1-1 By: Madla S.B. No. 817
1-2 (In the Senate - Filed March 10, 1993; March 15, 1993, read
1-3 first time and referred to Committee on Intergovernmental
1-4 Relations; April 29, 1993, reported adversely, with favorable
1-5 Committee Substitute by the following vote: Yeas 7, Nays 0;
1-6 April 29, 1993, sent to printer.)
1-7 COMMITTEE VOTE
1-8 Yea Nay PNV Absent
1-9 Armbrister x
1-10 Leedom x
1-11 Carriker x
1-12 Henderson x
1-13 Madla x
1-14 Moncrief x
1-15 Patterson x
1-16 Rosson x
1-17 Shapiro x
1-18 Wentworth x
1-19 Whitmire x
1-20 COMMITTEE SUBSTITUTE FOR S.B. No. 817 By: Madla
1-21 A BILL TO BE ENTITLED
1-22 AN ACT
1-23 relating to the retirement system for fire fighters and police
1-24 officers in certain municipalities.
1-25 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-26 ARTICLE 1. GENERAL PROVISIONS
1-27 SECTION 1.01. PURPOSE. The purpose of the fund is to
1-28 provide for the protection of pensions in a municipality to which
1-29 this Act applies for fire fighters and police officers and their
1-30 beneficiaries because of the hazardous nature of the professions of
1-31 fire fighting and law enforcement.
1-32 SECTION 1.02. DEFINITIONS. In this Act:
1-33 (1) "Board" means the board of trustees of a fund to
1-34 which this Act applies.
1-35 (2) "Fund" means the fire fighters and police officers
1-36 pension fund of a municipality to which this Act applies.
1-37 (3) "Retirement annuity" means monthly pension
1-38 benefits.
1-39 (4) "Surviving spouse" means a widow or a widower.
1-40 SECTION 1.03. APPLICABILITY. This Act applies to paid fire
1-41 and police departments of a municipality with a population between
1-42 750,000 and 1,000,000, according to the most recent federal census.
1-43 SECTION 1.04. STATUTORY TRUST. (a) The fund is a statutory
1-44 trust and is not a subdivision of government.
1-45 (b) The board shall hold in trust the assets of the fund for
1-46 the benefit of the members and retirees of the fund and their
1-47 beneficiaries and for defraying reasonable administrative expenses
1-48 of the fund.
1-49 (c) The fund may not be diverted, transferred, or used for
1-50 any purpose inconsistent with this Act and with the instruments
1-51 governing the fund.
1-52 (d) A public or private agency or authority may not alter or
1-53 impair any contract made by the board or under the authority or
1-54 direction of the board.
1-55 SECTION 1.05. EXEMPTIONS. A retirement annuity from the
1-56 fund is exempt from garnishment, assignment, attachment, judgments,
1-57 other legal process, and inheritance or other taxes established by
1-58 this state.
1-59 SECTION 1.06. OTHER PENSION SYSTEM ESTABLISHED BY STATE LAW.
1-60 Notwithstanding any other law, if the employees of the fire or
1-61 police department who have been members of the fund are included in
1-62 another pension system established by state law, the board shall
1-63 act for any similar board created by that law with regard to the
1-64 receipt and payment of amounts owed to the employees under this
1-65 Act. Employees of a department who are members of the fund and are
1-66 not included in the other pension system may not participate in any
1-67 payment under this section.
1-68 ARTICLE 2. ADMINISTRATIVE PROVISIONS
2-1 SECTION 2.01. BOARD OF TRUSTEES. (a) The fund is governed
2-2 by a board of trustees consisting of the following nine members:
2-3 (1) the mayor of a municipality to which this Act
2-4 applies;
2-5 (2) two members of the governing body of a
2-6 municipality to which this Act applies, appointed by that governing
2-7 body;
2-8 (3) two active fire fighters below the rank of fire
2-9 chief, elected by secret ballot by majority vote of the members of
2-10 the fire department who are contributing members of the fund;
2-11 (4) two active police officers below the rank of
2-12 police chief, elected by secret ballot by majority vote of the
2-13 members of the police department who are contributing members of
2-14 the fund;
2-15 (5) a retiree or beneficiary representative of the
2-16 fire department, elected by secret ballot by majority vote of the
2-17 retirees, or the surviving spouses of the retirees, from the fire
2-18 department; and
2-19 (6) a retiree or beneficiary representative of the
2-20 police department, elected by secret ballot by majority vote of the
2-21 retirees, or the surviving spouses of the retirees, from the police
2-22 department.
2-23 (b) The board, through its secretary, shall administer the
2-24 required elections of the retiree or beneficiary representatives by
2-25 mailing ballots to out-of-town retirees or beneficiaries. Only
2-26 retirees and surviving spouses of members properly enrolled on the
2-27 pension rolls are eligible to be elected as retiree or beneficiary
2-28 representatives.
2-29 (c) The fund is independent of the control of a municipality
2-30 to which this Act applies.
2-31 SECTION 2.02. TERMS OF TRUSTEES. (a) The mayor of a
2-32 municipality to which this Act applies serves on the board for the
2-33 term of the mayor's office.
2-34 (b) The two members of the municipal governing body serve on
2-35 the board for the term of the office to which they are elected.
2-36 (c) The two active fire fighters below the rank of fire
2-37 chief serve on the board for staggered four-year terms, with one
2-38 member's term expiring every two years.
2-39 (d) The two active police officers below the rank of police
2-40 chief serve on the board for staggered four-year terms, with one
2-41 member's term expiring every two years.
2-42 (e) The retiree or beneficiary representatives serve on the
2-43 board for staggered four-year terms, with one member's term
2-44 expiring every two years.
2-45 SECTION 2.03. REMOVAL OF TRUSTEES. (a) The members of the
2-46 board who are fire fighters or police officers may be removed by a
2-47 vote of the membership of their respective departments.
2-48 (b) The members of the board who are retiree or beneficiary
2-49 representatives may be removed by a vote of the group eligible to
2-50 elect them.
