By Greenberg, Naishtat, Maxey, Combs, Dukes H.B. No. 1699
74R3835 GCH-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to participation in, contributions to, and benefits and
1-3 administration of retirement systems for firefighters in certain
1-4 municipalities.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Chapter 183, Acts of the 64th Legislature,
1-7 Regular Session, 1975 (Article 6243e.1, Vernon's Texas Civil
1-8 Statutes), is amended to read as follows:
1-9 ARTICLE 1. GENERAL PROVISIONS
1-10 Sec. 1.01. APPLICABILITY. This Act applies only to a
1-11 municipality having a population of more than 450,000 and less than
1-12 500,000.
1-13 Sec. 1.02. DEFINITIONS. In this Act:
1-14 (1) "Accumulated contributions" means all sums of
1-15 money, including interest, in the individual account of a member or
1-16 former firefighter, as shown on the books and records of the fund.
1-17 (2) "Actuarial equivalent" means a benefit that, at
1-18 the time that it begins being paid, has the same present value as
1-19 the benefit it replaces, based on the recommendations of the
1-20 actuary.
1-21 (3) "Board of trustees" means the board of
1-22 firefighters relief and retirement fund trustees of the fund
1-23 existing pursuant to this Act.
1-24 (4) "Board's actuary" means the actuary employed under
2-1 Section 12.03 of this Act.
2-2 (5) "Compensation" means a firefighter's monthly
2-3 salary, excluding overtime pay, any temporary pay in higher
2-4 classifications, educational incentive pay, assignment pay,
2-5 Christmas Day bonus pay, and pay for automobile and clothing
2-6 allowances.
2-7 (6) "Dependent child" or "dependent children" means a
2-8 deceased member's unmarried children under the age of 22, other
2-9 than a child who has been determined by the board of trustees not
2-10 to have been dependent on the deceased member.
2-11 (7) "Fire department" means a regularly organized fire
2-12 department of a city to which this Act applies.
2-13 (8) "Firefighter" means a commissioned civil service
2-14 and Texas state-certified member of a fire department.
2-15 (9) "Fund" means the firefighters relief and
2-16 retirement fund existing pursuant to this Act.
2-17 (10) "Internal revenue code" means the Internal
2-18 Revenue Code of 1986.
2-19 (11) "Member" means any firefighter or retiree
2-20 included in a fund under this Act.
2-21 (12) "Retiree" means a person who has retired under
2-22 Article 5 or 6 of this Act and is receiving or is entitled to
2-23 receive an annuity from the fund.
2-24 Sec. 1.03. CONTINUED EXISTENCE. A firefighters relief and
2-25 retirement fund is continued in existence in each municipality to
2-26 which this Act applies. The name of a fund shall be the name of
2-27 the municipality, followed by the words "firefighters relief and
3-1 retirement fund."
3-2 Sec. 1.04. EXEMPTION FROM EXECUTION. All retirement annuity
3-3 payments, other benefit payments, and a member's accumulated
3-4 contributions are unassignable and are exempt from execution,
3-5 garnishment, attachment, and state and local taxation.
3-6 ARTICLE 2. ADMINISTRATION
3-7 Sec. 2.01. RESPONSIBILITY. Each fund established under this
3-8 Act is a trust. The board of trustees is responsible for the
3-9 administration of the fund.
3-10 Sec. 2.02. COMPOSITION OF BOARD. The board of trustees is
3-11 composed of:
3-12 (1) the mayor of the municipality;
3-13 (2) the city treasurer or, if there is no treasurer,
3-14 the person who by law, charter provision, or ordinance performs the
3-15 duty of city treasurer; and
3-16 (3) three members of the fund to be selected by vote
3-17 of the firefighters and retirees in the manner provided by this
3-18 Act.
3-19 Sec. 2.03. ELECTED MEMBERS OF BOARD. (a) The elected
3-20 members of the board of trustees shall be elected and hold office
3-21 in accordance with this section.
3-22 (b) Between November 1 of each year and before the first
3-23 Monday in January of the following year, the board of trustees
3-24 shall hold an election to elect one member of the board of
3-25 trustees.
3-26 (c) Each election is by secret written ballot on a date the
3-27 board of trustees determines. Only persons who have been nominated
4-1 may be listed on the written ballot. Nominations may be made in
4-2 person, by mail, or by telephone to the office of the fund and must
4-3 be received between October 1 and October 15.
4-4 (d) The board of trustees shall certify the results of each
4-5 election. A newly elected board member takes office at the first
4-6 board meeting in January.
4-7 (e) The elected members of the board of trustees hold office
4-8 for staggered terms of three years, with the term of one trustee
4-9 expiring each year. Elected members of the board of trustees shall
4-10 serve during the term for which they are elected and until their
4-11 successors are elected and have qualified, unless a vacancy results
4-12 because of death, resignation, or removal.
4-13 (f) A vacancy in the position of an elected member of the
4-14 board of trustees shall be filled for the remainder of that
4-15 person's term at an election to be held on a date selected by the
4-16 board of trustees that must be within 60 days after the date of the
4-17 event that caused the vacancy.
4-18 (g) The firefighter or retiree receiving the highest number
4-19 of votes in an election under this section is elected, except that
4-20 if no person receives a majority of the votes cast, a runoff
4-21 election shall be held between the two persons receiving the
4-22 highest number of votes. A runoff election is held on a date
4-23 determined by the board of trustees, and the person receiving the
4-24 highest number of votes in the runoff election is elected.
4-25 (h) The administrative expenses of an election under this
4-26 section may be paid from the assets of the fund. Assets of the
4-27 fund may not be used to pay campaign expenses incurred by or for a
5-1 member. Administrative office supplies and equipment belonging to
5-2 the fund may not be used to assist any candidate or person seeking
5-3 to assist a candidate for a position on the board of trustees.
5-4 Sec. 2.04. COMPENSATION. A member of the board of trustees
5-5 may not receive compensation for service on the board.
5-6 Sec. 2.05. OFFICERS. The mayor is the presiding officer and
5-7 the city treasurer is the secretary-treasurer of the board of
5-8 trustees. The board shall elect annually from its membership an
5-9 alternate presiding officer who shall preside in the absence or
5-10 disability of the mayor.
5-11 Sec. 2.06. QUORUM AND VOTING. Each member of the board of
5-12 trustees is entitled to one vote. A majority vote of members of
5-13 the board of trustees attending a meeting at which a quorum is
5-14 present is necessary for a decision of the board. A resolution or
5-15 order of the board of trustees must be made by a vote recorded in
5-16 the minutes of its proceedings.
5-17 Sec. 2.07. MEETINGS; MINUTES. The board of trustees shall
5-18 hold regular monthly meetings at a time and place that it
5-19 designates and may hold special meetings on the call of the
5-20 presiding officer or alternate presiding officer. The board of
5-21 trustees shall keep accurate minutes of its meetings and records of
5-22 its proceedings.
5-23 Sec. 2.08. ADMINISTRATION OF FUNDS. The board of trustees
5-24 shall:
5-25 (1) keep separate from all other municipal funds all
5-26 money and other assets it receives for the benefit of the fund;
5-27 (2) keep a record of all claims, receipts, and
6-1 disbursements and make disbursements only on vouchers signed by
6-2 such persons as the board of trustees designates by resolution; and
6-3 (3) publish annually a report containing a balance
6-4 sheet showing the financial and actuarial condition of the fund, a
6-5 statement showing receipts and disbursements during the year
6-6 covered by the report, and such additional matters as may be
6-7 determined appropriate by the board of trustees.
6-8 Sec. 2.09. DETERMINATION BY BOARD. The board of trustees is
6-9 authorized to hear and determine all matters regarding:
6-10 (1) eligibility of any person to participate in a fund
6-11 under this Act;
6-12 (2) eligibility of any person to receive a service,
6-13 disability, or survivor's benefit, and the amount of that benefit;
6-14 and
6-15 (3) whether a child or a parent of a deceased member
6-16 was dependent on the member for financial support.
6-17 Sec. 2.10. TESTIMONY. The board of trustees may compel
6-18 witnesses to attend and testify before it regarding all matters
6-19 related to the fund in the same manner as is provided for taking of
6-20 testimony before notaries public, and its presiding officer and
6-21 alternate presiding officer have the authority to administer oaths
6-22 to witnesses.
6-23 Sec. 2.11. RULEMAKING. The board of trustees shall adopt
6-24 rules and perform reasonable activities it considers necessary or
6-25 desirable for the efficient administration of the fund.
6-26 ARTICLE 3. MEMBERSHIP
6-27 Sec. 3.01. GENERAL REQUIREMENT. A person who begins service
7-1 as a firefighter in a municipality to which this Act applies and
7-2 who is not ineligible for membership in the fund becomes a member
7-3 of the fund as a condition of that person's appointment.
7-4 Sec. 3.02. APPOINTMENT TO CHIEF. A firefighter who is a
7-5 member of the fund continues to be a member if the firefighter is
7-6 appointed to the rank of chief or the rank immediately below chief.
7-7 Sec. 3.03. TERMINATION OF MEMBERSHIP. A person ceases to be
7-8 a member of the fund on the earlier of the date of:
7-9 (1) death; or
7-10 (2) refund or escheat of the person's contributions
7-11 while absent from service.
7-12 ARTICLE 4. SERVICE CREDIT
7-13 Sec. 4.01. GENERAL PROVISION. One month of service credit
7-14 is earned in the fund for each month in which a member of the fund
7-15 makes a contribution required under this Act.
7-16 Sec. 4.02. MILITARY SERVICE. A member of the fund retains
7-17 all accumulated service credit and is allowed service credit for
7-18 each month during which the member leaves employment with the fire
7-19 department and performs active duty service in the armed forces or
7-20 the armed forces reserves of the United States or their
7-21 auxiliaries, except that:
7-22 (1) the military service credit may not be for more
7-23 than five years and the person must return to service with the fire
7-24 department not later than the 180th day after the date of discharge
7-25 or release from military service or from hospitalization continuing
7-26 after discharge for a period of not more than one year;
7-27 (2) the member must leave the member's contributions
8-1 in the fund during the period of absence; and
8-2 (3) the member must file a written application with
8-3 the fund for the military service credit, accompanied by
8-4 satisfactory proof of the member's military service.
8-5 Sec. 4.03. FORMER SERVICE. A member of the fund who is
8-6 absent from service with the fire department for reasons other than
8-7 military service retains all accumulated service credit for the
8-8 member's former service with the fire department, but receives no
8-9 credit for the period of absence, if:
8-10 (1) the length of the absence is less than five years;
8-11 and
8-12 (2) the member leaves the member's contributions in
8-13 the fund during the absence.
8-14 Sec. 4.04. OTHER ABSENCE. If a member of the fund who has
8-15 less than 10 years of service credit in the fund is absent from
8-16 service with the fire department for at least five years for any
8-17 reason other than as provided by Section 4.02 of this Act, the fund
8-18 shall refund the member's accumulated contributions and cancel the
8-19 person's credited service.
8-20 Sec. 4.05. PERIODS OF DISABILITY. A firefighter may not be
8-21 granted service credit for time during which the person receives a
8-22 disability benefit from the fund.
8-23 ARTICLE 5. SERVICE RETIREMENT BENEFITS
8-24 Sec. 5.01. NORMAL SERVICE RETIREMENT ELIGIBILITY. A member
8-25 is eligible to retire and receive a normal service retirement
8-26 annuity if the member:
8-27 (1) has attained the age of 50 years and has at least
9-1 10 years of service credit in the fund; or
9-2 (2) has at least 25 years of service credit,
9-3 regardless of age.
9-4 Sec. 5.02. CONTINUED SERVICE. A member who continues to
9-5 serve actively in the fire department after the date the member
9-6 becomes eligible to retire shall continue to make contributions to
9-7 the fund and accrue service credit until the date of actual
9-8 retirement.
9-9 Sec. 5.03. DETERMINATION OF AVERAGE MONTHLY SALARY. A
9-10 member's average monthly salary is computed as the average of the
9-11 member's compensation for the 36 months of highest compensation
9-12 during the member's credited service. If a person has less than 36
9-13 months of credited service, the average monthly salary is computed,
9-14 as if the member had been employed by the fire department for 36
9-15 months, by attributing to a period that is immediately before the
9-16 member's employment and that is equal to the difference between the
9-17 number of months the member has been employed by the fire
9-18 department and 36 months the compensation the member would have
9-19 received at the rank the member held when the person became a
9-20 member.
9-21 Sec. 5.04. NORMAL SERVICE RETIREMENT BENEFIT. (a) The
9-22 service retirement annuity of a person who retires under Section
9-23 5.01 of this Act on or after January 1, 1995, is a monthly payment
9-24 that is equal to three percent of the member's average monthly
9-25 compensation multiplied by the member's number of years of service
9-26 credit and any fraction of a year of service credit.
9-27 (b) The three percent factor used in this section may be
10-1 changed to some other percent if the change:
10-2 (1) is first approved by the board's actuary;
10-3 (2) is approved by the board of trustees;
10-4 (3) applies only to firefighters who are employed on
10-5 an active, full-time basis in the fire department at the time of
10-6 the change and those who begin service with the fire department
10-7 after the change becomes effective; and
10-8 (4) does not reduce a member's benefit for service
10-9 credit accumulated before the date of the change.
