By: Barrientos S.B. No. 1150
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the powers and duties of, and systems and programs
1-2 administered by, the Teacher Retirement System of Texas and
1-3 programs administered by the Employees Retirement System of Texas.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subtitle A, Title 8, Government Code, is amended
1-6 by adding Chapter 805 to read as follows:
1-7 CHAPTER 805. CREDIT TRANSFER BETWEEN EMPLOYEES RETIREMENT
1-8 SYSTEM OF TEXAS AND TEACHER RETIREMENT SYSTEM OF TEXAS
1-9 Sec. 805.001. DEFINITIONS. In this chapter:
1-10 (1) "Employees retirement system" means the Employees
1-11 Retirement System of Texas.
1-12 (2) "Member" means a person having membership in the
1-13 employees retirement system or the teacher retirement system under
1-14 statutes and rules governing membership in the respective systems.
1-15 (3) "Service credit" has the meaning assigned, as
1-16 applicable, by Section 811.001 or Section 821.001.
1-17 (4) "System" means the employees retirement system or
1-18 the teacher retirement system.
1-19 (5) "Teacher retirement system" means the Teacher
1-20 Retirement System of Texas.
1-21 Sec. 805.002. ELIGIBILITY TO TRANSFER SERVICE CREDIT.
1-22 (a) Except as provided by Subsection (f), a member of both the
1-23 employees retirement system and the teacher retirement system who
2-1 applies for service or disability retirement from the system in
2-2 which the member most recently received service credit may transfer
2-3 to that system service credit established in the other system if
2-4 the member has at least three years of service credit in the system
2-5 from which the member is retiring.
2-6 (b) Except as provided by Subsection (f), a member of both
2-7 the employees retirement system and the teacher retirement system
2-8 who has less than three years of service credit in the system in
2-9 which the person most recently received service credit may, at the
2-10 time the person applies for service or disability retirement from
2-11 the other system, transfer service credit to that system from the
2-12 system in which the person most recently received service credit.
2-13 (c) Except as provided by Subsections (e), (f), and (g), a
2-14 member of the employees retirement system or the teacher retirement
2-15 system who applies for service or disability retirement and who
2-16 formerly was a member of the other system may reinstate or purchase
2-17 service credit in the other system for the purpose of making a
2-18 transfer under Subsection (a) if the member has at least three
2-19 years of service credit in the system from which the member is
2-20 retiring.
2-21 (d) Except as provided by Subsections (e), (f), and (g), the
2-22 designated beneficiary of a member of the employees retirement
2-23 system or the teacher retirement system who dies while holding a
2-24 position included in the membership of the system may make a
2-25 transfer under Subsection (a) and a reinstatement or purchase under
3-1 Subsection (c) if the deceased member had at least three years of
3-2 service credit in the system in which the member was performing
3-3 service at the time of death. The designated beneficiary may make
3-4 a transfer under Subsection (b) if the deceased member had less
3-5 than three years of service credit in the system in which the
3-6 member was performing service at the time of death. If a member is
3-7 not survived by a designated beneficiary, the personal
3-8 representative of the member's estate has the same right under this
3-9 subsection as a designated beneficiary.
3-10 (e) Service credit that is canceled by a termination of
3-11 membership that occurs after August 31, 1993, may be reinstated and
3-12 other service purchased only by a member of the system in which the
3-13 service is creditable who meets the general requirements for
3-14 reinstatement or purchase of service credit in that system.
3-15 (f) Service credit is not eligible to be transferred under
3-16 this section if credit for the same service is credited in the
3-17 system to which it would be transferred.
3-18 (g) A person who is receiving retirement benefits based on
3-19 the person's service credited in one system and who applies for
3-20 service or disability retirement from the other system is not
3-21 eligible to transfer service credit under this chapter. The
3-22 designated beneficiary, or the personal representative of the
3-23 estate, of a person who at the time of death was receiving benefits
3-24 based on the person's service credited in one system and held a
3-25 position included in the other system is not eligible to transfer
4-1 service credit under this chapter.
