S.B. No. 774
AN ACT
1-1 relating to participation in, contributions to, and benefits and
1-2 administration of retirement systems for firefighters in certain
1-3 municipalities.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Chapter 183, Acts of the 64th Legislature, 1975
1-6 (Article 6243e.1, Vernon's Texas Civil Statutes), is amended to
1-7 read as follows:
1-8 ARTICLE 1. GENERAL PROVISIONS
1-9 Sec. 1.01. APPLICABILITY. This Act applies only to a
1-10 municipality having a population of more than 450,000 and less than
1-11 500,000.
1-12 Sec. 1.02. DEFINITIONS. In this Act:
1-13 (1) "Accumulated contributions" means all sums of
1-14 money, including interest, in the individual account of a member or
1-15 former firefighter, as shown on the books and records of the fund.
1-16 (2) "Actuarial equivalent" means a benefit that, at
1-17 the time that it begins being paid, has the same present value as
1-18 the benefit it replaces, based on the recommendations of the
1-19 actuary.
1-20 (3) "Board of trustees" means the board of
1-21 firefighters relief and retirement fund trustees of the fund
1-22 existing pursuant to this Act.
1-23 (4) "Board's actuary" means the actuary employed under
1-24 Section 12.03 of this Act.
2-1 (5) "Compensation" means a firefighter's monthly
2-2 salary, excluding overtime pay, any temporary pay in higher
2-3 classifications, educational incentive pay, assignment pay,
2-4 Christmas Day bonus pay, and pay for automobile and clothing
2-5 allowances.
2-6 (6) "Dependent child" or "dependent children" means a
2-7 deceased member's unmarried children under the age of 22, other
2-8 than a child who has been determined by the board of trustees not
2-9 to have been dependent on the deceased member.
2-10 (7) "Fire department" means a regularly organized fire
2-11 department of a city to which this Act applies.
2-12 (8) "Firefighter" means a commissioned civil service
2-13 and Texas state-certified member of a fire department.
2-14 (9) "Fund" means the firefighters relief and
2-15 retirement fund existing pursuant to this Act.
2-16 (10) "Internal Revenue Code" means the Internal
2-17 Revenue Code of 1986.
2-18 (11) "Member" means any firefighter or retiree
2-19 included in a fund under this Act.
2-20 (12) "Retiree" means a person who has retired under
2-21 Article 5 or 6 of this Act and is receiving or is entitled to
2-22 receive an annuity from the fund.
2-23 Sec. 1.03. CONTINUED EXISTENCE. A firefighters relief and
2-24 retirement fund is continued in existence in each municipality to
2-25 which this Act applies. The name of the fund shall be the name of
2-26 the municipality, followed by the words "firefighters relief and
2-27 retirement fund."
3-1 Sec. 1.04. EXEMPTION FROM EXECUTION. All retirement annuity
3-2 payments, other benefit payments, and a member's accumulated
3-3 contributions are unassignable and are exempt from execution,
3-4 garnishment, attachment, and state and local taxation.
3-5 ARTICLE 2. ADMINISTRATION
3-6 Sec. 2.01. RESPONSIBILITY. Each fund established under this
3-7 Act is a trust. The board of trustees is responsible for the
3-8 administration of the fund.
3-9 Sec. 2.02. COMPOSITION OF BOARD. The board of trustees is
3-10 composed of:
3-11 (1) the mayor of the municipality;
3-12 (2) the city treasurer or, if there is no treasurer,
3-13 the person who by law, charter provision, or ordinance performs the
3-14 duty of city treasurer; and
3-15 (3) three members of the fund to be selected by vote
3-16 of the firefighters and retirees in the manner provided by this
3-17 Act.
3-18 Sec. 2.03. ELECTED MEMBERS OF BOARD. (a) The elected
3-19 members of the board of trustees shall be elected and hold office
3-20 in accordance with this section.
3-21 (b) Between November 1 of each year and the first Monday in
3-22 January of the following year, the board of trustees shall hold an
3-23 election to elect one member of the board of trustees.
3-24 (c) Each election is by secret written ballot on a date the
3-25 board of trustees determines. Only persons who have been nominated
3-26 may be listed on the written ballot. Nominations may be made in
3-27 person, by mail, or by telephone to the office of the fund and must
4-1 be received between October 1 and October 15.
4-2 (d) The board of trustees shall certify the results of each
4-3 election. A newly elected board member takes office at the first
4-4 board meeting in January.
4-5 (e) The elected members of the board of trustees hold office
4-6 for staggered terms of three years, with the term of one trustee
4-7 expiring each year. Elected members of the board of trustees shall
4-8 serve during the term for which they are elected and until their
4-9 successors are elected and have qualified, unless a vacancy results
4-10 because of death, resignation, or removal.
4-11 (f) A vacancy in the position of an elected member of the
4-12 board of trustees shall be filled for the remainder of that
4-13 person's term at an election to be held on a date selected by the
4-14 board of trustees that must be within 60 days after the date of the
4-15 event that caused the vacancy.
4-16 (g) The firefighter or retiree receiving the highest number
4-17 of votes cast in an election under this section is elected, except
4-18 that if no person receives a majority of the votes cast, a runoff
4-19 election shall be held between the two persons receiving the
4-20 highest number of votes. A runoff election is held on a date
4-21 determined by the board of trustees, and the person receiving the
4-22 higher number of votes in the runoff election is elected.
4-23 (h) The administrative expenses of an election under this
4-24 section may be paid from the assets of the fund. Assets of the
4-25 fund may not be used to pay campaign expenses incurred by or for a
4-26 member. Administrative office supplies and equipment belonging to
4-27 the fund may not be used to assist any candidate or person seeking
5-1 to assist a candidate for a position on the board of trustees.
5-2 Sec. 2.04. COMPENSATION. A member of the board of trustees
5-3 may not receive compensation for service on the board.
5-4 Sec. 2.05. OFFICERS. The mayor is the presiding officer and
5-5 the city treasurer is the secretary-treasurer of the board of
5-6 trustees. The board shall elect annually from its membership an
5-7 alternate presiding officer who shall preside in the absence or
5-8 disability of the mayor.
5-9 Sec. 2.06. QUORUM AND VOTING. Each member of the board of
5-10 trustees is entitled to one vote. A majority vote of members of
5-11 the board of trustees attending a meeting at which a quorum is
5-12 present is necessary for a decision of the board. A resolution or
5-13 order of the board of trustees must be made by a vote recorded in
5-14 the minutes of its proceedings.
5-15 Sec. 2.07. MEETINGS; MINUTES. The board of trustees shall
5-16 hold regular monthly meetings at a time and place that it
5-17 designates and may hold special meetings on the call of the
5-18 presiding officer or alternate presiding officer. The board of
5-19 trustees shall keep accurate minutes of its meetings and records of
5-20 its proceedings.
5-21 Sec. 2.08. ADMINISTRATION OF FUNDS. The board of trustees
5-22 shall:
5-23 (1) keep separate from all other municipal funds all
5-24 money and other assets it receives for the benefit of the fund;
5-25 (2) keep a record of all claims, receipts, and
5-26 disbursements and make disbursements only on vouchers signed by
5-27 such persons as the board of trustees designates by resolution; and
6-1 (3) publish annually a report containing a balance
6-2 sheet showing the financial and actuarial condition of the fund, a
6-3 statement showing receipts and disbursements during the year
6-4 covered by the report, and such additional matters as may be
6-5 determined appropriate by the board of trustees.
6-6 Sec. 2.09. DETERMINATION BY BOARD. The board of trustees is
6-7 authorized to hear and determine all matters regarding:
6-8 (1) eligibility of any person to participate in a fund
6-9 under this Act;
6-10 (2) eligibility of any person to receive a service,
6-11 disability, or survivor's benefit and the amount of that benefit;
6-12 and
6-13 (3) whether a child or a parent of a deceased member
6-14 was dependent on the member for financial support.
6-15 Sec. 2.10. TESTIMONY. The board of trustees may compel
6-16 witnesses to attend and testify before it regarding all matters
6-17 related to the fund in the same manner as is provided for taking of
6-18 testimony before notaries public, and its presiding officer and
6-19 alternate presiding officer have the authority to administer oaths
6-20 to witnesses.
6-21 Sec. 2.11. RULEMAKING. The board of trustees shall adopt
6-22 rules and perform reasonable activities it considers necessary or
6-23 desirable for the efficient administration of the fund.
6-24 ARTICLE 3. MEMBERSHIP
6-25 Sec. 3.01. GENERAL REQUIREMENT. A person who begins service
6-26 as a firefighter in a municipality to which this Act applies and
6-27 who is not ineligible for membership in the fund becomes a member
7-1 of the fund as a condition of that person's appointment.
7-2 Sec. 3.02. APPOINTMENT TO CHIEF. A firefighter who is a
7-3 member of the fund continues to be a member if the firefighter is
7-4 appointed to the rank of chief or the rank immediately below chief.
7-5 Sec. 3.03. TERMINATION OF MEMBERSHIP. A person ceases to be
7-6 a member of the fund on the earlier of the date of:
7-7 (1) death; or
7-8 (2) refund or escheat of the person's contributions
7-9 while absent from service.
7-10 ARTICLE 4. SERVICE CREDIT
7-11 Sec. 4.01. GENERAL PROVISION. One month of service credit
7-12 is earned in the fund for each month in which a member of the fund
7-13 makes a contribution required under this Act.
7-14 Sec. 4.02. MILITARY SERVICE. A member of the fund retains
7-15 all accumulated service credit and is allowed service credit for
7-16 each month during which the member leaves employment with the fire
7-17 department and performs active duty service in the armed forces or
7-18 the armed forces reserves of the United States or their
7-19 auxiliaries, except that:
7-20 (1) the military service credit may not be for more
7-21 than five years and the person must return to service with the fire
7-22 department not later than the 180th day after the date of discharge
7-23 or release from military service or from hospitalization continuing
7-24 after discharge for a period of not more than one year;
7-25 (2) the member must leave the member's contributions
7-26 in the fund during the period of absence; and
7-27 (3) the member must file a written application with
8-1 the fund for the military service credit, accompanied by
8-2 satisfactory proof of the member's military service.
8-3 Sec. 4.03. FORMER SERVICE. A member of the fund who is
8-4 absent from service with the fire department for reasons other than
8-5 military service retains all accumulated service credit for the
8-6 member's former service with the fire department, but receives no
8-7 credit for the period of absence, if:
8-8 (1) the length of the absence is less than five years;
8-9 and
8-10 (2) the member leaves the member's contributions in
8-11 the fund during the absence.
8-12 Sec. 4.04. OTHER ABSENCE. If a member of the fund who has
8-13 less than 10 years of service credit in the fund is absent from
8-14 service with the fire department for at least five years for any
8-15 reason other than as provided by Section 4.02 of this Act, the fund
8-16 shall refund the member's accumulated contributions and cancel the
8-17 person's credited service.
8-18 Sec. 4.05. PERIODS OF DISABILITY. A firefighter may not be
8-19 granted service credit for time during which the person receives a
8-20 disability benefit from the fund.
8-21 ARTICLE 5. SERVICE RETIREMENT BENEFITS
8-22 Sec. 5.01. NORMAL SERVICE RETIREMENT ELIGIBILITY. A member
8-23 is eligible to retire and receive a normal service retirement
8-24 annuity if the member:
8-25 (1) has attained the age of 50 years and has at least
8-26 10 years of service credit in the fund; or
8-27 (2) has at least 25 years of service credit,
9-1 regardless of age.
