By Johnson H.B. No. 2711
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the administration of, benefits payable by, eligibility
1-3 for benefits payable by, and credit under programs administered by
1-4 the Teacher Retirement System of Texas.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 821.001, Government Code, is amended to
1-7 read as follows:
1-8 Sec. 821.001. Definitions. In this subtitle:
1-9 (1) "Accumulated contributions" means the total of
1-10 amounts in a member's individual account in the member savings
1-11 account, including:
1-12 (A) amounts deducted from the compensation of
1-13 the member;
1-14 (B) other member deposits required to be placed
1-15 in the member's individual account; and
1-16 (C) interest credited to amounts in the member's
1-17 individual account.
1-18 (2) "Actuarial equivalent" of a benefit means a
1-19 benefit of equal monetary value computed on the basis of annuity or
1-20 mortality tables and on an interest or discount rate that is
1-21 adopted by the board of trustees for the purpose from time to time
1-22 and that is in force on the effective date of the benefit.
1-23 (3) "Actuarially reduced" means reduced to the
2-1 actuarial equivalent.
2-2 (4) "Alternate Payee" has the meaning provided for
2-3 that term in Section 804.001(1), Government Code.
2-4 (5) <(4)> "Annual compensation" means the compensation
2-5 to a member of the retirement system for service during a school
2-6 year that is reportable and subject to contributions as provided by
2-7 Section 822.201.
2-8 (6) "Beneficiary" means the person or entity entitled
2-9 to receive benefits payable by the retirement system on the death
2-10 of the member or annuitant pursuant to a valid written designation
2-11 or by law.
2-12 (7) <(5)> "Board of trustees" means the board
2-13 appointed under this subtitle to administer the retirement system.
2-14 (8) <(6)> "Employee" means a person who is employed,
2-15 as determined by the retirement system, on other than a temporary
2-16 basis by an employer for at least one-half time at a regular rate
2-17 of pay comparable to that of other persons employed in similar
2-18 positions.
2-19 (9) <(7)> "Employer" means the state or any of its
2-20 designated agents or agencies responsible for public education,
2-21 including the governing board of any school district created under
2-22 the laws of this state, any county school board, the board of
2-23 trustees, the State Board of Education, the Central Education
2-24 Agency, the board of regents of any college or university, or any
2-25 other legally constituted board or agency of any public school.
3-1 (10) <(8)> "Faculty member" means a person who is
3-2 employed by an institution of higher education on a full-time basis
3-3 as:
3-4 (A) a member of the faculty whose duties include
3-5 teaching or research;
3-6 (B) an administrator responsible for teaching
3-7 and research faculty;
3-8 (C) a member of the administrative staff of the
3-9 Texas Higher Education Coordinating Board; or
3-10 (D) a professional librarian, a president, a
3-11 chancellor, a vice-president, a vice-chancellor, or other
3-12 professional staff person whose national mobility requirements are
3-13 similar to those of faculty members and who fills a position that
3-14 is the subject of nationwide searches in the academic community.
3-15 (11) <(9)> "Governing board" means the body
3-16 responsible for policy direction of an institution of higher
3-17 education.
3-18 (12) <(10)> "Institution of higher education" has the
3-19 meaning provided for that term in Section 61.003, Education Code.
3-20 (13) <(11)> "Membership service" means service during
3-21 a time that a person is both an employee and a member of the
3-22 retirement system.
3-23 (14) <(12)> "Public school" means an educational
3-24 institution or organization in this state that is entitled by law
3-25 to be supported in whole or in part by state, county, school
4-1 district, or other municipal corporation funds.
4-2 (15) <(13)> "Retirement" means the withdrawal from
4-3 service with a retirement benefit granted under this subtitle.
4-4 (16) <(14)> "Retirement system" means the Teacher
4-5 Retirement System of Texas.
4-6 (17) <(15)> "School year" means:
4-7 (A) a 12-month period beginning approximately
4-8 September 1 and ending approximately August 31 of the next calendar
4-9 year; or
4-10 (B) for a member whose contract begins after
4-11 June 30 and continues after August 31 of the same calendar year, a
4-12 period not to include more than 12 months beginning on the date the
4-13 contract begins.
4-14 (18) <(16)> "Service" means the time a person is an
4-15 employee.
4-16 (19) <(17)> "Service credit" means the amount of
4-17 prior, membership, military, or equivalent membership service
4-18 credited to a person's account in the retirement system.
4-19 SECTION 2. Section 823.401, Government Code, is amended as
4-20 follows:
4-21 Sec. 823.401. Out-of-State Service. (a) Except as provided
4-22 by Subsection (b), an eligible member may establish equivalent
4-23 membership service credit for employment with a public school
4-24 system maintained wholly or partly by another state or territory of
4-25 the United States or by the United States for children of its
5-1 citizens.
5-2 (b) A member may not establish credit under this section for
5-3 service performed for a public school while a member of the armed
5-4 forces, for which service the member was compensated by the United
5-5 States.
