1-1 By: Kuempel (Senate Sponsor - Turner) H.B. No. 2168
1-2 (In the Senate - Received from the House April 21, 1995;
1-3 April 24, 1995, read first time and referred to Committee on
1-4 Intergovernmental Relations; May 10, 1995, reported favorably, as
1-5 amended, by the following vote: Yeas 8, Nays 0; May 10, 1995, sent
1-6 to printer.)
1-7 COMMITTEE AMENDMENT NO. 1 By: Whitmire
1-8 Amend H.B. 2168 by adding new sections 21 and 22 to read as follows
1-9 and by renumbering the current sections 21 and 22 accordingly:
1-10 SECTION 21. Section 854.102, Government Code, is amended by
1-11 adding Subsection (g) to read as follows:
1-12 (g) A member is eligible to retire and receive a service
1-13 retirement annuity if the member has at least 20 years of credited
1-14 service in the retirement system performed for one or more
1-15 municipalities that have adopted a like provision under Section
1-16 854.202(g).
1-17 SECTION 22. Section 854.202, Government Code, is amended by
1-18 adding Subsection (g) (h) and (i) to read as follows:
1-19 (g) The governing body may authorize a member to retire and
1-20 receive a service retirement benefit if the member has at least 20
1-21 years of credited service performed for one or more municipalities
1-22 that have authorized eligibility under this subsection.
1-23 (h) Before a governing body may elect to authorize a member
1-24 to retire pursuant to Subsection (g), the governing body shall:
1-25 (1) prepare an actuarial analysis of member retirement
1-26 annuties at 20 years of service; and
1-27 (2) hold a public hearing.
1-28 (i) The public hearing required under Subsection (h) shall
1-29 be held pursuant to the notice provisions of the Texas Open
1-30 Meetings Act, Chapter 551 Texas Government Code.
1-31 A BILL TO BE ENTITLED
1-32 AN ACT
1-33 relating to participation and credit in, contributions to, and
1-34 benefits and administration of the Texas Municipal Retirement
1-35 System.
1-36 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-37 SECTION 1. Section 851.001(6), Government Code, is amended
1-38 to read as follows:
1-39 (6) "Compensation" means the sum of payments made to
1-40 an employee for performance of personal services, as certified on a
1-41 written payroll of an employing department, that does not exceed
1-42 any rate of compensation fixed by a governing body as the maximum
1-43 salary on which member contributions to the retirement system may
1-44 be based and does not exceed $150,000 for a calendar year, indexed
1-45 in the same manner and for the same periods as provided by Section
1-46 401(a)(17) of the Internal Revenue Code of 1986 (26 U.S.C. Section
1-47 401), and includes amounts by which payment for earnings is reduced
1-48 by reason of:
1-49 (A) employer pick-up of employee contributions
1-50 to the retirement system under Section 855.402(j);
1-51 (B) deferral of compensation under benefit plans
1-52 adopted by the employer pursuant to Section 401(k) or 457 of the
1-53 Internal Revenue Code of 1986 (26 U.S.C. Sections 401, 457);
1-54 (C) cost of benefits furnished under qualified
1-55 cafeteria plans adopted by the employer pursuant to Section 125 of
1-56 the Internal Revenue Code of 1986 (26 U.S.C. Section 125);
1-57 (D) cost of tax-sheltered annuities acquired for
1-58 the employee under Section 403(b) of the Internal Revenue Code of
1-59 1986 (26 U.S.C. Section 403); and
1-60 (E) deductions for Federal Insurance
1-61 Contribution Act taxes, federal income taxes, or other obligations
1-62 of the employee.
1-63 SECTION 2. Section 852.004(c), Government Code, is amended
1-64 to read as follows:
1-65 (c) Before a municipality that has fewer than 10 employees
1-66 who are members of the retirement system is permitted to
1-67 participate in the fund, the board of trustees may require the
1-68 municipality to provide evidence that is satisfactory to the board
2-1 that the members are in good health. The board of trustees may
2-2 allow participation in the fund by those municipal employees who
2-3 are in good health on the effective date of participation and
2-4 exclude those municipal employees who are not in good health at
2-5 that time.