2-51 (c) A petition for removal under this section must be filed
2-52 with the board within 45 days after the date the first signature on
2-53 the petition is obtained. A signature is invalid if it is not
2-54 dated.
2-55 (d) A removal election under this section must be held
2-56 within 30 days after the date the board certifies that a proper
2-57 petition for a removal election has been signed by at least 20
2-58 percent of the membership from which the trustee was elected. A
2-59 trustee's term of service ends on the entry of an order by the
2-60 board declaring the results of a removal election under this
2-61 section to favor removal.
2-62 (e) On the date the board enters an order under Subsection
2-63 (d) of this section, the board shall call a special election to be
2-64 held not less than 20 nor more than 30 days after that date to fill
2-65 the vacancy for the unexpired term of the trustee who was removed.
2-66 The trustee who was removed is not eligible to run in the special
2-67 election but is eligible to run in all subsequent board elections
2-68 for the category in which the trustee was removed.
2-69 SECTION 2.04. OFFICERS. (a) The board shall elect a
2-70 chairman, a vice-chairman, and a secretary.
3-1 (b) The treasurer of the board is the treasurer of a
3-2 municipality to which this Act applies.
3-3 SECTION 2.05. EMPLOYEES. The board may employ an executive
3-4 director and staff as needed to administer the fund.
3-5 SECTION 2.06. MEETINGS. The board shall hold regular
3-6 monthly meetings and special meetings at the call of the chairman
3-7 or on written demand by a majority of the members of the board.
3-8 SECTION 2.07. COMMITTEES OF BOARD. (a) The chairman of the
3-9 board may appoint committees that report to the board.
3-10 (b) Only members of the board may be appointed to committees
3-11 under this section.
3-12 (c) Committees shall be composed of not fewer than three nor
3-13 more than five members of the board, except as otherwise
3-14 specifically provided by the board.
3-15 (d) Only members of committees may vote as committee
3-16 members.
3-17 (e) The board may direct staff and advisors to assist the
3-18 committees.
3-19 (f) All members of the board may attend committee meetings.
3-20 (g) Members of committees serve at the pleasure of the
3-21 board.
3-22 (h) Permanent or standing committees may not be appointed.
3-23 ARTICLE 3. GENERAL POWERS AND DUTIES OF BOARD
3-24 SECTION 3.01. GENERAL POWERS AND DUTIES OF BOARD. (a) The
3-25 board has complete authority and power to:
3-26 (1) administer the fund;
3-27 (2) order payments from the fund as required by this
3-28 Act; and
3-29 (3) control the fund independently.
3-30 (b) The board shall adopt rules relating to:
3-31 (1) the disbursement of the fund's assets;
3-32 (2) the designation of beneficiaries of the fund; and
3-33 (3) the name of the board and the fund.
3-34 (c) The board shall report annually to the governing body of
3-35 the municipality regarding the condition of the fund and the
3-36 receipts and disbursements of the fund.
3-37 SECTION 3.02. APPLICATIONS; HEARINGS. (a) The board shall
3-38 consider all cases for membership in the fund and for the
3-39 retirement and benefits of the members of the fund and all
3-40 applications for benefits by surviving spouses, children, and
3-41 dependent parents.
3-42 (b) The board shall give notice to persons asking for
3-43 membership in the fund or for a benefit to appear before the board
3-44 and offer sworn evidence.
3-45 (c) Any contributing member of the fund who is in good
3-46 standing in the fire or police department may:
3-47 (1) appear in person or by attorney to contest the
3-48 application for membership participation in the fund or for an
3-49 annuity or benefit by any person claiming to be entitled to an
3-50 annuity or benefit, either as a member or beneficiary; and
3-51 (2) offer supporting testimony.
3-52 (d) The chairman of the board may issue process for
3-53 witnesses, administer oaths to those witnesses, and examine any
3-54 witness in any manner affecting retirement or a benefit under this
3-55 Act. The process for witnesses may be served on any member of the
3-56 fire or police department. On the failure of any witness to attend
3-57 and testify, that person may be compelled to attend and testify as
3-58 in any judicial proceeding, according to the practice in a justice
3-59 court.
3-60 SECTION 3.03. ORDERS FOR DISBURSEMENTS. (a) The board
3-61 shall issue orders for disbursements signed by the chairman or
3-62 vice-chairman of the board and the secretary of the board to the
3-63 appropriate persons. The order shall state the purposes for the
3-64 payments. The board shall keep a record of those orders.
3-65 (b) At each monthly board meeting, the board shall send to
3-66 the treasurer of the board a written list of persons entitled to
3-67 the payment from the fund, stating the amount and reason for
3-68 payment. The list must be certified and signed by the chairman or
3-69 vice-chairman of the board and the secretary of the board.
3-70 (c) The fund may not be disbursed without a record vote of
4-1 the board.
4-2 (d) A quorum of the board is five members. When a quorum is
4-3 present, action of the board that requires a vote may be taken by a
4-4 majority of the members present.
4-5 ARTICLE 4. MEMBERSHIP AND CONTRIBUTIONS
4-6 SECTION 4.01. MEMBERSHIP. (a) A person becomes a member of
4-7 the fund as a condition of employment if the person:
4-8 (1) has been properly appointed and enrolled as a fire
4-9 fighter or police officer of a municipality to which this Act
4-10 applies in a position or office established and classified by
4-11 municipal ordinance;
4-12 (2) has served the probationary period for the
4-13 position;
4-14 (3) has served for six months as a fire fighter or
4-15 police officer of the municipality; and
4-16 (4) was not younger than 18 and had not attained the
4-17 age of 36 at the time of appointment.
4-18 (b) The drawing of compensation by an officer or employee in
4-19 the fire or police department for service in that department does
4-20 not of itself make that person a member of the fund.
4-21 (c) The regularity of an appointment as a fire fighter or
4-22 police officer of a municipality to which this Act applies may not
4-23 be presumed from the serving of the full probationary period, if
4-24 any. The service of the probationary period by an officer or
4-25 employee as a fire fighter or police officer of a municipality to
4-26 which this Act applies does not constitute the creation of a
4-27 position or office to which a proper appointment has been made for
4-28 purposes of this Act.
