74R10226 GCH-D
By Armbrister, et al. S.B. No. 9
Substitute the following for S.B. No. 9:
By Telford C.S.S.B. No. 9
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the functions and systems and programs administered by
1-3 the Teacher Retirement System of Texas.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Sections 821.001(7) and (15), Government Code,
1-6 are amended to read as follows:
1-7 (7) "Employer" means <the state or> any <of its
1-8 designated> agents or agencies in the state responsible for public
1-9 education, including the governing board of any school district
1-10 created under the laws of this state, any county school board, the
1-11 board of trustees, <the State Board of Education, the Central
1-12 Education Agency,> the board of regents of any college or
1-13 university, or any other legally constituted board or agency of any
1-14 public school, but excluding the State Board of Education and the
1-15 Central Education Agency.
1-16 (15) "School year" means:
1-17 (A) a 12-month period beginning approximately
1-18 September 1 and ending approximately August 31 of the next calendar
1-19 year; or
1-20 (B) for a member whose contract or oral or
1-21 written work agreement begins after June 30 and continues after
1-22 August 31 of the same calendar year, a period not to include more
1-23 than 12 months beginning on the date the contract or agreement
1-24 begins.
2-1 SECTION 2. Subchapter A, Chapter 821, Government Code, is
2-2 amended by adding Section 821.007 to read as follows:
2-3 Sec. 821.007. CONTROL OF HOME OFFICE FACILITIES. The
2-4 buildings comprising the home office of the retirement system are
2-5 under the control and custodianship of the retirement system, but
2-6 the retirement system shall:
2-7 (1) comply with space use regulations provided by
2-8 Section 6.021, State Purchasing and General Services Act (Article
2-9 601b, Vernon's Texas Civil Statutes); the General Appropriations
2-10 Act; or other state law; and
2-11 (2) lease to other persons at fair market value all
2-12 significant unused space in the buildings.
2-13 SECTION 3. Subchapter A, Chapter 821, Government Code, is
2-14 amended by adding Section 821.008 to read as follows:
2-15 Sec. 821.008. PURPOSE OF RETIREMENT SYSTEM. The purpose of
2-16 the retirement system is to invest and protect funds of the
2-17 retirement system and to deliver the benefits provided by statute,
2-18 not to advocate or influence legislative action or inaction or to
2-19 advocate higher benefits.
2-20 SECTION 4. Section 822.003, Government Code, is amended to
2-21 read as follows:
2-22 Sec. 822.003. Termination of Membership. (a) A person
2-23 terminates membership in the retirement system by:
2-24 (1) death;
2-25 (2) retirement;
2-26 (3) withdrawal of all of the person's contributions
2-27 while the person is absent from service; or
3-1 (4) not qualifying for service credit <absence from
3-2 service> for <more than> five consecutive years <within a six-year
3-3 period>.
3-4 (b) Termination of membership under Subsection (a)(4) is
3-5 effective on the first September 1 that occurs after the
3-6 non-qualifying years. If a person, regardless of age, has five or
3-7 more years of service credit, failure to qualify for additional
3-8 service credit <absence from service> does not terminate membership
3-9 in the retirement system unless all of the person's contributions
3-10 are withdrawn.
3-11 (c) A person does not terminate membership under Subsection
3-12 (a)(4) <is not absent from service> if the person:
3-13 (1) is performing military service creditable in the
3-14 retirement system; <or>
3-15 (2) is on leave of absence from employment in a public
3-16 school; or
3-17 (3) is earning service credit in another retirement
3-18 system covered by Chapter 803 or 805.
3-19 SECTION 5. Section 822.201, Government Code, is amended by
3-20 adding Subsection (d) to read as follows:
3-21 (d) For a person who first becomes a member of the
3-22 retirement system after August 31, 1996, the person's annual
3-23 compensation for purposes of the retirement system may not exceed
3-24 the limit imposed by Section 401(a)(17) of the Internal Revenue
3-25 Code of 1986 (Title 26, United States Code), as adjusted by the
3-26 commissioner of internal revenue for cost-of-living increases in
3-27 accordance with that provision. This limit does not apply to a
4-1 person who first became a member of the retirement system before
4-2 September 1, 1996.
4-3 SECTION 6. Section 823.002, Government Code, is amended to
4-4 read as follows:
4-5 Sec. 823.002. Service Creditable in a Year. The board of
4-6 trustees by rule shall determine how much service in any year is
4-7 equivalent to one year of service credit, but in no case may all of
4-8 a person's service in one school year be creditable as more than
4-9 one year of service. Service that has been credited by the
4-10 retirement system on annual statements for a period of five or more
4-11 years may not be deleted or corrected because of an error in
4-12 crediting unless the error concerns three or more years of service
4-13 credit or was caused by fraud.
4-14 SECTION 7. Subchapter A, Chapter 823, Government Code, is
4-15 amended by adding Sections 823.004 and 823.005 to read as follows:
4-16 Sec. 823.004. COMPUTATION OF AND PAYMENT FOR CREDIT. All
4-17 credit for military service, out-of-state service, developmental
4-18 leave, service previously waived, and service transferred to the
4-19 retirement system under Chapter 805 shall be computed on a
4-20 September 1 through August 31 school year. Payments for service
4-21 described by this section must be completed not later than the
4-22 later of the member's retirement date or the last day of the month
4-23 in which the member submits a retirement application.
4-24 Sec. 823.005. ACCEPTANCE OF ROLLOVERS AND TRANSFERS FROM
4-25 OTHER PLANS. Subject to rules adopted by the board of trustees,
4-26 the retirement system shall accept an eligible rollover
4-27 distribution or a direct transfer of funds from another qualified
5-1 plan in payment of all or a portion of any deposit a member is
5-2 permitted to make with the system for credit for service. The
5-3 rules adopted by the board shall condition the acceptance of a
5-4 rollover or transfer from another plan on the receipt from the
5-5 other plan of information necessary to enable the retirement system
5-6 to determine the eligibility of any transferred funds for tax-free
5-7 rollover treatment or other treatment under federal income tax law.
5-8 SECTION 8. Section 823.302(b), Government Code, is amended
5-9 to read as follows:
5-10 (b) A member eligible to establish military service credit
5-11 is one who has at least five years of service credit in the
5-12 retirement system for actual service in public schools, except that
5-13 a member meeting this condition does not qualify for insurance
5-14 coverage under the Texas Public School Employees Group Insurance
5-15 Act (Article 3.50-4, Insurance Code) until the member has 10 or
5-16 more years of membership service credit.
5-17 SECTION 9. Section 823.304, Government Code, is amended by
5-18 adding Subsection (f) to read as follows:
5-19 (f) The board of trustees may adopt rules that modify the
5-20 terms of this section for the purpose of compliance with the
5-21 Uniformed Services Employment and Reemployment Rights Act of 1994
5-22 (38 U.S.C. Section 4301 et seq.).
5-23 SECTION 10. Section 823.401, Government Code, is amended by
5-24 amending Subsection (d) and adding Subsection (i) to read as
5-25 follows:
5-26 (d) A member may establish credit under this section by
5-27 depositing with the retirement system for each year of service
6-1 claimed a contribution computed at the rate of:
6-2 (1) 12 percent of the rate of the member's annual
6-3 compensation during the first year of service for which the member
6-4 received membership credit in <as a member of> the retirement
6-5 system that is both after the service for which credit is sought
6-6 and after September 1, 1956; or
6-7 (2) 12 percent of the rate of the member's annual
6-8 compensation during the most recent year of service for which the
6-9 member received membership credit <as a member> that is after the
6-10 service for which credit is sought, if the member has performed no
6-11 service in Texas since September 1, 1956.
6-12 (i) In determining the amount of a contribution under
6-13 Subsection (d) required of a member who did not work full time or
6-14 worked fewer days or months than full-time employees in similar
6-15 positions, the retirement system shall compute an annual rate of
6-16 compensation from the member's reported compensation.
6-17 SECTION 11. Section 824.002, Government Code, is amended by
6-18 amending Subsections (a) and (b) and adding Subsections (e) and (f)
6-19 to read as follows:
6-20 (a) The effective date of a member's service retirement is
6-21 the last day of the later of the following months:
6-22 (1) any month in a three-month period in which the
6-23 third month is the month in which the member applies for retirement
6-24 as provided by Section 824.201;
6-25 (2) the month in which the member satisfies age and
6-26 service requirements for service retirement as provided by Section
6-27 824.202; or
7-1 (3) the month in which the member's employment in a
7-2 position included in the coverage of the retirement system ends.
7-3 (b) The effective date of a member's disability retirement
7-4 is the last day of the later of the following months:
7-5 (1) any month in a three-month period in which the
7-6 third month is the month in which the member applies for retirement
7-7 as provided by Section 824.301; or
7-8 (2) the month in which the member's employment in a
7-9 position included in the coverage of the retirement system ends.
7-10 (e) Not later than the later of a member's retirement date
7-11 or the last day of the month in which the member's application for
7-12 retirement is submitted, a member applying for service retirement
7-13 may reinstate withdrawn contributions; make deposits for service
7-14 previously waived, military service, and equivalent membership
7-15 service; and receive service credit as provided by this subtitle.
7-16 (f) An effective retirement date may not be changed after it
7-17 is established except by revocation of retirement under Section
7-18 824.005 and retirement at a later date.