9-2 Sec. 5.02. CONTINUED SERVICE. A member who continues to
9-3 serve actively in the fire department after the date the member
9-4 becomes eligible to retire shall continue to make contributions to
9-5 the fund and accrue service credit until the date of actual
9-6 retirement.
9-7 Sec. 5.03. DETERMINATION OF AVERAGE MONTHLY SALARY. A
9-8 member's average monthly salary is computed as the average of the
9-9 member's compensation for the 36 months of highest compensation
9-10 during the member's credited service. If a person has less than 36
9-11 months of credited service, the average monthly salary is computed,
9-12 as if the member had been employed by the fire department for 36
9-13 months, by attributing to a period that is immediately before the
9-14 member's employment and that is equal to the difference between the
9-15 number of months the member has been employed by the fire
9-16 department and 36 months of compensation the member would have
9-17 received at the rank the member held when the person became a
9-18 member.
9-19 Sec. 5.04. NORMAL SERVICE RETIREMENT BENEFIT. (a) The
9-20 service retirement annuity of a person who retires under Section
9-21 5.01 of this Act on or after January 1, 1995, is a monthly payment
9-22 that is equal to three percent of the member's average monthly
9-23 compensation multiplied by the member's number of years of service
9-24 credit and any fraction of a year of service credit.
9-25 (b) The three percent factor used in this section may be
9-26 changed to some other percent if the change:
9-27 (1) is first approved by the board's actuary;
10-1 (2) is approved by the board of trustees;
10-2 (3) applies only to firefighters who are employed on
10-3 an active, full-time basis in the fire department at the time of
10-4 the change and those who begin service with the fire department
10-5 after the change becomes effective; and
10-6 (4) does not reduce a member's benefit for service
10-7 credit accumulated before the date of the change.
10-8 (c) The service retirement annuity of a person who retired
10-9 before January 1, 1995, is a monthly payment based on the benefit
10-10 formula in effect at the time of the person's retirement, together
10-11 with any increases for retirees approved by the board of trustees
10-12 after the person's retirement.
10-13 Sec. 5.05. EARLY RETIREMENT. (a) A member is eligible to
10-14 retire and receive a reduced service retirement annuity if the
10-15 member:
10-16 (1) has attained the age of 48 years and has at least
10-17 10 years of service credit in the fund; or
10-18 (2) has at least 23 years of service credit,
10-19 regardless of age.
10-20 (b) The retirement annuity of a person who retires under
10-21 this section is a monthly payment equal to the payment described by
10-22 Section 5.04 of this Act, reduced according to tables recommended
10-23 by the board's actuary and adopted by the board of trustees for
10-24 early retirement.
10-25 Sec. 5.06. ELIGIBILITY AFTER 10 YEARS OF SERVICE. (a) A
10-26 member may terminate employment with the fire department and later
10-27 retire and receive a service retirement benefit if, at the time of
11-1 the member's retirement:
11-2 (1) the member has accumulated at least 10 years of
11-3 service credit in the fund and made required contributions to the
11-4 fund for at least 10 years;
11-5 (2) the member does not withdraw the member's
11-6 contributions from the fund at the time of or after the termination
11-7 of employment; and
11-8 (3) the member has either attained 50 years of age or
11-9 would have accumulated at least 25 years of service credit if the
11-10 member had not terminated employment with the fire department.
11-11 (b) The retirement benefit payable to a member on retirement
11-12 under this section is the service retirement benefit described by
11-13 Section 5.04 of this Act, computed on the basis of the formula in
11-14 effect at the time the member terminated employment with the fire
11-15 department.
11-16 Sec. 5.07. WITHDRAWAL OF CONTRIBUTIONS. A person who has
11-17 terminated employment with the fire department and left the
11-18 person's contributions with the fund under Section 5.06 of this Act
11-19 may at any time apply for and receive the person's accumulated
11-20 contributions under Section 9.06 of this Act, with the effect
11-21 provided by that section. If a person eligible for a refund of
11-22 contributions elects to have all or a portion of the accumulated
11-23 contributions paid directly to an eligible retirement plan and
11-24 specifies the eligible retirement plan to which the contributions
11-25 are to be paid on a form approved for that purpose by the fund, the
11-26 fund shall make the payment in the form of a direct
11-27 trustee-to-trustee transfer but is under no obligation to determine
12-1 whether the other plan in fact is an eligible retirement plan for
12-2 that purpose.
12-3 ARTICLE 6. DISABILITY RETIREMENT BENEFITS
12-4 Sec. 6.01. INITIAL ELIGIBILITY FOR DISABILITY RETIREMENT. A
12-5 firefighter is eligible to retire and receive a disability
12-6 retirement annuity if:
12-7 (1) application for retirement is made by the member
12-8 or the member's legal representative or if the board of trustees
12-9 determines that, although no application has been filed, retirement
12-10 is for the good of the fire department;
12-11 (2) the medical board certifies that the member is
12-12 unable to perform the duties of the member's occupation as a
12-13 firefighter and sends the member's application to the board of
12-14 trustees; and
12-15 (3) the board of trustees approves the disability
12-16 retirement.
12-17 Sec. 6.02. NO REQUIREMENT OF ON-THE-JOB INJURY. To qualify
12-18 for disability retirement, a person's disability does not have to
12-19 be incurred in connection with the person's performance of duties
12-20 as a firefighter and may be incurred while employed by some person
12-21 or entity other than the fire department.
12-22 Sec. 6.03. AMOUNT OF DISABILITY BENEFIT. Subject to
12-23 adjustment under Section 6.05 of this Act, the disability
12-24 retirement benefit payable to a member is the normal service
12-25 retirement benefit described by Section 5.04 of this Act, but not
12-26 less than the member would have received after 20 years of service
12-27 credit.
13-1 Sec. 6.04. TERMINATION DURING FIRST 2-1/2 YEARS. If, during
13-2 the first 2-1/2 years of disability retirement, a retiree recovers
13-3 to the extent that the person is able to perform the duties of the
13-4 person's job as a firefighter, the board of trustees may terminate
13-5 the retirement benefit and restore the person to active service at
13-6 not less than the same rank the person held at the time of
13-7 disability retirement.
13-8 Sec. 6.05. CONTINUATION AFTER FIRST 2-1/2 YEARS. After a
13-9 retiree has received disability retirement benefits from the fund
13-10 for at least 2-1/2 years, the board of trustees from time to time
13-11 may review the situation of the person to determine the status of
13-12 the disability. The board of trustees may ask the medical board
13-13 for its opinion of the status of the disability. If the board of
13-14 trustees determines that the person has recovered to the extent
13-15 that the person is able to be employed, the board of trustees may:
13-16 (1) continue to pay the full disability retirement
13-17 benefit;
13-18 (2) pay a reduced disability retirement benefit in an
13-19 amount commensurate with the person's disability as determined by
13-20 the board; or
13-21 (3) discontinue payment of a disability benefit.
13-22 Sec. 6.06. APPLICATION; PHYSICIAN'S STATEMENT; MEDICAL BOARD
13-23 ACTION. (a) An application for disability retirement must be
13-24 accompanied by a written statement, on a form approved by the board
13-25 of trustees, signed by a physician of the member's choice. The
13-26 member shall pay any costs of or fees for obtaining the physician's
13-27 statement and shall file the application and statement with the
14-1 fund. As soon as possible after the application is filed, the
14-2 medical board shall evaluate the medical and other pertinent
14-3 information concerning the member's application.
14-4 (b) The medical board may require any firefighter to obtain
14-5 additional medical opinions before issuing a certificate that the
14-6 member is unable, as a result of physical or mental disability, to
14-7 perform the duties of the member's occupation as a firefighter.
14-8 The fund shall pay any costs or fees of examination by a person
14-9 other than the member's own physician.
14-10 (c) A certificate from the medical board may include a
14-11 finding by that board that the disability is likely to be temporary
14-12 or is likely to be total and permanent.
14-13 (d) The board of trustees at any time may require a person
14-14 receiving a disability retirement benefit under this Act to appear
14-15 and undergo a medical examination by a physician selected by the
14-16 board of trustees or the medical board for that purpose. The
14-17 result of the examination and report by that physician shall be
14-18 considered by the board of trustees in determining whether the
14-19 disability retirement benefit will be continued, increased, if less
14-20 than the maximum provided by this Act, decreased, or discontinued.
14-21 Sec. 6.07. EVIDENCE OF INCOME OF DISABILITY RETIREE. The
14-22 board of trustees may require a person receiving disability
14-23 retirement benefits under this Act to provide evidence of annual
14-24 income. The board of trustees may consider the evidence in any
14-25 determination of ability to be employed. The board of trustees may
14-26 reduce or discontinue disability retirement benefit payments to a
14-27 person who fails or refuses to produce information which the board
15-1 of trustees has required under this section.
15-2 Sec. 6.08. REINSTATEMENT; SERVICE RETIREMENT ELIGIBILITY.
15-3 (a) The board of trustees may reinstate any disability retirement
15-4 benefit that previously has been terminated or reduced if the
15-5 disabled firefighter's condition has worsened as a result of the
15-6 same cause for which the person was previously granted disability
15-7 retirement.
15-8 (b) If a person's disability retirement benefit is reduced
15-9 or discontinued and the person is or subsequently becomes eligible
15-10 for service retirement under other provisions of this Act, the
15-11 person is entitled to the service retirement benefit on meeting all
15-12 requirements for that benefit, reduced by the amount of any
15-13 disability retirement benefit that the person continues to receive
15-14 from the fund.
15-15 Sec. 6.09. NO BENEFITS WHILE RECEIVING SALARY. A person may
15-16 not receive disability retirement benefits for any period during
15-17 which the person receives full salary or compensation from the fire
15-18 department, including payments received while on sick leave.
15-19 ARTICLE 7. SURVIVOR'S BENEFITS
15-20 Sec. 7.01. SURVIVING SPOUSE OF FIREFIGHTER. If a firefighter
15-21 dies before retirement, the firefighter's surviving spouse is
15-22 entitled to receive an immediate monthly benefit from the fund of
15-23 75 percent of the service retirement benefit that the firefighter
15-24 would have received if the firefighter had retired on the date of
15-25 death, but not less than 75 percent of the monthly payment the
15-26 decedent would have received based on 20 years of service credit.
15-27 Sec. 7.02. SURVIVING SPOUSE OF RETIREE. On the death of a
16-1 retiree, the retiree's surviving spouse, if married to the retiree
16-2 at the time of the retiree's retirement, is entitled to receive an
16-3 immediate monthly benefit from the fund of 75 percent of the
16-4 retirement benefit that was being paid to the retiree.
16-5 Sec. 7.03. SURVIVING SPOUSE OF FORMER FIREFIGHTER. (a) An
16-6 immediate monthly benefit is payable to the surviving spouse of a
16-7 former firefighter who:
16-8 (1) before termination of employment with the fire
16-9 department had accumulated at least 10 years of service credit in
16-10 the fund and had made required contributions to the fund for a
16-11 period of at least 10 years; and
16-12 (2) did not withdraw the member's contributions from
16-13 the fund at the time of or after the termination of employment.
