1-1 By: Greenberg, Naishtat H.B. No. 2799
1-2 (Senate Sponsor - Barrientos)
1-3 (In the Senate - Received from the House April 26, 1993;
1-4 April 27, 1993, read first time and referred to Committee on
1-5 Intergovernmental Relations; April 29, 1993, reported favorably by
1-6 the following vote: Yeas 6, Nays 0; April 29, 1993, sent to
1-7 printer.)
1-8 COMMITTEE VOTE
1-9 Yea Nay PNV Absent
1-10 Armbrister x
1-11 Leedom x
1-12 Carriker x
1-13 Henderson x
1-14 Madla x
1-15 Moncrief x
1-16 Patterson x
1-17 Rosson x
1-18 Shapiro x
1-19 Wentworth x
1-20 Whitmire x
1-21 A BILL TO BE ENTITLED
1-22 AN ACT
1-23 relating to public retirement systems for employees of certain
1-24 municipalities.
1-25 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-26 SECTION 1. Section 2, Chapter 451, Acts of the 72nd
1-27 Legislature, Regular Session, 1991 (Article 6243n, Vernon's Texas
1-28 Civil Statutes), is amended to read as follows:
1-29 Sec. 2. Definitions. The following words and phrases have
1-30 the meanings assigned by this section unless a different meaning is
1-31 plainly required by the context:
1-32 (1) "Accumulated deposits" means the amount standing
1-33 to the credit of a member derived from the deposits required to be
1-34 made by the member to the retirement system improved annually by
1-35 interest credited at a rate determined by the board which is
1-36 credited as of December 31 to amounts standing to the credit of the
1-37 member on January 1 of the same calendar year.
1-38 (2) "Actual retirement date" means the last day of the
1-39 month during which a member retires.
1-40 (3) <(2)> "Actuarial equivalent" means any benefit of
1-41 equal present value when computed on the basis of actuarial tables
1-42 adopted by the board in the proper administration of the retirement
1-43 system.
1-44 (4) <(3)> "Actuary" means the technical advisor of the
1-45 board regarding the operations which are based on mortality,
1-46 service, and compensation experience. <The actuary shall make
1-47 periodic valuations of the assets and liabilities of the funds and
1-48 other evaluations as requested by the board.>
1-49 (5) "Authorized leave of absence" means military leave
1-50 of absence, including a period of not more than the 90th day after
1-51 the date of release from active military duty, or any other leave
1-52 of absence during which a member is otherwise authorized by law to
1-53 continue making contributions to the system. The term does not
1-54 include an approved medical leave of absence.
1-55 (6) <(4)> "Average final compensation" means the
1-56 average monthly compensation, pay, or salary, exclusive of
1-57 overtime, incentive, and terminal pay, that is $16,666 or less and
1-58 that is earned by a member during, as applicable:
1-59 (A) if the member has 120 months or more of
1-60 membership service <during which the member contributed to the
1-61 system>, the 36 months of membership service which yielded the
1-62 highest average during the last 120 months of membership service
1-63 <during which the member contributed to the system>;
1-64 (B) if the member has less than 120 months of
1-65 membership service <during which the member contributed to the
1-66 system>, but has at least 36 months of membership service <during
1-67 which the member made contributions to the system>, then the
1-68 average during the 36 months which yield the highest average; or
2-1 (C) if the member does not have 36 months of
2-2 membership service <during which the member contributed to the
2-3 system>, then the average during the member's months of membership
2-4 service <during which the member made contributions to the system>.
2-5 (7) <(5)> "Beneficiary" means any person, trust, or
2-6 estate properly designated by a member <or retired member> to
2-7 receive benefits from the system. If there is no effective
2-8 beneficiary designation on the date of the member's death or if the
2-9 designated beneficiary predeceases the member, the member's
2-10 beneficiary is the member's spouse or, if the member does not have
2-11 a spouse, the member's estate.
2-12 (8) <(6)> "Creditable service" means the total of
2-13 prior service and membership service <prior service plus membership
2-14 service on the basis of which retirement allowances are computed
2-15 for all employees classified as entitled to retirement benefits>.
2-16 (9) <(7)> "Current service annuity" means a series of
2-17 equal monthly payments payable for the member's life after
2-18 retirement for membership service from funds of the retirement
2-19 system equal to one-twelfth of the product of 2.2 <2.1> percent of
2-20 a member's average final compensation multiplied by the number of
2-21 months of membership service <rendered after January 1, 1941>.
2-22 However, if payments commence before the member's normal retirement
2-23 date, the amount of the monthly payments to which the member would
2-24 otherwise be entitled shall be reduced as provided by Section 7(e)
2-25 of this Act <at the rate of five-twelfths of one percent for each
2-26 month before the normal retirement date at which said payments
2-27 commence>.
2-28 (10) <(8)> "Deposits" means the amounts required to be
2-29 paid by members <employees> in accordance with the provisions of
2-30 this Act.
2-31 (11) <(9)> "Disability retirement" means the
2-32 termination of employment <withdrawal> of a member because of
2-33 disability <from active service> with a disability retirement
2-34 allowance as provided in Section 8 of this Act.
2-35 (12) "Fund" means the trust fund containing the
2-36 aggregate of the assets of Fund No. 1 and Fund No. 2
2-37 <(10) "Employee" means any regular and permanent employee of the
2-38 cities governed hereby or the system's administrative staff, except
2-39 those employees specifically excluded from the benefits and
2-40 operations of the retirement and pensioning system. All civil
2-41 service commissioned police officers and fire fighters of the
2-42 cities governed hereby are specifically excluded from membership in
2-43 the retirement system. In any case of doubt regarding the
2-44 eligibility of any employee to become or remain a member of the
2-45 retirement system, the decision of the retirement board is final>.
2-46 (13) <(11)> "Fund No. 1" means the fund in which shall
2-47 be kept all accumulated deposits of members who have not withdrawn
2-48 from the system.
2-49 (14) <(12)> "Fund No. 2" means the fund in which shall
2-50 be kept all money contributed by the city on behalf of city
2-51 employees, all money contributed by a hospital authority on behalf
2-52 of hospital authority employees, and all money contributed by the
2-53 board on behalf of board employees, interest earned thereon, and
2-54 all accumulations and earnings of the system <except those of Fund
2-55 No. 1>.
2-56 (15) "Hospital authority" means a municipal hospital
2-57 authority created after September 1, 1992, under Chapter 262,
2-58 Health and Safety Code, and its subsequent amendments, by a city
2-59 governed by this Act.
2-60 (16) <(13)> "Investment consultant" means the person
2-61 or entity that monitors the investment performance of the system
2-62 and provides such other services as requested by the board.
2-63 (17) <(14)> "Investment manager" means the person or
2-64 entity that has the power to manage, acquire, or dispose of assets
2-65 of Fund No. 1 or Fund No. 2 <manages the investment portfolio for
2-66 the system, making specified investment decisions> on behalf of the
2-67 retirement system and acknowledges fiduciary responsibility to the
2-68 system in writing. The investment manager must be a person, firm,
2-69 or corporation registered as an investment adviser under the
2-70 Investment Advisers Act of 1940, a bank, or an insurance company
3-1 and must otherwise meet the requirements of Section 802.204,
3-2 Government Code, and its subsequent amendments.
3-3 (18) <(15)> "Life annuity" means a series of equal
3-4 monthly payments, payable after retirement for a member's life,
3-5 consisting of a combination of <">prior service pension<"> and
3-6 <">current service annuity to which the member is entitled<" based
3-7 on the employee service and average final compensation>.
3-8 (19) <(16)> "Life annuity (modified cash refund)"
3-9 means a life annuity providing that, in <series of equal monthly
3-10 payments, payable after retirement for life, consisting of a
3-11 combination of "prior service pension" and "current service
3-12 annuity" based on the employee service and average final
3-13 compensation. In> the event of death of the retired member before
3-14 that member has received payments under the life annuity totalling
3-15 <retirement allowances equal to> the amount of that member's
3-16 accumulated deposits at the date of retirement, the excess<, if
3-17 any,> of such accumulated deposits over the payments made
3-18 <retirement allowances paid> shall be paid <refunded> in one lump
3-19 sum to the member's designated beneficiary.
3-20 (20) <(17)> "Member" means any:
3-21 (A) regular full-time employee who has completed
3-22 six continuous months of employment with the city, a hospital
3-23 authority, or the board and who has been removed from the
3-24 employee's initial probationary status; and
3-25 (B) former regular full-time employee who has
3-26 not withdrawn the member's accumulated deposits from the system.
3-27 In any case of doubt regarding the eligibility of any
3-28 employee to become or remain a member of the retirement system, the
3-29 decision of the board is final <employee included in the retirement
3-30 system under this statute and approved for membership by the
3-31 retirement board, including staff hired for the administration of
3-32 the retirement system>.
3-33 (21) <(18)> "Membership service" means the period of
3-34 time on or after January 1, 1941, during which a person is or was
3-35 employed as a regular full-time employee or is or was on an
3-36 authorized leave of absence and who is eligible for participation
3-37 in the system and <member> pays into and keeps on deposit the
3-38 amounts of money prescribed to be paid by the member into the
3-39 system. The term includes redeemed membership service.
3-40 (22) "Normal retirement age" means age 62.
3-41 (23) <(19)> "Normal retirement date" means the earlier
3-42 of the date on <first day of the month following the earliest month
3-43 in> which the member has completed 25 <30> years of creditable
3-44 service <at any age> or has reached the age of 62.
3-45 (24) <(20)> "Prior service" means service as an
3-46 employee of the city rendered prior to January 1, 1941, for which a
3-47 pension credit is allowable under prior law governing the
3-48 retirement system of that city and includes redeemed prior service
3-49 <or bought-back service>.
3-50 (25) <(21)> "Prior service pension" means a series of
3-51 equal monthly payments payable from funds of the retirement system
3-52 for a member's life after retirement for <creditable> prior service
3-53 equal to one-twelfth of the product of 2.2 <2.1> percent <for each
3-54 year of creditable prior service,> of the member's average monthly
3-55 earnings during a period of five years preceding January 1, 1941,
3-56 multiplied by the number of months of prior service. On retirement
3-57 at an age other than normal retirement age, the monthly prior
3-58 service pension herein prescribed shall be the actuarial equivalent
3-59 thereof at the member's actual retirement date <age>, based on the
3-60 schedule or schedules of payments approved by the actuary and
3-61 adopted by the board and in effect on the member's actual
3-62 retirement date.
3-63 (26) "Qualified domestic relations order" has the
3-64 meaning assigned by Section 804.001, Government Code, and its
3-65 subsequent amendments.
3-66 (27) "Redeemed membership service" means membership
3-67 service reinstated in accordance with Section 5(e) of this Act.
3-68 (28) "Redeemed prior service" means prior service
3-69 reinstated in accordance with Section 5(e) of this Act.
3-70 (29) "Regular full-time employee" means an individual
4-1 who is employed by the city, a hospital authority, or the board,
4-2 who is not a commissioned civil service police officer or fire
4-3 fighter, the mayor, or a member of the city council, whose position
4-4 is classified in the annual city, board, or hospital authority
4-5 budget for employment for the full calendar year, whose position is
4-6 classified in the annual city, board, or hospital authority budget
4-7 to continue from year to year, and who works 30 hours or more in a
4-8 normal 40-hour work week. The term does not include an individual
4-9 whose position is classified as seasonal or temporary by the city,
4-10 a hospital authority, or the board, even if the individual works 30
4-11 hours or more in a normal 40-hour work week in which the individual
4-12 is employed.
4-13 (30) <(22) "Regular interest" means the rate of
4-14 interest assumed in the determination of the present value of
4-15 pensions and annuities provided hereunder.>
4-16 <(23)> "Retirement" means the termination of
4-17 employment of a member after the member becomes entitled to receive
4-18 <withdrawal of an employee from active service and receipt of> a
4-19 retirement allowance in accordance with the provisions of this Act.
4-20 (31) <(24)> "Retirement allowance" means the life
4-21 annuity (modified cash refund) to which a member may be entitled
4-22 under this Act, including annuities payable on disability
4-23 retirement or on early retirement <payments for life after
4-24 retirement date to a member from a combination of both pension and
4-25 annuity payments based on both prior and membership service.
