By: Armbrister, et al. S.B. No. 9
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the functions and systems and programs administered by
1-2 the Teacher Retirement System of Texas.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subchapter A, Chapter 821, Government Code, is
1-5 amended by adding Section 821.007 to read as follows:
1-6 Sec. 821.007. CONTROL OF HOME OFFICE FACILITIES. The
1-7 buildings comprising the home office of the retirement system are
1-8 under the control and custodianship of the retirement system, but
1-9 the retirement system shall:
1-10 (1) comply with space use regulations provided by
1-11 Section 6.021, State Purchasing and General Services Act (Article
1-12 601b, Vernon's Texas Civil Statutes); the General Appropriations
1-13 Act; or other state law; and
1-14 (2) lease to other persons at fair market value all
1-15 significant unused space in the buildings.
1-16 SECTION 2. Subchapter A, Chapter 821, Government Code, is
1-17 amended by adding Section 821.008 to read as follows:
1-18 Sec. 821.008. PURPOSE OF RETIREMENT SYSTEM. The purpose of
1-19 the retirement system is to invest and protect funds of the
1-20 retirement system and to deliver the benefits provided by statute,
1-21 not to advocate or influence legislative action or inaction or to
1-22 advocate higher benefits.
1-23 SECTION 3. Section 824.203, Government Code, is amended by
1-24 amending Subsection (a) and adding Subsection (e) to read as
2-1 follows:
2-2 (a) Except as provided by Subsections (c), <and> (d), and
2-3 (e), the standard service retirement annuity is an amount computed
2-4 on the basis of the member's average annual compensation for the
2-5 three years of service, whether or not consecutive, in which the
2-6 member received the highest annual compensation, times two percent
2-7 for each year of service credit in the retirement system.
2-8 (e) The annual standard service retirement annuity for a
2-9 person who immediately before retirement holds a position as a
2-10 classroom teacher or full-time librarian, or the annual death
2-11 benefit annuity based on the service of a member who at the time of
2-12 death held a position as a classroom teacher or full-time
2-13 librarian, may not be less than an amount computed on the basis of
2-14 the minimum annual salary provided by the Education Code for a
2-15 classroom teacher or full-time librarian, multiplied by two percent
2-16 for each year of service credit in the retirement system.
2-17 SECTION 4. Subchapter C, Chapter 824, Government Code, is
2-18 amended by adding Section 824.2031 to read as follows:
2-19 Sec. 824.2031. BENEFIT IMPROVEMENTS. (a) Each regular
2-20 legislative session, the legislature shall determine whether the
2-21 performance of the retirement system trust fund makes the fund
2-22 capable of supporting improvements in the plan of benefits.
2-23 (b) A determination under this section shall be founded on
2-24 the information in the most recent report of an investment
2-25 performance audit conducted under Section 825.512 and the
2-26 application of that information to:
2-27 (1) the present amortization period for liabilities of
3-1 the retirement system;
3-2 (2) the rate of return on retirement system
3-3 investments over and above the rate of inflation of the investment
3-4 portfolio as a whole, of the portion of the investment portfolio
3-5 entrusted to private investment entities, and of the portion of the
3-6 investment portfolio entrusted to investment officers who are
3-7 employees of the retirement system;
3-8 (3) economic projections of market conditions and
3-9 future investment rates of return as reflected in the comptroller's
3-10 most recent economic forecast and revenue estimate;
3-11 (4) the costs, including changes in the amortization
3-12 period for liabilities of the retirement system, of providing
3-13 cost-of-living or other increases in benefits to current
3-14 annuitants; and
3-15 (5) an evaluation of the diversity of retirement
3-16 system investments and whether the portfolio provides low-risk,
3-17 long-term growth.
3-18 SECTION 5. Subsection (e), Section 824.204, Government Code,
3-19 is amended to read as follows:
3-20 (e) The increase in the annuity under Subsection (d)<:>
3-21 <(1)> begins with the payment due at the end of
3-22 September, 1995, or the first monthly payment made to the retiree
3-23 following the date of death of the person nominated, whichever is
3-24 later, and is payable to the retiree for the remainder of the
3-25 retiree's life<; and>
3-26 <(2) applies only to a member who retires after August
3-27 31, 1989>.
4-1 SECTION 6. Subsection (b), Section 824.304, Government Code,
4-2 is amended to read as follows:
4-3 (b) If a member has a total of at least 10 years of service
4-4 credit in the retirement system on the date of disability
4-5 retirement, the retirement system shall pay the person for the
4-6 duration of the disability a disability retirement annuity in an
4-7 amount equal to the greater of:
4-8 (1) a standard service retirement annuity computed
4-9 under Section 824.203 <824.203(a)>; or
4-10 (2) $6.50 a month for each year of service credit on
4-11 the date of retirement.
4-12 SECTION 7. Subsection (a), Section 824.402, Government Code,
4-13 is amended to read as follows:
4-14 (a) Except as provided by Section 824.401, the designated
4-15 beneficiary of a member who dies during a school year in which the
4-16 member has performed service is eligible to receive at the
4-17 beneficiary's election the greatest of the following amounts:
4-18 (1) an amount equal to twice the member's annual
4-19 compensation for the school year immediately preceding the school
4-20 year in which the member dies, or $60,000, whichever is less;
4-21 (2) an amount equal to twice the member's rate of
4-22 annual compensation for the school year in which the member dies,
4-23 or $60,000, whichever is less;
4-24 (3) 60 monthly payments of a standard service
4-25 retirement annuity, computed as provided by Section 824.203
4-26 <824.203(a)>;
4-27 (4) an optional retirement annuity for the designated
5-1 beneficiary's life in an amount computed as provided by Section
5-2 824.204(c)(1) as if the member had retired on the last day of the
5-3 month immediately preceding the month in which the member dies; or
5-4 (5) an amount equal to the amount of accumulated
5-5 contributions in the member's individual account in the member
5-6 savings account.