4-29 SECTION 4.02. REINSTATEMENT. A former fund member who has
4-30 reentered the fire or police department may not be barred from
4-31 membership in the fund because of age as long as the member can
4-32 qualify for a 30-year pension on or before the member's 65th
4-33 birthday.
4-34 SECTION 4.03. MILITARY SERVICE. (a) A member of the fund
4-35 who enters active military service may not:
4-36 (1) be required to make the monthly payments into the
4-37 fund provided by this Act as long as the member is engaged in
4-38 active military service; or
4-39 (2) lose any seniority rights or retirement benefits
4-40 provided by this Act by virtue of that military service.
4-41 (b) Not later than the 90th day after the date of the
4-42 member's reinstatement to an active status in the fire or police
4-43 department, the member must file with the secretary of the board a
4-44 written statement of intent to pay into the fund an amount equal to
4-45 what the member would have paid if the member had remained on
4-46 active status in the department during the period of the member's
4-47 absence in military service.
4-48 (c) The member must make the payment described by Subsection
4-49 (b) of this section in full within an amount of time after the
4-50 member's return that is equal to twice the amount of time the
4-51 member was absent, except that the maximum period for payment may
4-52 not exceed four years.
4-53 (d) Except as provided by Subsection (f) of this section, if
4-54 the member does not comply with Subsections (b) and (c) of this
4-55 section, the member shall lose all credit toward the member's
4-56 retirement annuity for the length of time the member was engaged in
4-57 active military service.
4-58 (e) The amount of credit purchased under this section may
4-59 not exceed the length of the active military service authorized by
4-60 law.
4-61 (f) If a member does not make the payment required under
4-62 Subsection (c) of this section within the required amount of time
4-63 and the member is eligible for credit under federal law, the member
4-64 shall also pay interest, compounded annually, on the then current
4-65 rate of a member's contribution from the date the payment was
4-66 required to the date the payment was made. The board shall set the
4-67 rate of interest.
4-68 (g) A disability resulting from either injury or disease
4-69 contracted while engaged in military service does not entitle a
4-70 member to a disability retirement annuity.
5-1 (h) A municipality to which this Act applies shall
5-2 double-match payments made to the fund under this section.
5-3 SECTION 4.04. MEMBER CONTRIBUTIONS. There shall be deducted
5-4 from the wages of each fire fighter and police officer in the
5-5 employment of a municipality to which this Act applies a percentage
5-6 of the member's total salary, excluding overtime pay, according to
5-7 the following schedule:
5-8 (1) 11.16 percent for full pay periods after September
5-9 30, 1993, but before October 1, 1994;
5-10 (2) 11.32 percent for full pay periods after September
5-11 30, 1994, but before October 1, 1995;
5-12 (3) 11.50 percent for full pay periods after September
5-13 30, 1995, but before October 1, 1996;
5-14 (4) 11.66 percent for full pay periods after September
5-15 30, 1996, but before October 1, 1997;
5-16 (5) 11.82 percent for full pay periods after September
5-17 30, 1997, but before October 1, 1998;
5-18 (6) 12 percent for full pay periods after September
5-19 30, 1998, but before October 1, 1999;
5-20 (7) 12.16 percent for full pay periods after September
5-21 30, 1999, but before October 1, 2000;
5-22 (8) 12.32 percent for full pay periods after September
5-23 30, 2000, but before October 1, 2001; and
5-24 (9) 12.50 percent for full pay periods after September
5-25 30, 2001.
5-26 SECTION 4.05. MUNICIPAL CONTRIBUTIONS. (a) A municipality
5-27 to which this Act applies shall pay into the fund an amount equal
5-28 to double the sum total of all member contributions made in
5-29 accordance with Section 4.04 of this Act.
5-30 (b) The payments into the fund by the municipality, both as
5-31 to deductions and double-matching amounts, shall be made on the
5-32 same day the contributions are deducted from the members' pay.
5-33 (c) Any donations made to the fund and all funds received
5-34 from any source for the fund shall be deposited in the fund at the
5-35 earliest opportunity.
5-36 (d) The municipality's double-matching amount under this
5-37 section is in place of all other payments previously required by
5-38 law to be made by the municipality.
5-39 (e) The municipal contribution and retirement annuities are
5-40 a part of the compensation for services rendered to the
5-41 municipality. This Act is of the essence of the contract of
5-42 employment and appointment of the fire fighters and police officers
5-43 of a municipality to which this Act applies.
5-44 SECTION 4.06. DEFICIENCY PAYMENT BY MUNICIPALITY. A
5-45 municipality to which this Act applies shall pay the deficiency, if
5-46 any, between the amount available to pay all retirement annuities
5-47 and other benefits owed under this Act and the amount required by
5-48 this Act to pay those benefits.
5-49 SECTION 4.07. NO REFUND OF CONTRIBUTIONS. A member of the
5-50 fund is not entitled to any refund from the fund of any portion of
5-51 the money deducted from the member's pay for the benefit of the
5-52 fund. That money is public money and the property of the fund for
5-53 the benefit of the members qualifying for benefits and for their
5-54 beneficiaries.
5-55 ARTICLE 5. MEMBER BENEFITS
5-56 SECTION 5.01. RETIREMENT BENEFITS. (a) If a member of the
5-57 fund has contributed a portion of that member's salary as provided
5-58 by this Act and has contributed and served for 20 years or more in
5-59 the fire or police department, the board shall, on the application
5-60 of the member for a retirement annuity, authorize a retirement
5-61 annuity to the member.
5-62 (b) The board shall compute the retirement annuity of a
5-63 member who retires after September 30, 1991, on the basis of the
5-64 average of the member's total salary, excluding overtime pay, for
5-65 the highest three years of the last five years, computed from the
5-66 date of retirement, of the member's pay at the rate of two percent
5-67 for each of the first 20 years served, plus 3-1/2 percent for each
5-68 of the next 10 years served, plus one percent for each of the next
5-69 five years served, with fractional years prorated based on full
5-70 months served as a contributing member, but the annuity may not
6-1 exceed, as of the date of retirement, 80 percent of the average so
6-2 determined.
