting from either injury or disease
10-16 contracted while engaged in military service does not entitle a
10-17 member to a disability retirement annuity.
10-18 (h) A municipality to which this Act applies shall
10-19 double-match payments made to the fund under this section.
10-20 SECTION 4.04. MEMBER CONTRIBUTIONS. There shall be deducted
10-21 from the wages of each fire fighter and police officer in the
10-22 employment of a municipality to which this Act applies a percentage
10-23 of the member's total salary, excluding overtime pay, according to
10-24 the following schedule:
10-25 (1) 11.16 percent for full pay periods after September
10-26 30, 1993, but before October 1, 1994;
10-27 (2) 11.32 percent for full pay periods after September
11-1 30, 1994, but before October 1, 1995;
11-2 (3) 11.50 percent for full pay periods after September
11-3 30, 1995, but before October 1, 1996;
11-4 (4) 11.66 percent for full pay periods after September
11-5 30, 1996, but before October 1, 1997;
11-6 (5) 11.82 percent for full pay periods after September
11-7 30, 1997, but before October 1, 1998;
11-8 (6) 12 percent for full pay periods after September
11-9 30, 1998, but before October 1, 1999;
11-10 (7) 12.16 percent for full pay periods after September
11-11 30, 1999, but before October 1, 2000;
11-12 (8) 12.32 percent for full pay periods after September
11-13 30, 2000, but before October 1, 2001; and
11-14 (9) 12.50 percent for full pay periods after September
11-15 30, 2001.
11-16 SECTION 4.05. MUNICIPAL CONTRIBUTIONS. (a) A municipality
11-17 to which this Act applies shall pay into the fund an amount equal
11-18 to double the sum total of all member contributions made in
11-19 accordance with Section 4.04 of this Act.
11-20 (b) The payments into the fund by the municipality, both as
11-21 to deductions and double-matching amounts, shall be made on the
11-22 same day the contributions are deducted from the members' pay.
11-23 (c) Any donations made to the fund, and all funds received
11-24 from any source for the fund, shall be deposited in the fund at the
11-25 earliest opportunity.
11-26 (d) The municipality's double-matching amount under this
11-27 section is in place of all other payments previously required by
12-1 law to be made by the municipality.
12-2 (e) The municipal contribution and retirement annuities are
12-3 a part of the compensation for services rendered to the
12-4 municipality. This Act is of the essence of the contract of
12-5 employment and appointment of the fire fighters and police officers
12-6 of a municipality to which this Act applies.
12-7 SECTION 4.06. DEFICIENCY PAYMENT BY MUNICIPALITY. A
12-8 municipality to which this Act applies shall pay the deficiency, if
12-9 any, between the amount available to pay all retirement annuities
12-10 and other benefits owed under this Act and the amount required by
12-11 this Act to pay those benefits.
12-12 SECTION 4.07. NO REFUND OF CONTRIBUTIONS. A member of the
12-13 fund is not entitled to any refund from the fund of any portion of
12-14 the money deducted from the member's pay for the benefit of the
12-15 fund. That money is public money and the property of the fund for
12-16 the benefit of the members qualifying for benefits and for their
12-17 beneficiaries.
12-18 ARTICLE 5. MEMBER BENEFITS
12-19 SECTION 5.01. RETIREMENT BENEFITS. (a) If a member of the
12-20 fund has contributed a portion of that member's salary as provided
12-21 by this Act, and has contributed and served for 20 years or more in
12-22 the fire or police department, the board shall, on the application
12-23 of the member for a retirement annuity, authorize a retirement
12-24 annuity to the member.
12-25 (b) The board shall compute the retirement annuity of a
12-26 member who retires after September 30, 1991, on the basis of the
12-27 average of the member's total salary, excluding overtime pay, for
13-1 the highest three years of the last five years, computed from the
13-2 date of retirement, of the member's pay at the rate of two percent
13-3 for each of the first 20 years served, plus 3-1/2 percent for each
13-4 of the next 10 years served, plus one percent for each of the next
13-5 five years served, with fractional years prorated based on full
13-6 months served as a contributing member, but the annuity may not
13-7 exceed, as of the date of retirement, 80 percent of the average so
13-8 determined.