5-7 SECTION 8. Subsection (b), Section 825.002, Government Code,
5-8 is amended to read as follows:
5-9 (b) The governor shall appoint three members of the board to
5-10 hold office for staggered terms, with the term of one trustee
5-11 expiring on August 31 of each odd-numbered year. These <Two of
5-12 those three> members must be persons who have demonstrated
5-13 financial expertise, who have worked in private business or
5-14 industry, and who have broad investment experience, preferably in
5-15 investment of pension funds. One of these members must be
5-16 appointed from a list of nominees submitted by the speaker of the
5-17 house of representatives. None of the members appointed under this
5-18 subsection may be a member or annuitant of the retirement system.
5-19 SECTION 9. Section 825.003, Government Code, is amended to
5-20 read as follows:
5-21 Sec. 825.003. TRUSTEES APPOINTED BY LIEUTENANT GOVERNOR
5-22 <BOARD OF EDUCATION>. The lieutenant governor <State Board of
5-23 Education> shall appoint two members of the board of trustees
5-24 <subject to confirmation by two-thirds of the senate>. These
5-25 members must be persons who have demonstrated financial expertise,
5-26 have worked in private business or industry, and have broad
5-27 investment experience, preferably in investment of pension funds.
6-1 One of these members must be appointed from a list of nominees
6-2 submitted by the speaker of the house of representatives.
6-3 SECTION 10. Subsections (a), (b), and (f), Section 825.0032,
6-4 Government Code, are amended to read as follows:
6-5 (a) Except as provided by Subsection (b), a person is not
6-6 eligible for appointment to the board if the person or the person's
6-7 spouse:
6-8 (1) is employed by or participates in the management
6-9 of a business entity or other organization receiving funds from the
6-10 retirement system; <or>
6-11 (2) owns or controls, directly or indirectly, more
6-12 than a 10 percent interest in a business entity or other
6-13 organization receiving funds from the retirement system; or
6-14 (3) uses or receives a substantial amount of tangible
6-15 goods, services, or funds from the retirement system, other than
6-16 compensation or reimbursement authorized by law for board
6-17 membership, attendance, or expenses.
6-18 (b) Subsection (a) does not apply to employment by,
6-19 participation in the management of, or ownership or control of an
6-20 interest in a business entity or other organization on behalf of
6-21 the retirement system. Subsection (a)(3) does not apply to a
6-22 person who is nominated for appointment under Section 825.002(c),
6-23 (d), or (e).
6-24 (f) A person may not serve as a trustee or act as the
6-25 general counsel to the board or the retirement system if the person
6-26 is required to register as a lobbyist under Chapter 305 because of
6-27 the person's activities for compensation on behalf of a business or
7-1 an association related to the operation of the board.
7-2 SECTION 11. Subchapter A, Chapter 825, Government Code, is
7-3 amended by adding Section 825.0041 to read as follows:
7-4 Sec. 825.0041. BOARD MEMBER TRAINING. (a) Before a member
7-5 of the board may assume the member's duties and, if applicable,
7-6 before the member may be confirmed by the senate the member must
7-7 complete at least one course of the training program established
7-8 under this section.
7-9 (b) A training program established under this section shall
7-10 provide information to the member regarding:
7-11 (1) the enabling legislation that created the
7-12 retirement system and its policy-making body to which the member is
7-13 appointed to serve;
7-14 (2) the programs operated by the system;
7-15 (3) the role and functions of the system;
7-16 (4) the rules of the system with an emphasis on the
7-17 rules that relate to disciplinary and investigatory authority;
7-18 (5) the current budget for the system;
7-19 (6) the results of the most recent formal audit of the
7-20 system;
7-21 (7) the requirements of the:
7-22 (A) open meetings law, Chapter 551;
7-23 (B) open records law, Chapter 552; and
7-24 (C) administrative procedure law, Chapter 2001;
7-25 (8) the requirements of the conflict of interest laws
7-26 and other laws relating to public officials; and
7-27 (9) any applicable ethics policies adopted by the
8-1 system or the Texas Ethics Commission.
8-2 SECTION 12. Section 825.006, Government Code, is amended to
8-3 read as follows:
8-4 Sec. 825.006. Sunset Provision. The board of trustees of
8-5 the Teacher Retirement System of Texas is subject to review under
8-6 Chapter 325 (Texas Sunset Act), but is not abolished under that
8-7 chapter. The board shall be reviewed during the period in which
8-8 state agencies abolished in 2007 <1995> are reviewed or, if the
8-9 retirement system's operating expenses are not subject to the
8-10 appropriations process on September 1, 1995, the board shall be
8-11 reviewed during the period in which state agencies abolished in
8-12 1997 are reviewed. This section expires September 1, 2007 <1995>.
8-13 SECTION 13. Subsections (a) and (c), Section 825.010,
8-14 Government Code, are amended to read as follows:
8-15 (a) It is a ground for removal from the board if a trustee:
8-16 (1) does not have at the time of appointment the
8-17 qualifications required for the trustee's position;
8-18 (2) does not maintain during service on the board the
8-19 qualifications required for the trustee's position;
8-20 (3) violates a prohibition established by Section
8-21 825.002(b) or 825.0032;
8-22 (4) <(2)> cannot because of illness or disability
8-23 discharge the trustee's <person's> duties for a substantial part of
8-24 the term for which the trustee <person> is appointed <because of
8-25 illness or disability>; or
8-26 (5) <(3)> is absent from more than half of the
8-27 regularly scheduled board meetings that the person is eligible to
9-1 attend during a calendar year unless the absence is excused by
9-2 majority vote of the board.
9-3 (c) If the executive director has knowledge that a potential
9-4 ground for removal exists, the executive director shall notify the
9-5 presiding officer <chairman> of the board of the ground. The
9-6 presiding officer <chairman> shall then notify the appropriate
9-7 appointing officer and the attorney general <or body> that a
9-8 potential ground for removal exists. If the potential ground for
9-9 removal involves the presiding officer, the executive director
9-10 shall notify the next highest officer of the board, who shall
9-11 notify the appropriate appointing officer and the attorney general
9-12 that a potential ground for removal exists.