5-6 (c) A member eligible to establish credit under this section
5-7 is one who has at least 5 <10> years of service credit in the
5-8 retirement system for actual service in public schools.
5-9 (d) A member may establish credit under this section by
5-10 depositing with the retirement system for each year of service
5-11 claimed a contribution computed at the rate of:
5-12 (1) 12 percent of the member's annual compensation
5-13 during the first year of service as a member of the retirement
5-14 system that is both after the service for which credit is sought
5-15 and after September 1, 1956; or
5-16 (2) 12 percent of the member's annual compensation
5-17 during the most recent year of service as a member that is after
5-18 the service for which credit is sought, if the member has performed
5-19 no service in Texas since September 1, 1956.
5-20 (e) In addition to the contribution required by Subsection
5-21 (d), a member claiming credit under this section must pay a fee of
5-22 eight percent, compounded annually, of the required contribution
5-23 from the date of first eligibility to the date of deposit. A
5-24 deposit for at least one year of credit, including the fee, must be
5-25 made with an initial application for credit, and all payments for
6-1 service claimed under this section must be made before retirement.
6-2 (f) The amount of service credit a member may establish
6-3 under this section may not exceed the lesser of the number of years
6-4 of service credit the member has in the retirement system for
6-5 actual service in public schools or 10 years.
6-6 (g) After a member makes the deposits required by this
6-7 section, the retirement system shall grant the member one year of
6-8 equivalent membership service credit for each year of service
6-9 approved. The retirement system may not use service credit granted
6-10 under this section in computing a member's annual average
6-11 compensation.
6-12 (h) A member purchasing out of state service credit does not
6-13 qualify for insurance coverage until the member has 10 or more
6-14 years of membership service credit for actual service in the
6-15 public schools.
6-16 SECTION 3. Section 823.402(e), Government Code, is amended
6-17 to read as follows:
6-18 (e) A member may establish credit under this section by
6-19 depositing with the retirement system for each year of
6-20 developmental leave claimed an amount equal to the sum of:
6-21 (1) the rate of member contributions required during
6-22 the <member's most recent> year of <service that preceded the
6-23 developmental> leave, times the member's annual rate of
6-24 compensation during the member's most recent year of creditable
6-25 service that preceded the year of leave <that year>; plus
7-1 (2) the amount that the state would have contributed
7-2 had the member performed membership service during the year of
7-3 leave at the member's annual rate of compensation during the most
7-4 recent year of service that preceded the leave; plus
7-5 (3) any membership fees in effect during the year of
7-6 leave.
7-7 SECTION 4. Section 823.403(a), Government Code, is amended
7-8 to read as follows:
7-9 (a) A member who retires from an employer as defined in
7-10 Subchapter A, Section 821.001(9) <821.001(7)> of the Government
7-11 Code based on service or a disability is entitled to membership
7-12 service credit in the retirement system for the member's state sick
7-13 leave that has accumulated and is unused on the last day of
7-14 employment pursuant to the terms of this section. State sick leave
7-15 is creditable in the retirement system in the amount of one year of
7-16 service credit for 50 days or more, or 400 hours or more, of
7-17 accumulated state sick leave. An accumulation of less than 50 days
7-18 is not creditable. Not more than five days of unused state sick
7-19 leave may be accumulated per year. Credit established under this
7-20 section may be used only for the purpose of calculating benefits
7-21 under Section 824.203.
7-22 SECTION 5. Section 823.501(b), Government Code, is amended
7-23 to read as follows:
7-24 (b) A person eligible to reinstate service credit under this
7-25 section is one who resumes membership service in the retirement
8-1 system <and subsequently performs membership service for the
8-2 shorter of the following periods:>
8-3 <(1) two consecutive years; or>
8-4 <(2) a continuous period equal in duration to the
8-5 period from the date of termination to the date of resumption of
8-6 membership>.
8-7 SECTION 6. Section 824.101(c), Government Code, is amended
8-8 to read as follows:
8-9 (c) Only one person may be designated as beneficiary of an
8-10 optional retirement annuity under Section 824.204(c)(1) or (c)(2),
8-11 and a designation of beneficiary under either of those options may
8-12 not be made, changed, or revoked after the <date of the member's
8-13 retirement> date on which the retirement system makes the first
8-14 payment to the retiree or the date the first payment is due,
8-15 whichever is later. For the purpose of this section, the term
8-16 "makes payment" includes, but is not limited to, the depositing in
8-17 the mail of a payment warrant or the crediting of an account with
8-18 payment through electronic funds transfer. The retirement system
8-19 may enact rules to administer this section.
8-20 SECTION 7. Section 824.204(a), Government Code, is amended
8-21 to read as follows:
8-22 (a) Instead of the standard service retirement annuity
8-23 payable under Section 824.203 or an annuity reduced because of age
8-24 under Section 824.202, a retiring member may elect to receive an
8-25 optional service retirement annuity, reduced for early retirement
9-1 if applicable, under this section. An election to receive an
9-2 optional service retirement annuity must be filed with the board of
9-3 trustees no later than the effective date of retirement.