13-9 (c) A member may not receive an award from the fund for
13-10 service retirement until the member has served at least 20 years in
13-11 the fire or police department and has also contributed the required
13-12 amount of money for at least 20 years. In determining the number
13-13 of years of service in a department, the member shall be given full
13-14 credit for the time the member was actively engaged in military
13-15 service in accordance with Section 4.03 of this Act. Disciplinary
13-16 suspensions of 15 days or less may not be subtracted from a
13-17 member's service credit under this Act if the member has paid into
13-18 the fund within 30 days after the termination date of each
13-19 suspension a sum of money equal to the amount of money that would
13-20 have been deducted from that person's salary during that period of
13-21 suspension if it had not been for that suspension. A municipality
13-22 to which this Act applies shall double-match a payment made under
13-23 this subsection.
13-24 (d) If a member of the fire or police department has served
13-25 for 30 years or more in either department and has contributed a
13-26 portion of that member's salary as provided by this Act for the
13-27 same period, that member is retired automatically from service on
14-1 the member's 65th birthday.
14-2 (e) If, on a member's 65th birthday, the member has served
14-3 less than 30 years in either department and has not contributed a
14-4 portion of that member's salary as provided by this Act for that
14-5 period, the member may continue service and contributions until the
14-6 total service equals and the contributions have been made for 30
14-7 years.
14-8 (f) Except as provided by Subsection (g) of this section,
14-9 members of the fund at the time of their retirement shall receive
14-10 service credit for all unused sick leave accumulated by them under
14-11 Chapter 143, Local Government Code, and its subsequent amendments,
14-12 with fractional years prorated based on full months of sick leave.
14-13 (g) The retirement annuity for a member under Subsection (f)
14-14 of this section may not exceed, as of the date of retirement, 80
14-15 percent of the average, determined under that subsection and under
14-16 the ordinances of a municipality to which this Act applies, that
14-17 exceeds 90 days of accumulated sick leave.
14-18 SECTION 5.02. RETIREMENT BENEFITS AFTER CESSATION OF
14-19 MEMBERSHIP. (a) A person who has qualified for a retirement
14-20 annuity under this Act but who has subsequently ceased to be a
14-21 member of the fund or a properly enrolled member of the fire or
14-22 police department, by whatever means or for whatever reason, is
14-23 entitled to a retirement annuity from the fund that accrued to that
14-24 person before the time that person ceased to be a member of the
14-25 fund or a properly enrolled member of the fire or police department
14-26 if the person, or the person's beneficiary in the event of the
14-27 person's death, files an application for the retirement annuity
15-1 with the board within four years after the date that person ceased
15-2 to be a member of the fund or a properly enrolled member of the
15-3 fire or police department.
15-4 (b) A retirement annuity under Subsection (a) of this
15-5 section begins the first full calendar month after the month in
15-6 which the application is filed with the board.
15-7 (c) The amount of the retirement annuity under Subsection
15-8 (a) of this section is the lesser of:
15-9 (1) the amount established as of the date the person
15-10 ceased to be a member of the fund or a properly enrolled member of
15-11 the fire or police department; or
15-12 (2) the amount established as of the date the person,
15-13 or the person's beneficiary, filed an application under this
15-14 section.
15-15 SECTION 5.03. ELIGIBILITY FOR DISABILITY RETIREMENT. (a) A
15-16 member of the fund is eligible to retire and receive a disability
15-17 retirement annuity if the member:
15-18 (1) makes a written application for disability
15-19 retirement with the board;
15-20 (2) is permanently disabled through injury or disease
15-21 so as to incapacitate the member from the performance of duties and
15-22 has been off active duty for a continuous period of not less than
15-23 30 days before the date of the application for disability
15-24 retirement; and
15-25 (3) is a member in good standing of the fire or police
15-26 department in which the member is employed at the time of
15-27 retirement.
16-1 (b) A member of the fund who has a disability resulting from
16-2 injury or disease incurred while the member was engaged in active
16-3 military service is not entitled to a disability retirement annuity
16-4 based on that disability.
