By: Barrientos S.B. No. 1183
73R5225 SOS-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to public retirement systems for employees of certain
1-3 municipalities.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 2, Chapter 451, Acts of the 72nd
1-6 Legislature, Regular Session, 1991 (Article 6243n, Vernon's Texas
1-7 Civil Statutes), is amended to read as follows:
1-8 Sec. 2. Definitions. The following words and phrases have
1-9 the meanings assigned by this section unless a different meaning is
1-10 plainly required by the context:
1-11 (1) "Accumulated deposits" means the amount standing
1-12 to the credit of a member derived from the deposits required to be
1-13 made by the member to the retirement system improved annually by
1-14 interest credited at a rate determined by the board which is
1-15 credited as of December 31 to amounts standing to the credit of the
1-16 member on January 1 of the same calendar year.
1-17 (2) "Actual retirement date" means the last day of the
1-18 month during which a member retires.
1-19 (3) <(2)> "Actuarial equivalent" means any benefit of
1-20 equal present value when computed on the basis of actuarial tables
1-21 adopted by the board in the proper administration of the retirement
1-22 system.
1-23 (4) <(3)> "Actuary" means the technical advisor of the
1-24 board regarding the operations which are based on mortality,
2-1 service, and compensation experience. <The actuary shall make
2-2 periodic valuations of the assets and liabilities of the funds and
2-3 other evaluations as requested by the board.>
2-4 (5) "Authorized leave of absence" means military leave
2-5 of absence, including a period of not more than the 90th day after
2-6 the date of release from active military duty, or any other leave
2-7 of absence during which a member is otherwise authorized by law to
2-8 continue making contributions to the system. The term does not
2-9 include an approved medical leave of absence.
2-10 (6) <(4)> "Average final compensation" means the
2-11 average monthly compensation, pay, or salary, exclusive of
2-12 overtime, incentive, and terminal pay, that is $16,666 or less and
2-13 that is earned by a member during, as applicable:
2-14 (A) if the member has 120 months or more of
2-15 membership service <during which the member contributed to the
2-16 system>, the 36 months of membership service which yielded the
2-17 highest average during the last 120 months of membership service
2-18 <during which the member contributed to the system>;
2-19 (B) if the member has less than 120 months of
2-20 membership service <during which the member contributed to the
2-21 system>, but has at least 36 months of membership service <during
2-22 which the member made contributions to the system>, then the
2-23 average during the 36 months which yield the highest average; or
2-24 (C) if the member does not have 36 months of
2-25 membership service <during which the member contributed to the
2-26 system>, then the average during the member's months of membership
2-27 service <during which the member made contributions to the system>.
3-1 (7) <(5)> "Beneficiary" means any person, trust, or
3-2 estate properly designated by a member <or retired member> to
3-3 receive benefits from the system. If there is no effective
3-4 beneficiary designation on the date of the member's death or if the
3-5 designated beneficiary predeceases the member, the member's
3-6 beneficiary is the member's spouse or, if the member does not have
3-7 a spouse, the member's estate.
3-8 (8) <(6)> "Creditable service" means the total of
3-9 prior service and membership service <prior service plus membership
3-10 service on the basis of which retirement allowances are computed
3-11 for all employees classified as entitled to retirement benefits>.
3-12 (9) <(7)> "Current service annuity" means a series of
3-13 equal monthly payments payable for the member's life after
3-14 retirement for membership service from funds of the retirement
3-15 system equal to one-twelfth of the product of 2.2 <2.1> percent of
3-16 a member's average final compensation multiplied by the number of
3-17 months of membership service <rendered after January 1, 1941>.
3-18 However, if payments commence before the member's normal retirement
3-19 date, the amount of the monthly payments to which the member would
3-20 otherwise be entitled shall be reduced as provided by Section 7(e)
3-21 of this Act <at the rate of five-twelfths of one percent for each
3-22 month before the normal retirement date at which said payments
3-23 commence>.
3-24 (10) <(8)> "Deposits" means the amounts required to be
3-25 paid by members <employees> in accordance with the provisions of
3-26 this Act.
3-27 (11) <(9)> "Disability retirement" means the
4-1 termination of employment <withdrawal> of a member because of
4-2 disability <from active service> with a disability retirement
4-3 allowance as provided in Section 8 of this Act.
4-4 (12) "Fund" means the trust fund containing the
4-5 aggregate of the assets of Fund No. 1 and Fund No. 2
4-6 <(10) "Employee" means any regular and permanent employee of the
4-7 cities governed hereby or the system's administrative staff, except
4-8 those employees specifically excluded from the benefits and
4-9 operations of the retirement and pensioning system. All civil
4-10 service commissioned police officers and fire fighters of the
4-11 cities governed hereby are specifically excluded from membership in
4-12 the retirement system. In any case of doubt regarding the
4-13 eligibility of any employee to become or remain a member of the
4-14 retirement system, the decision of the retirement board is final>.
4-15 (13) <(11)> "Fund No. 1" means the fund in which shall
4-16 be kept all accumulated deposits of members who have not withdrawn
4-17 from the system.
4-18 (14) <(12)> "Fund No. 2" means the fund in which shall
4-19 be kept all money contributed by the city on behalf of city
4-20 employees, all money contributed by a hospital authority on behalf
4-21 of hospital authority employees, and all money contributed by the
4-22 board on behalf of board employees, interest earned thereon, and
4-23 all accumulations and earnings of the system <except those of Fund
4-24 No. 1>.
4-25 (15) "Hospital authority" means a municipal hospital
4-26 authority created after September 1, 1992, under Chapter 262,
4-27 Health and Safety Code, and its subsequent amendments, by a city
5-1 governed by this Act.
5-2 (16) <(13)> "Investment consultant" means the person
5-3 or entity that monitors the investment performance of the system
5-4 and provides such other services as requested by the board.
5-5 (17) <(14)> "Investment manager" means the person or
5-6 entity that has the power to manage, acquire, or dispose of assets
5-7 of Fund No. 1 or Fund No. 2 <manages the investment portfolio for
5-8 the system, making specified investment decisions> on behalf of the
5-9 retirement system and acknowledges fiduciary responsibility to the
5-10 system in writing. The investment manager must be a person, firm,
5-11 or corporation registered as an investment adviser under the
5-12 Investment Advisers Act of 1940, a bank, or an insurance company
5-13 and must otherwise meet the requirements of Section 802.204,
5-14 Government Code, and its subsequent amendments.
5-15 (18) <(15)> "Life annuity" means a series of equal
5-16 monthly payments, payable after retirement for a member's life,
5-17 consisting of a combination of <">prior service pension<"> and
5-18 <">current service annuity to which the member is entitled<" based
5-19 on the employee service and average final compensation>.
5-20 (19) <(16)> "Life annuity (modified cash refund)"
5-21 means a life annuity providing that, in <series of equal monthly
5-22 payments, payable after retirement for life, consisting of a
5-23 combination of "prior service pension" and "current service
5-24 annuity" based on the employee service and average final
5-25 compensation. In> the event of death of the retired member before
5-26 that member has received payments under the life annuity totalling
5-27 <retirement allowances equal to> the amount of that member's
6-1 accumulated deposits at the date of retirement, the excess<, if
6-2 any,> of such accumulated deposits over the payments made
6-3 <retirement allowances paid> shall be paid <refunded> in one lump
6-4 sum to the member's designated beneficiary.
6-5 (20) <(17)> "Member" means any:
6-6 (A) regular full-time employee who has completed
6-7 six continuous months of employment with the city, a hospital
6-8 authority, or the board and who has been removed from the
6-9 employee's initial probationary status; and
6-10 (B) former regular full-time employee who has
6-11 not withdrawn the member's accumulated deposits from the system.
6-12 In any case of doubt regarding the eligibility of any
6-13 employee to become or remain a member of the retirement system, the
6-14 decision of the board is final <employee included in the retirement
6-15 system under this statute and approved for membership by the
6-16 retirement board, including staff hired for the administration of
6-17 the retirement system>.
6-18 (21) <(18)> "Membership service" means the period of
6-19 time on or after January 1, 1941, during which a person is or was
6-20 employed as a regular full-time employee or is or was on an
6-21 authorized leave of absence and who is eligible for participation
6-22 in the system and <member> pays into and keeps on deposit the
6-23 amounts of money prescribed to be paid by the member into the
6-24 system. The term includes redeemed membership service.
6-25 (22) "Normal retirement age" means age 62.
6-26 (23) <(19)> "Normal retirement date" means the earlier
6-27 of the date on <first day of the month following the earliest month
7-1 in> which the member has completed 25 <30> years of creditable
7-2 service <at any age> or has reached the age of 62.
7-3 (24) <(20)> "Prior service" means service as an
7-4 employee of the city rendered prior to January 1, 1941, for which a
7-5 pension credit is allowable under prior law governing the
7-6 retirement system of that city and includes redeemed prior service
7-7 <or bought-back service>.
7-8 (25) <(21)> "Prior service pension" means a series of
7-9 equal monthly payments payable from funds of the retirement system
7-10 for a member's life after retirement for <creditable> prior service
7-11 equal to one-twelfth of the product of 2.2 <2.1> percent <for each
7-12 year of creditable prior service,> of the member's average monthly
7-13 earnings during a period of five years preceding January 1, 1941,
7-14 multiplied by the number of months of prior service. On retirement
7-15 at an age other than normal retirement age, the monthly prior
7-16 service pension herein prescribed shall be the actuarial equivalent
7-17 thereof at the member's actual retirement date <age>, based on the
7-18 schedule or schedules of payments approved by the actuary and
7-19 adopted by the board and in effect on the member's actual
7-20 retirement date.
7-21 (26) "Qualified domestic relations order" has the
7-22 meaning assigned by Section 804.001, Government Code, and its
7-23 subsequent amendments.
7-24 (27) "Redeemed membership service" means membership
7-25 service reinstated in accordance with Section 5(e) of this Act.
7-26 (28) "Redeemed prior service" means prior service
7-27 reinstated in accordance with Section 5(e) of this Act.
8-1 (29) "Regular full-time employee" means an individual
8-2 who is employed by the city, a hospital authority, or the board,
8-3 who is not a commissioned civil service police officer or fire
8-4 fighter, the mayor, or a member of the city council, whose position
8-5 is classified in the annual city, board, or hospital authority
8-6 budget for employment for the full calendar year, whose position is
8-7 classified in the annual city, board, or hospital authority budget
8-8 to continue from year to year, and who works 30 hours or more in a
8-9 normal 40-hour work week. The term does not include an individual
8-10 whose position is classified as seasonal or temporary by the city,
8-11 a hospital authority, or the board, even if the individual works 30
8-12 hours or more in a normal 40-hour work week in which the individual
8-13 is employed.
8-14 (30) <(22) "Regular interest" means the rate of
8-15 interest assumed in the determination of the present value of
8-16 pensions and annuities provided hereunder.>
8-17 <(23)> "Retirement" means the termination of
8-18 employment of a member after the member becomes entitled to receive
8-19 <withdrawal of an employee from active service and receipt of> a
8-20 retirement allowance in accordance with the provisions of this Act.
8-21 (31) <(24)> "Retirement allowance" means the life
8-22 annuity (modified cash refund) to which a member may be entitled
8-23 under this Act, including annuities payable on disability
8-24 retirement or on early retirement <payments for life after
8-25 retirement date to a member from a combination of both pension and
8-26 annuity payments based on both prior and membership service.
8-27 Retirement allowances shall be paid in equal monthly installments>.
9-1 (32) <(25)> "Retirement board" or "board" means the
9-2 board of trustees of the retirement and pensioning system herein
9-3 created for the purpose of administering the retirement system.
9-4 (33) <(26) "Retirement date" means the first day of
9-5 the month next succeeding the retirement of the member.>
9-6 <(27)> "Retirement system," "retirement and pensioning
9-7 system," "pension system," or "system" means the retirement and
9-8 pensioning system created by this Act for a city governed by this
9-9 Act.
