BILL ANALYSIS H.B. 1875 By: Turner, Sylvester May 2, 1995 Committee Report (Unamended) BACKGROUND There are currently two statutes which affect pensions of Houston Police officers. New employees are governed by 6243g-3, which is less favorable to those employees than the employees governed by 6243g-1. The main difference is the COLA (Cost of Living Increase) and when the COLA starts. Members of 6243g-1 begin receiving a compounded COLA upon retirement while members of 6243g-3 are entitled to receive a non-compounded COLA only after reaching age 55, even though they may retire after 20 years of service. This means that an officer who retires at age 45 after 20 years of service would not receive an inflation adjustment until age 55. PURPOSE Permits Houston Police officers to retire after 20 years of service and begin receiving a benefit that is adjusted annually for inflation. This adjustment is compounded through time. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1: Amends Section 24, Police Officers' Retirement Plan in certain cities (Article 6243g-3, V.T.C.S.), by deleting references relative to receiving a COLA beginning at age 55 and adding that the COLA will be compounded. SECTION 2: Emergency clause Committee on Pensions & Investments SUMMARY OF COMMITTEE ACTION HB 1875 was considered by the committee in a public hearing on May 1, 1995. Rep. Turner testified as the bill's author. The bill was reported favorably without amendment with the recommendation that it do pass and be printed and be sent to the Committee on Local & Consent Calendars, by a record vote of 7 ayes, 0 nays, 0 pnv & 2 absent.