9-13 SECTION 14. Section 825.108, Government Code, is amended by
9-14 adding Subsections (e) and (f) to read as follows:
9-15 (e) The board shall prepare annually a complete and detailed
9-16 written report accounting for all funds received and disbursed by
9-17 the retirement system during the preceding fiscal year. The annual
9-18 report must meet the reporting requirements applicable to financial
9-19 reporting provided in the General Appropriations Act.
9-20 (f) The board shall prepare biennially a complete and
9-21 detailed written report describing and explaining any use of
9-22 appropriated amounts, retirement system assets, or other resources
9-23 for governmental relations, member counseling, or official
9-24 publications. The report must be filed with the committees of the
9-25 senate and the house of representatives having jurisdiction over
9-26 appropriations, with the committees of the senate and the house of
9-27 representatives having principal jurisdiction over legislation
10-1 governing the retirement system, and with the Legislative Budget
10-2 Board at the time the retirement system submits its budget request
10-3 for the next state fiscal biennium.
10-4 SECTION 15. Subsections (a), (b), and (f), Section 825.113,
10-5 Government Code, are amended to read as follows:
10-6 (a) The executive director or the executive director's
10-7 designee <board> shall provide to its trustees and employees, as
10-8 often as necessary, information regarding their qualification for
10-9 office or employment under this chapter and their responsibilities
10-10 under applicable laws relating to standards of conduct for state
10-11 officers or employees.
10-12 (b) The board shall develop and implement policies that
10-13 clearly separate the policy-making <define the respective>
10-14 responsibilities of the board and the management responsibilities
10-15 of the executive director and the staff of the retirement system.
10-16 (f) The retirement system shall comply with federal and
10-17 state laws related to program and facility accessibility. The
10-18 executive director <board> shall prepare and maintain a written
10-19 plan that describes how a person who does not speak English can be
10-20 provided reasonable access to the board's programs. The board
10-21 shall also comply with federal and state laws for program and
10-22 facility accessibility.
10-23 SECTION 16. Subchapter B, Chapter 825, Government Code, is
10-24 amended by adding Section 825.115 to read as follows:
10-25 Sec. 825.115. APPLICABILITY OF CERTAIN LAWS. The board is
10-26 subject to the open meetings law, Chapter 551, and the
10-27 administrative procedure law, Chapter 2001.
11-1 SECTION 17. Section 825.201, Government Code, is amended to
11-2 read as follows:
11-3 Sec. 825.201. PRESIDING OFFICER <Chairman>. The governor
11-4 shall designate a member of the board as the presiding officer of
11-5 the board to serve in that capacity at the pleasure of the
11-6 governor. <The board of trustees shall elect a chairman. The
11-7 chairman must be a member of the board.>
11-8 SECTION 18. Section 825.206, Government Code, is amended by
11-9 adding Subsections (d) and (e) to read as follows:
11-10 (d) Each actuarial experience study must include a review of
11-11 all actuarial assumptions in light of relevant experience,
11-12 important trends, and economic projections. Interrelated actuarial
11-13 assumptions shall be reviewed carefully to ensure that adjustments
11-14 in one assumption are reflected appropriately in related
11-15 assumptions.
11-16 (e) Each actuarial valuation must include a detailed
11-17 analysis comparing experience factors to their actuarial
11-18 assumptions. The analysis shall be developed and reported to
11-19 identify significant variations in actual experience from what was
11-20 assumed. A material variation should be the focus of an actuarial
11-21 experience study.
11-22 SECTION 19. Subsections (a), (b), and (c), Section 825.213,
11-23 Government Code, are amended to read as follows:
11-24 (a) The executive director or the executive director's
11-25 designee shall develop an intra-agency career ladder program that
11-26 addresses opportunities for mobility and advancement for employees
11-27 within the retirement system. The program shall require
12-1 intra-agency posting of all <nonentry level> positions concurrently
12-2 with any public posting.
12-3 (b) The executive director or the executive director's
12-4 designee shall develop a system of annual performance evaluations
12-5 that are based on documented employee performance. All merit pay
12-6 for system employees must be based on the system established under
12-7 this subsection.
12-8 (c) The executive director or the executive director's
12-9 designee shall prepare and maintain a written policy statement to
12-10 assure implementation of a program of equal employment opportunity
12-11 under which all personnel transactions are made without regard to
12-12 race, color, disability, sex, religion, age, or national origin.
12-13 The policy statement must include:
12-14 (1) personnel policies, including policies relating to
12-15 recruitment, evaluation, selection, appointment, training, and
12-16 promotion of personnel that are in compliance with requirements of
12-17 Chapter 21, Labor Code <the Commission on Human Rights Act (Article
12-18 5221k, Vernon's Texas Civil Statutes)>;
12-19 (2) a comprehensive analysis of the retirement
12-20 system's work force that meets federal and state guidelines;
12-21 (3) procedures by which a determination can be made
12-22 about the extent of <significant> underuse in the retirement
12-23 system's work force of all persons for whom federal or state
12-24 guidelines encourage a more equitable balance; and
12-25 (4) reasonable methods to appropriately address those
12-26 areas of <significant> underuse.
12-27 SECTION 20. Subchapter C, Chapter 825, Government Code, is
13-1 amended by adding Section 825.215 to read as follows:
13-2 Sec. 825.215. ADVOCACY PROHIBITED. An employee of the
13-3 retirement system may not advocate increased benefits or engage in
13-4 activities to advocate or influence legislative action or inaction.
13-5 Advocacy or activity of this nature is grounds for dismissal of an
13-6 employee.
13-7 SECTION 21. Section 825.301, Government Code, is amended by
13-8 adding Subsection (f) to read as follows:
13-9 (f) The legislature finds that economically targeted
13-10 investments assist in the improvement of the economic well-being of
13-11 the State of Texas and its communities and residents. Economic
13-12 stimulation includes job creation, development and savings,
13-13 business creation, increases or improvements in the stock of
13-14 affordable housing, and improvements in infrastructure. Therefore,
13-15 the board of trustees may invest assets of the retirement system in
13-16 prudent investments to finance projects or businesses in areas
13-17 designated as distressed communities as provided by Section
13-18 481.195.