16-14 (b) If the former firefighter died before attaining 50 years
16-15 of age, the benefit is payable only if the spouse was married to
16-16 the former firefighter on the date of the former firefighter's
16-17 termination of employment with the fire department.
16-18 (c) If the former firefighter died after attaining 50 years
16-19 of age, the benefit is payable only if the spouse was married to
16-20 the former firefighter when the member attained 50 years of age.
16-21 (d) The amount of the benefit payable under this section is
16-22 75 percent of the retirement benefit the former firefighter either
16-23 was receiving or was entitled to receive at age 50.
16-24 Sec. 7.04. TERMINATION OF SPOUSE'S BENEFIT. If, at the time
16-25 of termination of employment with the fire department, the deceased
16-26 firefighter or retiree met the requirements for normal retirement
16-27 eligibility as provided by Section 5.01 of this Act, the benefit
17-1 payable to a surviving spouse is payable throughout the surviving
17-2 spouse's remaining lifetime. Otherwise, the benefit ceases on the
17-3 earlier of the spouse's death or marriage to any other person.
17-4 Sec. 7.05. SURVIVING CHILDREN'S BENEFIT. (a) On the death
17-5 of a member, if there is no surviving spouse, a benefit is payable
17-6 to the decedent's surviving dependent children, if any. The total
17-7 monthly benefit payable under this subsection is 75 percent of the
17-8 monthly payment that the decedent would have received under the
17-9 service retirement benefit described by Section 5.04 of this Act,
17-10 but not less than 75 percent of the monthly payment the decedent
17-11 would have received based on 20 years of service credit. If there
17-12 is more than one dependent child of the decedent, each dependent
17-13 child is entitled to receive an equal share of the total monthly
17-14 payment under this subsection.
17-15 (b) On the death of a member under this Act, if there is a
17-16 surviving spouse, a benefit is payable to each of the decedent's
17-17 surviving dependent children, if any. The monthly amount of the
17-18 benefit payable to each child is 15 percent of the monthly payment
17-19 that the decedent would have received under the service retirement
17-20 benefit described by Section 5.04 of this Act, but not less than 15
17-21 percent of the monthly payment the decedent would have received
17-22 based on 20 years of service credit. If the decedent left more
17-23 than five surviving dependent children, the monthly benefit payable
17-24 to each dependent child shall be reduced so that the total monthly
17-25 benefit payable under this subsection does not exceed the total
17-26 monthly benefit that would have been payable if the decedent had
17-27 left no surviving spouse.
18-1 (c) Payments by the fund to a dependent child under this
18-2 section shall cease on the earliest of the date of the child's
18-3 death, marriage, or attainment of age 22.
18-4 Sec. 7.06. PAYMENTS TO DEPENDENT PARENTS; PAYMENT TO ESTATE.
18-5 If a deceased member leaves no surviving spouse and no surviving
18-6 children entitled to receive a benefit under this Act but is
18-7 survived by one or more dependent parents, the dependent parent, or
18-8 one of the surviving parents designated by the board of trustees,
18-9 is entitled to receive a monthly benefit payment equal to the
18-10 monthly amount that would have been payable to a surviving spouse
18-11 of the deceased. All payments under this section cease on the
18-12 death of the surviving dependent parent.
18-13 Sec. 7.07. INCREASE IN SURVIVORS' BENEFITS. On the
18-14 affirmative vote of a majority of the members of the board of
18-15 trustees either or both of the following actions may be taken:
18-16 (1) benefits to dependent children may be increased to
18-17 an amount not to exceed the amount recommended by the board's
18-18 actuary; or
18-19 (2) benefits to surviving spouses may be increased to
18-20 an amount not to exceed the maximum approved by the actuary.
18-21 Sec. 7.08. PERSON CAUSING DEATH OF MEMBER OR BENEFICIARY.
18-22 (a) A benefit payable on the death of a member or beneficiary may
18-23 not be paid to a person convicted of causing that death, but
18-24 instead a benefit is payable as provided by Subsection (c) of this
18-25 section to a person who would be entitled to the benefit had the
18-26 convicted person predeceased the decedent. If no person would be
18-27 entitled to the benefit, the benefit is payable to the decedent's
19-1 estate.
19-2 (b) The fund is not required to pay a benefit under
19-3 Subsection (a) of this section unless it receives actual notice of
19-4 the conviction of the person who would have been entitled to the
19-5 benefits. However, the fund may delay payment of a benefit payable
19-6 on the death of a member pending the results of a criminal
19-7 investigation and of legal proceedings relating to the cause of
19-8 death.
19-9 (c) The benefit payable under Subsection (a) of this section
19-10 is a refund of the member's accumulated contributions and interest,
19-11 reduced by any annuity payments that may have been made as a result
19-12 of the member's retirement.
19-13 (d) For the purposes of this section, a person has been
19-14 convicted of causing the death of a member or beneficiary if the
19-15 person:
19-16 (1) has pleaded guilty or nolo contendere to or has
19-17 been found guilty by a court of an offense at the trial of which it
19-18 is established that the person's intentional, knowing, or reckless
19-19 act or omission resulted in the death of the person who was the
19-20 member or beneficiary, regardless of whether sentence is imposed or
19-21 probated; and
19-22 (2) has no appeal of the conviction pending and the
19-23 time provided for appeal has expired.
19-24 ARTICLE 8. DEFERRED RETIREMENT OPTION PLAN
19-25 Sec. 8.01. MEMBER REMAINING IN ACTIVE SERVICE. In lieu of
19-26 either leaving active service and beginning to receive a service
19-27 retirement annuity under Section 5.01 of this Act or remaining in
20-1 active service and continuing to accrue additional service credit
20-2 under Section 5.02 of this Act, a member who is eligible to receive
20-3 a normal service retirement benefit under Section 5.01 of this Act
20-4 may remain in active service, become a participant in the deferred
20-5 retirement option plan ("DROP") in accordance with Sections 8.02
20-6 and 8.03 of this Act, and defer the beginning of the person's
20-7 retirement annuity. Once an election to participate in the DROP
20-8 has been made, the election continues in effect as long as the
20-9 member remains in active service as a firefighter. When the member
20-10 leaves active service, the member may apply for a service
20-11 retirement annuity under Section 5.01 of this Act.
20-12 Sec. 8.02. ELECTION TO PARTICIPATE IN DROP. The election to
20-13 participate in the DROP shall be made in accordance with procedures
20-14 adopted by the board of trustees. The election may be made at any
20-15 time on or after the date the member becomes eligible for normal
20-16 service retirement under Section 5.01 of this Act and becomes
20-17 effective on the first day of the first month after the date of the
20-18 election. At the same time that a member makes an election to
20-19 participate in the DROP, the member must agree in writing to
20-20 terminate service with the fire department on a date not later than
20-21 the second anniversary of the effective date of the election under
20-22 this section. An agreement to terminate service is binding on the
20-23 member and the fire department, except that the member may
20-24 terminate active service at any time before the date selected. An
20-25 election to participate in the DROP has no effect on either the
20-26 municipality's or the member's contributions under Section 10.01 of
20-27 this Act.
21-1 Sec. 8.03. CREDITS TO MEMBER'S DROP ACCOUNT. Each month
21-2 after a member makes an election to participate in the DROP and
21-3 until the member's retirement, the board of trustees shall cause an
21-4 amount equal to the retirement annuity that the member would have
21-5 received under Section 5.04 of this Act for that month if the
21-6 member had left active service and been granted a retirement
21-7 annuity on the effective date of the election under Section 8.02 of
21-8 this Act to be credited to a separate DROP account maintained
21-9 within the fund for the benefit of the member. The member's
21-10 contributions under Section 10.01(d) of this Act made after the
21-11 effective date of the election to participate in the DROP shall
21-12 also be credited to the member's DROP account. Amounts held in a
21-13 member's DROP account shall be credited at the end of each calendar
21-14 month with interest at a rate equal to one-twelfth of five percent
21-15 until the member's retirement.
21-16 Sec. 8.04. AMOUNT OF CREDITS TO MEMBER'S DROP ACCOUNT. The
21-17 amount credited monthly to the member's DROP account:
21-18 (1) may not be increased as a result of any increase
21-19 in the formula used in computing service retirement benefits under
21-20 Section 5.04 of this Act that occurs after the effective date of
21-21 the member's election to participate in the DROP;
21-22 (2) shall be increased by any annual cost-of-living
21-23 adjustments under Section 9.04 of this Act that occur between the
21-24 effective date of the member's election to participate in the DROP
21-25 and the effective date of the member's retirement but only as to
21-26 amounts credited to the member's DROP account after a
21-27 cost-of-living adjustment; and
22-1 (3) is subject to the limitations prescribed by
22-2 Section 9.03 of this Act.
22-3 Sec. 8.05. DISTRIBUTIONS FROM MEMBER'S DROP ACCOUNT.
22-4 (a) On leaving active service as a firefighter and beginning to
22-5 receive a retirement annuity, a member who participates in the DROP
22-6 shall begin to receive the amount credited to the person's DROP
22-7 account under either of the following methods of distribution
22-8 selected by the member:
22-9 (1) a single-payment distribution made at a time
22-10 selected by the member but not later than April 1 of the year after
22-11 the member attains 70-1/2 years of age; or
22-12 (2) in not more than four payments, which may be equal
22-13 or unequal as the member may determine, all of which must occur not
22-14 later than April 1 of the year after the member attains 70-1/2
22-15 years of age.
22-16 (b) The DROP account balance of a member shall be credited
22-17 at the end of each calendar month with interest at a rate equal to
22-18 one-twelfth of five percent.
22-19 (c) A member may not receive a distribution from the
22-20 member's DROP account before termination of active service as a
22-21 firefighter. A member shall notify the fund in writing, on a form
22-22 that the board of trustees may prescribe, at least 30 days before
22-23 each distribution made under this section.
22-24 Sec. 8.06. ESTABLISHMENT OF DROP ACCOUNT AT RETIREMENT. In
22-25 lieu of electing to participate in the DROP before actual
22-26 retirement, a member who is eligible for normal service retirement
22-27 may elect to terminate active service as a firefighter and
23-1 establish a DROP account under this section. If a member so
23-2 elects:
23-3 (1) the board of trustees shall cause to be credited
23-4 to a DROP account maintained within the fund for the benefit of
23-5 that person an amount equal to the credits that the member's DROP
23-6 account would have received, including interest, if the member had
23-7 established the DROP account after becoming eligible for normal
23-8 service retirement, but not more than two years before the
23-9 effective date of the person's retirement;
23-10 (2) the date used in computations under Subdivision
23-11 (1) of this section as if the member had established the DROP
23-12 account on that date is the effective date of the member's election
23-13 to participate in the DROP;
23-14 (3) the member will receive payments from the member's
23-15 DROP account as the member may select under Section 8.05 of this
23-16 Act; and
23-17 (4) the member's DROP account shall be credited with
23-18 interest as provided by Section 8.05 of this Act.
23-19 Sec. 8.07. PAYMENTS FROM DROP ACCOUNT AT MEMBER'S DEATH.
23-20 (a) The provisions of Article 7 relating to death benefits of
23-21 qualified survivors do not apply to amounts credited to a member's
23-22 DROP account. Instead, a member who participates in the DROP may
23-23 designate a beneficiary to receive any balance in the member's DROP
23-24 account at the member's death. The beneficiary designation must be
23-25 made on a form prescribed by the board of trustees and filed with
23-26 the fund before the member's death. If the member is married at
23-27 the time of the designation, designation of a beneficiary other
24-1 than the member's spouse is valid only if the spouse consents to
24-2 the designation in writing on the same form that is used to
24-3 designate the beneficiary. Distributions from a member's DROP
24-4 account after the death of the member shall be made as provided by
24-5 this section.