10-10 (c) The service retirement annuity of a person who retired
10-11 before January 1, 1995, is a monthly payment based on the benefit
10-12 formula in effect at the time of the person's retirement, together
10-13 with any increases for retirees approved by the board of trustees
10-14 after the person's retirement.
10-15 Sec. 5.05. EARLY RETIREMENT. (a) A member is eligible to
10-16 retire and receive a reduced service retirement annuity if the
10-17 member:
10-18 (1) has attained the age of 48 years and has at least
10-19 10 years of service credit in the fund; or
10-20 (2) has at least 23 years of service credit,
10-21 regardless of age.
10-22 (b) The retirement annuity of a person who retires under
10-23 this section is a monthly payment equal to the payment described by
10-24 Section 5.01 of this Act, reduced according to tables recommended
10-25 by the board's actuary and adopted by the board of trustees for
10-26 early retirement.
10-27 Sec. 5.06. ELIGIBILITY AFTER 10 YEARS OF SERVICE. (a) A
11-1 member may terminate employment with the fire department and later
11-2 retire and receive a service retirement benefit if, at the time of
11-3 the member's retirement:
11-4 (1) the member has accumulated at least 10 years of
11-5 service credit in the fund and made required contributions to the
11-6 fund for at least 10 years;
11-7 (2) the member does not withdraw the member's
11-8 contributions from the fund at the time of or after the termination
11-9 of employment; and
11-10 (3) the member has either attained 50 years of age or
11-11 would have accumulated at least 25 years of service credit if the
11-12 member had not terminated employment with the fire department.
11-13 (b) The retirement benefit payable to a member on retirement
11-14 under this section is the service retirement benefit described by
11-15 Section 5.04 of this Act, computed on the basis of the formula in
11-16 effect at the time the member terminated employment with the fire
11-17 department.
11-18 Sec. 5.07. WITHDRAWAL OF CONTRIBUTIONS. A person who has
11-19 terminated employment with the fire department and left the
11-20 person's contributions with the fund under Section 5.06 of this Act
11-21 may at any time apply for and receive the person's accumulated
11-22 contributions under Section 9.06 of this Act, with the effect
11-23 provided by that section. If a person eligible for a refund of
11-24 contributions elects to have all or a portion of the accumulated
11-25 contributions paid directly to an eligible retirement plan and
11-26 specifies the eligible retirement plan to which the contributions
11-27 are to be paid on a form approved for that purpose by the fund, the
12-1 fund shall make the payment in the form of a direct
12-2 trustee-to-trustee transfer but is under no obligation to determine
12-3 whether the other plan in fact is an eligible retirement plan for
12-4 that purpose.
12-5 ARTICLE 6. DISABILITY RETIREMENT BENEFITS
12-6 Sec. 6.01. INITIAL ELIGIBILITY FOR DISABILITY RETIREMENT. A
12-7 firefighter is eligible to retire and receive a disability
12-8 retirement annuity if:
12-9 (1) application for retirement is made by the member
12-10 or the member's legal representative, or if the board of trustees
12-11 determines that, although no application has been filed, retirement
12-12 is for the good of the fire department;
12-13 (2) the medical board certifies that the member is
12-14 unable to perform the duties of the member's occupation as a
12-15 firefighter and sends the member's application to the board of
12-16 trustees; and
12-17 (3) the board of trustees approves the disability
12-18 retirement.
12-19 Sec. 6.02. NO REQUIREMENT OF ON-THE-JOB INJURY. To qualify
12-20 for disability retirement, a person's disability does not have to
12-21 be incurred in connection with the person's performance of duties
12-22 as a firefighter and may be incurred while employed by some person
12-23 or entity other than the fire department.
12-24 Sec. 6.03. AMOUNT OF DISABILITY BENEFIT. Subject to
12-25 adjustment under Section 6.05 of this Act, the disability
12-26 retirement benefit payable to a member is the normal service
12-27 retirement benefit described by Section 5.04 of this Act, but not
13-1 less than the member would have received after 20 years of service
13-2 credit.
13-3 Sec. 6.04. TERMINATION DURING FIRST 2-1/2 YEARS. If, during
13-4 the first 2-1/2 years of disability retirement, a retiree recovers
13-5 to the extent that the person is able to perform the duties of the
13-6 person's job as a firefighter, the board of trustees may terminate
13-7 the retirement benefit and restore the person to active service at
13-8 not less than the same rank the person held at the time of
13-9 disability retirement.
13-10 Sec. 6.05. CONTINUATION AFTER FIRST 2-1/2 YEARS. After a
13-11 retiree has received disability retirement benefits from the fund
13-12 for at least 2-1/2 years, the board of trustees from time to time
13-13 may review the situation of the person to determine the status of
13-14 the disability. The board of trustees may ask the medical board
13-15 for its opinion of the status of the disability. If the board of
13-16 trustees determines that the person has recovered to the extent
13-17 that the person is able to be employed, the board of trustees may:
13-18 (1) continue to pay the full disability retirement
13-19 benefit;
13-20 (2) pay a reduced disability retirement benefit in an
13-21 amount commensurate with the person's disability as determined by
13-22 the board; or
13-23 (3) discontinue payment of a disability benefit.
13-24 Sec. 6.06. APPLICATION; PHYSICIAN'S STATEMENT; MEDICAL BOARD
13-25 ACTION. (a) An application for disability retirement must be
13-26 accompanied by a written statement, on a form approved by the board
13-27 of trustees, signed by a physician of the member's choice. The
14-1 member shall pay any costs of or fees for obtaining the physician's
14-2 statement and shall file the application and statement with the
14-3 fund. As soon as possible after the application is filed, the
14-4 medical board shall evaluate the medical and other pertinent
14-5 information concerning the member's application.
14-6 (b) The medical board may require any firefighter to obtain
14-7 additional medical opinions before issuing a certificate that the
14-8 member is unable, as a result of physical or mental disability, to
14-9 perform the duties of the member's occupation as a firefighter.
14-10 The fund shall pay any costs or fees of examination by a person
14-11 other than the member's own physician.
14-12 (c) A certificate from the medical board may include a
14-13 finding by that board that the disability is likely to be temporary
14-14 or is likely to be total and permanent.
14-15 (d) The board of trustees at any time may require a person
14-16 receiving a disability retirement benefit under this Act to appear
14-17 and undergo a medical examination by a physician selected by the
14-18 board of trustees or the medical board for that purpose. The
14-19 result of the examination and report by that physician shall be
14-20 considered by the board of trustees in determining whether the
14-21 disability retirement benefit will be continued, increased, if less
14-22 than the maximum provided by this Act, decreased, or discontinued.
14-23 Sec. 6.07. EVIDENCE OF INCOME OF DISABILITY RETIREE. The
14-24 board of trustees may require a person receiving disability
14-25 retirement benefits under this Act to provide evidence of annual
14-26 income. The board of trustees may consider the evidence in any
14-27 determination of ability to be employed. The board of trustees may
15-1 reduce or discontinue disability retirement benefit payments to a
15-2 person who fails or refuses to produce information which the board
15-3 of trustees has required under this section.
15-4 Sec. 6.08. REINSTATEMENT; SERVICE RETIREMENT ELIGIBILITY.
15-5 (a) The board of trustees may reinstate any disability retirement
15-6 benefit that previously has been terminated or reduced if the
15-7 disabled firefighter's condition has worsened as a result of the
15-8 same cause for which the person was previously granted disability
15-9 retirement.
15-10 (b) If a person's disability retirement benefit is reduced
15-11 or discontinued and the person is or subsequently becomes eligible
15-12 for service retirement under other provisions of this Act, the
15-13 person is entitled to the service retirement benefit on meeting all
15-14 requirements for that benefit, reduced by the amount of any
15-15 disability retirement benefit that the person continues to receive
15-16 from the fund.
15-17 Sec. 6.09. NO BENEFITS WHILE RECEIVING SALARY. A person may
15-18 not receive disability retirement benefits for any period during
15-19 which the person receives full salary or compensation from the fire
15-20 department, including payments received while on sick leave.
15-21 ARTICLE 7. SURVIVOR'S BENEFITS
15-22 Sec. 7.01. SURVIVING SPOUSE OF FIREFIGHTER. If a
15-23 firefighter dies before retirement, the firefighter's surviving
15-24 spouse is entitled to receive an immediate monthly benefit from the
15-25 fund of 75 percent of the service retirement benefit that the
15-26 firefighter would have received if the firefighter had retired on
15-27 the date of death, but not less than 75 percent of the monthly
16-1 payment the decedent would have received based on 20 years of
16-2 service credit.
16-3 Sec. 7.02. SURVIVING SPOUSE OF RETIREE. On the death of a
16-4 retiree, the retiree's surviving spouse, if married to the retiree
16-5 at the time of the retiree's retirement, is entitled to receive an
16-6 immediate monthly benefit from the fund of 75 percent of the
16-7 retirement benefit that was being paid to the retiree.
16-8 Sec. 7.03. SURVIVING SPOUSE OF FORMER FIREFIGHTER. (a) An
16-9 immediate monthly benefit is payable to the surviving spouse of a
16-10 former firefighter who:
16-11 (1) before termination of employment with the fire
16-12 department had accumulated at least 10 years of service credit in
16-13 the fund and had made required contributions to the fund for a
16-14 period of at least 10 years; and
16-15 (2) did not withdraw the member's contributions from
16-16 the fund at the time of or after the termination of employment.
16-17 (b) If the former firefighter died before attaining 50 years
16-18 of age, the benefit is payable only if the spouse was married to
16-19 the former firefighter on the date of the former firefighter's
16-20 termination of employment with the fire department.
16-21 (c) If the former firefighter died after attaining 50 years
16-22 of age, the benefit is payable only if the spouse was married to
16-23 the former firefighter when the member attained 50 years of age.
16-24 (d) The amount of the benefit payable under this section is
16-25 75 percent of the retirement benefit the former firefighter either
16-26 was receiving or was entitled to receive at age 50.
16-27 Sec. 7.04. TERMINATION OF SPOUSE'S BENEFIT. If, at the time
17-1 of termination of employment with the fire department, the deceased
17-2 firefighter or retiree met the requirements for normal retirement
17-3 eligibility as provided by Section 5.01 of this Act, the benefit
17-4 payable to a surviving spouse is payable throughout the surviving
17-5 spouse's remaining lifetime. Otherwise, the benefit ceases on the
17-6 earlier of the spouse's death or marriage to any other person.
17-7 Sec. 7.05. SURVIVING CHILDREN'S BENEFIT. (a) On the death
17-8 of a member, if there is no surviving spouse, a benefit is payable
17-9 to the decedent's surviving dependent children, if any. The total
17-10 monthly benefit payable under this subsection is 75 percent of the
17-11 monthly payment that the decedent would have received under the
17-12 service retirement benefit described by Section 5.04 of this Act,
17-13 but not less than 75 percent of the monthly payment the decedent
17-14 would have received based on 20 years of service credit. If there
17-15 is more than one dependent child of the decedent, each dependent
17-16 child is entitled to receive an equal share of the total monthly
17-17 payment under this subsection.
17-18 (b) On the death of a member under this Act, if there is a
17-19 surviving spouse, a benefit is payable to each of the decedent's
17-20 surviving dependent children, if any. The monthly amount of the
17-21 benefit payable to each child is 15 percent of the monthly payment
17-22 that the decedent would have received under the service retirement
17-23 benefit described by Section 5.04 of this Act, but not less than 15
17-24 percent of the monthly payment the decedent would have received
17-25 based on 20 years of service credit. If the decedent left more
17-26 than five surviving dependent children, the monthly benefit payable
17-27 to each dependent child shall be reduced so that the total monthly
18-1 benefit payable under this subsection does not exceed the total
18-2 monthly benefit that would have been payable if the decedent had
18-3 left no surviving spouse.
18-4 (c) Payments by the fund to a dependent child under this
18-5 section shall cease on the earliest of the date of the child's
18-6 death, marriage, or attainment of age 22.
18-7 Sec. 7.06. PAYMENTS TO DEPENDENT PARENTS; PAYMENT TO ESTATE.
18-8 If a deceased member leaves no surviving spouse and no surviving
18-9 children entitled to receive a benefit under this Act, but is
18-10 survived by one or more dependent parents, the dependent parent, or
18-11 one of the surviving parents designated by the board of trustees,
18-12 is entitled to receive a monthly benefit payment equal to the
18-13 monthly amount that would have been payable to a surviving spouse
18-14 of the deceased. All payments under this section cease upon the
18-15 death of the surviving dependent parent.
18-16 Sec. 7.07. INCREASE IN SURVIVORS' BENEFITS. On the
18-17 affirmative vote of a majority of the members of the board of
18-18 trustees either or both of the following actions may be taken:
18-19 (1) benefits to dependent children may be increased to
18-20 an amount not to exceed the amount recommended by the board's
18-21 actuary; or
18-22 (2) benefits to surviving spouses may be increased to
18-23 an amount not to exceed the maximum approved by the actuary.
18-24 Sec. 7.08. PERSON CAUSING DEATH OF MEMBER OR BENEFICIARY.
18-25 (a) A benefit payable on the death of a member or beneficiary may
18-26 not be paid to a person convicted of causing that death, but
18-27 instead a benefit is payable as provided by Subsection (c) of this
19-1 section to a person who would be entitled to the benefit had the
19-2 convicted person predeceased the decedent. If no person would be
19-3 entitled to the benefit, the benefit is payable to the decedent's
19-4 estate.
