1-1 By: Greenberg, et al. (Senate Sponsor - Barrientos) H.B. No.
1-2 2943
1-3 (In the Senate - Received from the House May 1, 1995;
1-4 May 2, 1995, read first time and referred to Committee on
1-5 Intergovernmental Relations; May 10, 1995, reported favorably, as
1-6 amended, by the following vote: Yeas 7, Nays 0; May 10, 1995, sent
1-7 to printer.)
1-8 COMMITTEE AMENDMENT NO. 1 By: Gallegos
1-9 Amend H.B. No. 2943, in SECTION 1 of the bill, amending
1-10 Chapter 451, Acts of the 72nd Legislature, Regular Session, 1991
1-11 (Article 6243n, Vernon's Texas Civil Statutes), as follows:
1-12 (1) Strike proposed Section 2(39) of Article 6243n (house
1-13 engrossment, page 10, lines 11-24) and substitute the following:
1-14 (39) <(29)> "Regular full-time employee" means an
1-15 individual who is employed by the city, a hospital authority, or
1-16 the board;<,> who is not a commissioned civil service police
1-17 officer or fire fighter, a fire or police cadet employed under
1-18 civil service procedures, the mayor, or a member of the governing
1-19 body; who <city council, whose position> is classified in the
1-20 annual <city, board, or hospital authority> budget of an employer
1-21 for employment for the full calendar year;<, whose position is
1-22 classified in the annual city, board, or hospital authority budget
1-23 to continue from year to year,> and who works 30 hours or more in a
1-24 normal 40-hour work week. The term does not include an individual
1-25 whose position is classified as seasonal or temporary by the
1-26 employer <city, a hospital authority, or the board>, even if the
1-27 individual works 30 hours or more in a normal 40-hour work week in
1-28 which the individual is employed.
1-29 (2) In proposed Section 7(d) of Article 6243n, strike
1-30 Subdivision (2)(C) (house engrossment, page 32, lines 1-13) and
1-31 substitute the following:
1-32 (C) The amount of the adjustment for each
1-33 retired member or beneficiary shall be a uniform percentage of the
1-34 monthly payment being received by a member, or by a beneficiary by
1-35 reason of a member, who was retired at least one year before the
1-36 adjustment and may not exceed six percent of the monthly payment
1-37 due the retired member or beneficiary before the adjustment. For
1-38 members who retired during the year in which the adjustment is
1-39 authorized, the increase for the first year in which the adjustment
1-40 is being paid shall be prorated in the ratio that the number of
1-41 completed months after the member's retirement in the year of the
1-42 member's retirement bears to 12. After the first year the member
1-43 is entitled to the full amount of any <the> adjustment without
1-44 proration.
1-45 (3) In proposed Section 12 of Article 6243n, strike
1-46 Subsection (d) (house engrossment, page 62, line 17, through page
1-47 63, line 13) and substitute the following:
1-48 (d) Notwithstanding any other provision in this Act to the
1-49 contrary, in the event of a termination of the retirement and
1-50 pensioning system, the benefit of any highly compensated employee
1-51 or former employee is limited to a benefit that is
1-52 nondiscriminatory under Section 401(a)(4) of the code. Benefits
1-53 distributed to any of the 25 most highly compensated active and
1-54 former highly compensated employees are restricted such that the
1-55 annual payments are no greater than an amount equal to the payment
1-56 that would be made on behalf of an employee under a single life
1-57 annuity that is the <A member who is entitled to a benefit,
1-58 including a benefit consisting solely of a distribution of the
1-59 member's accumulated deposits, from the system may instruct the
1-60 system to pay the single lump-sum> actuarial equivalent of the sum
1-61 of the employee's accrued benefit and the employee's other benefits
1-62 under the plan. The preceding sentence shall not apply if: (1)
1-63 after payment of the benefit to an employee described in that
1-64 sentence, the value of plan assets equals or exceeds 110 percent of
1-65 the value of the current liabilities, as defined in Section
1-66 412(l)(7) of the code, or (2) the value of the benefits for an
1-67 employee described in that paragraph is less than one percent of
1-68 the value of current liabilities. For purposes of this subsection,
2-1 benefit includes loans in excess of the amount set forth in Section
2-2 72(p)(2)(A) of the code, any periodic income, any withdrawal values
2-3 payable to a living employee and any death benefits not provided
2-4 for by insurance on the employee's life.
2-5 (4) At the end of proposed Section 12 of Article 6243n
2-6 (house engrossment, page 64, between lines 26 and 27), insert the
2-7 following:
2-8 (f) The retirement system shall add six months to the
2-9 membership service of any member who was involuntarily terminated
2-10 by an employer for nondisciplinary reasons during the period
2-11 beginning April 1, 1995, and ending September 30, 1995. The
2-12 current service annuity of a member who is described by this
2-13 subsection and who is eligible for retirement will be equal to
2-14 one-twelfth of the product of 2.3 percent of the member's average
2-15 final compensation multiplied by the sum of the number of months of
2-16 membership service.
2-17 A BILL TO BE ENTITLED
2-18 AN ACT
2-19 relating to public retirement systems for employees of certain
2-20 municipalities.
2-21 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
2-22 SECTION 1. Chapter 451, Acts of the 72nd Legislature,
2-23 Regular Session, 1991 (Article 6243n, Vernon's Texas Civil
2-24 Statutes), is amended to read as follows:
2-25 Sec. 1. Scope. A retirement system is established by this
2-26 Act for employees of each municipality having a population of more
2-27 than 460,000 and less than 500,000, according to the most recent
2-28 federal census; provided, however, that once such pension system
2-29 becomes operative in any city, any right or privilege accruing to
2-30 any member thereunder shall be a vested right according to the
2-31 terms of this Act and the same shall not be denied or abridged
2-32 thereafter through any change in population of any such city taking
2-33 such city out of the population bracket as herein prescribed, and
2-34 said pension system shall continue to operate and function
2-35 regardless of whether or not any future population exceeds or falls
2-36 below said population bracket.
2-37 Sec. 2. Definitions. The following words and phrases have
2-38 the meanings assigned by this section unless a different meaning is
2-39 plainly required by the context:
2-40 (1) "Accumulated deposits" means the amount standing
2-41 to the credit of a member derived from the deposits required to be
2-42 made by the member to the retirement system improved annually by
2-43 interest credited at a rate determined by the retirement board from
2-44 time to time upon the advice of the retirement board's actuary and
2-45 <board which is> credited as of December 31 to amounts standing to
2-46 the credit of the member on January 1 of the same calendar year.
2-47 (2) "Actual retirement date" means the last day of the
2-48 month during which a member retires.
2-49 (3) "Actuarial equivalent" means any benefit of equal
2-50 present value when computed on the basis of actuarial tables
2-51 adopted by the retirement board from time to time upon the advice
2-52 of the retirement board's actuary. The actuarial tables adopted
2-53 for this purpose shall be clearly identified by resolution adopted
2-54 by the retirement board <board in the proper administration of the
2-55 retirement system>.
2-56 (4) "Actuary" means the technical advisor of the
2-57 retirement board regarding the operations which are based on
2-58 mortality, service, and compensation experience.
2-59 (5) "Agency of the municipality" means any agency or
2-60 instrumentality of the city, or governmental or publicly owned
2-61 legal entity created by the municipality, subsequent to the
2-62 effective date of this Act, to perform or provide a public service
2-63 or function and which entity is not a hospital authority and
2-64 employs one or more employees to provide services and/or accomplish
2-65 its public purpose.
2-66 (6) "Approved medical leave of absence" means any
2-67 absence authorized in writing by the member's employer for the
2-68 purpose of enabling the member to obtain medical care or treatment
2-69 or to recover from any sickness or injury.
2-70 (7) <(5)> "Authorized leave of absence" means military
3-1 leave of absence, including a period of not more than 90 days <the
3-2 90th day> after the date of release from active military duty, or
3-3 any other leave of absence during which a member is otherwise
3-4 authorized by law to continue making contributions to the system.
3-5 The term does not include an approved medical leave of absence.
3-6 (8) <(6)> "Average final compensation" means the
3-7 average monthly compensation, as defined and limited by Subdivision
3-8 (12) of this section, less <pay, or salary, exclusive of> overtime,
3-9 incentive, and terminal pay, plus, (i) amounts picked up by the
3-10 employer pursuant to Section 10(e) of this Act, and (ii) amounts
3-11 not otherwise included in the member's taxable income by reason of
3-12 either an election under a "cafeteria" plan as described in Section
3-13 125 of the code or deferrals under a plan of deferred compensation
3-14 within the scope of Section 457 of the code, to the extent not in
3-15 excess of $12,500 for persons who first become members after 1995
3-16 <that is $16,666 or less and> that is earned by a member during, as
3-17 applicable:
3-18 (A) if the member has 120 months or more of
3-19 membership service, the 36 months of membership service which
3-20 yielded the highest average during the last 120 months of
3-21 membership service;
3-22 (B) if the member has less than 120 months of
3-23 membership service, but has at least 36 months of membership
3-24 service, then the average during the 36 months which yield the
3-25 highest average; or
3-26 (C) if the member does not have 36 months of
3-27 membership service, then the average during the member's months of
3-28 membership service.
3-29 (9) <(7)> "Beneficiary" means the member's designated
3-30 beneficiary <any person, trust, or estate properly designated by a
3-31 member to receive benefits from the system>. If there is no
3-32 effective beneficiary designation on the date of the member's
3-33 death, or if the designated beneficiary predeceases the member (or
3-34 dies in or as a result of the same event that caused the member's
3-35 death and does not survive the member by 48 hours), <the member's
3-36 beneficiary is> the member's spouse or, if the member does not have
3-37 a spouse, the member's estate shall be the beneficiary.
3-38 (10) "Board" means the boards of directors of an
3-39 employer that is not a municipality as described in Section 1 of
3-40 this Act.
3-41 (11) "Code" means the United States Internal Revenue
3-42 Code of 1986 (26 U.S.C. Section 1 et seq.) and its successors.
3-43 (12) "Compensation" means, with respect to any member,
3-44 such member's wages, within the meaning of Section 3401(a) of the
3-45 code (for purposes of income tax withholding at the source) but
3-46 determined without regard to any rules that limit the remuneration
3-47 included in wages based on the nature or location of the employment
3-48 or the services performed (such as the exception for agricultural
3-49 labor in Section 3401(a)(2) of the code). Compensation in excess
3-50 of $12,500 per month for any employee who first becomes a member in
3-51 a year commencing after 1995 shall be disregarded. The $12,500
3-52 limitation shall be adjusted for cost of living increases as
3-53 provided under Section 401(a)(17) of the code. In applying the
3-54 limitations, the family group of a highly compensated employee who
3-55 is one of the 10 employees of the employer paid the highest
3-56 compensation during the year shall be treated as a single
3-57 employee, except that, for this purpose, family members shall
3-58 include only the affected highly compensated employee's spouse and
3-59 lineal descendants who have not attained age 19 before the close of
3-60 the year. If, as a result of the application of such rules, the
3-61 adjusted $12,500 limitation is exceeded, the limitation shall be
3-62 prorated among the affected family members' compensation prior to
3-63 the application of the limitation or the limitation shall be
3-64 adjusted in accordance with any other method permitted by Internal
3-65 Revenue Service guidelines.
3-66 (13) "Consumer price index" means the Consumer Price
3-67 Index for Urban Wage Earners and Clerical Workers (United States
3-68 City Average, All Items) published monthly by the Bureau of Labor
3-69 Statistics, United States Department of Labor, or its successor in
3-70 function.
4-1 (14) <(8)> "Creditable service" means the total of
4-2 prior service and membership service.
4-3 (15) <(9)> "Current service annuity" means a series of
4-4 equal monthly payments payable for the member's life after
4-5 retirement for membership service from funds of the retirement
4-6 system equal to one-twelfth of the product of 2.3 <2.2> percent of
4-7 a member's average final compensation multiplied by the number of
4-8 months of membership service. However, if payments commence before
4-9 the member's normal retirement date, the amount of the monthly
4-10 payments to which the member would otherwise be entitled shall be
4-11 reduced as provided by Section 7(e) of this Act.
4-12 (16) <(10)> "Deposits" means the amounts required to
4-13 be paid by members in accordance with the provisions of this Act.
4-14 (17) "Designated beneficiary" means any person, trust,
4-15 or estate properly designated in writing by a member to receive
4-16 benefits from the system in the event of the member's death. If
4-17 the member is married, an individual other than the member's spouse
4-18 may be the designated beneficiary only if the spouse consents to
4-19 such designation in the form and manner prescribed by the
4-20 retirement board.
4-21 (18) <(11)> "Disability retirement" means the
4-22 termination of employment of a member because of disability with a
4-23 disability retirement allowance as provided in Section 8 of this
4-24 Act.
