By: Madla S.B. No. 817
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the retirement system for fire fighters and police
1-2 officers in certain municipalities.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 ARTICLE 1. GENERAL PROVISIONS
1-5 SECTION 1.01. PURPOSE. The purpose of the fund is to
1-6 provide for the protection of pensions in a municipality to which
1-7 this Act applies for fire fighters and police officers and their
1-8 beneficiaries because of the hazardous nature of the professions of
1-9 fire fighting and law enforcement.
1-10 SECTION 1.02. DEFINITIONS. In this Act:
1-11 (1) "Board" means the board of trustees of a fund to
1-12 which this Act applies.
1-13 (2) "Fund" means the fire fighters and police officers
1-14 pension fund of a municipality to which this Act applies.
1-15 (3) "Retirement annuity" means monthly pension
1-16 benefits.
1-17 (4) "Surviving spouse" means a widow or a widower.
1-18 SECTION 1.03. APPLICABILITY. This Act applies to paid fire
1-19 and police departments of a municipality with a population between
1-20 750,000 and 1,000,000, according to the most recent federal census.
1-21 SECTION 1.04. STATUTORY TRUST. (a) The fund is a statutory
1-22 trust and is not a subdivision of government.
1-23 (b) The board shall hold in trust the assets of the fund for
1-24 the benefit of the members and retirees of the fund and their
2-1 beneficiaries and for defraying reasonable administrative expenses
2-2 of the fund.
2-3 (c) The fund may not be diverted, transferred, or used for
2-4 any purpose inconsistent with this Act and with the instruments
2-5 governing the fund.
2-6 (d) A public or private agency or authority may not alter or
2-7 impair any contract made by the board or under the authority or
2-8 direction of the board.
2-9 SECTION 1.05. EXEMPTIONS. A retirement annuity from the
2-10 fund is exempt from garnishment, assignment, attachment, judgments,
2-11 other legal process, and inheritance or other taxes established by
2-12 this state.
2-13 SECTION 1.06. OTHER PENSION SYSTEM ESTABLISHED BY STATE LAW.
2-14 Notwithstanding any other law, if the employees of the fire or
2-15 police department who have been members of the fund are included in
2-16 another pension system established by state law, the board shall
2-17 act for any similar board created by that law with regard to the
2-18 receipt and payment of amounts owed to the employees under this
2-19 Act. Employees of a department who are members of the fund and are
2-20 not included in the other pension system may not participate in any
2-21 payment under this section.
2-22 ARTICLE 2. ADMINISTRATIVE PROVISIONS
2-23 SECTION 2.01. BOARD OF TRUSTEES. (a) The fund is governed
2-24 by a board of trustees consisting of the following nine members:
2-25 (1) the mayor of a municipality to which this Act
2-26 applies;
2-27 (2) two members of the governing body of a
3-1 municipality to which this Act applies, appointed by that governing
3-2 body;
3-3 (3) two active fire fighters below the rank of fire
3-4 chief, elected by secret ballot by majority vote of the members of
3-5 the fire department who are contributing members of the fund;
3-6 (4) two active police officers below the rank of
3-7 police chief, elected by secret ballot by majority vote of the
3-8 members of the police department who are contributing members of
3-9 the fund;
3-10 (5) a retiree or beneficiary representative of the
3-11 fire department, elected by secret ballot by majority vote of the
3-12 retirees, or the surviving spouses of the retirees, from the fire
3-13 department; and
3-14 (6) a retiree or beneficiary representative of the
3-15 police department, elected by secret ballot by majority vote of the
3-16 retirees, or the surviving spouses of the retirees, from the police
3-17 department.
3-18 (b) The board, through its secretary, shall administer the
3-19 required elections of the retiree or beneficiary representatives by
3-20 mailing ballots to out-of-town retirees or beneficiaries. Only
3-21 retirees and surviving spouses of members properly enrolled on the
3-22 pension rolls are eligible to be elected as retiree or beneficiary
3-23 representatives.
3-24 (c) The fund is independent of the control of a municipality
3-25 to which this Act applies.
3-26 SECTION 2.02. TERMS OF TRUSTEES. (a) The mayor of a
3-27 municipality to which this Act applies serves on the board for the
4-1 term of the mayor's office.
4-2 (b) The two members of the municipal governing body serve on
4-3 the board for the term of the office to which they are elected.
4-4 (c) The two active fire fighters below the rank of fire
4-5 chief serve on the board for staggered four-year terms, with one
4-6 member's term expiring every two years.
4-7 (d) The two active police officers below the rank of police
4-8 chief serve on the board for staggered four-year terms, with one
4-9 member's term expiring every two years.
4-10 (e) The retiree or beneficiary representatives serve on the
4-11 board for staggered four-year terms, with one member's term
4-12 expiring every two years.
4-13 SECTION 2.03. REMOVAL OF TRUSTEES. (a) The members of the
4-14 board who are fire fighters or police officers may be removed by a
4-15 vote of the membership of their respective departments.
4-16 (b) The members of the board who are retiree or beneficiary
4-17 representatives may be removed by a vote of the group eligible to
4-18 elect them.
4-19 (c) A petition for removal under this section must be filed
4-20 with the board within 45 days after the date the first signature on
4-21 the petition is obtained. A signature is invalid if it is not
4-22 dated.
4-23 (d) A removal election under this section must be held
4-24 within 30 days after the date the board certifies that a proper
4-25 petition for a removal election has been signed by at least 20
4-26 percent of the membership from which the trustee was elected. A
4-27 trustee's term of service ends on the entry of an order by the
5-1 board declaring the results of a removal election under this
5-2 section favor removal.
5-3 (e) On the date the board enters an order under Subsection
5-4 (d) of this section, the board shall call a special election to be
5-5 held not less than 20 nor more than 30 days after that date to fill
5-6 the vacancy for the unexpired term of the trustee who was removed.