2-6 SECTION 3. Section 852.108, Government Code, is amended to
2-7 read as follows:
2-8 Sec. 852.108. RESUMPTION OF SERVICE WITH SAME EMPLOYER BY
2-9 RETIREE. (a) In this section and Section 852.109, a person's
2-10 reemploying municipality is the municipality for which the person
2-11 was performing creditable service at the time of the person's
2-12 retirement under this subtitle.
2-13 (b) A person who has retired with a service retirement
2-14 benefit under this subtitle and later becomes an employee of the
2-15 person's reemploying municipality also becomes a member of the
2-16 system on the date of employment, but credits and benefits
2-17 allowable to the person under this subtitle are limited as provided
2-18 by this section. <Except as provided by this section, a retiree is
2-19 not entitled to be paid a service retirement benefit for any month
2-20 in which the retiree is regularly employed by any participating
2-21 municipality. If a retiree is paid a retirement benefit for any
2-22 month during which the retiree is ineligible as provided by this
2-23 section, the benefit otherwise payable to the retiree for
2-24 subsequent months shall be suspended for an equivalent period.
2-25 Loss of benefits pursuant to this section does not extend any
2-26 period of guaranteed benefits elected pursuant to any provision of
2-27 this subtitle.>
2-28 (c) <(b)> The retirement system shall discontinue and
2-29 suspend payments of each service retirement annuity that is allowed
2-30 because of the person's previous service with the reemploying
2-31 municipality beginning with the month the retirement system
2-32 determines that the person has again become an employee of the
2-33 reemploying municipality. After the suspension, the retirement
2-34 system may not make payments of the annuity for any month during
2-35 which the person remains an employee of the reemploying
2-36 municipality. The suspension of a benefit under this section does
2-37 not suspend payment of a benefit to an alternate payee under a
2-38 qualified domestic relations order. <For purposes of this section,
2-39 a retiree is not considered regularly employed by a participating
2-40 municipality if the retiree is employed for 700 hours or less
2-41 during any calendar year.>
2-42 (d) <(c)> Member contributions under Section 855.402 shall
2-43 be made on all compensation paid to the employee by the reemploying
2-44 municipality at the same rate as is required of other employees of
2-45 the department. The retirement system shall deposit the
2-46 contributions on receipt in an individual account for the member in
2-47 the employees saving fund and shall credit the account with
2-48 interest annually at the same rate and manner as the accounts of
2-49 other members are credited. The compensation paid to the employee
2-50 by the reemploying municipality shall be included in computing the
2-51 monthly contributions the municipality makes to the municipality
2-52 accumulation fund. <Each participating municipality that employs a
2-53 retiree shall report the fact and terms of employment and payment
2-54 of the retiree on a form prescribed by the board.>
2-55 (e) <(d)> After termination of employment with the
2-56 reemploying municipality and after filing of an application for
2-57 resumption of retirement with the board of trustees, a person
2-58 described by Subsection (b) is entitled to receive future payments
2-59 of the suspended annuity, as provided by Subsection (f), and to the
2-60 additional benefits as provided by Subsections (g), (h), and (i).
2-61 <A person who has retired under this subtitle because of service
2-62 may not rejoin the retirement system.>
2-63 (f) Monthly payments of a suspended annuity shall be resumed
2-64 in the month following the month in which employment is terminated
2-65 with the reemploying municipality, without change in the amount
2-66 except for any increase allowed under Section 854.203 or the
2-67 duration of or another condition pertaining to the suspended
2-68 benefit. Payment of the resumed benefit may not be made for any
2-69 month during which the payment was suspended under this section.
2-70 (g) If a person with credited service under this section
3-1 dies before a payment under Subsection (i) is made, the person's
3-2 beneficiary, or if there is no beneficiary surviving, the executor
3-3 or administrator of the person's estate, may elect payment as
3-4 provided by Section 854.105(c).