4-25 (19) "Employer" means the city or municipality
4-26 described in Section 1 of this Act, a hospital authority as defined
4-27 in Subdivision (24) of this section or the retirement board defined
4-28 in Subdivision (42) of this section, or an agency of the
4-29 municipality as defined in Subdivision (5) of this section.
4-30 (20) <(12)> "Fund" means the trust fund containing the
4-31 aggregate of the assets of Fund No. 1 and Fund No. 2.
4-32 (21) <(13)> "Fund No. 1" means the fund in which shall
4-33 be kept all accumulated deposits of members who have not withdrawn
4-34 from the system.
4-35 (22) <(14)> "Fund No. 2" means the fund in which shall
4-36 be kept all money contributed by the city on behalf of city
4-37 employees, all money contributed by a hospital authority on behalf
4-38 of hospital authority employees, and all money contributed by the
4-39 retirement board on behalf of retirement board employees, interest
4-40 earned thereon, and all accumulations and earnings of the system.
4-41 (23) "Governing body" means the city council of the
4-42 municipality described in Section 1 and its successors as
4-43 constituted from time to time.
4-44 (24) <(15)> "Hospital authority" means a municipal
4-45 hospital authority created after September 1, 1992, under Chapter
4-46 262, Health and Safety Code, and its subsequent amendments, by a
4-47 city governed by this Act.
4-48 (25) <(16)> "Investment consultant" means the person
4-49 or entity that monitors the investment performance of the system
4-50 and provides such other services as requested by the retirement
4-51 board.
4-52 (26) <(17)> "Investment manager" means the persons
4-53 <person> or entities <entity> that have <has> the power to manage,
4-54 acquire, or dispose of assets of Fund No. 1 or Fund No. 2 on behalf
4-55 of the retirement system and that acknowledge <acknowledges>
4-56 fiduciary responsibility to the system in writing. An <The>
4-57 investment manager must be a person, firm, or corporation
4-58 registered as an investment adviser under the Investment Advisers
4-59 Act of 1940, a bank, or an insurance company qualified to manage,
4-60 acquire or dispose of assets under the laws of more than one state
4-61 including the State of Texas and must otherwise meet the
4-62 requirements of Section 802.204, Government Code, and its
4-63 subsequent amendments.
4-64 (27) <(18)> "Life annuity" means a series of equal
4-65 monthly payments, payable after retirement for a member's life,
4-66 consisting of a combination of prior service pension and current
4-67 service annuity to which the member is entitled.
4-68 (28) <(19)> "Life annuity (modified cash refund)"
4-69 means a life annuity providing that, in the event of death of the
4-70 retired member before that member has received payments under the
5-1 life annuity totaling <totalling> the amount of that member's
5-2 accumulated deposits at the date of retirement, the excess of such
5-3 accumulated deposits over the payments made shall be paid in one
5-4 lump sum to the member's designated beneficiary.
5-5 (29) "Malfeasance" means (A) willful misconduct or (B)
5-6 the knowingly improper performance of any act, duty or
5-7 responsibility under this Act, including non-performance; which
5-8 interrupts or interferes with the administration, operation and
5-9 management of the retirement system or any person's duties under
5-10 this Act.
5-11 (30) <(20)> "Member" means any:
5-12 (A) regular full-time employee of an employer
5-13 <who has completed six continuous months of employment with the
5-14 city, a hospital authority, or the board and who has been removed
5-15 from the employee's initial probationary status>; and
5-16 (B) former regular full-time employee who has
5-17 not withdrawn the member's accumulated deposits from the system.
5-18 In any case of doubt regarding the eligibility of any
5-19 employee to become or remain a member of the retirement system, the
5-20 decision of the retirement board is final.
5-21 (31) <(21)> "Membership service" means the period of
5-22 time on or after January 1, 1941, during which a person is or was
5-23 employed as a regular full-time employee or is or was on an
5-24 authorized leave of absence and who is eligible for participation
5-25 in the system and pays into and keeps on deposit the amounts of
5-26 money prescribed to be paid by the member into the system. The
5-27 term includes redeemed membership service.
5-28 (32) <(22)> "Normal retirement age" means attainment
5-29 of age 62.
5-30 (33) <(23)> "Normal retirement date" means the earlier
5-31 of the date on which the member has completed 25 years of
5-32 creditable service or has reached normal retirement age <the age of
5-33 62>.
5-34 (34) <(24)> "Prior service" means service as an
5-35 employee of the city rendered prior to January 1, 1941, for which a
5-36 pension credit is allowable under prior law governing the
5-37 retirement system of that city and includes redeemed prior service.
5-38 (35) <(25)> "Prior service pension" means a series of
5-39 equal monthly payments payable from funds of the retirement system
5-40 for a member's life after retirement for prior service equal to
5-41 one-twelfth of the product of 2.3 <2.2> percent of the member's
5-42 average monthly earnings during a period of five years preceding
5-43 January 1, 1941, multiplied by the number of months of prior
5-44 service. On retirement at an age other than normal retirement
5-45 age, the monthly prior service pension herein prescribed shall be
5-46 the actuarial equivalent thereof at the member's actual retirement
5-47 date, based on the schedule or schedules of payments approved by
5-48 the actuary and adopted by the retirement board and in effect on
5-49 the member's actual retirement date.
5-50 (36) <(26)> "Qualified domestic relations order" has
5-51 the meaning assigned by Section 804.001, Government Code, and its
5-52 subsequent amendments.
5-53 (37) <(27)> "Redeemed membership service" means
5-54 membership service reinstated in accordance with Section 5(e) of
5-55 this Act.
5-56 (38) <(28)> "Redeemed prior service" means prior
5-57 service reinstated in accordance with Section 5(e) of this Act.
5-58 (39) <(29)> "Regular full-time employee" means an
5-59 individual who is employed by the city, a hospital authority, or
5-60 the board;<,> who is not a commissioned civil service police
5-61 officer or fire fighter, the mayor, or a member of the governing
5-62 body; who <city council, whose position> is classified in the
5-63 annual <city, board, or hospital authority> budget of an employer
5-64 for employment for the full calendar year;<, whose position is
5-65 classified in the annual city, board, or hospital authority budget
5-66 to continue from year to year,> and who works 30 hours or more in a
5-67 normal 40-hour work week. The term does not include an individual
5-68 whose position is classified as seasonal or temporary by the
5-69 employer <city, a hospital authority, or the board>, even if the
5-70 individual works 30 hours or more in a normal 40-hour work week in
6-1 which the individual is employed.
6-2 (40) <(30)> "Retirement" means the termination of
6-3 employment of a member after the member becomes entitled to receive
6-4 a retirement allowance in accordance with the provisions of this
6-5 Act.
6-6 (41) <(31)> "Retirement allowance" means the life
6-7 annuity (modified cash refund) to which a member may be entitled
6-8 under this Act, including annuities payable on disability
6-9 retirement or on early retirement.
6-10 (42) <(32)> "Retirement board" <or "board"> means the
6-11 board of trustees of the retirement and pensioning system herein
6-12 created for the purpose of administering the retirement system.
6-13 (43) <(33)> "Retirement system," "retirement and
6-14 pensioning system," "pension system," or "system" means the
6-15 retirement and pensioning system created by this Act for a city
6-16 governed by this Act.
6-17 (44) <(34)> "Year of creditable service" means a
6-18 12-month period of creditable service determined in accordance with
6-19 uniform and nondiscriminatory rules established by the retirement
6-20 board.
6-21 Sec. 3. Establishment and applicability. (a) Except as
6-22 provided by Subsection (b) of this section and subject to the
6-23 authority granted the retirement board in Section 7(d)<(2)(D)> of
6-24 this Act, members who retired prior to September 1, 1993, shall
6-25 continue to receive the same retirement allowances they were
6-26 receiving prior to that date, together with any cost of living
6-27 adjustments authorized and paid in accordance with this Act.
6-28 (b) Members who retired during the calendar years 1962 and
6-29 1963 shall continue to receive a benefit in accordance with their
6-30 election, if any, and the retirement allowances computed in the
6-31 manner prescribed by an applicable city ordinance in effect as of
6-32 January 1, 1962, or in the manner in which said allowances would
6-33 have been computed under applicable city ordinances existing
6-34 immediately prior to the enactments of January 1, 1962, together
6-35 with any cost of living adjustments authorized and paid in
6-36 accordance with this Act.
6-37 Sec. 4. Administration. (a) There is hereby created a
6-38 retirement board of the retirement and pensioning system, in which
6-39 retirement board is hereby vested the power and responsibility for
6-40 the proper and effective general administration, management, and
6-41 operation of the retirement system. The retirement board shall be
6-42 organized immediately after its members have qualified and taken
6-43 the oath of office.
6-44 (b) The retirement board shall be composed of 11 members as
6-45 follows:
6-46 (1) place one: one <city council> member of the
6-47 governing body, designated by the governing body <city council>,
6-48 who may be removed and replaced or redesignated by the governing
6-49 body <city council> at any time;
6-50 (2) place two: the city manager of the city or his or
6-51 her designee;
6-52 (3) <place three: the director of finance of the city
6-53 or his or her designee;>
6-54 <(4)> places three <four> through five <six>: three
6-55 qualified voters of the city who have been city residents for the
6-56 preceding five years and who are not <city> employees, former
6-57 employees, or officers of an employer;
6-58 (4) <(5)> places six <seven> through nine <10>: four
6-59 active-contributory members elected by the active-contributory
6-60 members; and
6-61 (5) places ten and eleven: two retired members <(6)
6-62 place 11: a retired member who will be> elected by the retired
6-63 members.
6-64 (c)(1) The place one retirement board member serves at the
6-65 pleasure of the governing body <city council> and until the
6-66 governing body <council> redesignates the place one member, or
6-67 until the member is no longer able to serve because of death,
6-68 resignation, termination of position as a <city council> member of
6-69 the governing body, or disability. The governing body <city
6-70 council> shall appoint a person to fill a vacancy in place one not
7-1 later than the 90th day after the first date of the vacancy.
7-2 (2) In December of every second even-numbered year,
7-3 the governing body <city council> shall appoint, to place three,
7-4 <four> one person meeting the qualifications for place three
7-5 <four>. In December of every second odd-numbered year, the
7-6 governing body <city council> shall appoint, to place four, <five>
7-7 one person meeting the qualifications for place four <five>. In
7-8 December of every second odd-numbered year, the retirement board
7-9 shall appoint, to place five, <six> one person meeting the
7-10 qualifications for place five. Retirement board <six. Board>
7-11 members holding places three <four> through five <six> each serve a
7-12 four-year term beginning on January 1 of the year after their
7-13 appointment, unless service is earlier terminated by the death,
7-14 disability, resignation, or removal of that retirement board member
7-15 or the retirement board member ceases to meet the qualifications of
7-16 a citizen retirement board member as set forth in Section 4(b) of
7-17 this Act. The governing body <city council> shall fill a vacancy
7-18 in place three or four <or five> with a person meeting the
7-19 qualifications for that place not later than the 90th day after the
7-20 first date of the vacancy. If the governing body <city council>
7-21 fails to appoint an eligible person to fill a vacancy in place
7-22 three <four> or five within the 90-day period, the retirement board
7-23 may appoint a person meeting the qualifications for that place to
7-24 fill the vacancy for the remainder of the unexpired term. The
7-25 retirement board shall appoint a person meeting the qualifications
7-26 for place five <six> to fill a vacancy in place five for the
7-27 remainder of the unexpired term <six>.
7-28 (3) The places six <seven> through nine retirement
7-29 <10> board members each serve on the retirement board for a
7-30 four-year term, unless service is earlier terminated by the death,
7-31 resignation, termination of employment, disability, retirement, or
7-32 removal of the retirement <that> board member. The retirement
7-33 board shall appoint an active-contributory member to fill a vacancy
7-34 in each of places six <seven> through nine <10> for the remainder
7-35 of the unexpired term.
7-36 (4) The places ten and eleven retirement board members
7-37 serve <place 11 board member serves> for a four-year term, unless
7-38 that service is earlier terminated by the death, disability,
7-39 resignation, or removal of the member. The retirement board shall
7-40 appoint a retired member to fill a vacancy in place ten or eleven
7-41 <place 11> for the remainder of the unexpired term.
7-42 (d) Members for places six <seven> through eleven <11>
7-43 shall be elected in accordance with the following provisions:
7-44 (1) Only active-contributory members shall be eligible
7-45 for election for places six <seven> through nine <10>. Only
7-46 retired members shall be eligible for election for places ten and
7-47 eleven <place 11>. Not more than one active-contributory member
7-48 shall be eligible for election from any one city department.
7-49 (2) Members for places six <seven> through nine <10>
7-50 shall be elected to four-year staggered terms with the terms of two
7-51 of such retirement board members beginning January 1 of each
7-52 even-numbered year.
