By Johnson H.B. No. 2871
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the administration of, benefits payable by, eligibility
1-3 for benefits payable by, and credit under programs administered by,
1-4 the Teacher Retirement System of Texas and including transfer of
1-5 service issues between the Teacher Retirement System and the
1-6 Employees Retirement System.
1-7 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-8 SECTION 1. Section 823.002, Government Code, is amended to
1-9 read as follows:
1-10 Sec. 823.002. Service Creditable in a Year. The board of
1-11 trustees by rule shall determine how much service in any year is
1-12 equivalent to one year of service credit, but in no case may all of
1-13 a person's service in one year be creditable as more than one year
1-14 of service. Service credited by the system for five or more years
1-15 on annual statements will not be deleted or corrected even if an
1-16 error was made in crediting. This provision for not deleting or
1-17 correcting shall not apply in cases when fraud is involved or where
1-18 3 years or more of service credit is involved.
1-19 SECTION 2. A new section 823.004 and 823.005, Government
1-20 Code, shall be added to read as follows:
1-21 Sec. 823.004. Credit for Service. All credit for military
1-22 service, out-of-state service, development leave, waiver service,
1-23 and transfer service to the retirement system under Chapter 805
2-1 shall be figured on a September 1- August 31 school year. Payment
2-2 for any service referenced above shall be made by the date of
2-3 retirement or end of the month in which the retirement application
2-4 is submitted whichever date is later.
2-5 Sec. 823.005. Rollover Distributions. A member who is
2-6 entitled to purchase service credit may purchase such service
2-7 credit with a direct rollover of an eligible rollover distribution
2-8 from another qualified plan. The payment will be treated as a
2-9 pre-tax contribution to the retirement system. A rollover will be
2-10 accepted and applied to the purchase of service credit only if:
2-11 (1) the member in writing requests such application;
2-12 (2) the rollover is transmitted directly from the
2-13 distributing plan by a check made payable to Teacher Retirement
2-14 System in an amount no greater than the amount required to be paid
2-15 for the service credit the member is entitled to purchase; and
2-16 (3) the rollover is transmitted by a cover letter or
2-17 memorandum from the plan administrator, or other person responsible
2-18 for the other plan, certifying that the distribution is an eligible
2-19 rollover distribution from a qualified plan.
2-20 SECTION 3. Sub-sections (d), (e), and (h) of Section
2-21 823.401, Government Code, are amended to read as follows:
2-22 Sec. 823.401. Out-of-State Service. (d) A member may
2-23 establish credit under this section by depositing with the
2-24 retirement system for each year of service claimed a contribution
2-25 computed at the rate of:
3-1 (1) 12 percent of the member's annual compensation
3-2 during the first year of creditable service as a member of the
3-3 retirement system that is both after the service for which credit
3-4 is sought and after September 1, 1956; or
3-5 (2) 12 percent of the member's annual compensation
3-6 during the most recent year of creditable service as a member that
3-7 is after the service for which credit is sought, if the member has
3-8 performed no service in Texas since September 1. 1956.
3-9 (3) For purposes of sub-section (d) if a member did
3-10 not work full-time, worked less than 100% of the time, or worked
3-11 fewer months or days than persons in similar positions who were
3-12 working 100% of the time, TRS will compute the annual compensation
3-13 rate based on the reported amount. The cost for the out-of-state
3-14 service will be computed using the full computed rate of annual
3-15 compensation, not the amount actually reported.
3-16 (e) In addition to the contribution required by Subsection
3-17 (d), a member claiming credit under this section must pay a fee of
3-18 eight percent, compounded annually, of the required contribution
3-19 from the date when the member has at least ten years of service
3-20 credit in the retirement system for actual service in public
3-21 schools <of first eligibility> to the date of deposit. A deposit for
3-22 at least one year of credit, including the fee, must be made with
3-23 an initial application for credit, and all payments for service
3-24 claimed under this section must be made before retirement or the
3-25 end of the month in which the retirement application is submitted
4-1 whichever date is later.
4-2 (h) A member purchasing out-of-state service credit does not
4-3 qualify for insurance coverage with the Texas Public School Retired
4-4 Employees Group Insurance Program until the member has 10 years or
4-5 more years of membership service credit for actual service in
4-6 public schools.
4-7 SECTION 4. Subsection (a) and (b), Section 824.002,
4-8 Government Code, are amended and new Subsections (e) and (f) are
4-9 added to read as follows:
4-10 Sec. 824.002. Effective Date of Retirement. (a) The
4-11 effective date of a member's service retirement is the last day of
4-12 the later of the following months:
4-13 (1) any of the months in a six month period in which
4-14 the sixth month is the month in which the member applies for
4-15 retirement as provided by Section 824.201; or
4-16 (2) the month in which the member satisfies age and
4-17 service requirements for service retirement as provided by Section
4-18 824.202; or
4-19 (3) the month in which the member's employment in a
4-20 position included in the coverage of the retirement system ends.
4-21 (b) The effective date of member's disability retirement is
4-22 the last day of the later of the following months:
4-23 (1) any of the months in a six month period in which
4-24 the sixth month is the month in which the member applies for
4-25 retirement as provided by Section 824.301;
5-1 (2) the month in which the member's employment in a
5-2 position included in the coverage of the retirement system ends.
5-3 (e) By the date of retirement or the end of the month in
5-4 which the application for retirement is submitted whichever is
5-5 later, the member applying for service retirement may reinstate
5-6 withdrawn contributions, make deposits for service previously
5-7 waived, military service, and equivalent membership service and
5-8 receive service credit as provided by this subtitle.