9-10 (34) "Year of creditable service" means a 12-month
9-11 period of creditable service determined in accordance with uniform
9-12 and nondiscriminatory rules established by the board.
9-13 <(28) "Service" means service as an employee of the
9-14 city paid for by the city or service as a member of the system's
9-15 administrative staff paid for by the system.>
9-16 <(29) "Vested interest" means the amount of benefit to
9-17 which a member has a nonforfeitable right in accordance with the
9-18 provisions of this Act.>
9-19 <(30) "Withdrawal" means the separation of any
9-20 employee from active service for any cause whatsoever prior to
9-21 retirement date and the subsequent withdrawal from membership in
9-22 the retirement system.>
9-23 <(31) "Withdrawal allowance" means the accumulated
9-24 deposits of an employee withdrawing from active service and from
9-25 membership in the system. Withdrawal allowance payments shall be
9-26 made in one lump sum unless otherwise specifically provided in this
9-27 Act.>
10-1 SECTION 2. Section 3, Chapter 451, Acts of the 72nd
10-2 Legislature, Regular Session, 1991 (Article 6243n, Vernon's Texas
10-3 Civil Statutes), is amended to read as follows:
10-4 Sec. 3. Establishment and applicability. (a) Except as
10-5 provided by Subsection (b) of this section and subject to the
10-6 authority granted the board in Section 7(d)(2)(D) of this Act,
10-7 members <Members> who retired <retire> prior to September 1, 1993,
10-8 <January 1, 1971, and who are receiving retirement allowances on
10-9 that date> shall continue to receive the same retirement allowances
10-10 they were receiving prior to that date, together with any cost of
10-11 living adjustments authorized and paid in accordance with this Act.
10-12 (b) Members who retired during the calendar years 1962 and
10-13 1963 shall continue <be entitled to elect> to receive a benefit in
10-14 accordance with their election, if any, and the retirement
10-15 allowances computed in the manner prescribed by an applicable city
10-16 ordinance in effect as of January 1, 1962, or in the manner in
10-17 which said allowances would have been computed under applicable
10-18 city ordinances <the provisions> existing immediately prior to the
10-19 enactments of January 1, 1962, together with any cost of living
10-20 adjustments authorized and paid in accordance with this Act.
10-21 <(c) The provisions described in this Act shall be effective
10-22 for payment to all members of the system retiring on or after
10-23 January 1, 1973.>
10-24 SECTION 3. Section 4, Chapter 451, Acts of the 72nd
10-25 Legislature, Regular Session, 1991 (Article 6243n, Vernon's Texas
10-26 Civil Statutes), is amended to read as follows:
10-27 Sec. 4. Administration. (a) There is hereby created a
11-1 retirement board of the retirement and pensioning system, in which
11-2 board is hereby vested <invested> the power and responsibility for
11-3 the proper and effective general administration, management, and
11-4 <responsibility for the proper and effective> operation of the
11-5 retirement system. The board shall be organized immediately after
11-6 its members have qualified and taken the oath of office. <All
11-7 members of the board on January 15, 1991, shall become members of
11-8 the board and continue to serve for the remainder of the terms of
11-9 office in effect on January 15, 1991.>
11-10 (b) The retirement board shall be composed of 11 members as
11-11 follows:
11-12 (1) place one: one city council member designated by
11-13 the city council, who may be removed and replaced or redesignated
11-14 by the city council at any time;
11-15 (2) place two: the city manager of the city or his or
11-16 her designee;
11-17 (3) place three: the director of finance of the city
11-18 or his or her designee;
11-19 (4) places four through six: three voters of the city
11-20 who have been city residents for the preceding five years and who
11-21 are not city employees, former employees, or officers;
11-22 (5) places seven through 10: four active-contributory
11-23 members elected by the active-contributory members <four active
11-24 employee members elected by the members of the system. Each active
11-25 employee member shall serve for a term of four years. Vacancies
11-26 occurring by death, resignation, disability retirement or removal,
11-27 or any other reason except retirement shall be filled for the
12-1 remainder of the term by an active employee member appointed by the
12-2 board. An active employee member who retires, except for
12-3 disability retirement, will be eligible to complete the remainder
12-4 of his or her term;>
12-5 <(5) three legally qualified voters of the city,
12-6 residents thereof for the preceding five years who are neither
12-7 employees nor former employees nor officers of the city. Two of
12-8 the three will be designated by the city council, and one will be
12-9 designated by the board. The city and the board will each appoint
12-10 one such member in every other odd-numbered year. The city will
12-11 appoint one such member in every other even-numbered year. The
12-12 term of office of members so selected shall be four years, and each
12-13 member shall continue to serve until a successor is duly selected
12-14 and qualified. Vacancies occurring by death, resignation, or
12-15 removal of such citizen member shall be filled by the party that
12-16 made the original designation>; and
12-17 (6) place 11: a retired member who will be elected by
12-18 retired members. <The term of office of such member shall be four
12-19 years. Such member shall continue to serve until a successor is
12-20 duly elected and qualified. Vacancies occurring by death,
12-21 resignation, or removal of such retired member shall be filled for
12-22 the remainder of the term by a retired member appointed by the
12-23 board.>
12-24 (c)(1) The place one board member serves at the pleasure of
12-25 the city council and until the council redesignates the place one
12-26 member, or until the member is no longer able to serve because of
12-27 death, resignation, termination of position as a city council
13-1 member, or disability. The city council shall appoint a person to
13-2 fill a vacancy in place one not later than the 90th day after the
13-3 first date of the vacancy.
13-4 (2) In December of every second even-numbered year,
13-5 the city council shall appoint to place four one person meeting the
13-6 qualifications for place four. In December of every second
13-7 odd-numbered year, the city council shall appoint to place five one
13-8 person meeting the qualifications for place five. In December of
13-9 every second odd-numbered year, the board shall appoint to place
13-10 six one person meeting the qualifications for place six. Board
13-11 members holding places four through six each serve a four-year term
13-12 beginning on January 1 of the year after their appointment, unless
13-13 service is earlier terminated by the death, disability,
13-14 resignation, or removal of that board member or the board member
13-15 ceases to meet the qualifications of a citizen board member as set
13-16 forth in Section 4(b) of this Act. The city council shall fill a
13-17 vacancy in place four or five with a person meeting the
13-18 qualifications for that place not later than the 90th day after the
13-19 first date of the vacancy. If the city council fails to appoint an
13-20 eligible person to fill a vacancy in place four or five within the
13-21 90-day period, the board may appoint a person meeting the
13-22 qualifications for that place to fill the vacancy. The board shall
13-23 appoint a person meeting the qualifications for place six to fill a
13-24 vacancy in place six.
13-25 (3) The places seven through 10 board members each
13-26 serve on the board for a four-year term, unless service is earlier
13-27 terminated by the death, resignation, termination of employment,
14-1 disability, retirement, or removal of that board member. The board
14-2 shall appoint an active-contributory member to fill a vacancy in
14-3 each of places seven through 10 for the remainder of the unexpired
14-4 term.
14-5 (4) The place ll board member serves for a four-year
14-6 term, unless that service is earlier terminated by the death,
14-7 disability, resignation, or removal of the member. The board shall
14-8 appoint a retired member to fill a vacancy in place 11 for the
14-9 remainder of the unexpired term.
14-10 (d) Members for places seven through 11 <The elected active
14-11 employee members and the retiree member> shall be elected in
14-12 accordance with the following provisions:
14-13 (1) Only active-contributory members <active employees
14-14 of the city who are members of the retirement system> shall be
14-15 eligible for election for places seven through 10 <as active
14-16 employee members>. Only retired members <employees of the city who
14-17 are retired members of the retirement system> shall be eligible for
14-18 election for place 11 <as the retired member>. Not more than one
14-19 active-contributory <active employee> member shall be eligible for
14-20 election from any one city department.
14-21 (2) Members for places seven through 10 <The active
14-22 employee members of the board shall serve for terms of four years.
14-23 They> shall be elected to four-year staggered terms with the terms
14-24 of two of such board members beginning January 1 of each
14-25 even-numbered year.
14-26 (3) The board member for place 11 shall <The retired
14-27 member shall serve for a term of four years to> be elected in an
15-1 even-numbered year, with the term beginning on January 1 of the
15-2 next odd-numbered year.
15-3 (4)(A) No later than the first day of October of each
15-4 odd-numbered year, the board shall appoint a nominating and
15-5 election committee consisting of five committee members and two
15-6 alternates, all of whom are active-contributory <active employee>
15-7 members of the retirement system. The nominating and election
15-8 committee shall make one or more nominations for each
15-9 active-contributory <employee> member vacancy <vacancies> and shall
15-10 act as election judges. The nominating and election committee
15-11 shall prepare the ballot containing the names of all certified
15-12 active-contributory member <eligible> candidates<, ensuring a
15-13 minimum of three times as many active employee member candidates as
15-14 vacancies exist>.
15-15 (B) No later than the first day of October of
15-16 every second <alternate> even-numbered year, the board shall
15-17 appoint a nominating and election committee consisting of five
15-18 committee <retired> members and five alternates, all of whom are
15-19 retired members of the retirement system. The nominating and
15-20 election committee shall make one or more nominations for the
15-21 retired member vacancy and shall act as election judges. The
15-22 nominating <nomination> and election committee shall prepare the
15-23 ballot containing the names of all certified retired member
15-24 <eligible> candidates<, ensuring at least three candidates for the
15-25 retired member position. Only retired members of the retirement
15-26 system are eligible to vote for the retired member>.
15-27 (5) Each <The> nominating and election committee shall
16-1 publish a notice at least two weeks prior to the applicable
16-2 election date, informing all active-contributory <active employee>
16-3 members or retired members, as applicable, who have been certified
16-4 as candidates.
16-5 (6) Elections for places seven through 10 <employee
16-6 members> shall be held on the first payday in December of each
16-7 odd-numbered year. Elections for place 11 <the retired member>
16-8 shall be held in December of every second <other> even-numbered
16-9 year. The candidates receiving the highest number of eligible
16-10 votes shall be deemed elected. In case of a tie vote, selection
16-11 shall be by lot drawn by an existing member of the retirement board
16-12 at a meeting of the retirement board held after the election but
16-13 before the first day of January of the year after the election.
16-14 (7) The applicable nominating and election committee
16-15 shall canvass the returns, certify the results, and announce the
16-16 official results of the election.
16-17 (8) The retirement board shall approve written
16-18 procedures for the conduct of the election no later than August 1
16-19 of each year in which an election is held.
16-20 (e) <(d)> Each member of the retirement board within 30 days
16-21 after appointment and election shall take an oath of office that
16-22 the board<. The> member will diligently and honestly administer
16-23 the affairs of the retirement system and will not knowingly violate
16-24 or willingly permit to be violated any law or statute applicable to
16-25 the retirement system. All members of the board serve without
16-26 compensation. At any time, the <The> board, by a vote of six board
16-27 <remaining> members, may remove a board member for malfeasance.
17-1 (f) In January of each year, the <(e) The> board shall
17-2 elect from its membership a chairman and a vice-chairman to serve
17-3 one calendar year.
17-4 (g) <(f)> The board shall hire <appoint> a pension officer
17-5 as an employee of the board. The pension officer shall hire and
17-6 may fire or suspend <appoint> necessary staff members, and those
17-7 staff members are employees <with approval> of the board. The
17-8 pension officer acting under the direction of the board shall keep
17-9 all of the records of the retirement system and a record of the
17-10 proceedings of the board. The pension officer and each staff
17-11 member shall receive such compensation as the board may fix in each
17-12 annual budget of the retirement system, or amendments to the
17-13 budget, and that compensation shall be paid from the fund
17-14 <thereto>.
17-15 (h) <(g)> Subject to the limitations of this Act, the board
17-16 shall from time to time establish rules and regulations for the
17-17 administration of the <fund or> funds authorized to be created
17-18 hereunder and for the transaction of the board's business. Each
17-19 member of the board is entitled to one vote on the board. Six
17-20 concurring votes are necessary for a decision by the board members
17-21 at any meeting of the board, and six members constitute a quorum.
