By: Montford S.B. No. 289
A BILL TO BE ENTITLED
AN ACT
1-1 relating to participation and credit in, contributions to, and
1-2 benefits and administration of the Texas County and District
1-3 Retirement System.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 842.005, Government Code, is amended by
1-6 amending Subsection (e) and by adding Subsection (g), to read as
1-7 follows:
1-8 (e) Second priority shall be given to prior service credit,
1-9 prior service annuities, multiple matching credit, and multiple
1-10 matching annuities, without differentiation. If the ratio of the
1-11 sum of the available tangible assets for this priority group and
1-12 the available actuarial present value of future subdivision
1-13 contributions in excess of normal costs, if any, to the actuarial
1-14 present value of benefits is less than 1.00, then the annuities and
1-15 credits will have to all be proportionally reduced. If the ratio
1-16 is greater than 1.00, then the annuities and credits will all have
1-17 to be proportionally increased. The ratio will be redetermined
1-18 annually and adjustments made as needed, except as limited by
1-19 Subsection (g).
1-20 (g) If the participating subdivision continues in existence
1-21 or is succeeded by an organization, then the annuities and credits
1-22 described in Subsection (e) of this section cannot be increased to
1-23 a level that exceeds the greater of: (1) the level in effect at
2-1 the time Subsection (e) became applicable, or (2) the level in
2-2 effect on December 31, 1992. If the board of trustees determines,
2-3 on the basis of calculations made by the actuary, that the
2-4 available tangible assets are materially in excess of the actuarial
2-5 present value of benefits in Subsection (e) of this section, the
2-6 board may direct that a portion of the excess be paid to the
2-7 subdivision or its successor. When the participating subdivision
2-8 or its successor has no employees who are members of the retirement
2-9 system and has no present or potential liabilities resulting from
2-10 the participation of former employees, the subdivision's
2-11 participation in the retirement system ceases, and the system shall
2-12 repay to the subdivision or its successor the amount in the
2-13 subdivision accumulation fund that is credited to the subdivision.
2-14 SECTION 2. Subchapter A, Chapter 842, Government Code, is
2-15 amended by adding Section 842.007, to read as follows:
2-16 Sec. 842.007. SUBDIVISION NOT AGENT OF SYSTEM. Neither a
2-17 subdivision which participates in the retirement nor any employee
2-18 or official of such a subdivision has authority to act as an agent
2-19 of the retirement system; and an action by such a person, or lack
2-20 of action on the part of such a person, shall not be binding upon
2-21 the retirement system.
2-22 SECTION 3. Section 842.103, Government Code, is amended to
2-23 read as follows:
2-24 Sec. 842.103. CREDIT FOR PERSON WHO ELECTS TO BECOME MEMBER.
2-25 A person who becomes a member of the retirement system under
3-1 Section 842.102 may not receive credit for service performed before
3-2 membership except as provided by Section 843.102(a) (2) and by
3-3 Section 843.204.
3-4 SECTION 4. Section 842.108, Government Code, is amended to
3-5 read as follows:
3-6 Sec. 842.108. WITHDRAWAL OF CONTRIBUTIONS. (a) A person
3-7 who is not an employee of any participating subdivision and who has
3-8 not retired may, after application, withdraw all of the accumulated
3-9 contributions credited to the person's individual account in the
3-10 employees saving fund, and the retirement system shall close the
3-11 account.
3-12 (b) In the event that a person to whom a withdrawal would be
3-13 paid under this section or Section 844.401 elects to have all or
3-14 some portion of the accumulated contributions paid directly to an
3-15 eligible retirement plan, and specifies the eligible retirement
3-16 plan to which such contributions are to be paid using forms that
3-17 have been approved for such purpose by the board of trustees, the
3-18 retirement system will make such payment in the form of a direct
3-19 trustee-to-trustee transfer, but the retirement system shall be
3-20 under no obligation to determine whether or not the other plan in
3-21 fact is an eligible retirement plan for that purpose.
3-22 SECTION 5. Section 842.110, Government Code, is amended to
3-23 read as follows:
3-24 Sec. 842.110. RESUMPTION OF SERVICE BY RETIREE. (a) A
3-25 person who has retired upon a service retirement benefit under this
4-1 subtitle shall, if the person becomes an employee, as that word is
4-2 defined in Section 841.001, of any participating subdivision,
4-3 become a member of the system at date of employment, but credits
4-4 and benefits allowable to such person under this subtitle shall be
4-5 governed by and limited to those provided in this section.
4-6 (b) Payments of each service retirement annuity allowed by
4-7 reason of the person's previous service shall be discontinued and
4-8 shall be suspended beginning with the month following that in which
4-9 the person again becomes a member under the provisions of
4-10 subsection (a) of this section, and no payment of the annuity shall
4-11 be made for any month during which the person remains an employee
4-12 of a participating subdivision.
4-13 (c) Member contributions under Section 845.403 shall be made
4-14 on all compensation paid to the employee by the subdivision, at the
4-15 same rate as required of other employees of the subdivision. The
4-16 contributions shall be deposited by the system upon receipt in an
4-17 individual account for the member in the employees saving fund, and
4-18 shall be credited with interest annually at the same rate and
4-19 manner as are the accounts of other members. The compensation paid
4-20 to the employee by the subdivision shall be included in calculating
4-21 the monthly contributions which the subdivision makes to the
4-22 subdivision accumulation fund.
4-23 (d) After termination of employment with all participating
4-24 subdivisions, and upon filing an application for resumption of
4-25 retirement with the board of trustees, a person described in
5-1 subsection (d) of this section shall be entitled to receive future
5-2 payments of the suspended annuity, as provided in subsection (e) of
5-3 this section, and to the additional benefits as provided in
5-4 subsections (f) and (g) of this section.