24-6 (b) If a member who participates in the DROP dies while in
24-7 active service or if the member has not filed an election with the
24-8 board of trustees as described by Subsection (c) of this section,
24-9 distributions to the designated beneficiary will begin not more
24-10 than one year after the date of the member's death and shall be
24-11 made either as a single-payment distribution of the member's DROP
24-12 account balance or in not more than four equal annual installments
24-13 over a period of not more than 37 months.
24-14 (c) If a member who participates in the DROP dies after
24-15 terminating active service and has filed an election with the board
24-16 of trustees to be paid in not more than four equal annual
24-17 installments over a period of not more than 37 months, the balance
24-18 of the member's DROP account shall be distributed to the designated
24-19 beneficiary in the manner that the member selected.
24-20 (d) If the member has not designated a beneficiary to
24-21 receive distributions from the member's DROP account or if the
24-22 person so designated does not survive the member by at least 72
24-23 hours, the member's DROP account shall be distributed in a
24-24 single-sum payment as soon as administratively possible after the
24-25 member's death to any surviving spouse who survives the member by
24-26 at least 72 hours, if any, or to the member's estate if there is no
24-27 surviving spouse.
25-1 Sec. 8.08. SUBSEQUENT DISABILITY OF DROP PARTICIPANT. A
25-2 member who participates in the DROP becomes ineligible for any
25-3 disability benefits described by Article 6 of this Act. Instead,
25-4 if the board of trustees determines that the member would have been
25-5 eligible for disability retirement, the board of trustees shall
25-6 grant a normal service retirement annuity as described by Section
25-7 5.04 of this Act and shall pay the member both the service
25-8 retirement annuity and a distribution of the DROP account as
25-9 described by Section 8.05 of this Act.
25-10 Sec. 8.09. RETIREMENT BENEFIT PAYABLE TO DROP PARTICIPANT.
25-11 The retirement benefit payable under Article 5 or 6 of this Act to
25-12 a person who participates in the DROP:
25-13 (1) may not be increased as a result of any increase
25-14 in the formula used in computing service retirement benefits under
25-15 Section 5.04 of this Act that occurs after the effective date of
25-16 the member's election to participate in the DROP;
25-17 (2) may not be increased as a result of any increase
25-18 in the member's compensation that occurs after the effective date
25-19 of the member's election to participate in the DROP;
25-20 (3) shall be increased by any annual cost-of-living
25-21 adjustments under Section 9.04 of this Act that occur between the
25-22 effective date of the member's election to participate in the DROP
25-23 and the effective date of the member's retirement;
25-24 (4) may not be increased for additional service credit
25-25 after the effective date of the member's election to participate in
25-26 the DROP; and
25-27 (5) is subject to the limitations prescribed by
26-1 Section 9.03 of this Act.
26-2 Sec. 8.10. TERMINATION OR MODIFICATION OF DROP BY FUND. If
26-3 the board's actuary, not sooner than January 1, 2000, certifies to
26-4 the board that DROP participation is resulting in a significant
26-5 actuarial loss to the fund, the board of trustees may:
26-6 (1) reduce the interest paid on DROP accounts or take
26-7 other action that would reduce the future credits to DROP accounts,
26-8 but only for all DROP accounts that are established after the
26-9 effective date of the action by the board of trustees; or
26-10 (2) terminate the deferred retirement option plan for
26-11 all members who have not at that time established a DROP account.
26-12 ARTICLE 9. MISCELLANEOUS PROVISIONS REGARDING BENEFITS
26-13 Sec. 9.01. TIME FOR PAYMENT TO RETIRED MEMBERS. Benefits to
26-14 a person who retires under this Act are payable on the first day of
26-15 each month beginning with the month following the month in which
26-16 the person retires.
26-17 Sec. 9.02. TIME FOR PAYMENT TO SURVIVORS; PAYMENT TO ESTATE.
26-18 Benefits to a surviving spouse, dependent child, or dependent
26-19 parent under this Act are payable on the first day of each month
26-20 beginning with the month following the month in which the death of
26-21 the member or former firefighter occurs. After all payments cease,
26-22 any amount by which the member's or former firefighter's total
26-23 accumulated contributions at the date of that person's death exceed
26-24 the amount of all retirement and death benefits paid by the fund as
26-25 a result of the person's participation in the fund is payable to
26-26 the estate of the member or former firefighter.
26-27 Sec. 9.03. LIMITATION ON PAYMENT OF BENEFITS. (a) The
27-1 amount of the payment of any benefit under this Act that would
27-2 exceed the limitations set forth in this section shall be reduced
27-3 in accordance with this section.
27-4 (b) In this section:
27-5 (1) "Compensation" has the meaning provided by Section
27-6 415 of the Internal Revenue Code and the regulations adopted under
27-7 that section, instead of the meaning provided by Section 1.02 of
27-8 this Act, but as to any person who begins participation on or after
27-9 December 31, 1995, "compensation" excludes any payments received in
27-10 excess of $150,000 in a calendar year, indexed pursuant to Section
27-11 401(a)(17) of the Internal Revenue Code.
27-12 (2) "Highest average annual compensation" means the
27-13 average compensation for the three consecutive calendar years of
27-14 service with the fire department that produces the highest average.
27-15 (c) An annual benefit payable by the fund may not exceed 100
27-16 percent of the member's highest average annual compensation.
27-17 (d) If payment of a benefit begins before a member attains
27-18 age 55, the annual benefit may not exceed the greater of:
27-19 (1) the actuarial equivalent of a $75,000 annual
27-20 benefit beginning at age 55;
27-21 (2) the actuarial equivalent of a $90,000 annual
27-22 benefit beginning at age 62; or
27-23 (3) $50,000.
27-24 (e) If a member does not have at least 15 years of service
27-25 credit as a firefighter with the fire department, the $50,000
27-26 limitation provided by Subsection (d) of this section is
27-27 inapplicable.
28-1 (f) If payment of a benefit begins when or after a member
28-2 attains age 55 but before the member attains age 62, the annual
28-3 benefit may not exceed the greater of:
28-4 (1) the actuarial equivalent of a $90,000 annual
28-5 benefit beginning at age 62; or
28-6 (2) $75,000.
28-7 (g) If payment of a benefit begins when or after a member
28-8 attains age 62 but before the member attains age 65, the annual
28-9 benefit may not exceed $90,000.
28-10 (h) If payment of a benefit begins when or after a member
28-11 attains age 65, the annual benefit may not exceed the actuarial
28-12 equivalent of a $90,000 annual benefit beginning at age 65.
28-13 (i) The $90,000 and $50,000 limitations provided by this
28-14 section are automatically adjusted to the amounts determined by the
28-15 secretary of the treasury in effect at the time of the member's
28-16 retirement.
28-17 (j) To determine the actuarial equivalent of a benefit under
28-18 this section, the interest rate assumption is the rate not to
28-19 exceed five percent that is adopted by the board of trustees in the
28-20 proper administration of the fund.
28-21 (k) A person's vested accrued benefit in effect on September
28-22 1, 1995, may not be reduced under this section.
28-23 Sec. 9.04. COST-OF-LIVING ADJUSTMENT. (a) A person
28-24 receiving a retirement or survivor's benefit under this Act is
28-25 entitled to an annual cost-of-living adjustment of that person's
28-26 benefit based on any increase in the Consumer Price Index for All
28-27 Urban Consumers as determined by the United States Department of
29-1 Labor since the last increase in benefits under this section.
29-2 (b) An adjustment may not be made under this section unless
29-3 the board's actuary has advised the board of trustees that the
29-4 adjustment would not impair the financial stability of the fund and
29-5 the adjustment has been approved by the affirmative vote of a
29-6 majority of the board of trustees.
29-7 (c) The amount of an adjustment under this section shall be
29-8 determined by the board of trustees. An adjustment of a benefit
29-9 under this section may not reduce any person's benefit to an amount
29-10 less than the person received when the benefit first was paid to
29-11 that person.
29-12 Sec. 9.05. NO INTEGRATION WITH SOCIAL SECURITY. A benefit
29-13 payable under this Act may not be integrated with benefits payable
29-14 under the federal Social Security Act, as amended (42 U.S.C.
29-15 Section 301 et seq.), and benefits payable under the Social
29-16 Security Act may not be taken into account when determining the
29-17 amount of benefits to which a person is entitled under this Act.
29-18 Sec. 9.06. WITHDRAWAL OF CONTRIBUTIONS. (a) A living
29-19 person who has terminated all employment with the fire department
29-20 and who has not retired may withdraw, on application, all of the
29-21 accumulated contributions credited to that person's individual
29-22 account with the fund in excess of the amount of benefits that the
29-23 person previously has received from the fund. On withdrawal, the
29-24 person's account will be closed and all service credit the person
29-25 has accumulated will be canceled.
29-26 (b) If a member dies before retirement and no person is
29-27 entitled to a survivor's benefit under this Act, the person's
30-1 estate may, after application, withdraw all of the accumulated
30-2 contributions credited to that person's individual account with the
30-3 fund in excess of the amount of benefits that the person previously
30-4 has received from the fund.
30-5 Sec. 9.07. ESCHEAT OF CONTRIBUTIONS. If an application for
30-6 withdrawal of contributions under Section 9.06 of this Act from or
30-7 on behalf of a person who has ceased to be an employee of the fire
30-8 department or the person's estate has not been received by the fund
30-9 before the seventh anniversary of the termination of the person's
30-10 employment with the fire department for a reason other than
30-11 retirement, the person's accumulated contributions shall escheat to
30-12 the fund. If the person or the person's estate later applies for
30-13 the contributions, the fund shall refund the contributions
30-14 regardless of the earlier escheatment.
30-15 Sec. 9.08. INSUFFICIENT FUNDS; PRORATED REDUCTION IN
30-16 BENEFITS. If for any reason the funds available for any purpose
30-17 covered by this Act become insufficient to pay in full any benefit
30-18 payable under this Act, all benefits being paid by the fund shall
30-19 be reduced pro rata for the time the deficiency exists.
30-20 Sec. 9.09. REDUCTION IN BENEFIT PAYMENTS ON REQUEST. If a
30-21 person receiving a benefit from the fund requests in writing that
30-22 the amount of the benefit be reduced to a specified monthly
30-23 amount, the fund will pay the lesser amount specified in the
30-24 request. If the person subsequently requests in writing that the
30-25 benefit be increased to any specified amount that does not exceed
30-26 the amount originally payable, the fund will pay the increased
30-27 amount specified. If a person receiving a benefit from the fund
31-1 requests in writing that payment of the benefit be discontinued,
31-2 the fund shall discontinue payment of the benefit. If the person
31-3 subsequently requests that payment of the benefit be resumed, the
31-4 fund shall resume payment of the benefit. Any amounts not paid by
31-5 the fund pursuant to a request under this section are forfeited to
31-6 the fund and are not recoverable by any person.