6-3 (c) A member may not receive an award from the fund for
6-4 service retirement until the member has served at least 20 years in
6-5 the fire or police department and has also contributed the required
6-6 amount of money for at least 20 years. In determining the number
6-7 of years of service in a department, the member shall be given full
6-8 credit for the time the member was actively engaged in military
6-9 service in accordance with Section 4.03 of this Act. Disciplinary
6-10 suspensions of 15 days or less may not be subtracted from a
6-11 member's service credit under this Act if the member has paid into
6-12 the fund within 30 days after the termination date of each
6-13 suspension a sum of money equal to the amount of money that would
6-14 have been deducted from that person's salary during that period of
6-15 suspension if it had not been for that suspension. A municipality
6-16 to which this Act applies shall double-match a payment made under
6-17 this subsection.
6-18 (d) If a member of the fire or police department has served
6-19 for 30 years or more in either department and has contributed a
6-20 portion of that member's salary as provided by this Act for the
6-21 same period, that member is retired automatically from service on
6-22 the member's 65th birthday.
6-23 (e) If, on a member's 65th birthday, the member has served
6-24 less than 30 years in either department and has not contributed a
6-25 portion of that member's salary as provided by this Act for that
6-26 period, the member may continue service and contributions until the
6-27 total service equals and the contributions have been made for 30
6-28 years.
6-29 (f) Except as provided by Subsection (g) of this section,
6-30 members of the fund at the time of their retirement shall receive
6-31 service credit for all unused sick leave accumulated by them under
6-32 Chapter 143, Local Government Code, and its subsequent amendments,
6-33 with fractional years prorated based on full months of sick leave.
6-34 (g) The retirement annuity for a member under Subsection (f)
6-35 of this section may not exceed, as of the date of retirement, 80
6-36 percent of the average, determined under that subsection and under
6-37 the ordinances of a municipality to which this Act applies, that
6-38 exceeds 90 days of accumulated sick leave.
6-39 SECTION 5.02. RETIREMENT BENEFITS AFTER CESSATION OF
6-40 MEMBERSHIP. (a) A person who has qualified for a retirement
6-41 annuity under this Act but who has subsequently ceased to be a
6-42 member of the fund or a properly enrolled member of the fire or
6-43 police department, by whatever means or for whatever reason, is
6-44 entitled to a retirement annuity from the fund that accrued to that
6-45 person before the time that person ceased to be a member of the
6-46 fund or a properly enrolled member of the fire or police department
6-47 if the person or the person's beneficiary in the event of the
6-48 person's death files an application for the retirement annuity with
6-49 the board within four years after the date that person ceased to be
6-50 a member of the fund or a properly enrolled member of the fire or
6-51 police department.
6-52 (b) A retirement annuity under Subsection (a) of this
6-53 section begins the first full calendar month after the month in
6-54 which the application is filed with the board.
6-55 (c) The amount of the retirement annuity under Subsection
6-56 (a) of this section is the lesser of:
6-57 (1) the amount established as of the date the person
6-58 ceased to be a member of the fund or a properly enrolled member of
6-59 the fire or police department; or
6-60 (2) the amount established as of the date the person
6-61 or the person's beneficiary filed an application under this
6-62 section.
6-63 SECTION 5.03. ELIGIBILITY FOR DISABILITY RETIREMENT. (a) A
6-64 member of the fund is eligible to retire and receive a disability
6-65 retirement annuity if the member:
6-66 (1) makes a written application for disability
6-67 retirement with the board;
6-68 (2) is permanently disabled through injury or disease
6-69 so as to incapacitate the member from the performance of duties and
6-70 has been off active duty for a continuous period of not less than
7-1 30 days before the date of the application for disability
7-2 retirement; and
7-3 (3) is a member in good standing of the fire or police
7-4 department in which the member is employed at the time of
7-5 retirement.
7-6 (b) A member of the fund who has a disability resulting from
7-7 injury or disease incurred while the member was engaged in active
7-8 military service is not entitled to a disability retirement annuity
7-9 based on that disability.
7-10 (c) Except as provided by Subsection (d) of this section, a
7-11 member of the fund who is on suspension and who receives a total
7-12 and permanent disability resulting from an injury or disease
7-13 incurred while the member is on suspension is eligible for a
7-14 disability retirement annuity if the suspended member makes up each
7-15 deducted contribution lost by reason of the suspension not later
7-16 than the 30th day after the date the contribution would have been
7-17 deducted from the member's pay. A municipality to which this Act
7-18 applies shall double-match all contributions made by a member under
7-19 this subsection.
7-20 (d) A member of the fund who is on indefinite suspension is
7-21 not eligible for a disability retirement annuity until the final
7-22 determination of the suspension and all appeals of that
7-23 determination are exhausted. A member of the fund who is on
7-24 indefinite suspension is not entitled to a disability retirement
7-25 annuity if the member is finally discharged. A member of the fund
7-26 who is on indefinite suspension but who is restored to duty or who
7-27 is given a suspension for a specific period is eligible for a
7-28 disability retirement annuity as provided by Subsection (a) of this
7-29 section.
7-30 (e) A member of the fund who applies for disability
7-31 retirement under this section is subject to medical examination as
7-32 determined by the board.
7-33 (f) This section does not affect any rights under Section
7-34 5.02 of this Act.
7-35 SECTION 5.04. DISABILITY RETIREMENT BENEFITS. (a) A member
7-36 who is eligible to receive a disability retirement annuity is
7-37 entitled to receive from the fund 50 percent of the average of the
7-38 member's total salary, excluding overtime pay, for the highest
7-39 three years of the last five years, computed from the date of
7-40 retirement or, if the member has served less than three years
7-41 before the date of retirement, 50 percent of the member's average
7-42 monthly salary, excluding overtime pay, or a theoretical monthly
7-43 average if service is less than a full month.