5-7 The trustee who was removed is not eligible to run in the special
5-8 election but is eligible to run in all subsequent board elections
5-9 for the category in which the trustee was removed.
5-10 SECTION 2.04. OFFICERS. (a) The board shall elect a
5-11 chairman, a vice-chairman, and a secretary.
5-12 (b) The treasurer of the board is the treasurer of a
5-13 municipality to which this Act applies.
5-14 SECTION 2.05. EMPLOYEES. The board may employ an executive
5-15 director and staff as needed to administer the fund.
5-16 SECTION 2.06. MEETINGS. The board shall hold regular
5-17 monthly meetings and special meetings at the call of the chairman
5-18 or on written demand by a majority of the members of the board.
5-19 SECTION 2.07. COMMITTEES OF BOARD. (a) The chairman of the
5-20 board may appoint committees that report to the board.
5-21 (b) Only members of the board may be appointed to committees
5-22 under this section.
5-23 (c) Committees shall be composed of not fewer than three nor
5-24 more than five members of the board, except as otherwise
5-25 specifically provided by the board.
5-26 (d) Only members of committees may vote as committee
5-27 members.
6-1 (e) The board may direct staff and advisors to assist the
6-2 committees.
6-3 (f) All members of the board may attend committee meetings.
6-4 (g) Members of committees serve at the pleasure of the
6-5 board.
6-6 (h) Permanent or standing committees may not be appointed.
6-7 ARTICLE 3. GENERAL POWERS AND DUTIES OF BOARD
6-8 SECTION 3.01. GENERAL POWERS AND DUTIES OF BOARD. (a) The
6-9 board has complete authority and power to:
6-10 (1) administer the fund;
6-11 (2) order payments from the fund as required by this
6-12 Act; and
6-13 (3) control the fund independently.
6-14 (b) The board shall adopt rules relating to:
6-15 (1) the disbursement of the fund's assets;
6-16 (2) the designation of beneficiaries of the fund; and
6-17 (3) the name of the board and the fund.
6-18 (c) The board shall report annually to the governing body of
6-19 the municipality regarding the condition of the fund and the
6-20 receipts and disbursements of the fund.
6-21 SECTION 3.02. APPLICATIONS; HEARINGS. (a) The board shall
6-22 consider all cases for membership in the fund and for the
6-23 retirement and benefits of the members of the fund and all
6-24 applications for benefits by surviving spouses, children, and
6-25 dependent parents.
6-26 (b) The board shall give notice to persons asking for
6-27 membership in the fund or for a benefit to appear before the board
7-1 and offer sworn evidence.
7-2 (c) Any contributing member of the fund who is in good
7-3 standing in the fire or police department may:
7-4 (1) appear in person or by attorney to contest the
7-5 application for membership participation in the fund or for an
7-6 annuity or benefit by any person claiming to be entitled to an
7-7 annuity or benefit, either as a member or beneficiary; and
7-8 (2) offer supporting testimony.
7-9 (d) The chairman of the board may issue process for
7-10 witnesses, administer oaths to those witnesses, and examine any
7-11 witness in any manner affecting retirement or a benefit under this
7-12 Act. The process for witnesses may be served on any member of the
7-13 fire or police department. On the failure of any witness to attend
7-14 and testify, that person may be compelled to attend and testify as
7-15 in any judicial proceeding, according to the practice in a justice
7-16 court.
7-17 SECTION 3.03. ORDERS FOR DISBURSEMENTS. (a) The board
7-18 shall issue orders for disbursements signed by the chairman or
7-19 vice-chairman of the board and the secretary of the board to the
7-20 appropriate persons. The order shall state the purposes for the
7-21 payments. The board shall keep a record of those orders.
7-22 (b) At each monthly board meeting, the board shall send to
7-23 the treasurer of the board a written list of persons entitled to
7-24 the payment from the fund, stating the amount and reason for
7-25 payment. The list must be certified and signed by the chairman or
7-26 vice-chairman of the board and the secretary of the board.
7-27 (c) The fund may not be disbursed without a record vote of
8-1 the board.
8-2 (d) A quorum of the board is five members. When a quorum is
8-3 present, action of the board that requires a vote may be taken by a
8-4 majority of the members present.
8-5 ARTICLE 4. MEMBERSHIP AND CONTRIBUTIONS
8-6 SECTION 4.01. MEMBERSHIP. (a) A person becomes a member of
8-7 the fund as a condition of employment if the person:
8-8 (1) has been properly appointed and enrolled as a fire
8-9 fighter or police officer of a municipality to which this Act
8-10 applies in a position or office established and classified by
8-11 municipal ordinance;
8-12 (2) has served the probationary period for the
8-13 position;
8-14 (3) has served for six months as a fire fighter or
8-15 police officer of the municipality; and
8-16 (4) was not younger than 18 and had not attained the
8-17 age of 36 at the time of appointment.
8-18 (b) The drawing of compensation by an officer or employee in
8-19 the fire or police department for service in that department does
8-20 not of itself make that person a member of the fund.
8-21 (c) The regularity of an appointment as a fire fighter or
8-22 police officer of a municipality to which this Act applies may not
8-23 be presumed from the serving of the full probationary period, if
8-24 any. The service of the probationary period by an officer or
8-25 employee as a fire fighter or police officer of a municipality to
8-26 which this Act applies does not constitute the creation of a
8-27 position or office to which a proper appointment has been made for
9-1 purposes of this Act.
9-2 SECTION 4.02. REINSTATEMENT. A former fund member who has
9-3 reentered the fire or police department may not be barred from
9-4 membership in the fund because of age as long as the member can
9-5 qualify for a 30-year pension on or before the member's 65th
9-6 birthday.