4-26 Retirement allowances shall be paid in equal monthly installments>.
4-27 (32) <(25)> "Retirement board" or "board" means the
4-28 board of trustees of the retirement and pensioning system herein
4-29 created for the purpose of administering the retirement system.
4-30 (33) <(26) "Retirement date" means the first day of
4-31 the month next succeeding the retirement of the member.>
4-32 <(27)> "Retirement system," "retirement and pensioning
4-33 system," "pension system," or "system" means the retirement and
4-34 pensioning system created by this Act for a city governed by this
4-35 Act.
4-36 (34) "Year of creditable service" means a 12-month
4-37 period of creditable service determined in accordance with uniform
4-38 and nondiscriminatory rules established by the board.
4-39 <(28) "Service" means service as an employee of the
4-40 city paid for by the city or service as a member of the system's
4-41 administrative staff paid for by the system.>
4-42 <(29) "Vested interest" means the amount of benefit to
4-43 which a member has a nonforfeitable right in accordance with the
4-44 provisions of this Act.>
4-45 <(30) "Withdrawal" means the separation of any
4-46 employee from active service for any cause whatsoever prior to
4-47 retirement date and the subsequent withdrawal from membership in
4-48 the retirement system.>
4-49 <(31) "Withdrawal allowance" means the accumulated
4-50 deposits of an employee withdrawing from active service and from
4-51 membership in the system. Withdrawal allowance payments shall be
4-52 made in one lump sum unless otherwise specifically provided in this
4-53 Act.>
4-54 SECTION 2. Section 3, Chapter 451, Acts of the 72nd
4-55 Legislature, Regular Session, 1991 (Article 6243n, Vernon's Texas
4-56 Civil Statutes), is amended to read as follows:
4-57 Sec. 3. Establishment and applicability. (a) Except as
4-58 provided by Subsection (b) of this section and subject to the
4-59 authority granted the board in Section 7(d)(2)(D) of this Act,
4-60 members <Members> who retired <retire> prior to September 1, 1993,
4-61 <January 1, 1971, and who are receiving retirement allowances on
4-62 that date> shall continue to receive the same retirement allowances
4-63 they were receiving prior to that date, together with any cost of
4-64 living adjustments authorized and paid in accordance with this Act.
4-65 (b) Members who retired during the calendar years 1962 and
4-66 1963 shall continue <be entitled to elect> to receive a benefit in
4-67 accordance with their election, if any, and the retirement
4-68 allowances computed in the manner prescribed by an applicable city
4-69 ordinance in effect as of January 1, 1962, or in the manner in
4-70 which said allowances would have been computed under applicable
5-1 city ordinances <the provisions> existing immediately prior to the
5-2 enactments of January 1, 1962, together with any cost of living
5-3 adjustments authorized and paid in accordance with this Act.
5-4 <(c) The provisions described in this Act shall be effective
5-5 for payment to all members of the system retiring on or after
5-6 January 1, 1973.>
5-7 SECTION 3. Section 4, Chapter 451, Acts of the 72nd
5-8 Legislature, Regular Session, 1991 (Article 6243n, Vernon's Texas
5-9 Civil Statutes), is amended to read as follows:
5-10 Sec. 4. Administration. (a) There is hereby created a
5-11 retirement board of the retirement and pensioning system, in which
5-12 board is hereby vested <invested> the power and responsibility for
5-13 the proper and effective general administration, management, and
5-14 <responsibility for the proper and effective> operation of the
5-15 retirement system. The board shall be organized immediately after
5-16 its members have qualified and taken the oath of office. <All
5-17 members of the board on January 15, 1991, shall become members of
5-18 the board and continue to serve for the remainder of the terms of
5-19 office in effect on January 15, 1991.>
5-20 (b) The retirement board shall be composed of 11 members as
5-21 follows:
5-22 (1) place one: one city council member designated by
5-23 the city council, who may be removed and replaced or redesignated
5-24 by the city council at any time;
5-25 (2) place two: the city manager of the city or his or
5-26 her designee;
5-27 (3) place three: the director of finance of the city
5-28 or his or her designee;
5-29 (4) places four through six: three voters of the city
5-30 who have been city residents for the preceding five years and who
5-31 are not city employees, former employees, or officers;
5-32 (5) places seven through 10: four active-contributory
5-33 members elected by the active-contributory members <four active
5-34 employee members elected by the members of the system. Each active
5-35 employee member shall serve for a term of four years. Vacancies
5-36 occurring by death, resignation, disability retirement or removal,
5-37 or any other reason except retirement shall be filled for the
5-38 remainder of the term by an active employee member appointed by the
5-39 board. An active employee member who retires, except for
5-40 disability retirement, will be eligible to complete the remainder
5-41 of his or her term;>
5-42 <(5) three legally qualified voters of the city,
5-43 residents thereof for the preceding five years who are neither
5-44 employees nor former employees nor officers of the city. Two of
5-45 the three will be designated by the city council, and one will be
5-46 designated by the board. The city and the board will each appoint
5-47 one such member in every other odd-numbered year. The city will
5-48 appoint one such member in every other even-numbered year. The
5-49 term of office of members so selected shall be four years, and each
5-50 member shall continue to serve until a successor is duly selected
5-51 and qualified. Vacancies occurring by death, resignation, or
5-52 removal of such citizen member shall be filled by the party that
5-53 made the original designation>; and
5-54 (6) place 11: a retired member who will be elected by
5-55 retired members. <The term of office of such member shall be four
5-56 years. Such member shall continue to serve until a successor is
5-57 duly elected and qualified. Vacancies occurring by death,
5-58 resignation, or removal of such retired member shall be filled for
5-59 the remainder of the term by a retired member appointed by the
5-60 board.>
5-61 (c)(1) The place one board member serves at the pleasure of
5-62 the city council and until the council redesignates the place one
5-63 member, or until the member is no longer able to serve because of
5-64 death, resignation, termination of position as a city council
5-65 member, or disability. The city council shall appoint a person to
5-66 fill a vacancy in place one not later than the 90th day after the
5-67 first date of the vacancy.
5-68 (2) In December of every second even-numbered year,
5-69 the city council shall appoint to place four one person meeting the
5-70 qualifications for place four. In December of every second
6-1 odd-numbered year, the city council shall appoint to place five one
6-2 person meeting the qualifications for place five. In December of
6-3 every second odd-numbered year, the board shall appoint to place
6-4 six one person meeting the qualifications for place six. Board
6-5 members holding places four through six each serve a four-year term
6-6 beginning on January 1 of the year after their appointment, unless
6-7 service is earlier terminated by the death, disability,
6-8 resignation, or removal of that board member or the board member
6-9 ceases to meet the qualifications of a citizen board member as set
6-10 forth in Section 4(b) of this Act. The city council shall fill a
6-11 vacancy in place four or five with a person meeting the
6-12 qualifications for that place not later than the 90th day after the
6-13 first date of the vacancy. If the city council fails to appoint an
6-14 eligible person to fill a vacancy in place four or five within the
6-15 90-day period, the board may appoint a person meeting the
6-16 qualifications for that place to fill the vacancy. The board shall
6-17 appoint a person meeting the qualifications for place six to fill a
6-18 vacancy in place six.
6-19 (3) The places seven through 10 board members each
6-20 serve on the board for a four-year term, unless service is earlier
6-21 terminated by the death, resignation, termination of employment,
6-22 disability, retirement, or removal of that board member. The board
6-23 shall appoint an active-contributory member to fill a vacancy in
6-24 each of places seven through 10 for the remainder of the unexpired
6-25 term.
6-26 (4) The place ll board member serves for a four-year
6-27 term, unless that service is earlier terminated by the death,
6-28 disability, resignation, or removal of the member. The board shall
6-29 appoint a retired member to fill a vacancy in place 11 for the
6-30 remainder of the unexpired term.
6-31 (d) Members for places seven through 11 <The elected active
6-32 employee members and the retiree member> shall be elected in
6-33 accordance with the following provisions:
6-34 (1) Only active-contributory members <active employees
6-35 of the city who are members of the retirement system> shall be
6-36 eligible for election for places seven through 10 <as active
6-37 employee members>. Only retired members <employees of the city who
6-38 are retired members of the retirement system> shall be eligible for
6-39 election for place 11 <as the retired member>. Not more than one
6-40 active-contributory <active employee> member shall be eligible for
6-41 election from any one city department.
6-42 (2) Members for places seven through 10 <The active
6-43 employee members of the board shall serve for terms of four years.
6-44 They> shall be elected to four-year staggered terms with the terms
6-45 of two of such board members beginning January 1 of each
6-46 even-numbered year.
6-47 (3) The board member for place 11 shall <The retired
6-48 member shall serve for a term of four years to> be elected in an
6-49 even-numbered year, with the term beginning on January 1 of the
6-50 next odd-numbered year.
6-51 (4)(A) No later than the first day of October of each
6-52 odd-numbered year, the board shall appoint a nominating and
6-53 election committee consisting of five committee members and two
6-54 alternates, all of whom are active-contributory <active employee>
6-55 members of the retirement system. The nominating and election
6-56 committee shall make one or more nominations for each
6-57 active-contributory <employee> member vacancy <vacancies> and shall
6-58 act as election judges. The nominating and election committee
6-59 shall prepare the ballot containing the names of all certified
6-60 active-contributory member <eligible> candidates<, ensuring a
6-61 minimum of three times as many active employee member candidates as
6-62 vacancies exist>.
6-63 (B) No later than the first day of October of
6-64 every second <alternate> even-numbered year, the board shall
6-65 appoint a nominating and election committee consisting of five
6-66 committee <retired> members and five alternates, all of whom are
6-67 retired members of the retirement system. The nominating and
6-68 election committee shall make one or more nominations for the
6-69 retired member vacancy and shall act as election judges. The
6-70 nominating <nomination> and election committee shall prepare the
7-1 ballot containing the names of all certified retired member
7-2 <eligible> candidates<, ensuring at least three candidates for the
7-3 retired member position. Only retired members of the retirement
7-4 system are eligible to vote for the retired member>.
7-5 (5) Each <The> nominating and election committee shall
7-6 publish a notice at least two weeks prior to the applicable
7-7 election date, informing all active-contributory <active employee>
7-8 members or retired members, as applicable, who have been certified
7-9 as candidates.
7-10 (6) Elections for places seven through 10 <employee
7-11 members> shall be held on the first payday in December of each
7-12 odd-numbered year. Elections for place 11 <the retired member>
7-13 shall be held in December of every second <other> even-numbered
7-14 year. The candidates receiving the highest number of eligible
7-15 votes shall be deemed elected. In case of a tie vote, selection
7-16 shall be by lot drawn by an existing member of the retirement board
7-17 at a meeting of the retirement board held after the election but
7-18 before the first day of January of the year after the election.
7-19 (7) The applicable nominating and election committee
7-20 shall canvass the returns, certify the results, and announce the
7-21 official results of the election.
7-22 (8) The retirement board shall approve written
7-23 procedures for the conduct of the election no later than August 1
7-24 of each year in which an election is held.
7-25 (e) <(d)> Each member of the retirement board within 30 days
7-26 after appointment and election shall take an oath of office that
7-27 the board<. The> member will diligently and honestly administer
7-28 the affairs of the retirement system and will not knowingly violate
7-29 or willingly permit to be violated any law or statute applicable to
7-30 the retirement system. All members of the board serve without
7-31 compensation. At any time, the <The> board, by a vote of six board
7-32 <remaining> members, may remove a board member for malfeasance.
7-33 (f) In January of each year, the <(e) The> board shall
7-34 elect from its membership a chairman and a vice-chairman to serve
7-35 one calendar year.
7-36 (g) <(f)> The board shall hire <appoint> a pension officer
7-37 as an employee of the board. The pension officer shall hire and
7-38 may fire or suspend <appoint> necessary staff members, and those
7-39 staff members are employees <with approval> of the board. The
7-40 pension officer acting under the direction of the board shall keep
7-41 all of the records of the retirement system and a record of the
7-42 proceedings of the board. The pension officer and each staff
7-43 member shall receive such compensation as the board may fix in each
7-44 annual budget of the retirement system, or amendments to the
7-45 budget, and that compensation shall be paid from the fund
7-46 <thereto>.