13-19 SECTION 22. Section 825.308, Government Code, is amended to
13-20 read as follows:
13-21 Sec. 825.308. State Contribution Account. The retirement
13-22 system shall deposit in the state contribution account:
13-23 (1) all state contributions to the retirement system
13-24 required by Section 825.404;
13-25 (2) amounts from the interest account as provided by
13-26 Section 825.313(b)(5);
13-27 (3) retirement annuities waived or forfeited in
14-1 accordance with Section 824.601 or 824.004;
14-2 (4) fees collected under Section 825.403(h);
14-3 (5) fees and interest for reinstatement of service
14-4 credit or establishment of membership service credit as provided by
14-5 Section 823.202, 823.501, or 823.502;
14-6 (6) the portion of a deposit required by Section
14-7 823.302 to establish military service credit that represents a fee;
14-8 <and>
14-9 (7) the portion of a deposit required by Section
14-10 823.401(e) to establish out-of-state service credit that represents
14-11 a fee; and
14-12 (8) all membership fees required by this subtitle,
14-13 including the fees under Section 823.3021(f)(2).
14-14 SECTION 23. Sections 825.312, 825.313, and 825.314,
14-15 Government Code, are amended to read as follows:
14-16 Sec. 825.312. Expense Account. (a) The retirement system
14-17 shall deposit in the expense account:
14-18 (1) money transferred from the interest account or the
14-19 state contribution account under Section 825.313(c) <all membership
14-20 fees required by this subtitle, including the fees under Section
14-21 823.3021(f)(2);>
14-22 <(2) money required to be deposited in the account by
14-23 Section 825.313(b)(3) or 825.313(c)>; and
14-24 (2) <(3)> money received from the Texas Public School
14-25 <Retired> Employees Group Insurance Program for service performed
14-26 for the program by the retirement system.
14-27 (b) The retirement system shall pay from the account all
15-1 administrative expenses of <administration and maintenance of> the
15-2 retirement system that exceed the amounts appropriated under
15-3 Section 825.404(d) and that are required to perform the fiduciary
15-4 duties of the board.
15-5 Sec. 825.313. Transfers From Interest or State Contribution
15-6 Account. (a) Annually, the retirement system shall transfer from
15-7 the interest account to the state contribution account amounts
15-8 accumulated under Section 825.311(2).
15-9 (b) On August 31 of each year, the retirement system shall
15-10 make the following transfers from the interest account:
15-11 (1) to the member savings account, an amount computed
15-12 using the rate prescribed by Section 825.307(b);
15-13 (2) to the retired reserve account, an amount equal to
15-14 4 3/4 percent of the average balance of the retired reserve
15-15 account for that fiscal year or, if the transfer is authorized by
15-16 resolution of the board, an amount computed at a greater rate if
15-17 the actuary recommends the greater rate to adequately fund the
15-18 retired reserve account;
15-19 (3) <to the expense account, an amount designated by
15-20 the board of trustees in accordance with Subsection (c);>
15-21 <(4)> to the benefit increase reserve account, an
15-22 amount representing interest on the average annual balance of the
15-23 benefit increase reserve account at a rate set by the board of
15-24 trustees in accordance with Section 825.106; and
15-25 (4) <(5)> to the state contribution account, the
15-26 amount remaining in the interest account after the other transfers
15-27 required or authorized by this section are made.
16-1 (c) The board of trustees, by resolution recorded in its
16-2 minutes, may <shall> transfer from the interest account, or from
16-3 the state contribution account in an amount that does not exceed
16-4 the sum of membership fees deposited in the account the preceding
16-5 fiscal year, to the expense account an amount necessary to cover
16-6 the expenses of the retirement system for the fiscal year that
16-7 exceed the amount of operating expenses appropriated under Section
16-8 825.404(d) and that are required to perform the fiduciary duties of
16-9 the board, including the expense of servicing mortgages insured by
16-10 the Federal Housing Administration under the National Housing Act
16-11 (12 U.S.C. Section 1701 et seq.).
16-12 Sec. 825.314. Use And Reporting of State Contributions and
16-13 Other Appropriations and Assets. (a) The retirement system shall
16-14 use all assets contributed by the state, other than operating
16-15 expenses appropriated under Section 825.404(d), to pay benefits
16-16 authorized by this subtitle.
16-17 (b) The staff of the retirement system shall report to the
16-18 board at each board meeting the amounts and uses since the
16-19 preceding board meeting of any money expended by the system from
16-20 amounts transferred under Section 825.313(c) and include an
16-21 explanation of why the amounts were needed to perform the fiduciary
16-22 duties of the board. The retirement system annually shall prepare
16-23 and issue to each contributing member and annuitant and to the
16-24 governor, lieutenant governor, and speaker of the house of
16-25 representatives a summary of the reports presented during the
16-26 preceding year to the board.
16-27 SECTION 24. Subchapter D, Chapter 825, Government Code, is
17-1 amended by adding Section 825.315 to read as follows:
17-2 Sec. 825.315. PROHIBITED USE OF ASSETS AND APPROPRIATIONS.
17-3 A trustee or employee of the retirement system may not use an asset
17-4 of the retirement system, including facilities or utilities, or
17-5 amounts appropriated for operating expenses under Section
17-6 825.404(d), to advocate or influence legislative action or
17-7 inaction.
17-8 SECTION 25. Subsection (d), Section 825.401, Government
17-9 Code, is amended to read as follows:
17-10 (d) The retirement system shall deposit all membership fees
17-11 in the state contribution <expense> account.
17-12 SECTION 26. The heading of Section 825.404, Government Code,
17-13 is amended to read as follows:
17-14 Sec. 825.404. COLLECTION OF STATE CONTRIBUTIONS AND
17-15 APPROPRIATED OPERATING EXPENSES.
17-16 SECTION 27. Section 825.404, Government Code, is amended by
17-17 redesignating and amending Subsection (d) as Subsection (e) and
17-18 adding a new Subsection (d) to read as follows:
17-19 (d) The legislature shall appropriate from the general
17-20 revenue fund a specified amount of money to be used to pay
17-21 operating expenses of the retirement system for each fiscal year.