5-5 (e) Monthly payments of the suspended annuity shall be
5-6 resumed in the month following termination of employment with all
5-7 participating subdivisions, without change in the amount except for
5-8 any increase allowed pursuant to Section 844.208, duration, or
5-9 other condition pertaining to the suspended benefit, except that no
5-10 payment shall be allowed for any month during which the payment was
5-11 suspended pursuant to this section.
5-12 (f) If a person with credited service under this section
5-13 dies before a payment under subsection (g) of this section is made,
5-14 the person's beneficiary, or if there is no beneficiary surviving,
5-15 the executor or administrator of the person's estate, may elect
5-16 payment as provided for in Section 844.105(c).
5-17 (g) The additional service retirement benefit allowable to a
5-18 person to whom this section applies is, at the option of that
5-19 person, either a refund of accumulated contributions made since
5-20 reemployment and any accrued interest allowed thereon by the system
5-21 or a basic annuity actuarially determined from the sum of the
5-22 member's deposits made and accumulated since the date of last
5-23 becoming a member and current service credit calculated on the
5-24 amount of such deposits, and a supplemental annuity actuarially
5-25 determined from the multiple matching credit applicable to the
6-1 amount of contributions made and accumulated at interest in the
6-2 person's individual account since last becoming a member. The
6-3 additional benefit shall be payable as a standard service
6-4 retirement benefit, or, at the election of the member, any optional
6-5 benefit authorized under this subtitle that is the actuarial
6-6 equivalent of the standard retirement benefit. The first benefit
6-7 payment date shall be the end of the month following the last month
6-8 of employment, provided the person files an application not less
6-9 than 60 days prior to the payment date and has not resumed
6-10 employment with any participating subdivision in a position that
6-11 would make the person an employee as that word is defined in
6-12 Section 841.001.
6-13 (h) If a person becomes an employee, as that word is defined
6-14 in Section 841.001, of any participating subdivision within one
6-15 calendar month after that person's effective date of retirement,
6-16 the person shall be deemed not to have retired, and the person's
6-17 membership shall be restored. The sum of one-half of the basic
6-18 annuity payments made before the membership is restored shall be
6-19 deducted from the person's individual account in the employees
6-20 saving fund and shall be transferred to the current service annuity
6-21 reserve fund. The person's maximum prior service credit shall be
6-22 reduced by an amount equal to (i) divided by (ii), where (i) is the
6-23 sum of the prior service annuity payments made before the
6-24 membership is restored, and (ii) is the subdivision's allocated
6-25 prior service credit percentage multiplied by the interest factor
7-1 for interest from the subdivision's participation date to the
7-2 person's effective retirement date, both of which were used in
7-3 calculating the amount of the prior service annuity. <A person who
7-4 has retired under this subtitle because of service may not rejoin
7-5 the retirement system or earn additional retirement benefits by
7-6 reason of subsequent employment.>
7-7 SECTION 6. Section 843.203, Government Code, is amended to
7-8 read as follows:
7-9 Sec. 843.203. (a) The governing body of a subdivision that
7-10 has taken over the facilities of a hospital, utility, or other
7-11 public facility normally operated by another participating
7-12 subdivision may assume in whole or in part the obligations that the
7-13 former employer had undertaken under this subtitle by reason of
7-14 services performed by members of the system who become employees of
7-15 the subdivision seeking to participate in the system. A
7-16 subdivision participating in the system that could have assumed the
7-17 obligations of another subdivision had this section not been in
7-18 effect at time of participation may assume in whole or in part the
7-19 obligations that the subdivision that was the first employer had
7-20 undertaken by reason of service rendered by members who became
7-21 employees of the subdivision that is the second employer.
7-22 Assumptions under this section shall be by written agreement
7-23 between the affected subdivision and are subject to approval of the
7-24 board of trustees.
7-25 (b) If the board of trustees determines, on the basis of
8-1 calculations made by the actuary, that the tangible assets made
8-2 available by the successor subdivision to assume the obligations
8-3 that the first employer had undertaken are materially in excess of
8-4 the assumed obligation, the board may direct that a portion of the
8-5 excess be transferred from the account of the first employer in the
8-6 subdivision accumulation fund to the account of the successor
8-7 subdivision.
8-8 SECTION 7. Subchapter C, Chapter 843, Government Code, is
8-9 amended by adding Section 843.204, to read as follows:
8-10 Sec. 843.204. PREMEMBERSHIP CREDIT FOR OVER-AGE EMPLOYEES.
8-11 (a) The governing body of a participating subdivision, by order or
8-12 resolution, may authorize establishment of current service credit
8-13 in the system for any member for service performed for the
8-14 subdivision prior to date of membership if the person was employed
8-15 by the subdivision before September 1, 1987 and at time of such
8-16 employment was above the age requiring the person to become a
8-17 member. The member may deposit to the member's individual account
8-18 in the employees saving fund with the system, for each month of
8-19 pre-membership service for which current service credit is
8-20 authorized, an amount not exceeding the deposit for such month that
8-21 the person would have made had the person then been a member of the
8-22 system.
8-23 (b) The governing body of a subdivision may adopt the
8-24 provisions of this section:
8-25 (1) on the terms provided in Subchapter H of Chapter
9-1 844 of this subtitle; or
9-2 (2) if the board of trustees determines that,
9-3 according to the computations of the actuary approved by the board
9-4 of trustees, the adoption would not impair the ability of the
9-5 subdivision to fund all obligations against its account in the
9-6 subdivision accumulation fund before the 25th anniversary of the
9-7 subdivision's most recent actuarial valuation date.