9-4 SECTION 8. Subchapter C, Chapter 824, Government Code, is
9-5 amended by adding Section 824.206 to read as follows:
9-6 Sec. 824.206. CHANGE OF SERVICE RETIREMENT ANNUITY PAYMENT
9-7 PLAN. A retiree may change the retiree's choice of service
9-8 retirement annuity payment plans after the retiree's effective date
9-9 of retirement by filing written notice with the board of trustees
9-10 before the date on which the retirement system makes payment of the
9-11 first annuity payment or the date the first payment is due,
9-12 whichever is later. After the first payment has been made by the
9-13 retirement system, a retiree may not change the annuity payment
9-14 plan selected. For the purpose of this section, the term "makes
9-15 payment" includes, but is not limited to, the depositing in the
9-16 mail of a payment warrant or the crediting of an account with
9-17 payment through electronic funds transfer. The retirement system
9-18 may enact rules to administer this section.
9-19 SECTION 9. Section 824.304(c), Government Code, is repealed.
9-20 SECTION 10. Section 824.304(d), Government Code, is amended
9-21 to read as follows:
9-22 (c) <(d)> Before the 31st day after the date on which the
9-23 medical board certifies a member's disability, the member may
9-24 reinstate withdrawn contributions and make deposits for service
9-25 previously waived, military service, and equivalent membership
10-1 service and receive service credit as provided by this subtitle.
10-2 SECTION 11. Section 824.308(a), Government Code, is amended
10-3 to read as follows:
10-4 (a) Instead of an annuity payable under Section 824.304(b),
10-5 a member retiring under that section may elect to receive an
10-6 optional disability retirement annuity under this section. An
10-7 election to receive an optional disability retirement annuity must
10-8 be filed with the board of trustees no later than the effective
10-9 date of retirement.
10-10 SECTION 12. Subchapter D, Chapter 824, Government Code, is
10-11 amended by adding Section 824.309 to read as follows:
10-12 Sec. 824.309. CHANGE OF DISABILITY RETIREMENT PAYMENT PLAN.
10-13 A retiree may change the retiree's choice of disability retirement
10-14 payment plans after the retiree's effective date of retirement by
10-15 filing written notice with the board of trustees before the date on
10-16 which the retirement system makes payment of the first annuity
10-17 payment or the date the first payment is due, whichever is later.
10-18 After the first payment has been made by the retirement system, a
10-19 retiree may not change the annuity payment plan selected. For the
10-20 purpose of this section, the term "makes payment" includes but is
10-21 not limited to, the depositing in the mail of a payment warrant or
10-22 the crediting of an account with payment through electronic fund
10-23 transfer. The retirement system may enact rules to administer this
10-24 section.
10-25 SECTION 13. Sections 824.404(b), (c), and (d), Government
11-1 Code, are amended to read as follows:
11-2 (b) If the designated beneficiary is the spouse or a
11-3 dependent parent of the decedent, the beneficiary may elect to
11-4 receive for life a monthly benefit of $150 <$100>, beginning
11-5 immediately or on the date the beneficiary becomes 65 years old,
11-6 whichever is later.
11-7 (c) If the designated beneficiary is the spouse of the
11-8 decedent and has one or more children less than 18 years old or has
11-9 custody of one or more children of the decedent who are less than
11-10 18 years old, the designated beneficiary may elect to receive:
11-11 (1) a monthly benefit of $250 <$200> payable until the
11-12 youngest child becomes 18 years old; and
11-13 (2) when the youngest child has attained the age of
11-14 18, a monthly benefit for life of $150 <$100>, beginning on the
11-15 date the beneficiary becomes 65 years old.
11-16 (d) If the designated beneficiary or beneficiaries are the
11-17 decedent's dependent children who are less than 18 years old, their
11-18 guardian may elect to receive for them:
11-19 (1) a monthly benefit of $250 <$200>, payable as long
11-20 as two or more children are less than 18 years old; and
11-21 (2) a monthly benefit of $150 <$100>, payable as long
11-22 as only one child is less than 18 years old.
11-23 SECTION 14. Section 824.602, Government Code, is amended to
11-24 read as follows:
11-25 Sec. 824.602. Exceptions. (a) The retirement system may
12-1 not, under Section 824.601, withhold a monthly benefit payment if
12-2 the retiree is employed in a Texas public educational institution:
12-3 (1) as a substitute only with pay not more than the
12-4 daily rate of substitute pay established by the employer, if the
12-5 employment has not exceeded a total of 120 days in the school year
12-6 or, for a disability retiree, 90 days in the school year;
12-7 (2) in a position, other than as a substitute, on no
12-8 more than a one-half time basis for the month; <or>
12-9 (3) in one or more positions on as much as a full-time
12-10 basis, if:
12-11 (A) the work occurs in a school year that begins
12-12 after the retiree's effective date of retirement;
12-13 (B) the work occurs in no more than six months
12-14 of the school year; and
12-15 (C) the retiree executes on a form and within
12-16 any deadline prescribed by the retirement system a written election
12-17 to have this exception apply for the school year in determining
12-18 whether benefits are to be suspended for employment after
12-19 retirement; or
12-20 (4) for a disability retiree, in a position, other
12-21 than a substitute, on no more than a one-half time basis and for no
12-22 more than 90 days in the school year.