4-2 Sec. 805.003. PAYMENTS TO REINSTATE OR PURCHASE SERVICE
4-3 CREDIT. The cost of reinstating or purchasing service credit under
4-4 Section 805.002 is determined according to the statutes that govern
4-5 the reinstatement or purchase of the type of service credit in the
4-6 system in which it is to be reinstated or purchased. All payments
4-7 for service credit reinstated or purchased under Section 805.002
4-8 must be made before retirement or the first payment of a death
4-9 benefit annuity, as applicable.
4-10 Sec. 805.004. TRANSFER OF SERVICE CREDIT. (a) A person who
4-11 elects to transfer service credit under Section 805.002 shall
4-12 notify, in the manner required by the system to which the credit
4-13 will be transferred, the system of the election. The system shall
4-14 notify the other system of the election.
4-15 (b) The systems by rule or agreement shall determine the
4-16 manner in which the service credit is transferred.
4-17 (c) A transfer of service credit under this chapter cancels
4-18 service credit and, if applicable, membership in the system from
4-19 which it is transferred.
4-20 Sec. 805.005. APPLICABILITY OF PROPORTIONATE RETIREMENT
4-21 PROGRAM. An election to transfer service credit under Section
4-22 805.002 is an alternative to participation in the program provided
4-23 by Chapter 803, except that a person having service credit in the
4-24 employees retirement system, the teacher retirement system, and
4-25 another public retirement system participating in that program may
5-1 transfer service credit under this chapter, if eligible, and use
5-2 the combined service credit for purposes of the program provided by
5-3 Chapter 803.
5-4 Sec. 805.006. CREDITING OF TRANSFERRED SERVICE CREDIT.
5-5 Service credit transferred under this chapter is credited in the
5-6 system to which it is transferred according to rules of the teacher
5-7 retirement system determining the amount of service creditable.
5-8 Sec. 805.007. EFFECT OF TRANSFER OF SERVICE CREDIT. (a) A
5-9 person who transfers service credit under this chapter forfeits all
5-10 rights to benefits payable by the system from which it is
5-11 transferred and is not an annuitant of that system for any purpose,
5-12 including the payment of postretirement increases to annuitants of
5-13 that system.
5-14 (b) Service credit transferred under this chapter is
5-15 considered as if it had been granted for service performed under
5-16 the system to which it has been transferred and is used in
5-17 satisfying minimum service requirements for retirement and in
5-18 determining the amount of benefits that are based on the amount of
5-19 a person's service credit, except as provided by Section 805.006.
5-20 Sec. 805.008. RESPONSIBILITY FOR BENEFIT PAYMENTS. (a) The
5-21 system from which a person's service credit is transferred under
5-22 this chapter shall transfer to the other system, at the time the
5-23 annuity based on the service credit becomes payable, an amount
5-24 equal to the portion of the actuarial value of the annuity that
5-25 represents the percentage of the total amount of the person's
6-1 service credited in both systems that was credited in the system
6-2 from which the credit is being transferred.
6-3 (b) The systems jointly by rule shall adopt actuarial tables
6-4 and investment assumptions to be used in computing actuarial values
6-5 under this section.
6-6 (c) For the purpose of computing an amount to be transferred
6-7 under this section, service credit in either system must be
6-8 considered as if it were credited under rules of the teacher
6-9 retirement system determining the amount of service creditable.
6-10 (d) An amount transferred under this section is payable from
6-11 amounts credited to the person's individual account and amounts
6-12 credited to the account in which the system places state
6-13 contributions. An amount received under this section shall be
6-14 deposited in the account from which the system receiving the amount
6-15 pays annuities.
6-16 (e) The system to which a transfer is made under this
6-17 section is responsible for paying the annuity for which the
6-18 transfer was made, including the entire amount of any increase in
6-19 the annuity granted after the transfer.
6-20 Sec. 805.009. RULES. In addition to the rules specifically
6-21 required by this chapter, a system may adopt other rules for the
6-22 administration of this chapter.