7-53 (3) Members for places ten and eleven shall be elected
7-54 to four-year staggered terms. One such retirement board member
7-55 shall be elected at an election held in every other even-numbered
7-56 year with the term of such retirement board member <The board
7-57 member for place 11 shall be elected in an even-numbered year, with
7-58 the term> beginning on January 1 of the following <next>
7-59 odd-numbered year. The first election for place ten shall be held
7-60 in 1996 and the term of the retired member elected at that election
7-61 shall begin on January 1, 1997. The retirement board shall appoint
7-62 a retired member, to place ten, to serve until January 1, 1997.
7-63 The term of the retired member serving in place eleven shall expire
7-64 on December 31, 1998.
7-65 (4)(A) No later than the first day of October of each
7-66 odd-numbered year, the retirement board shall appoint a nominating
7-67 and election committee consisting of five committee members and two
7-68 alternates, all of whom are active-contributory members of the
7-69 retirement system. The nominating and election committee shall
7-70 make one or more nominations for each active-contributory member
8-1 vacancy and shall act as election judges. The nominating and
8-2 election committee shall determine and certify that each such
8-3 nominee and each candidate announcing for election is an
8-4 active-contributory member and prepare the ballot containing the
8-5 names of all certified active-contributory member candidates.
8-6 (B) No later than the first day of October of
8-7 every second even-numbered year, the retirement board shall appoint
8-8 a nominating and election committee consisting of five committee
8-9 members and five alternates, all of whom are retired members of the
8-10 retirement system. The nominating and election committee shall
8-11 make one or more nominations for the retired member vacancy and
8-12 shall act as election judges. The nominating and election
8-13 committee shall determine and certify that each such nominee and
8-14 each candidate announcing for election is a retired member and
8-15 prepare the ballot containing the names of all certified retired
8-16 member candidates.
8-17 (5) Each nominating and election committee shall
8-18 publish a notice at least two weeks prior to the applicable
8-19 election date, informing all active-contributory members or retired
8-20 members, as applicable, of the names of the persons who have been
8-21 certified as candidates.
8-22 (6) Elections for places seven through 10 shall be
8-23 held on the first payday in December of each odd-numbered year.
8-24 Elections for place 11 shall be held in December of every second
8-25 even-numbered year. The candidates receiving the highest number of
8-26 eligible votes shall be deemed elected. In case of a tie vote,
8-27 selection shall be by lot drawn by an existing member of the
8-28 retirement board at a meeting of the retirement board held after
8-29 the election but before the first day of January of the year after
8-30 the election.
8-31 (7) The applicable nominating and election committee
8-32 shall canvass the returns, certify the results, and announce the
8-33 official results of the election.
8-34 (8) The retirement board shall approve written
8-35 procedures for the conduct of the election no later than August 1
8-36 of each year in which an election is held.
8-37 (e) Each member of the retirement board shall, within 30
8-38 days after appointment and election, <shall> take an oath of office
8-39 that he or she <the board member> will diligently and honestly
8-40 administer the affairs of the retirement system and will not
8-41 knowingly violate or willingly permit to be violated any law or
8-42 statute applicable to the retirement system. All members of the
8-43 retirement board serve without compensation. The retirement board
8-44 may, at any time after notice and hearing <At any time, the board>,
8-45 by a vote of six retirement board members<, may> remove a
8-46 retirement board member for malfeasance.
8-47 (f) In January of each year, the retirement board shall
8-48 elect from its membership a chairman and a vice-chairman to serve
8-49 one calendar year.
8-50 (g) The retirement board shall hire a pension officer as an
8-51 employee of the retirement board. The pension officer shall hire
8-52 and may fire or suspend necessary staff members, and those staff
8-53 members are employees of the retirement board. The pension officer
8-54 acting under the direction of the retirement board shall keep all
8-55 of the records of the retirement system and a record of the
8-56 proceedings of the retirement board. The pension officer and each
8-57 staff member shall receive such compensation as the retirement
8-58 board may fix in each annual budget of the retirement system, or
8-59 amendments to the budget, and that compensation shall be paid from
8-60 the fund.
8-61 (h) Subject to the limitations of this Act, the retirement
8-62 board shall from time to time establish rules and regulations for
8-63 the administration of the funds authorized to be created hereunder
8-64 and for the transaction of the retirement board's business. Each
8-65 member of the retirement board is entitled to one vote <on the
8-66 board>. Six concurring votes are necessary for a decision by the
8-67 retirement board members at any meeting of the retirement board,
8-68 and six members constitute a quorum. Each member will be required
8-69 to serve on a committee of the retirement board. Any retirement
8-70 board member who is absent from four consecutive regular monthly
9-1 meetings of the retirement board shall be removed from the
9-2 retirement board and <the member shall be> replaced in accordance
9-3 with the provisions of this section.
9-4 (i)(1) The retirement board shall keep or cause to be kept
9-5 in convenient form such data as are necessary for actuarial
9-6 valuation of the fund of the retirement system and for checking the
9-7 mortality, service, compensation, and payment experience of the
9-8 system.
9-9 (2) The retirement board shall keep a record of all
9-10 its proceedings, which shall be open to public inspection except as
9-11 otherwise specifically provided or permitted by law, and shall
9-12 publish annually a report showing the fiscal transactions of the
9-13 retirement system for the preceding year, the amount of the
9-14 accumulated cash, <and> securities and other assets of the system,
9-15 and the last balance sheet showing the financial condition of the
9-16 system as disclosed by the most recent actuarial valuation of the
9-17 assets and liabilities of the retirement system.
9-18 (3) The retirement board shall have charge of and
9-19 administer the fund as trustee of the fund and shall order payments
9-20 therefrom in pursuance of the provisions of this Act. Each
9-21 employer <The city and each hospital authority> shall provide to
9-22 the retirement board the <all> records necessary and useful to
9-23 administer the system and the fund. The retirement board shall
9-24 report annually to the members on the condition of the fund and the
9-25 receipts and disbursements on account of the fund. The retirement
9-26 board shall keep a complete record <list> of the retired members,
9-27 surviving spouses, and beneficiaries of the fund and the amounts
9-28 paid to them.
9-29 (4) Individual accounts shall be maintained for each
9-30 member of the retirement system, showing the amount of the member's
9-31 accumulated deposits. Annually a statement shall be given each
9-32 member showing the total amount of that member's accumulated
9-33 deposits. The accounts of the retirement board and the retirement
9-34 system shall be included in the annual independent audit of the
9-35 accounts of the system. One <A> copy of the <this> annual audit
9-36 shall be provided to the governing body and to the board of each
9-37 employer <city mayor>.
9-38 (5) The retirement board shall designate an actuary
9-39 who shall be the technical advisor of the retirement board
9-40 regarding the maintenance and operations of the fund authorized by
9-41 the provisions of this Act and shall perform such other duties as
9-42 may be required in connection therewith, but shall not be an
9-43 investment advisor or fiduciary with respect to any investments of
9-44 the fund. The actuary shall make periodic valuations of the assets
9-45 and liabilities of the funds and other evaluations as requested by
9-46 the retirement board.
9-47 (6) From time to time on the advice of the actuary and
9-48 the direction of the retirement board, the actuary shall make an
9-49 actuarial investigation of the mortality, service, and compensation
9-50 experience of members, retired members, surviving spouses, and
9-51 beneficiaries of the retirement system and shall make a valuation
9-52 of the assets and liabilities of the funds of the system. Taking
9-53 into account the result of such investigation and valuation, the
9-54 retirement board shall adopt for the retirement system such
9-55 mortality, service, and other actuarial tables or rates as are
9-56 deemed necessary. On the basis of tables and rates adopted by the
9-57 retirement board, the actuary shall make a valuation at least once
9-58 every two years of the assets and liabilities of the funds of the
9-59 retirement system.
9-60 (7) The retirement board may retain the services of
9-61 one or more investment managers who shall have full authority to
9-62 invest and manage the assets of the retirement system and the fund,
9-63 as specified by contract in accordance with Subchapter C, Chapter
9-64 802, Government Code, and its subsequent amendments.
9-65 (8) The retirement board may retain the services of
9-66 one or more investment consultants to monitor the investment
9-67 performance of the investment managers and provide other
9-68 investment-related services as requested by the retirement board.
9-69 (j) The retirement board may retain legal counsel as
9-70 necessary in the judgment of the board to advise, consult, assist
10-1 and represent the retirement board and the system in and with
10-2 respect to any legal matter, issue, cause or claim that comes
10-3 before the retirement board or that may affect <to advise, assist,
10-4 or represent the board in any legal matters affecting> the
10-5 retirement system or <and> the operation of the fund.
10-6 (k) Except as provided by Subsection (l) of this section,
10-7 the retirement board may adopt rules, establish regulations or
10-8 procedures, correct any defect, supply any information, or
10-9 reconcile any inconsistency as the retirement board considers
10-10 necessary or advisable to carry out this Act. Further, the
10-11 retirement board is authorized to adopt any amendment that modifies
10-12 this Act to the extent necessary for the retirement system to be a
10-13 qualified plan.
10-14 (l) Any procedure, discretionary act, interpretation, or
10-15 construction by the retirement board must be done in a
10-16 nondiscriminatory manner based on uniform principles consistently
10-17 applied and must be consistent with this Act and with <26 U.S.C.>
10-18 Section 401(a) of the code and its subsequent amendments.
10-19 (m) The retirement board is authorized to administer oaths
10-20 to any person providing testimony at any hearing or other
10-21 proceeding of the retirement board.
10-22 Sec. 5. Membership. (a) Each regular full-time employee
10-23 <Any regular full-time employee who has completed six continuous
10-24 months of employment as a regular full-time employee before or
10-25 after the date of establishment of the retirement system and who
10-26 has been removed from the employee's initial probationary status,>
10-27 shall become an active-contributory member as a condition of
10-28 employment and shall make the required deposits commencing with the
10-29 first pay period in which the employee is compensated following the
10-30 effective date of this Act <following the later of the completion
10-31 of six continuous months of employment as a regular full-time
10-32 employee or the date of removal from the employee's initial
10-33 probationary status>. Unless on approved medical leave of absence
10-34 or on leave to serve in the uniformed services <other authorized
10-35 leave>, the employee shall make the deposits as long as the
10-36 employee remains a regular full-time employee and shall remain a
10-37 member of the system until the employee or the employee's
10-38 beneficiary ceases to be entitled to any benefits from the
10-39 retirement system. The membership for all new regular full-time
10-40 employees shall commence on the date their employment commences and
10-41 all current active contributory members shall be deemed to have
10-42 additional creditable service equal to the time elapsed between the
10-43 date their regular full-time employment commenced and the date they
10-44 became an active contributory member, but not in excess of six
10-45 months.
10-46 (b) Membership in the retirement system consists of the
10-47 following groups:
10-48 (1) the active-contributory members group, which
10-49 consists of all members, other than those on authorized leave of
10-50 absence, who are making deposits;
10-51 (2) the active-noncontributory members group, which
10-52 consists of all employees on approved medical leave of absence and
10-53 all employees of an employer <the city, a hospital authority, or
10-54 the board>, other than inactive-contributory members, who have been
10-55 <were> active-contributory members but who are no longer so because
10-56 they are not regular full-time employees;
10-57 (3) the inactive-contributory members group, which
10-58 consists of all members who are on an authorized leave of absence
10-59 and who continue to make deposits into the retirement system during
10-60 their <the employee's> absence;
10-61 (4) the inactive-noncontributory members group, which
10-62 consists of all members whose status as an employee <with the city,
10-63 a hospital authority, or the board> has been terminated before
10-64 retirement or disability retirement but <and> who are still
10-65 entitled to, or whose beneficiary may become entitled to, benefits
10-66 from the retirement system; and
10-67 (5) the retired members group, which consists of all
10-68 members who have retired and who are receiving or who are entitled
10-69 to receive a retirement allowance.
10-70 (c) An active-noncontributory member becomes an
11-1 active-contributory member immediately on resuming employment as a
11-2 regular full-time employee or on returning from an approved medical
11-3 leave of absence, as applicable.