7-44 (b) All fractional years under this section are prorated
7-45 based on full months served on the fire or police department as a
7-46 contributing member of the fund.
7-47 (c) The amount of 50 percent of the average total salary,
7-48 excluding overtime pay, is the maximum amount of disability
7-49 retirement annuity for total and permanent disability.
7-50 SECTION 5.05. MEDICAL REEXAMINATION AND REDUCTION OF
7-51 DISABILITY RETIREMENT BENEFITS. (a) The board may cause a
7-52 disability retiree to undergo a medical examination or examinations
7-53 by any reputable physician or physicians selected by the board.
7-54 Based on the examination, the board shall determine whether the
7-55 disability retirement annuity shall be continued, decreased,
7-56 restored to the original amount if it had been decreased, or
7-57 discontinued, except that a disability retirement annuity may not
7-58 be discontinued unless the disability retiree has first been
7-59 accepted for reinstatement in that person's former position or
7-60 status in the fire or police department by the chief of the
7-61 respective department.
7-62 (b) For those retired because of disability before August
7-63 30, 1971, the board may change the disability retirement annuity
7-64 provided by this Act, in accordance with any change in the degree
7-65 of disability, except that the percentage used to compute the
7-66 annuity may not, except in the case of discontinuance, be reduced
7-67 to less than two percent of the base pay of a private each month,
7-68 for each year that the retiree has served and contributed a portion
7-69 of salary as provided by this Act, based on the greater of:
7-70 (1) the rate of pay at the time of the original
8-1 granting of the disability retirement annuity; or
8-2 (2) a minimum base pay of $200 each month.
8-3 (c) For those retired because of disability on or after
8-4 August 30, 1971, the disability retirement annuity may not be
8-5 reduced to less than two percent, for each year that the retiree
8-6 has served and contributed a portion of salary, of the average of
8-7 the member's total salary, excluding overtime pay, for the highest
8-8 three years of the last five years, computed from the date of
8-9 retirement, or if the member has served less than three years
8-10 before the date of retirement, 50 percent of the member's average
8-11 monthly salary, excluding overtime pay, or a theoretical monthly
8-12 average if service is less than a full month. All fractional years
8-13 shall be prorated based on full months served on the fire or police
8-14 department as a contributing member of the fund before the date of
8-15 retirement.
8-16 (d) If a disability retiree, after notice, fails to undergo
8-17 a medical examination as provided by this section, the board may
8-18 reduce or entirely discontinue the retiree's disability annuity
8-19 payments.
8-20 SECTION 5.06. REMOVAL OF DISABILITY AND WAIVER ON
8-21 REINSTATEMENT. (a) If a disability retiree applies for
8-22 reinstatement to the department from which that person retired, the
8-23 disability retiree, in addition to complying with any applicable
8-24 civil service laws, shall file a written application with the board
8-25 for a discontinuance of that person's disability retirement
8-26 annuity, subject to medical examination, indicating that the person
8-27 has recovered from the disability for which that person has been
8-28 receiving disability retirement annuity payments and certifying to
8-29 the board that the chief of the department from which that person
8-30 was retired approves that person's reinstatement.
8-31 (b) The applicant must execute a waiver on a form prescribed
8-32 by the board in which the applicant waives a second disability
8-33 retirement annuity resulting from the same disability that was the
8-34 basis of the first disability at a higher rate than the applicant
8-35 was receiving at the time of the reinstatement for a period of
8-36 three years after reinstatement. After three years of reinstated
8-37 service, any subsequent disability retirement annuity is computed
8-38 as any other disability retirement annuity.
8-39 (c) If the applicant is required to undergo retraining and
8-40 is compensated during a period before being officially reinstated,
8-41 the applicant's monthly disability retirement annuity shall be
8-42 reduced by the amount of any monthly departmental payroll benefit,
8-43 to the extent that the latter is greater.
8-44 (d) The board may approve the discontinuance of a disability
8-45 retirement annuity as provided by this Act.
8-46 SECTION 5.07. OUTSIDE INCOME PENSION REDUCTION. (a) The
8-47 board shall require each disability retiree retiring after August
8-48 22, 1979, to provide the board annually not later than May 1 of
8-49 each year with a true and complete copy of the retiree's income tax
8-50 return for the previous year.
8-51 (b) If the retiree received income from other employment,
8-52 including self-employment, during the preceding year, the board may
8-53 reduce the retiree's disability retirement annuity by the amount of
8-54 $1 for each month for each $2 of income earned by the retiree from
8-55 the other employment during each month of the previous year, except
8-56 that the disability retirement annuity may not be decreased below
8-57 an amount based on two percent of the retiree's average salary,
8-58 excluding overtime pay, computed at the time of retirement under
8-59 Section 5.04 of this Act for each year of service in the
8-60 department.
8-61 SECTION 5.08. DISCRETION OF DEPARTMENT CHIEF FOR EMPLOYMENT
8-62 OF DISABILITY RETIREE. (a) A disability retirement annuity may
8-63 not be granted or continued if the chief of the member's department
8-64 will provide the member employment within the department
8-65 commensurate with that person's physical and mental capabilities.
8-66 (b) A determination under this section is solely within the
8-67 discretion of the department chief and must be reasonably
8-68 exercised.
8-69 SECTION 5.09. COST-OF-LIVING INCREASES. (a) At or before
8-70 its regular meeting in the month of March, the board annually shall
9-1 review the Consumer's Price Index for Moderate Income Families in
9-2 Large Cities--All Items or the nearest equivalent published by the
9-3 United States Bureau of Labor Statistics for the preceding calendar
9-4 year. If that index shows an increase during the preceding
9-5 calendar year in the cost of living as compared with that index at
9-6 the close of the previous year, the board shall order an increase
9-7 of all retirement annuities by the number of full percentage points
9-8 closest to the exact amount of the increase of that index, except
9-9 that any increased retirement annuities are payable only at the
9-10 rate of 75 percent of the applicable cost-of-living percentage for
9-11 those retirees, and the beneficiaries of those retirees, who were
9-12 retired on and after August 30, 1971.