9-7 SECTION 4.03. MILITARY SERVICE. (a) A member of the fund
9-8 who enters active military service may not:
9-9 (1) be required to make the monthly payments into the
9-10 fund provided by this Act as long as the member is engaged in
9-11 active military service; or
9-12 (2) lose any seniority rights or retirement benefits
9-13 provided by this Act by virtue of that military service.
9-14 (b) Not later than the 90th day after the date of the
9-15 member's reinstatement to an active status in the fire or police
9-16 department, the member must file with the secretary of the board a
9-17 written statement of intent to pay into the fund an amount equal to
9-18 what the member would have paid if the member had remained on
9-19 active status in the department during the period of the member's
9-20 absence in military service.
9-21 (c) The member must make the payment described by Subsection
9-22 (b) of this section in full within an amount of time after the
9-23 member's return that is equal to twice the amount of time the
9-24 member was absent, except that the maximum period for payment may
9-25 not exceed four years.
9-26 (d) Except as provided by Subsection (f) of this section, if
9-27 the member does not comply with Subsections (b) and (c) of this
10-1 section, the member shall lose all credit toward the member's
10-2 retirement annuity for the length of time the member was engaged in
10-3 active military service.
10-4 (e) The amount of credit purchased under this section may
10-5 not exceed the length of the active military service authorized by
10-6 law.
10-7 (f) If a member does not make the payment required under
10-8 Subsection (c) of this section within the required amount of time
10-9 and the member is eligible for credit under federal law, the member
10-10 shall also pay interest, compounded annually, on the then current
10-11 rate of a member's contribution from the date the payment was
10-12 required to the date the payment was made. The board shall set the
10-13 rate of interest.
10-14 (g) A disability resulting from either injury or disease
10-15 contracted while engaged in military service does not entitle a
10-16 member to a disability retirement annuity.
10-17 (h) A municipality to which this Act applies shall
10-18 double-match payments made to the fund under this section.
10-19 SECTION 4.04. MEMBER CONTRIBUTIONS. There shall be deducted
10-20 from the wages of each fire fighter and police officer in the
10-21 employment of a municipality to which this Act applies a percentage
10-22 of the member's total salary, excluding overtime pay, according to
10-23 the following schedule:
10-24 (1) 11.16 percent for full pay periods after September
10-25 30, 1993, but before October 1, 1994;
10-26 (2) 11.32 percent for full pay periods after September
10-27 30, 1994, but before October 1, 1995;
11-1 (3) 11.50 percent for full pay periods after September
11-2 30, 1995, but before October 1, 1996;
11-3 (4) 11.66 percent for full pay periods after September
11-4 30, 1996, but before October 1, 1997;
11-5 (5) 11.82 percent for full pay periods after September
11-6 30, 1997, but before October 1, 1998;
11-7 (6) 12 percent for full pay periods after September
11-8 30, 1998, but before October 1, 1999;
11-9 (7) 12.16 percent for full pay periods after September
11-10 30, 1999, but before October 1, 2000;
11-11 (8) 12.32 percent for full pay periods after September
11-12 30, 2000, but before October 1, 2001; and
11-13 (9) 12.50 percent for full pay periods after September
11-14 30, 2001.
11-15 SECTION 4.05. MUNICIPAL CONTRIBUTIONS. (a) A municipality
11-16 to which this Act applies shall pay into the fund an amount equal
11-17 to double the sum total of all member contributions made in
11-18 accordance with Section 4.04 of this Act.
11-19 (b) The payments into the fund by the municipality, both as
11-20 to deductions and double-matching amounts, shall be made on the
11-21 same day the contributions are deducted from the members' pay.
11-22 (c) Any donations made to the fund and all funds received
11-23 from any source for the fund shall be deposited in the fund at the
11-24 earliest opportunity.
11-25 (d) The municipality's double-matching amount under this
11-26 section is in place of all other payments previously required by
11-27 law to be made by the municipality.
12-1 (e) The municipal contribution and retirement annuities are
12-2 a part of the compensation for services rendered to the
12-3 municipality. This Act is of the essence of the contract of
12-4 employment and appointment of the fire fighters and police officers
12-5 of a municipality to which this Act applies.
12-6 SECTION 4.06. DEFICIENCY PAYMENT BY MUNICIPALITY. A
12-7 municipality to which this Act applies shall pay the deficiency, if
12-8 any, between the amount available to pay all retirement annuities
12-9 and other benefits owed under this Act and the amount required by
12-10 this Act to pay those benefits.
12-11 SECTION 4.07. NO REFUND OF CONTRIBUTIONS. A member of the
12-12 fund is not entitled to any refund from the fund of any portion of
12-13 the money deducted from the member's pay for the benefit of the
12-14 fund. That money is public money and the property of the fund for
12-15 the benefit of the members qualifying for benefits and for their
12-16 beneficiaries.
12-17 ARTICLE 5. MEMBER BENEFITS
12-18 SECTION 5.01. RETIREMENT BENEFITS. (a) If a member of the
12-19 fund has contributed a portion of that member's salary as provided
12-20 by this Act and has contributed and served for 20 years or more in
12-21 the fire or police department, the board shall, on the application
12-22 of the member for a retirement annuity, authorize a retirement
12-23 annuity to the member.
12-24 (b) The board shall compute the retirement annuity of a
12-25 member who retires after September 30, 1991, on the basis of the
12-26 average of the member's total salary, excluding overtime pay, for
12-27 the highest three years of the last five years, computed from the
13-1 date of retirement, of the member's pay at the rate of two percent
13-2 for each of the first 20 years served, plus 3-1/2 percent for each
13-3 of the next 10 years served, plus one percent for each of the next
13-4 five years served, with fractional years prorated based on full
13-5 months served as a contributing member, but the annuity may not
13-6 exceed, as of the date of retirement, 80 percent of the average so
13-7 determined.