11-4 (d) It shall be the duty of the retirement board to
11-5 determine the membership group to which each person who becomes a
11-6 member of the retirement system properly belongs. It shall be the
11-7 duty of the chief administrative officer of each employer <city
11-8 manager> to submit to the retirement board a statement showing the
11-9 name, position, compensation, duties, date of birth, length of
11-10 employment, and other information regarding each employee of the
11-11 employer <city> the retirement board may require. <The pension
11-12 officer shall submit to the board a statement showing the name,
11-13 position, compensation, duties, date of birth, length of
11-14 employment, and other information regarding each employee of the
11-15 board that the board requires. Each hospital authority board shall
11-16 submit to the retirement board a statement showing the name,
11-17 position, compensation, duties, date of birth, length of
11-18 employment, and other information regarding each employee of the
11-19 hospital authority that the retirement board requires.>
11-20 (e) Any person who has ceased to be a member and has
11-21 received a distribution of the person's accumulated deposits may
11-22 have the person's membership service or prior service reinstated if
11-23 the person is reemployed as a regular full-time employee for a
11-24 continuous period of 24 months and deposits into the system, within
11-25 a reasonable period established by the retirement board on a
11-26 uniform and nondiscriminatory basis, the accumulated deposits
11-27 withdrawn by that person, together with an interest payment equal
11-28 to the amount withdrawn multiplied by an interest factor. The
11-29 interest factor is equal to the annually compounded interest rate
11-30 assumed to have been earned by the fund beginning with the month
11-31 and year in which the person withdrew the person's accumulated
11-32 deposits and ending with the month and year in which the deposit
11-33 under this subsection is made. The interest rate assumed to have
11-34 been earned by the fund for any period is equal to the interest
11-35 rate credited for that period to the accumulated deposits of
11-36 members, divided by 0.75.
11-37 (f) A member on authorized leave of absence may make
11-38 deposits each <biweekly> pay period to the system while on
11-39 authorized leave of absence. Each such deposit shall be<,> in an
11-40 amount that is equal to the amount of the member's deposit for the
11-41 last complete <biweekly> pay period that the member was paid by the
11-42 employer <city, a hospital authority, or the board>. As long as
11-43 the member on authorized leave of absence makes the payments each
11-44 pay period, the employee's employer <biweekly payments, the city>
11-45 shall make contributions to the retirement fund, for such member,
11-46 each pay <on authorized leave of absence from the city each
11-47 biweekly pay> period in an amount equal to the contribution amount
11-48 the employer <city> would have made if the member's <biweekly> pay
11-49 had continued to be the <biweekly> pay the member received for the
11-50 last complete <biweekly> pay period that the member was paid by the
11-51 employer <city. Each hospital authority shall make contributions
11-52 to the retirement fund for a member on authorized leave of absence
11-53 from that hospital authority each pay period in an amount equal to
11-54 the contribution amount the hospital authority would have made if
11-55 the member's pay had continued to be the pay the member received
11-56 for the last complete pay period that the member was paid by the
11-57 hospital authority. The board shall make a contribution to the
11-58 retirement fund from system funds for a member on authorized leave
11-59 of absence from the board each biweekly pay period in an amount
11-60 equal to the contribution amount the board would have made if the
11-61 member's biweekly pay had continued to be the biweekly pay the
11-62 member received for the last complete biweekly pay period that the
11-63 member was paid by the board>. If the member does not make those
11-64 deposits while on authorized leave of absence, the member may make
11-65 a single payment, within five years after the member has returned
11-66 to employment with the employer, <city, with the hospital
11-67 authority, or with the board> equal to the deposits the member
11-68 would have made if the member had continued to be paid during the
11-69 authorized leave of absence at the same rate of pay the member was
11-70 receiving at the time the member's authorized leave of absence
12-1 began. In the event a member elects to make a single payment, the
12-2 member's employer <The city> shall make a single payment for such
12-3 member which payment shall be <employed by the city> equal to the
12-4 contributions the employer <it> would have made on the member's
12-5 behalf if the member had made deposits to the fund during the
12-6 period of the member's authorized leave of absence. During an
12-7 <Each hospital authority shall make a single payment for a member
12-8 employed by the hospital authority equal to the contributions it
12-9 would have made on the member's behalf if the member had made
12-10 deposits to the fund during the period of the member's> authorized
12-11 leave of absence, the member will continue to earn membership
12-12 service for the pay periods for which the member makes deposits <.
12-13 The board shall make a single payment to the fund for a member
12-14 employed by the board equal to the contributions it would have made
12-15 on the member's behalf if the member had made deposits to the fund
12-16 during the period of the member's authorized leave of absence. As
12-17 long as deposits are made> in accordance with this subsection<, the
12-18 member will continue to earn membership service during the period
12-19 of the authorized leave of absence>. If a member makes the lump
12-20 sum payment provided for in this subsection the membership service
12-21 will be credited at the time of payment.
12-22 (g) From time to time the retirement board, subject to the
12-23 approval of the system's actuary, may elect to permit the
12-24 reinstatement of membership service forfeited in accordance with
12-25 the terms of this section.
12-26 Sec. 6. Creditable service. (a) The retirement allowance
12-27 of a member is based on the member's <amount of> creditable service
12-28 <rendered by the member> as of the member's actual retirement date.
12-29 (b) The retirement board shall determine by
12-30 nondiscriminatory rules and regulations consistently applied,
12-31 subject to the provisions of this Act, in case of absence, illness,
12-32 or other temporary interruption in service as a regular full-time
12-33 employee, the portion of each calendar year to be allowed as
12-34 creditable service. No credit shall be allowed as creditable
12-35 service for any period exceeding one month during which an employee
12-36 was absent continuously without pay, except for an authorized leave
12-37 of absence as provided in this Act. The retirement board shall
12-38 verify the records for creditable service claims filed by the
12-39 members of the retirement system, subject to the provisions of this
12-40 Act and in accordance with such administrative rules and
12-41 regulations as the retirement board may from time to time adopt.
12-42 (c) At any time before a member's actual retirement date, a
12-43 member may establish creditable service for military service
12-44 performed that is creditable as provided under this subsection
12-45 according to the following conditions, limitations, and
12-46 restrictions:
12-47 (1) Military service creditable in the retirement
12-48 system is any service required to be credited by the Uniformed
12-49 Services Employment and Reemployment Act of 1994, as amended, and
12-50 certain active federal duty service in the armed forces of the
12-51 United States performed before the commencement of employment with
12-52 the employer, other than service as a student at a service academy,
12-53 as a member of the reserves, or any continuous active military
12-54 service lasting less than 90 days. To be creditable, the military
12-55 service must have been performed before the beginning of the
12-56 member's most recent period of membership in the retirement system
12-57 or its predecessor system.
12-58 (2) A member is not eligible to establish military
12-59 service credit unless the member was released from active military
12-60 duty under conditions other than dishonorable.
12-61 (3) A member may not establish creditable service in
12-62 the retirement system for military service for more than the
12-63 greater of the creditable service required under the Uniformed
12-64 Services Employment and Reemployment Act of 1994, as amended, or 24
12-65 months of creditable service in the retirement system for military
12-66 service under this subsection.
12-67 (4) A member may establish creditable service under
12-68 this subsection by contributing to the retirement system a single
12-69 payment equal to 25 percent of the estimated cost of the additional
12-70 projected retirement benefits the member will be entitled to
13-1 receive. The retirement board will determine the required
13-2 contribution based on a procedure recommended by the actuary and
13-3 approved by the retirement board, provided, however,
13-4 notwithstanding the amount determined under the preceding sentence,
13-5 such contribution may not exceed the amount required under the
13-6 Uniformed Services Employment and Reemployment Act of 1994, as
13-7 amended, in the case of a member who makes such contributions
13-8 within the time prescribed by such act.
13-9 (5) After the member makes the deposit required by
13-10 this subsection, the retirement system shall grant the member one
13-11 month of creditable service for each month of creditable military
13-12 service established under this subsection.
13-13 Sec. 7. Service retirement benefits and withdrawal benefits.
13-14 (a) Except as provided by Subsection (b) of this section, a member
13-15 who retires on or after the member's normal retirement date and
13-16 applies in writing for a retirement allowance shall receive a life
13-17 annuity (modified cash refund) beginning on the last day of the
13-18 month after the month in which the member retired. Unless
13-19 Subsection (e) of this section or Section 8 of this Act applies, a
13-20 member whose employment by the employer <city, a hospital
13-21 authority, or the board> terminates before the member's normal
13-22 retirement date is entitled to a distribution of the member's
13-23 accumulated deposits in a single lump sum. On receiving that
13-24 distribution, a member is not entitled to any other benefit under
13-25 this Act. If a member has at least five years of creditable
13-26 service and does not withdraw the member's accumulated deposits,
13-27 the member is entitled to a life annuity (modified cash refund)
13-28 beginning on the first day of the month after the month in which
13-29 the member's normal retirement date occurs. If a member has at
13-30 least 20 years of creditable service and does not withdraw the
13-31 member's accumulated deposits, the member is also entitled to elect
13-32 an early retirement benefit on attaining age 55.
13-33 (b) A member who terminates employment with the employer
13-34 <city, a hospital authority, or the board> and who has less than
13-35 five years of creditable service is not entitled to a retirement
13-36 allowance.
13-37 (c) The amount of the retirement allowance and all other
13-38 benefits payable under this statute shall be subject at all times
13-39 to such adjustments as may be required to ensure actuarial
13-40 soundness as may be approved by the actuary and adopted by the
13-41 retirement board, except that annuities already accrued <granted>
13-42 may not be reduced <below the base figure granted at time of
13-43 retirement>.
13-44 (d)(1) Subject to the conditions, limitations, and
13-45 restrictions set forth in this subsection, as well as all other
13-46 pertinent conditions, limitations, and restrictions set forth
13-47 elsewhere in this Act, the retirement board shall have the power
13-48 once each year to authorize a cost of living adjustment
13-49 (hereinafter referred to as the "adjustment") payment of which,
13-50 once authorized, shall be added to the current monthly payment of
13-51 all retirement annuities, pensions, or allowances of each and every
13-52 retired member (or the retired member's beneficiary) who has
13-53 <members' beneficiaries who have> become entitled to benefits, on
13-54 or before December 31 of the year before the year in which the
13-55 adjustment goes into effect. Before December 31 of each year, the
13-56 retirement board shall make a separate determination as to whether
13-57 to authorize the payment of an adjustment and the amount of such
13-58 adjustment, if any. In determining whether to authorize an
13-59 adjustment, the retirement board may consider the changes in the
13-60 consumer price index over the preceding 12-month period, the
13-61 actuarial experience of the fund, the investment experience of the
13-62 fund, the amount of any prior adjustments, and other factors that
13-63 the retirement board and the actuary consider appropriate.
13-64 (2) In determining whether to authorize the payment
13-65 and the amount of any adjustment, the retirement board shall be
13-66 governed by the following conditions, considerations, limitations,
13-67 and restrictions:
13-68 (A) Any and all determinations to authorize the
13-69 payment of any adjustment amount must be based on the ability of
13-70 the fund to pay such an amount and shall not be based on the
14-1 individual needs of any particular retired members or
14-2 beneficiaries.
14-3 (B) Prior to the retirement board's authorizing
14-4 the payment of an adjustment, the actuary must <approve and>
14-5 recommend such an adjustment to the retirement board and certify in
14-6 writing <to the board> that, based on the sound application of
14-7 actuarial assumptions and methods consistent with sound actuarial
14-8 principles and standards, it is demonstrable that the fund has and
14-9 likely will continue to have the ability to pay such an amount out
14-10 of its realized income after all other obligations of the fund have
14-11 been paid.
14-12 (C) The amount of the adjustment for each
14-13 retired member or beneficiary shall be a uniform percentage of the
14-14 monthly payment being receiving by a member, or by a beneficiary by
14-15 reason of a member, who was retired at least one year before the
14-16 adjustment and may not exceed six percent of the monthly payment
14-17 due the retired member or beneficiary before the adjustment. For
14-18 members who retired during the year in which the adjustment is
14-19 authorized, the increase for the first year in which the adjustment
14-20 is being paid shall be prorated in the ratio that the number of
14-21 completed months after the member's retirement in the year of the
14-22 member's retirement bears to 12. After the first year the member
14-23 is entitled to the full amount of any <the> adjustment without
14-24 proration.
14-25 <(D) The board shall have the authority and the
14-26 duty on recommendation by the actuary, at any and all times and
14-27 without notice to anyone, to decrease the amount of adjustment
14-28 payment as much as is necessary to protect the continuity of the
14-29 retirement and pensioning system and to protect the corpus of the
14-30 system should the ability of the system to continue to pay the
14-31 adjustment be threatened by a change in the economic situation of
14-32 the United States, the State of Texas, the city, or the system
14-33 itself, such as would dictate that a prudent trustee should
14-34 authorize such a decrease, providing that, if the threatening
14-35 change should prove not to have had the predicted harmful effect on
14-36 the system, then the board shall have the authority, on
14-37 recommendation by the actuary, to reinstate the payment of all or
14-38 any portion of the amount of the previously decreased adjustment
14-39 payments.>
14-40 (3) Any adjustment payments shall be in addition to
14-41 the benefits to which a retired member or beneficiary is otherwise
14-42 entitled under this Act<, and in no event shall a reduction in the
14-43 adjustment payments cause the retired member's or beneficiary's
14-44 benefits to be reduced below the actual base retirement figure
14-45 calculated under the provisions of this Act.>
14-46 <(4) The following terms and definitions shall be used
14-47 in construing the meaning of this section:>
14-48 <(A) "Base retirement figure" means that figure
14-49 calculated under the provisions of this Act at the time of actual
14-50 retirement to which, for the purposes of this subsection, a retired
14-51 member is entitled over a 12-month period.>
14-52 <(B) "Consumer price index" means the Consumer
14-53 Price Index (all items--United States City average) published
14-54 monthly by the Bureau of Labor Statistics, United States Department
14-55 of Labor or its successor in function.>
14-56 <(C) "Continuity of the fund" means the ability
14-57 of the retirement and pensioning system's fund to continue to meet
14-58 all of its purposes, to continue to thrive and grow along with the
14-59 economy of the United States, the State of Texas, and the city, or
14-60 to be able to sustain itself and its retired members and their
14-61 beneficiaries during and throughout the periods of deflation or
14-62 recession in those economies>.