17-22 Each member will be required to serve on a committee of the board.
17-23 Any board member who is absent from four consecutive regular
17-24 monthly meetings of the board shall be removed from the board and
17-25 the member shall be replaced in accordance with the provisions of
17-26 this section.
17-27 (i) <(h)>(1) The board shall keep or cause to be kept in
18-1 convenient form such data as are necessary for actuarial valuation
18-2 of the fund <various funds> of the retirement system and for
18-3 checking the mortality, service, compensation, and payment
18-4 experience of the system.
18-5 (2) The board shall keep a record of all its
18-6 proceedings, which shall be open to public inspection, and shall
18-7 publish annually a report showing the fiscal transactions of the
18-8 retirement system for the preceding year, the amount of the
18-9 accumulated cash and securities of the system, and the last balance
18-10 sheet showing the financial condition of the system as disclosed by
18-11 the most recent actuarial valuation of the assets and liabilities
18-12 of the retirement system.
18-13 (3) The board shall have charge of and administer the
18-14 fund as trustee of the fund <retirement system> and shall order
18-15 payments therefrom in pursuance of the provisions of this Act. The
18-16 city and each hospital authority shall provide to the board <shall
18-17 obtain from the city> all records necessary to administer the
18-18 system and the fund. The board shall report annually to the
18-19 members on the condition of the fund <said funds> and the receipts
18-20 and disbursements on account of the fund <same>. The board shall
18-21 keep a complete list of the retired members, surviving spouses, and
18-22 beneficiaries of the fund <said funds> and the amounts paid to
18-23 them.
18-24 (4) Individual accounts shall be maintained for <with>
18-25 each member of the retirement system, showing the amount of the
18-26 member's accumulated deposits <and the accumulated interest
18-27 allocated and standing to the credit of such member as provided
19-1 under the system>. Annually a statement shall be given each member
19-2 showing the total amount of that member's accumulated deposits
19-3 <accumulation of his or her credit>. The accounts of the board and
19-4 the retirement system shall be included in the annual independent
19-5 audit of the accounts of the system. A copy of this annual audit
19-6 shall be provided to the city mayor.
19-7 (5) The retirement board shall designate an actuary
19-8 who shall be the technical advisor of the board regarding the
19-9 maintenance and operations <operation> of the fund <funds>
19-10 authorized by provisions of this Act and shall perform such other
19-11 duties as may be required in connection therewith. The actuary
19-12 shall make periodic valuations of the assets and liabilities of the
19-13 funds and other evaluations as requested by the board.
19-14 (6) <As of the date of the establishment of the
19-15 retirement system the actuary shall make such investigation of the
19-16 mortality, service, and compensation experience of the members of
19-17 the system as the board shall authorize, and, on the basis of such
19-18 investigation, the actuary shall recommend for adoption by the
19-19 board such tables and rates as are hereinafter required. The board
19-20 shall adopt tables and certify rates, and, as soon as practicable
19-21 thereafter, the actuary shall make a valuation, based on the tables
19-22 and rates, of the assets and liabilities of the fund or funds
19-23 authorized by this Act to be created.>
19-24 <(7)> From time to time on the advice of the actuary
19-25 and the direction of the board, the actuary shall make an actuarial
19-26 investigation of the mortality, service, and compensation
19-27 experience of members, retired members, surviving spouses, and
20-1 beneficiaries of the retirement system and shall make a valuation
20-2 of the assets and liabilities of the funds of the system. Taking
20-3 into account the result of such investigation and valuation, the
20-4 board shall adopt for the retirement system such mortality,
20-5 service, and other actuarial tables or rates as are deemed
20-6 necessary. On the basis of <such> tables and rates adopted by the
20-7 board <adopts>, the actuary shall make a valuation at least once
20-8 every two years of the assets and liabilities of the funds of the
20-9 retirement system.
20-10 (7) <(8)> The retirement board may retain the services
20-11 of one or more <hire an> investment managers <manager> who shall
20-12 have full authority to invest and manage the assets of the
20-13 retirement system and <manage the portfolio of> the fund, as
20-14 specified by <employment> contract in accordance with Subchapter C,
20-15 Chapter 802, Government Code, and its subsequent amendments.
20-16 (8) <(9)> The retirement board may retain the services
20-17 of one or more <hire an> investment consultants <consultant> to
20-18 monitor the investment performance of the <fund's> investment
20-19 managers <manager> and provide other investment-related services as
20-20 requested by the board.
20-21 (j) <(i)> The retirement board may retain legal counsel to
20-22 advise, assist, or represent the board in any legal matters
20-23 affecting the retirement system and the operation of the fund.
20-24 (k) Except as provided by Subsection (l) of this section,
20-25 the board may adopt rules, establish regulations or procedures,
20-26 correct any defect, supply any information, or reconcile any
20-27 inconsistency as the board considers necessary or advisable to
21-1 carry out this Act.
21-2 (l) Any procedure, discretionary act, interpretation, or
21-3 construction by the board must be done in a nondiscriminatory
21-4 manner based on uniform principles consistently applied and must be
21-5 consistent with this Act and with 26 U.S.C. Section 401(a) and its
21-6 subsequent amendments.
21-7 SECTION 4. Section 5, Chapter 451, Acts of the 72nd
21-8 Legislature, Regular Session, 1991 (Article 6243n, Vernon's Texas
21-9 Civil Statutes), is amended to read as follows:
21-10 Sec. 5. Membership. (a) Any regular full-time employee who
21-11 has completed six continuous months of employment as a regular
21-12 full-time employee before or <person who becomes an employee of the
21-13 city or of the system's administrative staff> after the date of
21-14 establishment of the retirement system and who has been removed
21-15 from the employee's initial probationary status, <if eligible for
21-16 membership,> shall become an active-contributory <a> member as a
21-17 condition of employment and shall make the required deposits
21-18 commencing with the first pay period following the later of the
21-19 completion <a probationary period> of six continuous months of
21-20 employment as a regular full-time employee or the date of removal
21-21 from the employee's initial probationary status. Unless on
21-22 approved medical leave of absence or other authorized leave, the
21-23 employee shall make the deposits as long as the employee remains a
21-24 regular full-time employee and <from date of employment or
21-25 eligibility, whichever is later. The person> shall remain a member
21-26 of the system until the employee or the employee's beneficiary
21-27 ceases to be entitled to any benefits from the retirement system
22-1 <entitled to benefits under Section 7 of this Act or until entitled
22-2 to disability retirement pursuant to the provisions of Section 8 of
22-3 this Act>.
22-4 (b) <Employees of the city or the system's administrative
22-5 staff who may not become members of the retirement system include:>
22-6 <(1) the mayor and members of the city council;>
22-7 <(2) all civil service commissioned police officers
22-8 and fire fighters;>
22-9 <(3) all part-time employees who work less than 75
22-10 percent of a normal work week; and>
22-11 <(4) all seasonal and temporary employees. A regular
22-12 full-time employee of the city who is not included in this excepted
22-13 classification is one whose position is classified in the annual
22-14 city budget and who is employed throughout the full calendar year
22-15 and whose employment continues from year to year. If a regular
22-16 employee works at least 75 percent of a normal work week but less
22-17 than full time, the employee shall make deposits as though working
22-18 a normal full-time work week even though the rate of contribution
22-19 may thereby exceed seven percent of actual, regular compensation,
22-20 and the employee's average final compensation shall be computed on
22-21 the basis of the compensation for a normal work week, but no
22-22 deposits shall be made nor membership service credit received for
22-23 periods during which an employee's authorized normal work week is
22-24 less than 75 percent of a normal work week.>
22-25 <(c)> Membership in the retirement system consists of the
22-26 following groups:
22-27 (1) the active-contributory members group, which
23-1 consists of all members, other than those on authorized leave of
23-2 absence, who are making deposits; <Active-Contributory. The
23-3 employee whose current employment status allows payroll
23-4 contribution into the retirement system. The employee must work at
23-5 least 75 percent of a normal work week in a permanent position and
23-6 must have completed the initial six months probationary period for
23-7 membership.>
23-8 (2) the active-noncontributory members group, which
23-9 consists of all employees on approved medical leave of absence and
23-10 all employees of the city, a hospital authority, or the board,
23-11 other than inactive-contributory members, who were
23-12 active-contributory members but who are not regular full-time
23-13 employees; <Active-Noncontributory. The employee whose current
23-14 employment status does not allow contributions into the retirement
23-15 system and is thereby deactivated. The employee has the privilege
23-16 of immediate reentry, on appropriate change of status, to a
23-17 creditable period of membership service, with contributions resumed
23-18 at time of status change.>
23-19 (3) the inactive-contributory members group, which
23-20 consists of all members who are on an authorized leave of absence
23-21 and who continue <Inactive-Contributory. The employee who is on a
23-22 leave of absence, who is allowed> to make deposits into the
23-23 retirement system during the employee's absence;<.>
23-24 (4) the inactive-noncontributory members group, which
23-25 consists of all members whose status as an employee with the city,
23-26 a hospital authority, or the board has been terminated before
23-27 retirement or disability retirement and who are still entitled to,
24-1 or whose beneficiary may become entitled to, benefits from
24-2 <Vested-Noncontributory. The terminated employee who, being fully
24-3 vested, retains his or her contributions in> the retirement system;
24-4 and<.>
24-5 (5) the retired members group, which consists of all
24-6 members who have retired and who are receiving or who are entitled
24-7 to receive a retirement allowance <Retired. The employee who is
24-8 receiving a retirement annuity>.
24-9 (c) An active-noncontributory member becomes an
24-10 active-contributory member immediately on resuming employment as a
24-11 regular full-time employee or on returning from an approved medical
24-12 leave of absence, as applicable.
24-13 (d) It shall be the duty of the retirement board to
24-14 determine the membership group to which each person <employee> who
24-15 becomes a member of the retirement system properly belongs. It
24-16 shall be the duty of the city manager to submit to the board a
24-17 statement showing the name, position, compensation, duties, date of
24-18 birth, length of employment <service>, and other information
24-19 regarding each <the> employee of the city the board may require.
24-20 The pension officer shall submit to the board a statement showing
24-21 the name, position, compensation, duties, date of birth, length of
24-22 employment, and other information regarding each employee of the
24-23 board that the board requires. Each hospital authority board shall
24-24 submit to the retirement board a statement showing the name,
24-25 position, compensation, duties, date of birth, length of
24-26 employment, and other information regarding each employee of the
24-27 hospital authority that the retirement board requires.
25-1 (e) Any person who has ceased to be a member and has
25-2 received a distribution of the person's accumulated deposits may
25-3 have the person's membership service or prior service reinstated if
25-4 the person is reemployed as a regular full-time employee for a
25-5 continuous period of 24 months and deposits into the system, within
25-6 a reasonable period established by the board on a uniform and
25-7 nondiscriminatory basis, the accumulated deposits withdrawn by that
25-8 person, together with an interest payment equal to the amount
25-9 withdrawn multiplied by an interest factor. The interest factor is
25-10 equal to the annually compounded interest rate assumed to have been
25-11 earned by the fund beginning with the month and year in which the
25-12 person withdrew the person's accumulated deposits and ending with
25-13 the month and year in which the deposit under this subsection is
25-14 made. The interest rate assumed to have been earned by the fund
25-15 for any period is equal to the interest rate credited for that
25-16 period to the accumulated deposits of members, divided by 0.75.