13-8 (c) A member may not receive an award from the fund for
13-9 service retirement until the member has served at least 20 years in
13-10 the fire or police department and has also contributed the required
13-11 amount of money for at least 20 years. In determining the number
13-12 of years of service in a department, the member shall be given full
13-13 credit for the time the member was actively engaged in military
13-14 service in accordance with Section 4.03 of this Act. Disciplinary
13-15 suspensions of 15 days or less may not be subtracted from a
13-16 member's service credit under this Act if the member has paid into
13-17 the fund within 30 days after the termination date of each
13-18 suspension a sum of money equal to the amount of money that would
13-19 have been deducted from that person's salary during that period of
13-20 suspension if it had not been for that suspension. A municipality
13-21 to which this Act applies shall double-match a payment made under
13-22 this subsection.
13-23 (d) If a member of the fire or police department has served
13-24 for 30 years or more in either department and has contributed a
13-25 portion of that member's salary as provided by this Act for the
13-26 same period, that member is retired automatically from service on
13-27 the member's 65th birthday.
14-1 (e) If, on a member's 65th birthday, the member has served
14-2 less than 30 years in either department and has not contributed a
14-3 portion of that member's salary as provided by this Act for that
14-4 period, the member may continue service and contributions until the
14-5 total service equals and the contributions have been made for 30
14-6 years.
14-7 (f) Except as provided by Subsection (g) of this section,
14-8 members of the fund at the time of their retirement shall receive
14-9 service credit for all unused sick leave accumulated by them under
14-10 Chapter 143, Local Government Code, and its subsequent amendments,
14-11 with fractional years prorated based on full months of sick leave.
14-12 (g) The retirement annuity for a member under Subsection (f)
14-13 of this section may not exceed, as of the date of retirement, 80
14-14 percent of the average, determined under that subsection and under
14-15 the ordinances of a municipality to which this Act applies, that
14-16 exceeds 90 days of accumulated sick leave.
14-17 SECTION 5.02. RETIREMENT BENEFITS AFTER CESSATION OF
14-18 MEMBERSHIP. (a) A person who has qualified for a retirement
14-19 annuity under this Act but who has subsequently ceased to be a
14-20 member of the fund or a properly enrolled member of the fire or
14-21 police department, by whatever means or for whatever reason, is
14-22 entitled to a retirement annuity from the fund that accrued to that
14-23 person before the time that person ceased to be a member of the
14-24 fund or a properly enrolled member of the fire or police department
14-25 if the person or the person's beneficiary in the event of the
14-26 person's death files an application for the retirement annuity with
14-27 the board within four years after the date that person ceased to be
15-1 a member of the fund or a properly enrolled member of the fire or
15-2 police department.
15-3 (b) A retirement annuity under Subsection (a) of this
15-4 section begins the first full calendar month after the month in
15-5 which the application is filed with the board.
15-6 (c) The amount of the retirement annuity under Subsection
15-7 (a) of this section is the lesser of:
15-8 (1) the amount established as of the date the person
15-9 ceased to be a member of the fund or a properly enrolled member of
15-10 the fire or police department; or
15-11 (2) the amount established as of the date the person
15-12 or the person's beneficiary filed an application under this
15-13 section.
15-14 SECTION 5.03. ELIGIBILITY FOR DISABILITY RETIREMENT. (a) A
15-15 member of the fund is eligible to retire and receive a disability
15-16 retirement annuity if the member:
15-17 (1) makes a written application for disability
15-18 retirement with the board;
15-19 (2) is permanently disabled through injury or disease
15-20 so as to incapacitate the member from the performance of duties and
15-21 has been off active duty for a continuous period of not less than
15-22 30 days before the date of the application for disability
15-23 retirement; and
15-24 (3) is a member in good standing of the fire or police
15-25 department in which the member is employed at the time of
15-26 retirement.
15-27 (b) A member of the fund who has a disability resulting from
16-1 injury or disease incurred while the member was engaged in active
16-2 military service is not entitled to a disability retirement annuity
16-3 based on that disability.
16-4 (c) Except as provided by Subsection (d) of this section, a
16-5 member of the fund who is on suspension and who receives a total
16-6 and permanent disability resulting from an injury or disease
16-7 incurred while the member is on suspension is eligible for a
16-8 disability retirement annuity if the suspended member makes up each
16-9 deducted contribution lost by reason of the suspension not later
16-10 than the 30th day after the date the contribution would have been
16-11 deducted from the member's pay. A municipality to which this Act
16-12 applies shall double-match all contributions made by a member under
16-13 this subsection.
16-14 (d) A member of the fund who is on indefinite suspension is
16-15 not eligible for a disability retirement annuity until the final
16-16 determination of the suspension and all appeals of that
16-17 determination are exhausted. A member of the fund who is on
16-18 indefinite suspension is not entitled to a disability retirement
16-19 annuity if the member is finally discharged. A member of the fund
16-20 who is on indefinite suspension but who is restored to duty or who
16-21 is given a suspension for a specific period is eligible for a
16-22 disability retirement annuity as provided by Subsection (a) of this
16-23 section.
16-24 (e) A member of the fund who applies for disability
16-25 retirement under this section is subject to medical examination as
16-26 determined by the board.
16-27 (f) This section does not affect any rights under Section
17-1 5.02 of this Act.
17-2 SECTION 5.04. DISABILITY RETIREMENT BENEFITS. (a) A member
17-3 who is eligible to receive a disability retirement annuity is
17-4 entitled to receive from the fund 50 percent of the average of the
17-5 member's total salary, excluding overtime pay, for the highest
17-6 three years of the last five years, computed from the date of
17-7 retirement or, if the member has served less than three years
17-8 before the date of retirement, 50 percent of the member's average
17-9 monthly salary, excluding overtime pay, or a theoretical monthly
17-10 average if service is less than a full month.
17-11 (b) All fractional years under this section are prorated
17-12 based on full months served on the fire or police department as a
17-13 contributing member of the fund.