12-23 (b) Working as a substitute or otherwise any portion of a
12-24 day counts as working a full day for the purposes of Subsection
12-25 (a)(1) or (4).
13-1 (c) Working any portion of a month counts as working a full
13-2 month for the purposes of Subsection (a)(3).
13-3 (d) A retiree who has elected to avoid loss of monthly
13-4 benefits in a school year pursuant to Subsection (a)(3) is not
13-5 eligible during that school year for any other exceptions to loss
13-6 of benefits provided in this section. If a retiree elects the
13-7 exemption provided in Subsection (a)(3) for a school year, the
13-8 retirement system must include any previous employment during the
13-9 school year, including any employment that relied upon the
13-10 exemptions in Subsection (a)(1) or (a)(2), in determining whether
13-11 and when the retiree has exceeded six months of employment in the
13-12 school year.
13-13 (e) A retiree working as a substitute in a month is not
13-14 eligible for an exception to a loss of benefits for that month
13-15 pursuant to Subsection (a)(2) or (4) for that or any other
13-16 employment in a public educational institution.
13-17 (f) A disability retiree who has elected to avoid loss of
13-18 monthly benefits under Subsection (a)(1), (a)(4), or both may not
13-19 exceed a total of 90 days of employment in any capacity in a school
13-20 year. The retirement system must include any employment during the
13-21 school year, including any employment that relied upon either of
13-22 the exemptions in Subsection (a)(1) or (a)(4), in determining
13-23 whether and when the retiree has exceeded 90 days of employment in
13-24 the school year.
13-25 (g) <(f)> The exceptions provided by Subsections (a)(2) and
14-1 (a)(3) do not apply to disability retirees. The retirement system
14-2 nevertheless may not withhold a monthly benefit payment under
14-3 Section 824.601 if:
14-4 (1) a disability retiree is employed in a Texas public
14-5 educational institution in a position, other than as a substitute,
14-6 for a period not to exceed three consecutive months of the school
14-7 year;
14-8 (2) the work occurs in a period, designated by the
14-9 disability retiree, of no more than three consecutive months of a
14-10 school year;
14-11 (3) the disability retiree executes on a form and at a
14-12 time prescribed by the retirement system a written election to have
14-13 this exception apply on a one-time trial basis in determining
14-14 whether benefits are to be suspended for the months of employment
14-15 after retirement and in determining whether a disability retiree is
14-16 no longer mentally or physically incapacitated for the performance
14-17 of duty; and
14-18 (4) the disability retiree has not previously elected
14-19 to avoid loss of monthly benefits in a school year under this
14-20 subsection.
14-21 (h) <(g)> A disability retiree is not entitled to service
14-22 credit for service during a trial period under Subsection (g) <(f)>
14-23 if the retiree is restored to active service.
14-24 (i) <(h)> Section 824.005(b), concerning revocation of
14-25 retirement on certain reemployment, applies to employment described
15-1 in Subsection (a) or (g) <(f)>.
15-2 (j) <(i)> The board of trustees shall adopt rules governing
15-3 the employment of a substitute and defining "one-half time basis."
15-4 (k) <(j)> The actuary designated by the board of trustees
15-5 shall, in investigating the experience of the members of the
15-6 system, note any significant increase in early age retirements and
15-7 determine the extent to which any increase has been caused by the
15-8 exception to loss of benefits for employment after retirement
15-9 provided by Subsection (a)(3). If the actuary certifies in writing
15-10 to the retirement system that sound actuarial funding of the
15-11 retirement system's benefits is endangered by continuation of this
15-12 exception, the board of trustees may determine that no further
15-13 elections of the exception will be accepted from retirees, other
15-14 than from those who have previously relied on the exception in
15-15 retiring under this subtitle. A retiree may be considered to have
15-16 relied on this exception only if retirement occurred on or after
15-17 May 31, 1985, but before the date the board of trustees
15-18 acknowledges receipt of such certification and if the retiree has
15-19 first elected to receive benefits under the exception not later
15-20 than two years after the retiree's effective date of retirement.
15-21 SECTION 15. Section 825.106, Government Code, is repealed.
15-22 SECTION 16. Section 825.202, Government Code, is amended to
15-23 read as follows:
15-24 Sec. 825.202. EXECUTIVE DIRECTOR <SECRETARY>. (a) The
15-25 board of trustees, by a majority vote of all members, shall appoint
16-1 an executive director <secretary>.
16-2 (b) The executive director <secretary> may not be a member
16-3 of the board of trustees.