3-5 (h) The additional service retirement benefit allowable to a
3-6 person to whom this section applies is, at the option of that
3-7 person, either:
3-8 (1) a refund of accumulated contributions made since
3-9 reemployment plus any accrued interest on the accumulated
3-10 contributions allowed by the retirement system; or
3-11 (2) a benefit consisting of:
3-12 (A) a basic annuity actuarially determined from
3-13 the sum of the member's deposits made and accumulated since the
3-14 date the person last became a member, together with interest
3-15 accumulated on that amount since the person last became a member;
3-16 or
3-17 (B) a greater amount authorized by the
3-18 municipality under Section 855.501.
3-19 (i) The additional benefit described by Subsection (h) is
3-20 payable as a standard service retirement benefit or, at the
3-21 election of the member, any optional benefit authorized under this
3-22 subtitle that is the actuarial equivalent of the standard
3-23 retirement benefit. The first benefit payment date under this
3-24 subsection is the later of the end of the month following the last
3-25 month of employment or the end of the month following the month in
3-26 which the person files an application for payment. The first
3-27 payment may not be made if the person has resumed employment with
3-28 the reemploying municipality in a position that would make the
3-29 person an employee.
3-30 SECTION 4. Subchapter B, Chapter 852, Government Code, is
3-31 amended by adding Section 852.109 to read as follows:
3-32 Sec. 852.109. RESUMPTION OF SERVICE WITH DIFFERENT EMPLOYER
3-33 BY RETIREE. (a) If a person becomes an employee of a municipality
3-34 after beginning to receive a retirement benefit, and the
3-35 municipality is not the person's reemploying municipality, the
3-36 person again becomes a member of the retirement system, and the
3-37 person's retirement annuity is not suspended.
3-38 (b) Member contributions under Section 855.402 shall be made
3-39 on all compensation paid to the employee by the municipality at the
3-40 same rate as is required of other employees of the department. The
3-41 retirement system shall deposit the contributions on receipt in an
3-42 individual account for the member in the employees saving fund and
3-43 shall credit the account with interest at the same rate and in the
3-44 same manner as the accounts of other members are credited. The
3-45 compensation paid to the employee by the municipality shall be
3-46 included in computing the monthly contributions the municipality
3-47 makes to the municipality accumulation fund.
3-48 (c) If a person with credited service under this section
3-49 dies before a payment under Subsection (e) is made, the person's
3-50 beneficiary, or if there is no beneficiary surviving, the executor
3-51 or administrator of the person's estate, may elect payment as
3-52 provided by Section 854.105(c).
3-53 (d) The additional service retirement benefit allowable to a
3-54 person to whom this section applies is, at the option of that
3-55 person, either:
3-56 (1) a refund of accumulated contributions made since
3-57 reemployment plus any accrued interest on the accumulated
3-58 contributions allowed by the retirement system; or
3-59 (2) a benefit consisting of:
3-60 (A) a basic annuity actuarially determined from
3-61 the sum of the member's deposits made and accumulated since the
3-62 date the person last became a member together with interest
3-63 accumulated on that amount since the person last became a member
3-64 and an amount from the municipality accumulation fund equal to the
3-65 amount of the deposits credited to the member's individual account
3-66 since the person last became a member together with interest
3-67 accumulated on that amount since the person last became a member;
3-68 or
3-69 (B) a greater amount authorized by the
3-70 municipality under Section 855.501.
4-1 (e) The additional benefit described by Subsection (d) is
4-2 payable as a standard service retirement benefit or, at the
4-3 election of the member, any optional benefit authorized under this
4-4 subtitle that is the actuarial equivalent of the standard
4-5 retirement benefit. The first benefit payment date under this
4-6 subsection is the later of the end of the month following the last
4-7 month of employment or the end of the month following the month in
4-8 which the person files an application for payment. The first
4-9 payment may not be made if the person has resumed employment that
4-10 would result in suspension of a benefit.
4-11 (f) If a person became an employee of a municipality other
4-12 than the person's reemploying municipality after beginning to
4-13 receive a retirement benefit, and the person's service retirement
4-14 annuity was suspended under Section 852.108 as it existed at the
4-15 time of reemployment, the person may, on written application to the
4-16 retirement system, resume receiving the suspended annuity.
