H.B. No. 1503
1-1 AN ACT
1-2 relating to participation in, administration of, and benefits from
1-3 certain municipal retirement systems.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Chapter 358, Acts of the 48th Legislature,
1-6 Regular Session, 1943 (Article 6243g, Vernon's Texas Civil
1-7 Statutes), is amended by adding Sections 3A and 3B to read as
1-8 follows:
1-9 Sec. 3A. (a) A person who, on or after a date determined
1-10 by the Pension Board, becomes a member of, or resumes membership
1-11 in, the Pension System as an employee or elected official of a city
1-12 to which this Act applies shall elect:
1-13 (1) by submission of a signed and notarized form, to
1-14 become a Group A member and contribute a portion of the person's
1-15 salary to the Pension Fund as required by this Act; or
1-16 (2) to become a Group B member and make no
1-17 contributions to the Pension Fund.
1-18 (b) The date determined for the beginning of elections under
1-19 this section may not be before January 1, 1996.
1-20 Sec. 3B. (a) Each member of the Pension System as an
1-21 employee or elected official of a city to which this Act applies
1-22 shall make a one-time, irrevocable election on a date determined by
1-23 the Pension Board:
1-24 (1) to retain membership in the group of which the
2-1 employee or official is currently a member;
2-2 (2) to change membership from Group A to Group B and
2-3 receive a refund of contributions, without interest, made by the
2-4 person to Group A; or
2-5 (3) to change membership from Group B to Group A and
2-6 comply with the requirements of Subsection (b) of this section.
2-7 (b) A person who makes the election provided by Subsection
2-8 (a)(3) of this section must pay into the Pension Fund all
2-9 contributions that would have been deducted as member contributions
2-10 to Group A during the period that the person was a Group B member,
2-11 as computed under Section 5(j) of this Act, including required
2-12 interest. Payments of these amounts must be completed within the
2-13 earliest of the date of the member's termination of employment or
2-14 term in office, the date of the member's retirement or death, or
2-15 the fifth anniversary of the date of the member's election under
2-16 this section to become a Group A member. If the payments are not
2-17 completed within this period, the member or the member's estate may
2-18 either make an immediate payment of the balance due or receive a
2-19 refund, without interest, of the member's contributions to Group A.
2-20 If a refund is paid under this subsection, the member is considered
2-21 to have been a Group B member during the period since the member's
2-22 election and, if applicable, resumes membership in Group B.
2-23 (c) The Pension Board shall prepare and distribute a
2-24 brochure explaining the election provided by this section. The
2-25 brochure must fully describe the benefit alternatives under both
2-26 Group A and Group B membership and be designed to provide
2-27 sufficient information for making the election. The Board shall
3-1 designate one or more persons to be available to provide additional
3-2 information about the election.
3-3 (d) An election under this section must be on a form
3-4 approved by the Pension Board and must be notarized on execution.
3-5 The form must include a statement that the member has read and
3-6 understood the information provided by the Board and understands
3-7 the consequences of the election.
3-8 (e) The date determined for the election under this section
3-9 may not be before January 1, 1996.
3-10 SECTION 2. Sections 5(a) and (h), Chapter 358, Acts of the
3-11 48th Legislature, Regular Session, 1943 (Article 6243g, Vernon's
3-12 Texas Civil Statutes), are amended to read as follows:
3-13 (a) There is hereby created a Pension Board of the Pension
3-14 System to receive, handle, control, manage, and disburse the
3-15 Pension Fund for the respective city and<,> in which Board there is
3-16 hereby vested the general administration, management and
3-17 responsibility for the proper and effective operation of the
3-18 Pension System. The Board shall be organized immediately after its
3-19 members have qualified and taken the oath of office and shall serve
3-20 without compensation.
3-21 (h) The Pension Board shall:
3-22 (1) adopt for the administration of the Pension Fund
3-23 written rules and guidelines not inconsistent with this Act;
3-24 (2) correct any defect, supply any omission, and
3-25 reconcile any inconsistency that may appear in this Act in a manner
3-26 and to the extent that the Board considers expedient for the
3-27 administration of this Act for the greatest benefit of all members;
4-1 and
4-2 (3) establish and maintain all records necessary or
4-3 appropriate for the proper administration of the Pension Fund. <No
4-4 moneys shall be paid out of the Pension Fund except by warrant,
4-5 check or draft signed by the Treasurer and countersigned by the
4-6 Secretary, upon an order by said Pension Board duly entered in the
4-7 minutes. Facsimile signatures may be authorized by the Board.