25-17 <(e) A member ceases to be a member of the retirement system
25-18 and loses membership service if, through death, dismissal,
25-19 resignation, or from any other cause, the member severs the service
25-20 connection as an employee and withdraws accumulated deposits as
25-21 provided under the withdrawal allowance provisions; however, any
25-22 eligible member who has not previously received credit for one-half
25-23 of previously forfeited membership service is entitled to
25-24 reinstatement of membership service if such eligible member
25-25 deposits in the system the accumulated deposits withdrawn and an
25-26 interest charge based on the amount withdrawn times an interest
25-27 factor. The factor is based on the compounded net annual rates of
26-1 interest (the net annual rates of interest credited to the member's
26-2 accumulated contributions divided by 0.75) that were earned by the
26-3 fund beginning with the month and year in which the member withdrew
26-4 contributions and ending with the month and year payment is made to
26-5 reinstate the service.>
26-6 (f) <An eligible member is an employee who has been
26-7 reemployed by the city or the system and has completed at least 24
26-8 consecutive months of service as a member since being reemployed by
26-9 the city or the system and who deposits the lump sum described in
26-10 Subsection (e) of this section with the system during any time
26-11 period designated by the board with the approval of the system's
26-12 actuary.>
26-13 <(g) Any such member who has previously received credit for
26-14 one-half of previously forfeited membership service is entitled to
26-15 reinstate the remaining one-half of this previously withdrawn
26-16 membership service and an interest charge as described hereunder.>
26-17 <(h) An employee granted a leave of absence or withdrawing
26-18 from the service for a stated period of time, not to exceed in any
26-19 event a period of two years, who allows contributions in the
26-20 retirement and pension system to remain in the fund is eligible for
26-21 continued membership on reentering the service of the city or the
26-22 system. During the period of absence, the employee shall not
26-23 receive service credit.>
26-24 <(i) Military leave of absence shall not be included in the
26-25 two-year limit referred to in Subsection (h) of this section if
26-26 such member returns to active service with the city or the system
26-27 within 90 days after the expiration of such military leave of
27-1 absence.> A member <of the system> on authorized <military> leave
27-2 of absence may make deposits each biweekly pay period to the system
27-3 while on authorized <military> leave of absence, in an amount that
27-4 is equal to the amount of the member's <his or her> deposit for the
27-5 last complete biweekly pay period that the member was paid by the
27-6 city, a hospital authority, or the board. As long as the member on
27-7 authorized leave of absence makes the biweekly payments, the<.
27-8 The> city shall <will> make contributions <a contribution> to the
27-9 retirement fund for such member on authorized <military> leave of
27-10 absence from the city each biweekly pay period in an amount equal
27-11 to the contribution amount the city would have made if the member's
27-12 biweekly pay had continued to be the biweekly pay the member
27-13 received for the last complete biweekly pay period that the member
27-14 was paid by the city. Each hospital authority shall make
27-15 contributions to the retirement fund for a member on authorized
27-16 leave of absence from that hospital authority each pay period in an
27-17 amount equal to the contribution amount the hospital authority
27-18 would have made if the member's pay had continued to be the pay the
27-19 member received for the last complete pay period that the member
27-20 was paid by the hospital authority. The board shall make a
27-21 contribution to the retirement fund from system funds for a member
27-22 on authorized leave of absence from the board each biweekly pay
27-23 period in an amount equal to the contribution amount the board
27-24 would have made if the member's biweekly pay had continued to be
27-25 the biweekly pay the member received for the last complete biweekly
27-26 pay period that the member was paid by the board. If the member
27-27 does not make those deposits while on authorized <military> leave
28-1 of absence, the member may make a single payment, within five years
28-2 after the member has returned to employment with the city, with the
28-3 hospital authority, or with the board <system> equal to the
28-4 deposits the member would have made if the member had continued to
28-5 be paid during the authorized <his military> leave of absence at
28-6 the same rate of pay the member was receiving at the time the
28-7 member's authorized <military> leave of absence began. The city
28-8 shall <will> make a single payment for such member employed by the
28-9 city equal to the contributions <deposits> it would have made on
28-10 the member's behalf if the member had made deposits to the fund
28-11 during the period of the member's authorized <military> leave of
28-12 absence. Each hospital authority shall make a single payment for a
28-13 member employed by the hospital authority equal to the
28-14 contributions it would have made on the member's behalf if the
28-15 member had made deposits to the fund during the period of the
28-16 member's authorized leave of absence. The board shall make a
28-17 single payment to the fund for a member employed by the board equal
28-18 to the contributions it would have made on the member's behalf if
28-19 the member had made deposits to the fund during the period of the
28-20 member's authorized leave of absence. As long as deposits are made
28-21 in accordance with this subsection, the member will continue to
28-22 earn membership service during the period of the authorized leave
28-23 of absence.
28-24 (g) <(j) Normal retirement for any member under this system
28-25 shall be the earlier of completion of 30 years of creditable
28-26 service at any age or attainment of age 62. However, should a
28-27 member not retire on attainment of normal retirement, the member
29-1 shall continue to make deposits to the system and shall accrue
29-2 credit for membership service until the member elects to retire.>
29-3 <(k)> From time to time the board, subject to the approval
29-4 of the system's actuary, may elect to permit the reinstatement of
29-5 membership service forfeited in accordance with the terms of this
29-6 section.
29-7 SECTION 5. Section 6, Chapter 451, Acts of the 72nd
29-8 Legislature, Regular Session, 1991 (Article 6243n, Vernon's Texas
29-9 Civil Statutes), is amended to read as follows:
29-10 Sec. 6. CREDITABLE SERVICE. (a) The <Creditable service at
29-11 retirement on which the> retirement allowance of a member is based
29-12 on the amount of creditable <shall consist of all membership>
29-13 service rendered by the member as of the member's actual retirement
29-14 date <since the member last became a member plus any creditable
29-15 service received from the buy-back provisions of Section 5 of this
29-16 Act>.
29-17 (b) The board shall determine by nondiscriminatory
29-18 <appropriate> rules and regulations consistently applied, subject
29-19 to the provisions of this Act, in case of absence, <or> illness, or
29-20 other temporary interruption in service as a regular full-time
29-21 employee <separation from service>, the portion of each calendar
29-22 year to be allowed as creditable <credited to such employee on
29-23 future> service. No credit shall be allowed as creditable service
29-24 for any period exceeding one month during which an employee was
29-25 absent continuously without pay, except for an authorized
29-26 <military> leave of absence. The board shall verify the records
29-27 for creditable service claims filed by the members of the
30-1 retirement system, subject to the provisions of this Act and in
30-2 accordance with such administrative rules and regulations as the
30-3 board may from time to time adopt.
30-4 (c) At any time before a member's actual retirement date, a
30-5 member may establish creditable service for military service
30-6 performed that is creditable as provided under this subsection
30-7 according to the following conditions, limitations, and
30-8 restrictions:
30-9 (1) Military service creditable in the retirement
30-10 system is active federal duty service in the armed forces of the
30-11 United States, other than as a student at a service academy, as a
30-12 member of the reserves, or any continuous active military service
30-13 lasting less than 90 days. To be creditable, the military service
30-14 must have been performed before the beginning of the member's most
30-15 recent period of membership in the retirement system or its
30-16 predecessor system.
30-17 (2) A member is not eligible to establish military
30-18 service credit unless the member was released from active military
30-19 duty under conditions other than dishonorable.
30-20 (3) A member may not establish more than 24 months of
30-21 creditable service in the retirement system for military service
30-22 under this subsection.
30-23 (4) A member may establish creditable service under
30-24 this subsection by contributing to the retirement system a single
30-25 payment equal to 25 percent of the estimated cost of the additional
30-26 projected retirement benefits the member will be entitled to
30-27 receive. The board will determine the required contribution based
31-1 on a procedure recommended by the actuary and approved by the
31-2 board.
31-3 (5) After the member makes the deposit required by
31-4 this subsection, the retirement system shall grant the member one
31-5 month of creditable service for each month of creditable military
31-6 service established under this subsection.
31-7 SECTION 6. Section 7, Chapter 451, Acts of the 72nd
31-8 Legislature, Regular Session, 1991 (Article 6243n, Vernon's Texas
31-9 Civil Statutes), is amended to read as follows:
31-10 Sec. 7. SERVICE RETIREMENT BENEFITS AND WITHDRAWAL BENEFITS.
31-11 (a) Except as provided by Subsection (b) of this section, a member
31-12 who retires on or after the member's normal retirement date and
31-13 applies in writing for a retirement allowance <On retirement from
31-14 service, members entitled thereto> shall receive a life annuity
31-15 (modified cash refund) beginning on the last day of the month after
31-16 the month in which the member retired. Unless Subsection (e) of
31-17 this section or Section 8 of this Act applies, a member whose
31-18 employment by the city, a hospital authority, or the board
31-19 terminates before the member's normal retirement date is entitled
31-20 to a distribution of the member's accumulated deposits in a single
31-21 lump sum. On receiving that distribution, a member is not entitled
31-22 to any other benefit under this Act. If a member has at least five
31-23 years of creditable service and does not withdraw the member's
31-24 accumulated deposits, the member is entitled to a life annuity
31-25 (modified cash refund) beginning on the first day of the month
31-26 after the month in which the member's normal retirement date
31-27 occurs. If a member has at least 20 years of creditable service
32-1 and does not withdraw the member's accumulated deposits, the member
32-2 is also entitled to elect an early retirement benefit on attaining
32-3 age 55 <monthly retirement allowance consisting of current service
32-4 annuity, prior service pension, or both>.
32-5 (b) A member who terminates employment with the city, a
32-6 hospital authority, or the board and who has less than five years
32-7 of creditable service is not entitled to a retirement allowance
32-8 <meets the requirements of retirement shall receive monthly a
32-9 current service annuity payment>.
32-10 (c) <A member who meets the requirements therefor shall
32-11 receive monthly a prior service pension payment.>
32-12 <(d)> The amount <prior service pension and the current
32-13 service annuity, as hereinafter set out, shall be considered a life
32-14 annuity (modified cash refund) with the first monthly payment due
32-15 from the member's retirement date, but the amounts> of the
32-16 retirement allowance <these> and all other benefits payable under
32-17 this statute shall be subject at all times to such adjustments as
32-18 may be required to ensure actuarial soundness as may be approved by
32-19 the actuary and adopted by the board, except that annuities already
32-20 granted may not be reduced below the base figure granted at time of
32-21 retirement.
32-22 (d) <(e)>(1) Subject to the conditions, limitations, and
32-23 restrictions set forth in this subsection, as well as all other
32-24 pertinent conditions, limitations, and restrictions set forth
32-25 elsewhere in this Act, the board shall have the power once each
32-26 year to authorize a <an annual> cost of living adjustment
32-27 (hereinafter referred to as "adjustment") payment which, once
33-1 authorized, <shall be paid out in 12 equal monthly installments
33-2 which> shall be added to the current monthly payment of all
33-3 retirement annuities, pensions, or allowances of each and every
33-4 retired member <of the retirement and pensioning system who has
33-5 retired> or the retired members' <surviving spouses or>
33-6 beneficiaries who have become entitled to benefits, on or before
33-7 December 31 of the year before the year in which the adjustment
33-8 goes into effect <any preceding year>. Before December 31
33-9 <November 1> of each year, the board shall make a separate
33-10 determination as to whether to authorize the payment of an <annual>
33-11 adjustment and the amount of such adjustment, if any. In
33-12 determining whether to authorize an adjustment, the board may
33-13 consider the changes in the consumer price index over the preceding
33-14 12-month period, the actuarial experience of the fund, the
33-15 investment experience of the fund, the amount of any prior
33-16 adjustments, and other factors that the board and the actuary
33-17 consider appropriate.
33-18 (2) In determining whether to authorize the payment
33-19 and the amount of any <annual> adjustment, the board shall be
33-20 governed by the following conditions, considerations, limitations,
33-21 and restrictions:
33-22 (A) Any and all determinations to authorize the
33-23 payment of any adjustment amount must be based on the ability of
33-24 the fund to pay such an amount and shall not be based on the
33-25 individual needs of any particular retired members<, surviving
33-26 spouses,> or beneficiaries.
33-27 (B) Prior to the board's authorizing the payment
34-1 of an <annual> adjustment, the actuary must approve and recommend
34-2 such an adjustment to the board and certify in writing to the board
34-3 that, based on the sound application of actuarial assumptions and
34-4 methods consistent with sound actuarial principles and standards,
34-5 it is demonstrable that the fund has and will continue to have the
34-6 ability to pay such an amount out of its realized income after all
34-7 other obligations of the fund have been paid.