7-19 SECTION 12. Section 824.003, Government Code, is amended to
7-20 read as follows:
7-21 Sec. 824.003. When Benefits are Payable. Except as
7-22 otherwise provided by this chapter, an annuity provided by this
7-23 chapter is <not> payable for the month in which the person who
7-24 receives the annuity dies. Monthly annuity payments are generally
7-25 due to be paid on the first working day of each month following the
7-26 month for which the payment accrues.
7-27 SECTION 13. Section 824.005(a), Government Code, is amended
8-1 to read as follows:
8-2 (a) A person who has retired under the retirement system may
8-3 revoke that retirement by filing with the system a written
8-4 revocation in a form prescribed by the system. For a revocation to
8-5 be effective, the retirement system must receive the written
8-6 revocation before the later of the due date for the first payment
8-7 of the annuity or the date on which the retirement system makes the
8-8 first payment. After the later of those dates, a retiree may not
8-9 revoke the retirement. For purposes of this subtitle, the
8-10 retirement system makes a payment by depositing a check in the mail
8-11 or sending payment by electronic fund transfer <46th day after the
8-12 original date of retirement, and the person must return to the
8-13 system an amount equal to the amount of benefits received under the
8-14 original retirement. The period for revocation of a disability
8-15 retirement under this subsection begins on the date the medical
8-16 board certifies the disability if the date is later than the date
8-17 of retirement>.
8-18 SECTION 14. Subchapter A, Chapter 824, Government Code, is
8-19 amended by adding Section 824.006 to read as follows:
8-20 Sec. 824.006. PAYMENT OF ANNUITY ON DEATH OF MEMBER OR
8-21 RETIREE. (a) A monthly annuity payable to a retiree or
8-22 beneficiary is payable to that person through the month in which
8-23 the person dies. A continuation of an optional annuity or the
8-24 payment of a death or survivor benefit annuity begins with payment
8-25 for the month following the month in which the death occurs.
8-26 (b) The effective date of death of a member who dies before
8-27 retirement is, for the purpose of a death or survivor benefit
9-1 annuity, the last day of the month preceding the month in which the
9-2 member dies. The first payment of the annuity becomes due at the
9-3 end of the month in which the member's death occurs.
9-4 SECTION 15. Section 824.101(c), Government Code, is amended
9-5 to read as follows:
9-6 (c) Only one person may be designated as beneficiary of an
9-7 optional retirement annuity under Section 824.204(c)(1), <or>
9-8 (c)(2), or (c)(5), and a designation of beneficiary under either of
9-9 those options may not be made, changed, or revoked after the later
9-10 of the date on which the retirement system makes the first annuity
9-11 payment to the retiree or the date the first payment becomes due.
9-12 For purposes of this section, the term "makes payment" includes the
9-13 depositing in the mail of a payment warrant or the crediting of an
9-14 account with payment through electronic funds transfer.
9-15 SECTION 16. Section 824.103(a), Government Code, is amended
9-16 to read as follows:
9-17 (a) Benefits payable on the death of a member or annuitant,
9-18 except an optional retirement annuity under Section 824.204(c)(1),
9-19 <or> (c)(2), or (c)(5), are payable, and rights to elect survivor
9-20 benefits, if applicable, are available, to one of the classes of
9-21 persons described in Subsection (b), if:
9-22 (1) the member or annuitant fails to designate a
9-23 beneficiary before death;
9-24 (2) a designated beneficiary does not survive the
9-25 member or annuitant; or
9-26 (3) a designated beneficiary, under Section 824.004,
9-27 waives claims to benefits payable on the death of the member or
10-1 annuitant.
10-2 SECTION 17. Section 824.104(a), Government Code, is amended
10-3 to read as follows:
10-4 (a) If, before the first anniversary of the death of a
10-5 member or annuitant, the retirement system does not receive a claim
10-6 for payment of benefits from a designated beneficiary or a person
10-7 entitled to benefits under Section 824.103, the retirement system
10-8 may pay benefits, except an optional retirement annuity under
10-9 Section 824.204(c)(1), <or> (c)(2), or (c)(5), under the order of
10-10 precedence in Section 824.103(b), as if the person failing to claim
10-11 benefits had predeceased the decedent.
10-12 SECTION 18. Section 824.201(b), Government Code, is amended
10-13 to read as follows:
10-14 (b) At any time before the retirement system makes the first
10-15 annuity payment or the first annuity payment becomes due <effective
10-16 date of retirement>, a member may, by filing written notice with
10-17 the board of trustees, revoke the member's application for
10-18 retirement or make, revoke, or change a selection of an optional
10-19 service retirement annuity available as provided by Section
10-20 824.204.
10-21 SECTION 19. Sections 824.202(a), (d), and (f), Government
10-22 Code, are amended to read as follows:
10-23 (a) A member is eligible to retire and receive a standard
10-24 service retirement annuity if the member:
10-25 (1) is at least 65 years old and has at least five
10-26 years of service credit in the retirement system; <or>
10-27 (2) is at least 60 years old and has at least 20 years
11-1 of service credit in the retirement system; or
11-2 (3) is at least 50 years old and has at least 30 years
11-3 of service credit in the retirement system.
11-4 (d) If a member has at least 30 years of service credit in
11-5 the retirement system, the member is eligible to retire regardless
11-6 of age and receive a service retirement annuity consisting of a
11-7 percentage of the standard service retirement annuity available
11-8 under Subsection (a)(3) <(a)(2)>, derived from the table in
11-9 Subsection (c). The board of trustees shall extend the table in
11-10 Subsection (c) to ages earlier than 50 <55> years by decreasing the
11-11 percentages by two percent for each year of age under 50 <55>
11-12 years.
11-13 (f) Except as provided by Chapter 803 or 805 <the
11-14 proportionate retirement program in Subtitle A>, a member is not
11-15 eligible to receive service retirement benefits from the retirement
11-16 system unless the member has at least five years of service credit
11-17 in the retirement system for actual service in public schools.
11-18 SECTION 20. Section 824.203, Government Code, is amended by
11-19 amending Subsection (a) and adding Subsection (e) to read as
11-20 follows:
11-21 (a) Except as provided by Subsections (c), <and> (d), and
11-22 (e), the standard service retirement annuity is an amount computed
11-23 on the basis of the member's average annual compensation for the
11-24 three years of service, whether or not consecutive, in which the
11-25 member received the highest annual compensation, times two percent
11-26 for each year of service credit in the retirement system.
11-27 (e) The annual standard service retirement annuity for a
12-1 person who immediately before retirement holds a position as a
12-2 classroom teacher or full-time librarian, or the annual death
12-3 benefit annuity based on the service of a member who at the time of
12-4 death held a position as a classroom teacher or full-time
12-5 librarian, may not be less than an amount computed on the basis of
12-6 the minimum annual salary provided by the Education Code for a
12-7 classroom teacher or full-time librarian, multiplied by two percent
12-8 for each year of service credit in the retirement system.
12-9 SECTION 21. Subchapter C, Chapter 824, Government Code, is
12-10 amended by adding Section 824.2031 to read as follows:
12-11 Sec. 824.2031. BENEFIT IMPROVEMENTS. (a) Each regular
12-12 legislative session, the legislature shall determine whether the
12-13 performance of the retirement system trust fund makes the fund
12-14 capable of supporting improvements in the plan of benefits.
12-15 (b) A determination under this section shall be founded on
12-16 the information in the most recent report of an investment
12-17 performance audit conducted under Section 825.512 and the
12-18 application of that information to:
12-19 (1) the present amortization period for liabilities of
12-20 the retirement system;
12-21 (2) the rate of return on retirement system
12-22 investments over and above the rate of inflation of the investment
12-23 portfolio as a whole, of the portion of the investment portfolio
12-24 entrusted to private investment entities, and of the portion of the
12-25 investment portfolio entrusted to investment officers who are
12-26 employees of the retirement system;
12-27 (3) economic projections of market conditions and
13-1 future investment rates of return as reflected in the comptroller's
13-2 most recent economic forecast and revenue estimate;
13-3 (4) the costs, including changes in the amortization
13-4 period for liabilities of the retirement system, of providing
13-5 cost-of-living or other increases in benefits to current
13-6 annuitants; and
13-7 (5) an evaluation of the diversity of retirement
13-8 system investments and whether the portfolio provides low-risk,
13-9 long-term growth.
13-10 SECTION 22. Sections 824.204(c) and (e), Government Code,
13-11 are amended to read as follows:
13-12 (c) An eligible member may select one of the following
13-13 options, which provide that:
13-14 (1) after the retiree's death, the reduced annuity is
13-15 payable to and throughout the life of the person nominated by the
13-16 retiree's written designation filed prior to retirement;
13-17 (2) after the retiree's death, one-half of the reduced
13-18 annuity is payable to and throughout the life of the person
13-19 nominated by the retiree's written designation filed prior to
13-20 retirement;
13-21 (3) if the retiree dies before 60 monthly annuity
13-22 payments have been made, the remainder of the 60 payments are
13-23 payable to the designated beneficiary; <or>
13-24 (4) if the retiree dies before 120 monthly annuity
13-25 payments have been made, the remainder of the 120 payments are
13-26 payable to the designated beneficiary; or
13-27 (5) after the retiree's death, three-fourths of the
14-1 reduced annuity is payable to and throughout the life of the person
14-2 nominated by the retiree's written designation filed prior to
14-3 retirement.