9-13 (b) The retirement annuities to which this section applies
9-14 shall be computed as of the month of January before that March
9-15 board meeting and shall continue in effect for at least one full
9-16 year until there has been an additional increase to that
9-17 cost-of-living index and the board enters another order as provided
9-18 by this section.
9-19 (c) The cost-of-living increase paid to any retiree or
9-20 beneficiary of a member or retiree during the first full year after
9-21 the effective date of the retirement shall be prorated on the basis
9-22 of full months retired.
9-23 SECTION 5.10. INCREASE IN EXISTING RETIREMENT ANNUITIES.
9-24 Effective October 1, 1993, all retirement annuities for members who
9-25 retired before October 1, 1989, or to the combined beneficiaries of
9-26 the retirees are increased by $100 per month.
9-27 SECTION 5.11. COORDINATION WITH FEDERAL LAW. (a) A member
9-28 or beneficiary of a member of the fund may not accrue a service
9-29 retirement annuity; disability retirement annuity; death benefit,
9-30 whether death occurs in the line of duty or otherwise; or any other
9-31 benefit under this Act in excess of the benefit limits applicable
9-32 to the fund under Section 415 of the code. The board shall reduce
9-33 the amount of any benefit that exceeds those limits by the amount
9-34 of the excess.
9-35 (b) Annual compensation for which benefits may be paid under
9-36 this Act may not exceed $200,000 for each member or another limit
9-37 applicable under Section 401(a)(17) of the code.
9-38 (c) Accrued benefits under this Act become 100 percent
9-39 vested for all members on termination of the fund or on occurrence
9-40 of another event described in Section 401(a)(17) of the code and
9-41 become 100 percent vested for a member on the date the member
9-42 becomes 65 years of age and has completed 20 years of service.
9-43 (d) Amounts representing forfeited nonvested benefits of
9-44 terminated members may not be used to increase benefits payable
9-45 from the fund but may be used to reduce contributions for future
9-46 plan years.
9-47 (e) Distribution of benefits must begin not later than April
9-48 1 of the year following the calendar year during which the member
9-49 becomes 70-1/2 years of age and must otherwise conform to Section
9-50 401(a)(9) of the code.
9-51 (f) The fund shall be administered in a manner complying
9-52 with Section 401(a)(25) of the code, relating to actuarial
9-53 assumptions.
9-54 (g) This section applies to any benefit regardless of when
9-55 accrued.
9-56 (h) The board may adopt rules to administer this section. A
9-57 rule adopted by the board under this subsection is final and
9-58 binding.
9-59 (i) In this section, "code" means the Internal Revenue Code
9-60 of 1986 and its subsequent amendments.
9-61 ARTICLE 6. DEPENDENT'S BENEFITS
9-62 SECTION 6.01. MEMBER'S BENEFICIARY RIGHTS. A member of the
9-63 fund has, in addition to all rights accruing from the person's
9-64 membership, the same right to receive benefits as a beneficiary
9-65 that a nonmember who is a beneficiary has in similar circumstances
9-66 if the member's spouse also is a member of the fund.
9-67 SECTION 6.02. DEATH BENEFIT ANNUITY FOR SURVIVING SPOUSES
9-68 AND CHILDREN. (a) If a contributing member in good standing or a
9-69 retiree dies before or after retirement, leaving a surviving
9-70 spouse, one or more children under the age of 17 years, or one or
10-1 more unmarried children 17 years of age or older but under 19 years
10-2 of age who attend a public or private educational institution, the
10-3 surviving spouse and the children are entitled to receive from the
10-4 fund the same percentage of the member's average total salary that
10-5 the member would have been entitled to receive as a retirement
10-6 annuity, except that the percentage may not exceed the percentage
10-7 to which a member with 25 years of service credit would be
10-8 entitled. One-half of the death benefit annuity under this
10-9 subsection shall be awarded to the eligible surviving spouse and
10-10 one-half to the eligible child or children.
10-11 (b) A child resulting from any marriage occurring after the
10-12 date of retirement of the member from a spouse who was not the
10-13 spouse on the date of retirement is not entitled to a retirement
10-14 annuity under this Act.
10-15 (c) If there are no children, the surviving spouse is
10-16 entitled to receive an amount not to exceed 57.50 percent of the
10-17 average total salary, excluding overtime pay, of the deceased
10-18 member computed as provided under Subsection (a) of this section.
10-19 (d) If there is no surviving spouse, the children are
10-20 entitled to receive not more than 28.75 percent of the average
10-21 total salary computed as provided under Subsection (a) of this
10-22 section, except that if the board determines on investigation that
10-23 the eligible children are destitute, the board may increase the
10-24 death benefit annuity to an amount not to exceed 40 percent of that
10-25 average total salary. The amount awarded under this subsection to
10-26 any child shall be paid by the board to the legal guardian of the
10-27 child.
10-28 (e) A surviving spouse of a member of the fund who died
10-29 before retirement is entitled to at least 50 percent of the
10-30 member's average total salary that the member would have been
10-31 entitled to receive as a retirement annuity.
10-32 (f) A surviving spouse of a member of the fund is entitled
10-33 to a death benefit annuity based on the member's retirement
10-34 benefits in effect on the date of retirement.
10-35 (g) A child of the member who is so mentally or physically
10-36 disabled as to be incapable of being self-supporting to any extent,
10-37 if otherwise qualified and regardless of age, has the rights of a
10-38 child under 17 years of age, except that any death benefit annuity
10-39 paid under this subsection to any mentally or physically disabled
10-40 child shall be reduced to the extent of any state pension or aid,
10-41 including Medicaid, or any state-funded assistance received by the
10-42 child, regardless of whether the funds were made available to the
10-43 state by the federal government. In no other instance under this
10-44 Act is a child entitled to any benefit after becoming 19 years of
10-45 age.
10-46 SECTION 6.03. LIMITATION ON AMOUNT OF SURVIVING SPOUSE'S
10-47 DEATH BENEFIT ANNUITY. (a) The death benefit annuity of a
10-48 surviving spouse of a member of the fund who is killed in the line
10-49 of duty is governed by this section.