34-8 (C) The amount of the adjustment <payment> for
34-9 each retired member<, surviving spouse,> or beneficiary may not
34-10 exceed six <shall be increased or decreased by the amount of the
34-11 change in the price index over the previous year, or by four>
34-12 percent of the monthly payment due the retired member or
34-13 beneficiary before the adjustment. For members who retired during
34-14 the year in which the adjustment is authorized, the increase for
34-15 the first year in which the adjustment is being paid shall be
34-16 prorated in the ratio that the number of completed months after the
34-17 member's retirement in the year of the member's retirement bears to
34-18 12. After the first year the member is entitled to the full amount
34-19 of the adjustment without proration. <retirement allowance as
34-20 adjusted, whichever is the smaller, provided, however, that such
34-21 increase shall be prorated for a member who retired during the year
34-22 in the ratio that the number of completed months after the member's
34-23 retirement in that year bears to 12. The actuary, in making a
34-24 determination as to the amount of the adjustment payment, may use
34-25 the base period in order to compute an average base period price
34-26 index for the six-year base period by averaging or leveling the
34-27 increases and decreases of the price index over the same six-year
35-1 base period so long as it is demonstrated by the application of
35-2 sound actuarial standards that such a use of averaging or leveling
35-3 will not be detrimental to the continuity of the fund.>
35-4 (D) The board shall have the authority and the
35-5 duty on recommendation by the actuary, at any and all times and
35-6 without notice to anyone, to decrease the amount of <the>
35-7 adjustment payment as much as is necessary to protect the
35-8 continuity of the retirement and pensioning system and to protect
35-9 the corpus of the system should the ability of the system to
35-10 continue to pay the adjustment be threatened by a change in the
35-11 economic situation of the United States, the State of Texas, the
35-12 city, or the system itself, such as would dictate that a prudent
35-13 trustee should authorize such a decrease, providing that, if the
35-14 threatening change should prove not to have had the predicted
35-15 harmful effect on the system, then the board shall have the
35-16 authority, on recommendation by the actuary, to reinstate the
35-17 payment of all or any portion of the amount of the previously
35-18 decreased adjustment payments.
35-19 <(E) All monthly retirement annuities being paid
35-20 by the system in which payments began prior to January 1, 1985,
35-21 shall be increased effective March 1, 1985, with the first
35-22 increased amounts being paid March 31, 1985, in accordance with the
35-23 following schedule:>
35-24 <Year of> <Percentage>
35-25 (þLRetirementää þLIncreaseää
35-26 <1962 and earlier> <250>
35-27 <1963 through 1966> <230>
36-1 <1967 through 1970> <160>
36-2 <1971> <105>
36-3 <1972> <100>
36-4 <1973> <65>
36-5 <1974> <55>
36-6 <1975> <50>
36-7 <1976> <45>
36-8 <1977> <40>
36-9 <1978> <35>
36-10 <1979> <25>
36-11 <1980> <15>
36-12 <1981> <8>
36-13 <1982> <7>
36-14 <1983> <6>
36-15 <1984> <5>
36-16 <All members are entitled to the following
36-17 one-time benefit increase as of January 1, 1990:>
36-18 <Percent>
36-19 (þLDate Benefit Commencedää þLBenefit Increaseää
36-20 <1968 or earlier> <15>
36-21 <1969 through 1980> <11>
36-22 <1981 through September, 1985> <8>
36-23 <October, 1985, through August 1988> <2>
36-24 <September, 1988, through month prior>
36-25 <to effective date of benefit increase> <0.5>
36-26 (3) Any adjustment payments shall be in addition to
36-27 the benefits to which a retired member<, surviving spouse,> or
37-1 beneficiary is otherwise entitled under this Act, and in no event
37-2 shall a reduction in the adjustment payments cause the retired
37-3 member's<, surviving spouse's,> or beneficiary's benefits to be
37-4 reduced below the actual base retirement figure calculated under
37-5 the provisions of this Act.
37-6 (4) The following terms and definitions shall be used
37-7 in construing the meaning of this section <subsection>:
37-8 (A) "Base retirement figure" means that
37-9 <retirement> figure calculated under the provisions of this Act at
37-10 the time of actual retirement to which, for the purposes of this
37-11 subsection, a retired member is entitled over a 12-month period.
37-12 (B) "Consumer price <Price> index" means the
37-13 <annual average over a calendar year of the> Consumer Price Index
37-14 (all items-United States City average) published monthly by the
37-15 Bureau of Labor Statistics, United States Department of Labor or
37-16 its successor in function.
37-17 (C) <"Adjustment payment" means an annual cost
37-18 of living adjustment payment which is paid in 12 equal monthly
37-19 installments which are added to the current monthly payment figure
37-20 of retirement annuities, pensions, or allowances of members,
37-21 surviving spouses, or beneficiaries of the retirement and
37-22 pensioning system who have become entitled to benefits under this
37-23 Act.>
37-24 <(D) "Averaging" or "leveling" means a means
37-25 whereby the fluctuations in the price index over a stated period of
37-26 time may be first averaged out for the entire period to determine
37-27 the average amount over that period of time that may be paid out as
38-1 an annual adjustment payment, provided that in no event shall such
38-2 an averaging or leveling principle be used to justify an annual
38-3 increase in the annual adjustment payment which is equal to more
38-4 than four percent of the current retirement figure.>
38-5 <(E) "Base period" means the six years
38-6 immediately preceding the year for which the annual adjustment
38-7 payment is computed.>
38-8 <(F) "Fund" means, for the purposes of this
38-9 subsection, a combination of Fund No. 1 and Fund No. 2, as defined
38-10 in this Act unless otherwise indicated.>
38-11 <(G)> "Continuity of the fund" means the ability
38-12 of the retirement and pensioning system's fund to continue to meet
38-13 all of its purposes, to continue to thrive and grow along with the
38-14 economy of the United States, the State of Texas, and the city, or
38-15 to be able to sustain itself and its retired members<, surviving
38-16 spouses,> and their beneficiaries during and throughout the periods
38-17 of deflation or recession in those economies.
38-18 (e) <(f)> Any member shall be eligible for early retirement
38-19 if the member attains <attained> the age of 55 years and completes
38-20 <completed> at least 20 years of creditable service <with the
38-21 city>. Such member shall be entitled to a benefit equal to a life
38-22 <the current service> annuity (modified cash refund) reduced at the
38-23 rate of five-twelfths of one percent for each month the member was
38-24 retired before the member's normal retirement date. A member who
38-25 takes early retirement shall begin receiving the benefits provided
38-26 by this subsection beginning on the last day of the month after the
38-27 month in which the member retired <at which payments commence>.
39-1 (f) <(g) Any member, irrespective of the number of years of
39-2 creditable service, shall be eligible for normal retirement at age
39-3 62. After age 62 the member may continue in the employment of the
39-4 city or the system and shall continue to make deposits to the
39-5 system and accrue credit for membership service until he or she
39-6 elects to retire. No member shall be paid any benefits by the
39-7 system so long as the member is permanently employed by the city or
39-8 the system.>
39-9 <(h)> A member <attaining eligibility for retirement, except
39-10 for disability retirement,> may file a duly acknowledged written
39-11 designation which, if approved by the board, shall entitle the
39-12 member, on retirement, to receive the actuarial equivalent of the
39-13 life annuity in the form of one of the following options:
39-14 (1) Option I. 100 Percent Joint and Survivor Annuity.
39-15 This option is a reduced monthly annuity payable to the member but
39-16 with the provision that on the member's death the annuity shall be
39-17 continued throughout the life of and be paid to such person as the
39-18 member shall <irrevocably> designate before the member's actual
39-19 retirement date.
39-20 (2) Option II. 50 Percent Joint and Survivor Annuity.
39-21 This option is a reduced monthly annuity payable to the member but
39-22 with the provision that on the member's death one-half of the
39-23 annuity shall be continued throughout the life of and be paid to
39-24 such person as the member shall <irrevocably> designate before the
39-25 member's actual retirement date.
39-26 (3) Option III. 66-2/3 Percent Joint and Survivor
39-27 Annuity. This option is a reduced monthly annuity payable to the
40-1 member but with the provision that on the member's death two-thirds
40-2 of the annuity shall be continued throughout the life of and be
40-3 paid to such person as the member shall <irrevocably> designate
40-4 before the member's actual retirement date.
40-5 (4) Option IV. Joint and 66-2/3 Percent Last
40-6 Survivor Annuity. This option is a reduced monthly annuity payable
40-7 to the member but with the provision that two-thirds of the annuity
40-8 to which the member would be entitled shall be continued throughout
40-9 the life of and be paid to the survivor after the death of either
40-10 the member or such person as the member shall <irrevocably>
40-11 designate before the member's actual retirement date.
40-12 (5) Option V. Level Income Option. If payment of a
40-13 retirement allowance <benefit> commences prior to the earliest age
40-14 at which the member will become eligible for an old age insurance
40-15 benefit under the Social Security Act, the member may elect that
40-16 the amount of the monthly payments be adjusted so that an increased
40-17 monthly amount will be paid prior to such age and a reduced monthly
40-18 amount, if any, will be paid for life after such age. The purpose
40-19 of this adjustment is to enable the member to receive from this
40-20 plan and under the Social Security Act an aggregate income in
40-21 approximately a level amount for life. <Such adjusted payments
40-22 shall be the actuarial equivalent of the pension otherwise payable
40-23 to such member.>
40-24 (6) Option VI. 66-2/3 Percent Joint and
40-25 Survivor/Level Income Option. If payment of a retirement allowance
40-26 <benefit> commences prior to the earliest age at which the member
40-27 could become eligible for an old age insurance benefit under the
41-1 Social Security Act, the member may elect that the amount of the
41-2 monthly payments be adjusted so that an increased monthly amount
41-3 will be paid prior to such age and a reduced monthly amount will be
41-4 paid for life after such age. The purpose of this adjustment is to
41-5 enable the member to receive from this plan and under the Social
41-6 Security Act an aggregate income in approximately a level amount
41-7 for life. Option VI provides that if <If> the member's death
41-8 occurs after age 62, two-thirds of the monthly annuity the member
41-9 was receiving at the time of the member's death shall be continued
41-10 throughout the life of and be paid to such person as the member
41-11 shall <irrevocably> designate before the member's actual retirement
41-12 date. If the member's death occurs before age 62, two-thirds of
41-13 the monthly annuity the member was receiving at the time of
41-14 member's death shall be paid to such person as the member shall
41-15 <irrevocably> designate before the member's actual retirement date
41-16 through the end of the month when the member would have reached age
41-17 62. The monthly annuity being paid to such person as the member
41-18 shall <irrevocably> designate before the member's actual retirement
41-19 date will be reduced at the end of the month following the month in
41-20 which the member would have reached age 62 to two-thirds of the
41-21 reduced benefit the member would have begun to receive at age 62.
41-22 (7) Option VII. 15-Year Certain and Life Annuity.
41-23 This option is a reduced annuity payable to the member for life.
41-24 In the event of the member's death before 180 monthly payments have
41-25 been made, the remainder of the 180 payments shall be paid <are
41-26 payable> to the member's beneficiary or, if there is no
41-27 beneficiary, to the member's estate.
42-1 (8) Option VIII. Equivalent Benefit Plan. If a
42-2 member requests in writing, any <Any> other form of benefit or
42-3 benefits may be paid either to the member or to such person or
42-4 persons as the member shall designate before the member's actual
42-5 retirement date <in writing>, provided that the benefit plan
42-6 requested by the member is certified by the actuary for the system
42-7 to be the actuarial equivalent of the life annuity with guaranteed
42-8 refund of the retired member's accumulated deposits. If, on the
42-9 death of the member and all other persons entitled to receive
42-10 payments under an optional benefit, the member's accumulated
42-11 deposits as of the member's actual retirement date exceed the sum
42-12 of all payments made under that optional benefit, that excess shall
42-13 be paid in one lump sum to the member's beneficiary.