31-7 ARTICLE 10. COLLECTION OF CONTRIBUTIONS; INTEREST
31-8 Sec. 10.01. MUNICIPAL AND MEMBER CONTRIBUTIONS. (a) Each
31-9 month before October 1, 1994, each municipality in which a fire
31-10 department to which this Act applies is located shall appropriate
31-11 and contribute to the fund an amount equal to 14 percent, or a
31-12 higher percentage that the municipality authorizes, of the
31-13 compensation of all members during that month.
31-14 (b) Each calendar month after September 30, 1994, and before
31-15 October 1, 1995, each municipality in which a fire department to
31-16 which this Act applies is located shall appropriate and contribute
31-17 to the fund an amount equal to 16.05 percent of the compensation of
31-18 all members during that month.
31-19 (c) Each month after September 30, 1995, each municipality
31-20 in which a fire department to which this Act applies is located
31-21 shall appropriate and contribute to the fund an amount equal to
31-22 18.05 percent of the compensation of all members during that month.
31-23 (d) Each firefighter shall pay into the fund each month
31-24 13.70 percent of the firefighter's compensation for that month.
31-25 (e) The governing body of each municipality may authorize
31-26 the municipality to make an additional contribution to the fund in
31-27 whatever amount the governing body may determine. The members of
32-1 the fund, by a majority vote in favor of an increase in
32-2 contributions above 13.70 percent, may increase each firefighter's
32-3 contribution above 13.70 percent to any percentage recommended by a
32-4 majority vote of the board of trustees.
32-5 Sec. 10.02. PICKUP OF FIREFIGHTER CONTRIBUTIONS. A
32-6 municipality to which this Act applies shall pick up the
32-7 firefighter contributions to the fund that are required or
32-8 authorized pursuant to Section 10.01 of this Act, whichever is
32-9 higher. Firefighter contributions will be picked up by a reduction
32-10 in the monetary compensation of the firefighters. Contributions
32-11 picked up shall be treated as employer contributions in accordance
32-12 with Section 414(h)(2) of the Internal Revenue Code for the purpose
32-13 of determining tax treatment of the amounts under that code. These
32-14 contributions will be deposited to the credit of the individual
32-15 accounts of the firefighters in the fund and shall be treated as
32-16 the monthly contributions of the firefighters for all purposes of
32-17 this Act. These contributions are not includable in the gross
32-18 income of a firefighter until the time that they are distributed or
32-19 made available to the firefighter or survivors of the firefighter.
32-20 The board of trustees may at any time, by majority vote,
32-21 discontinue the pickup of firefighter contributions by the
32-22 municipality.
32-23 Sec. 10.03. CONTRIBUTIONS AND INCOME AS ASSETS OF FUND. All
32-24 contributions paid to the fund under Sections 10.01 and 10.02 of
32-25 this Act become a part of the assets of the fund. All interest and
32-26 dividends on investments of the assets of the fund shall be
32-27 deposited into the fund and are part of it.
33-1 Sec. 10.04. INTEREST ON INDIVIDUAL ACCOUNTS. The fund shall
33-2 credit interest on December 31 of each year to the account of each
33-3 firefighter, and of each former firefighter, who has not retired in
33-4 an amount equal to five percent of the accumulated contributions,
33-5 including previously credited interest, on deposit on January 1 of
33-6 that year. The fund may not pay interest on a firefighter's or
33-7 former firefighter's contributions for part of a year or for any
33-8 period that is more than five calendar years after the date of
33-9 termination of employment.
33-10 ARTICLE 11. INVESTMENT OF ASSETS
33-11 Sec. 11.01. PERMITTED INVESTMENTS. When the board of
33-12 trustees determines that there is in the fund a surplus exceeding
33-13 the reasonable, safe amount necessary to take care of the current
33-14 demands on the fund, the surplus, or so much of it as the board of
33-15 trustees considers prudent, may be invested in:
33-16 (1) direct obligations of or obligations the principal
33-17 and interest of which are guaranteed or fully insured by the United
33-18 States or its agencies or instrumentalities;
33-19 (2) commercial paper rated as investment quality or
33-20 higher by a nationally recognized investment rating firm;
33-21 (3) short-term investment funds, mutual funds, or
33-22 their equivalent, that:
33-23 (A) are rated as investment quality or higher by
33-24 a nationally recognized investment rating firm; and
33-25 (B) do not exceed an average of 270 days to
33-26 maturity;
33-27 (4) fully collateralized or direct repurchase
34-1 agreements, including direct and reverse security repurchase
34-2 agreements and security lending agreements that:
34-3 (A) have a defined termination date;
34-4 (B) are secured by obligations described by this
34-5 section or by cash; and
34-6 (C) are pledged with a third party selected or
34-7 approved by a majority vote of the board of trustees;
34-8 (5) corporate bonds, including convertible bonds and
34-9 collateralized mortgage obligations, rated as investment quality or
34-10 higher by a nationally recognized investment rating firm;
34-11 (6) common and preferred stocks of companies
34-12 incorporated in the United States and foreign stocks that are
34-13 designated in United States dollars and that are registered with
34-14 the Securities and Exchange Commission and listed on a United
34-15 States exchange or by the National Association of Securities
34-16 Dealers Automated Quotations;
34-17 (7) major foreign equity fixed income market
34-18 investments; and
34-19 (8) convertible stocks and bonds recognized as
34-20 investment quality or higher by a nationally recognized investment
34-21 rating firm or by the investment manager.
34-22 Sec. 11.02. REDUCTION IN RATING. An investment in corporate
34-23 bonds that meets the requirements of Section 11.01(5) of this Act
34-24 at the time of purchase is not required to be sold because the
34-25 bonds' rating is subsequently reduced to a rating that is not more
34-26 than one major classification lower than the requirements.
34-27 Sec. 11.03. LIMITATIONS ON INVESTMENTS. The fund may not
35-1 own more than five percent of the voting stock of any one
35-2 corporation. Under an investment measure at cost:
35-3 (1) total fixed-income investments should not
35-4 represent less than 50 percent nor more than 80 percent of the
35-5 value of the investment portfolio;
35-6 (2) total investments in common stocks should not
35-7 represent less than 20 percent nor more than 50 percent of the
35-8 value of the investment portfolio;
35-9 (3) total investments in common stocks of foreign
35-10 corporations may not represent more than five percent of the value
35-11 of the investment portfolio; and
35-12 (4) total investments in any one corporation may not
35-13 represent more than three percent of the value of the investment
35-14 portfolio.
35-15 Sec. 11.04. FIDUCIARIES. (a) A person or financial
35-16 institution is a fiduciary of the fund to the extent that the
35-17 person or the financial institution:
35-18 (1) exercises any discretionary authority or
35-19 discretionary control over management of the fund or exercises any
35-20 authority or control over management or disposition of the assets
35-21 of the fund;
35-22 (2) renders or has authority or responsibility to
35-23 render investment advice for a fee or other compensation, direct or
35-24 indirect, concerning any money or other property of the fund; or
35-25 (3) has any discretionary authority or discretionary
35-26 responsibility over the administration of the fund.
35-27 (b) A fiduciary of the fund may not cause the fund to engage
36-1 in a transaction if the fiduciary knows or should know that the
36-2 transaction constitutes a direct or indirect:
36-3 (1) sale, exchange, or lease of any property from the
36-4 fund to a party for less than adequate consideration or from a
36-5 party to the fund for more than adequate consideration;
36-6 (2) loan of money or other extension of credit from
36-7 the fund to a party without the receipt of adequate security and a
36-8 reasonable rate of interest or from a party to the fund with
36-9 provision of excessive security or an unreasonably high rate of
36-10 interest;
36-11 (3) furnishing of goods, services, or facilities from
36-12 the fund to a party for less than adequate consideration or from a
36-13 party to the fund for more than adequate consideration; or
36-14 (4) transfer to or use by or for the benefit of a
36-15 party of any assets of the fund for less than adequate
36-16 consideration.
36-17 (c) A fiduciary of the fund may not:
36-18 (1) deal with the assets of the fund in the
36-19 fiduciary's own interest or for the fiduciary's own account;
36-20 (2) in the fiduciary's individual or any other
36-21 capacity act in any transaction involving the fund on behalf of a
36-22 party whose interests are adverse to the interests of the fund or
36-23 the interests of its participants or beneficiaries; or
36-24 (3) receive any consideration for the fiduciary's own
36-25 personal account from any party dealing with the fund in connection
36-26 with a transaction involving the assets of the fund.
36-27 (d) The board of trustees may purchase insurance
37-1 indemnifying the members of the board of trustees against personal
37-2 loss or accountability from liability resulting from a member's act
37-3 or omission as a member of the board of trustees.
37-4 ARTICLE 12. OFFICERS, EMPLOYEES, AND PROFESSIONALS
37-5 Sec. 12.01. ADMINISTRATOR AND EMPLOYEES. The board of
37-6 trustees shall appoint an administrator who shall administer the
37-7 fund under the supervision and direction of the board of trustees.
37-8 The board of trustees shall employ such other employees as are
37-9 required for the efficient administration of the fund.
37-10 Sec. 12.02. LEGAL COUNSEL. The board of trustees shall
37-11 retain legal counsel for matters affecting the operation of the
37-12 fund.
37-13 Sec. 12.03. ACTUARY. (a) The board of trustees shall
37-14 employ an actuary who may be the consultant and technical advisor
37-15 to the board of trustees regarding the operation of the fund and
37-16 may perform such duties as may be required by the board.
37-17 (b) The actuary shall make a valuation at least once every
37-18 two years of the assets and liabilities of the fund on the basis of
37-19 assumptions and methods that are reasonable in the aggregate,
37-20 considering the experience of the fund and reasonable expectations
37-21 and that, in combination, offer the actuary's best estimate of
37-22 anticipated experience under the fund.
37-23 (c) On the basis of the valuation, the actuary shall make
37-24 recommendations to the board of trustees to ensure the actuarial
37-25 soundness of the fund. In making recommendations, the actuary
37-26 shall define each actuarial term and enumerate and explain each
37-27 actuarial assumption used in making the valuation. This
38-1 information must be included either in the actuarial study or in a
38-2 separate report made available as a public record.
38-3 (d) The board of trustees shall file with the State Pension
38-4 Review Board a copy of each actuarial study and each separate
38-5 report made as required by law.
38-6 (e) An actuary employed under this section must be a fellow
38-7 of the Society of Actuaries, a member of the American Academy of
38-8 Actuaries, or an enrolled actuary under the federal Employee
38-9 Retirement Income Security Act of 1974 (29 U.S.C. Section 1001 et
38-10 seq.).
38-11 (f) The municipality may pay all or part of the cost of the
38-12 actuarial services. Any cost not paid directly by the municipality
38-13 is payable from assets of the fund.
38-14 Sec. 12.04. INVESTMENT COUNSELORS AND MANAGERS; CUSTODIAN OF
38-15 ASSETS. (a) The board of trustees may employ professional
38-16 investment counselors to advise and assist the board in the
38-17 investment of the assets of the fund. The investment counseling
38-18 service must be provided by a nationally known organization whose
38-19 business functions include rendering continuous investment advisory
38-20 service to public pension and retirement funds. The municipality
38-21 may pay the entire cost of this counseling service. If not paid by
38-22 the municipality, the cost may be paid from the assets of the fund.
38-23 (b) The board of trustees shall appoint investment managers
38-24 for the fund by contracting for professional investment services
38-25 with one or more organizations, which may include a bank if it has
38-26 a trust department, that are in the business of managing
38-27 investments.