7-47 (h) <(g)> Subject to the limitations of this Act, the board
7-48 shall from time to time establish rules and regulations for the
7-49 administration of the <fund or> funds authorized to be created
7-50 hereunder and for the transaction of the board's business. Each
7-51 member of the board is entitled to one vote on the board. Six
7-52 concurring votes are necessary for a decision by the board members
7-53 at any meeting of the board, and six members constitute a quorum.
7-54 Each member will be required to serve on a committee of the board.
7-55 Any board member who is absent from four consecutive regular
7-56 monthly meetings of the board shall be removed from the board and
7-57 the member shall be replaced in accordance with the provisions of
7-58 this section.
7-59 (i) <(h)>(1) The board shall keep or cause to be kept in
7-60 convenient form such data as are necessary for actuarial valuation
7-61 of the fund <various funds> of the retirement system and for
7-62 checking the mortality, service, compensation, and payment
7-63 experience of the system.
7-64 (2) The board shall keep a record of all its
7-65 proceedings, which shall be open to public inspection, and shall
7-66 publish annually a report showing the fiscal transactions of the
7-67 retirement system for the preceding year, the amount of the
7-68 accumulated cash and securities of the system, and the last balance
7-69 sheet showing the financial condition of the system as disclosed by
7-70 the most recent actuarial valuation of the assets and liabilities
8-1 of the retirement system.
8-2 (3) The board shall have charge of and administer the
8-3 fund as trustee of the fund <retirement system> and shall order
8-4 payments therefrom in pursuance of the provisions of this Act. The
8-5 city and each hospital authority shall provide to the board <shall
8-6 obtain from the city> all records necessary to administer the
8-7 system and the fund. The board shall report annually to the
8-8 members on the condition of the fund <said funds> and the receipts
8-9 and disbursements on account of the fund <same>. The board shall
8-10 keep a complete list of the retired members, surviving spouses, and
8-11 beneficiaries of the fund <said funds> and the amounts paid to
8-12 them.
8-13 (4) Individual accounts shall be maintained for <with>
8-14 each member of the retirement system, showing the amount of the
8-15 member's accumulated deposits <and the accumulated interest
8-16 allocated and standing to the credit of such member as provided
8-17 under the system>. Annually a statement shall be given each member
8-18 showing the total amount of that member's accumulated deposits
8-19 <accumulation of his or her credit>. The accounts of the board and
8-20 the retirement system shall be included in the annual independent
8-21 audit of the accounts of the system. A copy of this annual audit
8-22 shall be provided to the city mayor.
8-23 (5) The retirement board shall designate an actuary
8-24 who shall be the technical advisor of the board regarding the
8-25 maintenance and operations <operation> of the fund <funds>
8-26 authorized by provisions of this Act and shall perform such other
8-27 duties as may be required in connection therewith. The actuary
8-28 shall make periodic valuations of the assets and liabilities of the
8-29 funds and other evaluations as requested by the board.
8-30 (6) <As of the date of the establishment of the
8-31 retirement system the actuary shall make such investigation of the
8-32 mortality, service, and compensation experience of the members of
8-33 the system as the board shall authorize, and, on the basis of such
8-34 investigation, the actuary shall recommend for adoption by the
8-35 board such tables and rates as are hereinafter required. The board
8-36 shall adopt tables and certify rates, and, as soon as practicable
8-37 thereafter, the actuary shall make a valuation, based on the tables
8-38 and rates, of the assets and liabilities of the fund or funds
8-39 authorized by this Act to be created.>
8-40 <(7)> From time to time on the advice of the actuary
8-41 and the direction of the board, the actuary shall make an actuarial
8-42 investigation of the mortality, service, and compensation
8-43 experience of members, retired members, surviving spouses, and
8-44 beneficiaries of the retirement system and shall make a valuation
8-45 of the assets and liabilities of the funds of the system. Taking
8-46 into account the result of such investigation and valuation, the
8-47 board shall adopt for the retirement system such mortality,
8-48 service, and other actuarial tables or rates as are deemed
8-49 necessary. On the basis of <such> tables and rates adopted by the
8-50 board <adopts>, the actuary shall make a valuation at least once
8-51 every two years of the assets and liabilities of the funds of the
8-52 retirement system.
8-53 (7) <(8)> The retirement board may retain the services
8-54 of one or more <hire an> investment managers <manager> who shall
8-55 have full authority to invest and manage the assets of the
8-56 retirement system and <manage the portfolio of> the fund, as
8-57 specified by <employment> contract in accordance with Subchapter C,
8-58 Chapter 802, Government Code, and its subsequent amendments.
8-59 (8) <(9)> The retirement board may retain the services
8-60 of one or more <hire an> investment consultants <consultant> to
8-61 monitor the investment performance of the <fund's> investment
8-62 managers <manager> and provide other investment-related services as
8-63 requested by the board.
8-64 (j) <(i)> The retirement board may retain legal counsel to
8-65 advise, assist, or represent the board in any legal matters
8-66 affecting the retirement system and the operation of the fund.
8-67 (k) Except as provided by Subsection (l) of this section,
8-68 the board may adopt rules, establish regulations or procedures,
8-69 correct any defect, supply any information, or reconcile any
8-70 inconsistency as the board considers necessary or advisable to
9-1 carry out this Act.
9-2 (l) Any procedure, discretionary act, interpretation, or
9-3 construction by the board must be done in a nondiscriminatory
9-4 manner based on uniform principles consistently applied and must be
9-5 consistent with this Act and with 26 U.S.C. Section 401(a) and its
9-6 subsequent amendments.
9-7 SECTION 4. Section 5, Chapter 451, Acts of the 72nd
9-8 Legislature, Regular Session, 1991 (Article 6243n, Vernon's Texas
9-9 Civil Statutes), is amended to read as follows:
9-10 Sec. 5. Membership. (a) Any regular full-time employee who
9-11 has completed six continuous months of employment as a regular
9-12 full-time employee before or <person who becomes an employee of the
9-13 city or of the system's administrative staff> after the date of
9-14 establishment of the retirement system and who has been removed
9-15 from the employee's initial probationary status, <if eligible for
9-16 membership,> shall become an active-contributory <a> member as a
9-17 condition of employment and shall make the required deposits
9-18 commencing with the first pay period following the later of the
9-19 completion <a probationary period> of six continuous months of
9-20 employment as a regular full-time employee or the date of removal
9-21 from the employee's initial probationary status. Unless on
9-22 approved medical leave of absence or other authorized leave, the
9-23 employee shall make the deposits as long as the employee remains a
9-24 regular full-time employee and <from date of employment or
9-25 eligibility, whichever is later. The person> shall remain a member
9-26 of the system until the employee or the employee's beneficiary
9-27 ceases to be entitled to any benefits from the retirement system
9-28 <entitled to benefits under Section 7 of this Act or until entitled
9-29 to disability retirement pursuant to the provisions of Section 8 of
9-30 this Act>.
9-31 (b) <Employees of the city or the system's administrative
9-32 staff who may not become members of the retirement system include:>
9-33 <(1) the mayor and members of the city council;>
9-34 <(2) all civil service commissioned police officers
9-35 and fire fighters;>
9-36 <(3) all part-time employees who work less than 75
9-37 percent of a normal work week; and>
9-38 <(4) all seasonal and temporary employees. A regular
9-39 full-time employee of the city who is not included in this excepted
9-40 classification is one whose position is classified in the annual
9-41 city budget and who is employed throughout the full calendar year
9-42 and whose employment continues from year to year. If a regular
9-43 employee works at least 75 percent of a normal work week but less
9-44 than full time, the employee shall make deposits as though working
9-45 a normal full-time work week even though the rate of contribution
9-46 may thereby exceed seven percent of actual, regular compensation,
9-47 and the employee's average final compensation shall be computed on
9-48 the basis of the compensation for a normal work week, but no
9-49 deposits shall be made nor membership service credit received for
9-50 periods during which an employee's authorized normal work week is
9-51 less than 75 percent of a normal work week.>
9-52 <(c)> Membership in the retirement system consists of the
9-53 following groups:
9-54 (1) the active-contributory members group, which
9-55 consists of all members, other than those on authorized leave of
9-56 absence, who are making deposits; <Active-Contributory. The
9-57 employee whose current employment status allows payroll
9-58 contribution into the retirement system. The employee must work at
9-59 least 75 percent of a normal work week in a permanent position and
9-60 must have completed the initial six months probationary period for
9-61 membership.>
9-62 (2) the active-noncontributory members group, which
9-63 consists of all employees on approved medical leave of absence and
9-64 all employees of the city, a hospital authority, or the board,
9-65 other than inactive-contributory members, who were
9-66 active-contributory members but who are not regular full-time
9-67 employees; <Active-Noncontributory. The employee whose current
9-68 employment status does not allow contributions into the retirement
9-69 system and is thereby deactivated. The employee has the privilege
9-70 of immediate reentry, on appropriate change of status, to a
10-1 creditable period of membership service, with contributions resumed
10-2 at time of status change.>
10-3 (3) the inactive-contributory members group, which
10-4 consists of all members who are on an authorized leave of absence
10-5 and who continue <Inactive-Contributory. The employee who is on a
10-6 leave of absence, who is allowed> to make deposits into the
10-7 retirement system during the employee's absence;<.>
10-8 (4) the inactive-noncontributory members group, which
10-9 consists of all members whose status as an employee with the city,
10-10 a hospital authority, or the board has been terminated before
10-11 retirement or disability retirement and who are still entitled to,
10-12 or whose beneficiary may become entitled to, benefits from
10-13 <Vested-Noncontributory. The terminated employee who, being fully
10-14 vested, retains his or her contributions in> the retirement system;
10-15 and<.>
10-16 (5) the retired members group, which consists of all
10-17 members who have retired and who are receiving or who are entitled
10-18 to receive a retirement allowance <Retired. The employee who is
10-19 receiving a retirement annuity>.
10-20 (c) An active-noncontributory member becomes an
10-21 active-contributory member immediately on resuming employment as a
10-22 regular full-time employee or on returning from an approved medical
10-23 leave of absence, as applicable.
10-24 (d) It shall be the duty of the retirement board to
10-25 determine the membership group to which each person <employee> who
10-26 becomes a member of the retirement system properly belongs. It
10-27 shall be the duty of the city manager to submit to the board a
10-28 statement showing the name, position, compensation, duties, date of
10-29 birth, length of employment <service>, and other information
10-30 regarding each <the> employee of the city the board may require.
10-31 The pension officer shall submit to the board a statement showing
10-32 the name, position, compensation, duties, date of birth, length of
10-33 employment, and other information regarding each employee of the
10-34 board that the board requires. Each hospital authority board shall
10-35 submit to the retirement board a statement showing the name,
10-36 position, compensation, duties, date of birth, length of
10-37 employment, and other information regarding each employee of the
10-38 hospital authority that the retirement board requires.
10-39 (e) Any person who has ceased to be a member and has
10-40 received a distribution of the person's accumulated deposits may
10-41 have the person's membership service or prior service reinstated if
10-42 the person is reemployed as a regular full-time employee for a
10-43 continuous period of 24 months and deposits into the system, within
10-44 a reasonable period established by the board on a uniform and
10-45 nondiscriminatory basis, the accumulated deposits withdrawn by that
10-46 person, together with an interest payment equal to the amount
10-47 withdrawn multiplied by an interest factor. The interest factor is
10-48 equal to the annually compounded interest rate assumed to have been
10-49 earned by the fund beginning with the month and year in which the
10-50 person withdrew the person's accumulated deposits and ending with
10-51 the month and year in which the deposit under this subsection is
10-52 made. The interest rate assumed to have been earned by the fund
10-53 for any period is equal to the interest rate credited for that
10-54 period to the accumulated deposits of members, divided by 0.75.