4-17 SECTION 5. The section heading to Section 853.305,
4-18 Government Code, is amended to read as follows:
4-19 Sec. 853.305. CREDIT FOR SERVICE WITH NONPARTICIPATING
4-20 MUNICIPALITY, AIRPORT AUTHORITY, OR COUNCIL OF GOVERNMENTS, OR
4-21 CERTAIN SERVICE PREVIOUSLY CANCELED <MUNICIPALITY OR WITH COUNCIL
4-22 OF GOVERNMENTS>.
4-23 SECTION 6. Sections 853.305(a), (c), and (e), Government
4-24 Code, are amended to read as follows:
4-25 (a) The governing body of a participating municipality by
4-26 ordinance may authorize the granting of restricted prior service
4-27 credit to an employee who is a member of the retirement system for
4-28 service previously performed:
4-29 (1) as an employee of any incorporated city or town in
4-30 the United States, <or of> any council of governments in this
4-31 state, or an airport board or authority governing an airport for
4-32 two cities having a combined population greater than 1,000,000, and
4-33 for which the person has not otherwise received credited service in
4-34 this system, including combined service credit under Chapter 803;
4-35 or
4-36 (2) as an employee of the state or any branch, agency,
4-37 or subdivision of the state for which the person received credited
4-38 service under the Employees Retirement System of Texas, the Teacher
4-39 Retirement System of Texas, the Judicial Retirement System of Texas
4-40 Plan One, the Judicial Retirement System of Texas Plan Two, the
4-41 Texas County and District Retirement System, or this retirement
4-42 system, and the credit for which was canceled because of withdrawal
4-43 of contributions and has not been reinstated.
4-44 (c) A member seeking to establish restricted prior service
4-45 credit under Subsection (a)(1) <this section> must obtain from the
4-46 clerk or secretary of the city or town, or from the similar
4-47 official of a council of governments or airport board or authority,
4-48 <governments,> for which the previous service was performed a
4-49 detailed statement of the service, verified by that official, and
4-50 file the statement with the clerk or secretary of the participating
4-51 municipality by which the member is employed. A member seeking to
4-52 establish restricted prior service credit under Subsection (a)(2)
4-53 must obtain from the public retirement system in which the canceled
4-54 service was credited a detailed statement of the service, verified
4-55 by an official of that retirement system, and file that statement
4-56 with the clerk or secretary of the participating municipality by
4-57 which the member is employed.
4-58 (e) On receipt of a certified copy of an approved claim, the
4-59 retirement system, if satisfied that credit for <the> service
4-60 claimed under Subsection (a)(1) has not previously been granted the
4-61 member, or that credit claimed under Subsection (a)(2) previously
4-62 existed but has been canceled and not reinstated, shall enter the
4-63 credit in the member's records.
4-64 SECTION 7. Section 853.404(d), Government Code, is amended
4-65 to read as follows:
4-66 (d) Except as provided by Subsection (e), an ordinance under
4-67 this section continues in effect for each year that the actuary
4-68 determines that all obligations charged against the municipality's
4-69 account in the municipality accumulation fund, including the
4-70 obligations to become effective the next January 1, can be funded
5-1 by the municipality within its maximum contribution rate before the
5-2 25th anniversary of the next January 1. An ordinance under this
5-3 section will cease to be in effect for future years if the actuary
5-4 cannot make that determination, but shall again take effect for
5-5 future years beginning January 1 of the first year after the
5-6 actuary can make that determination.
5-7 SECTION 8. Section 854.003, Government Code, is amended by
5-8 amending Subsections (a), (c), and (d) and adding Subsections (e),
5-9 (f), and (g) to read as follows:
5-10 (a) Except as provided by Subsections (b) and (e) <(d)>, the
5-11 effective date of a member's service retirement is the date the
5-12 member designates at the time the member applies for retirement
5-13 under Section 854.101, but the date must be the last day of a
5-14 calendar month and may not precede the date the member terminates
5-15 employment with all participating municipalities.
5-16 (c) Except as provided by Subsections (b) and (e), the <The>
5-17 effective date of a member's disability retirement is the date
5-18 designated on the application for retirement filed by or for the
5-19 member as provided by Section 854.301, but the date may not precede
5-20 the date the member terminates employment with all participating
5-21 municipalities.