17-14 (c) The amount of 50 percent of the average total salary,
17-15 excluding overtime pay, is the maximum amount of disability
17-16 retirement annuity for total and permanent disability.
17-17 SECTION 5.05. MEDICAL REEXAMINATION AND REDUCTION OF
17-18 DISABILITY RETIREMENT BENEFITS. (a) The board may cause a
17-19 disability retiree to undergo a medical examination or examinations
17-20 by any reputable physician or physicians selected by the board.
17-21 Based on the examination, the board shall determine whether the
17-22 disability retirement annuity shall be continued, decreased,
17-23 restored to the original amount if it had been decreased, or
17-24 discontinued, except that a disability retirement annuity may not
17-25 be discontinued unless the disability retiree has first been
17-26 accepted for reinstatement in that person's former position or
17-27 status in the fire or police department by the chief of the
18-1 respective department.
18-2 (b) For those retired because of disability before August
18-3 30, 1971, the board may change the disability retirement annuity
18-4 provided by this Act, in accordance with any change in the degree
18-5 of disability, except that the percentage used to compute the
18-6 annuity may not, except in the case of discontinuance, be reduced
18-7 to less than two percent of the base pay of a private each month,
18-8 for each year that the retiree has served and contributed a portion
18-9 of salary as provided by this Act, based on the greater of:
18-10 (1) the rate of pay at the time of the original
18-11 granting of the disability retirement annuity; or
18-12 (2) a minimum base pay of $200 each month.
18-13 (c) For those retired because of disability on or after
18-14 August 30, 1971, the disability retirement annuity may not be
18-15 reduced to less than two percent, for each year that the retiree
18-16 has served and contributed a portion of salary, of the average of
18-17 the member's total salary, excluding overtime pay, for the highest
18-18 three years of the last five years, computed from the date of
18-19 retirement, or if the member has served less than three years
18-20 before the date of retirement, 50 percent of the member's average
18-21 monthly salary, excluding overtime pay, or a theoretical monthly
18-22 average if service is less than a full month. All fractional years
18-23 shall be prorated based on full months served on the fire or police
18-24 department as a contributing member of the fund before the date of
18-25 retirement.
18-26 (d) If a disability retiree, after notice, fails to undergo
18-27 a medical examination as provided by this section, the board may
19-1 reduce or entirely discontinue the retiree's disability annuity
19-2 payments.
19-3 SECTION 5.06. REMOVAL OF DISABILITY AND WAIVER ON
19-4 REINSTATEMENT. (a) If a disability retiree applies for
19-5 reinstatement to the department from which that person retired, the
19-6 disability retiree, in addition to complying with any applicable
19-7 civil service laws, shall file a written application with the board
19-8 for a discontinuance of that person's disability retirement
19-9 annuity, subject to medical examination, indicating that the person
19-10 has recovered from the disability for which that person has been
19-11 receiving disability retirement annuity payments and certifying to
19-12 the board that the chief of the department from which that person
19-13 was retired approves that person's reinstatement.
19-14 (b) The applicant must execute a waiver on a form prescribed
19-15 by the board in which the applicant waives a second disability
19-16 retirement annuity resulting from the same disability that was the
19-17 basis of the first disability at a higher rate than the applicant
19-18 was receiving at the time of the reinstatement for a period of
19-19 three years after reinstatement. After three years of reinstated
19-20 service, any subsequent disability retirement annuity is computed
19-21 as any other disability retirement annuity.
19-22 (c) If the applicant is required to undergo retraining and
19-23 is compensated during a period before being officially reinstated,
19-24 the applicant's monthly disability retirement annuity shall be
19-25 reduced by the amount of any monthly departmental payroll benefit,
19-26 to the extent that the latter is greater.
19-27 (d) The board may approve the discontinuance of a disability
20-1 retirement annuity as provided by this Act.
20-2 SECTION 5.07. OUTSIDE INCOME PENSION REDUCTION. (a) The
20-3 board shall require each disability retiree retiring after August
20-4 22, 1979, to provide the board annually not later than May 1 of
20-5 each year with a true and complete copy of the retiree's income tax
20-6 return for the previous year.
20-7 (b) If the retiree received income from other employment,
20-8 including self-employment, during the preceding year, the board may
20-9 reduce the retiree's disability retirement annuity by the amount of
20-10 $1 for each month for each $2 of income earned by the retiree from
20-11 the other employment during each month of the previous year, except
20-12 that the disability retirement annuity may not be decreased below
20-13 an amount based on two percent of the retiree's average salary,
20-14 excluding overtime pay, computed at the time of retirement under
20-15 Section 5.04 of this Act for each year of service in the
20-16 department.
20-17 SECTION 5.08. DISCRETION OF DEPARTMENT CHIEF FOR EMPLOYMENT
20-18 OF DISABILITY RETIREE. (a) A disability retirement annuity may
20-19 not be granted or continued if the chief of the member's department
20-20 will provide the member employment within the department
20-21 commensurate with that person's physical and mental capabilities.
20-22 (b) A determination under this section is solely within the
20-23 discretion of the department chief and must be reasonably
20-24 exercised.
20-25 SECTION 5.09. COST-OF-LIVING INCREASES. (a) At or before
20-26 its regular meeting in the month of March, the board annually shall
20-27 review the Consumer's Price Index for Moderate Income Families in
21-1 Large Cities--All Items or the nearest equivalent published by the
21-2 United States Bureau of Labor Statistics for the preceding calendar
21-3 year. If that index shows an increase during the preceding
21-4 calendar year in the cost of living as compared with that index at
21-5 the close of the previous year, the board shall order an increase
21-6 of all retirement annuities by the number of full percentage points
21-7 closest to the exact amount of the increase of that index, except
21-8 that any increased retirement annuities are payable only at the
21-9 rate of 75 percent of the applicable cost-of-living percentage for
21-10 those retirees, and the beneficiaries of those retirees, who were
21-11 retired on and after August 30, 1971.