42-14 (g)(1) For purposes of Subsection (f) of this section,
42-15 designation of a beneficiary must be in writing. If a member has
42-16 chosen Option I, II, III, IV, VI, or VIII, the member's designation
42-17 of a beneficiary may not be revoked after a member retires, and any
42-18 attempted revocation of a designation for those options is void.
42-19 If the member is married, spousal consent is required for the
42-20 member to select an optional benefit other than Option I, II, III,
42-21 IV, or VI. At any time before retirement, a member may file with
42-22 the board a written statement designating one or more persons to be
42-23 entitled to receive as beneficiary the reduced annuity payable
42-24 under one of the optional benefits. If a married member designates
42-25 as a beneficiary any person other than the member's spouse, the
42-26 member's spouse must consent in writing to the beneficiary
42-27 designation, and the beneficiary designation may not be changed
43-1 without spousal consent, unless the consent of the spouse expressly
43-2 permits designations by the member without the requirement of
43-3 further consent by the spouse. The spouse's consent is irrevocable
43-4 and must acknowledge the effect of the designation and be witnessed
43-5 by a board employee or notary public. Spousal consent is not
43-6 required if it is established to the satisfaction of the board that
43-7 the required consent cannot be obtained because there is no spouse,
43-8 the spouse cannot be located, or other circumstances exist as
43-9 prescribed by United States Treasury regulations. Notwithstanding
43-10 other provisions of this subdivision, the option election or
43-11 beneficiary designation made by a member and consented to by the
43-12 member's spouse may be revoked by the member in writing without
43-13 consent of the spouse at any time before retirement. The number
43-14 of revocations is not limited. A former spouse's waiver or consent
43-15 is not binding on a new spouse. An option selection becomes
43-16 effective on the member's actual retirement date. The member
43-17 retains the right to change the option selected or the beneficiary
43-18 designated until the member's actual retirement date, subject to
43-19 this subsection.
43-20 (2) After filing the written statement selecting one
43-21 of the optional benefits, the member may continue in employment and
43-22 retire any time after the member becomes eligible by filing a
43-23 written application for retirement. If the member dies before
43-24 retirement but after becoming eligible for retirement, the
43-25 effective date of the member's retirement is the last day of the
43-26 calendar month of death, and the benefit is computed on the
43-27 optional benefit selected as if the member had retired on that
44-1 date.
44-2 (h) <(i)> The amount of the annuity payment in Options I,
44-3 II, III, IV, V, VI, VII, and VIII shall be determined without
44-4 considering the minimum cumulative payment of the retired member's
44-5 <employee's> accumulated deposits since that refund feature will
44-6 stay in effect as indicated herein.
44-7 (i) If a member who is eligible for retirement dies without
44-8 having filed a written selection of one of the enumerated options
44-9 and if the member leaves a surviving spouse, that spouse may select
44-10 the optional benefit in the same manner as if the member had made
44-11 the selection or may select a lump-sum payment equal to the
44-12 deceased member's accumulated deposits plus an equivalent amount
44-13 from Fund No. 2. If the member does not leave a surviving spouse,
44-14 the member's designated beneficiary is entitled to elect either
44-15 Option VII, to become effective at the beginning of the calendar
44-16 month after the month in which the death of the member occurs, or
44-17 the sum of a lump-sum payment equal to the deceased member's
44-18 accumulated deposits plus an equivalent amount from Fund No. 2. If
44-19 the surviving spouse dies before the spouse receives retirement
44-20 allowances equal to the amount of the member's accumulated deposits
44-21 on the date of the member's death, the excess of the accumulated
44-22 deposits over the retirement allowances paid shall be distributed
44-23 in one lump sum to the member's estate.
44-24 (j) <On separation from the service of the city by
44-25 resignation or dismissal before retirement, the member shall
44-26 receive the amount of the accumulated deposits standing to the
44-27 member's credit in one lump sum. But, if a member has had at least
45-1 five years of service with the city at the time the employee's
45-2 service is terminated, the member shall have a vested right to
45-3 elect to leave the member's accumulated deposits with the
45-4 retirement system until such time as the member has applied in
45-5 writing for benefit payments and has attained an age at which the
45-6 member becomes entitled to receive monthly retirement benefit
45-7 payments under this Act, at which time the member shall be entitled
45-8 to a retirement allowance equal to that which the member would have
45-9 received if the member had attained the age at the time of
45-10 termination of the member's service which the member had attained
45-11 at the time of making application.>
45-12 <(k)> In the event of death of a member who is ineligible
45-13 for retirement, the member's accumulated deposits <standing to the
45-14 member's credit in Fund No. 1> and an equivalent amount from Fund
45-15 No. 2 shall be paid <payable> in a lump sum to the member's
45-16 beneficiary <or, if there is no beneficiary, to the member's
45-17 estate, unless the member shall have directed otherwise in writing,
45-18 duly acknowledged and filed with the board>.
45-19 (k)(1) If a prior demand for withdrawal of accumulated
45-20 deposits has not been made within seven <(l) Seven> years after
45-21 termination of employment with the city, a hospital authority, or
45-22 the board <cessation of service> of a member with less than five
45-23 years' of creditable service, the member's <if no previous demand
45-24 has been made, any> accumulated deposits <standing to the member's
45-25 credit> shall be returned to the member or the member's
45-26 beneficiary. Except as provided by Subdivision (2) of this
45-27 subsection, if <estate. If> the system is unable to locate the
46-1 member or the member's beneficiary <estate>, the member's
46-2 accumulated deposits shall thereafter be forfeited and become a
46-3 part of Fund No. 2.
46-4 (2) If the member or member's beneficiary later
46-5 appears and requests in writing the payment of the member's
46-6 accumulated deposits, the system shall:
46-7 (A) reinstate the account of the member;
46-8 (B) credit to that account an amount equal to
46-9 all of the accumulated deposits previously standing to the member's
46-10 credit plus interest that would have been earned on those
46-11 accumulated deposits if the funds had remained in Fund No. 1
46-12 between the date of forfeiture to Fund No. 2 and the date of
46-13 reinstatement of the member's account;
46-14 (C) fund the account from the monies in Fund No.
46-15 2; and
46-16 (D) make all necessary payments to the member or
46-17 member's beneficiary from the reinstated account.
46-18 (3) On payment of the accumulated deposits under this
46-19 subsection, plus any interest on those deposits to which the member
46-20 may be entitled, to the member or member's beneficiary in
46-21 accordance with this subsection, the terminated employee ceases to
46-22 be a member of the system.
46-23 (l) <(m)> In the event of the death of a member receiving a
46-24 retirement allowance, the sum of $2,000 shall be payable in a lump
46-25 sum to the member's beneficiary <or, if there is no beneficiary, to
46-26 the member's estate, unless the member shall have directed
46-27 otherwise in writing, duly acknowledged and filed with the board>.
47-1 (m) <(n)(1) Within one year prior to the date on which a
47-2 member shall become eligible for retirement under any provisions of
47-3 this Act, the member may file with the board a written statement
47-4 selecting one of the optional benefits authorized by this Act,
47-5 designating the person or beneficiary to be entitled to receive the
47-6 reduced annuity payable under one of the optional benefits. If the
47-7 member is married, spousal consent is required for the member to
47-8 select an optional benefit other than Option I, II, III, IV, or VI.
47-9 An option selection shall become effective at the member's date of
47-10 eligibility to retire. The member shall retain the right to change
47-11 the option selected until his retirement date.>
47-12 <(2) After filing the written statement selecting one
47-13 of the optional benefits, the member may continue in service and
47-14 thereafter retire any time after eligibility by filing a written
47-15 application for retirement. If the member dies before retirement
47-16 but after becoming eligible for retirement, the effective date of
47-17 the member's retirement shall be the last day of the calendar month
47-18 of death, and the benefit shall be calculated as if the member had
47-19 retired as of that date on the optional benefit selected.>
47-20 <(o) In the event a member who is eligible for retirement
47-21 dies without having filed a written selection of one of the above
47-22 enumerated options and if the member leaves a lawfully married
47-23 spouse surviving, then the surviving spouse of such member may
47-24 select the optional benefit in the same manner as if the member had
47-25 made the selection or may select a lump-sum payment equal to the
47-26 accumulated deposits standing to the member's credit in Fund No. 1
47-27 plus an equivalent amount from Fund No. 2. If the member leaves no
48-1 lawfully married spouse surviving, then the member's designated
48-2 beneficiary or, if there is no beneficiary, the executor or
48-3 administrator of the estate of the member is entitled to elect
48-4 either Option VII, 15-Year Certain and Life Annuity, effective at
48-5 the beginning of the calendar month succeeding that in which the
48-6 death of the member occurs, or a lump-sum payment equal to the
48-7 accumulated deposits standing to the member's credit in Fund No. 1
48-8 plus an equivalent amount from Fund No. 2. In the event of the
48-9 death of the lawfully married surviving spouse before having
48-10 received retirement allowances equal to the amount of the member's
48-11 accumulated deposits at the date of the member's death, the excess
48-12 of such accumulated deposits over the retirement allowances paid
48-13 shall be refunded in one sum to the member's estate.>
48-14 <(p)> When monthly survivor benefits are deemed payable as a
48-15 result of the death of a member before retirement, an additional
48-16 sum of $2,000 shall be payable as a death benefit to the member's
48-17 designated beneficiary <or, if there is no beneficiary, to the
48-18 member's estate>.
48-19 (n) <(q)> In the event of the death of the retired member
48-20 under any retirement option and the death of the beneficiary
48-21 <person irrevocably> designated by the retired member when either
48-22 Option I, Option II, Option III, Option IV, or Option VI is in
48-23 effect, before <monthly> retirement allowances have been received
48-24 that are equal or greater than the retired member's accumulated
48-25 deposits, then the member's estate will receive the excess of the
48-26 retired member's accumulated deposits over the retirement
48-27 allowances paid.
49-1 (o) Notwithstanding any contrary provision of this Act, the
49-2 distribution of a member's benefits, including benefits payable
49-3 after the member's death, made on or after January 1, 1985, shall
49-4 be made in accordance with the following requirements and shall
49-5 otherwise comply with 26 U.S.C. Section 401(a)(9) and its
49-6 subsequent amendments and regulations, including Regulation Section
49-7 1.401(a)(9)-2:
49-8 (1) A member's benefits shall be distributed to the
49-9 member, or the distribution of those benefits shall begin, not
49-10 later than April 1 of the calendar year after the calendar year in
49-11 which occurs the later of the date on which the member attains age
49-12 70-1/2 or the date on which the member's employment by the city,
49-13 hospital authority, or the board terminates.
49-14 (2) A member's benefits shall be distributed over a
49-15 period not exceeding the life of the member or the lives of the
49-16 member and the member's beneficiary or over a period not exceeding
49-17 the life expectancy of the member or the life expectancy of the
49-18 member and the member's beneficiary.
49-19 (3) If the distribution of a member's benefit has
49-20 begun and the member dies before the member's entire benefit is
49-21 distributed, the remaining portion of that benefit shall be
49-22 distributed at least as rapidly as under the form of benefit
49-23 selected as of the date of the member's death, adjusted as
49-24 necessary under this subsection.
49-25 (4) If a member dies before the distribution of the
49-26 member's benefit has begun, the member's death benefit shall be
49-27 distributed to the member's beneficiary within five years after the
50-1 date of the member's death. This five-year rule does not apply to
50-2 any portion of the deceased member's benefit that is payable to or
50-3 for the benefit of the member's surviving spouse. A benefit
50-4 payable to or for the benefit of the member's surviving spouse may
50-5 be distributed over the life of the spouse or over a period not
50-6 exceeding the life expectancy of the spouse, provided that payment
50-7 of the benefit begins not later than the date on which the deceased
50-8 member would have attained age 70-1/2. If the surviving spouse
50-9 dies before distributions to that spouse begin, the five-year rule
50-10 applies as if the spouse had been the member.