14-63 (e) Any member shall be eligible for early retirement if the
14-64 member attains the age of 55 years and completes at least 20 years
14-65 of creditable service. Such member shall be entitled to a benefit
14-66 equal to a life annuity (modified cash refund) reduced at the rate
14-67 of five-twelfths of one percent for each month the member was
14-68 retired before the member's normal retirement date. A member who
14-69 takes early retirement shall begin receiving the benefits provided
14-70 by this subsection beginning on the last day of the month after the
15-1 month in which the member retired.
15-2 (f) A member may file a <duly acknowledged> written
15-3 designation, which, if approved by the retirement board, shall
15-4 entitle the member, on retirement, to receive the actuarial
15-5 equivalent of the life annuity in the form of one of the following
15-6 options:
15-7 (1) Option I. 100 Percent Joint and Survivor Annuity.
15-8 This option is a reduced monthly annuity payable to the member but
15-9 with the provision that on the member's death the annuity shall be
15-10 continued throughout the life of and be paid to such person as the
15-11 member shall designate before the member's actual retirement date.
15-12 (2) Option II. 50 Percent Joint and Survivor Annuity.
15-13 This option is a reduced monthly annuity payable to the member but
15-14 with the provision that on the member's death one-half of the
15-15 annuity shall be continued throughout the life of and be paid to
15-16 such person as the member shall designate before the member's
15-17 actual retirement date.
15-18 (3) Option III. 66-2/3 Percent Joint and Survivor
15-19 Annuity. This option is a reduced monthly annuity payable to the
15-20 member but with the provision that on the member's death two-thirds
15-21 of the annuity shall be continued throughout the life of and be
15-22 paid to such person as the member shall designate before the
15-23 member's actual retirement date.
15-24 (4) Option IV. Joint and 66-2/3 Percent Last Survivor
15-25 Annuity. This option is a reduced monthly annuity payable to the
15-26 member but with the provision that two-thirds of the annuity to
15-27 which the member would be entitled shall be continued throughout
15-28 the life of and be paid to the survivor after the death of either
15-29 the member or such person as the member shall designate before the
15-30 member's actual retirement date.
15-31 (5) Option V. Level Income Option. If payment of a
15-32 retirement allowance commences prior to the earliest age at which
15-33 the member will become eligible for an old age insurance benefit
15-34 under the Social Security Act, the member may elect that the amount
15-35 of the monthly payments be adjusted so that an increased monthly
15-36 amount will be paid prior to such age and a reduced monthly amount,
15-37 if any, will be paid for life after such age. The purpose of this
15-38 adjustment is to enable the member to receive from this plan and
15-39 under the Social Security Act an aggregate income in approximately
15-40 a level amount for life.
15-41 (6) Option VI. 66-2/3 Percent Joint and Survivor/Level
15-42 Income Option. If payment of a retirement allowance commences
15-43 prior to the earliest age at which the member could become eligible
15-44 for an old age insurance benefit under the Social Security Act, the
15-45 member may elect that the amount of the monthly payments be
15-46 adjusted so that an increased monthly amount will be paid prior to
15-47 such age and a reduced monthly amount will be paid for life after
15-48 such age. The purpose of this adjustment is to enable the member
15-49 to receive from this plan and under the Social Security Act an
15-50 aggregate income in approximately a level amount for life. Option
15-51 VI provides that if the member's death occurs after age 62,
15-52 two-thirds of the monthly annuity the member was receiving at the
15-53 time of the member's death shall be continued throughout the life
15-54 of and be paid to such person as the member shall designate before
15-55 the member's actual retirement date. If the member's death occurs
15-56 before age 62, two-thirds of the monthly annuity the member was
15-57 receiving at the time of member's death shall be paid to such
15-58 person as the member shall designate before the member's actual
15-59 retirement date through the end of the month when the member would
15-60 have reached age 62. The monthly annuity being paid to such person
15-61 as the member shall designate before the member's actual retirement
15-62 date will be reduced at the end of the month following the month in
15-63 which the member would have reached age 62 to two-thirds of the
15-64 reduced benefit the member would have begun to receive at age 62.
15-65 (7) Option VII. 15-Year Certain and Life Annuity.
15-66 This option is a reduced annuity payable to the member for life.
15-67 In the event of the member's death before 180 monthly payments have
15-68 been made, the remainder of the 180 payments shall be paid to the
15-69 member's beneficiary or, if there is no beneficiary, to the
15-70 member's estate.
16-1 (8) Option VIII. Equivalent Benefit Plan. If a member
16-2 requests in writing, any other form of benefit or benefits may be
16-3 paid either to the member or to such person or persons as the
16-4 member shall designate before the member's actual retirement date,
16-5 provided that the benefit plan requested by the member is certified
16-6 by the actuary for the system to be the actuarial equivalent of the
16-7 life annuity with guaranteed refund of the retired member's
16-8 accumulated deposits. If, on the death of the member and all other
16-9 persons entitled to receive payments under an optional benefit, the
16-10 member's accumulated deposits as of the member's actual retirement
16-11 date exceed the sum of all payments made under that optional
16-12 benefit, that excess shall be paid in one lump sum to the member's
16-13 beneficiary.
16-14 (g)(1) For purposes of Subsection (f) of this section, the
16-15 designation of a beneficiary must be made in writing on a form and
16-16 in the manner prescribed by the retirement board. If a member has
16-17 chosen Option I, II, III, IV, VI, or VIII, the member's designation
16-18 of a beneficiary may not be revoked after a member retires, and any
16-19 attempted revocation of a designation for those options is void.
16-20 Spousal consent shall not be required for a member to select Option
16-21 I, II, III, IV or VI. If the member is married, spousal consent is
16-22 required for the member to select an optional benefit other than
16-23 Option I, II, III, IV<,> or VI. At any time before retirement, a
16-24 member may file with the retirement board a written statement
16-25 designating one or more persons to be entitled to receive as
16-26 beneficiary the reduced annuity payable under one of the optional
16-27 benefits. If a married member designates as a beneficiary any
16-28 person other than the member's spouse, the member's spouse must
16-29 consent in writing to the beneficiary designation, and the
16-30 beneficiary designation may not be changed without spousal consent,
16-31 unless the consent of the spouse expressly permits designations by
16-32 the member without the requirement of further consent by the
16-33 spouse. The spouse's consent is irrevocable and must acknowledge
16-34 the effect of the designation and be witnessed by a retirement
16-35 board employee or notary public. Spousal consent is not required
16-36 if it is established to the satisfaction of the retirement board
16-37 that the required consent cannot be obtained because there is no
16-38 spouse, the spouse cannot be located, or other circumstances exist
16-39 as prescribed by United States Treasury regulations.
16-40 Notwithstanding other provisions of this subdivision, the option
16-41 election or beneficiary designation made by a member and consented
16-42 to by the member's spouse may be revoked by the member in writing
16-43 without consent of the spouse at any time before retirement. The
16-44 number of revocations is not limited. A former spouse's waiver or
16-45 consent is not binding on a new spouse. An option selection
16-46 becomes effective on the member's actual retirement date. The
16-47 member retains the right to change the option selected or the
16-48 beneficiary designated until the member's actual retirement date,
16-49 subject to this subsection.
16-50 (2) After filing the written statement selecting one
16-51 of the optional benefits, the member may continue in employment and
16-52 retire any time after the member becomes eligible by filing a
16-53 written application for retirement. If the member dies before
16-54 retirement but after becoming eligible for retirement, the
16-55 effective date of the member's retirement is the last day of the
16-56 calendar month of death, and the benefit is computed on the
16-57 optional benefit selected as if the member had retired on that
16-58 date.
16-59 (h) The amount of the annuity payment in Options I, II, III,
16-60 IV, V, VI, VII, and VIII shall be determined without considering
16-61 the minimum cumulative payment of the retired member's accumulated
16-62 deposits since that refund feature will stay in effect as indicated
16-63 herein.
16-64 (i) If a member who is eligible for retirement dies without
16-65 having filed a written selection of one of the enumerated options
16-66 and if the member leaves a surviving spouse, that spouse may select
16-67 the optional benefit in the same manner as if the member had made
16-68 the selection or may select a lump-sum payment equal to the
16-69 deceased member's accumulated deposits plus an equivalent amount
16-70 from Fund No. 2. If the member does not leave a surviving spouse,
17-1 the member's designated beneficiary is entitled to elect either
17-2 Option VII, to become effective at the beginning of the calendar
17-3 month after the month in which the death of the member occurs, or
17-4 the sum of a lump-sum payment equal to the deceased member's
17-5 accumulated deposits plus an equivalent amount from Fund No. 2.
17-6 If the surviving spouse dies before the spouse receives retirement
17-7 allowances equal to the amount of the member's accumulated deposits
17-8 on the date of the member's death, the excess of the accumulated
17-9 deposits over the retirement allowances paid shall be distributed
17-10 in one lump sum to the member's estate.
17-11 (j) In the event of death of a member who is ineligible for
17-12 retirement, the member's accumulated deposits and an equivalent
17-13 amount from Fund No. 2 shall be paid in a lump sum to the member's
17-14 beneficiary.
17-15 (k)(1) If a prior demand for withdrawal of accumulated
17-16 deposits has not been made within seven years after termination of
17-17 employment by <with the city, a hospital authority, or the board
17-18 of> a member with less than five years' of creditable service, the
17-19 member's accumulated deposits shall be returned to the member or
17-20 the member's beneficiary. Except as provided by Subdivision (2) of
17-21 this subsection, if the system is unable to locate the member or
17-22 the member's beneficiary, the member's accumulated deposits shall
17-23 thereafter be forfeited and become a part of Fund No. 2.
17-24 (2) If the member or member's beneficiary later
17-25 appears and requests in writing the payment of the member's
17-26 accumulated deposits, the system shall:
17-27 (A) reinstate the account of the member;
17-28 (B) credit to that account an amount equal to
17-29 all of the accumulated deposits previously standing to the member's
17-30 credit plus interest that would have been earned on those
17-31 accumulated deposits if the funds had remained in Fund No. 1
17-32 between the date of forfeiture to Fund No. 2 and the date of
17-33 reinstatement of the member's account;
17-34 (C) fund the account from the monies in Fund No.
17-35 2; and
17-36 (D) make all necessary payments to the member or
17-37 member's beneficiary from the reinstated account.
17-38 (3) On payment of the accumulated deposits under this
17-39 subsection, plus any interest on those deposits to which the member
17-40 may be entitled, to the member or member's beneficiary in
17-41 accordance with this subsection, the terminated employee ceases to
17-42 be a member of the system.
17-43 (l) In the event of the death of a member receiving a
17-44 retirement allowance, the sum of $10,000 <$2,000> shall be payable
17-45 in a lump sum to the member's beneficiary.
17-46 (m) When monthly survivor benefits are deemed payable as a
17-47 result of the death of a member before retirement, an additional
17-48 sum of $10,000 <$2,000> shall be payable as a death benefit to the
17-49 member's designated beneficiary.
17-50 (n) In the event of the death of the retired member then
17-51 receiving a retirement allowance under any retirement option and
17-52 the death of the beneficiary designated by the retired member, when
17-53 either Option I, Option II, Option III, Option IV, or Option VI is
17-54 in effect, before retirement allowances have been received that are
17-55 equal or greater than the retired member's accumulated deposits,
17-56 <then> the member's estate will receive the excess of the retired
17-57 member's accumulated deposits over the retirement allowances paid.
17-58 (o) Notwithstanding any contrary provision of this Act, the
17-59 distribution of a member's benefits, including benefits payable
17-60 after the member's death, made on or after January 1, 1985, shall
17-61 be made in accordance with the following requirements and shall
17-62 otherwise comply with <26 U.S.C.> Section 401(a)(9) of the code
17-63 and related <and its subsequent amendments and> regulations,
17-64 including Regulation Section 1.401(a)(9)-2:
17-65 (1) A member's benefits shall be distributed to the
17-66 member, or the distribution of those benefits shall begin, not
17-67 later than April 1 of the calendar year after the calendar year in
17-68 which occurs the later of the date on which the member attains age
17-69 70-1/2 or the date on which the member's employment by the employer
17-70 <city, hospital authority, or the board> terminates.