17-22 (e) <(d)> All money appropriated by the state to the
17-23 retirement system shall be paid to the state contribution account
17-24 in equal monthly installments as provided by Section 403.093(c),
17-25 Government Code, except money appropriated under Subsection (d),
17-26 which remains in the general revenue fund until expenses are
17-27 approved under Chapter 2103.
18-1 SECTION 28. Section 825.511, Government Code, is amended to
18-2 read as follows:
18-3 Sec. 825.511. Complaint Files. (a) The retirement system
18-4 shall keep an information file about each complaint filed with the
18-5 system that the system has authority to resolve. The system shall
18-6 provide to the person filing the complaint and the persons or
18-7 entities complained about the system's policies and procedures
18-8 pertaining to complaint investigation and resolution. The system,
18-9 at least quarterly and until final disposition of the complaint,
18-10 shall notify the person filing the complaint and the persons or
18-11 entities complained about of the status of the complaint unless the
18-12 notice would jeopardize an undercover investigation.
18-13 (b) The retirement system shall keep information about each
18-14 complaint filed with the system. The information shall include:
18-15 (1) the date the complaint is received;
18-16 (2) the name of the complainant;
18-17 (3) the subject matter of the complaint;
18-18 (4) a record of all persons contacted in relation to
18-19 the complaint;
18-20 (5) a summary of the results of the review or
18-21 investigation of the complaint; and
18-22 (6) for complaints for which the system took no
18-23 action, an explanation of the reason the complaint was closed
18-24 without action. <If a written complaint is filed with the
18-25 retirement system that the system has authority to resolve, the
18-26 system, at least quarterly and until final disposition of the
18-27 complaint, shall notify the parties to the complaint of the status
19-1 of the complaint unless the notice would jeopardize an undercover
19-2 investigation.>
19-3 SECTION 29. Subchapter F, Chapter 825, Government Code, is
19-4 amended by adding Sections 825.512, 825.513, 825.514, and 825.515
19-5 to read as follows:
19-6 Sec. 825.512. INVESTMENT PERFORMANCE AUDIT. (a) The
19-7 legislative audit committee biennially shall select an independent
19-8 firm with substantial experience in evaluating institutional
19-9 investment practices and performance to evaluate the retirement
19-10 system's investment practices and performance.
19-11 (b) The legislative audit committee shall determine specific
19-12 areas to be evaluated, but the first evaluation must be a
19-13 comprehensive analysis of the retirement system's investment
19-14 program.
19-15 (c) A report of an evaluation under this section shall be
19-16 filed with the legislative audit committee not later than December
19-17 1 of each even-numbered year.
19-18 (d) The retirement system shall pay the costs of each
19-19 evaluation under this section.
19-20 (e) The retirement system shall submit an annual investment
19-21 performance report not later than the 25th day of the month
19-22 following each fiscal year to the governor, the lieutenant
19-23 governor, the speaker of the house of representatives, the
19-24 executive director of the State Pension Review Board, the
19-25 legislative audit committee, the committees of the senate and the
19-26 house of representatives having jurisdiction over appropriations,
19-27 the committees of the senate and the house of representatives
20-1 having principal jurisdiction over legislation governing the
20-2 retirement system, and the Legislative Budget Board. The report
20-3 shall include a listing of all commissions and fees paid by the
20-4 system during the reporting period for the sale, purchase, or
20-5 management of system assets. The report shall be in a form
20-6 recommended by the evaluating firm.
20-7 Sec. 825.513. INFORMATION FOR PUBLICATION. The retirement
20-8 system shall verify with the State Pension Review Board the
20-9 accuracy of information about the effects of proposed legislation
20-10 on benefits and the trust fund before including the information in
20-11 an official publication of the retirement system.
20-12 Sec. 825.514. HISTORICALLY UNDERUTILIZED BUSINESSES. The
20-13 retirement system is subject to the provisions, including Sections
20-14 1.03 and 3.10, of the State Purchasing and General Services Act
20-15 (Article 601b, Vernon's Texas Civil Statutes), that relate to
20-16 historically underutilized businesses.
20-17 Sec. 825.515. INFORMATION ABOUT MEMBER POSITIONS. (a) The
20-18 retirement system shall compile and maintain records identifying
20-19 members and the types of positions they have held as members, the
20-20 length of service in each type of position, and whether service in
20-21 each type of position is or was as a full-time employee. The
20-22 retirement system by rule may require employers to certify
20-23 information compiled under this section.
20-24 (b) Information contained in records compiled and maintained
20-25 under this section is confidential within the limits prescribed by
20-26 Section 825.507.
20-27 SECTION 30. Section 1, Article 3.50-4, Insurance Code, is
21-1 amended to read as follows:
21-2 Sec. 1. Short Title. This article may be cited as the Texas
21-3 Public School <Retired> Employees Group Insurance Act.
21-4 SECTION 31. Subdivisions (3) and (4), Section 2, Article
21-5 3.50-4, Insurance Code, are amended to read as follows:
21-6 (3) "Dependent" means:
21-7 (A) a spouse of a retiree or active member;
21-8 (B) a retiree's, an active member's, or a
21-9 deceased active member's unmarried child who is younger than 25
21-10 years of age including:
21-11 (i) an adopted child;
21-12 (ii) a foster child, a stepchild, or other
21-13 child who is in a regular parent-child relationship; and
21-14 (iii) a recognized natural child; and
21-15 (C) a retiree's or active member's recognized
21-16 natural child, adopted child, foster child, stepchild, or other
21-17 child who is in a regular parent-child relationship and who lives
21-18 with or whose care is provided by the retiree, active member, or
21-19 surviving spouse on a regular basis, regardless of the child's age,
21-20 if the child is mentally retarded or physically incapacitated to
21-21 such an extent as to be dependent on the retiree, active member, or
21-22 surviving spouse for care or support, as determined by the trustee,
21-23 or in the case of a deceased active member, a recognized natural
21-24 child, adopted child, foster child, stepchild, or other child who
21-25 was in a regular parent-child relationship and who lived with or
21-26 whose care was provided by the deceased active member on a regular
21-27 basis, regardless of the child's age, if the child is mentally
22-1 retarded or physically incapacitated to such an extent as to have
22-2 been dependent on the deceased active member or surviving spouse
22-3 for care or support, as determined by the trustee.