16-5 (c) Except as provided by Subsection (d) of this section, a
16-6 member of the fund who is on suspension and who receives a total
16-7 and permanent disability resulting from an injury or disease
16-8 incurred while the member is on suspension is eligible for a
16-9 disability retirement annuity if the suspended member makes up each
16-10 deducted contribution lost by reason of the suspension not later
16-11 than the 30th day after the date the contribution would have been
16-12 deducted from the member's pay. A municipality to which this Act
16-13 applies shall double-match all contributions made by a member under
16-14 this subsection.
16-15 (d) A member of the fund who is on indefinite suspension is
16-16 not eligible for a disability retirement annuity until the final
16-17 determination of the suspension and all appeals of that
16-18 determination are exhausted. A member of the fund who is on
16-19 indefinite suspension is not entitled to a disability retirement
16-20 annuity if the member is finally discharged. A member of the fund
16-21 who is on indefinite suspension but who is restored to duty or who
16-22 is given a suspension for a specific period is eligible for a
16-23 disability retirement annuity as provided by Subsection (a) of this
16-24 section.
16-25 (e) A member of the fund who applies for disability
16-26 retirement under this section is subject to medical examination as
16-27 determined by the board.
17-1 (f) This section does not affect any rights under Section
17-2 5.02 of this Act.
17-3 SECTION 5.04. DISABILITY RETIREMENT BENEFITS. (a) A member
17-4 who is eligible to receive a disability retirement annuity is
17-5 entitled to receive from the fund 50 percent of the average of the
17-6 member's total salary, excluding overtime pay, for the highest
17-7 three years of the last five years, computed from the date of
17-8 retirement or, if the member has served less than three years
17-9 before the date of retirement, 50 percent of the member's average
17-10 monthly salary, excluding overtime pay, or a theoretical monthly
17-11 average if service is less than a full month.
17-12 (b) All fractional years under this section are prorated
17-13 based on full months served on the fire or police department as a
17-14 contributing member of the fund.
17-15 (c) The amount of 50 percent of the average total salary,
17-16 excluding overtime pay, is the maximum amount of disability
17-17 retirement annuity for total and permanent disability.
17-18 SECTION 5.05. MEDICAL REEXAMINATION AND REDUCTION OF
17-19 DISABILITY RETIREMENT BENEFITS. (a) The board may cause a
17-20 disability retiree to undergo a medical examination or examinations
17-21 by any reputable physician or physicians selected by the board.
17-22 Based on the examination, the board shall determine whether the
17-23 disability retirement annuity shall be continued, decreased,
17-24 restored to the original amount if it had been decreased, or
17-25 discontinued, except that a disability retirement annuity may not
17-26 be discontinued unless the disability retiree has first been
17-27 accepted for reinstatement in that person's former position or
18-1 status in the fire or police department by the chief of the
18-2 respective department.
18-3 (b) For those retired because of disability before August
18-4 30, 1971, the board may change the disability retirement annuity
18-5 provided by this Act, in accordance with any change in the degree
18-6 of disability, except that the percentage used to compute the
18-7 annuity may not, except in the case of discontinuance, be reduced
18-8 to less than two percent of the base pay of a private each month,
18-9 for each year that the retiree has served and contributed a portion
18-10 of salary as provided by this Act, based on the greater of:
18-11 (1) the rate of pay at the time of the original
18-12 granting of the disability retirement annuity; or
18-13 (2) a minimum base pay of $200 each month.
18-14 (c) For those retired because of disability on or after
18-15 August 30, 1971, the disability retirement annuity may not be
18-16 reduced to less than two percent, for each year that the retiree
18-17 has served and contributed a portion of salary, of the average of
18-18 the member's total salary, excluding overtime pay, for the highest
18-19 three years of the last five years, computed from the date of
18-20 retirement, or if the member has served less than three years
18-21 before the date of retirement, 50 percent of the member's average
18-22 monthly salary, excluding overtime pay, or a theoretical monthly
18-23 average if service is less than a full month. All fractional years
18-24 shall be prorated based on full months served on the fire or police
18-25 department as a contributing member of the fund before the date of
18-26 retirement.
18-27 (d) If a disability retiree, after notice, fails to undergo
19-1 a medical examination as provided by this section, the board may
19-2 reduce or entirely discontinue the retiree's disability annuity
19-3 payments.