5-9 (f) The effective retirement date may not be changed once it
5-10 is established except by revocation of retirement under Section
5-11 824.005 and retirement at a later date.
5-12 SECTION 5. Section 824.003, Government Code is amended to
5-13 read as follows:
5-14 Sec. 824.003. When Benefits are Payable. Except as
5-15 otherwise provided by this chapter, an annuity provided by this
5-16 chapter is <not> payable for the month in which the person who
5-17 receives the annuity dies. Monthly annuity payments are generally
5-18 due to be paid on the first working day of each month following the
5-19 month for which the payment is due the annuitant.
5-20 SECTION 6. Sub-section (a) of Section 824.005, Government
5-21 Code is amended to read as follows:
5-22 Sec. 824.005. Revocation of Retirement. (a) A person who
5-23 has retired under the retirement system may revoke that retirement
5-24 by filing with the system a written revocation in a form prescribed
5-25 by the system. For a revocation to be effective, the retirement
6-1 system must receive the written revocation before the date on which
6-2 the retirement system makes the first annuity payment. After the
6-3 first payment has been made by the retirement system, a retiree may
6-4 not revoke the retirement <46th day after the original date of
6-5 retirement, and person must return to the system an amount equal to
6-6 the amount of benefits received under the original retirement. The
6-7 period for revocation of a disability retirement under this
6-8 subsection begins on the date the medical board certifies the
6-9 disability if the date is later than the date of retirement>. For
6-10 purposes of this subsection "makes the first annuity payment" means
6-11 the later of the due date or the day the first check is placed in
6-12 the mail or the first money due is sent by electronic fund
6-13 transfer.
6-14 SECTION 7. Sub-section (b) of Section 824.201, Government
6-15 Code, is amended to read as follows:
6-16 Sec. 824.201. Application for Service Retirement Benefits.
6-17 (b) At any time before the retirement system makes the first
6-18 annuity payment <effective date of retirement>, a member may, by
6-19 filing written notice with the board of trustees, revoke the
6-20 member's application for retirement or make, revoke, or change a
6-21 selection of an optional service retirement annuity as provided by
6-22 Section 824.204.
6-23 SECTION 8. Sub-section (a) of Section 824.304, Government
6-24 Code, is amended and a new Sub-section (d) is added to read as
6-25 follows:
7-1 Sec. 824.304. Disability Retirement Benefits. (a) If a
7-2 member has a total of less than 10 years of service credit in the
7-3 retirement system on the date of disability retirement, the
7-4 retirement system shall pay the person a disability retirement of
7-5 $150 <$50> a month for the shortest of the following periods:
7-6 (1) the duration of the disability;
7-7 (2) the number of months of creditable service the
7-8 person has at retirement; or
7-9 (3) the duration of the person's life.
7-10 (b) If a member has a total of at least 10 years of service
7-11 credit in the retirement system on the date of disability
7-12 retirement, the retirement system shall pay the person for the
7-13 duration of the disability a disability retirement annuity in an
7-14 amount equal to the greater of:
7-15 (1) a standard service retirement annuity computed
7-16 under Section 824.203(a); or
7-17 (2) $6.50 a month for each year of service on the date
7-18 of retirement; or
7-19 (3) $150 a month.
7-20 (d) Sub-section (a) and (b) shall become effective September
7-21 1, 1995 and shall apply for future payments to all who are retired
7-22 under Sub-section (a) as well as those who may retire in the
7-23 future. No additional payments shall be due for any months
7-24 previous to September 1, 1995.
7-25 SECTION 9. Sub-sections 824.402 (a) (1) and (a) (2) are
8-1 amended to read as follows:
8-2 Sec. 824.402. Benefits on Death of Active Member.
8-3 (a) (1) an amount equal to twice the member's annual compensation
8-4 for the school year immediately preceding the school year in which
8-5 the member dies, or $80,000 <$60,000>, whichever is less;
8-6 (2) an amount equal to twice the member's rate of
8-7 annual compensation for the school year in which the member dies,
8-8 or $80,000 <$60,000>, whichever is less;
8-9 SECTION 10. Section 824.505, Government Code, is amended to
8-10 read as follows:
8-11 Sec. 824.505. Other Amount Payable on Death of Retiree or
8-12 Member. (a) For purposes of monthly annuity payments to retirees
8-13 and beneficiaries, a person who lives any part of a day in a month
8-14 shall be considered to live throughout the entire month. A
8-15 continuation of an option payment or the payment of death and
8-16 survivor benefit annuities shall begin with the month following the
8-17 date of death.
8-18 (b) For purposes of monthly benefit payments for members who
8-19 die prior to retirement, the effective date for death and survivor
8-20 benefit annuities is the last day of the month preceding the month
8-21 in which the death of the member occurs, with the first payment due
8-22 at the end of the month in which the death occurs.
8-23 (c) The retirement system may send a final monthly payment
8-24 to the bank or address previously indicated by the annuitant or
8-25 beneficiary.
9-1 (d) <(a)> Amounts payable by the retirement system to an
9-2 annuitant that are not received by that annuitant or the
9-3 annuitant's bank, as determined by the retirement system, before
9-4 the annuitant's death may be paid to the person named to receive
9-5 benefits in the event of the annuitant's death, in accordance with
9-6 rules adopted by the board of trustees.
