1-1 By: Yarbrough (Senate Sponsor - Whitmire) H.B. No. 1503
1-2 (In the Senate - Received from the House April 21, 1995;
1-3 April 24, 1995, read first time and referred to Committee on
1-4 Intergovernmental Relations; April 27, 1995, reported favorably by
1-5 the following vote: Yeas 10, Nays 0; April 27, 1995, sent to
1-6 printer.)
1-7 A BILL TO BE ENTITLED
1-8 AN ACT
1-9 relating to participation in, administration of, and benefits from
1-10 certain municipal retirement systems.
1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12 SECTION 1. Chapter 358, Acts of the 48th Legislature,
1-13 Regular Session, 1943 (Article 6243g, Vernon's Texas Civil
1-14 Statutes), is amended by adding Sections 3A and 3B to read as
1-15 follows:
1-16 Sec. 3A. (a) A person who, on or after a date determined
1-17 by the Pension Board, becomes a member of, or resumes membership
1-18 in, the Pension System as an employee or elected official of a city
1-19 to which this Act applies shall elect:
1-20 (1) by submission of a signed and notarized form, to
1-21 become a Group A member and contribute a portion of the person's
1-22 salary to the Pension Fund as required by this Act; or
1-23 (2) to become a Group B member and make no
1-24 contributions to the Pension Fund.
1-25 (b) The date determined for the beginning of elections under
1-26 this section may not be before January 1, 1996.
1-27 Sec. 3B. (a) Each member of the Pension System as an
1-28 employee or elected official of a city to which this Act applies
1-29 shall make a one-time, irrevocable election on a date determined by
1-30 the Pension Board:
1-31 (1) to retain membership in the group of which the
1-32 employee or official is currently a member;
1-33 (2) to change membership from Group A to Group B and
1-34 receive a refund of contributions, without interest, made by the
1-35 person to Group A; or
1-36 (3) to change membership from Group B to Group A and
1-37 comply with the requirements of Subsection (b) of this section.
1-38 (b) A person who makes the election provided by Subsection
1-39 (a)(3) of this section must pay into the Pension Fund all
1-40 contributions that would have been deducted as member contributions
1-41 to Group A during the period that the person was a Group B member,
1-42 as computed under Section 5(j) of this Act, including required
1-43 interest. Payments of these amounts must be completed within the
1-44 earliest of the date of the member's termination of employment or
1-45 term in office, the date of the member's retirement or death, or
1-46 the fifth anniversary of the date of the member's election under
1-47 this section to become a Group A member. If the payments are not
1-48 completed within this period, the member or the member's estate may
1-49 either make an immediate payment of the balance due or receive a
1-50 refund, without interest, of the member's contributions to Group A.
1-51 If a refund is paid under this subsection, the member is considered
1-52 to have been a Group B member during the period since the member's
1-53 election and, if applicable, resumes membership in Group B.
1-54 (c) The Pension Board shall prepare and distribute a
1-55 brochure explaining the election provided by this section. The
1-56 brochure must fully describe the benefit alternatives under both
1-57 Group A and Group B membership and be designed to provide
1-58 sufficient information for making the election. The Board shall
1-59 designate one or more persons to be available to provide additional
1-60 information about the election.
1-61 (d) An election under this section must be on a form
1-62 approved by the Pension Board and must be notarized on execution.
1-63 The form must include a statement that the member has read and
1-64 understood the information provided by the Board and understands
1-65 the consequences of the election.
1-66 (e) The date determined for the election under this section
1-67 may not be before January 1, 1996.
1-68 SECTION 2. Sections 5(a) and (h), Chapter 358, Acts of the
2-1 48th Legislature, Regular Session, 1943 (Article 6243g, Vernon's
2-2 Texas Civil Statutes), are amended to read as follows:
2-3 (a) There is hereby created a Pension Board of the Pension
2-4 System to receive, handle, control, manage, and disburse the
2-5 Pension Fund for the respective city and<,> in which Board there is
2-6 hereby vested the general administration, management and
2-7 responsibility for the proper and effective operation of the
2-8 Pension System. The Board shall be organized immediately after its
2-9 members have qualified and taken the oath of office and shall serve
2-10 without compensation.