10-50 (b) The board shall consider the finding of a municipality
10-51 to which this Act applies that a member was killed in the line of
10-52 duty as a guideline for its determination in applying this section.
10-53 On an application for survivor's benefits by a surviving spouse or
10-54 child, the fund shall pay the normal benefits payable under Section
10-55 6.02 of this Act. When a benefit is payable under this section,
10-56 the death benefit annuity shall be recomputed, applying Subsection
10-57 (c) of this section, and any deficiency payment shall be paid to
10-58 the eligible beneficiaries.
10-59 (c) Notwithstanding the formulas for computing the total
10-60 amounts of annuities otherwise provided by this section, if a
10-61 member is killed in the line of duty, the member's surviving spouse
10-62 and dependent children are entitled to a death benefit annuity
10-63 equal to the total salary, excluding overtime pay, of the member at
10-64 the time of death. Rules provided by this section relating to
10-65 qualification and disqualification for and apportionment of
10-66 benefits apply to a death benefit annuity computed under this
10-67 subsection. A death benefit annuity computed under this subsection
10-68 is subject to the same cost-of-living adjustments that apply to
10-69 pensions for service retirement.
10-70 SECTION 6.04. REMARRIAGE; BENEFITS AFTER TERMINATION OF
11-1 MARRIAGE. (a) The right of a surviving spouse or dependent child
11-2 to annuity payments under this Act terminates on the remarriage of
11-3 the surviving spouse, either statutory or common law, or on the
11-4 marriage of the child, as applicable.
11-5 (b) If the remarried surviving spouse or married dependent
11-6 child becomes unmarried, that person is entitled, on application,
11-7 to the greater of 75 percent of the annuity that was in effect on
11-8 the date of termination or a minimum annuity of $800 each month for
11-9 as long as that person remains unmarried.
11-10 SECTION 6.05. AFFIDAVIT OF MARITAL STATUS. (a) A surviving
11-11 spouse, a dependent beneficiary under this Act, or the guardian of
11-12 a surviving spouse or dependent beneficiary may be required by the
11-13 board to file an affidavit annually concerning the person's marital
11-14 status or the marital status of the person's wards or to give an
11-15 affidavit to the board at other times when probable cause exists to
11-16 suspect the possibility of marriage.
11-17 (b) If the surviving spouse, dependent beneficiary, or
11-18 guardian fails or refuses to file an affidavit required under
11-19 Subsection (a) of this section or if an incomplete, incorrect, or
11-20 false affidavit is filed, the board may suspend annuity payments to
11-21 that person indefinitely until the person complies with the
11-22 requests and orders of the board.
11-23 SECTION 6.06. COMMON-LAW MARRIAGES. Common-law marriages
11-24 are not recognized under this Act and benefits may not be conferred
11-25 on common-law spouses as beneficiaries unless a declaration of
11-26 informal marriage was made under Section 1.92, Family Code, and its
11-27 subsequent amendments before the member's death.
11-28 SECTION 6.07. SURVIVING SPOUSE'S RIGHT TO SINGLE
11-29 ENTITLEMENT. Unless otherwise provided by law, a surviving spouse
11-30 is not entitled to more than one annuity from the fund.
11-31 SECTION 6.08. LUMP-SUM DEATH BENEFIT. (a) Except as
11-32 provided by Subsection (b) of this section, a surviving spouse
11-33 whose status as such resulted from any marriage after the date of
11-34 the retirement of the member is entitled to a lump-sum death
11-35 benefit because of the member's death in the amount of:
11-36 (1) $10,000 if the marriage occurred 10 years or more
11-37 before the member's death;
11-38 (2) $7,500 if the marriage occurred 7-1/2 years before
11-39 but less than 10 years before the member's death;
11-40 (3) $5,000 if the marriage occurred five years or more
11-41 but less than 7-1/2 years before the member's death; and
11-42 (4) $2,500 if the marriage occurred 2-1/2 years or
11-43 more but less than five years before the member's death.
11-44 (b) A surviving spouse under this section is not entitled to
11-45 a lump-sum death benefit if a child is entitled to receive benefits
11-46 under this Act.
11-47 SECTION 6.09. DEATH BENEFIT ANNUITIES TO DEPENDENT PARENTS.
11-48 (a) If a contributing member in good standing of the fire or
11-49 police department or a retiree dies before or after retirement and
11-50 leaves no surviving spouse or child but leaves surviving a father
11-51 and mother wholly dependent on that person for support, the
11-52 dependent father and mother are entitled to receive one-third of
11-53 the average total salary, excluding overtime pay, of the deceased
11-54 member based on the same number of years of the member's pay as is
11-55 currently provided for computations of retirement annuities under
11-56 Section 5.01(a) of this Act, the annuity to be equally divided
11-57 between the father and mother as long as they are wholly dependent.
11-58 If there is only one dependent, either father or mother, the board
11-59 shall grant the surviving dependent an annuity not to exceed
11-60 one-fourth that average total salary as computed under this
11-61 subsection.
11-62 (b) The board may, on its own initiative, make a thorough
11-63 investigation, determine the facts as to the dependency with
11-64 respect to an application for benefits made under Subsection (a) of
11-65 this section, and at any time, on the request of any beneficiary or
11-66 any contributor to the fund, reopen any award made to any member or
11-67 dependent of any member who is receiving annuity payments under
11-68 this section and discontinue those payments as to all or any of
11-69 them. The findings of the board under this section and all
11-70 annuities granted under this section are final on all parties
12-1 unless set aside or revoked by a court of competent jurisdiction.
12-2 SECTION 6.10. SUSPENSION RIGHTS OF DEPENDENT PARENTS. If a
12-3 member dies who is under suspension at the time of death, including
12-4 an indefinite suspension that has not become final, the member's
12-5 dependent parents have the same rights as any other member under
12-6 this Act.
12-7 SECTION 6.11. DEATH BENEFIT FOR ACTIVE MEMBER'S ESTATE.