4-8 Provided, however, the Board may by contract with any bank which is
4-9 a depository for such Pension Fund authorize the bank to make
4-10 deductions from the Pension Fund's account with such bank in
4-11 connection with the purchase by the Board of authorized
4-12 investments.>
4-13 SECTION 3. Section 6, Chapter 358, Acts of the 48th
4-14 Legislature, Regular Session, 1943 (Article 6243g, Vernon's Texas
4-15 Civil Statutes), is amended to read as follows:
4-16 Sec. 6. The City Treasurer of any such city, or the person
4-17 discharging the duties of the City Treasurer, is hereby designated
4-18 as the Treasurer of said Pension Fund for said city and his
4-19 official bond to said city shall operate to cover his position of
4-20 Treasurer of said Pension Fund and his sureties shall be liable in
4-21 connection with the Treasurer's actions pertaining to such Fund as
4-22 fully as they are liable under the terms of said bond for the other
4-23 actions and conduct of said Treasurer. <All moneys of every kind
4-24 and character collected or to be collected for said Fund shall be
4-25 paid over to said Treasurer and shall be administered and paid out
4-26 only in accordance with the provisions of this Act.>
4-27 SECTION 4. Section 23(b), Chapter 358, Acts of the 48th
5-1 Legislature, Regular Session, 1943 (Article 6243g, Vernon's Texas
5-2 Civil Statutes), is amended to read as follows:
5-3 (b) A Group B member shall become eligible to receive a
5-4 normal <an early> pension if the member:
5-5 (1) has attained age fifty (50) and completed
5-6 twenty-five (25) or more years of credited service;
5-7 (2) has attained age fifty-five (55) and completed
5-8 twenty (20) or more years of credited service; or
5-9 (3) has attained age sixty (60) and completed ten (10)
5-10 or more years of credited service <after he has terminated
5-11 employment, beginning with the month when he has twenty (20) years
5-12 of credited service and has attained age fifty-five (55)>.
5-13 SECTION 5. Chapter 358, Acts of the 48th Legislature,
5-14 Regular Session, 1943 (Article 6243g, Vernon's Texas Civil
5-15 Statutes), is amended by adding Section 31A to read as follows:
5-16 Sec. 31A. (a) The Pension Board may pay a member or other
5-17 beneficiary, in lieu of any other benefit payable under this Act
5-18 and notwithstanding anything in this Act to the contrary, in a lump
5-19 sum the present value as a lump sum of any benefit payable to a
5-20 Group A or Group B member that is less than $10,000. If the lump
5-21 sum present value of the benefit is at least $3,500 but less than
5-22 $10,000, the Board may make a lump sum payment only on written
5-23 request by the member or other beneficiary. The Board shall make
5-24 any payments under this subsection as soon as practicable after a
5-25 member's termination of employment, death, divorce, or election to
5-26 receive a previously deferred pension.
5-27 (b) The Pension Board shall adopt actuarial assumptions,
6-1 including an interest rate, to be used in determining lump sum
6-2 present values and amounts distributable.
6-3 (c) If the Pension Board determines that available resources
6-4 in the Pension Fund are inadequate to make lump sum payments,
6-5 payments under this section will be paid monthly in amounts the
6-6 Board determines.
6-7 (d) Payments under this section may not be made for a
6-8 benefit that was being paid before September 1, 1995.
6-9 SECTION 6. Sections 23(d) and 24(b), Chapter 358, Acts of
6-10 the 48th Legislature, Regular Session, 1943 (Article 6243g,
6-11 Vernon's Texas Civil Statutes), are repealed.
6-12 SECTION 7. This Act takes effect September 1, 1995.
6-13 SECTION 8. The importance of this legislation and the
6-14 crowded condition of the calendars in both houses create an
6-15 emergency and an imperative public necessity that the
6-16 constitutional rule requiring bills to be read on three several
6-17 days in each house be suspended, and this rule is hereby suspended.