18-1 (2) A member's benefits shall be distributed over a
18-2 period not exceeding the life of the member or the lives of the
18-3 member and the member's beneficiary or over a period not exceeding
18-4 the life expectancy of the member or the life expectancy of the
18-5 member and the member's beneficiary.
18-6 (3) If the distribution of a member's benefit has
18-7 begun and the member dies before the member's entire benefit is
18-8 distributed, the remaining portion of that benefit shall be
18-9 distributed at least as rapidly as under the form of benefit
18-10 selected as of the date of the member's death, adjusted as
18-11 necessary under this subsection.
18-12 (4) If a member dies before the distribution of the
18-13 member's benefit has begun, the member's death benefit shall be
18-14 distributed to the member's beneficiary within five years after the
18-15 date of the member's death. This five-year rule does not apply to
18-16 any portion of the deceased member's benefit that is payable to or
18-17 for the benefit of the member's surviving spouse. A benefit
18-18 payable to or for the benefit of the member's surviving spouse may
18-19 be distributed over the life of the spouse or over a period not
18-20 exceeding the life expectancy of the spouse, provided that payment
18-21 of the benefit begins not later than the date on which the deceased
18-22 member would have attained age 70-1/2. If the surviving spouse
18-23 dies before distributions to that spouse begin, the five-year rule
18-24 applies as if the spouse had been the member.
18-25 (5) The five-year rule does not apply to distributions
18-26 payable to a beneficiary over the life or life expectancy of the
18-27 beneficiary, provided that payment of the benefit begins not later
18-28 than the first anniversary of the date of the member's death.
18-29 (6) In applying the requirements of this subsection,
18-30 the life expectancy of the member and the member's beneficiary
18-31 shall be redetermined annually in accordance with regulations under
18-32 <26 U.S.C.> Section 401(a)(9) of the code and its subsequent
18-33 amendments.
18-34 (p) Forfeitures that may result from the termination of any
18-35 right of a member may not be used to increase benefits to remaining
18-36 members. This subsection shall not preclude an increase in
18-37 benefits by amendment to this Act or action of the retirement board
18-38 in accordance with Subsection (d) of this section that is made
18-39 possible by forfeitures or for any other reason. <The board may
18-40 adjust the terms of payment under any form of benefit payment as
18-41 long as the benefit as adjusted is the actuarial equivalent of the
18-42 benefit before adjustment.>
18-43 Sec. 8. Disability retirement. (a) Only
18-44 active-contributory members, inactive-contributory members, and
18-45 members on approved medical leave of absence are eligible for
18-46 consideration for disability retirement. Such members may apply
18-47 for disability retirement at any date prior to their normal
18-48 retirement date. Inactive-noncontributory members are not eligible
18-49 for consideration for disability retirement and may not receive any
18-50 benefits under this section.
18-51 (b) If a member who is eligible for consideration for
18-52 disability retirement <and who has less than 10 years of creditable
18-53 service> has become mentally or physically incapacitated for the
18-54 performance of all employment duties as a direct result of injuries
18-55 sustained in the performance of the member's employment duties
18-56 subsequent to the member's effective date of membership in the
18-57 retirement system, the member may apply for disability retirement.
18-58 Such application, made by or on behalf of the injured member, shall
18-59 show that the injury sustained:
18-60 (1) was by external and violent means;
18-61 (2) came as a direct and proximate result of the
18-62 performance of the member's employment duties with the employer
18-63 <city, a hospital authority, or the board>; and
18-64 (3) is likely to be permanent.
18-65 (c) On recommendation of the physician or physicians
18-66 appointed or selected by the retirement board that the <an>
18-67 eligible member's incapacity is likely to be permanent and after
18-68 determining on that basis, or on the basis of <considering> any
18-69 additional evidence which the retirement board deems relevant, that
18-70 the member meets the requirements of Subsection (b) of this
19-1 section, the retirement board shall award such <the> member a
19-2 disability retirement allowance. The decision of the retirement
19-3 board is final subject to the reexamination, discontinuance and
19-4 revocation rules at Subsections (h) and (i) of this section.
19-5 (d) If a member who is eligible for consideration for
19-6 disability retirement, and who has more than 10 years of creditable
19-7 service, has become mentally or physically incapacitated for the
19-8 performance of all employment duties, such <the> member may apply
19-9 for disability retirement. The application made on behalf of the
19-10 disabled member shall show that the incapacity is likely to be
19-11 permanent. On recommendation of the physician or physicians
19-12 appointed or selected by the retirement board that the eligible
19-13 member's incapacity is likely to be permanent and after determining
19-14 on that basis, or on the basis of <considering> any additional
19-15 evidence which the retirement board deems relevant, that the member
19-16 meets the requirements of this Subsection (d) of this section, the
19-17 retirement board shall award such member a disability retirement
19-18 allowance. The decision of the retirement board is final subject
19-19 to the reexamination, discontinuance and revocation rules at
19-20 Subsections (h) and (i) of this section.
19-21 (e) On award of a disability retirement allowance, the
19-22 member shall receive a disability retirement allowance, beginning
19-23 on the last day of the month after the month in which the member
19-24 became disabled, which shall be computed in the same manner that a
19-25 retirement allowance would be computed at the member's normal
19-26 retirement date, based on compensation and creditable service at
19-27 the date of disability retirement, without reduction for early
19-28 retirement. The disabled member may choose to receive a life
19-29 annuity (modified cash refund) or a benefit as described by Section
19-30 7(f) of this Act as Option I, Option II, Option III, Option IV, or
19-31 Option VII.
19-32 (f) A member receiving a disability retirement allowance
19-33 will be required to file an annual report with the retirement board
19-34 concerning continued proof of disability. The report shall
19-35 include:
19-36 (1) a current statement of the member's physical or
19-37 mental condition, signed by the member's attending physician; and
19-38 (2) a statement of all employment activities pursued
19-39 in the preceding year.
19-40 (g) <The board may verify all information submitted in this
19-41 report.> Each calendar year, a disabled member shall file the <an>
19-42 annual report required by Subsection (f) of this section no <not>
19-43 later than the 60th day after the anniversary date of the member's
19-44 disability retirement. The retirement board may verify all
19-45 information submitted in the report.
19-46 (h) The pension officer will be responsible for a yearly
19-47 report to the retirement board listing those disabled members who
19-48 should be examined. The retirement board shall have the right to
19-49 order an examination of any person on disability retirement once
19-50 each year until the member reaches the age of 62 years. If the
19-51 member refuses to submit to an examination by a physician or
19-52 physicians appointed by the retirement board or if the member
19-53 refuses to submit an annual report in accordance with Subsection
19-54 (g) of this section concerning continued proof of disability, the
19-55 disability retirement allowance shall be discontinued until such
19-56 refusal is withdrawn and the member has submitted to an examination
19-57 and <or> has submitted an annual report. Should such refusal
19-58 continue for a period of one year, the disability retirement
19-59 allowance may be revoked by the retirement board. If a member's
19-60 disability retirement allowance has been revoked, the retirement
19-61 board may reinstate the member's disability retirement allowance on
19-62 a prospective basis only on the member's full performance of and
19-63 compliance with all requirements of this section and the retirement
19-64 board's determination that the member's disability is continuing.
19-65 (i) If after investigation of the disabled member's
19-66 activities or if the annual medical examination shows that the
19-67 member is no longer physically or mentally incapacitated for the
19-68 purposes of the performance of employment duties or that such
19-69 member is engaged in or is able to engage in substantial gainful
19-70 occupation, as defined by Social Security disability income
20-1 guidelines, for which he or she is reasonably suited by education,
20-2 training, or experience, the retirement board shall <may>
20-3 discontinue the disability retirement allowance. If the disability
20-4 retirement allowance of a member who had less than 10 years of
20-5 creditable service is discontinued under this subsection or
20-6 Subsection (h) of this section and not reinstated, and the member
20-7 is not reemployed by the employer <city, a hospital authority, or
20-8 the board>, the member is entitled to any amount by which the sum
20-9 of the member's accumulated deposits as of the date of disability
20-10 retirement exceeds the sum of all disability retirement benefits
20-11 paid to the member by the system. If the disability retirement
20-12 allowance of a member <who had 10 years or more of creditable
20-13 service> is discontinued under this subsection or Subsection (h) of
20-14 this section and not reinstated, and the member is not reemployed
20-15 by the employer <city, a hospital authority, or the board>, the
20-16 member may withdraw any amount by which the sum of the member's
20-17 accumulated deposits as of the date of the disability retirement
20-18 exceeds the sum of all disability retirement benefits paid to the
20-19 member by the system. If a member who had 10 or more years of
20-20 creditable service <the member> does not withdraw the excess, the
20-21 member is entitled to a life annuity (modified cash refund)
20-22 beginning on the first day of the month after the month in which
20-23 the member's normal retirement date occurs.
20-24 (j) If a disabled member returns to active employment
20-25 service with the employer <city, a hospital authority, or the
20-26 board>, the disability retirement allowance shall cease. If the
20-27 person is reemployed as a regular full-time employee, the person
20-28 shall be reinstated as an active-contributory member of the system
20-29 and shall comply with all requirements of this Act. If reinstated
20-30 as an active-contributory member, membership service credits
20-31 accumulated prior to disability shall be restored to the full
20-32 amount standing to the member's credit as of the date the
20-33 retirement board found the member eligible for disability
20-34 retirement, and any prior service credit shall be restored in full.
20-35 The member is not required to reimburse the fund for any disability
20-36 retirement allowance amounts received by the member.
20-37 Sec. 9. LIMITATIONS ON BENEFITS. (a) Notwithstanding any
20-38 other provisions of this Act, the annual benefit provided with
20-39 respect to any member may not exceed the lesser of:
20-40 (1) $90,000; or
20-41 (2) 100 percent of the member's compensation averaged
20-42 over the three consecutive calendar years during which the member
20-43 had the greatest aggregate compensation from the employer.
20-44 (b) Benefits provided to a member under this Act and under
20-45 any other qualified defined benefit plan or plans maintained by the
20-46 employer shall be aggregated for purposes of determining whether
20-47 the limitations in Subsection (a) of this section are met. If the
20-48 aggregate benefits otherwise payable to any member under this Act
20-49 and any other defined benefit plan or plans maintained by the
20-50 employer would otherwise exceed the limitations of Subsection (a)
20-51 of this section, the reductions in benefits shall be made in the
20-52 benefits provided under this Act, to the extent necessary to enable
20-53 each plan or plans to satisfy those limitations, unless the
20-54 retirement board is informed by the administrator of the other plan
20-55 that the reductions are required to be made in the other plan.
20-56 (c) The maximum benefit otherwise permitted under Subsection
20-57 (a) or (b) of this section is subject to the following adjustments:
20-58 (1) If the annual benefit begins before the member
20-59 attains age 62, the $90,000 limitation, as adjusted, shall be
20-60 reduced in a manner prescribed by the Secretary of the Treasury.
20-61 However, that adjustment may not reduce the member's annual benefit
20-62 below $75,000, if the member's benefit begins after age 55, or the
20-63 actuarial equivalent of $75,000 beginning at age 55 if benefits
20-64 begin before age 55.
20-65 (2) If the annual benefit begins after the member
20-66 attains age 65, the $90,000 limitation, as adjusted, will be
20-67 increased so that it is the actuarial equivalent of the $90,000
20-68 limitation at age 65.
20-69 (3) The portion of a member's benefit that is
20-70 attributable to the member's own after tax contributions is not
21-1 part of the annual benefit subject to the limitations of this
21-2 section. Instead, the amount of those contributions is treated as
21-3 an annual addition to a qualified defined contribution plan
21-4 maintained by the employer.
21-5 (d) The $90,000 limitation on annual benefits provided by
21-6 this section, but not the $75,000 limitation, shall be adjusted
21-7 annually as provided by Section 415(d) of the code and the
21-8 regulations prescribed by the Secretary of the Treasury to reflect
21-9 cost of living adjustments. The adjusted limitation is effective
21-10 as of January 1 of each calendar year.
21-11 (e) The limitation provided by this section for a member who
21-12 has separated from service with a vested right to a pension shall
21-13 be adjusted annually as provided by Section 415(d) of the code and
21-14 the regulations prescribed by the Secretary of the Treasury.
21-15 (f) The following interest rate assumptions shall be used in
21-16 computing the limitations under this section:
21-17 (1) For the purpose of determining the portion of the
21-18 annual benefit that is purchased with employee contributions, the
21-19 interest rate assumption is 120 percent of the federal mid-term
21-20 rate, as in effect under Section 1274 of the code, compounded
21-21 annually.