12-8 (a) If a member of the fire or police department in active service
12-9 dies and does not leave an eligible surviving spouse, a child under
12-10 17 years of age, a child under 19 years of age who is attending
12-11 school, a mentally or physically disabled child, or a dependent
12-12 father or mother, the estate of the deceased member is entitled to
12-13 a death benefit payment in the amount of $10,000 from the fund.
12-14 (b) The death benefit under this section is not payable if
12-15 the deceased member of the fund is survived by one or more
12-16 beneficiaries.
12-17 ARTICLE 7. INVESTMENTS AND FINANCIAL PROVISIONS
12-18 SECTION 7.01. TREASURER'S DUTIES. (a) All money of the
12-19 fund is payable to the treasurer of the fund for the use of the
12-20 fund.
12-21 (b) The duties imposed on the treasurer under this Act are
12-22 additional duties for which the treasurer is liable under oath and
12-23 bond as the treasurer of a municipality to which this Act applies.
12-24 (c) The treasurer is not entitled to compensation for
12-25 serving as the treasurer of the fund.
12-26 SECTION 7.02. ACCOUNTS. The accounts of the fund and of the
12-27 members shall be kept separately.
12-28 SECTION 7.03. RESERVE RETIREMENT FUND. (a) The board shall
12-29 determine a reasonably safe amount of surplus necessary to defray
12-30 reasonable expenses of administering the fund.
12-31 (b) All other assets shall be designated as reserve
12-32 retirement funds.
12-33 (c) Only the board may invest and manage the reserve
12-34 retirement funds for the sole benefit of the plan participants and
12-35 their beneficiaries.
12-36 SECTION 7.04. INVESTMENT POWERS OF THE BOARD. (a) The
12-37 board shall cause the reserve retirement funds to be invested in a
12-38 manner consistent with the care, skill, and diligence under the
12-39 prevailing circumstances that a prudent person acting in a like
12-40 capacity and familiar with matters of the type would use in the
12-41 conduct of an enterprise with a like character and like aims.
12-42 (b) The board shall diversify the investment of the fund to
12-43 minimize the risk of large losses unless under the circumstances it
12-44 is clearly prudent not to do so. In investing the assets of the
12-45 fund, the board shall be bound by the documents and instruments
12-46 governing the fund.
12-47 (c) The board may directly manage the investments of the
12-48 fund or may choose and contract for professional management
12-49 services. If the fund owns real estate, it may, at its discretion,
12-50 establish corporations described by Section 501(c)(25), Internal
12-51 Revenue Code of 1986 (26 U.S.C. Section 501), and its subsequent
12-52 amendments, to hold title to the real estate.
12-53 (d) The board shall have the ultimate responsibility for the
12-54 investment of the reserve retirement funds. The board may purchase
12-55 securities or engage in limited partnerships or make other
12-56 investments not specifically provided by this Act and shall have
12-57 the authority of exercising discretion in determining the nature,
12-58 type, quality, and size of any investment consistent with the
12-59 investment policies it establishes.
12-60 SECTION 7.05. PROFESSIONAL CONSULTANTS. (a) The board may
12-61 contract for professional investment management services, financial
12-62 consultants, independent auditors, and actuaries. Only the board
12-63 may enter into those contracts and may establish a reasonable fee
12-64 for compensation.
12-65 (b) The board may designate its own custodian or master
12-66 custodian to perform the customary duties involving the safekeeping
12-67 of the assets and the execution of transactions of either domestic
12-68 or foreign securities. The board may engage in a securities
12-69 lending program consistent with the benefits to plan participants
12-70 and their beneficiaries.
13-1 SECTION 7.06. INVESTMENT MANAGER QUALIFICATIONS. In
13-2 appointing investment managers, the board shall require that the
13-3 investment manager be:
13-4 (1) registered under the Investment Advisors Act of
13-5 1940 (15 U.S.C. Section 80b-1 et seq.) and its subsequent
13-6 amendments;
13-7 (2) a bank as defined by that Act; or
13-8 (3) an insurance company qualified to perform
13-9 investment services under the laws of more than one state.
13-10 ARTICLE 8. MISCELLANEOUS PROVISIONS
13-11 SECTION 8.01. REPEALER. Chapter 105, Acts of the 47th
13-12 Legislature, Regular Session, 1941 (Article 6243f, Vernon's Texas
13-13 Civil Statutes), is repealed.
13-14 SECTION 8.02. EFFECTIVE DATE. This Act takes effect October
13-15 1, 1993.
13-16 SECTION 8.03. RESTATEMENT. Unless otherwise expressly
13-17 provided by this Act, this Act is intended to be a restatement of
13-18 Chapter 105, Acts of the 47th Legislature, Regular Session, 1941
13-19 (Article 6243f, Vernon's Texas Civil Statutes), and is not intended
13-20 to impliedly repeal, reduce, or enhance any pension entitlement
13-21 that existed as of September 30, 1993, under that Act or to change
13-22 the meaning of any of the provisions of that Act.
13-23 SECTION 8.04. EMERGENCY. The importance of this legislation
13-24 and the crowded condition of the calendars in both houses create an
13-25 emergency and an imperative public necessity that the
13-26 constitutional rule requiring bills to be read on three several
13-27 days in each house be suspended, and this rule is hereby suspended.
13-28 * * * * *
13-29 Austin,
13-30 Texas
13-31 April 29, 1993
13-32 Hon. Bob Bullock
13-33 President of the Senate
13-34 Sir:
13-35 We, your Committee on Intergovernmental Relations to which was
13-36 referred S.B. No. 817, have had the same under consideration, and I
13-37 am instructed to report it back to the Senate with the
13-38 recommendation that it do not pass, but that the Committee
13-39 Substitute adopted in lieu thereof do pass and be printed.
13-40 Armbrister,
13-41 Chairman
13-42 * * * * *
13-43 WITNESSES
13-44 FOR AGAINST ON
13-45 ___________________________________________________________________
13-46 Name: Carlos Resendoz x
13-47 Representing: SA Fire & Police Pension Fund
13-48 City: San Antonio
13-49 -------------------------------------------------------------------