22-4 (4) "Fund" means the Texas public school <retired>
22-5 employees group insurance fund.
22-6 SECTION 32. Subsection (a), Section 3, Article 3.50-4,
22-7 Insurance Code, is amended to read as follows:
22-8 (a) The Texas Public School <Retired> Employees Group
22-9 Insurance Program is established to provide for an insurance plan
22-10 or plans under this article.
22-11 SECTION 33. Subsection (a), Section 5, Article 3.50-4,
22-12 Insurance Code, is amended to read as follows:
22-13 (a) The trustee may adopt rules, plans, procedures, and
22-14 orders reasonably necessary to implement this article, including:
22-15 (1) establishment of minimum benefit and financing
22-16 standards for group insurance coverage to be provided to all
22-17 retirees, active employees, dependents, surviving spouses, and
22-18 surviving dependent children;
22-19 (2) establishment of basic and optional group coverage
22-20 to be provided to retirees, active employees, dependents, surviving
22-21 spouses, and surviving dependent children;
22-22 (3) establishment of the procedures for contributions
22-23 and deductions;
22-24 (4) establishment of periods for enrollment and
22-25 selection of optional coverage and procedures for enrolling and
22-26 exercising options under the plan;
22-27 (5) determination of methods and procedures for claims
23-1 administration;
23-2 (6) study of the operation of all insurance coverage
23-3 provided under this article;
23-4 (7) administration of the fund;
23-5 (8) adoption of a timetable for the development of
23-6 minimum benefit and financial standards for group insurance
23-7 coverage, establishment of group insurance plans, and the taking of
23-8 bids for and awarding of contracts for insurance plans; and
23-9 (9) contracting with an independent and experienced
23-10 group insurance consultant or actuary, who does not receive
23-11 insurance commissions from any insurance company, for advice and
23-12 counsel in implementing and administering this program.
23-13 SECTION 34. Article 3.50-4, Insurance Code, is amended by
23-14 adding Section 7A to read as follows:
23-15 Sec. 7A. PARTICIPATION BY ACTIVE EMPLOYEES. (a) A public
23-16 school district may elect to participate in the program provided
23-17 under this article. A district that elects to participate must
23-18 accept the schedule of costs adopted by the trustee and may not
23-19 offer an alternative health benefit plan to its active employees
23-20 during the period of its participation in the program.
23-21 (b) The trustee by rule shall provide:
23-22 (1) eligibility requirements for participation by a
23-23 school district, which may include criteria based on size;
23-24 (2) restrictions on the ability of a school district
23-25 to begin or discontinue participation, which may include a minimum
23-26 period of participation and limited periods for elections to begin
23-27 or discontinue participation;
24-1 (3) administrative fees to be paid by participating
24-2 school districts to cover the trustee's administrative costs in
24-3 extending the program to active employees; and
24-4 (4) requirements to minimize the effects of adverse
24-5 selection on the program.
24-6 (c) The trustee shall provide optional group coverages for
24-7 active employees participating in the program. The coverages may
24-8 be combined with or similar to, but separate from, coverages
24-9 provided to retirees. The sum of premiums and administrative fees
24-10 received from participating school districts and active employees
24-11 must cover all expenses of school district employee participation
24-12 in the program.
24-13 (d) Participation by an active employee of a participating
24-14 school district is optional with the employee. A school district
24-15 may not offer a financial incentive to an active employee for
24-16 declining to participate in the program. An active employee is
24-17 entitled to obtain coverage for dependents in the same manner as a
24-18 participating retiree.
24-19 (e) Each participating school district shall contribute for
24-20 each district employee covered by the program an amount equal to
24-21 the cost for the employee only of the plans of group coverages
24-22 authorized by the trustee for active employees, except that the
24-23 school district's contribution may not exceed the amount
24-24 contributed for each state employee by the state under the Texas
24-25 Employees Uniform Group Insurance Benefits Act (Article 3.50-2,
24-26 Vernon's Texas Insurance Code).
24-27 (f) Each employee covered by the program shall pay that
25-1 portion of the cost of coverage selected by the employee that
25-2 exceeds the amount of employer contributions.
25-3 (g) The trustee shall deposit in the fund all fees collected
25-4 under Section 44(d), Chapter 812, Acts of the 73rd Legislature,
25-5 1993, except that portion used to conduct the survey required by
25-6 Section 44. The trustee shall continue to collect the fee through
25-7 the 1996-97 school year, after which time the fee expires.
25-8 (h) The state may make contributions to the fund in addition
25-9 to those required by Section 16(b) of this article for the purpose
25-10 of assisting in the expansion of the program to active employees.
25-11 (i) The trustee shall begin enrollment in the program for
25-12 active employees to be effective beginning with the 1996-97 school
25-13 year.
25-14 SECTION 35. Section 9, Article 3.50-4, Insurance Code, is
25-15 amended to read as follows:
25-16 Sec. 9. Benefit Certificates. At such times, or upon such
25-17 events, as designated by the trustee, each insurance carrier shall
25-18 issue to each retiree, active employee, surviving spouse, or
25-19 surviving dependent child insured under this article a certificate
25-20 of insurance that:
25-21 (1) states the benefits to which the person <retiree,
25-22 surviving spouse, or surviving dependent child> is entitled;
25-23 (2) states to whom the benefits are payable;
25-24 (3) states to whom the claims must be submitted; and
25-25 (4) summarizes the provisions of the policy
25-26 principally affecting the person <retiree, surviving spouse, or
25-27 surviving dependent child>.