19-5 (b) The fund is not required to pay a benefit under
19-6 Subsection (a) of this section unless it receives actual notice of
19-7 the conviction of the person who would have been entitled to the
19-8 benefits. However, the fund may delay payment of a benefit payable
19-9 on the death of a member pending the results of a criminal
19-10 investigation and of legal proceedings relating to the cause of
19-11 death.
19-12 (c) The benefit payable under Subsection (a) of this section
19-13 is a refund of the member's accumulated contributions and interest,
19-14 reduced by any annuity payments that may have been made as a result
19-15 of the member's retirement.
19-16 (d) For the purposes of this section, a person has been
19-17 convicted of causing the death of a member or beneficiary if the
19-18 person:
19-19 (1) has pleaded guilty or nolo contendere to or has
19-20 been found guilty by a court of an offense at the trial of which it
19-21 is established that the person's intentional, knowing, or reckless
19-22 act or omission resulted in the death of the person who was the
19-23 member or beneficiary, regardless of whether sentence is imposed or
19-24 probated; and
19-25 (2) has no appeal of the conviction pending and the
19-26 time provided for appeal has expired.
19-27 ARTICLE 8. DEFERRED RETIREMENT OPTION PLAN
20-1 Sec. 8.01. MEMBER REMAINING IN ACTIVE SERVICE. In lieu of
20-2 either leaving active service and beginning to receive a service
20-3 retirement annuity under Section 5.01 of this Act or remaining in
20-4 active service and continuing to accrue additional service credit
20-5 under Section 5.02 of this Act, a member who is eligible to receive
20-6 a normal service retirement benefit under Section 5.01 of this Act
20-7 may remain in active service, become a participant in the deferred
20-8 retirement option plan ("DROP") in accordance with Sections 8.02
20-9 and 8.03 of this Act, and defer the beginning of the person's
20-10 retirement annuity. Once an election to participate in the DROP
20-11 has been made, the election continues in effect as long as the
20-12 member remains in active service as a firefighter. When the member
20-13 leaves active service, the member may apply for a service
20-14 retirement annuity under Section 5.01 of this Act.
20-15 Sec. 8.02. ELECTION TO PARTICIPATE IN DROP. The election to
20-16 participate in the DROP shall be made in accordance with procedures
20-17 adopted by the board of trustees. The election may be made at any
20-18 time on or after the date the member becomes eligible for normal
20-19 service retirement under Section 5.01 of this Act and becomes
20-20 effective on the first day of the first month after the date of the
20-21 election. At the same time that a member makes an election to
20-22 participate in the DROP, the member must agree in writing to
20-23 terminate service with the fire department on a date not later than
20-24 the second anniversary of the effective date of the election under
20-25 this section. An agreement to terminate service is binding on the
20-26 member and the fire department, except that the member may
20-27 terminate active service at any time before the date selected. An
21-1 election to participate in the DROP has no effect on either the
21-2 municipality's or the member's contributions under Section 10.01 of
21-3 this Act.
21-4 Sec. 8.03. CREDITS TO MEMBER'S DROP ACCOUNT. Each month
21-5 after a member makes an election to participate in the DROP and
21-6 until the member's retirement, the board of trustees shall cause an
21-7 amount equal to the retirement annuity that the member would have
21-8 received under Section 5.03 of this Act for that month if the
21-9 member had left active service and been granted a retirement
21-10 annuity on the effective date of the election under Section 8.02 of
21-11 this Act to be credited to a separate DROP account maintained
21-12 within the fund for the benefit of the member. The member's
21-13 contributions under Section 10.01(c) of this Act made after the
21-14 effective date of the election to participate in the DROP shall
21-15 also be credited to the member's DROP account. Amounts held in a
21-16 member's DROP account shall be credited at the end of each calendar
21-17 month with interest at a rate equal to one-twelfth of five percent
21-18 until the member's retirement.
21-19 Sec. 8.04. AMOUNT OF CREDITS TO MEMBER'S DROP ACCOUNT. The
21-20 amount credited monthly to the member's DROP account:
21-21 (1) may not be increased as a result of any increase
21-22 in the formula used in computing service retirement benefits under
21-23 Section 5.04 of this Act that occurs after the effective date of
21-24 the member's election to participate in the DROP;
21-25 (2) shall be increased by any annual cost-of-living
21-26 adjustments under Section 9.04 of this Act that occur between the
21-27 effective date of the member's election to participate in the DROP
22-1 and the effective date of the member's retirement, but only as to
22-2 amounts credited to the member's DROP account after a
22-3 cost-of-living adjustment; and
22-4 (3) is subject to the limitations prescribed by
22-5 Section 9.03 of this Act.
22-6 Sec. 8.05. DISTRIBUTIONS FROM MEMBER'S DROP ACCOUNT. (a)
22-7 On leaving active service as a firefighter and beginning to receive
22-8 a retirement annuity, a member who participates in the DROP shall
22-9 begin to receive the amount credited to the person's DROP account
22-10 under either of the following methods of distribution selected by
22-11 the member:
22-12 (1) a single-payment distribution made at a time
22-13 selected by the member but not later than April 1 of the year after
22-14 the member attains 70-1/2 years of age; or
22-15 (2) in not more than four payments, which may be equal
22-16 or unequal as the member may determine, all of which must occur not
22-17 later than April 1 of the year after the member attains 70-1/2
22-18 years of age.
22-19 (b) The DROP account balance of a member shall be credited
22-20 at the end of each calendar month with interest at a rate equal to
22-21 one-twelfth of five percent.
22-22 (c) A member may not receive a distribution from the
22-23 member's DROP account before termination of active service as a
22-24 firefighter. A member shall notify the fund in writing, on a form
22-25 that the board of trustees may prescribe, at least 30 days before
22-26 each distribution made under this section.
22-27 Sec. 8.06. ESTABLISHMENT OF DROP ACCOUNT AT RETIREMENT. In
23-1 lieu of electing to participate in the DROP before actual
23-2 retirement, a member who is eligible for normal service retirement
23-3 may elect to terminate active service as a firefighter and
23-4 establish a DROP account under this section. If a member so
23-5 elects:
23-6 (1) the board of trustees shall cause to be credited
23-7 to a DROP account maintained within the fund for the benefit of
23-8 that person an amount equal to the credits that the member's DROP
23-9 account would have received, including interest, if the member had
23-10 established the DROP account after becoming eligible for normal
23-11 service retirement, but not more than two years before the
23-12 effective date of the person's retirement;
23-13 (2) the date used in computations under Subsection (a)
23-14 of this section as if the member had established the DROP account
23-15 on that date is the effective date of the member's election to
23-16 participate in the DROP;
23-17 (3) the member will receive payments from the member's
23-18 DROP account as the member may select under Section 8.05 of this
23-19 Act; and
23-20 (4) the member's DROP account shall be credited with
23-21 interest as provided by Section 8.05 of this Act.
23-22 Sec. 8.07. PAYMENTS FROM DROP ACCOUNT AT MEMBER'S DEATH.
23-23 (a) The provisions of Article 7 relating to death benefits of
23-24 qualified survivors do not apply to amounts credited to a member's
23-25 DROP account. Instead, a member who participates in the DROP may
23-26 designate a beneficiary to receive any balance in the member's DROP
23-27 account at the member's death. The beneficiary designation must be
24-1 made on a form prescribed by the board of trustees and filed with
24-2 the fund before the member's death. If the member is married at
24-3 the time of the designation, a designation of a beneficiary other
24-4 than the member's spouse is valid only if the spouse consents to
24-5 the designation in writing on the same form that is used to
24-6 designate the beneficiary. Distributions from a member's DROP
24-7 account after the death of the member shall be made as provided by
24-8 this section.
24-9 (b) If a member who participates in the DROP dies while in
24-10 active service or if the member has not filed an election with the
24-11 board of trustees as described by Subsection (c) of this section,
24-12 distributions to the designated beneficiary will begin not more
24-13 than one year after the date of the member's death and shall be
24-14 made either as a single-payment distribution of the member's DROP
24-15 account balance or in not more than four equal annual installments
24-16 over a period of not more than 37 months.
24-17 (c) If a member who participates in the DROP dies after
24-18 terminating active service and has filed an election with the board
24-19 of trustees to be paid in not more than four equal annual
24-20 installments over a period of not more than 37 months, the balance
24-21 of the member's DROP account shall be distributed to the designated
24-22 beneficiary in the manner that the member selected.
24-23 (d) If the member has not designated a beneficiary to
24-24 receive distributions from the member's DROP account, or if the
24-25 person so designated does not survive the member by at least 72
24-26 hours, the member's DROP account shall be distributed in a
24-27 single-sum payment as soon as administratively possible after the
25-1 member's death to any surviving spouse who survives the member by
25-2 at least 72 hours, if any, or to the member's estate if there is no
25-3 surviving spouse.
25-4 Sec. 8.08. SUBSEQUENT DISABILITY OF DROP PARTICIPANT. A
25-5 member who participates in the DROP becomes ineligible for any
25-6 disability benefits described by Article 6 of this Act. Instead,
25-7 if the board of trustees determines that the member would have been
25-8 eligible for disability retirement, the board of trustees shall
25-9 grant a normal service retirement annuity as described by Section
25-10 5.04 of this Act and shall pay the member both the service
25-11 retirement annuity and a distribution of the DROP account as
25-12 described by Section 8.05 of this Act.
25-13 Sec. 8.09. RETIREMENT BENEFIT PAYABLE TO DROP PARTICIPANT.
25-14 The retirement benefit payable under Article 5 or 6 of this Act to
25-15 a person who participates in the DROP:
25-16 (1) may not be increased as a result of any increase
25-17 in the formula used in computing service retirement benefits under
25-18 Section 5.04 of this Act that occurs after the effective date of
25-19 the member's election to participate in the DROP;
25-20 (2) may not be increased as a result of any increase
25-21 in the member's compensation that occurs after the effective date
25-22 of the member's election to participate in the DROP;
25-23 (3) shall be increased by any annual cost-of-living
25-24 adjustments under Section 9.04 of this Act that occur between the
25-25 effective date of the member's election to participate in the DROP
25-26 and the effective date of the member's retirement;
25-27 (4) may not be increased for additional service credit
26-1 after the effective date of the member's election to participate in
26-2 the DROP; and
26-3 (5) is subject to the limitations prescribed by
26-4 Section 9.03 of this Act.
26-5 Sec. 8.10. TERMINATION OR MODIFICATION OF DROP BY FUND. If
26-6 the board's actuary, not sooner than January 1, 2000, certifies to
26-7 the board that DROP participation is resulting in a significant
26-8 actuarial loss to the fund, the board of trustees may:
26-9 (1) reduce the interest paid on DROP accounts, or take
26-10 other action that would reduce the future credits to DROP accounts,
26-11 but only for all DROP accounts that are established after the
26-12 effective date of the action by the board of trustees; or
26-13 (2) terminate the deferred retirement option plan for
26-14 all members who have not at that time established a DROP account.
26-15 ARTICLE 9. MISCELLANEOUS PROVISIONS REGARDING BENEFITS
26-16 Sec. 9.01. TIME FOR PAYMENT TO RETIRED MEMBERS. Benefits to
26-17 a person who retires under this Act are payable on the first day of
26-18 each month beginning with the month following the month in which
26-19 the person retires.
26-20 Sec. 9.02. TIME FOR PAYMENT TO SURVIVORS; PAYMENT TO ESTATE.
26-21 Benefits to a surviving spouse, dependent child, or dependent
26-22 parent under this Act are payable on the first day of each month
26-23 beginning with the month following the month in which the death of
26-24 the member or former firefighter occurs. After all payments cease,
26-25 any amount by which the member's or former firefighter's total
26-26 accumulated contributions at the date of that person's death exceed
26-27 the amount of all retirement and death benefits paid by the fund as
27-1 a result of the person's participation in the fund is payable to
27-2 the estate of the member or former firefighter.
27-3 Sec. 9.03. LIMITATION ON PAYMENT OF BENEFITS. (a) The
27-4 amount of the payment of any benefit under this Act that would
27-5 exceed the limitations set forth in this section shall be reduced
27-6 in accordance with this section.
27-7 (b) In this section:
27-8 (1) "Compensation" has the meaning provided by Section
27-9 415 of the internal revenue code and the regulations adopted under
27-10 that section, instead of the meaning provided by Section 1.02 of
27-11 this Act, but as to any person who begins participation on or after
27-12 December 31, 1995, "compensation" excludes any payments received in
27-13 excess of $150,000 in a calendar year, indexed pursuant to Section
27-14 401(a)(17) of the internal revenue code.
27-15 (2) "Highest average annual compensation" means the
27-16 average compensation for the three consecutive calendar years of
27-17 service with the fire department that produces the highest average.
27-18 (c) An annual benefit payable by the fund may not exceed 100
27-19 percent of the member's highest average annual compensation.
27-20 (d) If payment of a benefit begins before a member attains
27-21 age 55, the annual benefit may not exceed the greater of:
27-22 (1) the actuarial equivalent of a $75,000 annual
27-23 benefit beginning at age 55;
27-24 (2) the actuarial equivalent of a $90,000 annual
27-25 benefit beginning at age 62; or
27-26 (3) $50,000.