19-4 SECTION 5.06. REMOVAL OF DISABILITY AND WAIVER ON
19-5 REINSTATEMENT. (a) If a disability retiree applies for
19-6 reinstatement to the department from which that person retired, the
19-7 disability retiree, in addition to complying with any applicable
19-8 civil service laws, shall file a written application with the board
19-9 for a discontinuance of that person's disability retirement
19-10 annuity, subject to medical examination, indicating that the person
19-11 has recovered from the disability for which that person has been
19-12 receiving disability retirement annuity payments, and certifying to
19-13 the board that the chief of the department from which that person
19-14 was retired approves that person's reinstatement.
19-15 (b) The applicant must execute a waiver on a form prescribed
19-16 by the board in which the applicant waives a second disability
19-17 retirement annuity resulting from the same disability that was the
19-18 basis of the first disability at a higher rate than the applicant
19-19 was receiving at the time of the reinstatement for a period of
19-20 three years after reinstatement. After three years of reinstated
19-21 service, any subsequent disability retirement annuity is computed
19-22 as any other disability retirement annuity.
19-23 (c) If the applicant is required to undergo retraining and
19-24 is compensated during a period before being officially reinstated,
19-25 the applicant's monthly disability retirement annuity shall be
19-26 reduced by the amount of any monthly departmental payroll benefit,
19-27 to the extent that the latter is greater.
20-1 (d) The board may approve the discontinuance of a disability
20-2 retirement annuity as provided by this Act.
20-3 SECTION 5.07. OUTSIDE INCOME PENSION REDUCTION. (a) The
20-4 board shall require each disability retiree retiring after August
20-5 22, 1979, to provide the board annually not later than May 1 of
20-6 each year with a true and complete copy of the retiree's income tax
20-7 return for the previous year.
20-8 (b) If the retiree received income from other employment,
20-9 including self-employment, during the preceding year, the board may
20-10 reduce the retiree's disability retirement annuity by the amount of
20-11 $1 for each month for each $2 of income earned by the retiree from
20-12 the other employment during each month of the previous year, except
20-13 that the disability retirement annuity may not be decreased below
20-14 an amount based on two percent of the retiree's average salary,
20-15 excluding overtime pay, computed at the time of retirement under
20-16 Section 5.04 of this Act for each year of service in the
20-17 department.
20-18 SECTION 5.08. DISCRETION OF DEPARTMENT CHIEF FOR EMPLOYMENT
20-19 OF DISABILITY RETIREE. (a) A disability retirement annuity may
20-20 not be granted or continued if the chief of the member's department
20-21 will provide the member employment within the department
20-22 commensurate with that person's physical and mental capabilities.
20-23 (b) A determination under this section is solely within the
20-24 discretion of the department chief and must be reasonably
20-25 exercised.
20-26 SECTION 5.09. COST-OF-LIVING INCREASES. (a) At or before
20-27 its regular meeting in the month of March, the board annually shall
21-1 review the Consumer's Price Index for Moderate Income Families in
21-2 Large Cities--All Items or the nearest equivalent published by the
21-3 United States Bureau of Labor Statistics for the preceding calendar
21-4 year. If that index shows an increase during the preceding
21-5 calendar year in the cost of living as compared with that index at
21-6 the close of the previous year, the board shall order an increase
21-7 of all retirement annuities by the number of full percentage points
21-8 closest to the exact amount of the increase of that index, except
21-9 that any increased retirement annuities are payable only at the
21-10 rate of 75 percent of the applicable cost-of-living percentage for
21-11 those retirees, and the beneficiaries of those retirees, who were
21-12 retired on and after August 30, 1971.
21-13 (b) The retirement annuities to which this section applies
21-14 shall be computed as of the month of January before that March
21-15 board meeting and shall continue in effect for at least one full
21-16 year until there has been an additional increase to that
21-17 cost-of-living index and the board enters another order as provided
21-18 by this section.
21-19 (c) The cost-of-living increase paid to any retiree or
21-20 beneficiary of a member or retiree during the first full year after
21-21 the effective date of the retirement shall be prorated on the basis
21-22 of full months retired.
21-23 SECTION 5.10. INCREASE IN EXISTING RETIREMENT ANNUITIES.