6-23 SECTION 2. Subchapter A, Chapter 825, Government Code, is
6-24 amended by adding Sections 825.0031 and 825.0032 to read as
6-25 follows:
7-1 Sec. 825.0031. NONDISCRIMINATION IN APPOINTMENTS.
7-2 Appointments to the board shall be made without regard to the race,
7-3 color, disability, sex, religion, age, or national origin of the
7-4 appointees.
7-5 Sec. 825.0032. INELIGIBILITY FOR BOARD AND OF CERTAIN
7-6 EMPLOYEES. (a) A person is not eligible for appointment to the
7-7 board if the person of the person's spouse:
7-8 (1) is employed by or participates in the management
7-9 of a business entity or other organization receiving funds from the
7-10 retirement system; or
7-11 (2) owns or controls, directly or indirectly, more
7-12 than a 10 percent interest in a business entity or other
7-13 organization receiving funds from the retirement system.
7-14 (b) An officer, employee, or paid consultant of a Texas
7-15 trade association in the field of investment or insurance may not
7-16 be a trustee or an employee of the retirement system who is exempt
7-17 from the state's position classification plan or is compensated at
7-18 or above the amount prescribed by the General Appropriations Act
7-19 for step 1, salary group 17, of the position classification salary
7-20 schedule.
7-21 (c) A person who is the spouse of an officer, manager, or
7-22 paid consultant of a Texas trade association in the field of
7-23 investment or insurance may not be a trustee and may not be an
7-24 employee of the retirement system who is exempt from the state's
7-25 position classification plan or is compensated at or above the
8-1 amount prescribed by the General Appropriations Act for step 1,
8-2 salary group 17, of the position classification salary schedule.
8-3 (d) For the purposes of this section, a Texas trade
8-4 association is a nonprofit, cooperative, and voluntarily joined
8-5 association of business or professional competitors in this state
8-6 designed to assist its members and its industry or profession in
8-7 dealing with mutual business or professional problems and in
8-8 promoting their common interest.
8-9 (e) A person may not serve as a trustee or act as the
8-10 general counsel to the board if the person is required to register
8-11 as a lobbyist under Chapter 305 because of the person's activities
8-12 for compensation on behalf of a business or an association related
8-13 to the operation of the board.
8-14 SECTION 3. Subchapter A, Chapter 825, Government Code, is
8-15 amended by adding Section 825.010 to read as follows:
8-16 Sec. 825.010. GROUNDS FOR REMOVAL OF TRUSTEE. (a) It is a
8-17 ground for removal from the board if a trustee:
8-18 (1) violates a prohibition established by Section
8-19 825.0032;
8-20 (2) cannot discharge the person's duties for a
8-21 substantial part of the term for which the person is appointed
8-22 because of illness or disability; or
8-23 (3) is absent from more than half of the regularly
8-24 scheduled board meetings that the person is eligible to attend
8-25 during a calendar year unless the absence is excused by majority
9-1 vote of the board.
9-2 (b) The validity of an action of the board is not affected
9-3 by the fact that it is taken when a ground for removal of a trustee
9-4 exists.
9-5 (c) If the executive secretary has knowledge that a
9-6 potential ground for removal exists, the executive secretary shall
9-7 notify the chairman of the board of the ground. The chairman shall
9-8 then notify the appropriate appointing officer or body that a
9-9 potential ground for removal exists.
9-10 SECTION 4. Subchapter B, Chapter 825, Government Code, is
9-11 amended by adding Section 825.113 to read as follows:
9-12 Sec. 825.113. MISCELLANEOUS BOARD DUTIES. (a) The board
9-13 shall provide to its trustees and employees, as often as necessary,
9-14 information regarding their qualification for office or employment
9-15 under this chapter and their responsibilities under applicable laws
9-16 relating to standards of conduct for state officers or employees.
9-17 (b) The board shall develop and implement policies that
9-18 clearly define the respective responsibilities of the board and the
9-19 staff of the retirement system.
9-20 (c) The board shall prepare information of interest to the
9-21 retirement system's members describing the functions of the system
9-22 and the system's procedures by which complaints are filed with and
9-23 resolved by the system. The system shall make the information
9-24 available to the system's members and appropriate state agencies.