21-22 (2) For the purpose of adjusting the annual benefit to
21-23 a straight life annuity, the interest rate assumption is five
21-24 percent, unless a different rate is required by the Secretary of
21-25 the Treasury.
21-26 (3) For the purpose of adjusting the $90,000
21-27 limitation after a member attains age 65, the interest rate
21-28 assumption is five percent, unless a different rate is required by
21-29 the Secretary of the Treasury, and the mortality decrement shall be
21-30 ignored to the extent that a forfeiture does not occur at death.
21-31 (g) For purposes of this section, an adjustment under
21-32 Section 415(d) of the code may not be taken into account before the
21-33 year for which that adjustment first takes effect. No adjustment
21-34 is required for the value of qualified joint and survivor annuity
21-35 benefits, preretirement death benefits, post retirement medical
21-36 benefits, or post retirement cost-of-living increases made in
21-37 accordance with Section 415(d) of the code and Section 1.415-3(c)
21-38 of the Income Tax Regulations.
21-39 (h) This plan may still pay an annual benefit to any member
21-40 in excess of the member's maximum annual benefit otherwise allowed
21-41 if:
21-42 (1) the annual benefit derived from the employer's
21-43 contributions under all qualified plans subject to the limitations
21-44 of Section 415 of the code does not in the aggregate exceed $10,000
21-45 for the year or for any prior year; and
21-46 (2) the member has not at any time participated in a
21-47 defined contribution plan maintained by the employer.
21-48 For purposes of this subsection, member contributions under
21-49 the Act are not considered a separate defined contribution plan
21-50 maintained by the employer.
21-51 (i) If a member has less than ten years of creditable
21-52 service at the time the member begins to receive benefits under the
21-53 Act, the $90,000 limitation, as adjusted, shall be reduced by
21-54 multiplying the limitation by a fraction in which the numerator is
21-55 the number of years of creditable service and the denominator is
21-56 10; provided, however, that the fraction may not be less than
21-57 one-tenth. If the employee has less than 10 years of employment
21-58 with the employer, the 100 percent limitation of Subsection (a)(2)
21-59 and the $10,000 limitation of Subsection (h) shall be reduced in
21-60 the same manner as provided in the preceding sentence, except the
21-61 numerator shall be the number of years of employment with the
21-62 employer rather than the number of years of creditable service.
21-63 (j) If a member is or has been a member in one or more
21-64 defined contribution plans maintained by the employer, the sum of
21-65 the defined benefit plan fraction and the defined contribution plan
21-66 fraction for any year may not exceed 1.0.
21-67 (k) For purposes of Subsection (j) of this section, the
21-68 defined benefit plan fraction for any year is a fraction in which:
21-69 (1) the numerator is the projected annual benefit of a
21-70 member, determined as of the close of the year pursuant to Section
22-1 1.415-7(b)(3) of the Income Tax Regulations; and
22-2 (2) the denominator is the lesser of:
22-3 (A) the product of 1.25 and the maximum dollar
22-4 limitation provided by Subsection (a)(1) of this section, as
22-5 adjusted, for the year; or
22-6 (B) the product of 1.4 and the amount that may
22-7 be taken into account under Subsection (a)(2) of this section for
22-8 the year.
22-9 (l) For purposes of Subsection (a) of this section, the
22-10 defined contribution plan fraction for any year is a fraction in
22-11 which:
22-12 (1) the numerator is the sum of the annual additions
22-13 to the member's account as of the close of the year; and
22-14 (2) the denominator is the sum of the lesser of the
22-15 following amounts determined for the year and each prior year of
22-16 employment with the employer:
22-17 (A) the product of 1.25 and the dollar
22-18 limitation in effect under Section 415(c)(1)(A) of the code for the
22-19 year, determined without regard to Section 415(c)(6) of the code;
22-20 or
22-21 (B) the product of 1.4 and the amount that may
22-22 be taken into account under Section 415(c)(1)(B) of the code for
22-23 the year.
22-24 The annual additions may not be recomputed for years
22-25 beginning before January 1, 1987, to treat all member contributions
22-26 as annual additions.
22-27 (m) If the sum of the defined benefit plan fraction and the
22-28 defined contribution plan fraction exceeds 1.0 in any year for any
22-29 member, the retirement board shall first request the person or
22-30 persons responsible for the defined contribution plan or plans, to
22-31 reduce, the annual additions to the member's account to the extent
22-32 necessary for that year. If, after limiting to the extent possible
22-33 the annual additions to the member's account for the year, the sum
22-34 of the defined benefit plan fraction and the defined contribution
22-35 plan fraction still exceeds 1.0, the retirement board shall adjust
22-36 the benefits provided under this Act so that the sum of both
22-37 fractions shall not exceed 1.0 in any year for the member.
22-38 (n) For purposes of determining the limits provided by this
22-39 section, all qualified defined benefit plans, whether terminated or
22-40 not, ever maintained by or contributed to by the employer, shall be
22-41 treated as one defined benefit plan, and all qualified defined
22-42 contribution plans, whether terminated or not, ever maintained by
22-43 or contributed to by the employer, shall be treated as one defined
22-44 contribution plan.
22-45 (o) Notwithstanding anything contained in this section to
22-46 the contrary, the limitations, adjustments, and other requirements
22-47 prescribed by this Act shall at all times comply with the
22-48 requirements of Section 415 of the code and all regulations
22-49 promulgated under the code. If any provision of Section 415 of the
22-50 code is repealed or is not enforced by the Internal Revenue
22-51 Service, that provision may not reduce the benefits of any member
22-52 after the effective date of the repeal of the provision or during
22-53 the period in which the provision is not enforced.
22-54 Sec. 10. METHOD OF FINANCING. (a) Each active-contributory
22-55 member shall make deposits to the retirement system at a rate equal
22-56 to seven percent of the member's compensation, pay, or salary,
22-57 exclusive of overtime, incentive, or terminal pay<, and
22-58 disregarding compensation, pay, or salary in any month in excess of
22-59 $16,666>. Deposits shall be made by payroll deduction. If a
22-60 regular full-time employee works at least 75 percent of a normal
22-61 40-hour work week but less than the full 40 hours, the employee
22-62 shall make deposits as though working a normal 40-hour work week
22-63 even though the rate of contribution may exceed seven percent of
22-64 the employee's actual compensation, pay, or salary, and the
22-65 employee's average final compensation shall be computed on the
22-66 basis of the compensation, pay, or salary for a normal 40-hour work
22-67 week. No deposits may be made nor membership service credit
22-68 received for periods during which an employee's authorized normal
22-69 work week is less than 75 percent of a normal 40-hour work week. A
22-70 person who is eligible for inactive-contributory membership status
23-1 and who chooses to be an inactive-contributory member shall make
23-2 deposits to the retirement system each pay period <biweekly> in an
23-3 amount that is equal to the amount of the member's deposit for the
23-4 last complete <biweekly> pay period that the member was employed by
23-5 the employer. The regular full-time employee <city, a hospital
23-6 authority, or the board. The> members, by a majority vote of all
23-7 such members voting in favor of an increase in contributions above
23-8 seven percent, may increase each member's contributions above seven
23-9 percent in whatever amount the retirement <pension> board
23-10 recommends. Each employer <The city> shall contribute amounts
23-11 equal to seven percent of the compensation, pay, or salary of each
23-12 active-contributory member and each inactive-contributory member
23-13 employed by the employer <city>, exclusive of overtime, incentive,
23-14 or terminal pay<, and disregarding compensation, pay, or salary in
23-15 any month in excess of $16,666>. If a regular full-time employee
23-16 of the employer <city> works at least 75 percent of a normal
23-17 40-hour work week but less than the full 40 hours, the employer
23-18 <city> shall make contributions for that employee as though that
23-19 employee works a normal 40-hour work week even though the rate of
23-20 contribution may exceed seven percent of that employee's actual
23-21 compensation, pay, or salary. The governing body of the city
23-22 <council> may authorize the city to make additional contributions
23-23 to the system in whatever amount the governing body may determine.
23-24 If the governing body <city council may determine. The board shall
23-25 pay from the fund contributions in amounts equal to seven percent
23-26 of the compensation, pay, or salary of each active-contributory
23-27 member and each inactive-contributory member employed by the board,
23-28 exclusive of overtime, incentive, or terminal pay, disregarding
23-29 compensation, pay, or salary in any month in excess of $16,666. If
23-30 a regular full-time employee of the board works at least 75 percent
23-31 of a normal 40-hour work week but less than the full 40 hours, the
23-32 board shall make contributions for the employee as though the
23-33 employee works a normal 40-hour work week even though the rate of
23-34 contribution may exceed seven percent of the employee's actual
23-35 compensation, pay, or salary. If the city council> authorizes
23-36 additional contributions to the system by the city for city
23-37 employees, the board of each employer may increase the
23-38 contributions for such employer's respective <the board> employees
23-39 by the same percentage. Employer contributions <Each hospital
23-40 authority shall contribute amounts equal to seven percent of the
23-41 compensation, pay, or salary of each active-contributory member and
23-42 each inactive-contributory member employed by the hospital
23-43 authority, exclusive of overtime, incentive, or terminal pay,
23-44 disregarding compensation, pay, or salary in any month in excess of
23-45 $16,666. If a regular full-time employee of a hospital authority
23-46 works at least 75 percent of a normal 40-hour work week but less
23-47 than the full 40 hours, the hospital authority shall make
23-48 contributions for that employee as though that employee works a
23-49 normal 40-hour work week even though the rate of contribution may
23-50 exceed seven percent of that employee's actual compensation, pay,
23-51 or salary. If the city council authorizes additional contributions
23-52 to the system by the city for city employees, each hospital
23-53 authority may increase the contributions for the hospital authority
23-54 employees by the same percentage. Contributions by the city, a
23-55 hospital authority, and the board> shall be made each pay period.
23-56 (b) In addition to the contributions by the city required by
23-57 Subsection (a) of this section, the city shall contribute to the
23-58 retirement fund each month two-thirds of such amounts as are
23-59 required for the payment of prior service pensions that are payable
23-60 during that month, and one-third of each prior service pension
23-61 payable that month shall be made from Fund No. 2.
23-62 (c) Employer contributions <Contributions by the city> shall
23-63 be paid to the retirement system after appropriation by the
23-64 respective governing body or board <city council>.
23-65 (d) Expenses for administration and operation of the
23-66 retirement system that are approved by the retirement board shall
23-67 be paid by the retirement board from funds of the retirement
23-68 system. Such expenses shall include salaries of retirement board
23-69 employees and fees for actuarial services, legal counsel services,
23-70 physician services, accountant services, annual audits, investment
24-1 manager services, investment consultant services, preparation of
24-2 annual reports, and staff assistance.
24-3 (e) Each employer shall pick up the contributions required
24-4 to be made to the fund by its respective employees. Active
24-5 contributory member <The city shall pick up the city employee
24-6 contributions to the fund. The board shall pick up the board
24-7 employee contributions to the fund. Each hospital authority shall
24-8 pick up hospital authority employee contributions to the fund.
24-9 Member> deposits will be picked up by each employer by a reduction
24-10 in each such employee's <their> monetary compensation. All such
24-11 employee contributions <Contributions picked up> shall be treated
24-12 as employer contributions in accordance with Section 414(h)(2) of
24-13 the <Internal Revenue> code <of 1986 (26 U.S.C. Section
24-14 414(h)(2))> for the purpose of determining tax treatment of the
24-15 amounts under the code. Such <Internal Revenue Code of 1986.
24-16 These> contributions are not includable in the gross income of the
24-17 employee until such time as they are distributed or made available
24-18 to the employee. Each employee deposit <Employee deposits> picked
24-19 up as provided by this subsection shall be credited to the
24-20 individual accumulated deposits account of each such <affected>
24-21 employee and shall be treated as compensation of the employee
24-22 <employees> for all other purposes of this Act <statute> and for
24-23 the purpose of determining contributions to social security. The
24-24 provisions of this subsection shall remain in effect as long as the
24-25 plan covering employees of the employers <city> is a qualified
24-26 retirement plan under Section 401(a) of the code <Internal Revenue
24-27 Code of 1986 (26 U.S.C. Section 401(a)),> and its related trust is
24-28 tax exempt under Section 501(a) of the code <Internal Revenue Code
24-29 of 1986 (26 U.S.C. Section 501(a))>.
24-30 (f) Under no circumstances and in no event may any of the
24-31 contributions and income of the retirement system revert to the
24-32 employer or otherwise be diverted to or used for any purpose other
24-33 than <Before the satisfaction of all liabilities incurred with
24-34 respect to members and their beneficiaries under this Act, the
24-35 corpus or income of the fund may not be used for, or diverted to,
24-36 purposes other than for> the exclusive benefit of the members,
24-37 retirees and their beneficiaries. It shall be impossible for the
24-38 diversion or use prohibited by the preceding sentence to occur,
24-39 whether by operation or natural termination of the retirement
24-40 system, by power of revocation or amendment, by the happening of a
24-41 contingency, by collateral arrangement, or by any other means.