16-4 (c) To be eligible to serve as the executive director
16-5 <secretary>, a person must have been a citizen of this state for
16-6 the three years immediately preceding the appointment.
16-7 (d) The executive director <secretary> shall recommend to
16-8 the board actuarial and other services necessary to administer the
16-9 retirement system.
16-10 (e) Annually, the executive director <secretary> shall
16-11 prepare an itemized expense budget for the following fiscal year
16-12 and shall submit the budget to the board for review and adoption.
16-13 SECTION 17. Section 825.207(b), Government Code, is amended
16-14 to read as follows:
16-15 (b) The state treasurer shall pay money from the accounts of
16-16 the retirement system on warrants drawn by the comptroller of
16-17 public accounts and authorized by vouchers signed by the executive
16-18 director <secretary> or other persons designated by the board of
16-19 trustees.
16-20 SECTION 18. Section 825.209(b) and (c), Government Code,
16-21 are amended to read as follows:
16-22 (b) The executive director <secretary> shall give a surety
16-23 bond in the amount of $25,000.
16-24 (c) The board of trustees may require any trustee or
16-25 employee of the board, other than the executive director
17-1 <secretary>, to give a surety bond in an amount determined by the
17-2 board.
17-3 SECTION 19. Section 825.303 of Title 8, Government Code, is
17-4 amended to read as follows:
17-5 Sec. 825.303. Securities Lending. (a) The retirement system
17-6 may, in the exercise of its constitutional discretion to manage the
17-7 assets of the retirement system, select one or more commercial
17-8 banks, depository trust companies, or other entities to serve as
17-9 custodian or custodians of the system's securities and to lend the
17-10 securities under rules adopted by the board of trustees and as
17-11 required by this section.
17-12 (b) To be eligible to lend securities under this section, a
17-13 bank or brokerage firm must:
17-14 (1) be experienced in the operation of a fully secured
17-15 securities loan program;
17-16 (2) maintain adequate capital in the prudent judgment
17-17 of the retirement system to assure the safety of the securities;
17-18 (3) execute an indemnification agreement satisfactory
17-19 in form and content to the retirement system fully indemnifying the
17-20 retirement system against loss resulting from borrower default or
17-21 the failure of the bank or brokerage firm to properly execute the
17-22 responsibilities of the bank or brokerage firm under the applicable
17-23 securities lending agreement <its operation of a securities loan
17-24 program for the system's securities> and;
17-25 (4) require any securities broker or dealer to whom it
18-1 lends securities belonging to the retirement system to deliver to
18-2 and maintain with the custodian collateral in the form of cash or
18-3 <United States> government securities eligible for book entry in
18-4 either the Federal Reserve System or the Participants Trust
18-5 Company, in an amount equal to not less than 100 percent of the
18-6 market value, from time to time, of the loaned securities.
18-7 SECTION 20. Section 825.306, Government Code, is amended to
18-8 read as follows:
18-9 Sec. 825.306. Crediting System Assets. The assets of the
18-10 retirement system shall be credited, according to the purpose for
18-11 which they are held, to one of the following accounts:
18-12 (1) member savings account;
18-13 (2) state contribution account;
18-14 (3) retired reserve account;
18-15 <(4) benefit increase reserve account;>
18-16 (4) <(5)> interest account; or
18-17 (5) <(6)> expense account.
18-18 SECTION 21. Section 825.309(b), Government Code, is amended
18-19 to read as follows:
18-20 (b) The retirement system shall use money in the retired
18-21 reserve account to pay all retirement annuities and all death or
18-22 survivor benefits <except those paid under Section 825.310(b)>,
18-23 including postretirement benefit increases and other adjustments of
18-24 initial benefit payments.
18-25 SECTION 22. Section 825.310, Government Code, is repealed.
19-1 SECTION 23. Section 825.311, Government Code, is amended to
19-2 read as follows:
19-3 In the interest account the retirement system shall:
19-4 (1) deposit all income, interest, and dividends from
19-5 deposits and investments of assets of the retirement system; <and>
19-6 (2) accumulate net capital gains and losses from the
19-7 sale, call, maturity, or conversion of securities; and
19-8 (3) accumulate net gains and losses from investments
19-9 of the retirement system resulting from recognition of changes in
19-10 carrying values.
19-11 SECTION 24. Section 825.312, Government Code, is amended to
19-12 read as follows: Sec. 825.312. Expense Account. (a) The
19-13 retirement system shall deposit in the expense account:
19-14 (1) all membership fees required by this subtitle;
19-15 <and>
19-16 (2) money required to be deposited in the account by
19-17 Section 825.313(b)(3) or 825.313(c); and
19-18 (3) money received from the Texas Public School
19-19 Retired Employees Group Insurance Program for service performed for
19-20 the program by the retirement system.
19-21 (b) The retirement system shall pay from the account all
19-22 expenses of administration and maintenance of the retirement
19-23 system.