10-55 <(e) A member ceases to be a member of the retirement system
10-56 and loses membership service if, through death, dismissal,
10-57 resignation, or from any other cause, the member severs the service
10-58 connection as an employee and withdraws accumulated deposits as
10-59 provided under the withdrawal allowance provisions; however, any
10-60 eligible member who has not previously received credit for one-half
10-61 of previously forfeited membership service is entitled to
10-62 reinstatement of membership service if such eligible member
10-63 deposits in the system the accumulated deposits withdrawn and an
10-64 interest charge based on the amount withdrawn times an interest
10-65 factor. The factor is based on the compounded net annual rates of
10-66 interest (the net annual rates of interest credited to the member's
10-67 accumulated contributions divided by 0.75) that were earned by the
10-68 fund beginning with the month and year in which the member withdrew
10-69 contributions and ending with the month and year payment is made to
10-70 reinstate the service.>
11-1 (f) <An eligible member is an employee who has been
11-2 reemployed by the city or the system and has completed at least 24
11-3 consecutive months of service as a member since being reemployed by
11-4 the city or the system and who deposits the lump sum described in
11-5 Subsection (e) of this section with the system during any time
11-6 period designated by the board with the approval of the system's
11-7 actuary.>
11-8 <(g) Any such member who has previously received credit for
11-9 one-half of previously forfeited membership service is entitled to
11-10 reinstate the remaining one-half of this previously withdrawn
11-11 membership service and an interest charge as described hereunder.>
11-12 <(h) An employee granted a leave of absence or withdrawing
11-13 from the service for a stated period of time, not to exceed in any
11-14 event a period of two years, who allows contributions in the
11-15 retirement and pension system to remain in the fund is eligible for
11-16 continued membership on reentering the service of the city or the
11-17 system. During the period of absence, the employee shall not
11-18 receive service credit.>
11-19 <(i) Military leave of absence shall not be included in the
11-20 two-year limit referred to in Subsection (h) of this section if
11-21 such member returns to active service with the city or the system
11-22 within 90 days after the expiration of such military leave of
11-23 absence.> A member <of the system> on authorized <military> leave
11-24 of absence may make deposits each biweekly pay period to the system
11-25 while on authorized <military> leave of absence, in an amount that
11-26 is equal to the amount of the member's <his or her> deposit for the
11-27 last complete biweekly pay period that the member was paid by the
11-28 city, a hospital authority, or the board. As long as the member on
11-29 authorized leave of absence makes the biweekly payments, the<.
11-30 The> city shall <will> make contributions <a contribution> to the
11-31 retirement fund for such member on authorized <military> leave of
11-32 absence from the city each biweekly pay period in an amount equal
11-33 to the contribution amount the city would have made if the member's
11-34 biweekly pay had continued to be the biweekly pay the member
11-35 received for the last complete biweekly pay period that the member
11-36 was paid by the city. Each hospital authority shall make
11-37 contributions to the retirement fund for a member on authorized
11-38 leave of absence from that hospital authority each pay period in an
11-39 amount equal to the contribution amount the hospital authority
11-40 would have made if the member's pay had continued to be the pay the
11-41 member received for the last complete pay period that the member
11-42 was paid by the hospital authority. The board shall make a
11-43 contribution to the retirement fund from system funds for a member
11-44 on authorized leave of absence from the board each biweekly pay
11-45 period in an amount equal to the contribution amount the board
11-46 would have made if the member's biweekly pay had continued to be
11-47 the biweekly pay the member received for the last complete biweekly
11-48 pay period that the member was paid by the board. If the member
11-49 does not make those deposits while on authorized <military> leave
11-50 of absence, the member may make a single payment, within five years
11-51 after the member has returned to employment with the city, with the
11-52 hospital authority, or with the board <system> equal to the
11-53 deposits the member would have made if the member had continued to
11-54 be paid during the authorized <his military> leave of absence at
11-55 the same rate of pay the member was receiving at the time the
11-56 member's authorized <military> leave of absence began. The city
11-57 shall <will> make a single payment for such member employed by the
11-58 city equal to the contributions <deposits> it would have made on
11-59 the member's behalf if the member had made deposits to the fund
11-60 during the period of the member's authorized <military> leave of
11-61 absence. Each hospital authority shall make a single payment for a
11-62 member employed by the hospital authority equal to the
11-63 contributions it would have made on the member's behalf if the
11-64 member had made deposits to the fund during the period of the
11-65 member's authorized leave of absence. The board shall make a
11-66 single payment to the fund for a member employed by the board equal
11-67 to the contributions it would have made on the member's behalf if
11-68 the member had made deposits to the fund during the period of the
11-69 member's authorized leave of absence. As long as deposits are made
11-70 in accordance with this subsection, the member will continue to
12-1 earn membership service during the period of the authorized leave
12-2 of absence.
12-3 (g) <(j) Normal retirement for any member under this system
12-4 shall be the earlier of completion of 30 years of creditable
12-5 service at any age or attainment of age 62. However, should a
12-6 member not retire on attainment of normal retirement, the member
12-7 shall continue to make deposits to the system and shall accrue
12-8 credit for membership service until the member elects to retire.>
12-9 <(k)> From time to time the board, subject to the approval
12-10 of the system's actuary, may elect to permit the reinstatement of
12-11 membership service forfeited in accordance with the terms of this
12-12 section.
12-13 SECTION 5. Section 6, Chapter 451, Acts of the 72nd
12-14 Legislature, Regular Session, 1991 (Article 6243n, Vernon's Texas
12-15 Civil Statutes), is amended to read as follows:
12-16 Sec. 6. CREDITABLE SERVICE. (a) The <Creditable service at
12-17 retirement on which the> retirement allowance of a member is based
12-18 on the amount of creditable <shall consist of all membership>
12-19 service rendered by the member as of the member's actual retirement
12-20 date <since the member last became a member plus any creditable
12-21 service received from the buy-back provisions of Section 5 of this
12-22 Act>.
12-23 (b) The board shall determine by nondiscriminatory
12-24 <appropriate> rules and regulations consistently applied, subject
12-25 to the provisions of this Act, in case of absence, <or> illness, or
12-26 other temporary interruption in service as a regular full-time
12-27 employee <separation from service>, the portion of each calendar
12-28 year to be allowed as creditable <credited to such employee on
12-29 future> service. No credit shall be allowed as creditable service
12-30 for any period exceeding one month during which an employee was
12-31 absent continuously without pay, except for an authorized
12-32 <military> leave of absence. The board shall verify the records
12-33 for creditable service claims filed by the members of the
12-34 retirement system, subject to the provisions of this Act and in
12-35 accordance with such administrative rules and regulations as the
12-36 board may from time to time adopt.
12-37 (c) At any time before a member's actual retirement date, a
12-38 member may establish creditable service for military service
12-39 performed that is creditable as provided under this subsection
12-40 according to the following conditions, limitations, and
12-41 restrictions:
12-42 (1) Military service creditable in the retirement
12-43 system is active federal duty service in the armed forces of the
12-44 United States, other than as a student at a service academy, as a
12-45 member of the reserves, or any continuous active military service
12-46 lasting less than 90 days. To be creditable, the military service
12-47 must have been performed before the beginning of the member's most
12-48 recent period of membership in the retirement system or its
12-49 predecessor system.
12-50 (2) A member is not eligible to establish military
12-51 service credit unless the member was released from active military
12-52 duty under conditions other than dishonorable.
12-53 (3) A member may not establish more than 24 months of
12-54 creditable service in the retirement system for military service
12-55 under this subsection.
12-56 (4) A member may establish creditable service under
12-57 this subsection by contributing to the retirement system a single
12-58 payment equal to 25 percent of the estimated cost of the additional
12-59 projected retirement benefits the member will be entitled to
12-60 receive. The board will determine the required contribution based
12-61 on a procedure recommended by the actuary and approved by the
12-62 board.
12-63 (5) After the member makes the deposit required by
12-64 this subsection, the retirement system shall grant the member one
12-65 month of creditable service for each month of creditable military
12-66 service established under this subsection.
12-67 SECTION 6. Section 7, Chapter 451, Acts of the 72nd
12-68 Legislature, Regular Session, 1991 (Article 6243n, Vernon's Texas
12-69 Civil Statutes), is amended to read as follows:
12-70 Sec. 7. SERVICE RETIREMENT BENEFITS AND WITHDRAWAL BENEFITS.
13-1 (a) Except as provided by Subsection (b) of this section, a member
13-2 who retires on or after the member's normal retirement date and
13-3 applies in writing for a retirement allowance <On retirement from
13-4 service, members entitled thereto> shall receive a life annuity
13-5 (modified cash refund) beginning on the last day of the month after
13-6 the month in which the member retired. Unless Subsection (e) of
13-7 this section or Section 8 of this Act applies, a member whose
13-8 employment by the city, a hospital authority, or the board
13-9 terminates before the member's normal retirement date is entitled
13-10 to a distribution of the member's accumulated deposits in a single
13-11 lump sum. On receiving that distribution, a member is not entitled
13-12 to any other benefit under this Act. If a member has at least five
13-13 years of creditable service and does not withdraw the member's
13-14 accumulated deposits, the member is entitled to a life annuity
13-15 (modified cash refund) beginning on the first day of the month
13-16 after the month in which the member's normal retirement date
13-17 occurs. If a member has at least 20 years of creditable service
13-18 and does not withdraw the member's accumulated deposits, the member
13-19 is also entitled to elect an early retirement benefit on attaining
13-20 age 55 <monthly retirement allowance consisting of current service
13-21 annuity, prior service pension, or both>.
13-22 (b) A member who terminates employment with the city, a
13-23 hospital authority, or the board and who has less than five years
13-24 of creditable service is not entitled to a retirement allowance
13-25 <meets the requirements of retirement shall receive monthly a
13-26 current service annuity payment>.
13-27 (c) <A member who meets the requirements therefor shall
13-28 receive monthly a prior service pension payment.>
13-29 <(d)> The amount <prior service pension and the current
13-30 service annuity, as hereinafter set out, shall be considered a life
13-31 annuity (modified cash refund) with the first monthly payment due
13-32 from the member's retirement date, but the amounts> of the
13-33 retirement allowance <these> and all other benefits payable under
13-34 this statute shall be subject at all times to such adjustments as
13-35 may be required to ensure actuarial soundness as may be approved by
13-36 the actuary and adopted by the board, except that annuities already
13-37 granted may not be reduced below the base figure granted at time of
13-38 retirement.
13-39 (d) <(e)>(1) Subject to the conditions, limitations, and
13-40 restrictions set forth in this subsection, as well as all other
13-41 pertinent conditions, limitations, and restrictions set forth
13-42 elsewhere in this Act, the board shall have the power once each
13-43 year to authorize a <an annual> cost of living adjustment
13-44 (hereinafter referred to as "adjustment") payment which, once
13-45 authorized, <shall be paid out in 12 equal monthly installments
13-46 which> shall be added to the current monthly payment of all
13-47 retirement annuities, pensions, or allowances of each and every
13-48 retired member <of the retirement and pensioning system who has
13-49 retired> or the retired members' <surviving spouses or>
13-50 beneficiaries who have become entitled to benefits, on or before
13-51 December 31 of the year before the year in which the adjustment
13-52 goes into effect <any preceding year>. Before December 31
13-53 <November 1> of each year, the board shall make a separate
13-54 determination as to whether to authorize the payment of an <annual>
13-55 adjustment and the amount of such adjustment, if any. In
13-56 determining whether to authorize an adjustment, the board may
13-57 consider the changes in the consumer price index over the preceding
13-58 12-month period, the actuarial experience of the fund, the
13-59 investment experience of the fund, the amount of any prior
13-60 adjustments, and other factors that the board and the actuary
13-61 consider appropriate.
13-62 (2) In determining whether to authorize the payment
13-63 and the amount of any <annual> adjustment, the board shall be
13-64 governed by the following conditions, considerations, limitations,
13-65 and restrictions:
13-66 (A) Any and all determinations to authorize the
13-67 payment of any adjustment amount must be based on the ability of
13-68 the fund to pay such an amount and shall not be based on the
13-69 individual needs of any particular retired members<, surviving
13-70 spouses,> or beneficiaries.
14-1 (B) Prior to the board's authorizing the payment
14-2 of an <annual> adjustment, the actuary must approve and recommend
14-3 such an adjustment to the board and certify in writing to the board
14-4 that, based on the sound application of actuarial assumptions and
14-5 methods consistent with sound actuarial principles and standards,
14-6 it is demonstrable that the fund has and will continue to have the
14-7 ability to pay such an amount out of its realized income after all
14-8 other obligations of the fund have been paid.