5-22 (d) If a person who has attained age 70-1/2 terminates or
5-23 has terminated covered employment without applying for retirement
5-24 or a refund of accumulated contributions, the retirement system
5-25 shall attempt to send to that person the written notice described
5-26 by Subsection (e) as soon as is practical after the last to occur
5-27 of:
5-28 (1) the date the person attains age 70-1/2;
5-29 (2) the date the person terminates all covered
5-30 employment; or
5-31 (3) the date the person first becomes eligible for
5-32 retirement under this chapter. <If a person who has attained age
5-33 70-1/2 terminates covered employment without applying for
5-34 retirement, the retirement system shall attempt to notify that
5-35 person in writing and advise the person that the person is required
5-36 to retire. If, before the 91st day after the date the retirement
5-37 system sends the notice, the person has not filed an application
5-38 with the board for retirement, the person is considered to have
5-39 retired on the last day of the month in which the person terminated
5-40 employment with all participating municipalities and:>
5-41 <(1) to have elected to receive an annuity under
5-42 Section 854.103, if the person did not have a spouse on the date of
5-43 employment termination; or>
5-44 <(2) if the person had a spouse on the date of
5-45 employment termination, to have elected to receive an annuity under
5-46 Section 854.104(c)(1) and to have designated the person's spouse as
5-47 the beneficiary under the annuity.>
5-48 (e) The written notice shall advise the person that the
5-49 person is required to retire. If, before the 91st day after the
5-50 date the retirement system sends the notice, the person has not
5-51 filed an application for refund or retirement with the board of
5-52 trustees, the person is considered to have retired on the last day
5-53 of the month following the last to occur of the three dates listed
5-54 in Subsection (d).
5-55 (f) If a person is considered by the retirement system to
5-56 have retired as a result of Subsection (e), the person also shall
5-57 be considered:
5-58 (1) to have elected to receive an annuity under
5-59 Section 854.103, if the person did not have a spouse on the date of
5-60 employment termination; or
5-61 (2) if the person had a spouse on the date of
5-62 employment termination, to have elected to receive an annuity under
5-63 Section 854.104(c)(1) and to have designated the person's spouse as
5-64 the beneficiary under the annuity.
5-65 (g) If a person who has less than 10 years of creditable
5-66 service and who has attained age 70-1/2 has terminated covered
5-67 employment without applying for a refund of accumulated
5-68 contributions and is not eligible to retire without additional
5-69 service or age, the retirement system shall attempt to send that
5-70 person written notice in accordance with this subsection as soon as
6-1 is practical after the person has been absent from covered
6-2 employment for five consecutive years. The written notice shall
6-3 advise the person that the person is required to receive a refund
6-4 of accumulated contributions in order to avoid a tax penalty
6-5 according to the Internal Revenue Code of 1986 (Title 26, United
6-6 States Code). If, before the 91st day after the date the
6-7 retirement system sends the notice, the person has not filed an
6-8 application for refund with the board of trustees, the person is
6-9 considered to have filed an application for refund and to have
6-10 elected to have withholding taxes withheld on that refund.
6-11 SECTION 9. Section 854.004, Government Code, is amended to
6-12 read as follows:
6-13 Sec. 854.004. WHEN ANNUITY IS PAYABLE; CHANGES BEFORE FIRST
6-14 PAYMENT. (a) A retiree may change the retiree's choice of
6-15 retirement annuity payment plans or the designation of beneficiary
6-16 after the retiree's effective date of retirement by filing written
6-17 notice with the board of trustees before the later of the date on
6-18 which the retirement system makes the first payment or the date the
6-19 first annuity payment becomes due. After the first payment has
6-20 been made by the retirement system or has become due, a retiree may
6-21 not change the annuity payment plan selected and may not change the
6-22 designated beneficiary except under Section 854.006.
6-23 (b) For purposes of this section, the term "makes payment"
6-24 includes the depositing in the mail of a payment or the crediting
6-25 of an account with payment through electronic funds transfer.
6-26 (c) An annuity under this subtitle is payable for a period
6-27 beginning on the last day of the first month following the month in
6-28 which retirement occurs and ending, except as otherwise provided by
6-29 this subtitle, on the last day of the month immediately preceding
6-30 the month in which death occurs.