9-25 (d) The board by rule shall establish methods by which
10-1 members are notified of the name, mailing address, and telephone
10-2 number of the retirement system for the purpose of directing
10-3 complaints to the system.
10-4 (e) The board shall develop and implement policies that
10-5 provide the public with a reasonable opportunity to appear before
10-6 the board and to speak on any issue under the jurisdiction of the
10-7 board.
10-8 (f) The board shall prepare and maintain a written plan
10-9 that describes how a person who does not speak English can be
10-10 provided reasonable access to the board's programs. The board
10-11 shall also comply with federal and state laws for program and
10-12 facility accessibility.
10-13 SECTION 5. Subchapter C, Chapter 825, Government Code, is
10-14 amended by adding Section 825.211 to read as follows:
10-15 Sec. 825.211. EMPLOYMENT PRACTICES. (a) The executive
10-16 secretary or the executive secretary's designee shall develop an
10-17 intra-agency career ladder program. The program shall require
10-18 intra-agency posting of all nonentry level positions concurrently
10-19 with any public posting.
10-20 (b) The executive secretary or the executive secretary's
10-21 designee shall develop a system of annual performance evaluations.
10-22 All merit pay for system employees must be based on the system
10-23 established under this subsection.
10-24 (c) The executive secretary or the executive secretary's
10-25 designee shall prepare and maintain a written policy statement to
11-1 assure implementation of a program of equal employment opportunity
11-2 under which all personnel transactions are made without regard to
11-3 race, color, disability, sex, religion, age, or national origin.
11-4 The policy statement must include:
11-5 (1) personnel policies, including policies relating to
11-6 recruitment, evaluation, selection, appointment, training, and
11-7 promotion of personnel that are in compliance with requirements of
11-8 the Commission on Human Rights Act (Article 5221k, Vernon's Texas
11-9 Civil Statutes);
11-10 (2) a comprehensive analysis of the retirement
11-11 system's work force that meets federal and state guidelines;
11-12 (3) procedures by which a determination can be made of
11-13 significant underuse in the retirement system's work force of all
11-14 persons for whom federal or state guidelines encourage a more
11-15 equitable balance; and
11-16 (4) reasonable methods to appropriately address those
11-17 areas of significant underuse.
11-18 (d) A policy statement prepared under Subsection (c) must
11-19 cover an annual period, be updated annually and reviewed by the
11-20 Commission on Human Rights for compliance with Subsection (c), and
11-21 be filed with the governor's office.
11-22 (e) The governor's office shall deliver a biennial report to
11-23 the legislature based on the information received under Subsection
11-24 (d). The report may be made separately or as a part of other
11-25 biennial reports made to the legislature.
12-1 SECTION 6. Subchapter F, Chapter 825, Government Code, is
12-2 amended by adding Section 825.508 to read as follows:
12-3 Sec. 825.508. COMPLAINT FILES. (a) The retirement system
12-4 shall keep an information file about each complaint filed with the
12-5 system that the system has authority to resolve.
12-6 (b) If a written complaint is filed with the retirement
12-7 system that the system has authority to resolve, the system, at
12-8 least quarterly and until final disposition of the complaint, shall
12-9 notify the parties to the complaint of the status of the complaint
12-10 unless the notice would jeopardize an undercover investigation.
12-11 SECTION 7. Section 13.913(a), Education Code, is amended to
12-12 read as follows:
12-13 (a) Each district shall make available to its employees
12-14 group health coverage provided by a risk pool established by one or
12-15 more school districts under Chapter 172, Local Government Code, or
12-16 under a policy of insurance or group contract issued by an insurer,
12-17 a company subject to Chapter 20, Insurance Code, or a health
12-18 maintenance organization under the Texas Health Maintenance
12-19 Organization Act (Chapter 20A, Vernon's Texas Insurance Code). The
12-20 coverage must meet the substantive coverage requirements of Article
12-21 3.51-6, Insurance Code, and any other law applicable to group
12-22 health insurance policies or contracts issued in this state and
12-23 must be comparable to the basic health coverage provided under the
12-24 Texas Employees Uniform Group Insurance Benefits Act (Article
12-25 3.50-2, Vernon's Texas Insurance Code). The cost of the coverage
13-1 may be shared by the employees and the district. Each district
13-2 shall certify the district's compliance with this subsection to the
13-3 executive secretary <director> of the Teacher <Employees>
13-4 Retirement System of Texas in the manner required by the board of
13-5 trustees of the Teacher <Employees> Retirement System of Texas.