19-24 SECTION 25. Section 825.313, Government Code, is amended to
19-25 read as follows:
20-1 Sec. 825.313. Transfers From Interest Account.
20-2 (a) Annually, the retirement system shall transfer from the
20-3 interest account to the state contribution account amounts
20-4 accumulated under Section 825.311(2).
20-5 (b) On August 31 of each year, the retirement system shall
20-6 make the following transfers from the interest account:
20-7 (1) to the member savings account, an amount computed
20-8 using the rate prescribed by Section 825.307(b);
20-9 (2) to the retired reserve account, an amount equal to
20-10 4 3/4 percent of the average balance of the retired reserve
20-11 account for that fiscal year or, if the transfer is authorized by
20-12 resolution of the board, an amount computed at a greater rate if
20-13 the actuary recommends the greater rate to adequately fund the
20-14 retired reserve account;
20-15 (3) to the expense account, an amount designated by
20-16 the board of trustees in accordance with Subsection (c); and
20-17 (4) <to the benefit increase reserve account, an
20-18 amount representing interest on the average annual balance of the
20-19 benefit increase reserve account at a rate set by the board of
20-20 trustees in accordance with Section 825.106; and>
20-21 <(5)> to the state contribution account, the amount
20-22 remaining in the interest account after the other transfers
20-23 required by this section are made.
20-24 (c) The board of trustees, by resolution recorded in its
20-25 minutes, shall transfer from the interest account to the expense
21-1 account an amount necessary to cover the expenses of the retirement
21-2 system for the fiscal year, including the expense of servicing
21-3 mortgages insured by the Federal Housing Administration under the
21-4 National Housing Act (12 U.S.C. Section 1701 et seq.).
21-5 SECTION 26. Section 825.403(b) and (c), Government Code,
21-6 are amended to read as follows:
21-7 (b) Each employer or the employer's designated disbursing
21-8 officer, at a time and in a form prescribed by the retirement
21-9 system, shall send to the executive director <secretary> all
21-10 deductions and a certification of earnings of each member employed
21-11 by the employer.
21-12 (c) The executive director <secretary> shall deposit with
21-13 the state treasurer all deductions received by the executive
21-14 director <secretary>.
21-15 SECTION 27. Section 825.405(d), Government Code, is amended
21-16 to read as follows:
21-17 (d) The employer must remit the amount required under this
21-18 section to the executive director <secretary> at the same time that
21-19 the employer remits the member's contribution.
21-20 SECTION 28. Section 825.410(g), Government Code, is amended
21-21 to read as follows:
21-22 (g) A member seeking to establish service credit by using
21-23 the installment payment method shall pay an additional fee of nine
21-24 percent per annum calculated on a declining balance method on the
21-25 lump sum due at the time the installment payment process begins.
22-1 For purposes of this subsection, the installment payment process
22-2 begins on the first business day of the month in which the first
22-3 installment payment is due. None of the additional fees shall be
22-4 returned to the member or a beneficiary.
22-5 SECTION 29. Section 825.502, Government Code, is amended to
22-6 read as follows:
22-7 (a) If a demand for the accumulated contributions of a
22-8 member with fewer than five years of service has not been made in
22-9 accordance with Section 822.005 before the seventh anniversary of
22-10 the member's last day of service, the retirement system may <shall>
22-11 return to the member or to the member's heirs all accumulated
22-12 contributions of the member.
22-13 (b) If the member or the member's heirs cannot be found, the
22-14 member's accumulated contributions may be <are> forfeited to the
22-15 retirement system. The retirement system shall credit the amount
22-16 forfeited to the retired reserve account.
22-17 SECTION 30. Section 825.503(d), Government Code, is amended
22-18 to read as follows:
22-19 (d) The executive director <secretary> or an authorized
22-20 representative may certify the authenticity of a photograph,
22-21 microphotograph, or film of a record reproduced under this section
22-22 and shall charge a fee for the certified photograph,
22-23 microphotograph, or film as provided by law.
22-24 SECTION 31. Section 825.507, Government Code, as added by
22-25 Acts 1991, 72nd Leg., 1st C.S., Ch. 16, Sec. 11.05(j), is amended
23-1 to read as follows:
23-2 Sec. 825.507. CONFIDENTIALITY OF INFORMATION ABOUT MEMBERS,
23-3 RETIREES, ANNUITANTS, <OR> BENEFICIARIES, OR ALTERNATE PAYEES.