39-1 (c) To be eligible for appointment under Subsection (b) of
39-2 this section, an investment manager must be:
39-3 (1) registered under the federal Investment Advisors
39-4 Act of 1940 (15 U.S.C. 801b-1 et seq.);
39-5 (2) a bank as defined by that Act; or
39-6 (3) an insurance company qualified to perform
39-7 investment services under the laws of more than one state.
39-8 (d) In a contract made under Subsection (b) of this section,
39-9 the board shall specify any policies, requirements, or
39-10 restrictions, including criteria for determining the quality of
39-11 investments and for the use of standard rating services, that the
39-12 board adopts for investments of the fund.
39-13 (e) The municipality may pay all or part of the cost of
39-14 professional investment management services under a contract under
39-15 Subsection (b) of this section. Any cost not paid directly by the
39-16 municipality is payable from assets of the fund.
39-17 (f) The board of trustees may at any time and shall at
39-18 frequent intervals monitor the investments made by any investment
39-19 manager for the fund. The board may contract for professional
39-20 evaluation services to fulfill this requirement.
39-21 (g) The municipality may pay all or part of the cost of
39-22 professional evaluation services under Subsection (f) of this
39-23 section. Any cost not paid directly by the municipality is payable
39-24 from assets of the fund.
39-25 (h) The board may enter into an investment custody account
39-26 agreement designating a state or national bank or a trust company
39-27 as custodian for all assets allocated to or generated under the
40-1 investment management contract.
40-2 (i) Under the custody account agreement, the board of
40-3 trustees shall require the designated custodian to perform the
40-4 duties and assume the responsibilities for assets under the
40-5 contract for which the agreement is established.
40-6 (j) The municipality may pay all or part of the cost of
40-7 services under a custody account agreement under Subsection (h) of
40-8 this section. Any cost not paid directly by the municipality is
40-9 payable from assets of the fund.
40-10 (k) An investment manager other than a bank having a
40-11 contract with the fund under Subsection (b) of this section may not
40-12 be a custodian of any assets of the fund.
40-13 (l) When demands of the fund require, the board shall
40-14 withdraw from a custodian of fund assets money for use in paying
40-15 benefits to members and other beneficiaries of the fund and for
40-16 reasonable expenses of administering the fund, as approved by the
40-17 board.
40-18 Sec. 12.05. MEDICAL BOARD. The board of trustees may
40-19 designate a medical board composed of three persons. To be
40-20 eligible to serve as a member of the medical board, a physician
40-21 must be licensed to practice medicine in this state and be of good
40-22 standing in the medical profession. The board of trustees also may
40-23 designate persons who are not physicians to serve on the medical
40-24 board. The medical board shall:
40-25 (1) review all medical examinations and reports
40-26 required by this Act;
40-27 (2) investigate essential statements and certificates
41-1 made by or on behalf of a member of the fund in connection with an
41-2 application for disability retirement; and
41-3 (3) report in writing to the board of trustees its
41-4 conclusions and recommendations on all matters referred to it.
41-5 Sec. 12.06. RETIREMENT COUNSELING. The board of trustees
41-6 may pay for the cost of counseling for members of the fund
41-7 regarding retirement matters.
41-8 Sec. 12.07. AUDITS; EMPLOYMENT OF CERTIFIED PUBLIC
41-9 ACCOUNTANTS. The board of trustees shall employ a certified public
41-10 accountant or firm of certified public accountants to perform an
41-11 audit of the fund at least annually. The municipality may pay the
41-12 entire cost of an audit. If not paid by the municipality, the cost
41-13 may be paid from the assets of the fund.
41-14 Sec. 12.08. CIVIL ACTIONS FOR MONEY WRONGFULLY PAID OUT OR
41-15 OBTAINED. The board of trustees may recover by civil action from
41-16 any offending party or from the party's sureties, if any, any money
41-17 paid out or obtained from the fund through fraud,
41-18 misrepresentation, defalcation, theft, embezzlement, or
41-19 misapplication and may institute, conduct, and maintain the action
41-20 in the name of the board of trustees for the use and benefit of the
41-21 fund.
41-22 <Sec. 1. In this Act:>
41-23 <(1) "Board" or "board of trustees" means the board of
41-24 fire fighter's relief and retirement fund trustees.>
41-25 <(2) "Fire fighter" means a commissioned civil service
41-26 and Texas state-certified member of a regularly organized fire
41-27 department of an incorporated city.>
42-1 <(3) "Fund" or "pension fund" means the fire fighter's
42-2 relief and retirement fund.>
42-3 <Sec. 2. (a) A fire fighter's relief and retirement fund is
42-4 created in all incorporated cities having a population of not less
42-5 than 450,000 nor more than 500,000, according to the last preceding
42-6 federal census, and having a fully paid fire department.>
42-7 <(b) The mayor of the city, the city treasurer, or if no
42-8 treasurer, then the city secretary, city clerk, or other person or
42-9 officer as by law, charter provision, or ordinance, performs the
42-10 duty of city treasurer, and three members of the regularly
42-11 organized active fire department, to be selected by vote of the
42-12 members of the fire department in the manner provided in this Act,
42-13 shall be and are constituted the "Board of Fire Fighter's Relief
42-14 and Retirement Fund Trustees" to receive, handle and control,
42-15 manage, and disburse the fund for the respective city or town. The
42-16 board shall have the power and authority to hear and determine all
42-17 applications for retirement, claims for disability, either partial
42-18 or total, and to designate the beneficiaries or persons entitled to
42-19 participate as provided by this Act. The board shall be known as
42-20 the "Board of Fire Fighter's Relief and Retirement Fund Trustees of
42-21 ______, Texas." The mayor shall be the chairman and the city
42-22 treasurer shall be the secretary-treasurer of the board of trustees
42-23 respectively. The fire department of any city that comes within
42-24 the provisions of this Act shall elect by ballot three of its
42-25 members, one to serve for one year, one to serve for two years, and
42-26 one to serve for three years, or until their successors may be
42-27 elected as provided in this Act, as members of the board of
43-1 trustees and shall immediately certify the election to the
43-2 governing body of the city. Annually thereafter, during the period
43-3 after December 1 of one year and before the first Monday in January
43-4 of the following year, the board of trustees shall call an election
43-5 by the members of the fund to elect by ballot and certify one fire
43-6 fighter member of such board of trustees for a three-year term. A
43-7 newly elected board member takes office at the first board meeting
43-8 in January.>
43-9 <(c) The administrative cost of an election under this
43-10 section may be paid from the assets of the fund. Assets of the
43-11 fund may not be used to pay campaign expenses incurred by or for a
43-12 member. Administrative office supplies and equipment belonging to
43-13 the fund may not be used to assist any candidate or person seeking
43-14 to assist a candidate for a position on the board of trustees.>
43-15 <(d) The board of trustees shall elect annually from among
43-16 their number a vice-chairman who shall act as chairman in the
43-17 absence or disability of the mayor-chairman. The board of trustees
43-18 shall hold regular monthly meetings at a time and place as it may
43-19 by resolution designate and may hold special meetings on call of
43-20 the chairman as he may deem necessary; shall keep accurate minutes
43-21 of its meetings and records of its proceedings; shall keep separate
43-22 from all other city funds all money for the use and benefit of the
43-23 fire fighter's relief and retirement fund; shall keep a record of
43-24 all claims, receipts, and disbursements in a book or books to be
43-25 furnished by the city for the purpose; shall make disbursements
43-26 from the fund only on regular voucher signed by the treasurer and
43-27 countersigned by the chairman or vice-chairman and at least one
44-1 other member of the board of trustees. The city treasurer, as the
44-2 treasurer of the board of trustees, shall be the custodian of the
44-3 fire fighter's relief and retirement fund for the city, except for
44-4 funds deposited in an investment custody account pursuant to an
44-5 investment custodial agreement described by Section 18(h) of this
44-6 Act, under penalty of his official bond and oath of office.>
44-7 <(e) No member of the board of trustees may receive
44-8 compensation for service on the board of trustees.>
44-9 <(f) The board of fire fighter's relief and retirement fund
44-10 trustees of each such city or town in this state shall annually and
44-11 not later than the 31st day of January of each year after this Act
44-12 takes effect, make and file with the city treasurer a detailed and
44-13 itemized report of all receipts and disbursements with respect to
44-14 the fund, together with a statement of their administration, and
44-15 shall make and file other reports and statements or furnish further
44-16 information as from time to time may be required or requested by
44-17 the city treasurer.>
44-18 <(g) The board of trustees shall have the power and
44-19 authority to compel witnesses to attend and testify before it with
44-20 respect to all matters connected with the operation of this Act in
44-21 the same manner as is or may be provided for the taking of
44-22 testimony before notaries public, and its chairman shall have the
44-23 power and authority to administer oaths to witnesses.>
44-24 <(h) A majority of all members shall constitute a quorum to
44-25 transact business, and any order of the board of trustees shall be
44-26 made by vote to be recorded in the minutes of its proceedings.>
44-27 <(i) If a vacancy occurs in the membership of the board of
45-1 trustees by reason of the death, resignation, removal, or
45-2 disability of an incumbent, the vacancy shall be filled in the
45-3 manner provided in this Act for the selection of the member to be
45-4 so succeeded.>
45-5 <Sec. 3. (a)(1) Any fire fighter who has been duly
45-6 appointed and enrolled and who has performed service in any rank,
45-7 as a fully paid fire fighter, in one or more fire departments in
45-8 any city in this state covered by the provisions of this Act may
45-9 retire and be entitled to receive from the fire fighter's relief
45-10 and retirement fund of that city a monthly pension equal to 2 1/2
45-11 percent of the fire fighter's average monthly salary multiplied by
45-12 the number of the person's years of service and any fraction of a
45-13 year of service, if the fire fighter:>
45-14 <(A) has attained the age of 52 years and
45-15 completed at least 10 years of service; or>
45-16 <(B) has served actively for a period of at
45-17 least 27 years, regardless of age.>
45-18 <(2) The maximum permissible employer-derived annual
45-19 benefit is the lesser of $90,000 or 100 percent of the
45-20 participant's highest average annual compensation. Highest average
45-21 annual compensation is the average compensation for the three
45-22 consecutive calendar years of service with the department that
45-23 produces the highest average. If the annual benefit begins before
45-24 age 62, the maximum permissible annual benefit may not exceed the
45-25 lesser of the actuarial equivalent of a $90,000 annual benefit
45-26 beginning at age 62 or the participant's highest average annual
45-27 compensation. This actuarial adjustment may not reduce the $90,000
46-1 limitation below $75,000 if the benefit begins at or after age 55.