9-8 SECTION 8. Section 844.003, Government Code, is amended by
9-9 amending Subsections (a) and (c) and by adding Subsection (d), to
9-10 read as follows:
9-11 (a) Except as provided by Subsections (b) and (d) of this
9-12 section, <Subsection (b),> the effective date of a member's service
9-13 retirement is the date the member designates at the time the member
9-14 applies for retirement under Section 844.101, but the date must be
9-15 the last day of a calendar month and may not precede the date the
9-16 member terminates employment with all participating subdivisions.
9-17 (c) Except as provided by Subsections (b) and (d) of this
9-18 section, <Subsection (b),> the effective date of a member's
9-19 disability retirement is the date designated on the application for
9-20 retirement filed by or for the member as provided by Section
9-21 844.301, but the date may not precede the date the member
9-22 terminates employment with all participating subdivisions.
9-23 (d) If a person who has attained the age of 70 and one-half
9-24 years terminates covered employment without applying for
9-25 retirement, the retirement system shall attempt to notify that
10-1 person in writing and advise the person that he or she is required
10-2 to retire. If the person has not filed an application with the
10-3 board for retirement within 90 days after the retirement system has
10-4 sent the person such a notice, the person shall be deemed to have:
10-5 (1) retired on the last day of the month in which the
10-6 person terminated employment with all participating subdivisions,
10-7 and
10-8 (2) elected to receive an annuity:
10-9 (i) under Section 844.103 if the person is
10-10 single, or
10-11 (ii) under Section 844.104(c)(1) if the person
10-12 has a surviving spouse at the time of termination of employment and
10-13 to have designated the person's spouse as the beneficiary in the
10-14 event that the person has a surviving spouse.
10-15 SECTION 9. Section 844.006, Government Code, is amended to
10-16 read as follows:
10-17 Sec. 844.006. CHANGE OF BENEFICIARY OR DIVISION OF BENEFIT
10-18 FOR CERTAIN PERSONS RECEIVING MONTHLY BENEFITS. <OF GUARANTEED TERM
10-19 ANNUITY.> (a) A retiree who is receiving payments of a standard
10-20 service or disability retirement annuity, or of an annuity for the
10-21 retiree's life but with payments to continue after the retiree's
10-22 death until a determined number of payments have been made may
10-23 <may, with the consent of the retiree's spouse if there is one,>
10-24 revoke any existing selection and designation of beneficiary
10-25 nominated to receive any <monthly> payments that may become due
11-1 under the annuity after the retiree's death and may select a new
11-2 beneficiary to whom <monthly> payments may be made.
11-3 (b) A person who, as beneficiary of a deceased retiree, is
11-4 receiving monthly payments of any fixed-term annuity described by
11-5 Subsection (a) may select and designate a person to whom shall be
11-6 paid any monthly payments that may become due under the annuity
11-7 after the death of the beneficiary making the designation.
11-8 (c) Any selection and designation of beneficiary under
11-9 Subsections (a) and (b) of this section must be in writing on forms
11-10 prescribed by the board of trustees and becomes effective on filing
11-11 with the director.
11-12 (d) In the event that a qualified domestic relations order,
11-13 as that term is defined in Section 804.001 of this Title, so
11-14 provides, the benefit payable to a retiree who is receiving
11-15 payments of an annuity for the retiree's life but with payments to
11-16 continue after the retiree's death until the death of another
11-17 person under Options 1, 2, 4B, or 4C as defined in Title 34, Texas
11-18 Administrative Code, Section 103.2, may be divided by the
11-19 retirement system into two annuities, provided that:
11-20 (1) the person who was designated to receive the
11-21 continued payments after the retiree's death is the same person as
11-22 the alternate payee;
11-23 (2) the domestic relations order specifies that one of
11-24 the two annuities is payable over the remaining life of the
11-25 retiree, with no payments to be made under that annuity after the
12-1 death of the retiree;
12-2 (3) the domestic relations order specifies that the
12-3 other annuity is payable over the remaining life of the alternate
12-4 payee, with no payments to be made under that annuity after the
12-5 death of the alternate payee named in the order; and
12-6 (4) the domestic relations order specifies that the
12-7 portion of the benefit payable to the alternate payee is stated as
12-8 a fixed percentage of the present benefit payable to the retiree,
12-9 which percentage may not exceed:
12-10 (i) 25 percent with regard to an Option 4B
12-11 benefit,
12-12 (ii) 50 percent with regard to an Option 2
12-13 benefit, and
12-14 (iii) 75 percent with regard to an Option 4C
12-15 benefit.
12-16 (e) The division of an annuity under Subsection (d) of this
12-17 section shall be effective when the order is determined by the
12-18 retirement system to be a qualified domestic relations order, and
12-19 the amount of each of the two annuities shall be calculated by the
12-20 retirement system at that time, based upon tables that have been
12-21 adopted by the retirement system as in effect at that time, and
12-22 calculated so that the two annuities are actuarially equivalent at
12-23 the time of division to the annuity being divided.
12-24 SECTION 10. Subchapter A, Chapter 844, Government Code, is
12-25 amended by adding Section 844.008 to read as follows:
13-1 Sec. 844.008. LIMITATION ON PAYMENT OF BENEFITS. (a) In
13-2 the event that the amount of any benefit payment under this Act
13-3 would exceed the limitations set forth in this section, the amount
13-4 of the benefit shall be reduced in accordance with this section.