27-27 (e) If a member does not have at least 15 years of service
28-1 credit as a firefighter with the fire department, the $50,000
28-2 limitation provided by Subsection (d) of this section is
28-3 inapplicable.
28-4 (f) If payment of a benefit begins when or after a member
28-5 attains age 55 but before the member attains age 62, the annual
28-6 benefit may not exceed the greater of:
28-7 (1) the actuarial equivalent of a $90,000 annual
28-8 benefit beginning at age 62; or
28-9 (2) $75,000.
28-10 (g) If payment of a benefit begins when or after a member
28-11 attains age 62 but before the member attains age 65, the annual
28-12 benefit may not exceed $90,000.
28-13 (h) If payment of a benefit begins when or after a member
28-14 attains age 65, the annual benefit may not exceed the actuarial
28-15 equivalent of a $90,000 annual benefit beginning at age 65.
28-16 (i) The $90,000 and $50,000 limitations provided by this
28-17 section are automatically adjusted to the amounts determined by the
28-18 secretary of the treasury in effect at the time of the member's
28-19 retirement.
28-20 (j) To determine the actuarial equivalent of a benefit under
28-21 this section, the interest rate assumption is the rate not to
28-22 exceed five percent that is adopted by the board of trustees in the
28-23 proper administration of the fund.
28-24 (k) A person's vested accrued benefit in effect on September
28-25 1, 1995, may not be reduced under this section.
28-26 Sec. 9.04. COST-OF-LIVING ADJUSTMENT. (a) A person
28-27 receiving a retirement or survivor's benefit under this Act is
29-1 entitled to an annual cost-of-living adjustment of that person's
29-2 benefit based on any increase in the Consumer Price Index for All
29-3 Urban Consumers as determined by the United States Department of
29-4 Labor since the last increase in benefits under this section.
29-5 (b) An adjustment may not be made under this section unless
29-6 the board's actuary has advised the board of trustees that the
29-7 adjustment would not impair the financial stability of the fund and
29-8 the adjustment has been approved by the affirmative vote of a
29-9 majority of the board of trustees.
29-10 (c) The amount of an adjustment under this section shall be
29-11 determined by the board of trustees. An adjustment of a benefit
29-12 under this section may not reduce any person's benefit to an amount
29-13 less than the person received when the benefit first was paid to
29-14 that person.
29-15 Sec. 9.05. NO INTEGRATION WITH SOCIAL SECURITY. A benefit
29-16 payable under this Act may not be integrated with benefits payable
29-17 under the Social Security Act, and benefits payable under the
29-18 Social Security Act may not be taken into account when determining
29-19 the amount of benefits to which a person is entitled under this
29-20 Act.
29-21 Sec. 9.06. WITHDRAWAL OF CONTRIBUTIONS. (a) A living
29-22 person who has terminated all employment with the fire department
29-23 and who has not retired may withdraw, on application, all of the
29-24 accumulated contributions credited to that person's individual
29-25 account with the fund in excess of the amount of benefits that the
29-26 person previously has received from the fund. On withdrawal, the
29-27 person's account will be closed and all service credit the person
30-1 has accumulated will be canceled.
30-2 (b) If a member dies before retirement and no person is
30-3 entitled to a survivor's benefit under this Act, the person's
30-4 estate may, after application, withdraw all of the accumulated
30-5 contributions credited to that person's individual account with the
30-6 fund in excess of the amount of benefits that the person previously
30-7 has received from the fund.
30-8 Sec. 9.07. ESCHEAT OF CONTRIBUTIONS. If an application for
30-9 withdrawal of contributions under Section 9.06 of this Act from or
30-10 on behalf of a person who has ceased to be an employee of the fire
30-11 department or the person's estate has not been received by the fund
30-12 before the seventh anniversary of the termination of the person's
30-13 employment with the fire department for a reason other than
30-14 retirement, the person's accumulated contributions shall escheat to
30-15 the fund. If the person or the person's estate later applies for
30-16 the contributions, the fund shall refund the contributions
30-17 regardless of the earlier escheatment.
30-18 Sec. 9.08. INSUFFICIENT FUNDS; PRORATED REDUCTION IN
30-19 BENEFITS. If for any reason the funds available for any purpose
30-20 covered by this Act become insufficient to pay in full any benefit
30-21 payable under this Act, all benefits being paid by the fund shall
30-22 be reduced pro rata for the time the deficiency exists.
30-23 Sec. 9.09. REDUCTION IN BENEFIT PAYMENTS ON REQUEST. If a
30-24 person receiving a benefit from the fund requests in writing that
30-25 the amount of the benefit be reduced to a specified monthly
30-26 amount, the fund will pay the lesser amount specified in the
30-27 request. If the person subsequently requests in writing that the
31-1 benefit be increased to any specified amount that does not exceed
31-2 the amount originally payable, the fund will pay the increased
31-3 amount specified. If a person receiving a benefit from the fund
31-4 requests in writing that payment of the benefit be discontinued,
31-5 the fund shall discontinue payment of the benefit. If the person
31-6 subsequently requests that payment of the benefit be resumed, the
31-7 fund shall resume payment of the benefit. Any amounts not paid by
31-8 the fund pursuant to a request under this section are forfeited to
31-9 the fund and are not recoverable by any person.
31-10 ARTICLE 10. COLLECTION OF CONTRIBUTIONS; INTEREST
31-11 Sec. 10.01. MUNICIPAL AND MEMBER CONTRIBUTIONS. (a) Each
31-12 month before October 1, 1994, each municipality in which a fire
31-13 department to which this Act applies is located shall appropriate
31-14 and contribute to the fund an amount equal to 14 percent, or a
31-15 higher percentage that the municipality authorizes, of the
31-16 compensation of all members during that month.
31-17 (b) Each calendar month after September 30, 1994, and before
31-18 October 1, 1995, each municipality in which a fire department to
31-19 which this Act applies is located shall appropriate and contribute
31-20 to the fund an amount equal to 16.05 percent of the compensation of
31-21 all members during that month.
31-22 (c) Each month after September 30, 1995, each municipality
31-23 in which a fire department to which this Act applies is located
31-24 shall appropriate and contribute to the fund an amount equal to
31-25 18.05 percent of the compensation of all members during that month.
31-26 (d) Each firefighter shall pay into the fund each month
31-27 13.70 percent of the firefighter's compensation for that month.
32-1 (e) The governing body of each municipality may authorize
32-2 the municipality to make an additional contribution to the fund in
32-3 whatever amount the governing body may determine. The members of
32-4 the fund, by a majority vote in favor of an increase in
32-5 contributions above 13.70 percent, may increase each firefighter's
32-6 contribution above 13.70 percent to any percentage recommended by a
32-7 majority vote of the board of trustees.
32-8 Sec. 10.02. PICKUP OF FIREFIGHTER CONTRIBUTIONS. A
32-9 municipality to which this Act applies shall pick up the
32-10 firefighter contributions to the fund that are required or
32-11 authorized pursuant to Section 10.01 of this Act, whichever is
32-12 higher. Firefighter contributions will be picked up by a reduction
32-13 in the monetary compensation of the firefighters. Contributions
32-14 picked up shall be treated as employer contributions in accordance
32-15 with Section 414(h)(2) of the internal revenue code for the purpose
32-16 of determining tax treatment of the amounts under that code. These
32-17 contributions will be deposited to the credit of the individual
32-18 accounts of the firefighters in the fund and shall be treated as
32-19 the monthly contributions of the firefighters for all purposes of
32-20 this Act. These contributions are not includable in the gross
32-21 income of a firefighter until the time that they are distributed or
32-22 made available to the firefighter or survivors of the firefighter.
32-23 The board of trustees may at any time, by majority vote,
32-24 discontinue the pickup of firefighter contributions by the
32-25 municipality.
32-26 Sec. 10.03. CONTRIBUTIONS AND INCOME AS ASSETS OF FUND. All
32-27 contributions paid to the fund under Sections 10.01 and 10.02 of
33-1 this Act become a part of the assets of the fund. All interest and
33-2 dividends on investments of the assets of the fund shall be
33-3 deposited into the fund and are part of it.
33-4 Sec. 10.04. INTEREST ON INDIVIDUAL ACCOUNTS. The fund shall
33-5 credit interest on December 31 of each year to the account of each
33-6 firefighter, and of each former firefighter, who has not retired in
33-7 an amount equal to five percent of the accumulated contributions,
33-8 including previously credited interest, on deposit on January 1 of
33-9 that year. The fund may not pay interest on a firefighter's or
33-10 former firefighter's contributions for part of a year or for any
33-11 period that is more than five calendar years after the date of
33-12 termination of employment.
33-13 ARTICLE 11. INVESTMENT OF ASSETS
33-14 Sec. 11.01. PERMITTED INVESTMENTS. When the board of
33-15 trustees determines that there is in the fund a surplus exceeding
33-16 the reasonable, safe amount necessary to take care of the current
33-17 demands on the fund, the surplus, or so much of it as the board of
33-18 trustees considers prudent, may be invested in:
33-19 (1) direct obligations of or obligations the principal
33-20 and interest of which are guaranteed or fully insured by the United
33-21 States or its agencies or instrumentalities;
33-22 (2) commercial paper rated as investment quality or
33-23 higher by a nationally recognized investment rating firm;
33-24 (3) short-term investment funds, mutual funds, or
33-25 their equivalent, that:
33-26 (A) are rated as investment quality or higher by
33-27 a nationally recognized investment rating firm; and
34-1 (B) do not exceed an average of 270 days to
34-2 maturity;
34-3 (4) fully collateralized or direct repurchase
34-4 agreements, including direct and reverse security repurchase
34-5 agreements and security lending agreements that:
34-6 (A) have a defined termination date;
34-7 (B) are secured by obligations described by
34-8 Subsection (a) of this section or by cash; and
34-9 (C) are pledged with a third party selected or
34-10 approved by a majority vote of the board of trustees;
34-11 (5) corporate bonds, including convertible bonds and
34-12 collateralized mortgage obligations, rated as investment quality or
34-13 higher by a nationally recognized investment rating firm;
34-14 (6) common and preferred stocks of companies
34-15 incorporated in the United States and foreign stocks that are
34-16 designated in United States dollars and that are registered with
34-17 the Securities and Exchange Commission and listed on a United
34-18 States exchange or by the National Association of Securities
34-19 Dealers Automated Quotations;
34-20 (7) major foreign equity fixed income market
34-21 investments; and
34-22 (8) convertible stocks and bonds recognized as
34-23 investment quality or higher by a nationally recognized investment
34-24 rating firm or by the investment manager.
34-25 Sec. 11.02. REDUCTION IN RATING. An investment in corporate
34-26 bonds that meets the requirements of Section 11.01(5) of this Act
34-27 at the time of purchase is not required to be sold because the
35-1 bonds' rating is subsequently reduced to a rating that is not more
35-2 than one major classification lower than the requirements.
35-3 Sec. 11.03. LIMITATIONS ON INVESTMENTS. The fund may not
35-4 own more than five percent of the voting stock of any one
35-5 corporation. Under an investment measure at cost:
35-6 (1) total fixed-income investments should not
35-7 represent less than 50 percent nor more than 80 percent of the
35-8 value of the investment portfolio;
35-9 (2) total investments in common stocks should not
35-10 represent less than 20 percent nor more than 50 percent of the
35-11 value of the investment portfolio;
35-12 (3) total investments in common stocks of foreign
35-13 corporations may not represent more than five percent of the value
35-14 of the investment portfolio; and
35-15 (4) total investments in any one corporation may not
35-16 represent more than three percent of the value of the investment
35-17 portfolio.
35-18 Sec. 11.04. FIDUCIARIES. (a) A person or financial
35-19 institution is a fiduciary of the fund to the extent that the
35-20 person or the financial institution:
35-21 (1) exercises any discretionary authority or
35-22 discretionary control over management of the fund or exercises any
35-23 authority or control over management or disposition of the assets
35-24 of the fund;
35-25 (2) renders or has authority or responsibility to
35-26 render investment advice for a fee or other compensation, direct or
35-27 indirect, concerning any money or other property of the fund; or
36-1 (3) has any discretionary authority or discretionary
36-2 responsibility over the administration of the fund.
36-3 (b) A fiduciary of the fund may not cause the fund to engage
36-4 in a transaction if the fiduciary knows or should know that the
36-5 transaction constitutes a direct or indirect:
36-6 (1) sale, exchange, or lease of any property from the
36-7 fund to a party for less than adequate consideration or from a
36-8 party to the fund for more than adequate consideration;
36-9 (2) loan of money or other extension of credit from
36-10 the fund to a party without the receipt of adequate security and a
36-11 reasonable rate of interest or from a party to the fund with
36-12 provision of excessive security or an unreasonably high rate of
36-13 interest;
36-14 (3) furnishing of goods, services, or facilities from
36-15 the fund to a party for less than adequate consideration or from a
36-16 party to the fund for more than adequate consideration; or
36-17 (4) transfer to or use by or for the benefit of a
36-18 party of any assets of the fund for less than adequate
36-19 consideration.
36-20 (c) A fiduciary of the fund may not:
36-21 (1) deal with the assets of the fund in the
36-22 fiduciary's own interest or for the fiduciary's own account;
36-23 (2) in the fiduciary's individual or any other
36-24 capacity act in any transaction involving the fund on behalf of a
36-25 party whose interests are adverse to the interests of the fund or
36-26 the interest of its participants or beneficiaries; or
36-27 (3) receive any consideration for the fiduciary's own
37-1 personal account from any party dealing with the fund in connection
37-2 with a transaction involving the assets of the fund.