14-4 (e) The increase in the annuity under Subsection (d)<:>
14-5 <(1)> begins with the payment due at the end of
14-6 September, 1995, or the first monthly payment made to the retiree
14-7 following the date of death of the person nominated, whichever is
14-8 later, and is payable to the retiree for the remainder of the
14-9 retiree's life<; and>
14-10 <(2) applies only to a member who retires after August
14-11 31, 1989>.
14-12 SECTION 23. Sections 824.304(a) and (b), Government Code,
14-13 are amended to read as follows:
14-14 (a) If a member has a total of less than 10 years of service
14-15 credit in the retirement system on the date of disability
14-16 retirement, the retirement system shall pay the person a disability
14-17 retirement annuity of $150 <$50> a month for the shortest of the
14-18 following periods:
14-19 (1) the duration of the disability;
14-20 (2) the number of months of creditable service the
14-21 person has at retirement; or
14-22 (3) the duration of the person's life.
14-23 (b) If a member has a total of at least 10 years of service
14-24 credit in the retirement system on the date of disability
14-25 retirement, the retirement system shall pay the person for the
14-26 duration of the disability a disability retirement annuity in an
14-27 amount equal to the greater of:
15-1 (1) a standard service retirement annuity computed
15-2 under Section 824.203 <824.203(a)>; <or>
15-3 (2) $6.50 a month for each year of service credit on
15-4 the date of retirement; or
15-5 (3) $150 a month.
15-6 SECTION 24. Sections 824.308(a), (b), (c), and (d),
15-7 Government Code, are amended to read as follows:
15-8 (a) Instead of an annuity payable under Section 824.304(b),
15-9 a member retiring under that section may elect to receive an
15-10 optional disability retirement annuity under this section. An
15-11 election to receive an optional disability retirement annuity must
15-12 be filed with the board of trustees not later than the later of the
15-13 effective date of retirement or the date the member applies for
15-14 retirement.
15-15 (b) An optional disability retirement annuity is an annuity
15-16 payable throughout the disability of the disability retiree and is
15-17 actuarially reduced from the annuity otherwise payable under
15-18 Section 824.304(b) <Sections 824.304(b)(1) and (b)(2)> to its
15-19 actuarial equivalent under the option selected under Subsection
15-20 (c).
15-21 (c) An eligible member may select one of the following
15-22 options:
15-23 (1) after the disability retiree's death, the reduced
15-24 annuity is payable throughout the life of a person nominated by the
15-25 retiree's written designation under Section 824.101 filed before
15-26 retirement;
15-27 (2) after the disability retiree's death, one-half of
16-1 the reduced annuity is payable throughout the life of the retiree's
16-2 designated beneficiary;
16-3 (3) if the disability retiree dies before 60 monthly
16-4 annuity payments have been made, the remainder of the 60 payments
16-5 are payable to the designated beneficiary; <or>
16-6 (4) if the disability retiree dies before 120 monthly
16-7 annuity payments have been made, the reminder of the 120 payments
16-8 are payable to the designated beneficiary; or
16-9 (5) after the disability retiree's death,
16-10 three-fourths of the reduced annuity is payable throughout the life
16-11 of the retiree's designated beneficiary.
16-12 (d) If the person nominated by the disability retiree's
16-13 written designation under Section 824.101 filed before or at the
16-14 time of retirement predeceases the disability retiree, the reduced
16-15 annuity of a disability retiree who has elected an optional
16-16 retirement annuity under Subsection (c)(1), (c)(2), or (c)(5) <or
16-17 (2)> is increased to the standard retirement annuity that the
16-18 disability retiree would otherwise be entitled to receive if the
16-19 disability retiree had not selected an annuity option. The
16-20 standard retirement annuity shall be adjusted as appropriate for
16-21 postretirement increases in retirement benefits authorized by law
16-22 after the date of retirement.
16-23 SECTION 25. Section 824.402(a), Government Code, is amended
16-24 to read as follows:
16-25 (a) Except as provided by Section 824.401, the designated
16-26 beneficiary of a member who dies during a school year in which the
16-27 member has performed service is eligible to receive at the
17-1 beneficiary's election the greatest of the following amounts:
17-2 (1) an amount equal to twice the member's annual
17-3 compensation for the school year immediately preceding the school
17-4 year in which the member dies, or $80,000 <$60,000>, whichever is
17-5 less;
17-6 (2) an amount equal to twice the member's rate of
17-7 annual compensation for the school year in which the member dies,
17-8 or $80,000 <$60,000>, whichever is less;
17-9 (3) 60 monthly payments of a standard service
17-10 retirement annuity, computed as provided by Section 824.203
17-11 <824.203(a)>;
17-12 (4) an optional retirement annuity for the designated
17-13 beneficiary's life in an amount computed as provided by Section
17-14 824.204(c)(1) as if the member had retired on the last day of the
17-15 month immediately preceding the month in which the member dies; or
17-16 (5) an amount equal to the amount of accumulated
17-17 contributions in the member's individual account in the member
17-18 savings account.
17-19 SECTION 26. Sections 824.503(a) and (c), Government Code,
17-20 are amended to read as follows:
17-21 (a) If a retiree dies while receiving a standard or reduced
17-22 service retirement annuity as provided by Section 824.202 or an
17-23 optional service retirement annuity as provided by Section
17-24 824.204(c)(1), <or> (c)(2), or (c)(5) and, in the case of a retiree
17-25 receiving an optional service retirement annuity, if the retiree's
17-26 designated beneficiary of the annuity has predeceased the retiree,
17-27 the retirement system shall pay a lump-sum death benefit in an
18-1 amount, if any, by which the amount of the deceased retiree's
18-2 accumulated contributions at the time of retirement exceeds the
18-3 amount of annuity payments made before the retiree's death.
18-4 (c) If a retiree's designated beneficiary dies while
18-5 receiving an optional annuity under Section 824.204(c)(1), <or>
18-6 (c)(2), or (c)(5), the retirement system shall pay a lump-sum death
18-7 benefit in an amount, if any, by which the amount of the retiree's
18-8 accumulated contributions at the time of retirement exceeds the
18-9 amount of annuity payments made to the retiree and the designated
18-10 beneficiary before the beneficiary's death.
18-11 SECTION 27. Section 824.505(a), Government Code, is amended
18-12 to read as follows:
18-13 (a) Amounts payable by the retirement system to an annuitant
18-14 that are not received by that annuitant or the annuitant's bank, as
18-15 determined by the retirement system, before the annuitant's death
18-16 may be paid to the person named to receive benefits in the event of
18-17 the annuitant's death, in accordance with rules adopted by the
18-18 board of trustees. The retirement system may send a final monthly
18-19 payment of an annuity to a bank or another address previously
18-20 indicated by the annuitant or beneficiary.
18-21 SECTION 28. Section 824.602(a), Government Code, is amended
18-22 to read as follows:
18-23 (a) The retirement system may not, under Section 824.601,
18-24 withhold a monthly benefit payment if the retiree is employed in a
18-25 Texas public educational institution:
18-26 (1) as a substitute only with pay not more than the
18-27 daily rate of substitute pay established by the employer and, if
19-1 the retiree is a disability retiree, <if> the employment has not
19-2 exceeded a total of <120 days in the school year or, for a
19-3 disability retiree,> 90 days in the school year;
19-4 (2) in a position, other than as a substitute, on no
19-5 more than a one-half time basis for the month;
19-6 (3) in one or more positions on as much as a full-time
19-7 basis, if:
19-8 (A) the work occurs in a school year that begins
19-9 after the retiree's effective date of retirement;
19-10 (B) the work occurs in no more than six months
19-11 of the school year; and
19-12 (C) the retiree executes on a form and within
19-13 any deadline prescribed by the retirement system a written election
19-14 to have this exception apply for the school year in determining
19-15 whether benefits are to be suspended for employment after
19-16 retirement; or
19-17 (4) in a position, other than as a substitute, on no
19-18 more than a one-half time basis for no more than 90 days in the
19-19 school year, if the retiree is a disability retiree.
19-20 SECTION 29. Section 825.002(b), Government Code, is amended
19-21 to read as follows:
19-22 (b) The governor shall appoint three members of the board to
19-23 hold office for staggered terms, with the term of one trustee
19-24 expiring on August 31 of each odd-numbered year. These <Two of
19-25 those three> members must be persons who have demonstrated
19-26 financial expertise, who have worked in private business or
19-27 industry, and who have broad investment experience, preferably in
20-1 investment of pension funds. None of the members appointed under
20-2 this subsection may be a member or annuitant of the retirement
20-3 system.
20-4 SECTION 30. Section 825.003, Government Code, is amended to
20-5 read as follows:
20-6 Sec. 825.003. TRUSTEES APPOINTED BY GOVERNOR FROM NOMINEES
20-7 OF BOARD OF EDUCATION. The governor <State Board of Education>
20-8 shall appoint two members of the board of trustees, subject to
20-9 confirmation by two-thirds of the senate, from lists of nominees
20-10 submitted by the State Board of Education. These members must be
20-11 persons who have demonstrated financial expertise, have worked in
20-12 private business or industry, and have broad investment experience,
20-13 preferably in investment of pension funds.