13-5 (b) As used in this section, the term:
13-6 (1) "annual benefit" means the total of all annuity
13-7 payments by the retirement system to a member during a calendar
13-8 year, including any distributive benefit payments;
13-9 (2) "compensation" has the meaning set forth in
13-10 Section 415 of the Internal Revenue Code of 1986 (26 U.S.C. Section
13-11 415), and the regulations adopted thereunder, not to exceed the
13-12 limitations set forth in Section 401(a)(17) of that code; and
13-13 (3) "highest average annual compensation" means the
13-14 average compensation for the three consecutive calendar years of
13-15 service that produces the highest average.
13-16 (c) Except as provided in this section, the benefit is
13-17 adjusted to an actuarially equivalent straight life annuity for the
13-18 purpose of determining limitations under this section. The
13-19 interest rate assumption to determine actuarial equivalence is the
13-20 greater of the rate specified in Section 845.314(a) or five
13-21 percent. No actuarial adjustment to the benefit is required for
13-22 the value of a qualified joint and survivor annuity and the value
13-23 of postretirement cost of living increases made in accordance with
13-24 Section 415 of the Internal Revenue Code.
13-25 (d) Except as provided in Subsections (f), (g), and (h) of
14-1 this section, an annual benefit payable by the retirement system
14-2 shall not exceed the lesser of:
14-3 (1) $112,221, as adjusted each January 1 by the
14-4 Secretary of the Treasury under Section 415 of the Internal Revenue
14-5 Code for cost of living increases after January 1, 1992, or
14-6 (2) 100 percent of the member's highest average annual
14-7 compensation.
14-8 (e) If payment of the benefit begins before the member
14-9 attains the age of 62 years, the dollar limitation shall be the
14-10 actuarial equivalent of an annual benefit beginning at the age of
14-11 62 years, as described in Subsection (d)(1) of this section for a
14-12 person at the age of 62 years. To determine actuarial equivalence,
14-13 the interest rate assumption is the greater of the rate specified
14-14 in Section 845.314(a) or five percent. A reduction under this
14-15 subsection shall not reduce the dollar limitation below $75,000 if
14-16 the benefit begins at or after the age of 55 years or, if the
14-17 benefit begins after the age of 55 years, the actuarial equivalent
14-18 of a $75,000 limitation for the age of 55 years.
14-19 (f) If the payment of the benefit begins after the member
14-20 attains the age of 65 years, the dollar limitation shall be the
14-21 actuarial equivalent of an annual benefit beginning at the age of
14-22 65 years as described in Subsection (d)(1) of this section. To
14-23 determine actuarial equivalence, the interest rate assumption is
14-24 the lesser of the rate specified in Section 845.314(a) or five
14-25 percent.
15-1 (g) The limitation set forth in Subsections (d), (e), and
15-2 (f) of this section shall not apply to any portion of the annual
15-3 benefit payable by the retirement system that is paid from the
15-4 balance in the member's individual account in the employees saving
15-5 fund as of December 31, 1985, or from interest credited to the
15-6 member's account subsequent to December 31, 1985 as a result of
15-7 deposits prior to that date.
15-8 (h) Nothing in this section shall reduce the annual benefit
15-9 payable to any person who has retired under the retirement system
15-10 prior to January 1, 1994, nor shall anything in this section reduce
15-11 the vested accrued benefit as of December 31, 1993 of any person
15-12 who is a member of the retirement system on that date.
15-13 (i) In the event that the Internal Revenue Code is amended
15-14 in such a manner that limitations similar to those set forth in
15-15 this section are not required of governmental retirement plans in
15-16 order to constitute a qualified plan, the board of trustees of the
15-17 retirement system may, by rule, eliminate all or any portion of the
15-18 limitations set forth in this section.
15-19 (j) An employer may not provide employee retirement or
15-20 deferred benefits to the extent that, when considered together with
15-21 the benefits authorized by this subtitle as required by the
15-22 Internal Revenue Code, would result in the retirement system's plan
15-23 failing to meet federal qualification standards as applied to
15-24 governmental pension plans.
15-25 SECTION 11. Section 844.104, Government Code, is amended to
16-1 read as follows:
16-2 Sec. 844.104. OPTIONAL SERVICE RETIREMENT ANNUITY.
16-3 (a) Instead of the standard service retirement annuity payable
16-4 under Section 844.103, a retiring member may elect to receive an
16-5 optional service retirement annuity under this section.
16-6 (b) An optional service retirement annuity is payable
16-7 throughout the life of the retiree and is actuarially reduced from
16-8 the standard service retirement annuity to its actuarial equivalent
16-9 under the option selected under Subsection (c).
16-10 (c) An eligible person may select any optional annuity
16-11 approved by the board of trustees, the entire benefit of which is
16-12 certified by the actuary as the actuarial equivalent of the annuity
16-13 to which the person is entitled, or may select one of the following
16-14 options, which provide that:
16-15 (1) after the retiree's death, the reduced annuity is
16-16 payable throughout the life of a person designated by the retiree;
16-17 (2) after the retiree's death, one-half of the reduced
16-18 annuity is payable throughout the life of a person designated by
16-19 the retiree;
16-20 (3) if the retiree dies before 60 monthly annuity
16-21 payments have been made, the remainder of the 60 payments are
16-22 payable to the retiree's beneficiary or, if one does not exist, to
16-23 the retiree's estate; or
16-24 (4) if the retiree dies before 120 monthly annuity
16-25 payments have been made, the remainder of the 120 payments are
17-1 payable to the retiree's beneficiary or, if one does not exist, to
17-2 the retiree's estate.