9-7 (e) <(b)> The board of trustees may adopt rules necessary to
9-8 administer this section.
9-9 SECTION 11. Sub-section 824.602 (a) (1), Government Code is
9-10 amended to read as follows:
9-11 Sec. 824.602. Exceptions. (a) The retirement system may
9-12 not, under Section 824.601, withhold a monthly benefit payment if
9-13 the retiree is employed in a Texas public educational institution:
9-14 (1) as a substitute only with pay not more than the
9-15 daily rate of substitute pay established by the employer<,>. For a
9-16 disability retiree only <if> the employment may <has> not exceed<ed>
9-17 total of <120 days in the school year or, for a disability retiree>
9-18 90 days in the school year.
9-19 SECTION 12. Section 825.403(b), Government Code is amended
9-20 and a new sub-section (j) is added to Section 825.403, Government
9-21 Code, to read as follows:
9-22 Sec. 825.403. Collection of Member's Contributions.
9-23 (b) Each Employer or the employer's designated disbursing officer,
9-24 at a time and in a form prescribed by the retirement system, shall
9-25 send to the executive director all deductions and a certification
10-1 of earnings of each member employed by the employer. The employer
10-2 shall use electronic fund transfer or shall certify to the
10-3 retirement system that the employer is unable to establish a
10-4 qualifying account at a financial institution or that payment by
10-5 electronic fund transfer would be impractical and/or more costly
10-6 than payment by paper check.
10-7 (j) If deductions were previously required, but not paid
10-8 proof of service must be made before any credit will be given or
10-9 payment required. Proof of service is sufficient if the employer
10-10 submits documentation that the employer has records made at or near
10-11 the time of service which demonstrates amount of time worked and
10-12 salary earned. In lieu of employer documentation, the member may
10-13 submit Internal Revenue records, Social Security records, bank
10-14 records, or other written records made at or near the time of the
10-15 service which demonstrate time worked and salary earned.
10-16 Affidavits based solely on memory and no written records made at or
10-17 near the time of the service are not sufficient documentation. The
10-18 retirement system has the authority to audit records as needed.
10-19 SECTION 13. Sub-section 822.003 (a) and (c), Government Code
10-20 are amended to read as follows:
10-21 Sec. 822.003. Termination of Membership. (a) A person
10-22 terminates membership in the retirement system by:
10-23 (1) death;
10-24 (2) retirement;
10-25 (3) withdrawal of all the person's contributions while
11-1 the person is absent from service; or
11-2 (4) as of September 1 following an absence from
11-3 service for more than five consecutive creditable years. <within a
11-4 six-year period.>
11-5 (c) A person is not absent from service if the person:
11-6 (1) is performing military service creditable in the
11-7 retirement system; or
11-8 (2) is on leave of absence from employment in a public
11-9 school; or
11-10 (3) is earning service credit in another retirement
11-11 system covered under Chapter 803 or 805 of the Government Code.
11-12 SECTION 14. Section 825.503, Government Code, is amended to
11-13 read as follows:
11-14 Sec. 825.503. Reproduction and Preservation of Records.
11-15 (a) The retirement system may photograph, microphotograph, <or>
11-16 film, or use electronic storage for all records pertaining to a
11-17 member's individual file, accounting records, district report
11-18 records, and investment records. Further the retirement system may
11-19 receive any record or report on paper, film, or in an electronic
11-20 storage form.
11-21 (b) if a record is reproduced under Subsection (a), the
11-22 retirement system may destroy or dispose of the original record if
11-23 the system first:
11-24 (1) places the reproduction or electronic record in a
11-25 file that may be conveniently accessed by TRS personnel <accessible
12-1 files>; and
12-2 (2) provides for the preservation, examination, and
12-3 use of the reproduction or stored electronic record.
12-4 (c) A photograph, microphotograph, <or> film, or electronic
12-5 record of a record received or reproduced under Subsection (a) is
12-6 equivalent to the original record for all purposes, including
12-7 introduction as evidence in all courts and administrative agency
12-8 proceedings. A duly certified or authenticated copy of such a
12-9 photograph, microphotograph, <or> film, or electronic record is
12-10 admissible as evidence equally with the original photograph,
12-11 microphotograph, <or> film, or electronic record.
12-12 (d) The executive director or an authorized representative
12-13 may certify the authenticity of a photograph, microphotograph, <or>
12-14 film, or electronic record of a record reproduced under this
12-15 section and shall charge a fee for the certified photograph,
12-16 microphotograph, <or> film, or electronic record as provided by law.
12-17 (e) Certified records shall be furnished to any person who
12-18 is authorized by law to receive them.
12-19 (f) "Electronic storage" means the maintenance of record
12-20 data in the form of digital electronic signals on a computer hard
12-21 disk, magnetic tape, optical disk, or similar machine-readable
12-22 medium.
12-23 (g) "Electronic record" means any information that is
12-24 recorded in a form for computer processing.
12-25 SECTION 15. Section 825.504, Government Code, is amended to
13-1 read as follows:
13-2 Sec. 825.504. Employer Certification to Board. (a) An
13-3 employer annually shall certify to the board of trustees the
13-4 beginning date of the contract of each member whose contract year
13-5 begins after June 30 and continues after August 31 of the same
13-6 calendar year.
13-7 (b) For school years after 1994-95, an employer shall
13-8 certify to the board of trustees the beginning date of an oral or
13-9 written work agreement that begins after June 30 and continues
13-10 after August 31 of the same calendar year.