21-24 Effective October 1, 1993, all retirement annuities for members who
21-25 retired before October 1, 1989, or to the combined beneficiaries of
21-26 the retirees, are increased by $100 per month.
21-27 SECTION 5.11. COORDINATION WITH FEDERAL LAW. (a) A member
22-1 or beneficiary of a member of the fund may not accrue a service
22-2 retirement annuity; disability retirement annuity; death benefit,
22-3 whether death occurs in the line of duty or otherwise; or any other
22-4 benefit under this Act in excess of the benefit limits applicable
22-5 to the fund under Section 415 of the code. The board shall reduce
22-6 the amount of any benefit that exceeds those limits by the amount
22-7 of the excess.
22-8 (b) Annual compensation for which benefits may be paid under
22-9 this Act may not exceed $200,000 for each member or another limit
22-10 applicable under Section 401(a)(17) of the code.
22-11 (c) Accrued benefits under this Act become 100 percent
22-12 vested for all members on termination of the fund or on occurrence
22-13 of another event described in Section 401(a)(17) of the code and
22-14 become 100 percent vested for a member on the date the member
22-15 becomes 65 years of age and has completed 20 years of service.
22-16 (d) Amounts representing forfeited nonvested benefits of
22-17 terminated members may not be used to increase benefits payable
22-18 from the fund but may be used to reduce contributions for future
22-19 plan years.
22-20 (e) Distribution of benefits must begin not later than April
22-21 1 of the year following the calendar year during which the member
22-22 becomes 70-1/2 years of age and must otherwise conform to Section
22-23 401(a)(9) of the code.
22-24 (f) The fund shall be administered in a manner complying
22-25 with Section 401(a)(25) of the code, relating to actuarial
22-26 assumptions.
22-27 (g) This section applies to any benefit regardless of when
23-1 accrued.
23-2 (h) The board may adopt rules to administer this section. A
23-3 rule adopted by the board under this subsection is final and
23-4 binding.
23-5 (i) In this section, "code" means the Internal Revenue Code
23-6 of 1986 and its subsequent amendments.
23-7 ARTICLE 6. DEPENDENT'S BENEFITS
23-8 SECTION 6.01. MEMBER'S BENEFICIARY RIGHTS. A member of the
23-9 fund has, in addition to all rights accruing from the person's
23-10 membership, the same right to receive benefits as a beneficiary
23-11 that a nonmember who is a beneficiary has in similar circumstances
23-12 if the member's spouse also is a member of the fund.
23-13 SECTION 6.02. DEATH BENEFIT ANNUITY FOR SURVIVING SPOUSES
23-14 AND CHILDREN. (a) If a contributing member in good standing or a
23-15 retiree dies before or after retirement, leaving a surviving
23-16 spouse, one or more children under the age of 17 years, or one or
23-17 more unmarried children 17 years of age or older but under 19 years
23-18 of age who attend a public or private educational institution, the
23-19 surviving spouse and the children are entitled to receive from the
23-20 fund the same percentage of the member's average total salary that
23-21 the member would have been entitled to receive as a retirement
23-22 annuity, except that the percentage may not exceed the percentage
23-23 to which a member with 25 years of service credit would be
23-24 entitled. One-half of the death benefit annuity under this
23-25 subsection shall be awarded to the eligible surviving spouse and
23-26 one-half to the eligible child or children.
23-27 (b) A child resulting from any marriage occurring after the
24-1 date of retirement of the member from a spouse who was not the
24-2 spouse on the date of retirement is not entitled to a retirement
24-3 annuity under this Act.
24-4 (c) If there are no children, the surviving spouse is
24-5 entitled to receive an amount not to exceed 57.50 percent of the
24-6 average total salary, excluding overtime pay, of the deceased
24-7 member computed as provided under Subsection (a) of this section.
24-8 (d) If there is no surviving spouse, the children are
24-9 entitled to receive not more than 28.75 percent of the average
24-10 total salary computed as provided under Subsection (a) of this
24-11 section, except that if the board determines on investigation that
24-12 the eligible children are destitute, the board may increase the
24-13 death benefit annuity to an amount not to exceed 40 percent of that
24-14 average total salary. The amount awarded under this subsection to
24-15 any child shall be paid by the board to the legal guardian of the
24-16 child.