20-14 SECTION 31. Sections 825.0032(a), (b), and (f), Government
20-15 Code, are amended to read as follows:
20-16 (a) Except as provided by Subsection (b), a person is not
20-17 eligible for appointment to the board if the person or the person's
20-18 spouse:
20-19 (1) is employed by or participates in the management
20-20 of a business entity or other organization receiving funds from the
20-21 retirement system; <or>
20-22 (2) owns or controls, directly or indirectly, more
20-23 than a 10 percent interest in a business entity or other
20-24 organization receiving funds from the retirement system; or
20-25 (3) uses or receives a substantial amount of tangible
20-26 goods, services, or funds from the retirement system, other than
20-27 compensation or reimbursement authorized by law for board
21-1 membership, attendance, or expenses.
21-2 (b) Subsection (a) does not apply to employment by,
21-3 participation in the management of, or ownership or control of an
21-4 interest in a business entity or other organization on behalf of
21-5 the retirement system. Subsection (a)(3) does not apply to a
21-6 person who is nominated for appointment under Section 825.002(c),
21-7 (d), or (e).
21-8 (f) A person may not serve as a trustee or act as the
21-9 general counsel to the board or the retirement system if the person
21-10 is required to register as a lobbyist under Chapter 305 because of
21-11 the person's activities for compensation on behalf of a business or
21-12 an association related to the operation of the board.
21-13 SECTION 32. Subchapter A, Chapter 825, Government Code, is
21-14 amended by adding Section 825.0041 to read as follows:
21-15 Sec. 825.0041. BOARD MEMBER TRAINING. (a) Before a member
21-16 of the board may assume the member's duties and, if applicable,
21-17 before the member may be confirmed by the senate the member must
21-18 complete at least one course of the training program established
21-19 under this section.
21-20 (b) A training program established under this section shall
21-21 provide information to the member regarding:
21-22 (1) the enabling legislation that created the
21-23 retirement system and its policy-making body to which the member is
21-24 appointed to serve;
21-25 (2) the programs operated by the system;
21-26 (3) the role and functions of the system;
21-27 (4) the rules of the system with an emphasis on the
22-1 rules that relate to disciplinary and investigatory authority;
22-2 (5) the current budget for the system;
22-3 (6) the results of the most recent formal audit of the
22-4 system;
22-5 (7) the requirements of the:
22-6 (A) open meetings law, Chapter 551;
22-7 (B) open records law, Chapter 552; and
22-8 (C) administrative procedure law, Chapter 2001;
22-9 (8) the requirements of the conflict of interest laws
22-10 and other laws relating to public officials; and
22-11 (9) any applicable ethics policies adopted by the
22-12 system or the Texas Ethics Commission.
22-13 SECTION 33. Section 825.006, Government Code, is amended to
22-14 read as follows:
22-15 Sec. 825.006. Sunset Provision. The board of trustees of
22-16 the Teacher Retirement System of Texas is subject to review under
22-17 Chapter 325 (Texas Sunset Act), but is not abolished under that
22-18 chapter. The board shall be reviewed during the period in which
22-19 state agencies abolished in 1999 <1995> are reviewed or, if the
22-20 retirement system's operating expenses are not subject to the
22-21 appropriations process on September 1, 1995, the board shall be
22-22 reviewed during the period in which state agencies abolished in
22-23 1997 are reviewed. This section expires September 1, 1999 <1995>.
22-24 SECTION 34. Sections 825.010(a) and (c), Government Code,
22-25 are amended to read as follows:
22-26 (a) It is a ground for removal from the board if a trustee:
22-27 (1) does not have at the time of appointment the
23-1 qualifications required for the trustee's position;
23-2 (2) does not maintain during service on the board the
23-3 qualifications required for the trustee's position;
23-4 (3) violates a prohibition established by Section
23-5 825.002(b) or 825.0032;
23-6 (4) <(2)> cannot because of illness or disability
23-7 discharge the trustee's <person's> duties for a substantial part of
23-8 the term for which the trustee <person> is appointed <because of
23-9 illness or disability>; or
23-10 (5) <(3)> is absent from more than half of the
23-11 regularly scheduled board meetings that the person is eligible to
23-12 attend during a calendar year unless the absence is excused by
23-13 majority vote of the board.
23-14 (c) If the executive director has knowledge that a potential
23-15 ground for removal exists, the executive director shall notify the
23-16 presiding officer <chairman> of the board of the ground. The
23-17 presiding officer <chairman> shall then notify the appropriate
23-18 appointing officer and the attorney general <or body> that a
23-19 potential ground for removal exists. If the potential ground for
23-20 removal involves the presiding officer, the executive director
23-21 shall notify the next highest officer of the board, who shall
23-22 notify the appropriate appointing officer and the attorney general
23-23 that a potential ground for removal exists.
23-24 SECTION 35. Section 825.108, Government Code, is amended by
23-25 adding Subsections (e) and (f) to read as follows:
23-26 (e) The board shall prepare annually a complete and detailed
23-27 written report accounting for all funds received and disbursed by
24-1 the retirement system during the preceding fiscal year. The annual
24-2 report must meet the reporting requirements applicable to financial
24-3 reporting provided in the General Appropriations Act.
24-4 (f) The board shall prepare biennially a complete and
24-5 detailed written report describing and explaining any use of
24-6 appropriated amounts, retirement system assets, or other resources
24-7 for governmental relations, member counseling, or official
24-8 publications. The report must be filed with the committees of the
24-9 senate and the house of representatives having jurisdiction over
24-10 appropriations, with the committees of the senate and the house of
24-11 representatives having principal jurisdiction over legislation
24-12 governing the retirement system, and with the Legislative Budget
24-13 Board at the time the retirement system submits its budget request
24-14 for the next state fiscal biennium.
24-15 SECTION 36. Sections 825.113(a), (b), and (f), Government
24-16 Code, are amended to read as follows:
24-17 (a) The executive director or the executive director's
24-18 designee <board> shall provide to its trustees and employees, as
24-19 often as necessary, information regarding their qualification for
24-20 office or employment under this chapter and their responsibilities
24-21 under applicable laws relating to standards of conduct for state
24-22 officers or employees.
24-23 (b) The board shall develop and implement policies that
24-24 clearly separate the policy-making <define the respective>
24-25 responsibilities of the board and the management responsibilities
24-26 of the executive director and the staff of the retirement system.
24-27 (f) The retirement system shall comply with federal and
25-1 state laws related to program and facility accessibility. The
25-2 executive director <board> shall prepare and maintain a written
25-3 plan that describes how a person who does not speak English can be
25-4 provided reasonable access to the board's programs. The board
25-5 shall also comply with federal and state laws for program and
25-6 facility accessibility.
25-7 SECTION 37. Subchapter B, Chapter 825, Government Code, is
25-8 amended by adding Section 825.115 to read as follows:
25-9 Sec. 825.115. APPLICABILITY OF CERTAIN LAWS. The board is
25-10 subject to the open meetings law, Chapter 551, and the
25-11 administrative procedure law, Chapter 2001.
25-12 SECTION 38. Section 825.201, Government Code, is amended to
25-13 read as follows:
25-14 Sec. 825.201. PRESIDING OFFICER <Chairman>. The governor
25-15 shall designate a member of the board as the presiding officer of
25-16 the board to serve in that capacity at the pleasure of the
25-17 governor. <The board of trustees shall elect a chairman. The
25-18 chairman must be a member of the board.>
25-19 SECTION 39. Section 825.206, Government Code, is amended by
25-20 adding Subsections (d) and (e) to read as follows:
25-21 (d) Each actuarial experience study must include a review of
25-22 all actuarial assumptions in light of relevant experience,
25-23 important trends, and economic projections. Interrelated actuarial
25-24 assumptions shall be reviewed carefully to ensure that adjustments
25-25 in one assumption are reflected appropriately in related
25-26 assumptions.
25-27 (e) Each actuarial valuation must include a detailed
26-1 analysis comparing experience factors to their actuarial
26-2 assumptions. The analysis shall be developed and reported to
26-3 identify significant variations in actual experience from what was
26-4 assumed. A material variation should be the focus of an actuarial
26-5 experience study.
26-6 SECTION 40. Sections 825.213(a), (b), and (c), Government
26-7 Code, are amended to read as follows:
26-8 (a) The executive director or the executive director's
26-9 designee shall develop an intra-agency career ladder program that
26-10 addresses opportunities for mobility and advancement for employees
26-11 within the retirement system. The program shall require
26-12 intra-agency posting of all <nonentry level> positions concurrently
26-13 with any public posting.
26-14 (b) The executive director or the executive director's
26-15 designee shall develop a system of annual performance evaluations
26-16 that are based on documented employee performance. All merit pay
26-17 for system employees must be based on the system established under
26-18 this subsection.
26-19 (c) The executive director or the executive director's
26-20 designee shall prepare and maintain a written policy statement to
26-21 assure implementation of a program of equal employment opportunity
26-22 under which all personnel transactions are made without regard to
26-23 race, color, disability, sex, religion, age, or national origin.