13-11 (c) Reporting districts shall cooperate with the system in
13-12 ascertaining full year earnings during any year. The board of
13-13 trustees by rule may prescribe the form of and procedures for
13-14 filing certification required by this section.
13-15 SECTION 16. Sub-section (c) of Section 824.204, Government
13-16 Code, is amended to read as follows:
13-17 Sec. 824.204. Optional Service Retirement Benefits. (c) An
13-18 eligible member may select on of the following options, which
13-19 provide that:
13-20 (1) after the retiree's death, the reduced annuity is
13-21 payable to and throughout the life of the person nominated by the
13-22 retiree's written designation filed prior to retirement;
13-23 (2) after the retiree's death, one-half of the reduced
13-24 annuity is payable to and throughout the life of the person
13-25 nominated by the retiree's written designation filed prior to
14-1 retirement;
14-2 (3) if the retiree dies before 60 monthly annuity
14-3 payments have been made, the remainder of the 60 payments are
14-4 payable to the designated beneficiary; or
14-5 (4) if the retiree dies before 120 monthly annuity
14-6 payments have been made, the remainder of the 120 payments are
14-7 payable to the designated beneficiary.
14-8 (5) after the retiree's death, three-fourths of the
14-9 reduced annuity is payable to and throughout the life of the person
14-10 nominated by the retiree's written designation filed prior to
14-11 retirement.
14-12 SECTION 17. Sub-section (c) of Section 824.101, Government
14-13 Code, is amended to read as follows:
14-14 Sec. 824.101. Designation of a Beneficiary. (c) Only one
14-15 person may be designated as beneficiary of an optional retirement
14-16 annuity under Section 824.204(c)1, <or> (c)2, or (c)5, and a
14-17 designation of beneficiary under either of those options may not be
14-18 made, changed, or revoked after the later of the date on which the
14-19 retirement system makes the first annuity payment to the retiree or
14-20 the date the first payment becomes due. For purposes of this
14-21 section, the term "makes payment" includes the depositing in the
14-22 mail of a payment warrant or the crediting of an account with
14-23 payment through electronic funds transfer.
14-24 SECTION 18. Sub-section (a) of Section 824.103, Government
14-25 Code, is amended to read as follows:
15-1 Sec. 824.103. Absence of Beneficiary. (a) Benefits payable
15-2 on the death of a member or annuitant, except an optional
15-3 retirement annuity under Section 824.204(c)1, <or> (c)2, or (c)5, are
15-4 payable, and rights to elect survivor benefits, if applicable, are
15-5 available, to one of the classes of persons described in Subsection
15-6 (b), if:
15-7 (1) the member or annuitant fails to designate a
15-8 beneficiary before death;
15-9 (2) a designated beneficiary does not survive the
15-10 member or annuitant; or
15-11 (3) a designated beneficiary, under Section 824.004,
15-12 waives claims to benefits payable on the death of the member or
15-13 annuitant.
15-14 SECTION 19. Sub-section (a) of Section 824.104, Government
15-15 Code, is amended to read as follows:
15-16 Sec. 824.104. Failure of Beneficiary to Claim Benefits.
15-17 (a) If, before the first anniversary of the death of a member, or
15-18 annuitant, the retirement system does not receive a claim for
15-19 payment of benefits from a designated beneficiary or a person
15-20 entitled to benefits under Section 824.103, the retirement system
15-21 may pay benefits, except an optional retirement annuity under
15-22 Section 824.204(c)1, <or> (c)2, or (c)5, under the order of
15-23 precedence in Section 824.103(b), as if the person failing to claim
15-24 benefits had predeceased the decedent.
15-25 SECTION 20. Sub-Section (a), (c), and (d) of 824.308,
16-1 Government Code, are amended to read as follows:
16-2 Sec. 824.308. Optional Disability Retirement Benefits.
16-3 (a) Instead of an annuity payable under Section 824.304(b), a
16-4 member retiring under that section may elect to receive an optional
16-5 disability retirement annuity under this section. An election to
16-6 receive an optional disability retirement annuity must be filed
16-7 with the board of trustees not later than the effective date of
16-8 retirement or date of application for retirement whichever is
16-9 later.
16-10 (c) An eligible member may select one of the following
16-11 options:
16-12 (1) after the disability retiree's death, the reduced
16-13 annuity is payable throughout the life of a person nominated by the
16-14 retiree's written designation under Section 824.101 filed before
16-15 retirement;
16-16 (2) after the disability retiree's death, one-half of
16-17 the reduced annuity is payable throughout the life of the retiree's
16-18 designated beneficiary;
16-19 (3) if the disability retiree dies before 60 monthly
16-20 annuity payments have been made, the remainder of the 60 payments
16-21 are payable to the designated beneficiary; or
16-22 (4) if the disability retiree dies before 120 monthly
16-23 annuity payments have been made, the remainder of the 120 payments
16-24 are payable to the designated beneficiary.
16-25 (5) after the disability retiree's death,
17-1 three-fourths of the reduced annuity is payable throughout the life
17-2 of the retiree's designated beneficiary;
17-3 (d) If the person nominated by the disability retiree's
17-4 written designation under Section 824.101 filed before or at the
17-5 time of retirement predeceases the disability retiree, the reduced
17-6 annuity of a disability retiree who has elected an optional
17-7 retirement annuity under Subsection (c)(1), <or> (c)(2), or (c)(5) is
17-8 increased to the standard retirement annuity that the disability
17-9 retiree would otherwise be entitled to receive if the disability
17-10 retiree had not selected an annuity option. The standard
17-11 retirement annuity shall be adjusted as appropriate for
17-12 postretirement increases in retirement benefits authorized by law
17-13 after the date of retirement.