37-3 (d) The board of trustees may purchase insurance
37-4 indemnifying the members of the board of trustees against personal
37-5 loss or accountability from liability resulting from a member's act
37-6 or omission as a member of the board of trustees.
37-7 ARTICLE 12. OFFICERS, EMPLOYEES, AND PROFESSIONALS
37-8 Sec. 12.01. ADMINISTRATOR AND EMPLOYEES. The board of
37-9 trustees shall appoint an administrator who shall administer the
37-10 fund under the supervision and direction of the board of trustees.
37-11 The board of trustees shall employ such other employees as are
37-12 required for the efficient administration of the fund.
37-13 Sec. 12.02. LEGAL COUNSEL. The board of trustees shall
37-14 retain legal counsel for matters affecting the operation of the
37-15 fund.
37-16 Sec. 12.03. ACTUARY. (a) The board of trustees shall
37-17 employ an actuary who may be the consultant and technical advisor
37-18 to the board of trustees regarding the operation of the fund and
37-19 may perform such duties as may be required by the board.
37-20 (b) The actuary shall make a valuation at least once every
37-21 two years of the assets and liabilities of the fund on the basis of
37-22 assumptions and methods that are reasonable in the aggregate,
37-23 considering the experience of the fund and reasonable expectations
37-24 and that, in combination, offer the actuary's best estimate of
37-25 anticipated experience under the fund.
37-26 (c) On the basis of the valuation, the actuary shall make
37-27 recommendations to the board of trustees to ensure the actuarial
38-1 soundness of the fund. In making recommendations, the actuary
38-2 shall define each actuarial term and enumerate and explain each
38-3 actuarial assumption used in making the valuation. This
38-4 information must be included either in the actuarial study or in a
38-5 separate report made available as a public record.
38-6 (d) The board of trustees shall file with the State Pension
38-7 Review Board a copy of each actuarial study and each separate
38-8 report made as required by law.
38-9 (e) An actuary employed under this section must be a fellow
38-10 of the Society of Actuaries, a member of the American Academy of
38-11 Actuaries, or an enrolled actuary under the federal Employee
38-12 Retirement Income Security Act of 1974.
38-13 (f) The municipality may pay all or part of the cost of the
38-14 actuarial services. Any cost not paid directly by the municipality
38-15 is payable from assets of the fund.
38-16 Sec. 12.04. INVESTMENT COUNSELORS AND MANAGERS; CUSTODIAN OF
38-17 ASSETS. (a) The board of trustees may employ professional
38-18 investment counselors to advise and assist the board in the
38-19 investment of the assets of the fund. The investment counseling
38-20 service must be provided by a nationally known organization whose
38-21 business functions include rendering continuous investment advisory
38-22 service to public pension and retirement funds. The municipality
38-23 may pay the entire cost of this counseling service. If not paid by
38-24 the municipality, the cost may be paid from the assets of the fund.
38-25 (b) The board of trustees shall appoint investment managers
38-26 for the fund by contracting for professional investment services
38-27 with one or more organizations, which may include a bank if it has
39-1 a trust department, that are in the business of managing
39-2 investments.
39-3 (c) To be eligible for appointment under Subsection (b) of
39-4 this section, an investment manager must be:
39-5 (1) registered under the federal Investment Advisors
39-6 Act of 1940;
39-7 (2) a bank as defined by that Act; or
39-8 (3) an insurance company qualified to perform
39-9 investment services under the laws of more than one state.
39-10 (d) In a contract made under Subsection (b) of this section,
39-11 the board shall specify any policies, requirements, or
39-12 restrictions, including criteria for determining the quality of
39-13 investments and for the use of standard rating services, that the
39-14 board adopts for investments of the fund.
39-15 (e) The municipality may pay all or part of the cost of
39-16 professional investment management services under a contract under
39-17 Subsection (b) of this section. Any cost not paid directly by the
39-18 municipality is payable from assets of the fund.
39-19 (f) The board of trustees may at any time and shall at
39-20 frequent intervals monitor the investments made by any investment
39-21 manager for the fund. The board may contract for professional
39-22 evaluation services to fulfill this requirement.
39-23 (g) The municipality may pay all or part of the cost of
39-24 professional evaluation services under Subsection (f) of this
39-25 section. Any cost not paid directly by the municipality is payable
39-26 from assets of the fund.
39-27 (h) The board may enter into an investment custody account
40-1 agreement designating a state or national bank or a trust company
40-2 as custodian for all assets allocated to or generated under the
40-3 investment management contract.
40-4 (i) Under the custody account agreement, the board of
40-5 trustees shall require the designated custodian to perform the
40-6 duties and assume the responsibilities for assets under the
40-7 contract for which the agreement is established.
40-8 (j) The municipality may pay all or part of the cost of
40-9 services under a custody account agreement under Subsection (h) of
40-10 this section. Any cost not paid directly by the municipality is
40-11 payable from assets of the fund.
40-12 (k) An investment manager other than a bank having a
40-13 contract with the fund under Subsection (b) of this section may not
40-14 be a custodian of any assets of the fund.
40-15 (l) When demands of the fund require, the board shall
40-16 withdraw from a custodian of fund assets money for use in paying
40-17 benefits to members and other beneficiaries of the fund and for
40-18 reasonable expenses of administering the fund, as approved by the
40-19 board.
40-20 Sec. 12.05. MEDICAL BOARD. The board of trustees may
40-21 designate a medical board composed of three persons. To be
40-22 eligible to serve as a member of the medical board, a physician
40-23 must be licensed to practice medicine in this state and be of good
40-24 standing in the medical profession. The board of trustees also may
40-25 designate persons who are not physicians to serve on the medical
40-26 board. The medical board shall:
40-27 (1) review all medical examinations and reports
41-1 required by this Act;
41-2 (2) investigate essential statements and certificates
41-3 made by or on behalf of a member of the fund in connection with an
41-4 application for disability retirement; and
41-5 (3) report in writing to the board of trustees its
41-6 conclusions and recommendations on all matters referred to it.
41-7 Sec. 12.06. RETIREMENT COUNSELING. The board of trustees
41-8 may pay for the cost of counseling for members of the fund
41-9 regarding retirement matters.
41-10 Sec. 12.07. AUDITS; EMPLOYMENT OF CERTIFIED PUBLIC
41-11 ACCOUNTANTS. The board of trustees shall employ a certified public
41-12 accountant or firm of certified public accountants to perform an
41-13 audit of the fund at least annually. The municipality may pay the
41-14 entire cost of an audit. If not paid by the municipality, the cost
41-15 may be paid from the assets of the fund.
41-16 Sec. 12.08. CIVIL ACTIONS FOR MONEY WRONGFULLY PAID OUT OR
41-17 OBTAINED. The board of trustees may recover by civil action from
41-18 any offending party or from the party's sureties, if any, any money
41-19 paid out or obtained from the fund through fraud,
41-20 misrepresentation, defalcation, theft, embezzlement, or
41-21 misapplication and may institute, conduct, and maintain the action
41-22 in the name of the board of trustees for the use and benefit of the
41-23 fund.
41-24 <Sec. 1. ><Definitions><. In this Act:>
41-25 <(1) "Board" or "board of trustees" means the board of
41-26 fire fighter's relief and retirement fund trustees.>
41-27 <(2) "Fire fighter" means a commissioned civil service
42-1 and Texas state-certified member of a regularly organized fire
42-2 department of an incorporated city.>
42-3 <(3) "Fund" or "pension fund" means the fire fighter's
42-4 relief and retirement fund.>
42-5 <Sec. 2. ><Creation of fund; board of fire fighter's relief
42-6 and retirement fund trustees><. (a) A fire fighter's relief and
42-7 retirement fund is created in all incorporated cities having a
42-8 population of not less than 450,000 nor more than 500,000,
42-9 according to the last preceding federal census, and having a fully
42-10 paid fire department.>
42-11 <(b) The mayor of the city, the city treasurer, or if no
42-12 treasurer, then the city secretary, city clerk, or other person or
42-13 officer as by law, charter provision, or ordinance, performs the
42-14 duty of city treasurer, and three members of the regularly
42-15 organized active fire department, to be selected by vote of the
42-16 members of the fire department in the manner provided in this Act,
42-17 shall be and are constituted the "Board of Fire Fighter's Relief
42-18 and Retirement Fund Trustees" to receive, handle and control,
42-19 manage, and disburse the fund for the respective city or town. The
42-20 board shall have the power and authority to hear and determine all
42-21 applications for retirement, claims for disability, either partial
42-22 or total, and to designate the beneficiaries or persons entitled to
42-23 participate as provided by this Act. The board shall be known as
42-24 the "Board of Fire Fighter's Relief and Retirement Fund Trustees of
42-25 ______, Texas." The mayor shall be the chairman and the city
42-26 treasurer shall be the secretary-treasurer of the board of trustees
42-27 respectively. The fire department of any city that comes within
43-1 the provisions of this Act shall elect by ballot three of its
43-2 members, one to serve for one year, one to serve for two years, and
43-3 one to serve for three years, or until their successors may be
43-4 elected as provided in this Act, as members of the board of
43-5 trustees and shall immediately certify the election to the
43-6 governing body of the city. Annually thereafter, during the period
43-7 after December 1 of one year and before the first Monday in January
43-8 of the following year, the board of trustees shall call an election
43-9 by the members of the fund to elect by ballot and certify one fire
43-10 fighter member of such board of trustees for a three-year term. A
43-11 newly elected board member takes office at the first board meeting
43-12 in January.>
43-13 <(c) The administrative cost of an election under this
43-14 section may be paid from the assets of the fund. Assets of the
43-15 fund may not be used to pay campaign expenses incurred by or for a
43-16 member. Administrative office supplies and equipment belonging to
43-17 the fund may not be used to assist any candidate or person seeking
43-18 to assist a candidate for a position on the board of trustees.>
43-19 <(d) The board of trustees shall elect annually from among
43-20 their number a vice-chairman who shall act as chairman in the
43-21 absence or disability of the mayor-chairman. The board of trustees
43-22 shall hold regular monthly meetings at a time and place as it may
43-23 by resolution designate and may hold special meetings on call of
43-24 the chairman as he may deem necessary; shall keep accurate minutes
43-25 of its meetings and records of its proceedings; shall keep separate
43-26 from all other city funds all money for the use and benefit of the
43-27 fire fighter's relief and retirement fund; shall keep a record of
44-1 all claims, receipts, and disbursements in a book or books to be
44-2 furnished by the city for the purpose; shall make disbursements
44-3 from the fund only on regular voucher signed by the treasurer and
44-4 countersigned by the chairman or vice-chairman and at least one
44-5 other member of the board of trustees. The city treasurer, as the
44-6 treasurer of the board of trustees, shall be the custodian of the
44-7 fire fighter's relief and retirement fund for the city, except for
44-8 funds deposited in an investment custody account pursuant to an
44-9 investment custodial agreement described by Section 18(h) of this
44-10 Act, under penalty of his official bond and oath of office.>
44-11 <(e) No member of the board of trustees may receive
44-12 compensation for service on the board of trustees.>
44-13 <(f) The board of fire fighter's relief and retirement fund
44-14 trustees of each such city or town in this state shall annually and
44-15 not later than the 31st day of January of each year after this Act
44-16 takes effect, make and file with the city treasurer a detailed and
44-17 itemized report of all receipts and disbursements with respect to
44-18 the fund, together with a statement of their administration, and
44-19 shall make and file other reports and statements or furnish further
44-20 information as from time to time may be required or requested by
44-21 the city treasurer.>
44-22 <(g) The board of trustees shall have the power and
44-23 authority to compel witnesses to attend and testify before it with
44-24 respect to all matters connected with the operation of this Act in
44-25 the same manner as is or may be provided for the taking of
44-26 testimony before notaries public, and its chairman shall have the
44-27 power and authority to administer oaths to witnesses.>
45-1 <(h) A majority of all members shall constitute a quorum to
45-2 transact business, and any order of the board of trustees shall be
45-3 made by vote to be recorded in the minutes of its proceedings.>
45-4 <(i) If a vacancy occurs in the membership of the board of
45-5 trustees by reason of the death, resignation, removal, or
45-6 disability of an incumbent, the vacancy shall be filled in the
45-7 manner provided in this Act for the selection of the member to be
45-8 so succeeded.>
45-9 <Sec. 3. ><Eligibility; amount and time of payment of
45-10 benefits><. (a)(1) Any fire fighter who has been duly appointed and
45-11 enrolled and who has performed service in any rank, as a fully paid
45-12 fire fighter, in one or more fire departments in any city in this
45-13 state covered by the provisions of this Act may retire and be
45-14 entitled to receive from the fire fighter's relief and retirement
45-15 fund of that city a monthly pension equal to 2 1/2 percent of the
45-16 fire fighter's average monthly salary multiplied by the number of
45-17 the person's years of service and any fraction of a year of
45-18 service, if the fire fighter:>
45-19 <(A) has attained the age of 52 years and
45-20 completed at least 10 years of service; or>
45-21 <(B) has served actively for a period of at
45-22 least 27 years, regardless of age.>
45-23 <(2) The maximum permissible employer-derived annual
45-24 benefit is the lesser of $90,000 or 100 percent of the
45-25 participant's highest average annual compensation. Highest average
45-26 annual compensation is the average compensation for the three
45-27 consecutive calendar years of service with the department that
46-1 produces the highest average. If the annual benefit begins before
46-2 age 62, the maximum permissible annual benefit may not exceed the
46-3 lesser of the actuarial equivalent of a $90,000 annual benefit
46-4 beginning at age 62 or the participant's highest average annual
46-5 compensation. This actuarial adjustment may not reduce the $90,000
46-6 limitation below $75,000 if the benefit begins at or after age 55.