13-6 SECTION 8. Subchapter E, Chapter 3, Insurance Code, is
13-7 amended by adding Article 3.50-7 to read as follows:
13-8 Art. 3.50-7. SCHOOL DISTRICT EMPLOYEES UNIFORM GROUP
13-9 INSURANCE ACT
13-10 Sec. 1. SHORT TITLE. This article may be cited as the
13-11 School District Employees Uniform Group Insurance Act.
13-12 Sec. 2. DEFINITIONS. In this article:
13-13 (1) "Administering firm" means any firm designated by
13-14 the trustee to administer any coverages, services, benefits, or
13-15 requirements under this article and the trustee's rules adopted
13-16 under this article.
13-17 (2) "Basic coverage" means the programs of group
13-18 coverages determined by the trustee in which every full-time
13-19 employee participates automatically unless participation is
13-20 specifically waived.
13-21 (3) "Cafeteria plan" means a plan as defined and
13-22 authorized by Section 125, Internal Revenue Code of 1986 (26 U.S.C.
13-23 Section 125).
13-24 (4) "Employee" means a participating member of the
13-25 Teacher Retirement System who is employed by a participating school
14-1 district and who is not covered by a group insurance program under
14-2 the Texas Employees Uniform Group Insurance Benefits Act (Article
14-3 3.50-2, Vernon's Texas Insurance Code) or Chapter 32, Acts of the
14-4 65th Legislature, Regular Session, 1977 (Article 3.50-3, Vernon's
14-5 Texas Insurance Code), but does not include a person performing
14-6 personal services for a school district as an independent
14-7 contractor.
14-8 (5) "Employer" means a participating school district.
14-9 (6) "Health benefits plan" means any group policy or
14-10 contract, medical, dental, or hospital service agreement,
14-11 membership or subscription contract, salary continuation plan,
14-12 health maintenance organization agreement, preferred provider
14-13 arrangement, or any similar group arrangement or any combination of
14-14 those policies, plans, contracts, agreements, or arrangements
14-15 provided for the purpose of providing, paying for, or reimbursing
14-16 expenses for health care services, including comparable health care
14-17 services for employees who rely solely on spiritual means through
14-18 prayer for healing in accordance with the teaching of a recognized
14-19 church or denomination.
14-20 (7) "Participating school district" means a public
14-21 school district that elects under Section 4 of this article to
14-22 participate in the program provided under this article.
14-23 (8) "Trustee" means the Teacher Retirement System of
14-24 Texas.
14-25 Sec. 3. ADMINISTRATION. (a) The administration and
15-1 implementation of this article are vested solely in the trustee
15-2 districts. The coverages may include group life coverages, health
15-3 benefit plans, accidental death and dismemberment coverages,
15-4 coverages against short-term or long-term loss of salary, and other
15-5 coverages considered advisable by the trustee. Comparable plans of
15-6 each type of coverage established must be offered to employees of
15-7 all participating school districts.
15-8 (b) The trustee by rule may define the basic coverage in
15-9 which each full-time employee participates unless specifically
15-10 waived. Basic coverage must include a health benefits plan. The
15-11 trustee also by rule may define optional coverage for which the
15-12 trustee may make available employer contributions and voluntary
15-13 coverage for which the employee is responsible for all
15-14 contributions.
15-15 (c) The trustee may provide a cafeteria plan for employees
15-16 of participating school districts.