17-3 (d) If a person selects or if a person's death prior to
17-4 retirement results in the commencement of an optional annuity
17-5 providing for payment of a fixed number of monthly payments to the
17-6 person's beneficiary or estate if the person dies before the total
17-7 number of payments has been completed, the option is limited by
17-8 this subsection in the following manner:
17-9 (1) If the joint life expectancy of the person making
17-10 the selection and of the designated beneficiary, according to
17-11 mortality tables adopted by the Internal Revenue Service, at the
17-12 time of the person's retirement is less than the minimum period
17-13 that monthly payments would be required under the option selected,
17-14 the person must select another option so that the minimum period
17-15 that monthly payments would be required does not exceed the joint
17-16 life expectancy of the person making the selection and of the
17-17 designated beneficiary.
17-18 (2) If the life expectancy according to mortality
17-19 tables adopted by the Internal Revenue Service of a person to whom
17-20 a benefit will be paid as the result of a member's death before
17-21 retirement is less at the time of the member's death than the
17-22 minimum period that monthly payments would be required under the
17-23 option selected, the minimum period that monthly payments would be
17-24 required shall be adjusted by the retirement system to that period
17-25 which is the greatest multiple of 12 months which adjusted period
18-1 of monthly payments does not exceed the life expectancy of the
18-2 person to whom the benefit will be paid (but not less than 60
18-3 payments), and the amount of the monthly payment shall be adjusted
18-4 to the actuarial equivalent of the payments that would have been
18-5 made over the greater number of months.
18-6 (3) If the person making the selection designates his
18-7 or her estate as beneficiary and if the life expectancy according
18-8 to mortality tables adopted by the Internal Revenue Service of that
18-9 person is less than the minimum period that monthly payments would
18-10 be required under the option selected, the person must select
18-11 another option so that the minimum period that monthly payments
18-12 would be required does not exceed the person's life expectancy at
18-13 the time of the person's retirement.
18-14 (4) If an estate will be paid monthly benefits as the
18-15 result of a member's death before retirement over a period that
18-16 would exceed 60 months, the time over which the payments will be
18-17 made shall be reduced to 60 months, and the amount of the monthly
18-18 payment to the estate shall be the actuarial equivalent of the
18-19 payments that would have been made over the greater number of
18-20 months.
18-21 (e) <(d)> To select an optional service retirement annuity,
18-22 a member or retiree must make the selection and designate a
18-23 beneficiary on a form prescribed by and filed with the board of
18-24 trustees before the 31st day after the effective date of
18-25 retirement.
19-1 (f) <(e)> A retiree who dies before the 31st day after the
19-2 effective date of service retirement and who did not select an
19-3 optional service retirement annuity before death is considered to
19-4 have selected an optional annuity under Subsection (c)(4).
19-5 Alternatively, the decedent's beneficiary may elect to receive a
19-6 refund of the decedent's accumulated contributions under Section
19-7 844.401, in which case the decedent will be considered to have been
19-8 a contributing member at the time of death.
19-9 (g) <(f)> If monthly payments of an optional service
19-10 retirement annuity cease before the sum of all of the monthly
19-11 payments equals or exceeds the amount of accumulated contributions
19-12 in the individual account in the employees saving fund at the time
19-13 of retirement of the member on whose service the annuity was based,
19-14 a lump-sum benefit equal to the amount by which the accumulated
19-15 contributions exceed the sum of all monthly payments made under the
19-16 annuity is payable:
19-17 (1) to the designated beneficiary, if living, or if
19-18 not living, to the estate of the designated beneficiary, if the
19-19 designated beneficiary survived the retiree; or
19-20 (2) to the estate of the retiree, if the designated
19-21 beneficiary predeceased the retiree.
19-22 (h) <(g)> The benefit provided by Subsection (g) <(f)> is
19-23 payable from the current service annuity reserve fund and the
19-24 subdivision accumulation fund in the ratio described by Section
19-25 844.402(c).
20-1 (i) If the retiree selects an optional annuity
20-2 in Subsection (c) of this section that is payable after the
20-3 retiree's death throughout the life of a nonspouse beneficiary,
20-4 payments to the beneficiary after the retiree's death shall not
20-5 exceed the applicable percentage of the annuity payment that would
20-6 have been payable to the retiree using the following table:
20-7 Excess of age of retiree Applicable
20-8 over age of beneficiary: percentage:
20-9 10 years or less 100 percent
20-10 11-19 years 75 percent
20-11 20 years or more 50 percent
20-12 (j) Unless the retiree's spouse is the designated
20-13 beneficiary of an optional annuity in Subsection (c) of this
20-14 section which guarantees a fixed number of monthly payments, the
20-15 guaranteed number of payments shall not exceed the applicable
20-16 period using the following table:
20-17 Maximum number
20-18 of guaranteed
20-19 Age of retiree: monthly payments:
20-20 83 years or less 180
20-21 84-90 years 120
20-22 91 or more 60
20-23 SECTION 12. Section 844.209, Government Code, is amended by
20-24 amending Subsection (b) and by adding Subsection (e), to read as
20-25 follows:
21-1 (b) If a member who has sufficient credited service
21-2 performed for subdivisions that have adopted or are subject to this
21-3 section to entitle the member to withdraw from service, to leave on
21-4 deposit with the retirement system the member's accumulated
21-5 contributions, and, on attainment of an age prescribed by this
21-6 subtitle, to retire with a service retirement benefit dies before
21-7 becoming eligible for deferred service retirement and leaves
21-8 surviving a person whom the member has designated as beneficiary
21-9 entitled to payment of the member's accumulated contributions if
21-10 the member dies before retirement, the surviving beneficiary may by
21-11 written notice filed with the board elect to <leave the accumulated
21-12 deposits with the retirement system subject to this section. If
21-13 the accumulated deposits have not been withdrawn before the time
21-14 the member, if living, would have become entitled to service
21-15 retirement, the surviving beneficiary may elect to> receive, in
21-16 lieu of the accumulated deposits, an annuity payable during the
21-17 lifetime of the surviving beneficiary in the amount that would have
21-18 been payable to the surviving beneficiary had the member <lived
21-19 and> retired on the last day of the month prior to the month in
21-20 which death occurred <at that date> under an optional annuity
21-21 described by Section 844.104(c)(1).