23-4 (a) Information contained in records that are in the custody of
23-5 the retirement system concerning an individual member, retiree,
23-6 annuitant, <or> beneficiary, or alternate payee is confidential
23-7 under Section 3(a)(1), Chapter 424, Acts of the 63rd Legislature,
23-8 Regular Session, 1973 (Article 6252-17a, Vernon's Texas Civil
23-9 Statutes), and may not be disclosed in a form identifiable with a
23-10 specific individual unless:
23-11 (1) the information is disclosed to:
23-12 (A) the individual or the individual's attorney,
23-13 guardian, executor, administrator, conservator, or other person who
23-14 the executive director <secretary> determines is acting in the
23-15 interest of the individual or the individual's estate;
23-16 (B) a spouse or former spouse of the individual
23-17 if the executive director <secretary> determines that the
23-18 information is relevant to the spouse's or former spouse's interest
23-19 in member accounts, benefits, or other amounts payable by the
23-20 retirement system;
23-21 (C) a governmental official or employee if the
23-22 executive director <secretary> determines that disclosure of the
23-23 information requested is reasonably necessary to the performance of
23-24 the duties of the official or employee; or
23-25 (D) a person authorized by the individual in
24-1 writing to receive the information; or
24-2 (2) the information is disclosed pursuant to a
24-3 subpoena and the executive director <secretary> determines that the
24-4 individual will have a reasonable opportunity to contest the
24-5 subpoena.
24-6 (b) This section does not prevent the disclosure of the
24-7 status or identity of an individual as a member, former member,
24-8 retiree, deceased member or retiree, or beneficiary of the
24-9 retirement system.
24-10 (c) The executive director <secretary> may designate other
24-11 employees of the retirement system to make the necessary
24-12 determinations under Subsection (a).
24-13 (d) A determination and disclosure under Subsection (a) may
24-14 be made without notice to the individual member, retiree,
24-15 annuitant, <or> beneficiary, or alternate payee.
24-16 SECTION 32. Section 825.507, Government Code, as added by
24-17 Acts 1991, 72nd Leg., 1st C.S., ch. 13, Sec. 29, is amended by
24-18 renumbering it as Section 825.508, Government Code.
24-19 SECTION 33. Subchapter F, Chapter 825, Government Code, is
24-20 amended by adding Section 825.509 to read as follows:
24-21 Sec. 825.509. TRUSTEE TO TRUSTEE TRANSFERS. (a) This
24-22 section applies to distributions made on or after January 1, 1993.
24-23 Notwithstanding any provision of the laws governing the Teacher
24-24 Retirement System of Texas to the contrary that would otherwise
24-25 limit a distributee's election under this section, a distributee
25-1 may elect, at the time and in the manner prescribed by the
25-2 Executive Director or his designee to have any portion of an
25-3 eligible rollover distribution from the Teacher Retirement System
25-4 of Texas paid directly to an eligible retirement plan specified by
25-5 the distributee in a direct rollover.
25-6 (b) An eligible rollover distribution is any distribution of
25-7 all or any portion of the balance to the credit of the distributee,
25-8 except that an eligible rollover distribution does not include:
25-9 any distribution that is one of a series of substantially equal
25-10 periodic payments (not less frequently than annually) made of the
25-11 life (or life expectancy) of the distributee or the joint lives (or
25-12 joint life expectancies) of the distributee and the distributee's
25-13 designated beneficiary, or for a specified period of ten years or
25-14 more; any distribution to the extent such distribution is required
25-15 under section 401(a)(9) of the Internal Revenue Code; and the
25-16 portion of any distribution that is not includible in gross income.
25-17 (c) An eligible retirement plan is an individual retirement
25-18 account described in section 408(a) of the Internal Revenue Code,
25-19 an individual retirement annuity described in section 408(b) of the
25-20 Internal Revenue Code, an annuity plan described in section 403(a)
25-21 of the Internal Revenue Code, or a qualified trust described in
25-22 section 401(a) of the Internal Revenue Code, that accepts the
25-23 distributee's eligible rollover distribution. However, in the case
25-24 of an eligible rollover distribution to the surviving spouse, an
25-25 eligible retirement plan is an individual retirement account or
26-1 individual retirement annuity.
26-2 (d) A distributee is a person who receives an eligible
26-3 rollover distribution from the Teacher Retirement System of Texas
26-4 and includes an employee or former employee. In addition, the
26-5 employee's or former employee's surviving spouse and the employee's
26-6 or former employee's spouse or former spouse who is the alternate
26-7 payee under a qualified domestic relations order, as defined in
26-8 section 414(p)(11) of the Internal Revenue Code, are distributees
26-9 with regard to the interest of the spouse or former spouse.
26-10 (e) A direct rollover is a payment by the Teacher Retirement
26-11 System of Texas to the eligible retirement plan specified by the
26-12 distributee.
26-13 SECTION 34. Section 830.003, Government Code, is amended to
26-14 read as follows:
26-15 Sec. 830.003. Application. In this chapter, the term
26-16 "institution of higher education" includes the Texas Higher
26-17 Education Coordinating Board, the Texas State Technical College
26-18 System, and the institutions defined in Section 821.001(12)
26-19 <821.001(10)>, but excludes the Rodent and Predatory Animal Control
26-20 Service.
26-21 SECTION 35. Section 830.202(c), Government Code, is amended
26-22 to read as follows:
26-23 (c) In this section, "annual compensation" has the meaning
26-24 assigned to that term by Section 821.004(5) <821.001(4)>.