46-2 If the annual benefit begins before age 55, the maximum permissible
46-3 annual benefit may not exceed the greater of (1) the actuarial
46-4 equivalent of a $75,000 annual benefit beginning at age 55, (2) the
46-5 actuarial equivalent of a $90,000 annual benefit beginning at age
46-6 62, or (3) $50,000. To determine actuarial equivalence of a
46-7 benefit beginning before age 62, the interest rate assumption is
46-8 the rate adopted by the board of trustees in the proper
46-9 administration of the fund, but not less than five percent. If the
46-10 annual benefit begins after age 65, the benefit may not exceed the
46-11 lesser of the actuarial equivalent of a $90,000 annual benefit
46-12 beginning at age 65 or the participant's highest average annual
46-13 compensation. To determine actuarial equivalence of a benefit
46-14 beginning after age 65, the interest rate assumption is the rate
46-15 adopted by the board of trustees in the proper administration of
46-16 the fund, but not more than five percent.>
46-17 <(3) Both the $90,000 limitation and the $50,000
46-18 limitation will be automatically adjusted to new dollar limitation
46-19 amounts as determined by the commissioner of the Internal Revenue
46-20 Service for subsequent calendar years effective as of January 1 of
46-21 those years. A new limitation will apply to limitation years
46-22 ending within the calendar year of the date of the adjustments.>
46-23 <(4) The $50,000 limitation applies only to
46-24 participants whose service used in determining benefits under this
46-25 section includes at least 20 years of service as a full-time fire
46-26 fighter of the city.>
46-27 <(b) The factor of 2 1/2 percent may be changed from 2 1/2
47-1 percent, provided that:>
47-2 <(1) the change is first approved by the board's
47-3 actuary;>
47-4 <(2) the change is approved by the board of trustees;>
47-5 <(3) the change applies only to active full-time
47-6 firemen in the department at the time of the change and those who
47-7 enter the department after the change is effective; and>
47-8 <(4) a person's vested accrued benefit cannot be
47-9 decreased.>
47-10 <(c) The average monthly salary means the monthly average of
47-11 the fireman's total salary for the highest 36 months during his
47-12 period of service, excluding overtime pay, any temporary pay in
47-13 higher classifications, educational incentive pay, assignment pay,
47-14 Christmas Day bonus pay, and pay for automobile and clothing
47-15 allowances. If at the time of death or disability a fire fighter
47-16 has less than 36 months of service, his average salary will be
47-17 computed as if he had been employed for the previous 36 months.
47-18 For the period before his employment, the average salary will be
47-19 computed as if the fire fighter had held the same rank he held when
47-20 he became a member of the fund at the amount of salary for
47-21 retirement fund benefit and contribution purposes that he would
47-22 have received if he had been employed by the fire department during
47-23 that period.>
47-24 <(d) Any person who continues to serve actively beyond the
47-25 date he would normally retire shall continue to make contributions
47-26 to the fund and accrue pension credits to the date of actual
47-27 retirement.>
48-1 <(e) Benefits shall be payable on the first day of each
48-2 month commencing with the month following the date as of which the
48-3 member retired.>
48-4 <(f) Any person who has been appointed and enrolled and
48-5 either has attained the age of 50 years and served actively for a
48-6 period of at least 10 years, or has served at least 25 years,
48-7 regardless of age, in any rank, as a fully paid fire fighter, in
48-8 one or more regularly organized fire departments in any city
48-9 covered by this Act may retire and be entitled to receive from the
48-10 fire fighter's relief and retirement fund of that city a monthly
48-11 pension equal to the pension described under Section 3(a) of this
48-12 Act, reduced according to tables recommended by the board of
48-13 trustees' actuary and adopted by the board for early retirement.>
48-14 <Sec. 4. Any fireman and beneficiaries of a fireman who
48-15 retires or has retired or who receive benefits under Section 3, 6,
48-16 or 11 of this Act, shall be entitled to an annual cost-of-living
48-17 adjustment of his pension allowance and their benefits based on the
48-18 Consumer Price Index for All Urban Consumers as determined by the
48-19 United States Department of Labor. The adjustment must first be
48-20 approved by a majority of the members of the board of firemen's
48-21 relief and retirement fund trustees of the city and the board of
48-22 trustees' actuary. The adjusted pension allowance and adjusted
48-23 benefits shall never be less than the amount granted the fireman or
48-24 his beneficiaries on the date of his retirement or death without
48-25 regard to changes in the consumer price index. The adjusted
48-26 pension allowance or adjusted benefits may be increased by an
48-27 amount to be determined by a majority of the board of firemen's
49-1 relief and retirement fund trustees of the city and the board of
49-2 trustees' actuary.>
49-3 <Sec. 5. (a)(1) A fire fighter's normal retirement age is
49-4 the earliest age at which the fire fighter will be at least 52
49-5 years of age and will have completed at least 10 years of service
49-6 or the earliest age at which the fire fighter would have completed
49-7 at least 27 years of service had the fire fighter not terminated
49-8 employment.>
49-9 <(2) Any fire fighter who terminates employment after
49-10 having served for a period of at least 10 years in any fire
49-11 department covered by this Act and who has contributed to the fire
49-12 fighter's relief and retirement fund of the city for a period of at
49-13 least 10 years, shall be entitled to receive a pension allowance
49-14 beginning at the end of the month in which the fire fighter attains
49-15 a normal retirement age, provided that the following conditions are
49-16 met:>
49-17 <(A) on termination of employment, the fire
49-18 fighter shall leave his contributions in the fund, and shall not be
49-19 required to make any further contributions to the fund;>
49-20 <(B) the pension allowance shall be based on the
49-21 monthly average of the fire fighter's total salary for the highest
49-22 36 months during the fire fighter's service excluding overtime pay,
49-23 any temporary pay in higher classifications, educational incentive
49-24 pay, assignment pay, Christmas Day bonus pay, and pay for
49-25 automobile and clothing allowances; and>
49-26 <(C) the pension allowance shall be calculated
49-27 by the formula, as set out in Section 3(a) of this Act, in effect
50-1 at the time the fire fighter terminated his employment.>
50-2 <(b) In the event a fire fighter who terminates employment
50-3 with the fire department under this section dies either before age
50-4 52 or after attaining the age of 52 and beginning to receive
50-5 benefits under this section, the fire fighter's surviving spouse is
50-6 entitled to receive an immediate monthly benefit as described under
50-7 Section 11(c) of this Act, if the spouse was married to the fire
50-8 fighter:>
50-9 <(1) on the fire fighter's date of termination, if the
50-10 fire fighter's death occurred before age 52; or>
50-11 <(2) when the fire fighter attained the age of 52, if
50-12 the fire fighter's death occurred after attaining the age of 52.>
50-13 <(c) Any fireman qualifying for a pension allowance under
50-14 Subsection (a) of this section may, on or after termination of his
50-15 employment, elect to withdraw his contributions from the fund,
50-16 thereby forfeiting any rights he may have had in the fund.>
50-17 <(d) The provisions of this section shall not become
50-18 operable until a majority of the members of the board of firemen's
50-19 relief and retirement fund trustees of the city and an actuary so
50-20 approve.>
50-21 <Sec. 6. (a) If a person serving as an active fire fighter
50-22 duly enrolled in a fire department covered by this Act becomes
50-23 disabled for either physical or mental reasons before meeting the
50-24 requirements to qualify for a service retirement benefit described
50-25 by Section 3(a) of this Act, the board of trustees shall, on his
50-26 request, or without his request if it shall deem proper and for the
50-27 good of the department, retire the fire fighter from active service
51-1 and order that he be paid from the fire fighter's relief and
51-2 retirement fund of the city a monthly amount equal to his accrued
51-3 unreduced pension as determined under Section 3(a) of this Act. If
51-4 a fire fighter becomes disabled as described in this section, the
51-5 amount to be paid shall not be less than the amount computed under
51-6 Section 3(a) of this Act when 20 years of service is assumed. In
51-7 order for a fire fighter to receive these benefits for the first
51-8 2-1/2 years, the fire fighter must be unable to perform the duties
51-9 of the person's occupation as a fire fighter.>
51-10 <(b) In order to receive benefits under Subsection (a) of
51-11 this section after this 2-1/2 year period, the disabled person must
51-12 be unable to be gainfully employed. The board may require any
51-13 person receiving disability benefits provided for in this Act to
51-14 provide evidence of annual income. The evidence may be considered
51-15 in any determination of ability to be gainfully employed. The
51-16 board may, in its discretion, reduce or discontinue disability
51-17 payments to a person on the failure or refusal of the person to
51-18 provide such evidence as is directed by the board.>
51-19 <(c) If a person serving as an active fire fighter enrolled
51-20 in a regularly active fire department becomes totally and
51-21 permanently disabled from any cause for either physical or mental
51-22 reasons after meeting the requirements to qualify for a service
51-23 retirement benefit as described under Section 3(a) of this Act, the
51-24 person is eligible to receive a disability pension under Subsection
51-25 (a) of this section. In this Act, a total disability is a
51-26 disability caused by illness or bodily injury that makes a person
51-27 unable to work for pay or profit or to engage in any business or
52-1 occupation for which the person is suited by education, training,
52-2 or experience. A total disability is permanent when it has
52-3 continued without break for at least nine months and is expected to
52-4 continue indefinitely.>
52-5 <(d) If, during the first 2-1/2 years, the fire fighter
52-6 recovers to the extent that the person is able to perform the
52-7 duties of the person's job as a fire fighter, the board of trustees
52-8 may terminate the fire fighter's disability benefit and restore the
52-9 person to active service at not less than the same rank the person
52-10 held at the time of retirement for disability.>
52-11 <(e) After the disabled fire fighter has received disability
52-12 benefits from the fund for at least 2-1/2 years, the board of
52-13 trustees may review the situation of the disabled fire fighter to
52-14 determine the status of the fire fighter's disability. If the fire
52-15 fighter has recovered to the extent that the fire fighter is able
52-16 to be gainfully employed, the board of trustees may, at its
52-17 discretion:>
52-18 <(1) continue to pay a full disability benefit to the
52-19 disabled fire fighter;>
52-20 <(2) elect to pay the disabled fire fighter a partial
52-21 disability benefit in an amount commensurate with the person's
52-22 disability as determined by the board;>
52-23 <(3) discontinue payment of a disability benefit to
52-24 the fire fighter; or>
52-25 <(4) discontinue payment of a disability benefit to
52-26 the fire fighter and restore the fire fighter to active service at
52-27 not less than the same rank the person held at the time of
53-1 retirement for disability.>
53-2 <(f) The board of trustees may reinstate any disability
53-3 benefit that has been previously terminated or reduced if the
53-4 disabled fire fighter's condition has worsened due to the same
53-5 cause for which the person was originally disabled.>
53-6 <(g) This section applies even if a fire fighter is disabled
53-7 while gainfully employed by someone other than the fire department
53-8 by which the person is also employed.>
53-9 <(h) No person may receive retirement benefits under this
53-10 section for any period during which that person received full
53-11 salary or compensation, including payment received while on sick
53-12 leave.>
53-13 <(i) A fire fighter may not be retired for disability except
53-14 as provided by this Act or receive any allowance for disability
53-15 from the fund until a certificate of disability or eligibility has
53-16 been signed by a physician of the member's choice and filed with
53-17 and approved by the board of trustees. The member shall pay any
53-18 costs imposed by a physician the member chooses to certify a
53-19 disability or eligibility. The board of trustees, at its cost, may
53-20 obtain additional medical opinions before approving or disapproving
53-21 a disability retirement.>
53-22 <(j) The board of trustees at any time may require any fire
53-23 fighter retired for disability under this Act to appear and undergo
53-24 a medical examination by the city physician or any other physician
53-25 appointed or selected by the board of trustees for that purpose.