26-1 SECTION 36. Subsection (a), Section 10, Article 3.50-4,
26-2 Insurance Code, is amended to read as follows:
26-3 (a) Not later than the 180th day after the end of each state
26-4 fiscal year, the trustee shall make a written report to the State
26-5 Board of Insurance concerning the insurance coverages provided and
26-6 the benefits and services being received by persons <retirees,
26-7 surviving spouses, dependents, and surviving dependent children>
26-8 insured under this article.
26-9 SECTION 37. Sections 12 and 13, Article 3.50-4, Insurance
26-10 Code, are amended to read as follows:
26-11 Sec. 12. Death Claims: Beneficiaries. The amount of group
26-12 life insurance and group accidental death and dismemberment
26-13 insurance covering a retiree, active employee, surviving spouse,
26-14 dependent, or surviving dependent child at the date of death shall
26-15 be paid, on the establishment of a valid claim, only:
26-16 (1) to the beneficiary or beneficiaries designated by
26-17 the person <retiree, surviving spouse, dependent, or surviving
26-18 dependent child> in a signed and witnessed written document
26-19 received before death in the trustee's office; or
26-20 (2) if no beneficiary is properly designated or in
26-21 existence, to persons in accordance with the trustee's death
26-22 benefit provisions in Subsection (b), Section 824.103, Government
26-23 Code.
26-24 Sec. 13. Automatic Coverage. A retiree or active employee
26-25 who applies during an enrollment period may not be denied any of
26-26 the group insurance basic coverage provided under this article
26-27 unless the person <retiree> has been found under Section 18A of
27-1 this article to have defrauded or attempted to defraud the Texas
27-2 Public School <Retired> Employees Group Insurance Program.
27-3 SECTION 38. The heading of Section 15, Article 3.50-4,
27-4 Insurance Code, is amended to read as follows:
27-5 Sec. 15. <RETIRED> SCHOOL EMPLOYEES GROUP INSURANCE FUND.
27-6 SECTION 39. Subsection (a), Section 15, Article 3.50-4,
27-7 Insurance Code, is amended to read as follows:
27-8 (a) The <retired> school employees group insurance fund is
27-9 created. The State Treasurer is the custodian of the fund, and the
27-10 trustee shall administer the fund. All contributions from active
27-11 employees, retirees, and the state, contributions for optional
27-12 coverages, investment income, appropriations for implementation of
27-13 this program, and other money required or authorized to be paid
27-14 into the fund shall be paid into the fund. From the fund shall be
27-15 paid, without state fiscal year limitation, the appropriate
27-16 premiums to the carrier or carriers providing group coverage under
27-17 the plan or plans under this article, claims for benefits under the
27-18 group coverage, and the amounts expended by the trustee for
27-19 administration of the program. The appropriate portion of the
27-20 contributions to the fund to provide for incurred but unreported
27-21 claim reserves and contingency reserves, as determined by the
27-22 trustee, shall be retained in the fund.
27-23 SECTION 40. Article 3.50-4, Insurance Code, is amended by
27-24 adding Section 15A to read as follows:
27-25 Sec. 15A. FUNDING STUDY. (a) The legislative audit
27-26 committee shall select an independent firm with substantial
27-27 experience in evaluating group insurance plans to conduct a study
28-1 and make recommendations to the legislature and the trustee
28-2 concerning the funding of the plan provided by this article for the
28-3 benefit of and participation by active employees and retirees of
28-4 public school districts. In its study of funding alternatives, the
28-5 evaluating firm may consider and recommend procedures having an
28-6 effect on funding, including procedures to control costs and
28-7 minimize adverse selection.
28-8 (b) A report of the study under this section, including
28-9 recommendations resulting from the study, shall be filed not later
28-10 than December 1, 1996, with the legislative audit committee, the
28-11 lieutenant governor, the speaker of the house of representatives,
28-12 and the trustee.
28-13 (c) The trustee shall pay the costs of the study from the
28-14 fund.
28-15 (d) This section expires January 1, 1997.
28-16 SECTION 41. Subsections (a), (b), (d), and (f), Section 18A,
28-17 Article 3.50-4, Insurance Code, are amended to read as follows:
28-18 (a) After notice and hearing as provided by this section,
28-19 the trustee may expel from participation in the Texas Public School
28-20 <Retired> Employees Group Insurance Program any retiree, active
28-21 employee, surviving spouse, dependent, or surviving dependent child
28-22 who submits a fraudulent claim under, or has defrauded or attempted
28-23 to defraud, any health benefits plan offered under the program.
28-24 (b) On its motion or on the receipt of a complaint, the
28-25 trustee may call and hold a hearing to determine whether a person
28-26 <retiree, surviving spouse, dependent, or surviving dependent
28-27 child> has submitted a fraudulent claim under, or has defrauded or
29-1 attempted to defraud, any health benefits plan offered under the
29-2 Texas Public School <Retired> Employees Group Insurance Program.
29-3 (d) If the trustee, at the conclusion of the hearing, issues
29-4 a decision that finds that the accused <retiree, surviving spouse,
29-5 dependent, or surviving dependent child> submitted a fraudulent
29-6 claim or has defrauded or attempted to defraud any health benefits
29-7 plan offered under the Texas Public School <Retired> Employees
29-8 Group Insurance Program, the trustee shall expel the person
29-9 <retiree, surviving spouse, dependent, or surviving dependent
29-10 child> from participation in the program.
29-11 (f) A person <retiree, surviving spouse, dependent, or
29-12 surviving dependent child> expelled from the Texas Public School
29-13 <Retired> Employees Group Insurance Program may not be insured by
29-14 any health insurance plan offered by the program for a period, to
29-15 be determined by the trustee, of up to five years from the date the
29-16 expulsion takes effect.
29-17 SECTION 42. Subsection (a), Section 18B, Article 3.50-4,
29-18 Insurance Code, is amended to read as follows:
29-19 (a) Section 825.507, Government Code <35.507, Title 110B,
29-20 Revised Statutes>, concerning the confidentiality of information in
29-21 records that are in the custody of the Teacher Retirement System of
29-22 Texas, applies to information in records that are in the custody of
29-23 the retirement system regarding retirees, active employees,
29-24 annuitants, or beneficiaries under the Texas Public School
29-25 <Retired> Employees Group Insurance Program.