26-25 SECTION 36. Section 2(1), Texas Public School Retired
27-1 Employees Group Insurance Act (Article 3.50-4, Insurance Code), is
27-2 amended to read as follows:
27-3 (1) "Active employee" means an employee as defined by
27-4 Subdivision (8) <(6)>, Section 821.001, Government Code, who is a
27-5 member of the Teacher Retirement System of Texas and who is not
27-6 entitled to coverage under a plan provided under the Texas
27-7 Employees Uniform Group Insurance Benefits Act (Article 3.50-2,
27-8 Vernon's Texas Insurance Code), or under the Texas State College
27-9 and University Employees Uniform Insurance Benefits Act (Article
27-10 3.50-3, Vernon's Texas Insurance Code).
27-11 SECTION 37. Monthly payments of a minimum standard service
27-12 retirement annuity made after September 1, 1993, under Section
27-13 824.203, Government Code, to persons who retired prior to September
27-14 1, 1991, shall be no less than $6.50 a month for each year of
27-15 service credit or, for a member who was at least 65 years old at
27-16 the time of retirement, no less than the great of $6.50 a month for
27-17 each year of service credit, or $150 a month. The minimum benefits
27-18 provided by this section are subject to reduction in the same
27-19 manner as other benefits because of early retirement or selection
27-20 of an optional retirement annuity.
27-21 SECTION 38. Monthly payments of a survivor benefit under
27-22 Section 824.404, Government Code, or its predecessor statute to a
27-23 spouse of a deceased member or retiree which were terminated
27-24 because of remarriage prior to the effective date of Section 5,
27-25 Chapter 570, Acts of the 66th Legislature, Regular Session, 1979,
28-1 may be restored by the retirement system upon application for such
28-2 benefits by the beneficiary. No retroactive payments shall be
28-3 made. Payments shall resume beginning with the month after the
28-4 month in which the beneficiary applies for restoration of benefits
28-5 under this section.
28-6 SECTION 39. A retiree who is subject to loss of benefits
28-7 under Section 824.601, Government Code, for months to which the
28-8 exception provided in Section 824.602(a)(3), Government Code, could
28-9 have applied if the retiree had executed the required form within
28-10 the time period provided by Section 824.602(a)(3), prior to
28-11 amendment by Chapter 13, Acts of the 72nd Texas Legislature, First
28-12 Called Session, 1991, may apply to avoid loss of the benefits or to
28-13 have any lost benefits restored by the retirement system. To apply
28-14 under this section to have lost benefits restored or to avoid loss
28-15 of benefits, the retiree must submit a written request to the
28-16 retirement system no later than March 1, 1994. Benefits eligible
28-17 to be paid under this section are those that would have been
28-18 payable between September 1, 1985, and August 31, 1991, if not for
28-19 the failure to execute the required form in a timely manner. A
28-20 retiree may not apply for payment of benefits under this section
28-21 for months of employment credited under Section 823.502, Government
28-22 Code. Months of employment in which a retiree receives a monthly
28-23 benefit payment under this section may not be considered in
28-24 applying the provisions of Section 823.502, Government Code. Only
28-25 a retiree who is surviving as of the effective date of this Act is
29-1 eligible to apply for benefits under this section.
29-2 SECTION 40. Upon the effective date of this Act, the
29-3 retirement system shall transfer all funds from the benefit
29-4 increase reserve account to the retired reserve account.
29-5 SECTION 41. The supplemental service retirement benefit
29-6 provided for in Chapter 14, Acts of the 60th Texas Legislature,
29-7 Regular Session, 1969, shall be payable to the beneficiary of any
29-8 retiree if the retiree if still living as of the effective date of
29-9 this Act and if retirement benefits will be payable to the
29-10 beneficiary upon the death of the retiree.
29-11 SECTION 42. The increase in monthly annuities provided for
29-12 in Section 13 applies to benefits paid after September 1, 1993,
29-13 even if the beneficiary elected to receive the monthly benefits
29-14 prior to the effective date of this Act.
29-15 SECTION 43. This Act takes effect September 1, 1993.
29-16 SECTION 44. If any word, phrase, clause, paragraph,
29-17 sentence, part, portion, or provision of this Act or the
29-18 application thereof to any person or circumstance shall be held to
29-19 be invalid or unconstitutional, the remainder of the Act in all its
29-20 particulars and as to all other persons and circumstances shall be
29-21 valid and of full force and effect, and the legislature hereby
29-22 declares that this Act would have been enacted without such invalid
29-23 or unconstitutional word, phrase, clause, paragraph, sentence,
29-24 part, portion, or provision, and to this end the provisions of the
29-25 Act are declared to be severable.
30-1 SECTION 45. The importance of this legislation and the
30-2 crowded condition of the calendars in both houses create an
30-3 emergency and an imperative public necessity that the
30-4 constitutional rule requiring bills to be read on three several
30-5 days in each house be suspended, and this rule is hereby suspended,
30-6 and that this Act take effect and be in force according to its
30-7 terms, and it is so enacted.