50-11 (5) The five-year rule does not apply to distributions
50-12 payable to a beneficiary over the life or life expectancy of the
50-13 beneficiary, provided that payment of the benefit begins not later
50-14 than the first anniversary of the date of the member's death.
50-15 (6) In applying the requirements of this subsection,
50-16 the life expectancy of the member and the member's beneficiary
50-17 shall be redetermined annually in accordance with regulations under
50-18 26 U.S.C. Section 401(a)(9) and its subsequent amendments.
50-19 (p) The board may adjust the terms of payment under any form
50-20 of benefit payment as long as the benefit as adjusted is the
50-21 actuarial equivalent of the benefit before adjustment.
50-22 SECTION 7. Section 8, Chapter 451, Acts of the 72nd
50-23 Legislature, Regular Session, 1991 (Article 6243n, Vernon's Texas
50-24 Civil Statutes), is amended to read as follows:
50-25 Sec. 8. Disability retirement. (a) Only
50-26 active-contributory members, inactive-contributory members, and
50-27 members on approved medical leave of absence <members who are
51-1 permanent full-time employees or who are eligible to participate in
51-2 the retirement fund or are contributing members or who work 30
51-3 hours or more per week> are eligible for consideration for
51-4 disability retirement. Such members may apply for disability
51-5 retirement at any date prior to their normal retirement date.
51-6 (b) If a member who is eligible for disability retirement
51-7 and who has <with> less than 10 years of creditable service has
51-8 become mentally or physically incapacitated for the performance of
51-9 employment duties as a direct result of injuries sustained
51-10 subsequent to the member's effective date of membership in the
51-11 retirement system, the member may apply for disability retirement.
51-12 Such application made by or on behalf of the injured member shall
51-13 show that the injury sustained:
51-14 (1) was by external and violent means;
51-15 (2) came as a direct and proximate result of the
51-16 performance of the member's <his or her> employment duties with the
51-17 city, a hospital authority, or the board <system>; and
51-18 (3) is likely to be permanent.
51-19 (c) On recommendation of the physician or physicians
51-20 appointed or selected by the board that an eligible <the> member's
51-21 incapacity is likely to be permanent and after considering any
51-22 additional evidence which the board deems relevant, the retirement
51-23 board shall <may> award the member a disability retirement
51-24 allowance <benefits>. The decision of the board is final.
51-25 (d) If a member who is eligible for disability retirement
51-26 and who has <with> more than 10 years of creditable service has
51-27 become mentally or physically incapacitated for the performance of
52-1 employment duties, the member may apply for disability retirement.
52-2 The application made on behalf of the disabled member shall show
52-3 that the incapacity is likely to be permanent. On recommendation
52-4 of the physician or physicians appointed or selected by the board
52-5 that the eligible member's incapacity is likely to be permanent
52-6 and after considering any additional evidence which the board deems
52-7 relevant, the retirement board shall <may> award such member a
52-8 disability retirement allowance <benefits>. The decision of the
52-9 board is final.
52-10 (e) On award of a disability retirement allowance
52-11 <benefits>, the member shall receive a disability retirement
52-12 allowance, beginning on the last day of the month after the month
52-13 in which the member became disabled, which shall be computed in the
52-14 same manner that a retirement allowance would be computed at the
52-15 member's normal retirement date, based on compensation and
52-16 creditable service at the date of disability retirement, without
52-17 reduction for early retirement. The disabled member may choose to
52-18 receive a life annuity (modified cash refund) or a benefit as <The
52-19 options allowed are life annuity or its actuarial equivalent
52-20 payable in the form> described by Section 7(f) of this Act as
52-21 Option I, Option II, Option III, Option IV, or Option VII.
52-22 (f) A member receiving a disability retirement allowance
52-23 will be required to file an annual report with <to> the retirement
52-24 board concerning continued proof of disability. The report shall
52-25 include:
52-26 (1) a current statement of the member's physical or
52-27 mental condition, signed by the member's attending physician; and
53-1 (2) a statement of all employment activities pursued
53-2 in the preceding year.
53-3 (g) The board may verify all information submitted in this
53-4 report. Each calendar year, a <A> disabled member shall file an
53-5 annual report not later than the 60th day after <on> the
53-6 anniversary date of the member's disability retirement<; the annual
53-7 report shall be filed no later than 60 days following the due
53-8 date>.
53-9 (h) The pension officer will be responsible for a yearly
53-10 report to the retirement board listing those disabled members who
53-11 should be examined. The retirement board shall have the right to
53-12 order an examination of any person on disability retirement once
53-13 each year until the member reaches the age of 62 years. If the
53-14 member refuses to submit to an examination by a physician or
53-15 physicians appointed by the board or if the member refuses to
53-16 submit an annual report in accordance with Subsection (g) of this
53-17 section concerning continued proof of disability, the disability
53-18 retirement allowance shall be discontinued until such refusal is
53-19 withdrawn and the member has submitted to an examination or has
53-20 submitted an annual report. Should such refusal continue for a
53-21 period of one year, the disability retirement allowance may be
53-22 revoked by the board. If a member's disability retirement
53-23 allowance has been revoked, the board may reinstate the member's
53-24 disability retirement allowance on the member's full performance of
53-25 and compliance with all requirements of this section and the
53-26 board's determination that the member's disability is continuing.
53-27 (i) If after investigation of the disabled member's
54-1 activities or if the annual medical examination shows that the
54-2 member is no longer physically or mentally incapacitated for the
54-3 purposes of the performance of employment duties or that such
54-4 member is engaged in or is able to engage in substantial gainful
54-5 occupation, as defined by Social Security disability income
54-6 guidelines, for which he or she is reasonably suited by education,
54-7 training, or experience, the board may discontinue the disability
54-8 retirement allowance. If the disability retirement allowance of a
54-9 member who had less than 10 years of creditable service is
54-10 discontinued under this subsection or Subsection (h) of this
54-11 section and not reinstated, and the member is not reemployed by the
54-12 city, a hospital authority, or the board, the member is entitled to
54-13 any amount by which the sum of the member's accumulated deposits as
54-14 of the date of disability retirement exceeds the sum of all
54-15 disability retirement benefits paid to the member by the system.
54-16 If the disability retirement allowance of a member who had 10 years
54-17 or more of creditable service is discontinued under this subsection
54-18 or Subsection (h) of this section and not reinstated, and the
54-19 member is not reemployed by the city, a hospital authority, or the
54-20 board, the member may withdraw any amount by which the sum of the
54-21 member's accumulated deposits as of the date of the disability
54-22 retirement exceeds the sum of all disability retirement benefits
54-23 paid to the member by the system. If the member does not withdraw
54-24 the excess, the member is entitled to a life annuity (modified cash
54-25 refund) beginning on the first day of the month after the month in
54-26 which the member's normal retirement date occurs. <If the member
54-27 who received a disability allowance with less than 10 years
55-1 creditable service has his or her allowance discontinued pursuant
55-2 to this provision, any remaining balance of Fund No. 1 will be
55-3 refunded to the member. If the member who received a disability
55-4 allowance after 10 years creditable service has his or her
55-5 allowance discontinued pursuant to this provision, his or her
55-6 contributions shall remain in the system and he or she shall be
55-7 considered a vested-noncontributory member.>
55-8 (j) If a disabled member returns to active employment
55-9 service with the city, a hospital authority, or the board <system>,
55-10 the disability retirement allowance shall cease. If the person is
55-11 reemployed as a regular full-time employee, the <Such> person shall
55-12 be reinstated as an active-contributory <active> member of the
55-13 system and shall comply with all requirements of this Act. If
55-14 reinstated as an active-contributory member, membership<.
55-15 Membership> service credits accumulated prior to disability shall
55-16 be restored to the full amount standing to the member's credit as
55-17 of the date the board found the member <him or her> eligible for
55-18 disability retirement, and any<. Any> prior service credit shall
55-19 be restored in full. The member is not required to reimburse the
55-20 fund for any disability retirement allowance amounts received by
55-21 the member.
55-22 SECTION 8. Section 9, Chapter 451, Acts of the 72nd
55-23 Legislature, Regular Session, 1991 (Article 6243n, Vernon's Texas
55-24 Civil Statutes), is amended to read as follows:
55-25 Sec. 9. Method of financing. (a) Each active-contributory
55-26 member shall make deposits <Deposits by the members> to the
55-27 retirement system <shall be made> at a rate equal to <based on>
56-1 seven percent of the member's compensation, pay, or salary, <basic
56-2 hourly earnings of each member> exclusive of overtime, incentive,
56-3 or terminal pay, and disregarding compensation, pay, or salary in
56-4 any month in excess of $16,666. <Deposits shall be made so long as
56-5 a member remains employed by the city or the system.> Deposits
56-6 shall be made by payroll deduction. If a regular full-time
56-7 employee works at least 75 percent of a normal 40-hour work week
56-8 but less than the full 40 hours, the employee shall make deposits
56-9 as though working a normal 40-hour work week even though the rate
56-10 of contribution may exceed seven percent of the employee's actual
56-11 compensation, pay, or salary, and the employee's average final
56-12 compensation shall be computed on the basis of the compensation,
56-13 pay, or salary for a normal 40-hour work week. No deposits may be
56-14 made nor membership service credit received for periods during
56-15 which an employee's authorized normal work week is less than 75
56-16 percent of a normal 40-hour work week. A person who is eligible
56-17 for inactive-contributory membership status and who chooses to be
56-18 an inactive-contributory member shall make deposits to the
56-19 retirement system biweekly in an amount that is equal to the amount
56-20 of the member's deposit for the last complete biweekly pay period
56-21 that the member was employed by the city, a hospital authority, or
56-22 the board. The members, by a majority vote in favor of an increase
56-23 in contributions above seven percent, may <shall> increase each
56-24 member's contributions above seven percent in whatever amount the
56-25 pension board recommends. The city shall contribute amounts equal
56-26 to seven percent of the compensation, pay, or salary <basic hourly
56-27 earnings> of each active-contributory member and each
57-1 inactive-contributory member employed by the city, exclusive of
57-2 overtime, incentive, or terminal pay, and disregarding
57-3 compensation, pay, or salary in any month in excess of $16,666. If
57-4 a regular full-time employee of the city works at least 75 percent
57-5 of a normal 40-hour work week but less than the full 40 hours, the
57-6 city shall make contributions for that employee as though that
57-7 employee works a normal 40-hour work week even though the rate of
57-8 contribution may exceed seven percent of that employee's actual
57-9 compensation, pay, or salary. The city council may authorize the
57-10 city to make additional contributions to the system in whatever
57-11 amount the city council may determine. The board shall pay from
57-12 the fund contributions in amounts equal to seven percent of the
57-13 compensation, pay, or salary of each active-contributory member and
57-14 each inactive-contributory member employed by the board, exclusive
57-15 of overtime, incentive, or terminal pay, disregarding compensation,
57-16 pay, or salary in any month in excess of $16,666. If a regular
57-17 full-time employee of the board works at least 75 percent of a
57-18 normal 40-hour work week but less than the full 40 hours, the board
57-19 shall make contributions for the employee as though the employee
57-20 works a normal 40-hour work week even though the rate of
57-21 contribution may exceed seven percent of the employee's actual
57-22 compensation, pay, or salary. If the city council authorizes
57-23 additional contributions to the system by the city for city
57-24 employees, the board may increase the contributions for the board
57-25 employees by the same percentage. Each hospital authority shall
57-26 contribute amounts equal to seven percent of the compensation, pay,
57-27 or salary of each active-contributory member and each
58-1 inactive-contributory member employed by the hospital authority,
58-2 exclusive of overtime, incentive, or terminal pay, disregarding
58-3 compensation, pay, or salary in any month in excess of $16,666. If
58-4 a regular full-time employee of a hospital authority works at least
58-5 75 percent of a normal 40-hour work week but less than the full 40
58-6 hours, the hospital authority shall make contributions for that
58-7 employee as though that employee works a normal 40-hour work week
58-8 even though the rate of contribution may exceed seven percent of
58-9 that employee's actual compensation, pay, or salary. If the city
58-10 council authorizes additional contributions to the system by the
58-11 city for city employees, each hospital authority may increase the
58-12 contributions for the hospital authority employees by the same
58-13 percentage. Contributions by the city, a hospital authority, and
58-14 the board shall be made each pay period.