29-26 SECTION 43. Subsections (c), (d), and (i), Section 18C,
29-27 Article 3.50-4, Insurance Code, are amended to read as follows:
30-1 (c) The trustee, the Texas public school <retired> employees
30-2 group insurance program, the <retired> school employees group
30-3 insurance fund, and the board of trustees, officers, advisory
30-4 committee members, and employees of the trustee are not liable for
30-5 damages arising from the acts or omissions of health care providers
30-6 who are participating health care providers in the coordinated care
30-7 network established by the trustee. Those health care providers
30-8 are independent contractors and are responsible for their own acts
30-9 and omissions.
30-10 (d) The trustee, the Texas public school <retired> employees
30-11 group insurance program, the <retired> school employees group
30-12 insurance fund, or a member of a credentialing committee, or the
30-13 board of trustees, officers, advisory committee members, or
30-14 employees of the trustee are not liable for damages arising from
30-15 any act, statement, determination, recommendation made, or act
30-16 reported, without malice, in the course of the evaluation of the
30-17 qualifications of health care providers or of the patient care
30-18 rendered by those providers.
30-19 (i) A credentialing committee, a person participating in a
30-20 credentialing review, a health care provider, the trustee, the
30-21 Texas public school <retired> employees group insurance program, or
30-22 the board of trustees, officers, advisory committee members, or
30-23 employees of the trustee that are named as defendants in any civil
30-24 action filed as a result of participation in the credentialing
30-25 process may use otherwise confidential information obtained for
30-26 legitimate internal business and professional purposes, including
30-27 use in their own defense. Use of information under this subsection
31-1 does not constitute a waiver of the confidential and privileged
31-2 nature of the information.
31-3 SECTION 44. (a) Monthly payments of a death or retirement
31-4 benefit annuity by the Teacher Retirement System of Texas are
31-5 increased beginning with the payment due at the end of September,
31-6 1995.
31-7 (b) Except as provided by Subsection (c) of this section,
31-8 the amount of the monthly increase is computed by multiplying the
31-9 previous monthly benefit by a percentage determined in accordance
31-10 with the following table:
31-11 LATEST RETIREMENT DATE OR, IF APPLICABLE, DATE OF DEATH INCREASE
31-12 Before September 1, 1972 14%
31-13 On or after September 1, 1972, but before September 1, 1973 15%
31-14 On or after September 1, 1973, but before September 1, 1974 17%
31-15 On or after September 1, 1974, but before September 1, 1975 14%
31-16 On or after September 1, 1975, but before September 1, 1976 13%
31-17 On or after September 1, 1976, but before September 1, 1977 16%
31-18 On or after September 1, 1977, but before September 1, 1978 14%
31-19 On or after September 1, 1978, but before September 1, 1979 13%
31-20 On or after September 1, 1979, but before September 1, 1980 12%
31-21 On or after September 1, 1980, but before September 1, 1981 9%
31-22 On or after September 1, 1981, but before September 1, 1982 8%
31-23 On or after September 1, 1982, but before September 1, 1983 7%
31-24 On or after September 1, 1983, but before September 1, 1985 8%
31-25 On or after September 1, 1985, but before September 1, 1986 7%
31-26 On or after September 1, 1986, but before September 1, 1987 8%
31-27 On or after September 1, 1987, but before September 1, 1989 7%
32-1 On or after September 1, 1989, but before September 1, 1990 5%
32-2 On or after September 1, 1990, but before September 1, 1992 3%
32-3 On or after September 1, 1992, but before September 1, 1993 2%
32-4 (c) An annuitant is entitled to the greater of:
32-5 (1) a monthly benefit annuity computed as if:
32-6 (A) Subtitle C, Title 8, Government Code, as it
32-7 existed on January 1, 1995, had been in effect on the date of
32-8 retirement or on the date of death, as applicable; and
32-9 (B) all benefits increases, including that
32-10 provided by Subsection (b) of this section, were included that are
32-11 applicable to the annuity and were provided after the date the
32-12 annuity began; or
32-13 (2) the monthly benefit annuity option selected at the
32-14 time of retirement or death:
32-15 (A) recomputed on the basis of one-twelfth of
32-16 the minimum annual salary provided by the Education Code for a
32-17 classroom teacher or full-time librarian, multiplied by two percent
32-18 for each year of service credit in the retirement system;
32-19 (B) actuarially reduced, if applicable, for
32-20 early retirement; and
32-21 (C) excluding the increase provided by
32-22 Subsection (b) of this section.
32-23 SECTION 45. The terms of members of the Board of Trustees of
32-24 the Teacher Retirement System of Texas appointed under Section
32-25 825.003, Government Code, as it existed before the effective date
32-26 of this section, expire on the effective date of this section. The
32-27 changes in the qualifications and methods of appointment of other
33-1 members of the board of trustees made by this Act apply only to
33-2 members appointed for terms that begin on or after the effective
33-3 date of this section. In implementing the changes, the governor
33-4 shall appoint a member of the board of trustees from a list of
33-5 nominees submitted by the speaker of the house of representatives
33-6 to a term expiring August 31, 2001, and the lieutenant governor
33-7 shall appoint a member of the board from a list of nominees
33-8 submitted by the speaker to a term expiring August 31, 1997, and
33-9 another member of the board without the necessity of consultation
33-10 with the speaker to a term expiring August 31, 2001.
33-11 SECTION 46. The Teacher Retirement System of Texas shall
33-12 develop an initial space allocation plan as defined in rules of the
33-13 General Services Commission and submit the plan to the commission
33-14 for approval not later than March 1, 1996. The retirement system
33-15 shall implement an approved plan not later than September 1, 1996.
33-16 SECTION 47. This Act takes effect September 1, 1995, except
33-17 Section 45 and this section, which take effect August 31, 1995.
33-18 SECTION 48. The importance of this legislation and the
33-19 crowded condition of the calendars in both houses create an
33-20 emergency and an imperative public necessity that the
33-21 constitutional rule requiring bills to be read on three several
33-22 days in each house be suspended, and this rule is hereby suspended.