14-9 (C) The amount of the adjustment <payment> for
14-10 each retired member<, surviving spouse,> or beneficiary may not
14-11 exceed six <shall be increased or decreased by the amount of the
14-12 change in the price index over the previous year, or by four>
14-13 percent of the monthly payment due the retired member or
14-14 beneficiary before the adjustment. For members who retired during
14-15 the year in which the adjustment is authorized, the increase for
14-16 the first year in which the adjustment is being paid shall be
14-17 prorated in the ratio that the number of completed months after the
14-18 member's retirement in the year of the member's retirement bears to
14-19 12. After the first year the member is entitled to the full amount
14-20 of the adjustment without proration. <retirement allowance as
14-21 adjusted, whichever is the smaller, provided, however, that such
14-22 increase shall be prorated for a member who retired during the year
14-23 in the ratio that the number of completed months after the member's
14-24 retirement in that year bears to 12. The actuary, in making a
14-25 determination as to the amount of the adjustment payment, may use
14-26 the base period in order to compute an average base period price
14-27 index for the six-year base period by averaging or leveling the
14-28 increases and decreases of the price index over the same six-year
14-29 base period so long as it is demonstrated by the application of
14-30 sound actuarial standards that such a use of averaging or leveling
14-31 will not be detrimental to the continuity of the fund.>
14-32 (D) The board shall have the authority and the
14-33 duty on recommendation by the actuary, at any and all times and
14-34 without notice to anyone, to decrease the amount of <the>
14-35 adjustment payment as much as is necessary to protect the
14-36 continuity of the retirement and pensioning system and to protect
14-37 the corpus of the system should the ability of the system to
14-38 continue to pay the adjustment be threatened by a change in the
14-39 economic situation of the United States, the State of Texas, the
14-40 city, or the system itself, such as would dictate that a prudent
14-41 trustee should authorize such a decrease, providing that, if the
14-42 threatening change should prove not to have had the predicted
14-43 harmful effect on the system, then the board shall have the
14-44 authority, on recommendation by the actuary, to reinstate the
14-45 payment of all or any portion of the amount of the previously
14-46 decreased adjustment payments.
14-47 <(E) All monthly retirement annuities being paid
14-48 by the system in which payments began prior to January 1, 1985,
14-49 shall be increased effective March 1, 1985, with the first
14-50 increased amounts being paid March 31, 1985, in accordance with the
14-51 following schedule:>
14-52 <Year of> <Percentage>
14-53 (þLRetirementää þLIncreaseää
14-54 <1962 and earlier> <250>
14-55 <1963 through 1966> <230>
14-56 <1967 through 1970> <160>
14-57 <1971> <105>
14-58 <1972> <100>
14-59 <1973> <65>
14-60 <1974> <55>
14-61 <1975> <50>
14-62 <1976> <45>
14-63 <1977> <40>
14-64 <1978> <35>
14-65 <1979> <25>
14-66 <1980> <15>
14-67 <1981> <8>
14-68 <1982> <7>
14-69 <1983> <6>
14-70 <1984> <5>
15-1 <All members are entitled to the following
15-2 one-time benefit increase as of January 1, 1990:>
15-3 <Percent>
15-4 (þLDate Benefit Commencedää þLBenefit Increaseää
15-5 <1968 or earlier> <15>
15-6 <1969 through 1980> <11>
15-7 <1981 through September, 1985> <8>
15-8 <October, 1985, through August 1988> <2>
15-9 <September, 1988, through month prior>
15-10 <to effective date of benefit increase> <0.5>
15-11 (3) Any adjustment payments shall be in addition to
15-12 the benefits to which a retired member<, surviving spouse,> or
15-13 beneficiary is otherwise entitled under this Act, and in no event
15-14 shall a reduction in the adjustment payments cause the retired
15-15 member's<, surviving spouse's,> or beneficiary's benefits to be
15-16 reduced below the actual base retirement figure calculated under
15-17 the provisions of this Act.
15-18 (4) The following terms and definitions shall be used
15-19 in construing the meaning of this section <subsection>:
15-20 (A) "Base retirement figure" means that
15-21 <retirement> figure calculated under the provisions of this Act at
15-22 the time of actual retirement to which, for the purposes of this
15-23 subsection, a retired member is entitled over a 12-month period.
15-24 (B) "Consumer price <Price> index" means the
15-25 <annual average over a calendar year of the> Consumer Price Index
15-26 (all items-United States City average) published monthly by the
15-27 Bureau of Labor Statistics, United States Department of Labor or
15-28 its successor in function.
15-29 (C) <"Adjustment payment" means an annual cost
15-30 of living adjustment payment which is paid in 12 equal monthly
15-31 installments which are added to the current monthly payment figure
15-32 of retirement annuities, pensions, or allowances of members,
15-33 surviving spouses, or beneficiaries of the retirement and
15-34 pensioning system who have become entitled to benefits under this
15-35 Act.>
15-36 <(D) "Averaging" or "leveling" means a means
15-37 whereby the fluctuations in the price index over a stated period of
15-38 time may be first averaged out for the entire period to determine
15-39 the average amount over that period of time that may be paid out as
15-40 an annual adjustment payment, provided that in no event shall such
15-41 an averaging or leveling principle be used to justify an annual
15-42 increase in the annual adjustment payment which is equal to more
15-43 than four percent of the current retirement figure.>
15-44 <(E) "Base period" means the six years
15-45 immediately preceding the year for which the annual adjustment
15-46 payment is computed.>
15-47 <(F) "Fund" means, for the purposes of this
15-48 subsection, a combination of Fund No. 1 and Fund No. 2, as defined
15-49 in this Act unless otherwise indicated.>
15-50 <(G)> "Continuity of the fund" means the ability
15-51 of the retirement and pensioning system's fund to continue to meet
15-52 all of its purposes, to continue to thrive and grow along with the
15-53 economy of the United States, the State of Texas, and the city, or
15-54 to be able to sustain itself and its retired members<, surviving
15-55 spouses,> and their beneficiaries during and throughout the periods
15-56 of deflation or recession in those economies.
15-57 (e) <(f)> Any member shall be eligible for early retirement
15-58 if the member attains <attained> the age of 55 years and completes
15-59 <completed> at least 20 years of creditable service <with the
15-60 city>. Such member shall be entitled to a benefit equal to a life
15-61 <the current service> annuity (modified cash refund) reduced at the
15-62 rate of five-twelfths of one percent for each month the member was
15-63 retired before the member's normal retirement date. A member who
15-64 takes early retirement shall begin receiving the benefits provided
15-65 by this subsection beginning on the last day of the month after the
15-66 month in which the member retired <at which payments commence>.
15-67 (f) <(g) Any member, irrespective of the number of years of
15-68 creditable service, shall be eligible for normal retirement at age
15-69 62. After age 62 the member may continue in the employment of the
15-70 city or the system and shall continue to make deposits to the
16-1 system and accrue credit for membership service until he or she
16-2 elects to retire. No member shall be paid any benefits by the
16-3 system so long as the member is permanently employed by the city or
16-4 the system.>
16-5 <(h)> A member <attaining eligibility for retirement, except
16-6 for disability retirement,> may file a duly acknowledged written
16-7 designation which, if approved by the board, shall entitle the
16-8 member, on retirement, to receive the actuarial equivalent of the
16-9 life annuity in the form of one of the following options:
16-10 (1) Option I. 100 Percent Joint and Survivor Annuity.
16-11 This option is a reduced monthly annuity payable to the member but
16-12 with the provision that on the member's death the annuity shall be
16-13 continued throughout the life of and be paid to such person as the
16-14 member shall <irrevocably> designate before the member's actual
16-15 retirement date.
16-16 (2) Option II. 50 Percent Joint and Survivor Annuity.
16-17 This option is a reduced monthly annuity payable to the member but
16-18 with the provision that on the member's death one-half of the
16-19 annuity shall be continued throughout the life of and be paid to
16-20 such person as the member shall <irrevocably> designate before the
16-21 member's actual retirement date.
16-22 (3) Option III. 66-2/3 Percent Joint and Survivor
16-23 Annuity. This option is a reduced monthly annuity payable to the
16-24 member but with the provision that on the member's death two-thirds
16-25 of the annuity shall be continued throughout the life of and be
16-26 paid to such person as the member shall <irrevocably> designate
16-27 before the member's actual retirement date.
16-28 (4) Option IV. Joint and 66-2/3 Percent Last
16-29 Survivor Annuity. This option is a reduced monthly annuity payable
16-30 to the member but with the provision that two-thirds of the annuity
16-31 to which the member would be entitled shall be continued throughout
16-32 the life of and be paid to the survivor after the death of either
16-33 the member or such person as the member shall <irrevocably>
16-34 designate before the member's actual retirement date.
16-35 (5) Option V. Level Income Option. If payment of a
16-36 retirement allowance <benefit> commences prior to the earliest age
16-37 at which the member will become eligible for an old age insurance
16-38 benefit under the Social Security Act, the member may elect that
16-39 the amount of the monthly payments be adjusted so that an increased
16-40 monthly amount will be paid prior to such age and a reduced monthly
16-41 amount, if any, will be paid for life after such age. The purpose
16-42 of this adjustment is to enable the member to receive from this
16-43 plan and under the Social Security Act an aggregate income in
16-44 approximately a level amount for life. <Such adjusted payments
16-45 shall be the actuarial equivalent of the pension otherwise payable
16-46 to such member.>
16-47 (6) Option VI. 66-2/3 Percent Joint and
16-48 Survivor/Level Income Option. If payment of a retirement allowance
16-49 <benefit> commences prior to the earliest age at which the member
16-50 could become eligible for an old age insurance benefit under the
16-51 Social Security Act, the member may elect that the amount of the
16-52 monthly payments be adjusted so that an increased monthly amount
16-53 will be paid prior to such age and a reduced monthly amount will be
16-54 paid for life after such age. The purpose of this adjustment is to
16-55 enable the member to receive from this plan and under the Social
16-56 Security Act an aggregate income in approximately a level amount
16-57 for life. Option VI provides that if <If> the member's death
16-58 occurs after age 62, two-thirds of the monthly annuity the member
16-59 was receiving at the time of the member's death shall be continued
16-60 throughout the life of and be paid to such person as the member
16-61 shall <irrevocably> designate before the member's actual retirement
16-62 date. If the member's death occurs before age 62, two-thirds of
16-63 the monthly annuity the member was receiving at the time of
16-64 member's death shall be paid to such person as the member shall
16-65 <irrevocably> designate before the member's actual retirement date
16-66 through the end of the month when the member would have reached age
16-67 62. The monthly annuity being paid to such person as the member
16-68 shall <irrevocably> designate before the member's actual retirement
16-69 date will be reduced at the end of the month following the month in
16-70 which the member would have reached age 62 to two-thirds of the
17-1 reduced benefit the member would have begun to receive at age 62.
17-2 (7) Option VII. 15-Year Certain and Life Annuity.
17-3 This option is a reduced annuity payable to the member for life.
17-4 In the event of the member's death before 180 monthly payments have
17-5 been made, the remainder of the 180 payments shall be paid <are
17-6 payable> to the member's beneficiary or, if there is no
17-7 beneficiary, to the member's estate.
17-8 (8) Option VIII. Equivalent Benefit Plan. If a
17-9 member requests in writing, any <Any> other form of benefit or
17-10 benefits may be paid either to the member or to such person or
17-11 persons as the member shall designate before the member's actual
17-12 retirement date <in writing>, provided that the benefit plan
17-13 requested by the member is certified by the actuary for the system
17-14 to be the actuarial equivalent of the life annuity with guaranteed
17-15 refund of the retired member's accumulated deposits. If, on the
17-16 death of the member and all other persons entitled to receive
17-17 payments under an optional benefit, the member's accumulated
17-18 deposits as of the member's actual retirement date exceed the sum
17-19 of all payments made under that optional benefit, that excess shall
17-20 be paid in one lump sum to the member's beneficiary.