21-22 (e) The benefit payable under Subsection (b) of this section
21-23 is payable as if the member had retired on the later of December
21-24 31, 1993, or the last day of the month prior to the month in which
21-25 death occurred. Any benefit payable under this section must begin
22-1 being paid within one year after the later of December 31, 1993, or
22-2 the last day of the month prior to the month in which death
22-3 occurred. The benefit payable under Subsection (b) of this section
22-4 with regard to persons who died prior to January 1, 1994, shall be
22-5 based on the benefit that would have been payable if death had
22-6 occurred on January 1, 1994.
22-7 SECTION 13. Section 844.305, Government Code, is amended to
22-8 read as follows:
22-9 Sec. 844.305. OPTIONAL DISABILITY RETIREMENT ANNUITY.
22-10 (a) Instead of the standard disability retirement annuity payable
22-11 under Section 844.304, a retiring member may elect to receive an
22-12 optional disability retirement annuity under this section.
22-13 (b) An optional disability retirement annuity is payable
22-14 throughout the life of the retiree and is actuarially reduced from
22-15 the standard disability retirement annuity to its actuarial
22-16 equivalent under the option selected under Subsection (c).
22-17 (c) An eligible person may select any optional annuity
22-18 approved by the board of trustees, the entire benefit of which is
22-19 certified by the actuary as the actuarial equivalent of the annuity
22-20 to which the person is entitled, or may select one of the following
22-21 options, which provide that:
22-22 (1) after the retiree's death, the reduced annuity is
22-23 payable throughout the life of a person designated by the retiree;
22-24 (2) After the retiree's death, one-half of the reduced
22-25 annuity is payable throughout the life of a person designated by
23-1 the retiree;
23-2 (3) if the retiree dies before 60 monthly annuity
23-3 payments have been made, the remainder of the 60 payments are
23-4 payable to the retiree's beneficiary or, if one does not exist, to
23-5 the retiree's estate; or
23-6 (4) if the retiree dies before 120 monthly annuity
23-7 payments have been made, the remainder of the 120 payments are
23-8 payable to the retiree's beneficiary or, if one does not exist, to
23-9 the retiree's estate.
23-10 (d) If a person selects an optional annuity providing for
23-11 payment of a fixed number of monthly annuity payments to the
23-12 person's beneficiary or to the person's estate if the person dies
23-13 before the total number of payments has been completed, the option
23-14 is limited by this subsection in the following manner:
23-15 (1) If the joint life expectancy of the person making
23-16 the selection and of the designated beneficiary according to
23-17 mortality tables adopted by the Internal Revenue Service at the
23-18 time of the person's retirement is less than the minimum period
23-19 that monthly payment would be required under the option selected,
23-20 the person must select another option so that the minimum period
23-21 that monthly payments would be required does not exceed the joint
23-22 life expectancy of the person making the selection and of the
23-23 designated beneficiary.
23-24 (2) If the person making the selection designates his
23-25 or her estate as beneficiary and if the life expectancy according
24-1 to mortality tables adopted by the Internal Revenue Service of that
24-2 person is less than the minimum period that monthly payments would
24-3 be required under the option selected, the person must select
24-4 another option so that the minimum period that monthly payments
24-5 would be required does not exceed the person's life expectancy at
24-6 the time of the person's retirement.
24-7 (e) <(d)> To select an optional disability retirement
24-8 annuity, a member or retiree must make the selection and designate
24-9 a beneficiary on a form prescribed by and filed with the board of
24-10 trustees before the 31st day after the effective date of
24-11 retirement.
24-12 (f) <(e)> A retiree who dies before the 31st day after the
24-13 effective date of disability retirement and who did not select an
24-14 optional disability retirement annuity before death is considered
24-15 to have selected an optional annuity under Subsection (c)(4).
24-16 Alternatively, the decedent's beneficiary may elect to receive a
24-17 refund of the decedent's accumulated contributions under Section
24-18 844.401, in which case the decedent will be considered to have been
24-19 a contributing member at the time of death.
24-20 (g) <(f)> If a person's disability retirement annuity is
24-21 discontinued under Section 844.307 or 844.308, the person's
24-22 selection of any optional annuity under this section becomes void.
24-23 (h) <(g)> If monthly payments of an optional disability
24-24 retirement annuity cease before the sum of all of the monthly
24-25 payments equals or exceeds the amount of accumulated contributions
25-1 in the individual account in the employees saving fund at the time
25-2 of retirement of the member on whose service the annuity was based,
25-3 a lump-sum benefit equal to the amount by which the accumulated
25-4 contributions exceed the sum of all monthly payments made under the
25-5 annuity is payable:
25-6 (1) to the designated beneficiary, if living, or if
25-7 not living, to the estate of the designated beneficiary, if the
25-8 designated beneficiary survived the retiree; or
25-9 (2) to the estate of the retiree, if the designated
25-10 beneficiary predeceased the retiree.