46-7 If the annual benefit begins before age 55, the maximum permissible
46-8 annual benefit may not exceed the greater of (1) the actuarial
46-9 equivalent of a $75,000 annual benefit beginning at age 55, (2) the
46-10 actuarial equivalent of a $90,000 annual benefit beginning at age
46-11 62, or (3) $50,000. To determine actuarial equivalence of a
46-12 benefit beginning before age 62, the interest rate assumption is
46-13 the rate adopted by the board of trustees in the proper
46-14 administration of the fund, but not less than five percent. If the
46-15 annual benefit begins after age 65, the benefit may not exceed the
46-16 lesser of the actuarial equivalent of a $90,000 annual benefit
46-17 beginning at age 65 or the participant's highest average annual
46-18 compensation. To determine actuarial equivalence of a benefit
46-19 beginning after age 65, the interest rate assumption is the rate
46-20 adopted by the board of trustees in the proper administration of
46-21 the fund, but not more than five percent.>
46-22 <(3) Both the $90,000 limitation and the $50,000
46-23 limitation will be automatically adjusted to new dollar limitation
46-24 amounts as determined by the commissioner of the Internal Revenue
46-25 Service for subsequent calendar years effective as of January 1 of
46-26 those years. A new limitation will apply to limitation years ending
46-27 within the calendar year of the date of the adjustments.>
47-1 <(4) The $50,000 limitation applies only to
47-2 participants whose service used in determining benefits under this
47-3 section includes at least 20 years of service as a full-time fire
47-4 fighter of the city.>
47-5 <(b) The factor of 2 1/2 percent may be changed from 2 1/2
47-6 percent, provided that:>
47-7 <(1) the change is first approved by the board's
47-8 actuary;>
47-9 <(2) the change is approved by the board of trustees;>
47-10 <(3) the change applies only to active full-time
47-11 firemen in the department at the time of the change and those who
47-12 enter the department after the change is effective; and>
47-13 <(4) a person's vested accrued benefit cannot be
47-14 decreased.>
47-15 <(c) The average monthly salary means the monthly average of
47-16 the fireman's total salary for the highest 36 months during his
47-17 period of service, excluding overtime pay, any temporary pay in
47-18 higher classifications, educational incentive pay, assignment pay,
47-19 Christmas Day bonus pay, and pay for automobile and clothing
47-20 allowances. If at the time of death or disability a fire fighter
47-21 has less than 36 months of service, his average salary will be
47-22 computed as if he had been employed for the previous 36 months.
47-23 For the period before his employment, the average salary will be
47-24 computed as if the fire fighter had held the same rank he held when
47-25 he became a member of the fund at the amount of salary for
47-26 retirement fund benefit and contribution purposes that he would
47-27 have received if he had been employed by the fire department during
48-1 that period.>
48-2 <(d) Any person who continues to serve actively beyond the
48-3 date he would normally retire shall continue to make contributions
48-4 to the fund and accrue pension credits to the date of actual
48-5 retirement.>
48-6 <(e) Benefits shall be payable on the first day of each
48-7 month commencing with the month following the date as of which the
48-8 member retired.>
48-9 <(f) Any person who has been appointed and enrolled and
48-10 either has attained the age of 50 years and served actively for a
48-11 period of at least 10 years, or has served at least 25 years,
48-12 regardless of age, in any rank, as a fully paid fire fighter, in
48-13 one or more regularly organized fire departments in any city
48-14 covered by this Act may retire and be entitled to receive from the
48-15 fire fighter's relief and retirement fund of that city a monthly
48-16 pension equal to the pension described under Section 3(a) of this
48-17 Act, reduced according to tables recommended by the board of
48-18 trustees' actuary and adopted by the board for early retirement.>
48-19 <Sec. 4. ><Cost of living adjustment><. Any fireman and
48-20 beneficiaries of a fireman who retires or has retired or who
48-21 receive benefits under Section 3, 6, or 11 of this Act, shall be
48-22 entitled to an annual cost-of-living adjustment of his pension
48-23 allowance and their benefits based on the Consumer Price Index for
48-24 All Urban Consumers as determined by the United States Department
48-25 of Labor. The adjustment must first be approved by a majority of
48-26 the members of the board of firemen's relief and retirement fund
48-27 trustees of the city and the board of trustees' actuary. The
49-1 adjusted pension allowance and adjusted benefits shall never be
49-2 less than the amount granted the fireman or his beneficiaries on
49-3 the date of his retirement or death without regard to changes in
49-4 the consumer price index. The adjusted pension allowance or
49-5 adjusted benefits may be increased by an amount to be determined by
49-6 a majority of the board of firemen's relief and retirement fund
49-7 trustees of the city and the board of trustees' actuary.>
49-8 <Sec. 5. ><Retirement age; eligibility after 10 years of
49-9 service><. (a)(1) A fire fighter's normal retirement age is the
49-10 earliest age at which the fire fighter will be at least 52 years of
49-11 age and will have completed at least 10 years of service or the
49-12 earliest age at which the fire fighter would have completed at
49-13 least 27 years of service had the fire fighter not terminated
49-14 employment.>
49-15 <(2) Any fire fighter who terminates employment after
49-16 having served for a period of at least 10 years in any fire
49-17 department covered by this Act and who has contributed to the fire
49-18 fighter's relief and retirement fund of the city for a period of at
49-19 least 10 years, shall be entitled to receive a pension allowance
49-20 beginning at the end of the month in which the fire fighter attains
49-21 a normal retirement age, provided that the following conditions are
49-22 met:>
49-23 <(A) on termination of employment, the fire
49-24 fighter shall leave his contributions in the fund, and shall not be
49-25 required to make any further contributions to the fund;>
49-26 <(B) the pension allowance shall be based on the
49-27 monthly average of the fire fighter's total salary for the highest
50-1 36 months during the fire fighter's service excluding overtime pay,
50-2 any temporary pay in higher classifications, educational incentive
50-3 pay, assignment pay, Christmas Day bonus pay, and pay for
50-4 automobile and clothing allowances; and>
50-5 <(C) the pension allowance shall be calculated
50-6 by the formula, as set out in Section 3(a) of this Act, in effect
50-7 at the time the fire fighter terminated his employment.>
50-8 <(b) In the event a fire fighter who terminates employment
50-9 with the fire department under this section dies either before age
50-10 52 or after attaining the age of 52 and beginning to receive
50-11 benefits under this section, the fire fighter's surviving spouse is
50-12 entitled to receive an immediate monthly benefit as described under
50-13 Section 11(c) of this Act, if the spouse was married to the fire
50-14 fighter:>
50-15 <(1) on the fire fighter's date of termination, if the
50-16 fire fighter's death occurred before age 52; or>
50-17 <(2) when the fire fighter attained the age of 52, if
50-18 the fire fighter's death occurred after attaining the age of 52.>
50-19 <(c) Any fireman qualifying for a pension allowance under
50-20 Subsection (a) of this section may, on or after termination of his
50-21 employment, elect to withdraw his contributions from the fund,
50-22 thereby forfeiting any rights he may have had in the fund.>
50-23 <(d) The provisions of this section shall not become
50-24 operable until a majority of the members of the board of firemen's
50-25 relief and retirement fund trustees of the city and an actuary so
50-26 approve.>
50-27 <Sec. 6. ><Total and permanent disability><. (a) If a person
51-1 serving as an active fire fighter duly enrolled in a fire
51-2 department covered by this Act becomes disabled for either physical
51-3 or mental reasons before meeting the requirements to qualify for a
51-4 service retirement benefit described by Section 3(a) of this Act,
51-5 the board of trustees shall, on his request, or without his request
51-6 if it shall deem proper and for the good of the department, retire
51-7 the fire fighter from active service and order that he be paid from
51-8 the fire fighter's relief and retirement fund of the city a monthly
51-9 amount equal to his accrued unreduced pension as determined under
51-10 Section 3(a) of this Act. If a fire fighter becomes disabled as
51-11 described in this section, the amount to be paid shall not be less
51-12 than the amount computed under Section 3(a) of this Act when 20
51-13 years of service is assumed. In order for a fire fighter to
51-14 receive these benefits for the first 2- 1/2 years, the fire
51-15 fighter must be unable to perform the duties of the person's
51-16 occupation as a fire fighter.>
51-17 <(b) In order to receive benefits under Subsection (a) of
51-18 this section after this 2- 1/2 -year period, the disabled person
51-19 must be unable to be gainfully employed. The board may require any
51-20 person receiving disability benefits provided for in this Act to
51-21 provide evidence of annual income. The evidence may be considered
51-22 in any determination of ability to be gainfully employed. The
51-23 board may, in its discretion, reduce or discontinue disability
51-24 payments to a person on the failure or refusal of the person to
51-25 provide such evidence as is directed by the board.>
51-26 <(c) If a person serving as an active fire fighter enrolled
51-27 in a regularly active fire department becomes totally and
52-1 permanently disabled from any cause for either physical or mental
52-2 reasons after meeting the requirements to qualify for a service
52-3 retirement benefit as described under Section 3(a) of this Act, the
52-4 person is eligible to receive a disability pension under Subsection
52-5 (a) of this section. In this Act, a total disability is a
52-6 disability caused by illness or bodily injury that makes a person
52-7 unable to work for pay or profit or to engage in any business or
52-8 occupation for which the person is suited by education, training,
52-9 or experience. A total disability is permanent when it has
52-10 continued without break for at least nine months and is expected to
52-11 continue indefinitely.>
52-12 <(d) If, during the first 2 1/2 years, the fire fighter
52-13 recovers to the extent that the person is able to perform the
52-14 duties of the person's job as a fire fighter, the board of trustees
52-15 may terminate the fire fighter's disability benefit and restore the
52-16 person to active service at not less than the same rank the person
52-17 held at the time of retirement for disability.>
52-18 <(e) After the disabled fire fighter has received disability
52-19 benefits from the fund for at least 2 1/2 years, the board of
52-20 trustees may review the situation of the disabled fire fighter to
52-21 determine the status of the fire fighter's disability. If the fire
52-22 fighter has recovered to the extent that the fire fighter is able
52-23 to be gainfully employed, the board of trustees may, at its
52-24 discretion:>
52-25 <(1) continue to pay a full disability benefit to the
52-26 disabled fire fighter;>
52-27 <(2) elect to pay the disabled fire fighter a partial
53-1 disability benefit in an amount commensurate with the person's
53-2 disability as determined by the board;>
53-3 <(3) discontinue payment of a disability benefit to
53-4 the fire fighter; or>
53-5 <(4) discontinue payment of a disability benefit to
53-6 the fire fighter and restore the fire fighter to active service at
53-7 not less than the same rank the person held at the time of
53-8 retirement for disability.>
53-9 <(f) The board of trustees may reinstate any disability
53-10 benefit that has been previously terminated or reduced if the
53-11 disabled fire fighter's condition has worsened due to the same
53-12 cause for which the person was originally disabled.>
53-13 <(g) This section applies even if a fire fighter is disabled
53-14 while gainfully employed by someone other than the fire department
53-15 by which the person is also employed.>
53-16 <(h) No person may receive retirement benefits under this
53-17 section for any period during which that person received full
53-18 salary or compensation, including payment received while on sick
53-19 leave.>
53-20 <(i) A fire fighter may not be retired for disability except
53-21 as provided by this Act or receive any allowance for disability
53-22 from the fund until a certificate of disability or eligibility has
53-23 been signed by a physician of the member's choice and filed with
53-24 and approved by the board of trustees. The member shall pay any
53-25 costs imposed by a physician the member chooses to certify a
53-26 disability or eligibility. The board of trustees, at its cost, may
53-27 obtain additional medical opinions before approving or disapproving
54-1 a disability retirement.>
54-2 <(j) The board of trustees at any time may require any fire
54-3 fighter retired for disability under this Act to appear and undergo
54-4 a medical examination by the city physician or any other physician
54-5 appointed or selected by the board of trustees for that purpose.