24-42 Sec. 11 <10>. INVESTMENTS OF THE RETIREMENT BOARD. (a) The
24-43 retirement board shall be the trustee of the funds of the
24-44 retirement system and shall have full power in its sole discretion
24-45 to invest and reinvest, alter, and change the form of investment of
24-46 the funds. The retirement board shall invest the funds in whatever
24-47 instrument or investments the retirement board considers prudent.
24-48 In making investments for the funds, the retirement board shall
24-49 discharge its duties:
24-50 (1) for the exclusive purposes of:
24-51 (A) providing benefits to members and their
24-52 beneficiaries; and
24-53 (B) defraying reasonable expenses of
24-54 administering the funds;
24-55 (2) with the care, skill, prudence, and diligence
24-56 under the circumstances then prevailing that a prudent person
24-57 acting in a like capacity and familiar with such matters would use
24-58 in the conduct of an enterprise of a like character and with like
24-59 aims;
24-60 (3) by diversifying the investments of the funds to
24-61 minimize the risk of large losses, unless under the circumstances
24-62 it is clearly prudent not to do so; and
24-63 (4) in accordance with the laws, documents, and
24-64 instruments governing the funds.
24-65 (b) A member of the retirement board is not liable for any
24-66 losses incurred in the investment of the fund in accordance with
24-67 this section.
24-68 (c) No member of the retirement board and no employee of the
24-69 retirement board, except as herein provided, shall have any
24-70 interest, directly or indirectly, in the funds or receive any pay
25-1 or emolument for his or her services. No member of the retirement
25-2 board or employee thereof shall, directly or indirectly, for
25-3 himself or herself or as an agent, in any manner use the funds or
25-4 deposits of the retirement system except to make such current and
25-5 necessary payments as are authorized by the retirement board, nor
25-6 shall any member or employee of the retirement board become an
25-7 endorser or surety or in any manner an obligor <obligator> for
25-8 money loaned by or borrowed from the retirement system <board>.
25-9 (d) Subject to the exceptions provided by this subsection,
25-10 the funds or money mentioned in this Act are not assignable and are
25-11 not subject to execution, levy, attachment, garnishment, the
25-12 operation of bankruptcy or insolvency law, or any other process of
25-13 law whatsoever. This subsection does not apply to a qualified
25-14 domestic relations order. The retirement board shall establish <a>
25-15 written procedures <procedure> to determine the qualified status of
25-16 domestic relations orders and to administer distributions under
25-17 those orders. To the extent necessary to authorize distributions
25-18 pursuant to a qualified domestic relations order, a former spouse
25-19 of a member will be treated as the spouse or surviving spouse of
25-20 the member.
25-21 (e) Subject to the exceptions provided by this subsection,
25-22 the right of a member to a pension, an annuity, a disability
25-23 retirement allowance, or a retirement allowance, to the return of
25-24 accumulated deposits, the pension, annuity, or retirement allowance
25-25 itself, any optional benefit or death benefits, any other right
25-26 accrued or accruing to any person under the provisions of this Act
25-27 is <are> unassignable and is <are> not subject to execution, levy,
25-28 attachment, garnishment, the operation of bankruptcy or insolvency
25-29 law, or any other process of law whatsoever. This subsection does
25-30 not apply to a qualified domestic relations order.
25-31 (f) If the retirement board makes an election to have
25-32 Subchapters A and C of Chapter 804, Government Code, and their
25-33 subsequent amendments, apply to the system, the death of an
25-34 alternate payee, as defined by Section 804.001, Government Code,
25-35 and its subsequent amendments, or the death of a member's spouse
25-36 terminates any interest of the alternate payee or spouse that would
25-37 otherwise exist under this Act, except an interest accrued by that
25-38 person as a member.
25-39 Sec. 12 <11>. Miscellaneous. (a) A person who with intent
25-40 to deceive makes any statement or report required under this Act
25-41 which is untrue or falsifies or knowingly permits to be falsified
25-42 any record or records of the retirement system shall forfeit any
25-43 office or rights held by the person under the system, and such
25-44 deception, falsification, or acquiescence in falsification is
25-45 deemed a Class B misdemeanor.
25-46 (b) If any change or error in the records of the retirement
25-47 system is discovered or results in any member, surviving spouse, or
25-48 beneficiary receiving from the retirement system more or less than
25-49 the member, surviving spouse, or beneficiary would have been
25-50 entitled to receive had the records been correct, the retirement
25-51 board shall have the power to correct such error and as far as
25-52 possible to adjust the payments in such a manner that the actuarial
25-53 equivalent of the benefits to which the member, surviving spouse,
25-54 or beneficiary was correctly entitled shall be paid.
25-55 (c) On the full or partial termination of the retirement and
25-56 pensioning system, or on the complete discontinuance of
25-57 contributions by all employers <the city, all hospital authorities,
25-58 and the board> under this Act, the retirement allowance of each
25-59 affected <a> member who is employed by an employer <the city, a
25-60 hospital authority, or the board> on the date of termination is
25-61 determined by reference to the member's average final compensation
25-62 and creditable service determined as of the date of termination or
25-63 partial termination of the system or the date of discontinuance of
25-64 deposits as if the member had attained normal retirement age on
25-65 that date, and such amount shall become nonforfeitable to the
25-66 extent then funded. This subsection does not accelerate the date
25-67 on which the payment of that benefit would otherwise begin.
25-68 (d) Any other provision in this Act to the contrary, in the
25-69 event of a termination of the retirement and pensioning system, the
25-70 benefit of any highly compensated employee or former employee is
26-1 limited to a benefit that is nondiscriminatory under Section
26-2 401(a)(4) of the code. Benefits distributed to any of the 25 most
26-3 highly compensated active and former highly compensated employees
26-4 are restricted such that the annual payments are no greater than an
26-5 amount equal to the payment that would be made on behalf of an
26-6 employee under a single life annuity that is the <A member who is
26-7 entitled to a benefit, including a benefit consisting solely of a
26-8 distribution of the member's accumulated deposits, from the system
26-9 may instruct the system to pay the single lump-sum> actuarial
26-10 equivalent of the sum of the employee's accrued benefit and the
26-11 employee's other benefits under the plan. The preceding sentence
26-12 shall not apply if: (1) after payment of the benefit to an employee
26-13 described in that sentence, the value of plan assets equals or
26-14 exceeds 110 percent of the value of the current liabilities, as
26-15 defined in Section 412(l)(7) of the code, or (2) the value of the
26-16 benefits for an employee described in that paragraph is less than
26-17 one percent of the value of current liabilities. For purposes of
26-18 this subsection, benefit includes loans in excess of the amount set
26-19 forth in Section 72(p)(2)(A) of the code, any periodic income, any
26-20 withdrawal values payable to a living employee and any death
26-21 benefits not provided for by insurance on the employee's life.
26-22 (e) Notwithstanding any provision of this Act to the
26-23 contrary that would otherwise limit a distributee's election, a
26-24 distributee may elect, at the time and in the manner prescribed by
26-25 the retirement board, to have any portion of an eligible rollover
26-26 distribution paid directly to an eligible retirement plan specified
26-27 by the distributee in a direct rollover.
26-28 For purposes of this Subsection (e) of this section:
26-29 (1) An eligible rollover distribution is any
26-30 distribution of all or any portion of the balance to the credit of
26-31 the distributee, except that an eligible rollover distribution does
26-32 not include: (1) any distribution that is one of a series of
26-33 substantially equal periodic payments (not less frequently than
26-34 annually) made over the life (or life expectancy) of the
26-35 distributee or the joint lives (or joint life expectancies) of the
26-36 distributee and the distributee's designated beneficiary; (2) any
26-37 series of payments for a specified period of ten years or more; (3)
26-38 any distribution to the extent such distribution is required under
26-39 Section 401(a)(9) of the code; or (4) the portion of any
26-40 distribution that is not includable in gross income (determined
26-41 without regard to the exclusion for net unrealized appreciation
26-42 with respect to employer securities).
26-43 (2) An "eligible retirement plan" is an individual
26-44 retirement account described in Section 408(a) of the code, an
26-45 individual retirement annuity described in Section 408(b) of the
26-46 code, an annuity plan described in Section 403(a) of the code, or a
26-47 qualified trust described in Section 401(a) of the code, that
26-48 accepts the distributee's eligible rollover distribution. However,
26-49 in the case of an eligible rollover distribution to the surviving
26-50 spouse, an eligible retirement plan is an individual retirement
26-51 account or individual retirement annuity only.
26-52 (3) A "distributee" includes an employee or former
26-53 employee. In addition, the employee's or former employee's
26-54 surviving spouse and the employee's or former employee's spouse or
26-55 former spouse who is the alternate payee under a qualified domestic
26-56 relations order, as defined in Section 414(p) of the code, are
26-57 distributees with regard to the interest of the spouse or the
26-58 former spouse.
26-59 (4) A "direct rollover" is a payment by the retirement
26-60 system to the eligible retirement plan specified by the
26-61 distributee.
26-62 Sec. 13. CONFIDENTIALITY. (a) Information contained in
26-63 records that are in the custody of the retirement board or the
26-64 system concerning an individual member, retiree, annuitant,
26-65 beneficiary, or alternate payee is confidential under this Section
26-66 13 and may not be disclosed in a form identifiable with a specific
26-67 individual unless:
26-68 (1) the information is disclosed to:
26-69 (A) the individual or the individual's attorney,
26-70 guardian, executor, administrator, conservator, or other person who
27-1 the pension officer determines is acting in the interest of the
27-2 individual or the individual's estate;
27-3 (B) a spouse or former spouse of the individual
27-4 if the pension officer determines that the information is relevant
27-5 to the spouse's or former spouse's interest in member accounts,
27-6 benefits, or other amounts payable by the retirement system;
27-7 (C) a governmental official or employee if the
27-8 pension officer determines that disclosure of the information
27-9 requested is reasonably necessary to the performance of the duties
27-10 of the official or employee;
27-11 (D) the individual's employer as defined in this
27-12 Act; or
27-13 (E) a person authorized by the individual in
27-14 writing to receive the information; or
27-15 (2) the information is disclosed pursuant to a
27-16 subpoena and the pension officer determines that the individual
27-17 will have a reasonable opportunity to contest the subpoena.
27-18 (b) This section does not prevent the disclosure of the
27-19 status or identity of an individual as a member, former member,
27-20 retiree, deceased member or retiree, beneficiary, or alternate
27-21 payee of the retirement system.
27-22 (c) The pension officer may designate other employees of the
27-23 retirement system to make the necessary determinations under
27-24 Subsection (a) of this section.
27-25 (d) A determination and disclosure under Subsection (a) of
27-26 this section may be made without notice to the individual member,
27-27 retiree, annuitant, beneficiary, or alternate payee. <that benefit
27-28 directly to:>
27-29 <(1) another trust forming part of a pension,
27-30 profit-sharing, or stock bonus plan maintained by that member's new
27-31 employer and represented by that employer in writing as meeting the
27-32 requirements of 26 U.S.C. Section 401(a) and its subsequent
27-33 amendments, subject to the acceptance by the trust to which those
27-34 transfers are made of those transfers; or>
27-35 <(2) an eligible transferee plan in accordance with
27-36 the federal Unemployment Compensation Amendments of 1992 (Pub. L.
27-37 No. 102-318) and its subsequent amendments governing direct
27-38 rollovers of eligible rollover distributions from qualified
27-39 retirement plans.>
27-40 <(e) This Act does not grant a contract of employment
27-41 between a member and the city, a hospital authority, or the board.>
27-42 SECTION 2. (a) Retirement allowances being paid by the
27-43 retirement and pensioning system created by Chapter 451, Acts of
27-44 the 72nd Legislature, Regular Session, 1991 (Article 6243n,
27-45 Vernon's Texas Civil Statutes), to members of the retirement
27-46 system, or to the beneficiaries of those members, who retired
27-47 before October 1, 1995, are increased beginning with the payments
27-48 due at the end of October 1995.
27-49 (b) The amount of the increase for a member, or the
27-50 beneficiary of the member, is by a percentage equal to:
27-51 (1) 2.3 percent divided by the retirement formula in
27-52 effect on the date of the member's retirement;
27-53 (2) minus one; and
27-54 (3) multiplied by 100.
27-55 SECTION 3. This Act takes effect October 1, 1995.
27-56 SECTION 4. The importance of this legislation and the
27-57 crowded condition of the calendars in both houses create an
27-58 emergency and an imperative public necessity that the
27-59 constitutional rule requiring bills to be read on three several
27-60 days in each house be suspended, and this rule is hereby suspended.
27-61 * * * * *