25-11 (i) <(h)> The benefit provided by Subsection (h) <(g)> of
25-12 this section is payable from the current service annuity reserve
25-13 fund and the subdivision accumulation fund in the ratio described
25-14 by Section 844.402(c).
25-15 (j) If the retiree selects an optional annuity in Subsection
25-16 (c) that is payable after the retiree's death throughout the life
25-17 of a nonspouse beneficiary, payments to the beneficiary after the
25-18 retiree's death must not exceed the applicable percentage of the
25-19 annuity payment that would have been payable to the retiree using
25-20 the following table:
25-21 Excess of age of retiree Applicable
25-22 over age of beneficiary: percentage:
25-23 10 years or less 100 percent
25-24 11-19 years 75 percent
25-25 20 years or more 50 percent
26-1 (k) Unless the retiree's spouse is the designated
26-2 beneficiary of an optional annuity in Subsection (c) of this
26-3 section which guarantees a fixed number of monthly payments, the
26-4 guaranteed number of payments shall not exceed the applicable
26-5 period using the following table:
26-6 Maximum number
26-7 of guaranteed
26-8 Age of retiree: monthly payments:
26-9 83 years or less 180
26-10 84-90 years 120
26-11 91 or more 60
26-12 SECTION 14. Section 844.607, Government Code, is amended to
26-13 read as follows:
26-14 Sec. 844.607. Required Decrease in Credits. (a) If the
26-15 actuary has made the determination, provided for by Section
26-16 844.601(b), that a subdivision's contributions are inadequate to
26-17 fund all obligations charged against its account in the subdivision
26-18 accumulation fund and has made the determination, provided for by
26-19 Section 844.606(b), of the lower percentage to be used for multiple
26-20 matching credits of future member contributions that is necessary
26-21 to make the financing arrangement adequate, the actuary shall give
26-22 written notice of the determinations to the director, who shall
26-23 give written notice to the governing body of the subdivision.
26-24 (b) If the governing body of the subdivision does not adopt
26-25 an order or resolution described in Subsection (c) effective on the
27-1 first day of the first calendar year that begins after the date of
27-2 the notice in Subsection (a), the actuary shall make new
27-3 determinations, provided for by Sections 844.601(b) and 844.606(b),
27-4 based on the most recent actuarial valuation. The actuary shall
27-5 give written notice of these determinations to the director, who
27-6 shall give a second written notice to the governing body of the
27-7 subdivision.
27-8 (c) <(b)> The lower percentage to be used for multiple
27-9 matching credits of future member contributions as determined by
27-10 the actuary based on the most recent actuarial valuation and
27-11 specified in the second notice to the governing body becomes
27-12 effective as to all members who perform current service for the
27-13 affected subdivision on or after the first day of the second
27-14 calendar year that begins after the date of the notice in
27-15 Subsection (a) of this section and is not earlier than January 1,
27-16 1993, unless before the effective date, the governing body of the
27-17 subdivision adopts an order or resolution, approved by the board of
27-18 trustees, authorizing additional subdivision contributions under
27-19 Section 844.605 or authorizing a reduction in multiple matching
27-20 credits under Section 844.606 or authorizing additional
27-21 contributions and a reduction in multiple matching credits.
27-22 SECTION 15. Section 844.702, Government Code, is amended to
27-23 read as follows:
27-24 Sec. 844.702. MEMBER CONTRIBUTIONS. The governing body of
27-25 the subdivision may designate the rate of member contributions for
28-1 employees of the subdivision to take effect beginning on the
28-2 effective date of adoption of the plan provisions of this
28-3 subchapter. The subdivision may elect a rate of four, five, six,
28-4 or seven percent of the current service compensation of its
28-5 employees. The governing body of the subdivision may thereafter
28-6 increase or decrease the contribution rate to take effect on the
28-7 next January 1 after the date of adoption of the increase or
28-8 decrease, <but may reduce the rate of member contributions only
28-9 after the existing rate has been in effect for five years,>
28-10 notwithstanding the provisions of Sections 845.402(c) and (d).
28-11 SECTION 16. Sections 844.703(b), (d), and (g), Government
28-12 Code, are amended to read as follows:
28-13 (b) Each subdivision adopting the plan provisions of this
28-14 subchapter shall pay to the subdivision accumulation fund, as its
28-15 prior service contribution, an amount equal to a percentage of the
28-16 compensation of members employed by the subdivision for that month.
28-17 The rate of contribution is the rate determined annually by the
28-18 actuary and approved by the board of trustees as being the rate
28-19 required to fund all unfunded obligations charged against the
28-20 subdivision's account in the subdivision accumulation fund within
28-21 the subdivision's amortization period without probable future
28-22 depletion of that account, or if there are no unfunded obligations,
28-23 the rate required to amortize any overfunded obligations over
28-24 perpetuity. <account.>
28-25 (d) The actuary annually shall determine the subdivision
29-1 normal contribution rate and the prior service contribution rate
29-2 for subdivisions adopting the plan provisions of this subchapter
29-3 from the most recent data available at the time of determination.
29-4 Before January 1 of each year, the board of trustees shall certify
29-5 the rates of each subdivision that has adopted the plan provisions
29-6 of this subchapter. If the combined rates of the subdivision's
29-7 normal contributions and prior service contributions under this
29-8 subchapter exceed the rate prescribed by Subsection (c), the rate
29-9 for prior service contributions must be reduced to the rate that
29-10 equals the difference between the maximum rate prescribed by
29-11 Subsection (c) and the normal contribution rate. If for any year,
29-12 the combined rates of a subdivision's normal contribution rate and
29-13 its prior service contribution rate as determined under Subsections
29-14 (a) and (b) of this section shall be less than the subdivision's
29-15 employee contribution rate, the governing body of the subdivision
29-16 may elect that the subdivision make normal contributions and prior
29-17 service contributions for that year at a combined rate equal to the
29-18 employee contribution rate for that year.