17-14 SECTION 21. Sub-Sections (a) and (c) of Section 824.503,
17-15 Government Code, are amended to read as follows:
17-16 (a) If a retiree dies while receiving a standard or reduced
17-17 service retirement annuity as provided by Section 824.202 or an
17-18 optional service retirement annuity as provided by Section
17-19 824.204(c)(1), <or> (c)(2), or (c)(5) and, in the case of a retiree
17-20 receiving an optional service retirement annuity, if the retiree's
17-21 designated beneficiary of the annuity has predeceased the retiree,
17-22 the retirement system shall pay a lump-sum death benefit in an
17-23 amount, if any, by which the amount of the deceased retiree's
17-24 accumulated contributions at the time of retirement exceeds the
17-25 amount of annuity payments made before the retiree's death.
18-1 (c) If a retiree's designated beneficiary dies while
18-2 receiving an optional annuity under Section 824.204(c)(1), <or>
18-3 (c)(2), or (c)(5), the retirement system shall pay a lump-sum death
18-4 benefit in an amount, if any, by which the amount of the retiree's
18-5 accumulated contributions at the time of retirement exceeds the
18-6 amount of annuity payments made to the retiree and the designated
18-7 beneficiary before the beneficiary's death.
18-8 SECTION 22. A new Section 822.007, Government Code, is added
18-9 to read as follows:
18-10 Sec. 822.007 Membership in TRS by ERS Transfer Employee.
18-11 Any person whose membership in the retirement system was
18-12 transferred under Acts of the 73rd Legislature, Chapter 812,
18-13 Section 43 (1993) and who had previously been a retiree of the
18-14 Employees Retirement System, may elect to participate or continue
18-15 to participate in the retirement system without interruption of
18-16 service credit for actual service.
18-17 SECTION 23. Section 821.001 (7) and (15), Government Code
18-18 are amended to read as follows:
18-19 Sec. 822.001. Definitions. (7) "Employer" means <the state
18-20 or> any <of its designated> agents or agencies of the state
18-21 responsible for public education, including the governing board of
18-22 any school district created under the laws of this state, any
18-23 county school board, the board of trustees, <the State Board of
18-24 Education, the Central Education Agency,> the board of regents of
18-25 any college or university, or any other legally constituted board
19-1 or agency of any public school.
19-2 (15) "School Year" means:
19-3 (A) a 12-month period beginning approximately
19-4 September 1 and ending approximately August 31 of the next calendar
19-5 year; or
19-6 (B) for a member whose contract, or oral or
19-7 written work agreement begins after June 30 and continues after
19-8 August 31 of the same calendar year, a period not to include more
19-9 than 12 months beginning on the date the contract or agreement
19-10 begins.
19-11 SECTION 24. Section 823.302(b), Government Code is amended
19-12 to read as follows:
19-13 Sec. 823.302. Military Service Credit. (b) A member
19-14 eligible to establish military service credit is one who has at
19-15 least five years of service credit in the retirement system for
19-16 actual service in public schools, except that a member meeting this
19-17 condition does not qualify for insurance coverage with the Texas
19-18 Public School Retired Employees Group Insurance Program until the
19-19 member has 10 or more years of membership service credit.
19-20 SECTION 25. A new Section 821.007, Government Code is added
19-21 to read:
19-22 Sec. 821.007. Exclusive Benefit of Members and Their
19-23 Beneficiaries. Under no circumstances and in no event may any of
19-24 the contributions and income of the retirement system revert to the
19-25 employer or otherwise be diverted to or used for any purpose other
20-1 than the exclusive benefit of the members, retirees and their
20-2 beneficiaries. It shall be impossible for the diversion or use
20-3 prohibited by the preceding sentence to occur, whether by operation
20-4 or natural termination of the retirement system, by power of
20-5 revocation or amendment, by the happening of a contingency, by
20-6 collateral arrangement, or by any other means.
20-7 SECTION 26. A new Subchapter I is added to Chapter 824 of
20-8 the Government Code to read:
20-9 SUBCHAPTER I. LIMITATIONS
20-10 Sec. 824.801. Limitations on Benefits. (a) Notwithstanding
20-11 any other provision of this chapter, the benefits provided with
20-12 respect to any member shall not exceed the benefits permitted to be
20-13 provided under a qualified plan by Section 415 of the Internal
20-14 Revenue Code of 1986, as amended or restated from time to time (26
20-15 U.S.C. Section 415).
20-16 (b) The board of trustees shall adopt rules that assure the
20-17 benefits paid to any member do not exceed the limits imposed by
20-18 Section 415 of the Internal Revenue Code (26 U.S.C. 415).
20-19 Sec. 824.802. Benefits Payable Under More Than One Plan
20-20 (a) If the benefits payable under this chapter, after
20-21 reduction if any required by Section 824.801(b), would not exceed
20-22 the limits imposed by Section 415 of the Internal Revenue Code (26
20-23 U.S.C. 415) but the aggregate benefits payable to, and
20-24 contributions on behalf of, a member under this chapter and under
20-25 any other plan or plans maintained by the employer would exceed
21-1 such limits, the benefits and /or contributions provided under such
21-2 other plan or plans that have not then been terminated shall be
21-3 reduced to the extent necessary to enable all plans to meet those
21-4 limitations.