2-11 (h) The Pension Board shall:
2-12 (1) adopt for the administration of the Pension Fund
2-13 written rules and guidelines not inconsistent with this Act;
2-14 (2) correct any defect, supply any omission, and
2-15 reconcile any inconsistency that may appear in this Act in a manner
2-16 and to the extent that the Board considers expedient for the
2-17 administration of this Act for the greatest benefit of all members;
2-18 and
2-19 (3) establish and maintain all records necessary or
2-20 appropriate for the proper administration of the Pension Fund. <No
2-21 moneys shall be paid out of the Pension Fund except by warrant,
2-22 check or draft signed by the Treasurer and countersigned by the
2-23 Secretary, upon an order by said Pension Board duly entered in the
2-24 minutes. Facsimile signatures may be authorized by the Board.
2-25 Provided, however, the Board may by contract with any bank which is
2-26 a depository for such Pension Fund authorize the bank to make
2-27 deductions from the Pension Fund's account with such bank in
2-28 connection with the purchase by the Board of authorized
2-29 investments.>
2-30 SECTION 3. Section 6, Chapter 358, Acts of the 48th
2-31 Legislature, Regular Session, 1943 (Article 6243g, Vernon's Texas
2-32 Civil Statutes), is amended to read as follows:
2-33 Sec. 6. The City Treasurer of any such city, or the person
2-34 discharging the duties of the City Treasurer, is hereby designated
2-35 as the Treasurer of said Pension Fund for said city and his
2-36 official bond to said city shall operate to cover his position of
2-37 Treasurer of said Pension Fund and his sureties shall be liable in
2-38 connection with the Treasurer's actions pertaining to such Fund as
2-39 fully as they are liable under the terms of said bond for the other
2-40 actions and conduct of said Treasurer. <All moneys of every kind
2-41 and character collected or to be collected for said Fund shall be
2-42 paid over to said Treasurer and shall be administered and paid out
2-43 only in accordance with the provisions of this Act.>
2-44 SECTION 4. Section 23(b), Chapter 358, Acts of the 48th
2-45 Legislature, Regular Session, 1943 (Article 6243g, Vernon's Texas
2-46 Civil Statutes), is amended to read as follows:
2-47 (b) A Group B member shall become eligible to receive a
2-48 normal <an early> pension if the member:
2-49 (1) has attained age fifty (50) and completed
2-50 twenty-five (25) or more years of credited service;
2-51 (2) has attained age fifty-five (55) and completed
2-52 twenty (20) or more years of credited service; or
2-53 (3) has attained age sixty (60) and completed ten (10)
2-54 or more years of credited service <after he has terminated
2-55 employment, beginning with the month when he has twenty (20) years
2-56 of credited service and has attained age fifty-five (55)>.
2-57 SECTION 5. Chapter 358, Acts of the 48th Legislature,
2-58 Regular Session, 1943 (Article 6243g, Vernon's Texas Civil
2-59 Statutes), is amended by adding Section 31A to read as follows:
2-60 Sec. 31A. (a) The Pension Board may pay a member or other
2-61 beneficiary, in lieu of any other benefit payable under this Act
2-62 and notwithstanding anything in this Act to the contrary, in a lump
2-63 sum the present value as a lump sum of any benefit payable to a
2-64 Group A or Group B member that is less than $10,000. If the lump
2-65 sum present value of the benefit is at least $3,500 but less than
2-66 $10,000, the Board may make a lump sum payment only on written
2-67 request by the member or other beneficiary. The Board shall make
2-68 any payments under this subsection as soon as practicable after a
2-69 member's termination of employment, death, divorce, or election to
2-70 receive a previously deferred pension.
3-1 (b) The Pension Board shall adopt actuarial assumptions,
3-2 including an interest rate, to be used in determining lump sum
3-3 present values and amounts distributable.
3-4 (c) If the Pension Board determines that available resources
3-5 in the Pension Fund are inadequate to make lump sum payments,
3-6 payments under this section will be paid monthly in amounts the
3-7 Board determines.
3-8 (d) Payments under this section may not be made for a
3-9 benefit that was being paid before September 1, 1995.
3-10 SECTION 6. Sections 23(d) and 24(b), Chapter 358, Acts of
3-11 the 48th Legislature, Regular Session, 1943 (Article 6243g,
3-12 Vernon's Texas Civil Statutes), are repealed.
3-13 SECTION 7. This Act takes effect September 1, 1995.
3-14 SECTION 8. The importance of this legislation and the
3-15 crowded condition of the calendars in both houses create an
3-16 emergency and an imperative public necessity that the
3-17 constitutional rule requiring bills to be read on three several
3-18 days in each house be suspended, and this rule is hereby suspended.
3-19 * * * * *