21-12 (b) The retirement annuities to which this section applies
21-13 shall be computed as of the month of January before that March
21-14 board meeting and shall continue in effect for at least one full
21-15 year until there has been an additional increase to that
21-16 cost-of-living index and the board enters another order as provided
21-17 by this section.
21-18 (c) The cost-of-living increase paid to any retiree or
21-19 beneficiary of a member or retiree during the first full year after
21-20 the effective date of the retirement shall be prorated on the basis
21-21 of full months retired.
21-22 SECTION 5.10. INCREASE IN EXISTING RETIREMENT ANNUITIES.
21-23 Effective October 1, 1993, all retirement annuities for members who
21-24 retired before October 1, 1989, or to the combined beneficiaries of
21-25 the retirees are increased by $100 per month.
21-26 SECTION 5.11. COORDINATION WITH FEDERAL LAW. (a) A member
21-27 or beneficiary of a member of the fund may not accrue a service
22-1 retirement annuity; disability retirement annuity; death benefit,
22-2 whether death occurs in the line of duty or otherwise; or any other
22-3 benefit under this Act in excess of the benefit limits applicable
22-4 to the fund under Section 415 of the code. The board shall reduce
22-5 the amount of any benefit that exceeds those limits by the amount
22-6 of the excess.
22-7 (b) Annual compensation for which benefits may be paid under
22-8 this Act may not exceed $200,000 for each member or another limit
22-9 applicable under Section 401(a)(17) of the code.
22-10 (c) Accrued benefits under this Act become 100 percent
22-11 vested for all members on termination of the fund or on occurrence
22-12 of another event described in Section 401(a)(17) of the code and
22-13 become 100 percent vested for a member on the date the member
22-14 becomes 65 years of age and has completed 20 years of service.
22-15 (d) Amounts representing forfeited nonvested benefits of
22-16 terminated members may not be used to increase benefits payable
22-17 from the fund but may be used to reduce contributions for future
22-18 plan years.
22-19 (e) Distribution of benefits must begin not later than April
22-20 1 of the year following the calendar year during which the member
22-21 becomes 70-1/2 years of age and must otherwise conform to Section
22-22 401(a)(9) of the code.
22-23 (f) The fund shall be administered in a manner complying
22-24 with Section 401(a)(25) of the code, relating to actuarial
22-25 assumptions.
22-26 (g) This section applies to any benefit regardless of when
22-27 accrued.
23-1 (h) The board may adopt rules to administer this section. A
23-2 rule adopted by the board under this subsection is final and
23-3 binding.
23-4 (i) In this section, "code" means the Internal Revenue Code
23-5 of 1986 and its subsequent amendments.
23-6 ARTICLE 6. DEPENDENT'S BENEFITS
23-7 SECTION 6.01. MEMBER'S BENEFICIARY RIGHTS. A member of the
23-8 fund has, in addition to all rights accruing from the person's
23-9 membership, the same right to receive benefits as a beneficiary
23-10 that a nonmember who is a beneficiary has in similar circumstances
23-11 if the member's spouse also is a member of the fund.
23-12 SECTION 6.02. DEATH BENEFIT ANNUITY FOR SURVIVING SPOUSES
23-13 AND CHILDREN. (a) If a contributing member in good standing or a
23-14 retiree dies before or after retirement, leaving a surviving
23-15 spouse, one or more children under the age of 17 years, or one or
23-16 more unmarried children 17 years of age or older but under 19 years
23-17 of age who attend a public or private educational institution, the
23-18 surviving spouse and the children are entitled to receive from the
23-19 fund the same percentage of the member's average total salary that
23-20 the member would have been entitled to receive as a retirement
23-21 annuity, except that the percentage may not exceed the percentage
23-22 to which a member with 25 years of service credit would be
23-23 entitled. One-half of the death benefit annuity under this
23-24 subsection shall be awarded to the eligible surviving spouse and
23-25 one-half to the eligible child or children.
23-26 (b) A child resulting from any marriage occurring after the
23-27 date of retirement of the member from a spouse who was not the
24-1 spouse on the date of retirement is not entitled to a retirement
24-2 annuity under this Act.
24-3 (c) If there are no children, the surviving spouse is
24-4 entitled to receive an amount not to exceed 57.50 percent of the
24-5 average total salary, excluding overtime pay, of the deceased
24-6 member computed as provided under Subsection (a) of this section.
24-7 (d) If there is no surviving spouse, the children are
24-8 entitled to receive not more than 28.75 percent of the average
24-9 total salary computed as provided under Subsection (a) of this
24-10 section, except that if the board determines on investigation that
24-11 the eligible children are destitute, the board may increase the
24-12 death benefit annuity to an amount not to exceed 40 percent of that
24-13 average total salary. The amount awarded under this subsection to
24-14 any child shall be paid by the board to the legal guardian of the
24-15 child.
24-16 (e) A surviving spouse of a member of the fund who died
24-17 before retirement is entitled to at least 50 percent of the
24-18 member's average total salary that the member would have been
24-19 entitled to receive as a retirement annuity.
24-20 (f) A surviving spouse of a member of the fund is entitled
24-21 to a death benefit annuity based on the member's retirement
24-22 benefits in effect on the date of retirement.
24-23 (g) A child of the member who is so mentally or physically
24-24 disabled as to be incapable of being self-supporting to any extent,
24-25 if otherwise qualified and regardless of age, has the rights of a
24-26 child under 17 years of age, except that any death benefit annuity
24-27 paid under this subsection to any mentally or physically disabled
25-1 child shall be reduced to the extent of any state pension or aid,
25-2 including Medicaid, or any state-funded assistance received by the
25-3 child, regardless of whether the funds were made available to the
25-4 state by the federal government. In no other instance under this
25-5 Act is a child entitled to any benefit after becoming 19 years of
25-6 age.