58-15 (b) In addition to the contributions by the city required by
58-16 Subsection (a) of this section, the city shall contribute to the
58-17 retirement fund each month two-thirds of such amounts <each month>
58-18 as are <may be> required for the payment of prior service pensions
58-19 <for service and disability retirement benefits> that are <may
58-20 become> payable during that month, and <under the provisions of the
58-21 retirement system, except that> one-third of each prior service
58-22 pension payable that month <payment> shall be made from Fund No. 2.
58-23 (c) Contributions by the city shall be paid to the
58-24 retirement system after appropriation by the city council.
58-25 (d) Expenses for <involved in> administration and operation
58-26 of the retirement system that are approved by the board shall be
58-27 paid by the board from funds of the retirement system <subject to
59-1 approval of the board>. Such expenses shall include salaries of
59-2 board employees and fees for actuarial services, legal counsel
59-3 services, physician services, accountant services, annual audits,
59-4 investment manager services, investment consultant services,
59-5 preparation of annual reports, and staff assistance. <Other
59-6 services and expenses may be authorized and paid for by the board
59-7 as deemed necessary for the proper administration of the system.>
59-8 (e) The city shall pick up the city employee contributions
59-9 to the fund. The board <system> shall pick up the board employee
59-10 contributions <administrative staff's contribution> to the fund.
59-11 Each hospital authority shall pick up hospital authority employee
59-12 contributions to the fund. Member deposits <contributions> will be
59-13 picked up by a reduction in their monetary compensation.
59-14 Contributions picked up shall be treated as employer contributions
59-15 in accordance with the Internal Revenue Code of 1986 (26 U.S.C.
59-16 Section 414(h)(2)) for the purpose of determining tax treatment of
59-17 the amounts under the Internal Revenue Code of 1986. These
59-18 contributions are not includable in the gross income of the
59-19 employee until such time as they are distributed or made available
59-20 to the employee. Employee deposits <contributions> picked up as
59-21 provided by this subsection shall be credited <deposited> to the
59-22 individual accumulated deposits account of each affected employee
59-23 and shall be treated as compensation of employees for all other
59-24 purposes of this statute and for the purpose of determining
59-25 contributions to social security. The provisions of this
59-26 subsection shall remain in effect as long as the plan covering
59-27 employees of the city is a qualified retirement plan under Section
60-1 401(a) of the Internal Revenue Code of 1986 (26 U.S.C. Section
60-2 401(a)), and its related trust is tax exempt under Section 501(a)
60-3 of the Internal Revenue Code of 1986 (26 U.S.C. Section 501(a)).
60-4 (f) Before the satisfaction of all liabilities incurred with
60-5 respect to members and their beneficiaries under this Act, the
60-6 corpus or income of the fund may not be used for, or diverted to,
60-7 purposes other than for the exclusive benefit of the members and
60-8 their beneficiaries.
60-9 SECTION 9. Section 10, Chapter 451, Acts of the 72nd
60-10 Legislature, Regular Session, 1991 (Article 6243n, Vernon's Texas
60-11 Civil Statutes), is amended to read as follows:
60-12 Sec. 10. Investments of the board. (a) The retirement
60-13 board shall be the trustee of the funds of the retirement system
60-14 and shall have full power in its sole discretion to invest and
60-15 reinvest, alter, and change the form of investment of the funds.
60-16 The retirement board shall invest the funds in whatever instrument
60-17 or investments the board considers prudent. In making investments
60-18 for the funds, the retirement board shall discharge its duties:
60-19 (1) for the exclusive purposes of:
60-20 (A) providing benefits to members and their
60-21 beneficiaries; and
60-22 (B) defraying reasonable expenses of
60-23 administering the funds;
60-24 (2) with the care, skill, prudence, and diligence
60-25 under the circumstances then prevailing that a prudent person
60-26 acting in a like capacity and familiar with such matters would use
60-27 in the conduct of an enterprise of a like character and with like
61-1 aims;
61-2 (3) by diversifying the investments of the funds to
61-3 minimize the risk of large losses, unless under the circumstances
61-4 it is clearly prudent not to do so; and
61-5 (4) in accordance with the laws, documents, and
61-6 instruments governing the funds.
61-7 (b) A member of the board is not liable for any losses
61-8 incurred in the investment of the fund in accordance with this
61-9 section.
61-10 (c) No member of the board and no employee of the board,
61-11 except as herein provided, shall have any interest, directly or
61-12 indirectly, in the funds or receive any pay or emolument for his or
61-13 her services. No member of the board or employee thereof shall,
61-14 directly or indirectly, for himself or herself or as an agent, in
61-15 any manner use the funds or deposits of the retirement system
61-16 except to make such current and necessary payments as are
61-17 authorized by the board, nor shall any member or employee of the
61-18 board become an endorser or surety or in any manner an obligator
61-19 for money loaned by or borrowed from the board.
61-20 (d) Subject to the exceptions provided by this subsection,
61-21 <(c) None of> the funds or money mentioned in this Act are not
61-22 assignable and are not<. None of the funds or money mentioned in
61-23 this Act are> subject to execution, levy, attachment, garnishment,
61-24 the operation of bankruptcy or insolvency law, or any other process
61-25 of law whatsoever. This subsection does not apply to a qualified
61-26 domestic relations order. The board shall establish a written
61-27 procedure to determine the qualified status of domestic relations
62-1 orders and to administer distributions under those orders. To the
62-2 extent necessary to authorize distributions pursuant to a qualified
62-3 domestic relations order, a former spouse of a member will be
62-4 treated as the spouse or surviving spouse of the member.
62-5 (e) Subject to the exceptions provided by this subsection,
62-6 the <(d) The> right of a member to a pension, an annuity, a
62-7 disability retirement allowance, or a retirement allowance, to the
62-8 return of accumulated deposits <contributions>, the pension,
62-9 annuity, or retirement allowance itself, any optional benefit or
62-10 death benefits, any other right accrued or accruing to any person
62-11 under the provisions of this Act are unassignable and are not
62-12 subject to execution, levy, attachment, garnishment, the operation
62-13 of bankruptcy or insolvency law, or any other process of law
62-14 whatsoever. This subsection does not apply to a qualified domestic
62-15 relations order.
62-16 (f) If the board makes an election to have Subchapters A and
62-17 C of Chapter 804, Government Code, and their subsequent amendments,
62-18 apply to the system, the death of an alternate payee, as defined by
62-19 Section 804.001, Government Code, and its subsequent amendments, or
62-20 the death of a member's spouse terminates any interest of the
62-21 alternate payee or spouse that would otherwise exist under this
62-22 Act, except an interest accrued by that person as a member.
62-23 SECTION 10. Section 11, Chapter 451, Acts of the 72nd
62-24 Legislature, Regular Session, 1991 (Article 6243n, Vernon's Texas
62-25 Civil Statutes), is amended to read as follows:
62-26 Sec. 11. Miscellaneous. (a) A person who with intent to
62-27 deceive makes any statement or report required under this Act which
63-1 is untrue or falsifies or permits to be falsified any record or
63-2 records of the retirement system shall forfeit any office or rights
63-3 held by the person under the system, and such deception,
63-4 falsification, or acquiescence in falsification is deemed a Class B
63-5 misdemeanor.
63-6 (b) If any change or error in the records of the retirement
63-7 system is discovered or results in any member, <retired member,>
63-8 surviving spouse, or beneficiary receiving from the retirement
63-9 system more or less than the member, <retired member,> surviving
63-10 spouse, or beneficiary would have been entitled to receive had the
63-11 records been correct, the retirement board shall have the power to
63-12 correct such error and as far as possible to adjust the payments in
63-13 such a manner that the actuarial equivalent of the benefits to
63-14 which the member, <retired member,> surviving spouse, or
63-15 beneficiary was correctly entitled shall be paid.
63-16 (c) On the full termination of the retirement and pensioning
63-17 system, or on the complete discontinuance of contributions by the
63-18 city, all hospital authorities, and the board under this Act, the
63-19 retirement allowance of a member who is employed by the city, a
63-20 hospital authority, or the board on the date of termination is
63-21 determined by reference to the member's average final compensation
63-22 and creditable service determined as of the date of termination of
63-23 the system or the date of discontinuance of deposits as if the
63-24 member had attained normal retirement age on that date. This
63-25 subsection does not accelerate the date on which the payment of
63-26 that benefit would otherwise begin.
63-27 (d) A member who is entitled to a benefit, including a
64-1 benefit consisting solely of a distribution of the member's
64-2 accumulated deposits, from the system may instruct the system to
64-3 pay the single lump-sum actuarial equivalent of that benefit
64-4 directly to:
64-5 (1) another trust forming part of a pension,
64-6 profit-sharing, or stock bonus plan maintained by that member's new
64-7 employer and represented by that employer in writing as meeting the
64-8 requirements of 26 U.S.C. Section 401(a) and its subsequent
64-9 amendments, subject to the acceptance by the trust to which those
64-10 transfers are made of those transfers; or
64-11 (2) an eligible transferee plan in accordance with the
64-12 federal Unemployment Compensation Amendments of 1992 (Pub. L. No.
64-13 102-318) and its subsequent amendments governing direct rollovers
64-14 of eligible rollover distributions from qualified retirement plans.
64-15 (e) This Act does not grant a contract of employment between
64-16 a member and the city, a hospital authority, or the board.
64-17 SECTION 11. (a) Retirement allowances being paid by the
64-18 retirement and pensioning system created by Chapter 451, Acts of
64-19 the 72nd Legislature, Regular Session, 1991 (Article 6243n,
64-20 Vernon's Texas Civil Statutes), to members of the retirement
64-21 system, or to the beneficiaries of those members, who retired
64-22 before December 1, 1989, are increased beginning with the payments
64-23 due at the end of September in 1993.
64-24 (b) The amount of the increase for a member, or the
64-25 beneficiary of the member, is by a percentage equal to:
64-26 (1) 2.2 percent divided by the retirement formula in
64-27 effect on the date of the member's retirement;
65-1 (2) minus one; and
65-2 (3) multiplied by 100.
65-3 SECTION 12. (a) The changes in law made by this Act to
65-4 Section 5(e), Chapter 451, Acts of the 72nd Legislature, Regular
65-5 Session, 1991 (Article 6243n, Vernon's Texas Civil Statutes), as
65-6 redesignated by this Act, permit a member who, before July 1, 1993,
65-7 reinstated any portion of the member's membership service or prior
65-8 service under a city ordinance that was in effect before July 1,
65-9 1993, to reinstate any membership service or prior service to which
65-10 the member was not entitled to reinstate under that city ordinance.
65-11 (b) The changes in law made by this Act to Section 7,
65-12 Chapter 451, Acts of the 72nd Legislature, Regular Session, 1991
65-13 (Article 6243n, Vernon's Texas Civil Statutes), apply only to an
65-14 option election or beneficiary designation made on or after the
65-15 effective date of this Act. An option election or beneficiary
65-16 designation made before the effective date of this Act is governed
65-17 by the law in effect at the time the election or designation was
65-18 made, and that law is continued in effect for this purpose only.
65-19 SECTION 13. This Act takes effect July 1, 1993.
65-20 SECTION 14. The importance of this legislation and the
65-21 crowded condition of the calendars in both houses create an
65-22 emergency and an imperative public necessity that the
65-23 constitutional rule requiring bills to be read on three several
65-24 days in each house be suspended, and this rule is hereby suspended,
65-25 and that this Act take effect and be in force according to its
65-26 terms, and it is so enacted.