17-21 (g)(1) For purposes of Subsection (f) of this section,
17-22 designation of a beneficiary must be in writing. If a member has
17-23 chosen Option I, II, III, IV, VI, or VIII, the member's designation
17-24 of a beneficiary may not be revoked after a member retires, and any
17-25 attempted revocation of a designation for those options is void.
17-26 If the member is married, spousal consent is required for the
17-27 member to select an optional benefit other than Option I, II, III,
17-28 IV, or VI. At any time before retirement, a member may file with
17-29 the board a written statement designating one or more persons to be
17-30 entitled to receive as beneficiary the reduced annuity payable
17-31 under one of the optional benefits. If a married member designates
17-32 as a beneficiary any person other than the member's spouse, the
17-33 member's spouse must consent in writing to the beneficiary
17-34 designation, and the beneficiary designation may not be changed
17-35 without spousal consent, unless the consent of the spouse expressly
17-36 permits designations by the member without the requirement of
17-37 further consent by the spouse. The spouse's consent is irrevocable
17-38 and must acknowledge the effect of the designation and be witnessed
17-39 by a board employee or notary public. Spousal consent is not
17-40 required if it is established to the satisfaction of the board that
17-41 the required consent cannot be obtained because there is no spouse,
17-42 the spouse cannot be located, or other circumstances exist as
17-43 prescribed by United States Treasury regulations. Notwithstanding
17-44 other provisions of this subdivision, the option election or
17-45 beneficiary designation made by a member and consented to by the
17-46 member's spouse may be revoked by the member in writing without
17-47 consent of the spouse at any time before retirement. The number
17-48 of revocations is not limited. A former spouse's waiver or consent
17-49 is not binding on a new spouse. An option selection becomes
17-50 effective on the member's actual retirement date. The member
17-51 retains the right to change the option selected or the beneficiary
17-52 designated until the member's actual retirement date, subject to
17-53 this subsection.
17-54 (2) After filing the written statement selecting one
17-55 of the optional benefits, the member may continue in employment and
17-56 retire any time after the member becomes eligible by filing a
17-57 written application for retirement. If the member dies before
17-58 retirement but after becoming eligible for retirement, the
17-59 effective date of the member's retirement is the last day of the
17-60 calendar month of death, and the benefit is computed on the
17-61 optional benefit selected as if the member had retired on that
17-62 date.
17-63 (h) <(i)> The amount of the annuity payment in Options I,
17-64 II, III, IV, V, VI, VII, and VIII shall be determined without
17-65 considering the minimum cumulative payment of the retired member's
17-66 <employee's> accumulated deposits since that refund feature will
17-67 stay in effect as indicated herein.
17-68 (i) If a member who is eligible for retirement dies without
17-69 having filed a written selection of one of the enumerated options
17-70 and if the member leaves a surviving spouse, that spouse may select
18-1 the optional benefit in the same manner as if the member had made
18-2 the selection or may select a lump-sum payment equal to the
18-3 deceased member's accumulated deposits plus an equivalent amount
18-4 from Fund No. 2. If the member does not leave a surviving spouse,
18-5 the member's designated beneficiary is entitled to elect either
18-6 Option VII, to become effective at the beginning of the calendar
18-7 month after the month in which the death of the member occurs, or
18-8 the sum of a lump-sum payment equal to the deceased member's
18-9 accumulated deposits plus an equivalent amount from Fund No. 2. If
18-10 the surviving spouse dies before the spouse receives retirement
18-11 allowances equal to the amount of the member's accumulated deposits
18-12 on the date of the member's death, the excess of the accumulated
18-13 deposits over the retirement allowances paid shall be distributed
18-14 in one lump sum to the member's estate.
18-15 (j) <On separation from the service of the city by
18-16 resignation or dismissal before retirement, the member shall
18-17 receive the amount of the accumulated deposits standing to the
18-18 member's credit in one lump sum. But, if a member has had at least
18-19 five years of service with the city at the time the employee's
18-20 service is terminated, the member shall have a vested right to
18-21 elect to leave the member's accumulated deposits with the
18-22 retirement system until such time as the member has applied in
18-23 writing for benefit payments and has attained an age at which the
18-24 member becomes entitled to receive monthly retirement benefit
18-25 payments under this Act, at which time the member shall be entitled
18-26 to a retirement allowance equal to that which the member would have
18-27 received if the member had attained the age at the time of
18-28 termination of the member's service which the member had attained
18-29 at the time of making application.>
18-30 <(k)> In the event of death of a member who is ineligible
18-31 for retirement, the member's accumulated deposits <standing to the
18-32 member's credit in Fund No. 1> and an equivalent amount from Fund
18-33 No. 2 shall be paid <payable> in a lump sum to the member's
18-34 beneficiary <or, if there is no beneficiary, to the member's
18-35 estate, unless the member shall have directed otherwise in writing,
18-36 duly acknowledged and filed with the board>.
18-37 (k)(1) If a prior demand for withdrawal of accumulated
18-38 deposits has not been made within seven <(l) Seven> years after
18-39 termination of employment with the city, a hospital authority, or
18-40 the board <cessation of service> of a member with less than five
18-41 years' of creditable service, the member's <if no previous demand
18-42 has been made, any> accumulated deposits <standing to the member's
18-43 credit> shall be returned to the member or the member's
18-44 beneficiary. Except as provided by Subdivision (2) of this
18-45 subsection, if <estate. If> the system is unable to locate the
18-46 member or the member's beneficiary <estate>, the member's
18-47 accumulated deposits shall thereafter be forfeited and become a
18-48 part of Fund No. 2.
18-49 (2) If the member or member's beneficiary later
18-50 appears and requests in writing the payment of the member's
18-51 accumulated deposits, the system shall:
18-52 (A) reinstate the account of the member;
18-53 (B) credit to that account an amount equal to
18-54 all of the accumulated deposits previously standing to the member's
18-55 credit plus interest that would have been earned on those
18-56 accumulated deposits if the funds had remained in Fund No. 1
18-57 between the date of forfeiture to Fund No. 2 and the date of
18-58 reinstatement of the member's account;
18-59 (C) fund the account from the monies in Fund No.
18-60 2; and
18-61 (D) make all necessary payments to the member or
18-62 member's beneficiary from the reinstated account.
18-63 (3) On payment of the accumulated deposits under this
18-64 subsection, plus any interest on those deposits to which the member
18-65 may be entitled, to the member or member's beneficiary in
18-66 accordance with this subsection, the terminated employee ceases to
18-67 be a member of the system.
18-68 (l) <(m)> In the event of the death of a member receiving a
18-69 retirement allowance, the sum of $2,000 shall be payable in a lump
18-70 sum to the member's beneficiary <or, if there is no beneficiary, to
19-1 the member's estate, unless the member shall have directed
19-2 otherwise in writing, duly acknowledged and filed with the board>.
19-3 (m) <(n)(1) Within one year prior to the date on which a
19-4 member shall become eligible for retirement under any provisions of
19-5 this Act, the member may file with the board a written statement
19-6 selecting one of the optional benefits authorized by this Act,
19-7 designating the person or beneficiary to be entitled to receive the
19-8 reduced annuity payable under one of the optional benefits. If the
19-9 member is married, spousal consent is required for the member to
19-10 select an optional benefit other than Option I, II, III, IV, or VI.
19-11 An option selection shall become effective at the member's date of
19-12 eligibility to retire. The member shall retain the right to change
19-13 the option selected until his retirement date.>
19-14 <(2) After filing the written statement selecting one
19-15 of the optional benefits, the member may continue in service and
19-16 thereafter retire any time after eligibility by filing a written
19-17 application for retirement. If the member dies before retirement
19-18 but after becoming eligible for retirement, the effective date of
19-19 the member's retirement shall be the last day of the calendar month
19-20 of death, and the benefit shall be calculated as if the member had
19-21 retired as of that date on the optional benefit selected.>
19-22 <(o) In the event a member who is eligible for retirement
19-23 dies without having filed a written selection of one of the above
19-24 enumerated options and if the member leaves a lawfully married
19-25 spouse surviving, then the surviving spouse of such member may
19-26 select the optional benefit in the same manner as if the member had
19-27 made the selection or may select a lump-sum payment equal to the
19-28 accumulated deposits standing to the member's credit in Fund No. 1
19-29 plus an equivalent amount from Fund No. 2. If the member leaves no
19-30 lawfully married spouse surviving, then the member's designated
19-31 beneficiary or, if there is no beneficiary, the executor or
19-32 administrator of the estate of the member is entitled to elect
19-33 either Option VII, 15-Year Certain and Life Annuity, effective at
19-34 the beginning of the calendar month succeeding that in which the
19-35 death of the member occurs, or a lump-sum payment equal to the
19-36 accumulated deposits standing to the member's credit in Fund No. 1
19-37 plus an equivalent amount from Fund No. 2. In the event of the
19-38 death of the lawfully married surviving spouse before having
19-39 received retirement allowances equal to the amount of the member's
19-40 accumulated deposits at the date of the member's death, the excess
19-41 of such accumulated deposits over the retirement allowances paid
19-42 shall be refunded in one sum to the member's estate.>
19-43 <(p)> When monthly survivor benefits are deemed payable as a
19-44 result of the death of a member before retirement, an additional
19-45 sum of $2,000 shall be payable as a death benefit to the member's
19-46 designated beneficiary <or, if there is no beneficiary, to the
19-47 member's estate>.
19-48 (n) <(q)> In the event of the death of the retired member
19-49 under any retirement option and the death of the beneficiary
19-50 <person irrevocably> designated by the retired member when either
19-51 Option I, Option II, Option III, Option IV, or Option VI is in
19-52 effect, before <monthly> retirement allowances have been received
19-53 that are equal or greater than the retired member's accumulated
19-54 deposits, then the member's estate will receive the excess of the
19-55 retired member's accumulated deposits over the retirement
19-56 allowances paid.
19-57 (o) Notwithstanding any contrary provision of this Act, the
19-58 distribution of a member's benefits, including benefits payable
19-59 after the member's death, made on or after January 1, 1985, shall
19-60 be made in accordance with the following requirements and shall
19-61 otherwise comply with 26 U.S.C. Section 401(a)(9) and its
19-62 subsequent amendments and regulations, including Regulation Section
19-63 1.401(a)(9)-2:
19-64 (1) A member's benefits shall be distributed to the
19-65 member, or the distribution of those benefits shall begin, not
19-66 later than April 1 of the calendar year after the calendar year in
19-67 which occurs the later of the date on which the member attains age
19-68 70-1/2 or the date on which the member's employment by the city,
19-69 hospital authority, or the board terminates.
19-70 (2) A member's benefits shall be distributed over a
20-1 period not exceeding the life of the member or the lives of the
20-2 member and the member's beneficiary or over a period not exceeding
20-3 the life expectancy of the member or the life expectancy of the
20-4 member and the member's beneficiary.
20-5 (3) If the distribution of a member's benefit has
20-6 begun and the member dies before the member's entire benefit is
20-7 distributed, the remaining portion of that benefit shall be
20-8 distributed at least as rapidly as under the form of benefit
20-9 selected as of the date of the member's death, adjusted as
20-10 necessary under this subsection.
20-11 (4) If a member dies before the distribution of the
20-12 member's benefit has begun, the member's death benefit shall be
20-13 distributed to the member's beneficiary within five years after the
20-14 date of the member's death. This five-year rule does not apply to
20-15 any portion of the deceased member's benefit that is payable to or
20-16 for the benefit of the member's surviving spouse. A benefit
20-17 payable to or for the benefit of the member's surviving spouse may
20-18 be distributed over the life of the spouse or over a period not
20-19 exceeding the life expectancy of the spouse, provided that payment
20-20 of the benefit begins not later than the date on which the deceased
20-21 member would have attained age 70-1/2. If the surviving spouse
20-22 dies before distributions to that spouse begin, the five-year rule
20-23 applies as if the spouse had been the member.
20-24 (5) The five-year rule does not apply to distributions
20-25 payable to a beneficiary over the life or life expectancy of the
20-26 beneficiary, provided that payment of the benefit begins not later
20-27 than the first anniversary of the date of the member's death.
20-28 (6) In applying the requirements of this subsection,
20-29 the life expectancy of the member and the member's beneficiary
20-30 shall be redetermined annually in accordance with regulations under
20-31 26 U.S.C. Section 401(a)(9) and its subsequent amendments.