26-24 The policy statement must include:
26-25 (1) personnel policies, including policies relating to
26-26 recruitment, evaluation, selection, appointment, training, and
26-27 promotion of personnel that are in compliance with requirements of
27-1 Chapter 21, Labor Code <the Commission on Human Rights Act (Article
27-2 5221k, Vernon's Texas Civil Statutes)>;
27-3 (2) a comprehensive analysis of the retirement
27-4 system's work force that meets federal and state guidelines;
27-5 (3) procedures by which a determination can be made
27-6 about the extent of <significant> underuse in the retirement
27-7 system's work force of all persons for whom federal or state
27-8 guidelines encourage a more equitable balance; and
27-9 (4) reasonable methods to appropriately address those
27-10 areas of <significant> underuse.
27-11 SECTION 41. Subchapter C, Chapter 825, Government Code, is
27-12 amended by adding Section 825.215 to read as follows:
27-13 Sec. 825.215. ADVOCACY PROHIBITED. An employee of the
27-14 retirement system may not advocate increased benefits or engage in
27-15 activities to advocate or influence legislative action or inaction.
27-16 Advocacy or activity of this nature is grounds for dismissal of an
27-17 employee.
27-18 SECTION 42. Section 825.306, Government Code, is amended to
27-19 read as follows:
27-20 Sec. 825.306. Crediting System Assets. The assets of the
27-21 retirement system shall be credited, according to the purpose for
27-22 which they are held, to one of the following accounts:
27-23 (1) member savings account;
27-24 (2) state contribution account;
27-25 (3) retired reserve account;
27-26 (4) <benefit increase reserve account;>
27-27 <(5)> interest account; or
28-1 (5) <(6)> expense account.
28-2 SECTION 43. Section 825.309(b), Government Code, is amended
28-3 to read as follows:
28-4 (b) The retirement system shall use money in the retired
28-5 reserve account to pay all retirement annuities and all death or
28-6 survivor benefits, including postretirement benefit increases and
28-7 other adjustments to annuities <except those paid under Section
28-8 825.310(b)>.
28-9 SECTION 44. Sections 825.312, 825.313, and 825.314,
28-10 Government Code, are amended to read as follows:
28-11 Sec. 825.312. Expense Account. (a) The retirement system
28-12 shall deposit in the expense account:
28-13 (1) money transferred from the interest account under
28-14 Section 825.313(c) <all membership fees required by this subtitle,
28-15 including the fees under Section 823.3021(f)(2);>
28-16 <(2) money required to be deposited in the account by
28-17 Section 825.313(b)(3) or 825.313(c)>; and
28-18 (2) <(3)> money received from the Texas Public School
28-19 <Retired> Employees Group Insurance Program for service performed
28-20 for the program by the retirement system.
28-21 (b) The retirement system shall pay from the account all
28-22 administrative expenses of <administration and maintenance of> the
28-23 retirement system that exceed the amounts appropriated under
28-24 Section 825.404(d) and that are required to perform the fiduciary
28-25 duties of the board.
28-26 Sec. 825.313. Transfers From Interest or State Contribution
28-27 Account. (a) Annually, the retirement system shall transfer from
29-1 the interest account to the state contribution account amounts
29-2 accumulated under Section 825.311(2).
29-3 (b) On August 31 of each year, the retirement system shall
29-4 make the following transfers from the interest account:
29-5 (1) to the member savings account, an amount computed
29-6 using the rate prescribed by Section 825.307(b);
29-7 (2) to the retired reserve account, an amount equal to
29-8 4 3/4 percent of the average balance of the retired reserve
29-9 account for that fiscal year or, if the transfer is authorized by
29-10 resolution of the board, an amount computed at a greater rate if
29-11 the actuary recommends the greater rate to adequately fund the
29-12 retired reserve account;
29-13 <(3) to the expense account, an amount designated by
29-14 the board of trustees in accordance with Subsection (c);>
29-15 <(4) to the benefit increase reserve account, an
29-16 amount representing interest on the average annual balance of the
29-17 benefit increase reserve account at a rate set by the board of
29-18 trustees in accordance with Section 825.106;> and
29-19 (3) <(5)> to the state contribution account, the
29-20 amount remaining in the interest account after the other transfers
29-21 required or authorized by this section are made.
29-22 (c) The board of trustees, by resolution recorded in its
29-23 minutes, may <shall> transfer from the interest account to the
29-24 expense account an amount necessary to cover the expenses of the
29-25 retirement system for the fiscal year that exceed the amount of
29-26 operating expenses appropriated under Section 825.404(d) and that
29-27 are required to perform the fiduciary duties of the board,
30-1 including the expense of servicing mortgages insured by the Federal
30-2 Housing Administration under the National Housing Act (12 U.S.C.
30-3 Section 1701 et seq.).
30-4 Sec. 825.314. Use And Reporting of State Contributions and
30-5 Other Appropriations and Assets. (a) The retirement system shall
30-6 use all assets contributed by the state, other than operating
30-7 expenses appropriated under Section 825.404(d), to pay benefits
30-8 authorized by this subtitle.
30-9 (b) The staff of the retirement system shall report to the
30-10 board at each board meeting the amounts and uses since the
30-11 preceding board meeting of any money expended by the system from
30-12 amounts transferred under Section 825.313(c) and include an
30-13 explanation of why the amounts were needed to perform the fiduciary
30-14 duties of the board. The retirement system annually shall prepare
30-15 and issue to each contributing member and annuitant and to the
30-16 governor, lieutenant governor, and speaker of the house of
30-17 representatives a summary of the reports presented during the
30-18 preceding year to the board.
30-19 SECTION 45. Subchapter D, Chapter 825, Government Code, is
30-20 amended by adding Section 825.315 to read as follows:
30-21 Sec. 825.315. PROHIBITED USE OF ASSETS. Assets of the
30-22 retirement system may not be used to advocate or influence the
30-23 outcome of an election or the passage or defeat of any legislative
30-24 measure. This prohibition may not be construed to prevent any
30-25 trustee or employee from furnishing information in the hands of the
30-26 trustee or employee that is not considered condifential under law
30-27 to a member or committee of the legislature, to any other state
31-1 officer or employee, or to any private citizen, at the request of
31-2 the person or entity to whom the information is furnished. This
31-3 prohibition does not apply to the incidental use of retirement
31-4 system facilities by groups of members or retirees or by officers
31-5 or employees of state agencies.
31-6 SECTION 46. Section 825.403, Government Code, is amended by
31-7 amending Subsection (b) and adding Subsection (j) to read as
31-8 follows:
31-9 (b) Each employer or the employer's designated disbursing
31-10 officer, at a time and in a form prescribed by the retirement
31-11 system, shall send to the executive director all deductions and a
31-12 certification of earnings of each member employed by the employer.
31-13 An employer shall use electronic fund transfer to send deductions
31-14 required by this section or shall certify to the retirement system
31-15 either that the employer is unable to establish a qualifying
31-16 account at a financial institution or that payment by electronic
31-17 fund transfer would be impractical or more costly than payment by
31-18 paper check.
31-19 (j) If deductions were previously required of a member but
31-20 not paid, proof of service must be made before service credit is
31-21 granted or payment for the credit is required. Proof of service is
31-22 sufficient if the member's employer documents that the employer has
31-23 records made at or near the time of service that establish the
31-24 amount of time worked and salary earned. A member may submit in
31-25 lieu of employer documentation internal revenue, social security,
31-26 bank, or other written records that were made at or near the time
31-27 of service and that establish the amount of time worked and salary
32-1 earned. An affidavit based on memory without written records made
32-2 at or near the time of service is not sufficient documentation for
32-3 the establishment of service credit. The retirement system may
32-4 audit records used for documentation under this subsection.
32-5 SECTION 47. The heading of Section 825.404, Government Code,
32-6 is amended to read as follows:
32-7 Sec. 825.404. COLLECTION OF STATE CONTRIBUTIONS AND
32-8 APPROPRIATED OPERATING EXPENSES.
32-9 SECTION 48. Section 825.404, Government Code, is amended by
32-10 redesignating and amending Subsection (d) as Subsection (e) and
32-11 adding new Subsection (d) to read as follows:
32-12 (d) The legislature shall appropriate from the general
32-13 revenue fund a specified amount of money to be used to pay
32-14 operating expenses of the retirement system for each fiscal year.
32-15 (e) <(d)> All money appropriated by the state to the
32-16 retirement system shall be paid to the state contribution account
32-17 in equal monthly installments as provided by Section 403.093(c),
32-18 Government Code, except money appropriated under Subsection (d),
32-19 which remains in the general revenue fund until expenses are
32-20 approved under Chapter 2103.
32-21 SECTION 49. Section 825.503, Government Code, is amended to
32-22 read as follows:
32-23 Sec. 825.503. REPRODUCTION AND PRESERVATION OF RECORDS.
32-24 (a) The retirement system may photograph, microphotograph, or
32-25 film, or use electronic storage for, all records pertaining to a
32-26 member's individual file, accounting records, district report
32-27 records, and investment records. The retirement system may receive
33-1 any record or report on paper or film or in an electronic storage
33-2 format.
33-3 (b) If a record is reproduced under Subsection (a), the
33-4 retirement system may destroy or dispose of the original record if
33-5 the system first:
33-6 (1) places the reproduction or electronic record in a
33-7 file conveniently accessible to retirement system personnel <in
33-8 conveniently accessible files>; and
33-9 (2) provides for the preservation, examination, and
33-10 use of the reproduction or stored electronic record.