6-31 SECTION 10. Section 854.005(a), Government Code, is amended
6-32 to read as follows:
6-33 (a) An annuitant by written request may authorize the
6-34 retirement system to cease the annuitant's monthly payment or
6-35 reduce the annuitant's monthly payment to an amount specified in
6-36 the request. In writing, the annuitant may subsequently request
6-37 the retirement system to reinitiate or increase the annuitant's
6-38 monthly payment at or to any specified amount that does not exceed
6-39 the amount originally payable.
6-40 SECTION 11. Section 854.007(a)(1), Government Code, is
6-41 amended to read as follows:
6-42 (1) "Annual benefit" means the total of all annuity
6-43 payments by the retirement system on behalf of a person who has
6-44 retired under this Subtitle <to an annuitant> during a calendar
6-45 year, including any distributive benefit payments.
6-46 SECTION 12. Section 854.007(d), Government Code, is amended
6-47 to read as follows:
6-48 (d) Except as provided by Subsections (f), (h), and (i), an
6-49 annual benefit payable by the retirement system may not exceed the
6-50 lesser of:
6-51 (1) $115,641, or another amount as adjusted each
6-52 January 1 by the secretary of the treasury under Section 415 of the
6-53 Internal Revenue Code of 1986 (26 U.S.C. Section 415) for
6-54 cost-of-living increases after January 1, 1993; or
6-55 (2) 100 percent of the former member's highest average
6-56 annual compensation, including annual cost-of-living increases
6-57 after separation from service.
6-58 SECTION 13. Section 854.007, Government Code, is amended by
6-59 adding Subsections (l) and (m) to read as follows:
6-60 (l) The annual benefit payable by the retirement system that
6-61 is otherwise limited by Subsection (d) may be increased each year
6-62 in accordance with cost-of-living adjustments by the secretary of
6-63 the treasury of the dollar limitation or the compensation
6-64 limitation, as long as the benefit does not exceed the amount that
6-65 would be payable without the limitation of Section 415 of the
6-66 Internal Revenue Code of 1986 (26 U.S.C. Section 415).
6-67 (m) The limitations provided by this section may not be
6-68 applied to reduce the benefit of any person whose retirement
6-69 benefits payable under this and all other defined benefit plans of
6-70 the member's employer do not exceed $10,000, plus the benefit
7-1 provided under Subsection (h), for the plan year or for any
7-2 previous plan year and who has not at any time participated in a
7-3 defined contribution plan maintained by the person's employer.
7-4 SECTION 14. Subchapter B, Chapter 854, Government Code, is
7-5 amended by adding Section 854.106 to read as follows:
7-6 Sec. 854.106. NO SURVIVING SPOUSE, EXECUTOR, OR
7-7 ADMINISTRATOR. (a) If a surviving spouse, or the executor or
7-8 administrator of a member's estate, would be entitled to make an
7-9 election under Section 854.105(c) because of the death of the
7-10 member, the heirs of the deceased member may make that election if:
7-11 (1) no surviving spouse exists;
7-12 (2) no petition for the appointment of a personal
7-13 representative of the member is pending or has been granted;
7-14 (3) 30 days have elapsed since the death of the
7-15 member;
7-16 (4) the value of the entire assets of the member's
7-17 estate, excluding homestead and exempt property, does not exceed
7-18 $50,000;
7-19 (5) there are not more than three heirs; and
7-20 (6) on file with the retirement system is a certified
7-21 copy of a small estates affidavit that has been approved and filed
7-22 in accordance with Section 137, Texas Probate Code, or an original
7-23 affidavit as described by Subsection (b).
7-24 (b) If no affidavit has been filed with the clerk of the
7-25 court having jurisdiction and venue as provided by Section 137 of
7-26 the Texas Probate Code, the retirement system may accept instead an
7-27 affidavit sworn to by two disinterested witnesses, by the heirs who
7-28 have legal capacity, and, if the facts warrant, by the natural
7-29 guardian or next of kin of any minor or incompetent who is also an
7-30 heir. The affidavit shall include the names and addresses of the
7-31 heirs and witnesses, establish the facts listed in Subsection (a),
7-32 include a list of the assets and liabilities of the estate, show
7-33 the facts that constitute the basis for the right of the heirs to
7-34 receive the estate, and show the fractional interests of the heirs
7-35 in the estate as a result of those facts.