21-5 (b) If any other plan or plans mentioned in Subsection (a)
21-6 are unable or unwilling to make the reductions in contributions or
21-7 benefits to the extent required by that Subsection, then one or
21-8 more of such other plans shall be disqualified to the extent
21-9 necessary to enable all benefits provided to a member under this
21-10 chapter to satisfy the limitations of Section 415 of the Internal
21-11 Revenue Code (26 U.S.C. 415).
21-12 SECTION 27. Sub-section (b) of Section 825.506, Government
21-13 Code is amended and sub-section (c) is added to read:
21-14 (b) In determining qualification status under Section 401(a)
21-15 of the Internal Revenue Code of 1986 (26 U.S.C. Section) or its
21-16 successors, the retirement system's benefit plan shall be
21-17 considered primary. An employer may not provide employee
21-18 retirement or deferred benefits to the extent that, when considered
21-19 together with the benefits authorized by this subtitle as required
21-20 by federal law, would result in the retirement system's plan
21-21 failing to meet federal qualification standards as applied to
21-22 public pension plans. If any change or adjustment in the benefits
21-23 that would otherwise have been provided under the retirement
21-24 system's plan or any other plan or plans maintained by an employer
21-25 shall be required to preserve the qualified status of the
22-1 retirement system's plan or the other plan or plans, the change, or
22-2 adjustment in benefits, shall be made to the other plan or plans
22-3 and not to the retirement system's plan.
22-4 (c) Notwithstanding any other provision of this subtitle, no
22-5 member or beneficiary shall ever have a right to receive any
22-6 benefit under the retirement system's plan to the extent that the
22-7 payment of such benefit would, in the opinion of the board of
22-8 trustees, cause the retirement system's plan to fail to qualify
22-9 under Section 401(a) of the Internal Revenue Code of 1986 (26
22-10 U.S.C. 401) or its successor.
22-11 SECTION 28. Section 824.308(b), Government Code, is amended
22-12 to read as follows:
22-13 Sec. 824.308. Optional Disability Retirement Benefits
22-14 (b) An optional disability retirement annuity is and annuity
22-15 payable throughout the disability of the disability retiree and is
22-16 actuarially reduced from the annuity otherwise payable under
22-17 Sections 824.304(b)<(1) and (b)(2)> to its actuarial equivalent under
22-18 the option selected under Subsection (c).
22-19 SECTION 29. Section 823.304, Government Code, is amended to
22-20 read as follows:
22-21 Sec. 823.304. Reemployed Veteran's and Uniformed Services
22-22 Employment and Reemployment Credit. (a) A person eligible to
22-23 establish reemployment uniformed services <reemployed veteran's>
22-24 credit is one who qualifies under the Veteran's Reemployment Rights
22-25 Act, 38 U.S.C. Section 2021 et seq., or the Uniformed Services
23-1 Employment and Reemployment Rights Act of 1994, 38 U.S.C. 4301, for
23-2 the benefits of reemployment in a position included within the
23-3 membership of the retirement system and who is entitled under that
23-4 Act to additional credit and benefits from the retirement system
23-5 because of the person's service in a uniformed service <active duty
23-6 in the armed forces> of the United States.
23-7 (b) A person who receives credit under this section may not
23-8 receive military service credit under Sections 823.301 and 823.302
23-9 for the same service.
23-10 (c) A person may establish credit under this section by
23-11 depositing with the retirement system for each year and fractional
23-12 year of service claimed an amount equal to<:>
23-13 <(1)> the member contributions to the retirement system,
23-14 as determined by the retirement system, that the person would have
23-15 made had the person continued to be employed in the person's former
23-16 position covered by the retirement system during the entire period
23-17 of service with a uniformed service <active duty in the armed forces>
23-18 for which the person is to receive retirement credit<; and>
23-19 <(2) a fee of five percent, compounded annually, of the
23-20 required contribution from the date of the person's first
23-21 eligibility to establish the credit to the date of deposit>.
23-22 (d) To the extent required by the Veteran's Reemployment
23-23 Rights Act or the Uniformed Services Employment and Reemployment
23-24 Act of 1994 and permitted by Sections 401(a) and 415 of the
23-25 Internal Revenue Code of 1986 (26 U.S.C. Sections 401 and 415), the
24-1 retirement system may:
24-2 (1) grant the person service credit for the period of
24-3 service with a uniformed service <active duty in the armed forces> as
24-4 if the person had been employed in a position eligible for
24-5 membership and credit with the retirement system; and
24-6 (2) include in relevant benefit computations under
24-7 this subtitle the annual compensation, as determined by the
24-8 retirement system, that would have been otherwise received by the
24-9 person for the service covered by the retirement system during any
24-10 period <year> in which the person had service with a uniformed
24-11 service <active duty in the armed forces>.
24-12 (e) The state shall deposit with the retirement system an
24-13 amount equal to the state contributions, as determined by the
24-14 retirement system, that the state would have made had the person
24-15 continued to be employed in the person's former position covered by
24-16 the retirement system during the entire period of service <active
24-17 duty in the armed forces> for which the person had received service
24-18 credit under this section. The state shall deposit the required
24-19 amount with the retirement system not later than the 30th day after
24-20 the date the state receives notice from the retirement system of
24-21 the amount of state contributions required for service credit
24-22 established by a person under this section.
24-23 SECTION 30. Section 825.508(b), Government Code, is amended
24-24 to read as follows:
24-25 Sec. 825.508. Powers of Attorney.