33-11 (c) A photograph, microphotograph, <or> film, or electronic
33-12 record of a record received or reproduced under Subsection (a) is
33-13 equivalent to the original record for all purposes, including
33-14 introduction as evidence in all courts and administrative agency
33-15 proceedings. A duly certified or authenticated copy of such a
33-16 photograph, microphotograph, <or> film, or electronic record is
33-17 admissible as evidence equally with the original photograph,
33-18 microphotograph, <or> film, or electronic record.
33-19 (d) The executive director or an authorized representative
33-20 may certify the authenticity of a photograph, microphotograph, <or>
33-21 film, or electronic record of a record reproduced under this
33-22 section and shall charge a fee for the certified photograph,
33-23 microphotograph, <or> film, or electronic record as provided by
33-24 law.
33-25 (e) Certified records shall be furnished to any person who
33-26 is authorized by law to receive them.
33-27 (f) In this section:
34-1 (1) "Electronic storage" means the maintenance of
34-2 record data in the form of digital electronic signals on a computer
34-3 hard disk, magnetic tape, optical disk, or similar medium readable
34-4 by machine.
34-5 (2) "Electronic record" means any information that is
34-6 recorded in a form for computer processing.
34-7 SECTION 50. Section 825.504, Government Code, is amended to
34-8 read as follows:
34-9 Sec. 825.504. EMPLOYER CERTIFICATION TO BOARD. (a) An
34-10 employer annually shall certify to the board of trustees the
34-11 beginning date of the contract of each member whose contract year
34-12 begins after June 30 and continues after August 31 of the same
34-13 calendar year.
34-14 (b) For school years after the 1994-95 school year, an
34-15 employer annually shall certify to the board of trustees the
34-16 beginning date of an oral or written work agreement that begins
34-17 after June 30 and continues after August 31 of the same calendar
34-18 year.
34-19 (c) Each reporting district shall cooperate with the
34-20 retirement system in ascertaining a member's annual earnings during
34-21 any year. The board of trustees by rule may prescribe the form of
34-22 and procedures for filing certifications required by this section.
34-23 SECTION 51. Section 825.506(a), Government Code, is amended
34-24 to read as follows:
34-25 (a) It is intended that the provisions of this subtitle be
34-26 construed and administered in a manner that the retirement system's
34-27 benefit plan will be considered a qualified plan under Section
35-1 401(a) of the Internal Revenue Code of 1986 (26 U.S.C. Section
35-2 401). Notwithstanding any other provision of this subtitle,
35-3 benefits provided to a retiree, or based on the service of a member
35-4 or retiree, may not exceed benefits permitted to be provided by a
35-5 qualified plan by Section 415 of the Internal Revenue Code of 1986
35-6 (26 U.S.C. Section 415). The board of trustees may adopt rules
35-7 that modify the plan to the extent necessary for the retirement
35-8 system to be a qualified plan and shall adopt rules to ensure that
35-9 benefits paid to a retiree, or to a beneficiary of a member or
35-10 retiree, do not exceed the limits provided by Section 415 of the
35-11 Internal Revenue Code of 1986 (26 U.S.C. Section 415). Rules
35-12 adopted by the board of trustees are to be considered a part of the
35-13 plan.
35-14 SECTION 52. Section 825.508(b), Government Code, is amended
35-15 to read as follows:
35-16 (b) The system must honor a power of attorney executed in
35-17 accordance with Chapter XII <1>, Section 490 <36A>, Texas Probate
35-18 Code.
35-19 SECTION 53. Section 825.511, Government Code, is amended to
35-20 read as follows:
35-21 Sec. 825.511. Complaint Files. (a) The retirement system
35-22 shall keep an information file about each complaint filed with the
35-23 system that the system has authority to resolve. The system shall
35-24 provide to the person filing the complaint and the persons or
35-25 entities complained about the system's policies and procedures
35-26 pertaining to complaint investigation and resolution. The system,
35-27 at least quarterly and until final disposition of the complaint,
36-1 shall notify the person filing the complaint and the persons or
36-2 entities complained about of the status of the complaint unless the
36-3 notice would jeopardize an undercover investigation.
36-4 (b) The retirement system shall keep information about each
36-5 complaint filed with the system. The information shall include:
36-6 (1) the date the complaint is received;
36-7 (2) the name of the complainant;
36-8 (3) the subject matter of the complaint;
36-9 (4) a record of all persons contacted in relation to
36-10 the complaint;
36-11 (5) a summary of the results of the review or
36-12 investigation of the complaint; and
36-13 (6) for complaints for which the system took no
36-14 action, an explanation of the reason the complaint was closed
36-15 without action. <If a written complaint is filed with the
36-16 retirement system that the system has authority to resolve, the
36-17 system, at least quarterly and until final disposition of the
36-18 complaint, shall notify the parties to the complaint of the status
36-19 of the complaint unless the notice would jeopardize an undercover
36-20 investigation.>
36-21 SECTION 54. Subchapter F, Chapter 825, Government Code, is
36-22 amended by adding Sections 825.512, 825.513, 825.514, and 825.515
36-23 to read as follows:
36-24 Sec. 825.512. INVESTMENT PERFORMANCE AUDIT. (a) The
36-25 legislative audit committee biennially shall select an independent
36-26 firm with substantial experience in evaluating institutional
36-27 investment practices and performance to evaluate the retirement
37-1 system's investment practices and performance.
37-2 (b) The legislative audit committee shall determine specific
37-3 areas to be evaluated, but the first evaluation must be a
37-4 comprehensive analysis of the retirement system's investment
37-5 program.
37-6 (c) A report of an evaluation under this section shall be
37-7 filed with the legislative audit committee not later than December
37-8 1 of each even-numbered year.
37-9 (d) The retirement system shall pay the costs of each
37-10 evaluation under this section.
37-11 (e) The retirement system shall submit an annual investment
37-12 performance report not later than the 25th day of the month
37-13 following each fiscal year to the governor, the lieutenant
37-14 governor, the speaker of the house of representatives, the
37-15 executive director of the State Pension Review Board, the
37-16 legislative audit committee, the committees of the senate and the
37-17 house of representatives having jurisdiction over appropriations,
37-18 the committees of the senate and the house of representatives
37-19 having principal jurisdiction over legislation governing the
37-20 retirement system, and the Legislative Budget Board. The report
37-21 shall include a listing of all commissions and fees paid by the
37-22 system during the reporting period for the sale, purchase, or
37-23 management of system assets. The report shall be in a form
37-24 recommended by the evaluating firm.
37-25 Sec. 825.513. INFORMATION FOR PUBLICATION. The retirement
37-26 system shall verify with the State Pension Review Board the
37-27 accuracy of information about the effects of proposed legislation
38-1 on benefits and the trust fund before including the information in
38-2 an official publication of the retirement system.
38-3 Sec. 825.514. HISTORICALLY UNDERUTILIZED BUSINESSES. The
38-4 retirement system is subject to the provisions, including Sections
38-5 1.03 and 3.10, of the State Purchasing and General Services Act
38-6 (Article 601b, Vernon's Texas Civil Statutes), that relate to
38-7 historically underutilized businesses.
38-8 Sec. 825.515. INFORMATION ABOUT MEMBER POSITIONS. (a) The
38-9 retirement system shall acquire and maintain records identifying
38-10 members and the types of positions they have held as members, the
38-11 length of service in each type of position, and whether service in
38-12 each type of position is or was as a full-time employee. The
38-13 retirement system shall cooperate with the commissioner of
38-14 education in maintaining information about the employment status of
38-15 members of the retirement system.
38-16 (b) Each school year, the retirement system shall provide to
38-17 the commissioner of education information, of a type and in a form
38-18 determined by the commissioner, that allows contributing members of
38-19 the retirement system to be identified in information submitted to
38-20 the commissioner by school districts under the Education Code.
38-21 (c) Information contained in records of the retirement
38-22 system maintained under this section is confidential within the
38-23 limits prescribed by Section 825.507.
38-24 SECTION 55. Section 1, Article 3.50-4, Insurance Code, is
38-25 amended to read as follows:
38-26 Sec. 1. Short Title. This article may be cited as the Texas
38-27 Public School <Retired> Employees Group Insurance Act.
39-1 SECTION 56. Sections 2(3) and (4), Article 3.50-4, Insurance
39-2 Code, are amended to read as follows:
39-3 (3) "Dependent" means:
39-4 (A) a spouse of a retiree or active member;
39-5 (B) a retiree's, an active member's, or a
39-6 deceased active member's unmarried child who is younger than 25
39-7 years of age including:
39-8 (i) an adopted child;
39-9 (ii) a foster child, a stepchild, or other
39-10 child who is in a regular parent-child relationship; and
39-11 (iii) a recognized natural child; and
39-12 (C) a retiree's or active member's recognized
39-13 natural child, adopted child, foster child, stepchild, or other
39-14 child who is in a regular parent-child relationship and who lives
39-15 with or whose care is provided by the retiree, active member, or
39-16 surviving spouse on a regular basis, regardless of the child's age,
39-17 if the child is mentally retarded or physically incapacitated to
39-18 such an extent as to be dependent on the retiree, active member, or
39-19 surviving spouse for care or support, as determined by the trustee,
39-20 or in the case of a deceased active member, a recognized natural
39-21 child, adopted child, foster child, stepchild, or other child who
39-22 was in a regular parent-child relationship and who lived with or
39-23 whose care was provided by the deceased active member on a regular
39-24 basis, regardless of the child's age, if the child is mentally
39-25 retarded or physically incapacitated to such an extent as to have
39-26 been dependent on the deceased active member or surviving spouse
39-27 for care or support, as determined by the trustee.