7-36 (c) If the retirement system, acting through the director or
7-37 a person designated by the director, approves the affidavit, the
7-38 heirs can make the election if each heir agrees to the election.
7-39 (d) In this section, "heirs" has the meaning assigned by
7-40 Section 3, Texas Probate Code, except that the term excludes any
7-41 persons who have filed with the retirement system a proper
7-42 disclaimer or renunciation.
7-43 SECTION 15. Subchapter F, Chapter 854, Government Code, is
7-44 amended by adding Section 854.503 to read as follows:
7-45 Sec. 854.503. TRUST AS BENEFICIARY. (a) Except as provided
7-46 by Subsection (b), a member or retiree may designate a trust as
7-47 beneficiary for the payment of benefits from the retirement system.
7-48 If a trust is designated beneficiary, the beneficiary of the trust
7-49 is considered the designated beneficiary for the purpose of
7-50 determining eligibility for and the amount and duration of
7-51 benefits. The trustee is entitled to exercise any rights to elect
7-52 benefit options and name subsequent beneficiaries.
7-53 (b) A trust having more than one beneficiary may not receive
7-54 benefits to which multiple designated beneficiaries are not
7-55 eligible under this chapter.
7-56 SECTION 16. Subchapter F, Chapter 854, Government Code, is
7-57 amended by adding Section 854.504 to read as follows:
7-58 Sec. 854.504. PERSON CAUSING DEATH OF MEMBER OR ANNUITANT.
7-59 (a) A benefit payable on the death of a member or annuitant may
7-60 not be paid to a person convicted of causing that death but instead
7-61 is payable to a person who would be entitled to the benefit had the
7-62 convicted person predeceased the decedent. If no person would be
7-63 entitled to the benefit, the benefit is payable to the decedent's
7-64 estate.
7-65 (b) The retirement system is not required to pay a benefit
7-66 under Subsection (a) of this section unless it receives actual
7-67 notice of the conviction of the person who would have been entitled
7-68 to the benefits. However, the retirement system may delay payment
7-69 of a benefit payable on the death of a member or annuitant pending
7-70 the results of a criminal investigation and of legal proceedings
8-1 relating to the cause of death.
8-2 (c) The retirement system shall convert the remainder of any
8-3 annuity that would otherwise have been payable throughout the life
8-4 of the convicted person to an actuarially equivalent annuity
8-5 payable to the decedent's estate in 60 monthly annuity payments.
8-6 The time of the actuarial equivalence is the earlier of the time
8-7 the retirement system receives the notice of the conviction under
8-8 Subsection (b) or the time the retirement system begins the delay
8-9 in payment of a benefit according to Subsection (b).
8-10 (d) For the purposes of this section, a person has been
8-11 convicted of causing the death of a member or annuitant if the
8-12 person:
8-13 (1) has pleaded guilty or nolo contendere to or has
8-14 been found guilty by a court of an offense at the trial of which it
8-15 is established that the person's intentional, knowing, or reckless
8-16 act or omission resulted in the death of a person who was a member
8-17 or annuitant, regardless of whether sentence is imposed or
8-18 probated; and
8-19 (2) has no appeal of the conviction pending and the
8-20 time provided for appeal has expired.
8-21 SECTION 17. Subchapter F, Chapter 854, Government Code, is
8-22 amended by adding Section 854.505 to read as follows:
8-23 Sec. 854.505. SIMULTANEOUS DEATH OF MEMBER AND BENEFICIARY.
8-24 When a member or retiree and the spouse or beneficiary of the
8-25 member or retiree have died within a period of less than 120 hours
8-26 of each other, the member or retiree is considered to have survived
8-27 the spouse or beneficiary for the purpose of determining the rights
8-28 to amounts payable under this subtitle on the death of the member
8-29 or retiree.