25-1 (b) The system must honor a power of attorney executed in
25-2 accordance with Chapter XII <1>, Section 490 <36A>, Texas Probate Code.
25-3 SECTION 31. Section 825.106, Government Code, is repealed.
25-4 SECTION 32. Section 825.306, Government Code, is amended to
25-5 read as follows:
25-6 Sec. 825.306. Crediting System of Assets. The assets of the
25-7 retirement system shall be credited, according to the purpose for
25-8 which they are held, to one of the following accounts:
25-9 (1) member sayings account;
25-10 (2) state contribution account;
25-11 (3) retired reserve account;
25-12 <(4) benefit increase reserve account;>
25-13 (4) <(5)> interest account; or
25-14 (5) <(6)> expense account.
25-15 SECTION 33. Section 825.309(b), Government Code, is amended
25-16 to read as follows:
25-17 Sec. 825.309. Retired Reserve Account. (b) The retirement
25-18 system shall use money in the retired reserve account to pay all
25-19 retirement annuities and all death or survivor benefits including
25-20 postretirement benefit increases and other adjustments of þLinitial
25-21 benefit paymentsää <except those paid under Section 825.310(b)>.
25-22 SECTION 34. Section 825.310, Government Code, is repealed.
25-23 SECTION 35. Section 825.313(b) (3), (4), and (5), Government
25-24 Code, is amended to read as follows:
25-25 Sec. 825.313. Transfers From Interest Account. (3) to the
26-1 expense account, an amount designated by the board of trustees in
26-2 accordance with Subsection (c); and
26-3 (4) <to the benefit increase reserve account, an amount
26-4 representing interest on the average annual balance of the benefit
26-5 increase reserve account at a rate set by the board of trustees in
26-6 accordance with Section 825.106; and>
26-7 <(5)> to the state contribution account, the amount
26-8 remaining in the interest account after the other transfers
26-9 required by this section are made.
26-10 SECTION 36 Upon the effective date of this Act, the
26-11 retirement system shall transfer all funds from the benefit
26-12 increase reserve account to the retiree reserve account.
26-13 SECTION 37. Section 805.001(6), Government Code is added to
26-14 read as follows:
26-15 Sec. 805.001. Definitions.
26-16 (6) "designated beneficiary" means the person or entity who,
26-17 under valid written designations or by law, is entitled to receive
26-18 benefits payable by a system on the death of a member or annuitant.
26-19 SECTION 38. Section 805.002, Government Code is amended to
26-20 read as follows:
26-21 Sec. 805.002. Eligibility to Transfer Service Credit.
26-22 (a) Except as provided by subsection (h), a <A> member of both the
26-23 employees retirement system and the teacher retirement system who
26-24 applies for service or disability retirement from either system may
26-25 transfer to that system service credit established in the other
27-1 system if the member has at least three years of service credit in
27-2 the system from which the member is retiring. A person resuming
27-3 membership in the teacher retirement system after a transfer under
27-4 Acts of the 73rd Legislature, Chapter 812, Section 43 (1993) could
27-5 count previous teacher retirement service as well as more current
27-6 teacher retirement service for the three year requirement to
27-7 transfer employee retirement service to teacher retirement.
27-8 (b) Except as provided by Subsection (h), a <A> member of both
27-9 the employees retirement system and the teacher retirement system
27-10 who has less than three years of service credit in the system in
27-11 which the person most recently received service credit and at least
27-12 three years of service credit in the other system may, at the time
27-13 the person applies for service or disability retirement <from the
27-14 other system>, transfer service credit to the other <that> system from
27-15 the system in which the person most recently received service
27-16 credit.
27-17 (c) No change.
27-18 (d) Except as provided by Subsections (e) and (f), the
27-19 designated beneficiary of a member of the employees retirement
27-20 system or the teacher retirement system who dies while holding a
27-21 position included in the membership of the system may make a
27-22 transfer under Subsection (a) and reinstatement or purchase under
27-23 Subsection (c) if the deceased member had at least three years of
27-24 service credit in the system in which the member was performing
27-25 service at the time of death. The designated beneficiary may make
28-1 a transfer under Subsection (b) if the deceased member had less
28-2 than three years of service credit in the system in which the
28-3 member was performing service at the time of death. If a member is
28-4 not survived by a designated beneficiary, an alternate
28-5 beneficiary, or a beneficiary provided by law, or has failed to
28-6 designate a beneficiary after becoming or resuming membership, the
28-7 personal representative of the member's estate has the same right
28-8 under this subsection as a designated beneficiary. The transfer of
28-9 service by the beneficiary or personal representative of the
28-10 decedent's estate shall be permitted only if such transfer would
28-11 result in the payment of a death benefit annuity.
28-12 (e)-(f) No change.
28-13 (g) To be eligible to make a transfer pursuant to Subsection
28-14 (d), the beneficiary designation must be the same under both
28-15 retirement systems; otherwise a transfer cannot be made.
28-16 (h) A member applying for occupational disability at the
28-17 employees retirement system may transfer teacher retirement system
28-18 service only if the member was contributing to the employees
28-19 retirement system at the time the disabling condition occurred.