20-32 (p) The board may adjust the terms of payment under any form
20-33 of benefit payment as long as the benefit as adjusted is the
20-34 actuarial equivalent of the benefit before adjustment.
20-35 SECTION 7. Section 8, Chapter 451, Acts of the 72nd
20-36 Legislature, Regular Session, 1991 (Article 6243n, Vernon's Texas
20-37 Civil Statutes), is amended to read as follows:
20-38 Sec. 8. Disability retirement. (a) Only
20-39 active-contributory members, inactive-contributory members, and
20-40 members on approved medical leave of absence <members who are
20-41 permanent full-time employees or who are eligible to participate in
20-42 the retirement fund or are contributing members or who work 30
20-43 hours or more per week> are eligible for consideration for
20-44 disability retirement. Such members may apply for disability
20-45 retirement at any date prior to their normal retirement date.
20-46 (b) If a member who is eligible for disability retirement
20-47 and who has <with> less than 10 years of creditable service has
20-48 become mentally or physically incapacitated for the performance of
20-49 employment duties as a direct result of injuries sustained
20-50 subsequent to the member's effective date of membership in the
20-51 retirement system, the member may apply for disability retirement.
20-52 Such application made by or on behalf of the injured member shall
20-53 show that the injury sustained:
20-54 (1) was by external and violent means;
20-55 (2) came as a direct and proximate result of the
20-56 performance of the member's <his or her> employment duties with the
20-57 city, a hospital authority, or the board <system>; and
20-58 (3) is likely to be permanent.
20-59 (c) On recommendation of the physician or physicians
20-60 appointed or selected by the board that an eligible <the> member's
20-61 incapacity is likely to be permanent and after considering any
20-62 additional evidence which the board deems relevant, the retirement
20-63 board shall <may> award the member a disability retirement
20-64 allowance <benefits>. The decision of the board is final.
20-65 (d) If a member who is eligible for disability retirement
20-66 and who has <with> more than 10 years of creditable service has
20-67 become mentally or physically incapacitated for the performance of
20-68 employment duties, the member may apply for disability retirement.
20-69 The application made on behalf of the disabled member shall show
20-70 that the incapacity is likely to be permanent. On recommendation
21-1 of the physician or physicians appointed or selected by the board
21-2 that the eligible member's incapacity is likely to be permanent
21-3 and after considering any additional evidence which the board deems
21-4 relevant, the retirement board shall <may> award such member a
21-5 disability retirement allowance <benefits>. The decision of the
21-6 board is final.
21-7 (e) On award of a disability retirement allowance
21-8 <benefits>, the member shall receive a disability retirement
21-9 allowance, beginning on the last day of the month after the month
21-10 in which the member became disabled, which shall be computed in the
21-11 same manner that a retirement allowance would be computed at the
21-12 member's normal retirement date, based on compensation and
21-13 creditable service at the date of disability retirement, without
21-14 reduction for early retirement. The disabled member may choose to
21-15 receive a life annuity (modified cash refund) or a benefit as <The
21-16 options allowed are life annuity or its actuarial equivalent
21-17 payable in the form> described by Section 7(f) of this Act as
21-18 Option I, Option II, Option III, Option IV, or Option VII.
21-19 (f) A member receiving a disability retirement allowance
21-20 will be required to file an annual report with <to> the retirement
21-21 board concerning continued proof of disability. The report shall
21-22 include:
21-23 (1) a current statement of the member's physical or
21-24 mental condition, signed by the member's attending physician; and
21-25 (2) a statement of all employment activities pursued
21-26 in the preceding year.
21-27 (g) The board may verify all information submitted in this
21-28 report. Each calendar year, a <A> disabled member shall file an
21-29 annual report not later than the 60th day after <on> the
21-30 anniversary date of the member's disability retirement<; the annual
21-31 report shall be filed no later than 60 days following the due
21-32 date>.
21-33 (h) The pension officer will be responsible for a yearly
21-34 report to the retirement board listing those disabled members who
21-35 should be examined. The retirement board shall have the right to
21-36 order an examination of any person on disability retirement once
21-37 each year until the member reaches the age of 62 years. If the
21-38 member refuses to submit to an examination by a physician or
21-39 physicians appointed by the board or if the member refuses to
21-40 submit an annual report in accordance with Subsection (g) of this
21-41 section concerning continued proof of disability, the disability
21-42 retirement allowance shall be discontinued until such refusal is
21-43 withdrawn and the member has submitted to an examination or has
21-44 submitted an annual report. Should such refusal continue for a
21-45 period of one year, the disability retirement allowance may be
21-46 revoked by the board. If a member's disability retirement
21-47 allowance has been revoked, the board may reinstate the member's
21-48 disability retirement allowance on the member's full performance of
21-49 and compliance with all requirements of this section and the
21-50 board's determination that the member's disability is continuing.
21-51 (i) If after investigation of the disabled member's
21-52 activities or if the annual medical examination shows that the
21-53 member is no longer physically or mentally incapacitated for the
21-54 purposes of the performance of employment duties or that such
21-55 member is engaged in or is able to engage in substantial gainful
21-56 occupation, as defined by Social Security disability income
21-57 guidelines, for which he or she is reasonably suited by education,
21-58 training, or experience, the board may discontinue the disability
21-59 retirement allowance. If the disability retirement allowance of a
21-60 member who had less than 10 years of creditable service is
21-61 discontinued under this subsection or Subsection (h) of this
21-62 section and not reinstated, and the member is not reemployed by the
21-63 city, a hospital authority, or the board, the member is entitled to
21-64 any amount by which the sum of the member's accumulated deposits as
21-65 of the date of disability retirement exceeds the sum of all
21-66 disability retirement benefits paid to the member by the system.
21-67 If the disability retirement allowance of a member who had 10 years
21-68 or more of creditable service is discontinued under this subsection
21-69 or Subsection (h) of this section and not reinstated, and the
21-70 member is not reemployed by the city, a hospital authority, or the
22-1 board, the member may withdraw any amount by which the sum of the
22-2 member's accumulated deposits as of the date of the disability
22-3 retirement exceeds the sum of all disability retirement benefits
22-4 paid to the member by the system. If the member does not withdraw
22-5 the excess, the member is entitled to a life annuity (modified cash
22-6 refund) beginning on the first day of the month after the month in
22-7 which the member's normal retirement date occurs. <If the member
22-8 who received a disability allowance with less than 10 years
22-9 creditable service has his or her allowance discontinued pursuant
22-10 to this provision, any remaining balance of Fund No. 1 will be
22-11 refunded to the member. If the member who received a disability
22-12 allowance after 10 years creditable service has his or her
22-13 allowance discontinued pursuant to this provision, his or her
22-14 contributions shall remain in the system and he or she shall be
22-15 considered a vested-noncontributory member.>
22-16 (j) If a disabled member returns to active employment
22-17 service with the city, a hospital authority, or the board <system>,
22-18 the disability retirement allowance shall cease. If the person is
22-19 reemployed as a regular full-time employee, the <Such> person shall
22-20 be reinstated as an active-contributory <active> member of the
22-21 system and shall comply with all requirements of this Act. If
22-22 reinstated as an active-contributory member, membership<.
22-23 Membership> service credits accumulated prior to disability shall
22-24 be restored to the full amount standing to the member's credit as
22-25 of the date the board found the member <him or her> eligible for
22-26 disability retirement, and any<. Any> prior service credit shall
22-27 be restored in full. The member is not required to reimburse the
22-28 fund for any disability retirement allowance amounts received by
22-29 the member.
22-30 SECTION 8. Section 9, Chapter 451, Acts of the 72nd
22-31 Legislature, Regular Session, 1991 (Article 6243n, Vernon's Texas
22-32 Civil Statutes), is amended to read as follows:
22-33 Sec. 9. Method of financing. (a) Each active-contributory
22-34 member shall make deposits <Deposits by the members> to the
22-35 retirement system <shall be made> at a rate equal to <based on>
22-36 seven percent of the member's compensation, pay, or salary, <basic
22-37 hourly earnings of each member> exclusive of overtime, incentive,
22-38 or terminal pay, and disregarding compensation, pay, or salary in
22-39 any month in excess of $16,666. <Deposits shall be made so long as
22-40 a member remains employed by the city or the system.> Deposits
22-41 shall be made by payroll deduction. If a regular full-time
22-42 employee works at least 75 percent of a normal 40-hour work week
22-43 but less than the full 40 hours, the employee shall make deposits
22-44 as though working a normal 40-hour work week even though the rate
22-45 of contribution may exceed seven percent of the employee's actual
22-46 compensation, pay, or salary, and the employee's average final
22-47 compensation shall be computed on the basis of the compensation,
22-48 pay, or salary for a normal 40-hour work week. No deposits may be
22-49 made nor membership service credit received for periods during
22-50 which an employee's authorized normal work week is less than 75
22-51 percent of a normal 40-hour work week. A person who is eligible
22-52 for inactive-contributory membership status and who chooses to be
22-53 an inactive-contributory member shall make deposits to the
22-54 retirement system biweekly in an amount that is equal to the amount
22-55 of the member's deposit for the last complete biweekly pay period
22-56 that the member was employed by the city, a hospital authority, or
22-57 the board. The members, by a majority vote in favor of an increase
22-58 in contributions above seven percent, may <shall> increase each
22-59 member's contributions above seven percent in whatever amount the
22-60 pension board recommends. The city shall contribute amounts equal
22-61 to seven percent of the compensation, pay, or salary <basic hourly
22-62 earnings> of each active-contributory member and each
22-63 inactive-contributory member employed by the city, exclusive of
22-64 overtime, incentive, or terminal pay, and disregarding
22-65 compensation, pay, or salary in any month in excess of $16,666. If
22-66 a regular full-time employee of the city works at least 75 percent
22-67 of a normal 40-hour work week but less than the full 40 hours, the
22-68 city shall make contributions for that employee as though that
22-69 employee works a normal 40-hour work week even though the rate of
22-70 contribution may exceed seven percent of that employee's actual
23-1 compensation, pay, or salary. The city council may authorize the
23-2 city to make additional contributions to the system in whatever
23-3 amount the city council may determine. The board shall pay from
23-4 the fund contributions in amounts equal to seven percent of the
23-5 compensation, pay, or salary of each active-contributory member and
23-6 each inactive-contributory member employed by the board, exclusive
23-7 of overtime, incentive, or terminal pay, disregarding compensation,
23-8 pay, or salary in any month in excess of $16,666. If a regular
23-9 full-time employee of the board works at least 75 percent of a
23-10 normal 40-hour work week but less than the full 40 hours, the board
23-11 shall make contributions for the employee as though the employee
23-12 works a normal 40-hour work week even though the rate of
23-13 contribution may exceed seven percent of the employee's actual
23-14 compensation, pay, or salary. If the city council authorizes
23-15 additional contributions to the system by the city for city
23-16 employees, the board may increase the contributions for the board
23-17 employees by the same percentage. Each hospital authority shall
23-18 contribute amounts equal to seven percent of the compensation, pay,
23-19 or salary of each active-contributory member and each
23-20 inactive-contributory member employed by the hospital authority,
23-21 exclusive of overtime, incentive, or terminal pay, disregarding
23-22 compensation, pay, or salary in any month in excess of $16,666. If
23-23 a regular full-time employee of a hospital authority works at least
23-24 75 percent of a normal 40-hour work week but less than the full 40
23-25 hours, the hospital authority shall make contributions for that
23-26 employee as though that employee works a normal 40-hour work week
23-27 even though the rate of contribution may exceed seven percent of
23-28 that employee's actual compensation, pay, or salary. If the city
23-29 council authorizes additional contributions to the system by the
23-30 city for city employees, each hospital authority may increase the
23-31 contributions for the hospital authority employees by the same
23-32 percentage. Contributions by the city, a hospital authority, and
23-33 the board shall be made each pay period.
23-34 (b) In addition to the contributions by the city required by
23-35 Subsection (a) of this section, the city shall contribute to the
23-36 retirement fund each month two-thirds of such amounts <each month>
23-37 as are <may be> required for the payment of prior service pensions
23-38 <for service and disability retirement benefits> that are <may
23-39 become> payable during that month, and <under the provisions of the
23-40 retirement system, except that> one-third of each prior service
23-41 pension payable that month <payment> shall be made from Fund No. 2.