15-17 Sec. 6. PAYMENT OF CONTRIBUTIONS. (a) Each participating
15-18 school district shall contribute for each district employee covered
15-19 by the program an amount equal to the cost for the employee only of
15-20 the plans of group coverages authorized by the trustee for school
15-21 district employees, except that the school district's contribution
15-22 may not exceed the amount contributed for each state employee by
15-23 the state under the Texas Employees Uniform Group Insurance
15-24 Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code).
15-25 (b) Each employee covered by the program shall pay that
16-1 portion of the cost of coverage selected by the employee that
16-2 exceeds the amount of employer contributions.
16-3 (c) Each person who is employed full-time by a public school
16-4 (b) The trustee may hire and compensate employees.
16-5 (c) The trustee may, on a competitive bid basis, contract
16-6 with a qualified, experienced firm of group insurance specialists
16-7 or an administering firm who will act for the trustee in a capacity
16-8 as independent administrators and managers of the programs
16-9 authorized under this article. The independent administrator
16-10 selected by the trustee shall assist the trustee to ensure the
16-11 proper administration of this article and the coverages, services,
16-12 and benefits provided for or authorized by this article and shall
16-13 be paid by the trustee.
16-14 (d) The trustee may enter into interagency contracts with
16-15 any agency of the state, including the Employees Retirement System
16-16 of Texas, for the purpose of assistance in implementing the
16-17 programs provided by this article.
16-18 (e) The trustee may adopt rules to administer this article.
16-19 Sec. 4. PARTICIPATION IN PROGRAM. (a) A public school
16-20 district may elect to participate in the programs provided under
16-21 this article. A district that elects to participate must accept
16-22 the schedule of costs adopted by the trustee.
16-23 (b) The trustee by rule may provide for a minimum period of
16-24 participation applicable to each school district that makes an
16-25 election under this section.
17-1 (c) The trustee may assess a participating school district a
17-2 fee to cover administrative costs if state funds are not
17-3 appropriated for this purpose.
17-4 Sec. 5. GROUP COVERAGES. (a) The trustee shall establish
17-5 plans of group coverages for employees of participating school
17-6 district in this state, including employees within the meaning of
17-7 this article, shall pay an annual fee of $10 to the trustee for the
17-8 support of the program provided by this article. The fee expires
17-9 when the trustee determines that the contingency reserves in the
17-10 fund are sufficient to support the program. The trustee shall file
17-11 a determination made under this subsection with the secretary of
17-12 state for publication in the Texas Register.
17-13 Sec. 7. FUND. (a) Contributions and fees collected under
17-14 Section 6 of this article shall be deposited in the school district
17-15 employees uniform group insurance trust fund. The fund is created
17-16 outside the state treasury. The state treasurer is custodian of
17-17 the fund. The trustee may use amounts in the fund only to provide
17-18 group coverages under this article and to pay the expenses of
17-19 administering the program.
17-20 (b) The trustee may invest assets of the fund in the manner
17-21 provided by Article XVI, Section 67(a)(3), of the Texas
17-22 Constitution.
17-23 SECTION 9. (a) Chapter 805, Government Code, as added by
17-24 this Act, applies only to retirements and deaths that occur on or
17-25 after August 31, 1993.
18-1 (b) The Teacher Retirement System of Texas shall implement
18-2 the program provided by Article 3.50-7, Insurance Code, as added by
18-3 this Act, not later than September 1, 1994. The fee required by
18-4 Section 6(c) of that article, as added by this Act, becomes payable
18-5 in the fiscal year beginning September 1, 1993.
18-6 SECTION 10. (a) Except as provided by Subsection (b) of
18-7 this section, this Act takes effect September 1, 1993.
18-8 (b) This section, Section 1, and Section 28(a) of this Act
18-9 take effect immediately.
18-10 SECTION 11. The importance of this legislation and the
18-11 crowded condition of the calendars in both houses create an
18-12 emergency and an imperative public necessity that the
18-13 constitutional rule requiring bills to be read on three several
18-14 days in each house be suspended, and this rule is hereby suspended,
18-15 and that this Act take effect and be in force according to its
18-16 terms, and it is so enacted.