28-20 (i) A member of the employees retirement system with at
28-21 least thirty-six months of credit, may resume membership in the
28-22 teacher retirement system under the terms of Section 823.502 of the
28-23 Government Code. The thirty-six months period of credit under the
28-24 employees retirement system shall satisfy the two consecutive years
28-25 required in Section 823.502. Deposits required in Section 823.502
29-1 (c) will be the amount equal to service retirement benefits
29-2 received plus a reinstatement fee of six percent, compounded
29-3 annually, of the amount determined above from the first day of the
29-4 person's service at the employees retirement system to the date of
29-5 redeposit.
29-6 SECTION 39. Section 805.003, Government Code, is amended to
29-7 read as follows:
29-8 Sec. 805.003. Payments to Reinstate or Purchase Service
29-9 Credit
29-10 The cost of reinstating or purchasing service under 805.002
29-11 is determined according to the statues that govern the
29-12 reinstatement or purchase of the type of service credit in the
29-13 system in which it is to be reinstated or purchased. All payments
29-14 for service credit reinstated or purchased under 805.002 must be
29-15 made before retirement or the first payment of a death benefit
29-16 annuity or a later date if allowed for members of the retiring
29-17 system by the retiring system's statutes, as applicable.
29-18 SECTION 40. Section 805.007, Government Code, is amended to
29-19 read as follows:
29-20 Sec. 805.007 Effect of Transfer of Service Credit
29-21 (a) a person who transfers service credit under this chapter
29-22 forfeits all rights to benefits payable by the system from which it
29-23 is transferred and is not an annuitant of that system for any
29-24 purpose, including the payment of postretirement increases to
29-25 annuitants of that system. This sub-section does not preclude a
30-1 person from receiving benefits as a beneficiary of another account
30-2 not related to the transfer in question.
30-3 (b) Service credit transferred under this chapter is
30-4 considered as if it had been granted for service performed under
30-5 the system to which it has transferred and is used in satisfying
30-6 minimum service requirements for retirement and in determining the
30-7 amount of benefits that are based on the amount of a person's
30-8 service credit;
30-9 (1) except that a person's average salary for the
30-10 purpose of computing an annuity may be determined only from service
30-11 that was originally established in one system and that results in
30-12 higher average salary; and
30-13 (2) except as provided by Section 805.006; and
30-14 (3) except in the event of an occupational disability
30-15 retirement as provided under Section 814.206.
30-16 SECTION 41. Section 805.008, Government Code is amended to
30-17 read as follows:
30-18 Sec. 805.008. Responsibility for Benefit Payments.
30-19 (a)-(b) No change.
30-20 (c) As an alternative to Subsections (a) and (b) of this
30-21 section, the systems may by rule require the system from which the
30-22 service was transferred to pay monthly an amount equal to the
30-23 portion of the actual value of the annuity that represents the
30-24 percentage of the total amount transferred.
30-25 (d) <(c)> For the purpose of computing an amount to be
31-1 transferred under this section, service credit in either system
31-2 must be considered as if it were credited under rules of the
31-3 teacher retirement system determining the amount of service
31-4 creditable.
31-5 (e) <(d)> An amount transferred under this section is payable
31-6 from amounts credited to the person's individual account and
31-7 amounts credited to the account in which the system places state
31-8 contributions. Except as provided in Subsection (g), an <An> amount
31-9 received under this section shall be deposited in the account from
31-10 which the system receiving the amount pays annuities.
31-11 (f) <(e)> The system to which a transfer is made under this
31-12 section is responsible for paying the annuity for which the
31-13 transfer was made, including the entire amount of any increase in
31-14 the annuity granted after the transfer.
31-15 (g) At the time of the death of a person whose membership
31-16 was transferred from the teacher retirement system to the employees
31-17 retirement system pursuant to Acts of the 73rd Legislature, Chapter
31-18 812, Section 43(a) (1993), the teacher retirement system shall
31-19 transfer to the employees retirement system the person's service
31-20 credit in the teacher retirement system, and an amount of money as
31-21 provided by paragraphs (1) or (2) of this subsection provided
31-22 employment with the transferring agency was continuous from the
31-23 date of transfer to the date of death.
31-24 (1) If an annuity is paid under Chapter 814,
31-25 Government Code, the teacher retirement system shall transfer an
32-1 amount as provided by Subsections (a) through (c) of this section.
32-2 (2) If a death benefit, but not an annuity, is paid
32-3 under Chapter 814, the teacher retirement system shall transfer the
32-4 amount of money in the employee's savings account plus an amount
32-5 equal to 5% of the person's account balance for each full year of
32-6 service credited in the teacher retirement system, for the purpose
32-7 of a lump-sum payment.
32-8 SECTION 42. This Act takes effect September 1, 1995 unless
32-9 specified differently in the Act.
32-10 SECTION 43. If any word, phrase, clause, paragraph,
32-11 sentence, part, portion, or provision of this Act or the
32-12 application thereof to any person or circumstance shall be held to
32-13 be invalid or unconstitutional, the remainder of the Act in all its
32-14 particulars and as to all other persons and circumstances shall be
32-15 valid and of full force and effect, and the legislature hereby
32-16 declares that this Act would have been enacted without such invalid
32-17 or unconstitutional word, phrase, clause, paragraph, sentence,
32-18 part, portion, or provision, and to this end the provisions of this
32-19 Act are declared to be severable.
32-20 SECTION 44. The importance of this legislation and the
32-21 crowded condition of the calendars of both houses create an
32-22 emergency and an imperative public necessity that the
32-23 constitutional rule requiring bills to be read on three several
32-24 days in each house be suspended, and this rule is hereby suspended,
32-25 and that this Act take effect and be in force according to its
33-1 terms, and it is so enacted.