24-17 (e) A surviving spouse of a member of the fund who died
24-18 before retirement is entitled to at least 50 percent of the
24-19 member's average total salary that the member would have been
24-20 entitled to receive as a retirement annuity.
24-21 (f) A surviving spouse of a member of the fund is entitled
24-22 to a death benefit annuity based on the member's retirement
24-23 benefits in effect on the date of retirement.
24-24 (g) A child of the member who is so mentally or physically
24-25 disabled as to be incapable of being self-supporting to any extent,
24-26 if otherwise qualified and regardless of age, has the rights of a
24-27 child under 17 years of age, except that any death benefit annuity
25-1 paid under this subsection to any mentally or physically disabled
25-2 child shall be reduced to the extent of any state pension or aid,
25-3 including Medicaid, or any state-funded assistance received by the
25-4 child, regardless of whether the funds were made available to the
25-5 state by the federal government. In no other instance under this
25-6 Act is a child entitled to any benefit after becoming 19 years of
25-7 age.
25-8 SECTION 6.03. LIMITATION ON AMOUNT OF SURVIVING SPOUSE'S
25-9 DEATH BENEFIT ANNUITY. (a) The death benefit annuity of a
25-10 surviving spouse of a member of the fund who is killed in the line
25-11 of duty is governed by this section.
25-12 (b) The board shall consider the finding of a municipality
25-13 to which this Act applies that a member was killed in the line of
25-14 duty as a guideline for its determination in applying this section.
25-15 On an application for survivor's benefits by a surviving spouse or
25-16 child, the fund shall pay the normal benefits payable under Section
25-17 6.02 of this Act. When a benefit is payable under this section,
25-18 the death benefit annuity shall be recomputed, applying Subsection
25-19 (c) of this section, and any deficiency payment shall be paid to
25-20 the eligible beneficiaries.
25-21 (c) Notwithstanding the formulas for computing the total
25-22 amounts of annuities otherwise provided by this section, if a
25-23 member is killed in the line of duty, the member's surviving spouse
25-24 and dependent children are entitled to a death benefit annuity
25-25 equal to the total salary, excluding overtime pay, of the member at
25-26 the time of death. Rules provided by this section relating to
25-27 qualification and disqualification for and apportionment of
26-1 benefits apply to a death benefit annuity computed under this
26-2 subsection. A death benefit annuity computed under this subsection
26-3 is subject to the same cost-of-living adjustments that apply to
26-4 pensions for service retirement.
26-5 SECTION 6.04. REMARRIAGE; BENEFITS AFTER TERMINATION OF
26-6 MARRIAGE. (a) The right of a surviving spouse or dependent child
26-7 to annuity payments under this Act terminates on the remarriage of
26-8 the surviving spouse, either statutory or common law, or on the
26-9 marriage of the child, as applicable.
26-10 (b) If the remarried surviving spouse or married dependent
26-11 child becomes unmarried, that person is entitled, on application,
26-12 to the greater of 75 percent of the annuity that was in effect on
26-13 the date of termination or a minimum annuity of $800 each month for
26-14 as long as that person remains unmarried.
26-15 SECTION 6.05. AFFIDAVIT OF MARITAL STATUS. (a) A surviving
26-16 spouse, a dependent beneficiary under this Act, or the guardian of
26-17 a surviving spouse or dependent beneficiary may be required by the
26-18 board to file an affidavit annually concerning the person's marital
26-19 status, or the marital status of the person's wards, or to give an
26-20 affidavit to the board at other times when probable cause exists to
26-21 suspect the possibility of marriage.
26-22 (b) If the surviving spouse, dependent beneficiary, or
26-23 guardian fails or refuses to file an affidavit required under
26-24 Subsection (a) of this section, or if an incomplete, incorrect, or
26-25 false affidavit is filed, the board may suspend annuity payments to
26-26 that person indefinitely until the person complies with the
26-27 requests and orders of the board.
27-1 SECTION 6.06. COMMON-LAW MARRIAGES. Common-law marriages
27-2 are not recognized under this Act and benefits may not be conferred
27-3 on common-law spouses as beneficiaries unless a declaration of
27-4 informal marriage was made under Section 1.92, Family Code, and its
27-5 subsequent amendments before the member's death.