54-6 The result of the examination and report by the physician shall be
54-7 considered by the board of trustees in determining whether the
54-8 disability retirement benefit will be continued, increased (if less
54-9 than the maximum provided by this Act), decreased, or discontinued
54-10 in accordance with this section. If any fire fighter receiving a
54-11 disability retirement benefit under this Act, after due notice from
54-12 the board of trustees to appear and be reexamined, fails to appear
54-13 or refuses to submit to reexamination, unless excused by the board,
54-14 the board may reduce or entirely discontinue the benefit.>
54-15 <(k) If a fire fighter who is covered by this Act has ever
54-16 experienced a reduction in the fire fighter's disability benefit on
54-17 the grounds that the fire fighter was receiving a workers'
54-18 compensation benefit at the same time the fire fighter was
54-19 receiving a disability benefit under this Act, the fund shall:>
54-20 <(1) pay the fire fighter, beginning with the fire
54-21 fighter's next monthly benefit payment, the full, unreduced
54-22 disability benefit that the fire fighter is entitled to under this
54-23 Act; and>
54-24 <(2) pay the fire fighter, as soon as it is reasonably
54-25 possible, a lump-sum amount equal to the difference between the
54-26 reduced disability payments the fire fighter has received and the
54-27 full, unreduced disability payments that the fire fighter would
55-1 have been entitled to receive during this period of time except for
55-2 the reduction in the amount of workers' compensation benefits.>
55-3 <(l) If a fire fighter's monthly disability benefit is
55-4 reduced or discontinued under this section, the fire fighter is
55-5 entitled to receive a pension allowance under Section 5(a)(2) of
55-6 this Act if the fire fighter meets the conditions of that
55-7 subdivision.>
55-8 <Sec. 10. ><Contributions; membership; creditable service;
55-9 investment of surplus funds; fiduciary relationships;
55-10 indemnification of trustees><. (a) The city shall contribute and
55-11 appropriate each month to the fund an amount equal to 14 percent of
55-12 the total monthly payroll, excluding overtime pay, any temporary
55-13 pay in higher classifications of the fire department of the city,
55-14 educational incentive pay, assignment pay, Christmas Day bonus pay,
55-15 and pay for automobile and clothing allowances. Each full-time
55-16 fireman shall pay into the pension fund 13.70 percent of his total
55-17 monthly salary, excluding overtime pay, any temporary pay in higher
55-18 classifications, educational incentive pay, assignment pay,
55-19 Christmas Day bonus pay, and pay for automobile and clothing
55-20 allowances. The governing body of the city may authorize the city
55-21 to make an additional contribution to its fire fighter's relief and
55-22 retirement fund in whatever amount the governing body of the city
55-23 may fix. The firemen, by a majority vote in favor of an increase
55-24 in contributions above the 13.70 percent, shall increase each
55-25 member's contribution above 13.70 percent in whatever amount the
55-26 pension board recommends.>
55-27 <(b) Money deducted from salaries or compensation as
56-1 provided by this section and the payments and contributions
56-2 provided by this section shall become and form a part of the
56-3 firemen's relief and retirement fund of the city in which the
56-4 contributing firemen serve.>
56-5 <(c) Any person who enters service as a fire fighter in any
56-6 city that has a fire fighter's relief and retirement fund to which
56-7 the person is eligible for membership shall become a member of the
56-8 fund as a condition of that person's appointment, and shall, by
56-9 acceptance of the appointment, agree to make the contributions
56-10 required by this Act of fire fighter members of the fund and is
56-11 eligible to participate in the benefits of membership in the fund
56-12 as provided in this Act. However, no person is eligible to
56-13 membership in the fund who has reached the person's 30th birthday
56-14 at the time the person enters service as a fire fighter, and any
56-15 person who enters service as a fire fighter may be denied or
56-16 excused from membership in the fund if the board of trustees of the
56-17 fund determines that the person is not of sound health. The person
56-18 being considered for membership shall pay the cost of any physical
56-19 examination required by the board of trustees for this purpose. A
56-20 fire fighter who is a member of the fund shall continue to be a
56-21 member of the fund if the fire fighter is appointed to the rank of
56-22 chief or the rank immediately below chief.>
56-23 <(d) Each person who is an active member of a firemen's
56-24 relief and retirement fund previously organized and existing under
56-25 the laws of this state at the effective date of this amendment
56-26 shall continue as a member of the fund, and he shall retain and be
56-27 allowed credit for all service to which he was entitled in the fund
57-1 of which he was a member immediately prior to the effective date of
57-2 this amendment.>
57-3 <(e)(1) The severance benefit of a fire fighter who
57-4 terminates the fire fighter's employment before eligibility for
57-5 retirement shall be an amount equal to the amount of the fire
57-6 fighter's monthly contributions, with interest, made while a
57-7 participating member of the fire fighter's relief and retirement
57-8 fund, in excess of the amount of benefits that the member
57-9 previously received from the fund. If the member's employment is
57-10 terminated by death before retirement and the member leaves no
57-11 surviving beneficiary entitled to pension benefits, the member's
57-12 estate shall receive the amount of the member's contributions, with
57-13 interest, in excess of the amount of benefits that the member
57-14 previously received from the fund. In each instance in which a
57-15 member's contributions are to be paid to a fire fighter or a fire
57-16 fighter's estate or surviving relative, the payment will include
57-17 accumulated interest computed as provided by this section.>
57-18 <(2) On December 31, 1993, the fund shall credit
57-19 interest to the account of each fire fighter who had contributions
57-20 on deposit with the fund on January 1, 1993, and has not retired,
57-21 died, or withdrawn those contributions. The amount of interest
57-22 credited on December 31, 1993, will be computed by multiplying five
57-23 percent by an amount equal to one-half of the member's
57-24 contributions on deposit on January 1, 1993, and then multiplying
57-25 that product by the number of whole calendar years that the fire
57-26 fighter has been a member of the fund on December 31, 1993.>
57-27 <(3) Beginning December 31, 1994, the fund shall
58-1 credit interest on December 31 of each year to the account of each
58-2 fire fighter in an amount equal to five percent of the accumulated
58-3 contributions, including previously credited interest, on deposit
58-4 on January 1 of that year.>
58-5 <(4) The fund may not pay interest on a fire fighter's
58-6 contributions for part of a year or for any period that is more
58-7 than five calendar years after the date of termination of
58-8 employment.>
58-9 <(f) These provisions apply to all active full-time members
58-10 of the fire department and to those persons who shall become
58-11 members of the fire department at any time in the future.>
58-12 <(g) When, in the opinion of the board of trustees, there is
58-13 on hand in the fire fighter's relief and retirement fund of any
58-14 city under this Act a surplus over and above a reasonable and safe
58-15 amount to take care of the current demands on the fund, the
58-16 surplus, or so much of it as in the judgment of the board is deemed
58-17 safe, may be invested in:>
58-18 <(1) direct obligations of or obligations the
58-19 principal and interest of which are guaranteed or fully insured by
58-20 the United States or its agencies or instrumentalities;>
58-21 <(2) commercial paper rated as investment quality or
58-22 higher by a nationally recognized investment rating firm;>
58-23 <(3) short-term investment funds, mutual funds, or
58-24 their equivalent, that:>
58-25 <(A) are rated as investment quality or higher
58-26 by a nationally recognized investment rating firm; and>
58-27 <(B) do not exceed an average of 270 days to
59-1 maturity;>
59-2 <(4) fully collateralized or direct repurchase
59-3 agreements, including direct and reverse security repurchase
59-4 agreements and security lending agreements, that:>
59-5 <(A) have a defined termination date;>
59-6 <(B) are secured by obligations described by
59-7 Subdivision (1) of this subsection or by cash; and>
59-8 <(C) are pledged with a third party selected or
59-9 approved by a majority of the board of trustees;>
59-10 <(5) corporate bonds, including convertible bonds and
59-11 collateralized mortgage obligations, rated as investment quality or
59-12 higher by a nationally recognized investment rating firm;>
59-13 <(6) common and preferred stock of companies
59-14 incorporated in the United States and foreign stocks that are
59-15 designated in United States dollars and that are registered with
59-16 the Securities and Exchange Commission and listed on a United
59-17 States exchange or by the National Association of Securities
59-18 Dealers Automated Quotations;>
59-19 <(7) major foreign equity and fixed income market
59-20 investments; and>
59-21 <(8) convertible stocks and bonds rated as investment
59-22 quality or higher by a nationally recognized investment rating firm
59-23 or by the investment manager.>
59-24 <(h) An investment in corporate bonds that meets the
59-25 requirements of Subsection (g)(3) of this section at the time of
59-26 purchase is not required to be sold because the bonds' rating is
59-27 subsequently reduced to a rating that is not more than one major
60-1 classification lower than the requirements. Interest or dividends
60-2 on investments shall be deposited into the fund and become part of
60-3 it. The fund may not own more than five percent of the voting
60-4 stock of any one corporation. Under an investment measure at cost:>
60-5 <(1) total fixed-income investments should not
60-6 represent less than 50 percent nor more than 80 percent of the
60-7 value of the investment portfolio;>
60-8 <(2) total investments in common stocks should not
60-9 represent less than 20 percent nor more than 50 percent of the
60-10 value of the investment portfolio;>
60-11 <(3) total investments in common stocks of foreign
60-12 corporations may not represent more than five percent of the value
60-13 of the investment portfolio; and>
60-14 <(4) total investments in any one corporation may not
60-15 represent more than three percent of the value of the investment
60-16 portfolio.>
60-17 <(i) A person or financial institution is a fiduciary of a
60-18 fire fighter's relief and retirement fund established under this
60-19 Act to the extent that the person or the financial institution:>
60-20 <(1) exercises any discretionary authority or
60-21 discretionary control over management of the fire fighter's relief
60-22 and retirement fund or exercises any authority or control over
60-23 management or disposition of the assets of the fund;>
60-24 <(2) renders or has authority or responsibility to
60-25 render investment advice for a fee or other compensation, direct or
60-26 indirect, concerning any money or other property of the fund; or>
60-27 <(3) has any discretionary authority or discretionary
61-1 responsibility over the administration of the fund.>
61-2 <(j) A fiduciary of a fire fighter's relief and retirement
61-3 fund established under this Act may not cause the fund to engage in
61-4 a transaction if the fiduciary knows or should know that the
61-5 transaction constitutes a direct or indirect:>
61-6 <(1) sale, exchange, or lease of any property from the
61-7 fund to a party for less than adequate consideration or from a
61-8 party to the fund for more than adequate consideration;>
61-9 <(2) loan of money or other extension of credit from
61-10 the fund to a party without the receipt of adequate security and a
61-11 reasonable rate of interest or from a party to the fund with
61-12 provision of excessive security or an unreasonably high rate of
61-13 interest;>
61-14 <(3) furnishing of goods, services, or facilities from
61-15 the fund to a party for less than adequate consideration or from a
61-16 party to the fund for more than adequate consideration; or>
61-17 <(4) transfer to or use by or for the benefit of a
61-18 party of any assets of the fund for less than adequate
61-19 consideration.>
61-20 <(k) A fiduciary of a fire fighter's relief and retirement
61-21 fund established under this Act may not:>
61-22 <(1) deal with the assets of the fund in the
61-23 fiduciary's own interest or for the fiduciary's own account;>
61-24 <(2) in the fiduciary's individual or any other
61-25 capacity act in any transaction involving the fund on behalf of a
61-26 party whose interests are adverse to the interests of the fund or
61-27 the interest of its participants or beneficiaries; or>
62-1 <(3) receive any consideration for the fiduciary's own
62-2 personal account from any party dealing with the fund in connection
62-3 with a transaction involving the assets of the fund.>
62-4 <(l) The board of trustees may purchase insurance
62-5 indemnifying the members of the board of trustees against personal
62-6 loss or accountability from liability resulting from a member's act
62-7 or omission as a member of the board of trustees.>
62-8 <Sec. 11. ><Survivors' benefits><. (a) If a fire fighter dies
62-9 before retirement, the fire fighter's surviving spouse, if married
62-10 to the member on the member's date of death, shall be entitled to
62-11 receive an immediate monthly pension, the amount of which shall be
62-12 75 percent of the member's accrued unreduced pension as determined
62-13 under Section 3(a) of this Act when 20 years of service is assumed.>
62-14 <(b) On the death of a member who retired under Section 3(a)
62-15 or (f) or Section 6(a) or (b) of this Act, the surviving spouse, if
62-16 married to the person on the person's date of retirement, is
62-17 entitled to receive an immediate monthly pension equal to 75
62-18 percent of the pension being paid to the member.>
62-19 <(c) On the death of a fire fighter who terminated
62-20 employment with the fire department after 10 or more years of
62-21 service before age 52, the surviving spouse is entitled to receive
62-22 an immediate monthly pension equal to 75 percent of the pension the
62-23 member was either receiving or entitled to receive at age 52, if:>
62-24 <(1) the spouse was married to the member on the date
62-25 of the member's termination of employment, if the member's death
62-26 occurred before age 52; or>
62-27 <(2) the spouse was married to the member when the
63-1 member attained the age of 52, if the member's death occurred after
63-2 the member attained the age of 52.>
63-3 <(d) A deceased member's unmarried children under the age of
63-4 22 are entitled to receive, if there is no surviving spouse, a
63-5 total amount of monthly pension equal to 75 percent of the monthly
63-6 benefit based on the fire fighter's average monthly salary at the
63-7 time of death and the number of years and any fraction of a year of
63-8 the fire fighter's service, assuming 20 years of service if service
63-9 is less than 20 years. Each dependent child is entitled to receive
63-10 an equal share of the total amount of monthly pension. If there is
63-11 a surviving spouse, each deceased member's unmarried child under
63-12 the age of 22 is entitled to receive 15 percent of the monthly
63-13 benefit based on the fire fighter's average monthly salary at the
63-14 time of death and the number of years and any fraction of a year of
63-15 the fire fighter's service, assuming 20 years of service if service
63-16 is less than 20 years. The total amount of benefits being paid to
63-17 the children if there is a surviving spouse may not exceed the
63-18 total amount of benefits payable to dependent children if there is
63-19 no surviving spouse. Payments to a child shall be made whether or
63-20 not a spouse survives and shall continue after the death of a
63-21 surviving spouse but shall cease on the earliest of the child's
63-22 death, marriage, or attainment of age 22.>
63-23 <(e) The spouse's monthly benefit is payable for life if the
63-24 fire fighter was either retired or eligible to retire under Section
63-25 3(a) or (f) or Section 6(c) of this Act at the date of the fire
63-26 fighter's termination of service with the fire department.