25-7 SECTION 6.03. LIMITATION ON AMOUNT OF SURVIVING SPOUSE'S
25-8 DEATH BENEFIT ANNUITY. (a) The death benefit annuity of a
25-9 surviving spouse of a member of the fund who is killed in the line
25-10 of duty is governed by this section.
25-11 (b) The board shall consider the finding of a municipality
25-12 to which this Act applies that a member was killed in the line of
25-13 duty as a guideline for its determination in applying this section.
25-14 On an application for survivor's benefits by a surviving spouse or
25-15 child, the fund shall pay the normal benefits payable under Section
25-16 6.02 of this Act. When a benefit is payable under this section,
25-17 the death benefit annuity shall be recomputed, applying Subsection
25-18 (c) of this section, and any deficiency payment shall be paid to
25-19 the eligible beneficiaries.
25-20 (c) Notwithstanding the formulas for computing the total
25-21 amounts of annuities otherwise provided by this section, if a
25-22 member is killed in the line of duty, the member's surviving spouse
25-23 and dependent children are entitled to a death benefit annuity
25-24 equal to the total salary, excluding overtime pay, of the member at
25-25 the time of death. Rules provided by this section relating to
25-26 qualification and disqualification for and apportionment of
25-27 benefits apply to a death benefit annuity computed under this
26-1 subsection. A death benefit annuity computed under this subsection
26-2 is subject to the same cost-of-living adjustments that apply to
26-3 pensions for service retirement.
26-4 SECTION 6.04. REMARRIAGE; BENEFITS AFTER TERMINATION OF
26-5 MARRIAGE. (a) The right of a surviving spouse or dependent child
26-6 to annuity payments under this Act terminates on the remarriage of
26-7 the surviving spouse, either statutory or common law, or on the
26-8 marriage of the child, as applicable.
26-9 (b) If the remarried surviving spouse or married dependent
26-10 child becomes unmarried, that person is entitled, on application,
26-11 to the greater of 75 percent of the annuity that was in effect on
26-12 the date of termination or a minimum annuity of $800 each month for
26-13 as long as that person remains unmarried.
26-14 SECTION 6.05. AFFIDAVIT OF MARITAL STATUS. (a) A surviving
26-15 spouse, a dependent beneficiary under this Act, or the guardian of
26-16 a surviving spouse or dependent beneficiary may be required by the
26-17 board to file an affidavit annually concerning the person's marital
26-18 status or the marital status of the person's wards or to give an
26-19 affidavit to the board at other times when probable cause exists to
26-20 suspect the possibility of marriage.
26-21 (b) If the surviving spouse, dependent beneficiary, or
26-22 guardian fails or refuses to file an affidavit required under
26-23 Subsection (a) of this section or if an incomplete, incorrect, or
26-24 false affidavit is filed, the board may suspend annuity payments to
26-25 that person indefinitely until the person complies with the
26-26 requests and orders of the board.
26-27 SECTION 6.06. COMMON-LAW MARRIAGES. Common-law marriages
27-1 are not recognized under this Act and benefits may not be conferred
27-2 on common-law spouses as beneficiaries unless a declaration of
27-3 informal marriage was made under Section 1.92, Family Code, and its
27-4 subsequent amendments before the member's death.
27-5 SECTION 6.07. SURVIVING SPOUSE'S RIGHT TO SINGLE
27-6 ENTITLEMENT. Unless otherwise provided by law, a surviving spouse
27-7 is not entitled to more than one annuity from the fund.
27-8 SECTION 6.08. LUMP-SUM DEATH BENEFIT. (a) Except as
27-9 provided by Subsection (b) of this section, a surviving spouse
27-10 whose status as such resulted from any marriage after the date of
27-11 the retirement of the member is entitled to a lump-sum death
27-12 benefit because of the member's death in the amount of:
27-13 (1) $10,000 if the marriage occurred 10 years or more
27-14 before the member's death;
27-15 (2) $7,500 if the marriage occurred 7-1/2 years before
27-16 but less than 10 years before the member's death;
27-17 (3) $5,000 if the marriage occurred five years or more
27-18 but less than 7-1/2 years before the member's death; and
27-19 (4) $2,500 if the marriage occurred 2-1/2 years or
27-20 more but less than five years before the member's death.
27-21 (b) A surviving spouse under this section is not entitled to
27-22 a lump-sum death benefit if a child is entitled to receive benefits
27-23 under this Act.
27-24 SECTION 6.09. DEATH BENEFIT ANNUITIES TO DEPENDENT PARENTS.
27-25 (a) If a contributing member in good standing of the fire or
27-26 police department or a retiree dies before or after retirement and
27-27 leaves no surviving spouse or child but leaves surviving a father
28-1 and mother wholly dependent on that person for support, the
28-2 dependent father and mother are entitled to receive one-third of
28-3 the average total salary, excluding overtime pay, of the deceased
28-4 member based on the same number of years of the member's pay as is
28-5 currently provided for computations of retirement annuities under
28-6 Section 5.01(a) of this Act, the annuity to be equally divided
28-7 between the father and mother as long as they are wholly dependent.
28-8 If there is only one dependent, either father or mother, the board
28-9 shall grant the surviving dependent an annuity not to exceed
28-10 one-fourth that average total salary as computed under this
28-11 subsection.
28-12 (b) The board may, on its own initiative, make a thorough
28-13 investigation, determine the facts as to the dependency with
28-14 respect to an application for benefits made under Subsection (a) of
28-15 this section, and at any time, on the request of any beneficiary or
28-16 any contributor to the fund, reopen any award made to any member or
28-17 dependent of any member who is receiving annuity payments under
28-18 this section and discontinue those payments as to all or any of
28-19 them. The findings of the board under this section and all
28-20 annuities granted under this section are final on all parties
28-21 unless set aside or revoked by a court of competent jurisdiction.