40-1 (4) "Fund" means the Texas public school <retired>
40-2 employees group insurance fund.
40-3 SECTION 57. Section 3(a), Article 3.50-4, Insurance Code, is
40-4 amended to read as follows:
40-5 (a) The Texas Public School <Retired> Employees Group
40-6 Insurance Program is established to provide for an insurance plan
40-7 or plans under this article.
40-8 SECTION 58. Section 5(a), Article 3.50-4, Insurance Code, is
40-9 amended to read as follows:
40-10 (a) The trustee may adopt rules, plans, procedures, and
40-11 orders reasonably necessary to implement this article, including:
40-12 (1) establishment of minimum benefit and financing
40-13 standards for group insurance coverage to be provided to all
40-14 retirees, active employees, dependents, surviving spouses, and
40-15 surviving dependent children;
40-16 (2) establishment of basic and optional group coverage
40-17 to be provided to retirees, active employees, dependents, surviving
40-18 spouses, and surviving dependent children;
40-19 (3) establishment of the procedures for contributions
40-20 and deductions;
40-21 (4) establishment of periods for enrollment and
40-22 selection of optional coverage and procedures for enrolling and
40-23 exercising options under the plan;
40-24 (5) determination of methods and procedures for claims
40-25 administration;
40-26 (6) study of the operation of all insurance coverage
40-27 provided under this article;
41-1 (7) administration of the fund;
41-2 (8) adoption of a timetable for the development of
41-3 minimum benefit and financial standards for group insurance
41-4 coverage, establishment of group insurance plans, and the taking of
41-5 bids for and awarding of contracts for insurance plans; and
41-6 (9) contracting with an independent and experienced
41-7 group insurance consultant or actuary, who does not receive
41-8 insurance commissions from any insurance company, for advice and
41-9 counsel in implementing and administering this program.
41-10 SECTION 59. Article 3.50-4, Insurance Code, is amended by
41-11 adding Section 7A to read as follows:
41-12 Sec. 7A. PARTICIPATION BY ACTIVE EMPLOYEES. (a) A public
41-13 school district may elect to participate in the program provided
41-14 under this article. A district that elects to participate must
41-15 accept the schedule of costs adopted by the trustee and may not
41-16 offer an alternative health benefit plan to its active employees
41-17 during the period of its participation in the program.
41-18 (b) The trustee by rule shall provide:
41-19 (1) eligibility requirements for participation by a
41-20 school district, which may include criteria based on size;
41-21 (2) restrictions on the ability of a school district
41-22 to begin or discontinue participation, which may include a minimum
41-23 period of participation and limited periods for elections to begin
41-24 or discontinue participation;
41-25 (3) administrative fees to be paid by participating
41-26 school districts to cover the trustee's administrative costs in
41-27 extending the program to active employees; and
42-1 (4) requirements to minimize the effects of adverse
42-2 selection on the program.
42-3 (c) The trustee shall provide optional group coverages for
42-4 active employees participating in the program. The coverages may
42-5 be combined with or similar to, but separate from, coverages
42-6 provided to retirees. The sum of premiums and administrative fees
42-7 received from participating school districts and active employees
42-8 must cover all expenses of school district employee participation
42-9 in the program.
42-10 (d) Participation by an active employee of a participating
42-11 school district is optional with the employee. A school district
42-12 may not offer a financial incentive to an active employee for
42-13 declining to participate in the program. An active employee is
42-14 entitled to obtain coverage for dependents in the same manner as a
42-15 participating retiree.
42-16 (e) Each participating school district shall contribute for
42-17 each district employee covered by the program an amount equal to
42-18 the cost for the employee only of the plans of group coverages
42-19 authorized by the trustee for active employees, except that the
42-20 school district's contribution may not exceed the amount
42-21 contributed for each state employee by the state under the Texas
42-22 Employees Uniform Group Insurance Benefits Act (Article 3.50-2,
42-23 Vernon's Texas Insurance Code).
42-24 (f) Each employee covered by the program shall pay that
42-25 portion of the cost of coverage selected by the employee that
42-26 exceeds the amount of employer contributions.
42-27 (g) The trustee shall deposit in the fund all fees collected
43-1 under Section 44(d), Chapter 812, Acts of the 73rd Legislature,
43-2 1993, except that portion used to conduct the survey required by
43-3 Section 44. The trustee shall continue to collect the fee through
43-4 the 1996-97 school year, after which time the fee expires.
43-5 (h) The state may make contributions to the fund in addition
43-6 to those required by Section 16(b) of this article for the purpose
43-7 of assisting in the expansion of the program to active employees.
43-8 (i) The trustee shall begin enrollment in the program for
43-9 active employees to be effective beginning with the 1996-97 school
43-10 year.
43-11 SECTION 60. Section 9, Article 3.50-4, Insurance Code, is
43-12 amended to read as follows:
43-13 Sec. 9. Benefit Certificates. At such times, or upon such
43-14 events, as designated by the trustee, each insurance carrier shall
43-15 issue to each retiree, active employee, surviving spouse, or
43-16 surviving dependent child insured under this article a certificate
43-17 of insurance that:
43-18 (1) states the benefits to which the person <retiree,
43-19 surviving spouse, or surviving dependent child> is entitled;
43-20 (2) states to whom the benefits are payable;
43-21 (3) states to whom the claims must be submitted; and
43-22 (4) summarizes the provisions of the policy
43-23 principally affecting the person <retiree, surviving spouse, or
43-24 surviving dependent child>.
43-25 SECTION 61. Section 10(a), Article 3.50-4, Insurance Code,
43-26 is amended to read as follows:
43-27 (a) Not later than the 180th day after the end of each state
44-1 fiscal year, the trustee shall make a written report to the State
44-2 Board of Insurance concerning the insurance coverages provided and
44-3 the benefits and services being received by persons <retirees,
44-4 surviving spouses, dependents, and surviving dependent children>
44-5 insured under this article.
44-6 SECTION 62. Sections 12 and 13, Article 3.50-4, Insurance
44-7 Code, are amended to read as follows:
44-8 Sec. 12. Death Claims: Beneficiaries. The amount of group
44-9 life insurance and group accidental death and dismemberment
44-10 insurance covering a retiree, active employee, surviving spouse,
44-11 dependent, or surviving dependent child at the date of death shall
44-12 be paid, on the establishment of a valid claim, only:
44-13 (1) to the beneficiary or beneficiaries designated by
44-14 the person <retiree, surviving spouse, dependent, or surviving
44-15 dependent child> in a signed and witnessed written document
44-16 received before death in the trustee's office; or
44-17 (2) if no beneficiary is properly designated or in
44-18 existence, to persons in accordance with the trustee's death
44-19 benefit provisions in Subsection (b), Section 824.103, Government
44-20 Code.
44-21 Sec. 13. Automatic Coverage. A retiree or active employee
44-22 who applies during an enrollment period may not be denied any of
44-23 the group insurance basic coverage provided under this article
44-24 unless the person <retiree> has been found under Section 18A of
44-25 this article to have defrauded or attempted to defraud the Texas
44-26 Public School <Retired> Employees Group Insurance Program.
44-27 SECTION 63. The heading of Section 15, Article 3.50-4,
45-1 Insurance Code, is amended to read as follows:
45-2 Sec. 15. <RETIRED> SCHOOL EMPLOYEES GROUP INSURANCE FUND.
45-3 SECTION 64. Section 15(a), Article 3.50-4, Insurance Code,
45-4 is amended to read as follows:
45-5 (a) The <retired> school employees group insurance fund is
45-6 created. The State Treasurer is the custodian of the fund, and the
45-7 trustee shall administer the fund. All contributions from active
45-8 employees, retirees, and the state, contributions for optional
45-9 coverages, investment income, appropriations for implementation of
45-10 this program, and other money required or authorized to be paid
45-11 into the fund shall be paid into the fund. From the fund shall be
45-12 paid, without state fiscal year limitation, the appropriate
45-13 premiums to the carrier or carriers providing group coverage under
45-14 the plan or plans under this article, claims for benefits under the
45-15 group coverage, and the amounts expended by the trustee for
45-16 administration of the program. The appropriate portion of the
45-17 contributions to the fund to provide for incurred but unreported
45-18 claim reserves and contingency reserves, as determined by the
45-19 trustee, shall be retained in the fund.
45-20 SECTION 65. Article 3.50-4, Insurance Code, is amended by
45-21 adding Section 15A to read as follows:
45-22 Sec. 15A. FUNDING STUDY. (a) The legislative audit
45-23 committee shall select an independent firm with substantial
45-24 experience in evaluating group insurance plans to conduct a study
45-25 and make recommendations to the legislature and the trustee
45-26 concerning the funding of the plan provided by this article for the
45-27 benefit of and participation by active employees and retirees of
46-1 public school districts. In its study of funding alternatives, the
46-2 evaluating firm may consider and recommend procedures having an
46-3 effect on funding, including procedures to control costs and
46-4 minimize adverse selection.