27-6 SECTION 6.07. SURVIVING SPOUSE'S RIGHT TO SINGLE
27-7 ENTITLEMENT. Unless otherwise provided by law, a surviving spouse
27-8 is not entitled to more than one annuity from the fund.
27-9 SECTION 6.08. LUMP-SUM DEATH BENEFIT. (a) Except as
27-10 provided by Subsection (b) of this section, a surviving spouse
27-11 whose status as such resulted from any marriage after the date of
27-12 the retirement of the member is entitled to a lump-sum death
27-13 benefit because of the member's death in the amount of:
27-14 (1) $10,000 if the marriage occurred 10 years or more
27-15 before the member's death;
27-16 (2) $7,500 if the marriage occurred 7-1/2 years before
27-17 but less than 10 years before the member's death;
27-18 (3) $5,000 if the marriage occurred five years or more
27-19 but less than 7-1/2 years before the member's death; and
27-20 (4) $2,500 if the marriage occurred 2-1/2 years or
27-21 more but less than five years before the member's death.
27-22 (b) A surviving spouse under this section is not entitled to
27-23 a lump-sum death benefit if a child is entitled to receive benefits
27-24 under this Act.
27-25 SECTION 6.09. DEATH BENEFIT ANNUITIES TO DEPENDENT PARENTS.
27-26 (a) If a contributing member in good standing of the fire or
27-27 police department or a retiree dies before or after retirement and
28-1 leaves no surviving spouse or child but leaves surviving a father
28-2 and mother wholly dependent on that person for support, the
28-3 dependent father and mother are entitled to receive one-third of
28-4 the average total salary, excluding overtime pay, of the deceased
28-5 member based on the same number of years of the member's pay as is
28-6 currently provided for computations of retirement annuities under
28-7 Section 5.01(a) of this Act, the annuity to be equally divided
28-8 between the father and mother as long as they are wholly dependent.
28-9 If there is only one dependent, either father or mother, the board
28-10 shall grant the surviving dependent an annuity not to exceed
28-11 one-fourth that average total salary as computed under this
28-12 subsection.
28-13 (b) The board may, on its own initiative, make a thorough
28-14 investigation, determine the facts as to the dependency with
28-15 respect to an application for benefits made under Subsection (a) of
28-16 this section, and at any time, on the request of any beneficiary or
28-17 any contributor to the fund, reopen any award made to any member or
28-18 dependent of any member who is receiving annuity payments under
28-19 this section and discontinue those payments as to all or any of
28-20 them. The findings of the board under this section, and all
28-21 annuities granted under this section, are final on all parties
28-22 unless set aside or revoked by a court of competent jurisdiction.
28-23 SECTION 6.10. SUSPENSION RIGHTS OF DEPENDENT PARENTS. If a
28-24 member dies who is under suspension at the time of death, including
28-25 an indefinite suspension that has not become final, the member's
28-26 dependent parents have the same rights as any other member under
28-27 this Act.
29-1 SECTION 6.11. DEATH BENEFIT FOR ACTIVE MEMBER'S ESTATE. (a)
29-2 If a member of the fire or police department in active service dies
29-3 and does not leave an eligible surviving spouse, a child under 17
29-4 years of age, a child under 19 years of age who is attending
29-5 school, a mentally or physically disabled child, or a dependent
29-6 father or mother, the estate of the deceased member is entitled to
29-7 a death benefit payment in the amount of $10,000 from the fund.
29-8 (b) The death benefit under this section is not payable if
29-9 the deceased member of the fund is survived by one or more
29-10 beneficiaries.
29-11 ARTICLE 7. INVESTMENTS AND FINANCIAL PROVISIONS
29-12 SECTION 7.01. TREASURER'S DUTIES. (a) All money of the
29-13 fund is payable to the treasurer of the fund for the use of the
29-14 fund.
29-15 (b) The duties imposed on the treasurer under this Act are
29-16 additional duties for which the treasurer is liable under oath and
29-17 bond as the treasurer of a municipality to which this Act applies.
29-18 (c) The treasurer is not entitled to compensation for
29-19 serving as the treasurer of the fund.