28-22 SECTION 6.10. SUSPENSION RIGHTS OF DEPENDENT PARENTS. If a
28-23 member dies who is under suspension at the time of death, including
28-24 an indefinite suspension that has not become final, the member's
28-25 dependent parents have the same rights as any other member under
28-26 this Act.
28-27 SECTION 6.11. DEATH BENEFIT FOR ACTIVE MEMBER'S ESTATE.
29-1 (a) If a member of the fire or police department in active service
29-2 dies and does not leave an eligible surviving spouse, a child under
29-3 17 years of age, a child under 19 years of age who is attending
29-4 school, a mentally or physically disabled child, or a dependent
29-5 father or mother, the estate of the deceased member is entitled to
29-6 a death benefit payment in the amount of $10,000 from the fund.
29-7 (b) The death benefit under this section is not payable if
29-8 the deceased member of the fund is survived by one or more
29-9 beneficiaries.
29-10 ARTICLE 7. INVESTMENTS AND FINANCIAL PROVISIONS
29-11 SECTION 7.01. TREASURER'S DUTIES. (a) All money of the
29-12 fund is payable to the treasurer of the fund for the use of the
29-13 fund.
29-14 (b) The duties imposed on the treasurer under this Act are
29-15 additional duties for which the treasurer is liable under oath and
29-16 bond as the treasurer of a municipality to which this Act applies.
29-17 (c) The treasurer is not entitled to compensation for
29-18 serving as the treasurer of the fund.
29-19 SECTION 7.02. ACCOUNTS. The accounts of the fund and of the
29-20 members shall be kept separately.
29-21 SECTION 7.03. RESERVE RETIREMENT FUND. (a) The board shall
29-22 determine a reasonably safe amount of surplus necessary to defray
29-23 reasonable expenses of administering the fund.
29-24 (b) All other assets shall be designated as reserve
29-25 retirement funds.
29-26 (c) Only the board may invest and manage the reserve
29-27 retirement funds for the sole benefit of the plan participants and
30-1 their beneficiaries.
30-2 SECTION 7.04. INVESTMENT POWERS OF THE BOARD. (a) The
30-3 board shall cause the reserve retirement funds to be invested in a
30-4 manner consistent with the care, skill, and diligence under the
30-5 prevailing circumstances that a prudent person acting in a like
30-6 capacity and familiar with matters of the type would use in the
30-7 conduct of an enterprise with a like character and like aims.
30-8 (b) The board shall diversify the investment of the fund to
30-9 minimize the risk of large losses unless under the circumstances it
30-10 is clearly prudent not to do so. In investing the assets of the
30-11 fund, the board shall be bound by the documents and instruments
30-12 governing the fund.
30-13 (c) The board may directly manage the investments of the
30-14 fund or may choose and contract for professional management
30-15 services. If the fund owns real estate, it may, at its discretion,
30-16 establish corporations described by Section 501(c)(25), Internal
30-17 Revenue Code of 1986 (26 U.S.C. Section 501), and its subsequent
30-18 amendments, to hold title to the real estate.
30-19 (d) The board shall have the ultimate responsibility for the
30-20 investment of the reserve retirement funds. The board may purchase
30-21 securities or engage in limited partnerships or make other
30-22 investments not specifically provided by this Act and shall have
30-23 the authority of exercising discretion in determining the nature,
30-24 type, quality, and size of any investment consistent with the
30-25 investment policies it establishes.
30-26 SECTION 7.05. PROFESSIONAL CONSULTANTS. (a) The board may
30-27 contract for professional investment management services, financial
31-1 consultants, independent auditors, and actuaries. Only the board
31-2 may enter into those contracts and may establish a reasonable fee
31-3 for compensation.
31-4 (b) The board may designate its own custodian or master
31-5 custodian to perform the customary duties involving the safekeeping
31-6 of the assets and the execution of transactions of either domestic
31-7 or foreign securities. The board may engage in a securities
31-8 lending program consistent with the benefits to plan participants
31-9 and their beneficiaries.
31-10 SECTION 7.06. INVESTMENT MANAGER QUALIFICATIONS. In
31-11 appointing investment managers, the board shall require that the
31-12 investment manager be:
31-13 (1) registered under the Investment Advisors Act of
31-14 1940 (15 U.S.C. Section 80b-1 et seq.) and its subsequent
31-15 amendments;
31-16 (2) a bank as defined by that Act; or
31-17 (3) an insurance company qualified to perform
31-18 investment services under the laws of more than one state.
31-19 ARTICLE 8. MISCELLANEOUS PROVISIONS
31-20 SECTION 8.01. REPEALER. Chapter 105, Acts of the 47th
31-21 Legislature, Regular Session, 1941 (Article 6243f, Vernon's Texas
31-22 Civil Statutes), is repealed.
31-23 SECTION 8.02. EFFECTIVE DATE. This Act takes effect October
31-24 1, 1993.
31-25 SECTION 8.03. RESTATEMENT. Unless otherwise expressly
31-26 provided by this Act, this Act is intended to be a restatement of
31-27 Chapter 105, Acts of the 47th Legislature, Regular Session, 1941
32-1 (Article 6243f, Vernon's Texas Civil Statutes), and is not intended
32-2 to impliedly repeal, reduce, or enhance any pension entitlement
32-3 that existed as of September 30, 1993, under that Act or to change
32-4 the meaning of any of the provisions of that Act.
32-5 SECTION 8.04. EMERGENCY. The importance of this legislation
32-6 and the crowded condition of the calendars in both houses create an
32-7 emergency and an imperative public necessity that the
32-8 constitutional rule requiring bills to be read on three several
32-9 days in each house be suspended, and this rule is hereby suspended.