63-27 Otherwise, the spouse's monthly benefit ceases on the earlier of
64-1 the spouse's death or remarriage. After all payments cease, any
64-2 excess of the member's total contributions at the date of the
64-3 member's death over any retirement and death benefits shall be paid
64-4 to the member's estate.>
64-5 <(f) If a deceased or retired member leaves no surviving
64-6 spouse or children eligible to receive a benefit under this section
64-7 but is survived by one or more dependent parents, the dependent
64-8 parent, or one of the surviving parents designated by the board of
64-9 trustees, is entitled to receive a monthly pension equal to the
64-10 amount that would have been payable to a surviving spouse. If a
64-11 deceased member leaves no surviving spouse, children, or dependent
64-12 parent eligible to receive a benefit as provided in this section,
64-13 the member's total contributions, less any amount previously paid
64-14 to the member, shall be paid to the member's estate.>
64-15 <(h) Benefits provided in this section shall be payable on
64-16 the first day of each month commencing with the month following the
64-17 one in which the member's death occurs.>
64-18 <(i) The board of trustees shall determine all questions of
64-19 dependency, and their determination shall be final and conclusive
64-20 on all parties. All unmarried children under age 22, in the
64-21 absence of a determination to the contrary, are considered
64-22 dependent.>
64-23 <(j) On a majority vote of the board of trustees, benefits
64-24 to children under age 22 may be increased to an amount not to
64-25 exceed the maximum approved by an actuary.>
64-26 <(k) On a majority vote of the board of trustees, benefits
64-27 to a surviving spouse may be increased to an amount not to exceed
65-1 the maximum approved by an actuary.>
65-2 <(l) The provisions of this section shall apply even though
65-3 the death was caused while the member was gainfully employed by
65-4 someone other than the respective fire department for which he was
65-5 employed.>
65-6 <Sec. 12. ><Exemption from execution, attachment, garnishment,
65-7 etc.; transfers or assignments void><. No portion of a firemen's
65-8 relief and retirement fund may, either before or after its order of
65-9 disbursement by the board of trustees to a retired or disabled
65-10 fireman or the surviving spouse, the guardian of any minor child or
65-11 children, or the dependent parent of any deceased, retired, or
65-12 disabled fireman, be ever held, seized, taken, subjected to, or
65-13 detained, or levied on by virtue of any execution, attachment,
65-14 garnishment, injunction, or other writ, order, or decree, or any
65-15 process, or proceedings whatsoever issued out of or by any court of
65-16 this state for the payment or satisfaction, in whole or in part, of
65-17 any debt, damage, claim, demand, or judgment against such fireman
65-18 or the fireman's surviving spouse, the guardian of the fireman's
65-19 minor child or children, the fireman's dependent father or mother,
65-20 nor shall said fund or any claim thereto be directly or indirectly
65-21 assigned or transferred, and any attempt to transfer or assign the
65-22 same shall be void. The fund shall be sacredly held, kept, and
65-23 disbursed for the purposes provided by this Act and for no other
65-24 purpose whatever.>
65-25 <Sec. 13. ><Integration with benefits under federal Social
65-26 Security Act><. No firemen's relief and retirement fund for fully
65-27 paid firemen may ever be integrated with benefits payable under the
66-1 federal Social Security Act, and benefits which might be available
66-2 to a fireman under the federal Social Security Act may never be
66-3 taken into account in a city where firemen are eligible to enroll
66-4 for or receive retirement benefits under the Social Security Act
66-5 when determining the amount of benefits which a fireman may receive
66-6 from a firemen's relief and retirement fund for fully paid firemen.>
66-7 <Sec. 16. ><Creditable service><. (a) If a fire fighter is
66-8 absent from service with the fire department for less than five
66-9 years because of military service and returns to service with the
66-10 fire department not later than the 180th day after the date of
66-11 discharge or release from military service, the fire fighter will
66-12 receive service credit for both the fire fighter's previous period
66-13 of service with the fire department and the period of military
66-14 service, if the fire fighter has left the fire fighter's
66-15 contributions in the fund.>
66-16 <(b) If a fire fighter is absent from service with the fire
66-17 department for less than five years for reasons other than military
66-18 service and returns to service with the fire department, the fire
66-19 fighter will receive service credit for the fire fighter's previous
66-20 period of service with the fire department if the fire fighter has
66-21 left the fire fighter's contributions in the fund. Credit may not
66-22 be given for the period the fire fighter is absent from service as
66-23 described by this subsection.>
66-24 <(c) If a fire fighter who has less than 10 years of service
66-25 credit in the fund is absent from service with the fire department
66-26 for at least five years for any reason, the fund will refund the
66-27 fire fighter's accumulated contributions and the fire fighter will
67-1 forfeit the fire fighter's service credit with the fund. If, on
67-2 the expiration of two years after the five-year period of absence,
67-3 the fund is unable to refund the fire fighter's accumulated
67-4 contributions, the fire fighter's accumulated contributions will
67-5 escheat to the fund. However, if the fire fighter who was formerly
67-6 a member of the fund later claims the fire fighter's accumulated
67-7 contributions, the fund shall refund this amount to the fire
67-8 fighter.>
67-9 <(d) A fire fighter may not be granted service credit for
67-10 time during which the person receives a disability pension from the
67-11 fund.>
67-12 <Sec. 17. ><City attorney; representation of board of
67-13 trustees><. The board of trustees shall retain legal counsel for
67-14 matters affecting the operation of the fund.>
67-15 <Sec. 18. ><Investment of assets; employment of professional
67-16 counselors><. (a) The board of trustees of a fully paid fire
67-17 department may engage and employ professional investment counselors
67-18 to advise and assist the board in the investment of the assets of
67-19 the fund. The investment counseling service must be provided by a
67-20 nationally known organization whose business functions include
67-21 rendering continuous investment advisory service to public pension
67-22 and retirement funds. The city may pay the entire cost of this
67-23 counseling service; if not paid by the city, the cost may be paid
67-24 from the assets of the fund.>
67-25 <(b) The board shall appoint investment managers for the
67-26 fund by contracting for professional investment services with one
67-27 or more organizations, which may include a bank if it has a trust
68-1 department, that are in the business of managing investments.>
68-2 <(c) To be eligible for appointment under Subsection (b) of
68-3 this section, an investment manager must be:>
68-4 <(1) registered under the federal Investment Advisors
68-5 Act of 1940;>
68-6 <(2) a bank as defined by that Act; or>
68-7 <(3) an insurance company qualified to perform
68-8 investment services under the laws of more than one state.>
68-9 <(d) In a contract made under Subsection (b) of this
68-10 section, the board shall specify any policies, requirements, or
68-11 restrictions, including criteria for determining the quality of
68-12 investments and for the use of standard rating services, that the
68-13 board adopts for investments of the fund.>
68-14 <(e) The city may pay all or part of the cost of
68-15 professional investment management services under a contract under
68-16 Subsection (b) of this section. Any cost not paid directly by the
68-17 city is payable from assets of the fund.>
68-18 <(f) The board may at any time and shall at frequent
68-19 intervals monitor the investments made by any investment manager
68-20 for the fund. The board may contract for professional evaluation
68-21 services to fulfill this requirement.>
68-22 <(g) The city may pay all or part of the cost of
68-23 professional evaluation services under Subsection (f) of this
68-24 section. Any cost not paid directly by the city is payable from
68-25 assets of the fund.>
68-26 <(h) The board may enter into an investment custody account
68-27 agreement designating a state or national bank as custodian for all
69-1 assets allocated to or generated under the investment management
69-2 contract.>
69-3 <(i) Under a custody account agreement, the board shall
69-4 require the designated bank to perform the duties and assume the
69-5 responsibilities for assets under the contract for which the
69-6 agreement is established.>
69-7 <(j) The city may pay all or part of the cost of bank
69-8 services under a custody account agreement under Subsection (h) of
69-9 this section. Any cost not paid directly by the city is payable
69-10 from assets of the fund.>
69-11 <(k) An investment manager other than a bank having a
69-12 contract with the fund under Subsection (b) of this section may not
69-13 be a custodian of any assets of the fund.>
69-14 <(l) When demands of the fund require, the board shall
69-15 withdraw from a custodian of fund assets money for use in paying
69-16 benefits to members and other beneficiaries of the fund and for
69-17 reasonable expenses of administering the fund, as approved by the
69-18 board.>
69-19 <Sec. 19. ><Employment of actuaries><. (a) The board of
69-20 trustees of a fire fighter's relief and retirement fund coming
69-21 under the provisions of this Act shall employ an actuary who may be
69-22 the consultant and technical advisor to the board regarding the
69-23 operation of the fund and may perform such duties as may be
69-24 required by the board.>
69-25 <(b) The actuary shall make a valuation at least once every
69-26 two years of the assets and liabilities of the fund on the basis of
69-27 assumptions and methods that are reasonable in the aggregate,
70-1 considering the experience of the program and reasonable
70-2 expectations, and that, in combination, offer the actuary's best
70-3 estimate of anticipated experience under the program.>
70-4 <(c) On the basis of the valuation, the actuary shall make
70-5 recommendations to the board to ensure the actuarial soundness of
70-6 the fund. In making recommendations, the actuary shall define each
70-7 actuarial term and enumerate and explain each actuarial assumption
70-8 used in making the valuation. This information must be included
70-9 either in the actuarial study or in a separate report made
70-10 available as a public record.>
70-11 <(d) The board shall file with the State Pension Review
70-12 Board a copy of each actuarial study and each separate report made
70-13 as required by law.>
70-14 <(e) An actuary employed under this section must be a fellow
70-15 of the Society of Actuaries, a member of the American Academy of
70-16 Actuaries, or an enrolled actuary under the federal Employee
70-17 Retirement Income Security Act of 1974.>
70-18 <(f) The city may pay all or part of the cost of the
70-19 actuarial services. Any cost not paid directly by the city is
70-20 payable from assets of the fund.>
70-21 <Sec. 20. ><Civil actions for money wrongfully paid out or
70-22 obtained><. The board of trustees of any city created and
70-23 constituted under the provisions of this Act shall have the power
70-24 and authority to recover by civil action from any offending party
70-25 or from his bondsmen, if any, any money paid out or obtained from
70-26 said fund through fraud, misrepresentation, defalcation, theft,
70-27 embezzlement, or misapplication and may institute, conduct, and
71-1 maintain the action in the name of the board of trustees for the
71-2 use and benefit of the fund.>
71-3 <Sec. 21. ><Audits; employment of certified public
71-4 accountants><. The board of trustees of a fully paid fire department
71-5 shall engage and employ a certified public accountant or firm of
71-6 certified public accountants to perform an audit of the fire
71-7 fighter's relief and retirement fund at least annually. The city
71-8 may pay the entire cost of such audits; if not paid by the city,
71-9 the cost may be paid from the assets of the fund.>
71-10 <Sec. 22. ><Insufficient funds; prorated reduction in
71-11 benefits><. If, for any reason, the fund or funds made available for
71-12 any purpose covered by this Act shall be insufficient to pay in
71-13 full any allowance or disability benefits, then all granted
71-14 allowances, or disability benefits shall be proratably reduced for
71-15 the time the deficiency exists.>
71-16 <Sec. 23. ><Pickup of fire fighter contributions><. The city
71-17 shall pick up the fire fighter contributions to the fund required
71-18 by Section 10(a) of this Act, or such contributions as are
71-19 authorized by vote as provided by Section 10(a), whichever are
71-20 higher. Fire fighter contributions will be picked up by a
71-21 reduction in the monetary compensation of the affected fire
71-22 fighters. Contributions picked up shall be treated as employer
71-23 contributions in accordance with Section 414(h)(2), federal
71-24 Internal Revenue Code, for the purpose of determining tax treatment
71-25 of the amounts under the federal Internal Revenue Code. These
71-26 contributions are not includable in the gross income of a fire
71-27 fighter until the time that they are distributed or made available
72-1 to the fire fighter. Fire fighter contributions picked up as
72-2 provided by this section shall be deposited to the individual
72-3 account of each affected fire fighter and shall be treated as the
72-4 monthly contributions of each individual fire fighter for all other
72-5 purposes of this Act. This section takes effect on January 1,
72-6 1986, and remains in effect as long as the plan covering fire
72-7 fighters of the city is a qualified retirement plan under Section
72-8 401(a), federal Internal Revenue Code, and its related trust is tax
72-9 exempt under Section 501(a), federal Internal Revenue Code, or
72-10 until a time that the board by a majority vote elects to
72-11 discontinue the pickup of fire fighter contributions by the city.>
72-12 SECTION 2. This Act takes effect September 1, 1995.
72-13 SECTION 3. The importance of this legislation and the
72-14 crowded condition of the calendars in both houses create an
72-15 emergency and an imperative public necessity that the
72-16 constitutional rule requiring bills to be read on three several
72-17 days in each house be suspended, and this rule is hereby suspended.