29-20 SECTION 7.02. ACCOUNTS. The accounts of the fund and of the
29-21 members shall be kept separately.
29-22 SECTION 7.03. RESERVE RETIREMENT FUND. (a) The board shall
29-23 determine a reasonably safe amount of surplus necessary to defray
29-24 reasonable expenses of administering the fund.
29-25 (b) All other assets shall be designated as reserve
29-26 retirement funds.
29-27 (c) Only the board may invest and manage the reserve
30-1 retirement funds for the sole benefit of the plan participants and
30-2 their beneficiaries.
30-3 SECTION 7.04. INVESTMENT POWERS OF THE BOARD. (a) The
30-4 board shall cause the reserve retirement funds to be invested in a
30-5 manner consistent with the care, skill, and diligence under the
30-6 prevailing circumstances that a prudent person acting in a like
30-7 capacity and familiar with matters of the type would use in the
30-8 conduct of an enterprise with a like character and like aims.
30-9 (b) The board shall diversify the investment of the fund to
30-10 minimize the risk of large losses unless under the circumstances it
30-11 is clearly prudent not to do so. In investing the assets of the
30-12 fund, the board shall be bound by the documents and instruments
30-13 governing the fund.
30-14 (c) The board may directly manage the investments of the
30-15 fund or may choose and contract for professional management
30-16 services. If the fund owns real estate, it may, at its discretion,
30-17 establish corporations described by Section 501(c)(25), Internal
30-18 Revenue Code of 1986 (26 U.S.C. Section 501), and its subsequent
30-19 amendments, to hold title to the real estate.
30-20 (d) The board shall have the ultimate responsibility for the
30-21 investment of the reserve retirement funds. The board may purchase
30-22 securities or engage in limited partnerships or make other
30-23 investments not specifically provided by this Act and shall have
30-24 the authority of exercising discretion in determining the nature,
30-25 type, quality, and size of any investment consistent with the
30-26 investment policies it establishes.
30-27 SECTION 7.05. PROFESSIONAL CONSULTANTS. (a) The board may
31-1 contract for professional investment management services, financial
31-2 consultants, independent auditors, and actuaries. Only the board
31-3 may enter into those contracts and may establish a reasonable fee
31-4 for compensation.
31-5 (b) The board may designate its own custodian or master
31-6 custodian to perform the customary duties involving the safekeeping
31-7 of the assets and the execution of transactions of either domestic
31-8 or foreign securities. The board may engage in a securities
31-9 lending program consistent with the benefits to plan participants
31-10 and their beneficiaries.
31-11 SECTION 7.06. INVESTMENT MANAGER QUALIFICATIONS. In
31-12 appointing investment managers, the board shall require that the
31-13 investment manager be:
31-14 (1) registered under the Investment Advisors Act of
31-15 1940 (15 U.S.C. Section 80b-1 et seq.) and its subsequent
31-16 amendments;
31-17 (2) a bank as defined by that Act; or
31-18 (3) an insurance company qualified to perform
31-19 investment services under the laws of more than one state.
31-20 ARTICLE 8. MISCELLANEOUS PROVISIONS
31-21 SECTION 8.01. REPEALER. Chapter 105, Acts of the 47th
31-22 Legislature, Regular Session, 1941 (Article 6243f, Vernon's Texas
31-23 Civil Statutes), is repealed.
31-24 SECTION 8.02. EFFECTIVE DATE. This Act takes effect October
31-25 1, 1993.
31-26 SECTION 8.03. RESTATEMENT. Unless otherwise expressly
31-27 provided by this Act, this Act is intended to be a restatement of
32-1 Chapter 105, Acts of the 47th Legislature, Regular Session, 1941
32-2 (Article 6243f, Vernon's Texas Civil Statutes), and is not intended
32-3 to impliedly repeal, reduce, or enhance any pension entitlement
32-4 that existed as of September 30, 1993, under that Act or to change
32-5 the meaning of any of the provisions of that Act.
32-6 SECTION 8.04. EMERGENCY. The importance of this legislation
32-7 and the crowded condition of the calendars in both houses create an
32-8 emergency and an imperative public necessity that the
32-9 constitutional rule requiring bills to be read on three several
32-10 days in each house be suspended, and this rule is hereby suspended.