23-42 (c) Contributions by the city shall be paid to the
23-43 retirement system after appropriation by the city council.
23-44 (d) Expenses for <involved in> administration and operation
23-45 of the retirement system that are approved by the board shall be
23-46 paid by the board from funds of the retirement system <subject to
23-47 approval of the board>. Such expenses shall include salaries of
23-48 board employees and fees for actuarial services, legal counsel
23-49 services, physician services, accountant services, annual audits,
23-50 investment manager services, investment consultant services,
23-51 preparation of annual reports, and staff assistance. <Other
23-52 services and expenses may be authorized and paid for by the board
23-53 as deemed necessary for the proper administration of the system.>
23-54 (e) The city shall pick up the city employee contributions
23-55 to the fund. The board <system> shall pick up the board employee
23-56 contributions <administrative staff's contribution> to the fund.
23-57 Each hospital authority shall pick up hospital authority employee
23-58 contributions to the fund. Member deposits <contributions> will be
23-59 picked up by a reduction in their monetary compensation.
23-60 Contributions picked up shall be treated as employer contributions
23-61 in accordance with the Internal Revenue Code of 1986 (26 U.S.C.
23-62 Section 414(h)(2)) for the purpose of determining tax treatment of
23-63 the amounts under the Internal Revenue Code of 1986. These
23-64 contributions are not includable in the gross income of the
23-65 employee until such time as they are distributed or made available
23-66 to the employee. Employee deposits <contributions> picked up as
23-67 provided by this subsection shall be credited <deposited> to the
23-68 individual accumulated deposits account of each affected employee
23-69 and shall be treated as compensation of employees for all other
23-70 purposes of this statute and for the purpose of determining
24-1 contributions to social security. The provisions of this
24-2 subsection shall remain in effect as long as the plan covering
24-3 employees of the city is a qualified retirement plan under Section
24-4 401(a) of the Internal Revenue Code of 1986 (26 U.S.C. Section
24-5 401(a)), and its related trust is tax exempt under Section 501(a)
24-6 of the Internal Revenue Code of 1986 (26 U.S.C. Section 501(a)).
24-7 (f) Before the satisfaction of all liabilities incurred with
24-8 respect to members and their beneficiaries under this Act, the
24-9 corpus or income of the fund may not be used for, or diverted to,
24-10 purposes other than for the exclusive benefit of the members and
24-11 their beneficiaries.
24-12 SECTION 9. Section 10, Chapter 451, Acts of the 72nd
24-13 Legislature, Regular Session, 1991 (Article 6243n, Vernon's Texas
24-14 Civil Statutes), is amended to read as follows:
24-15 Sec. 10. Investments of the board. (a) The retirement
24-16 board shall be the trustee of the funds of the retirement system
24-17 and shall have full power in its sole discretion to invest and
24-18 reinvest, alter, and change the form of investment of the funds.
24-19 The retirement board shall invest the funds in whatever instrument
24-20 or investments the board considers prudent. In making investments
24-21 for the funds, the retirement board shall discharge its duties:
24-22 (1) for the exclusive purposes of:
24-23 (A) providing benefits to members and their
24-24 beneficiaries; and
24-25 (B) defraying reasonable expenses of
24-26 administering the funds;
24-27 (2) with the care, skill, prudence, and diligence
24-28 under the circumstances then prevailing that a prudent person
24-29 acting in a like capacity and familiar with such matters would use
24-30 in the conduct of an enterprise of a like character and with like
24-31 aims;
24-32 (3) by diversifying the investments of the funds to
24-33 minimize the risk of large losses, unless under the circumstances
24-34 it is clearly prudent not to do so; and
24-35 (4) in accordance with the laws, documents, and
24-36 instruments governing the funds.
24-37 (b) A member of the board is not liable for any losses
24-38 incurred in the investment of the fund in accordance with this
24-39 section.
24-40 (c) No member of the board and no employee of the board,
24-41 except as herein provided, shall have any interest, directly or
24-42 indirectly, in the funds or receive any pay or emolument for his or
24-43 her services. No member of the board or employee thereof shall,
24-44 directly or indirectly, for himself or herself or as an agent, in
24-45 any manner use the funds or deposits of the retirement system
24-46 except to make such current and necessary payments as are
24-47 authorized by the board, nor shall any member or employee of the
24-48 board become an endorser or surety or in any manner an obligator
24-49 for money loaned by or borrowed from the board.
24-50 (d) Subject to the exceptions provided by this subsection,
24-51 <(c) None of> the funds or money mentioned in this Act are not
24-52 assignable and are not<. None of the funds or money mentioned in
24-53 this Act are> subject to execution, levy, attachment, garnishment,
24-54 the operation of bankruptcy or insolvency law, or any other process
24-55 of law whatsoever. This subsection does not apply to a qualified
24-56 domestic relations order. The board shall establish a written
24-57 procedure to determine the qualified status of domestic relations
24-58 orders and to administer distributions under those orders. To the
24-59 extent necessary to authorize distributions pursuant to a qualified
24-60 domestic relations order, a former spouse of a member will be
24-61 treated as the spouse or surviving spouse of the member.
24-62 (e) Subject to the exceptions provided by this subsection,
24-63 the <(d) The> right of a member to a pension, an annuity, a
24-64 disability retirement allowance, or a retirement allowance, to the
24-65 return of accumulated deposits <contributions>, the pension,
24-66 annuity, or retirement allowance itself, any optional benefit or
24-67 death benefits, any other right accrued or accruing to any person
24-68 under the provisions of this Act are unassignable and are not
24-69 subject to execution, levy, attachment, garnishment, the operation
24-70 of bankruptcy or insolvency law, or any other process of law
25-1 whatsoever. This subsection does not apply to a qualified domestic
25-2 relations order.
25-3 (f) If the board makes an election to have Subchapters A and
25-4 C of Chapter 804, Government Code, and their subsequent amendments,
25-5 apply to the system, the death of an alternate payee, as defined by
25-6 Section 804.001, Government Code, and its subsequent amendments, or
25-7 the death of a member's spouse terminates any interest of the
25-8 alternate payee or spouse that would otherwise exist under this
25-9 Act, except an interest accrued by that person as a member.
25-10 SECTION 10. Section 11, Chapter 451, Acts of the 72nd
25-11 Legislature, Regular Session, 1991 (Article 6243n, Vernon's Texas
25-12 Civil Statutes), is amended to read as follows:
25-13 Sec. 11. Miscellaneous. (a) A person who with intent to
25-14 deceive makes any statement or report required under this Act which
25-15 is untrue or falsifies or permits to be falsified any record or
25-16 records of the retirement system shall forfeit any office or rights
25-17 held by the person under the system, and such deception,
25-18 falsification, or acquiescence in falsification is deemed a Class B
25-19 misdemeanor.
25-20 (b) If any change or error in the records of the retirement
25-21 system is discovered or results in any member, <retired member,>
25-22 surviving spouse, or beneficiary receiving from the retirement
25-23 system more or less than the member, <retired member,> surviving
25-24 spouse, or beneficiary would have been entitled to receive had the
25-25 records been correct, the retirement board shall have the power to
25-26 correct such error and as far as possible to adjust the payments in
25-27 such a manner that the actuarial equivalent of the benefits to
25-28 which the member, <retired member,> surviving spouse, or
25-29 beneficiary was correctly entitled shall be paid.
25-30 (c) On the full termination of the retirement and pensioning
25-31 system, or on the complete discontinuance of contributions by the
25-32 city, all hospital authorities, and the board under this Act, the
25-33 retirement allowance of a member who is employed by the city, a
25-34 hospital authority, or the board on the date of termination is
25-35 determined by reference to the member's average final compensation
25-36 and creditable service determined as of the date of termination of
25-37 the system or the date of discontinuance of deposits as if the
25-38 member had attained normal retirement age on that date. This
25-39 subsection does not accelerate the date on which the payment of
25-40 that benefit would otherwise begin.
25-41 (d) A member who is entitled to a benefit, including a
25-42 benefit consisting solely of a distribution of the member's
25-43 accumulated deposits, from the system may instruct the system to
25-44 pay the single lump-sum actuarial equivalent of that benefit
25-45 directly to:
25-46 (1) another trust forming part of a pension,
25-47 profit-sharing, or stock bonus plan maintained by that member's new
25-48 employer and represented by that employer in writing as meeting the
25-49 requirements of 26 U.S.C. Section 401(a) and its subsequent
25-50 amendments, subject to the acceptance by the trust to which those
25-51 transfers are made of those transfers; or
25-52 (2) an eligible transferee plan in accordance with the
25-53 federal Unemployment Compensation Amendments of 1992 (Pub. L. No.
25-54 102-318) and its subsequent amendments governing direct rollovers
25-55 of eligible rollover distributions from qualified retirement plans.
25-56 (e) This Act does not grant a contract of employment between
25-57 a member and the city, a hospital authority, or the board.
25-58 SECTION 11. (a) Retirement allowances being paid by the
25-59 retirement and pensioning system created by Chapter 451, Acts of
25-60 the 72nd Legislature, Regular Session, 1991 (Article 6243n,
25-61 Vernon's Texas Civil Statutes), to members of the retirement
25-62 system, or to the beneficiaries of those members, who retired
25-63 before December 1, 1989, are increased beginning with the payments
25-64 due at the end of September in 1993.
25-65 (b) The amount of the increase for a member, or the
25-66 beneficiary of the member, is by a percentage equal to:
25-67 (1) 2.2 percent divided by the retirement formula in
25-68 effect on the date of the member's retirement;
25-69 (2) minus one; and
25-70 (3) multiplied by 100.
26-1 SECTION 12. (a) The changes in law made by this Act to
26-2 Section 5(e), Chapter 451, Acts of the 72nd Legislature, Regular
26-3 Session, 1991 (Article 6243n, Vernon's Texas Civil Statutes), as
26-4 redesignated by this Act, permit a member who, before July 1, 1993,
26-5 reinstated any portion of the member's membership service or prior
26-6 service under a city ordinance that was in effect before July 1,
26-7 1993, to reinstate any membership service or prior service to which
26-8 the member was not entitled to reinstate under that city ordinance.
26-9 (b) The changes in law made by this Act to Section 7,
26-10 Chapter 451, Acts of the 72nd Legislature, Regular Session, 1991
26-11 (Article 6243n, Vernon's Texas Civil Statutes), apply only to an
26-12 option election or beneficiary designation made on or after the
26-13 effective date of this Act. An option election or beneficiary
26-14 designation made before the effective date of this Act is governed
26-15 by the law in effect at the time the election or designation was
26-16 made, and that law is continued in effect for this purpose only.
26-17 SECTION 13. This Act takes effect July 1, 1993.
26-18 SECTION 14. The importance of this legislation and the
26-19 crowded condition of the calendars in both houses create an
26-20 emergency and an imperative public necessity that the
26-21 constitutional rule requiring bills to be read on three several
26-22 days in each house be suspended, and this rule is hereby suspended,
26-23 and that this Act take effect and be in force according to its
26-24 terms, and it is so enacted.
26-25 * * * * *
26-26 Austin,
26-27 Texas
26-28 April 29, 1993
26-29 Hon. Bob Bullock
26-30 President of the Senate
26-31 Sir:
26-32 We, your Committee on Intergovernmental Relations to which was
26-33 referred H.B. No. 2799, have had the same under consideration, and
26-34 I am instructed to report it back to the Senate with the
26-35 recommendation that it do pass and be printed.
26-36 Armbrister,
26-37 Chairman
26-38 * * * * *
26-39 WITNESSES
26-40 FOR AGAINST ON
26-41 ___________________________________________________________________
26-42 Name: Pete Evans x
26-43 Representing: City of Austin Employees Retir
26-44 City: Austin
26-45 -------------------------------------------------------------------
26-46 Name: Robert M. May x
26-47 Representing: Austin Employees Retirement
26-48 City: Austin
26-49 -------------------------------------------------------------------
26-50 Name: Evelya Howard-Hard x
26-51 Representing: City of Austin ERS
26-52 City: Austin
26-53 -------------------------------------------------------------------