8-30 SECTION 18. Section 854.602, Government Code, is amended by
8-31 adding Subsection (f) to read as follows:
8-32 (f) If a member included in the coverage of the supplemental
8-33 death benefit program becomes eligible to apply for the extended
8-34 coverage but fails to comply with Subsections (b) and (c) before
8-35 the member's death, the member will be considered to have had the
8-36 extended coverage if proof is furnished that the member could have
8-37 qualified for extended coverage if application for the coverage had
8-38 been made according to Subsections (b) and (c) and that the death
8-39 occurred within six months after the date the coverage of the
8-40 supplemental death benefit program was discontinued under Section
8-41 854.601.
8-42 SECTION 19. Section 855.301, Government Code, is amended to
8-43 read as follows:
8-44 Sec. 855.301. INVESTMENT OF ASSETS. (a) The board of
8-45 trustees shall invest and reinvest the assets of the retirement
8-46 system without distinction as to their source in:
8-47 (1) interest-bearing bonds or other evidences of
8-48 indebtedness of this state, a county, school district, city, or
8-49 other municipal corporation of this state, the United States, or an
8-50 authority or agency of the United States;
8-51 (2) securities on which the United States or any
8-52 authority or agency of the United States guarantees the payment of
8-53 principal and interest;
8-54 (3) corporate bonds or debentures that are issued by a
8-55 company:
8-56 (A) incorporated in the United States and that
8-57 are rated "A" or better by one or more nationally recognized rating
8-58 agencies approved by the board; or
8-59 (B) in whose stock the retirement system may
8-60 invest as provided by Subdivision (4);
8-61 (4) common or preferred stocks of a company
8-62 incorporated in the United States that has paid cash dividends on
8-63 its stock for 10 consecutive years immediately before the date of
8-64 purchase and, unless the stocks are bank or insurance stocks, that
8-65 is listed on an exchange registered with the Securities and
8-66 Exchange Commission or its successor;
8-67 (5) obligations issued, assumed, or guaranteed by the
8-68 Inter-American Development Bank, the International Bank for
8-69 Reconstruction and Development (the World Bank), the African
8-70 Development Bank, the Asian Development Bank, and the International
9-1 Finance Corporation; or
9-2 (6) bonds issued, assumed, or guaranteed by the State
9-3 of Israel.
9-4 (b) The assets of the retirement system may be held in the
9-5 name of agents, nominees, depository trust companies, or other
9-6 entities designated by the board of trustees. The records and all
9-7 relevant reports or accounts of the retirement system must show the
9-8 ownership interests of the retirement system in these assets and
9-9 the facts regarding the system's holdings.
9-10 SECTION 20. Section 855.501, Government Code, is amended by
9-11 adding Subsections (i) and (j) to read as follows:
9-12 (i) A participating municipality electing to provide an
9-13 increased service annuity reserve and electing a contribution rate
9-14 of 150 percent for a year may, by ordinance, agree to be liable for
9-15 total contributions at a rate that does not exceed a rate equal to
9-16 the maximum rate prescribed for the municipality by Section 855.407
9-17 plus two and one-half percent if the contribution rate for its
9-18 employees is six percent, or a rate that does not exceed a rate
9-19 equal to the maximum rate prescribed for the municipality by
9-20 Section 855.407 plus three percent if the contribution rate for its
9-21 employees is seven percent.
9-22 (j) A participating municipality electing to provide an
9-23 increased service annuity reserve and electing a contribution rate
9-24 of 200 percent for a year may, by ordinance, agree to be liable for
9-25 total contributions at a rate that does not exceed a rate equal to
9-26 the maximum rate prescribed for the municipality by Section 855.407
9-27 plus five percent if the contribution rate for its employees is six
9-28 percent, or a rate that does not exceed a rate equal to the maximum
9-29 rate prescribed for the municipality by Section 855.407 plus six
9-30 percent if the contribution rate for its employees is seven
9-31 percent.
9-32 SECTION 21. This Act takes effect September 1, 1995.
9-33 SECTION 22. The importance of this legislation and the
9-34 crowded condition of the calendars in both houses create an
9-35 emergency and an imperative public necessity that the
9-36 constitutional rule requiring bills to be read on three several
9-37 days in each house be suspended, and this rule is hereby suspended.
9-38 * * * * *