46-5 (b) A report of the study under this section, including
46-6 recommendations resulting from the study, shall be filed not later
46-7 than December 1, 1996, with the legislative audit committee, the
46-8 lieutenant governor, the speaker of the house of representatives,
46-9 and the trustee.
46-10 (c) The trustee shall pay the costs of the study from the
46-11 fund.
46-12 (d) This section expires January 1, 1997.
46-13 SECTION 66. Sections 18A(a), (b), (d), and (f), Article
46-14 3.50-4, Insurance Code, are amended to read as follows:
46-15 (a) After notice and hearing as provided by this section,
46-16 the trustee may expel from participation in the Texas Public School
46-17 <Retired> Employees Group Insurance Program any retiree, active
46-18 employee, surviving spouse, dependent, or surviving dependent child
46-19 who submits a fraudulent claim under, or has defrauded or attempted
46-20 to defraud, any health benefits plan offered under the program.
46-21 (b) On its motion or on the receipt of a complaint, the
46-22 trustee may call and hold a hearing to determine whether a person
46-23 <retiree, surviving spouse, dependent, or surviving dependent
46-24 child> has submitted a fraudulent claim under, or has defrauded or
46-25 attempted to defraud, any health benefits plan offered under the
46-26 Texas Public School <Retired> Employees Group Insurance Program.
46-27 (d) If the trustee, at the conclusion of the hearing, issues
47-1 a decision that finds that the accused <retiree, surviving spouse,
47-2 dependent, or surviving dependent child> submitted a fraudulent
47-3 claim or has defrauded or attempted to defraud any health benefits
47-4 plan offered under the Texas Public School <Retired> Employees
47-5 Group Insurance Program, the trustee shall expel the person
47-6 <retiree, surviving spouse, dependent, or surviving dependent
47-7 child> from participation in the program.
47-8 (f) A person <retiree, surviving spouse, dependent, or
47-9 surviving dependent child> expelled from the Texas Public School
47-10 <Retired> Employees Group Insurance Program may not be insured by
47-11 any health insurance plan offered by the program for a period, to
47-12 be determined by the trustee, of up to five years from the date the
47-13 expulsion takes effect.
47-14 SECTION 67. Section 18B(a), Article 3.50-4, Insurance Code,
47-15 is amended to read as follows:
47-16 (a) Section 825.507, Government Code <35.507, Title 110B,
47-17 Revised Statutes>, concerning the confidentiality of information in
47-18 records that are in the custody of the Teacher Retirement System of
47-19 Texas, applies to information in records that are in the custody of
47-20 the retirement system regarding retirees, active employees,
47-21 annuitants, or beneficiaries under the Texas Public School
47-22 <Retired> Employees Group Insurance Program.
47-23 SECTION 68. Sections 18C(c), (d), and (i), Article 3.50-4,
47-24 Insurance Code, are amended to read as follows:
47-25 (c) The trustee, the Texas public school <retired> employees
47-26 group insurance program, the <retired> school employees group
47-27 insurance fund, and the board of trustees, officers, advisory
48-1 committee members, and employees of the trustee are not liable for
48-2 damages arising from the acts or omissions of health care providers
48-3 who are participating health care providers in the coordinated care
48-4 network established by the trustee. Those health care providers
48-5 are independent contractors and are responsible for their own acts
48-6 and omissions.
48-7 (d) The trustee, the Texas public school <retired> employees
48-8 group insurance program, the <retired> school employees group
48-9 insurance fund, or a member of a credentialing committee, or the
48-10 board of trustees, officers, advisory committee members, or
48-11 employees of the trustee are not liable for damages arising from
48-12 any act, statement, determination, recommendation made, or act
48-13 reported, without malice, in the course of the evaluation of the
48-14 qualifications of health care providers or of the patient care
48-15 rendered by those providers.
48-16 (i) A credentialing committee, a person participating in a
48-17 credentialing review, a health care provider, the trustee, the
48-18 Texas public school <retired> employees group insurance program, or
48-19 the board of trustees, officers, advisory committee members, or
48-20 employees of the trustee that are named as defendants in any civil
48-21 action filed as a result of participation in the credentialing
48-22 process may use otherwise confidential information obtained for
48-23 legitimate internal business and professional purposes, including
48-24 use in their own defense. Use of information under this subsection
48-25 does not constitute a waiver of the confidential and privileged
48-26 nature of the information.
48-27 SECTION 69. (a) Monthly payments of a death or retirement
49-1 benefit annuity by the Teacher Retirement System of Texas are
49-2 increased beginning with the payment due at the end of September,
49-3 1995.
49-4 (b) Except as provided by Subsection (c) of this section,
49-5 the amount of the monthly increase is computed by multiplying the
49-6 previous monthly benefit by a percentage determined in accordance
49-7 with the following table:
49-8 LATEST RETIREMENT DATE OR, IF APPLICABLE, DATE OF DEATH INCREASE
49-9 Before September 1, 1972 14%
49-10 On or after September 1, 1972, but before September 1, 1973 15%
49-11 On or after September 1, 1973, but before September 1, 1974 17%
49-12 On or after September 1, 1974, but before September 1, 1975 14%
49-13 On or after September 1, 1975, but before September 1, 1976 13%
49-14 On or after September 1, 1976, but before September 1, 1977 16%
49-15 On or after September 1, 1977, but before September 1, 1978 14%
49-16 On or after September 1, 1978, but before September 1, 1979 13%
49-17 On or after September 1, 1979, but before September 1, 1980 12%
49-18 On or after September 1, 1980, but before September 1, 1981 9%
49-19 On or after September 1, 1981, but before September 1, 1982 8%
49-20 On or after September 1, 1982, but before September 1, 1983 7%
49-21 On or after September 1, 1983, but before September 1, 1985 8%
49-22 On or after September 1, 1985, but before September 1, 1986 7%
49-23 On or after September 1, 1986, but before September 1, 1987 8%
49-24 On or after September 1, 1987, but before September 1, 1989 7%
49-25 On or after September 1, 1989, but before September 1, 1990 5%
49-26 On or after September 1, 1990, but before September 1, 1992 3%
49-27 On or after September 1, 1992, but before September 1, 1993 2%
50-1 (c) An annuitant is entitled to the greater of:
50-2 (1) a monthly benefit annuity computed as if:
50-3 (A) Subtitle C, Title 8, Government Code, as it
50-4 existed on January 1, 1995, had been in effect on the date of
50-5 retirement or on the date of death, as applicable; and
50-6 (B) all benefits increases, including that
50-7 provided by Subsection (b) of this section, were included that are
50-8 applicable to the annuity and were provided after the date the
50-9 annuity began; or
50-10 (2) if the annuity is based on a retirement or death
50-11 that occurred before September 1, 1993, the monthly benefit annuity
50-12 option selected at the time of retirement or death:
50-13 (A) recomputed on the basis of one-twelfth of
50-14 the minimum annual salary provided by the Education Code for a
50-15 classroom teacher or full-time librarian, multiplied by two percent
50-16 for each year of service credit in the retirement system;
50-17 (B) actuarially reduced, if applicable, for
50-18 early retirement; and
50-19 (C) excluding the increase provided by
50-20 Subsection (b) of this section.
50-21 SECTION 70. The following sections of the Government Code
50-22 are repealed:
50-23 (1) Section 825.106;
50-24 (2) Section 825.310; and
50-25 (3) Section 825.401.
50-26 SECTION 71. (a) Section 824.304, Government Code, as
50-27 amended by this Act, applies to payments of monthly annuities that
51-1 are made to persons who retired for disability before the effective
51-2 date of this section and that become due on or after that date, as
51-3 well as to annuities that first become payable on or after that
51-4 date.
51-5 (b) On September 1, 1995, the Teacher Retirement System of
51-6 Texas shall transfer all amounts in the benefit increase reserve
51-7 account to the retired reserve account.
51-8 SECTION 72. The terms of members of the Board of Trustees of
51-9 the Teacher Retirement System of Texas appointed under Section
51-10 825.003, Government Code, as it existed before the effective date
51-11 of this section, expire on the effective date of this section. The
51-12 changes in the qualifications and methods of appointment of other
51-13 members of the board of trustees made by this Act apply only to
51-14 members appointed for terms that begin on or after the effective
51-15 date of this section. In implementing the changes, the governor
51-16 shall appoint a member of the board of trustees from a list of
51-17 nominees submitted by the State Board of Education to a term
51-18 expiring August 31, 2001, another member of the board from a list
51-19 of nominees submitted by the State Board of Education to a term
51-20 expiring August 31, 1997, and another member of the board without
51-21 the necessity of consultation with the State Board of Education to
51-22 a term expiring August 31, 2001.
51-23 SECTION 73. The Teacher Retirement System of Texas shall
51-24 develop an initial space allocation plan as defined in rules of the
51-25 General Services Commission and submit the plan to the commission
51-26 for approval not later than March 1, 1996. The retirement system
51-27 shall implement an approved plan not later than September 1, 1996.
52-1 SECTION 74. This Act takes effect September 1, 1995, except
52-2 Section 72 and this section, which take effect August 31, 1995.
52-3 SECTION 75. The importance of this legislation and the
52-4 crowded condition of the calendars in both houses create an
52-5 emergency and an imperative public necessity that the
52-6 constitutional rule requiring bills to be read on three several
52-7 days in each house be suspended, and this rule is hereby suspended.