29-19 (g) If the combined rates of the subdivision's normal
29-20 contributions and prior service contributions under this subchapter
29-21 exceed the maximum rate prescribed by Subsection (c) before the
29-22 adjustment prescribed by Subsection (d), the actuary shall
29-23 determine what lower percentage for determining multiple matching
29-24 credits of future member contributions is necessary to make the
29-25 combined rates of the subdivision not to exceed the maximum rate
30-1 prescribed by Subsection (c). The actuary shall give written
30-2 notice of the determination to the director, who shall give written
30-3 notice to the governing body of the subdivision. The lower
30-4 percentage determined by the actuary and specified in the notice to
30-5 the governing body becomes effective as to all members who perform
30-6 current service for the affected subdivision on or after the first
30-7 day of the first <second> calendar year that begins after the date
30-8 of the notice, unless before the effective date, the governing body
30-9 of the subdivision adopts an order or resolution, approved by the
30-10 board of trustees, authorizing a reduction in the percentage used
30-11 in determining multiple matching credits in accordance with Section
30-12 844.704(a).
30-13 SECTION 17. Section 844.704(a), Government Code, is amended
30-14 to read as follows:
30-15 (a) On the adoption of the plan provisions of this
30-16 subchapter, the governing body of the subdivision shall select a
30-17 percentage for determining multiple matching credits under Section
30-18 843.403. The governing body shall select a percentage of 0, 25,
30-19 50, 75, 100, 125, or 150 percent, or it may select the
30-20 multiple-matching percentage which the subdivision has in effect at
30-21 the date of its adoption of the provisions of this subchapter.
30-22 <percent.> If a subdivision has a current service credit
30-23 percentage in excess of 100 percent, the governing body of that
30-24 subdivision may elect a percentage under this section which, when
30-25 added to the current service credit percentage, is a multiple of 25
31-1 percent, provided that the combined percentages do not exceed 250
31-2 percent. The governing body may thereafter increase the percentage
31-3 used in determining multiple matching credits under Section 843.403
31-4 to one of the percentages specified in this subsection, to take
31-5 effect on the next January 1 after the date of the increase.
31-6 However, the sum of the percentage for current service credits may
31-7 not exceed 250 percent. The governing body also may thereafter
31-8 reduce the percentage used in determining multiple matching credits
31-9 for contributions made after the effective date of the reduction to
31-10 one of the percentages specified in this subsection, to take effect
31-11 on the next January 1 after the date of the reduction.
31-12 SECTION 18. Section 845.206(d), Government Code, is amended
31-13 to read as follows:
31-14 (d) On the basis of tables and rates adopted by the board,
31-15 the actuary shall:
31-16 (1) compute the current interest rate in accordance
31-17 with Section 845.314; and
31-18 <(2) certify the amount of each annuity and benefit
31-19 granted by the board; and>
31-20 (2) <(3)> make an annual valuation of the assets and
31-21 liabilities of the funds of the retirement system.
31-22 SECTION 19. Section 845.301, Government Code, is amended to
31-23 read as follows:
31-24 Sec. 845.301. Investment of Assets. The board of trustees
31-25 shall invest and reinvest the assets of the retirement system
32-1 without distinction as to their source in:
32-2 (1) interest-bearing bonds or other evidences of
32-3 indebtedness of this state, a county, school district, city, or
32-4 other municipal corporation of this state, the United States, or an
32-5 authority or an agency of the United States;
32-6 (2) securities for which the United States or any
32-7 authority or agency of the United States guarantees the payment of
32-8 principal and interest;
32-9 (3) interest-bearing bonds, notes, or other evidences
32-10 of indebtedness that are issued by a company:
32-11 (A) incorporated in the United States and that
32-12 are rated "A" or better by one or more nationally recognized rating
32-13 agencies approved by the board; or
32-14 (B) in whose stock the retirement system may
32-15 invest as provided by subdivision (4);
32-16 (4) common or preferred stocks of a company
32-17 incorporated in the United States that has paid cash dividends on
32-18 its common stock for 10 consecutive years immediately before the
32-19 date of purchase and, unless the stocks are bank or insurance
32-20 stocks, that is listed on an exchange registered with the
32-21 Securities and Exchange Commission or its successor; or
32-22 (5) obligations issued, assumed, or guaranteed by the
32-23 Inter-American Development Bank, the International Bank for
32-24 Reconstruction and Development (the World Bank), the African
32-25 Development Bank, the Asian Development Bank, and the International
33-1 Finance Corporation; or
33-2 (6) real estate mortgage investment conduit securities
33-3 (REMICs) or other participation certificates issued by the Federal
33-4 National Mortgage Corporation, or by the Federal Home Loan Mortgage
33-5 Corporation, evidencing an undivided beneficial interest in pools
33-6 of real estate mortgage notes which are guaranteed as to payment of
33-7 principal and interest by the issuer, or by any agency, authority
33-8 or instrumentality of the United States, and which are to be held
33-9 in trust by the issuer for the benefit of the certificate holder.
33-10 SECTION 20. This Act takes effect January 1, 1994.
33-11 SECTION 21. The importance of this legislation and the
33-12 crowded condition of the calendars in both houses create an
33-13 emergency and an imperative public necessity that the
33-14 constitutional rule requiring bills to be read on three several
33-15 days in each house be suspended, and this rule is hereby suspended.