53-26 The result of the examination and report by the physician shall be
53-27 considered by the board of trustees in determining whether the
54-1 disability retirement benefit will be continued, increased (if less
54-2 than the maximum provided by this Act), decreased, or discontinued
54-3 in accordance with this section. If any fire fighter receiving a
54-4 disability retirement benefit under this Act, after due notice from
54-5 the board of trustees to appear and be reexamined, fails to appear
54-6 or refuses to submit to reexamination, unless excused by the board,
54-7 the board may reduce or entirely discontinue the benefit.>
54-8 <(k) If a fire fighter who is covered by this Act has ever
54-9 experienced a reduction in the fire fighter's disability benefit on
54-10 the grounds that the fire fighter was receiving a workers'
54-11 compensation benefit at the same time the fire fighter was
54-12 receiving a disability benefit under this Act, the fund shall:>
54-13 <(1) pay the fire fighter, beginning with the fire
54-14 fighter's next monthly benefit payment, the full, unreduced
54-15 disability benefit that the fire fighter is entitled to under this
54-16 Act; and>
54-17 <(2) pay the fire fighter, as soon as it is reasonably
54-18 possible, a lump-sum amount equal to the difference between the
54-19 reduced disability payments the fire fighter has received and the
54-20 full, unreduced disability payments that the fire fighter would
54-21 have been entitled to receive during this period of time except for
54-22 the reduction in the amount of workers' compensation benefits.>
54-23 <(l) If a fire fighter's monthly disability benefit is
54-24 reduced or discontinued under this section, the fire fighter is
54-25 entitled to receive a pension allowance under Section 5(a)(2) of
54-26 this Act if the fire fighter meets the conditions of that
54-27 subdivision.>
55-1 <Sec. 10. (a) The city shall contribute and appropriate
55-2 each month to the fund an amount equal to 14 percent of the total
55-3 monthly payroll, excluding overtime pay, any temporary pay in
55-4 higher classifications of the fire department of the city,
55-5 educational incentive pay, assignment pay, Christmas Day bonus pay,
55-6 and pay for automobile and clothing allowances. Each full-time
55-7 fireman shall pay into the pension fund 13.70 percent of his total
55-8 monthly salary, excluding overtime pay, any temporary pay in higher
55-9 classifications, educational incentive pay, assignment pay,
55-10 Christmas Day bonus pay, and pay for automobile and clothing
55-11 allowances. The governing body of the city may authorize the city
55-12 to make an additional contribution to its fire fighter's relief and
55-13 retirement fund in whatever amount the governing body of the city
55-14 may fix. The firemen, by a majority vote in favor of an increase
55-15 in contributions above the 13.70 percent, shall increase each
55-16 member's contribution above 13.70 percent in whatever amount the
55-17 pension board recommends.>
55-18 <(b) Money deducted from salaries or compensation as
55-19 provided by this section and the payments and contributions
55-20 provided by this section shall become and form a part of the
55-21 firemen's relief and retirement fund of the city in which the
55-22 contributing firemen serve.>
55-23 <(c) Any person who enters service as a fire fighter in any
55-24 city that has a fire fighter's relief and retirement fund to which
55-25 the person is eligible for membership shall become a member of the
55-26 fund as a condition of that person's appointment, and shall, by
55-27 acceptance of the appointment, agree to make the contributions
56-1 required by this Act of fire fighter members of the fund and is
56-2 eligible to participate in the benefits of membership in the fund
56-3 as provided in this Act. However, no person is eligible to
56-4 membership in the fund who has reached the person's 30th birthday
56-5 at the time the person enters service as a fire fighter, and any
56-6 person who enters service as a fire fighter may be denied or
56-7 excused from membership in the fund if the board of trustees of the
56-8 fund determines that the person is not of sound health. The person
56-9 being considered for membership shall pay the cost of any physical
56-10 examination required by the board of trustees for this purpose. A
56-11 fire fighter who is a member of the fund shall continue to be a
56-12 member of the fund if the fire fighter is appointed to the rank of
56-13 chief or the rank immediately below chief.>
56-14 <(d) Each person who is an active member of a firemen's
56-15 relief and retirement fund previously organized and existing under
56-16 the laws of this state at the effective date of this amendment
56-17 shall continue as a member of the fund, and he shall retain and be
56-18 allowed credit for all service to which he was entitled in the fund
56-19 of which he was a member immediately prior to the effective date of
56-20 this amendment.>
56-21 <(e)(1) The severance benefit of a fire fighter who
56-22 terminates the fire fighter's employment before eligibility for
56-23 retirement shall be an amount equal to the amount of the fire
56-24 fighter's monthly contributions, with interest, made while a
56-25 participating member of the fire fighter's relief and retirement
56-26 fund, in excess of the amount of benefits that the member
56-27 previously received from the fund. If the member's employment is
57-1 terminated by death before retirement and the member leaves no
57-2 surviving beneficiary entitled to pension benefits, the member's
57-3 estate shall receive the amount of the member's contributions, with
57-4 interest, in excess of the amount of benefits that the member
57-5 previously received from the fund. In each instance in which a
57-6 member's contributions are to be paid to a fire fighter or a fire
57-7 fighter's estate or surviving relative, the payment will include
57-8 accumulated interest computed as provided by this section.>
57-9 <(2) On December 31, 1993, the fund shall credit
57-10 interest to the account of each fire fighter who had contributions
57-11 on deposit with the fund on January 1, 1993, and has not retired,
57-12 died, or withdrawn those contributions. The amount of interest
57-13 credited on December 31, 1993, will be computed by multiplying five
57-14 percent by an amount equal to one-half of the member's
57-15 contributions on deposit on January 1, 1993, and then multiplying
57-16 that product by the number of whole calendar years that the fire
57-17 fighter has been a member of the fund on December 31, 1993.>
57-18 <(3) Beginning December 31, 1994, the fund shall
57-19 credit interest on December 31 of each year to the account of each
57-20 fire fighter in an amount equal to five percent of the accumulated
57-21 contributions, including previously credited interest, on deposit
57-22 on January 1 of that year.>
57-23 <(4) The fund may not pay interest on a fire fighter's
57-24 contributions for part of a year or for any period that is more
57-25 than five calendar years after the date of termination of
57-26 employment.>
57-27 <(f) These provisions apply to all active full-time members
58-1 of the fire department and to those persons who shall become
58-2 members of the fire department at any time in the future.>
58-3 <(g) When, in the opinion of the board of trustees, there is
58-4 on hand in the fire fighter's relief and retirement fund of any
58-5 city under this Act a surplus over and above a reasonable and safe
58-6 amount to take care of the current demands on the fund, the
58-7 surplus, or so much of it as in the judgment of the board is deemed
58-8 safe, may be invested in:>
58-9 <(1) direct obligations of or obligations the
58-10 principal and interest of which are guaranteed or fully insured by
58-11 the United States or its agencies or instrumentalities;>
58-12 <(2) commercial paper rated as investment quality or
58-13 higher by a nationally recognized investment rating firm;>
58-14 <(3) short-term investment funds, mutual funds, or
58-15 their equivalent, that:>
58-16 <(A) are rated as investment quality or higher
58-17 by a nationally recognized investment rating firm; and>
58-18 <(B) do not exceed an average of 270 days to
58-19 maturity;>
58-20 <(4) fully collateralized or direct repurchase
58-21 agreements, including direct and reverse security repurchase
58-22 agreements and security lending agreements, that:>
58-23 <(A) have a defined termination date;>
58-24 <(B) are secured by obligations described by
58-25 Subdivision (1) of this subsection or by cash; and>
58-26 <(C) are pledged with a third party selected or
58-27 approved by a majority of the board of trustees;>
59-1 <(5) corporate bonds, including convertible bonds and
59-2 collateralized mortgage obligations, rated as investment quality or
59-3 higher by a nationally recognized investment rating firm;>
59-4 <(6) common and preferred stock of companies
59-5 incorporated in the United States and foreign stocks that are
59-6 designated in United States dollars and that are registered with
59-7 the Securities and Exchange Commission and listed on a United
59-8 States exchange or by the National Association of Securities
59-9 Dealers Automated Quotations;>
59-10 <(7) major foreign equity and fixed income market
59-11 investments; and>
59-12 <(8) convertible stocks and bonds rated as investment
59-13 quality or higher by a nationally recognized investment rating firm
59-14 or by the investment manager.>
59-15 <(h) An investment in corporate bonds that meets the
59-16 requirements of Subsection (g)(3) of this section at the time of
59-17 purchase is not required to be sold because the bonds' rating is
59-18 subsequently reduced to a rating that is not more than one major
59-19 classification lower than the requirements. Interest or dividends
59-20 on investments shall be deposited into the fund and become part of
59-21 it. The fund may not own more than five percent of the voting
59-22 stock of any one corporation. Under an investment measure at cost:>
59-23 <(1) total fixed-income investments should not
59-24 represent less than 50 percent nor more than 80 percent of the
59-25 value of the investment portfolio;>
59-26 <(2) total investments in common stocks should not
59-27 represent less than 20 percent nor more than 50 percent of the
60-1 value of the investment portfolio;>
60-2 <(3) total investments in common stocks of foreign
60-3 corporations may not represent more than five percent of the value
60-4 of the investment portfolio; and>
60-5 <(4) total investments in any one corporation may not
60-6 represent more than three percent of the value of the investment
60-7 portfolio.>
60-8 <(i) A person or financial institution is a fiduciary of a
60-9 fire fighter's relief and retirement fund established under this
60-10 Act to the extent that the person or the financial institution:>
60-11 <(1) exercises any discretionary authority or
60-12 discretionary control over management of the fire fighter's relief
60-13 and retirement fund or exercises any authority or control over
60-14 management or disposition of the assets of the fund;>
60-15 <(2) renders or has authority or responsibility to
60-16 render investment advice for a fee or other compensation, direct or
60-17 indirect, concerning any money or other property of the fund; or>
60-18 <(3) has any discretionary authority or discretionary
60-19 responsibility over the administration of the fund.>
60-20 <(j) A fiduciary of a fire fighter's relief and retirement
60-21 fund established under this Act may not cause the fund to engage in
60-22 a transaction if the fiduciary knows or should know that the
60-23 transaction constitutes a direct or indirect:>
60-24 <(1) sale, exchange, or lease of any property from the
60-25 fund to a party for less than adequate consideration or from a
60-26 party to the fund for more than adequate consideration;>
60-27 <(2) loan of money or other extension of credit from
61-1 the fund to a party without the receipt of adequate security and a
61-2 reasonable rate of interest or from a party to the fund with
61-3 provision of excessive security or an unreasonably high rate of
61-4 interest;>
61-5 <(3) furnishing of goods, services, or facilities from
61-6 the fund to a party for less than adequate consideration or from a
61-7 party to the fund for more than adequate consideration; or>
61-8 <(4) transfer to or use by or for the benefit of a
61-9 party of any assets of the fund for less than adequate
61-10 consideration.>
61-11 <(k) A fiduciary of a fire fighter's relief and retirement
61-12 fund established under this Act may not:>
61-13 <(1) deal with the assets of the fund in the
61-14 fiduciary's own interest or for the fiduciary's own account;>
61-15 <(2) in the fiduciary's individual or any other
61-16 capacity act in any transaction involving the fund on behalf of a
61-17 party whose interests are adverse to the interests of the fund or
61-18 the interest of its participants or beneficiaries; or>
61-19 <(3) receive any consideration for the fiduciary's own
61-20 personal account from any party dealing with the fund in connection
61-21 with a transaction involving the assets of the fund.>
61-22 <(l) The board of trustees may purchase insurance
61-23 indemnifying the members of the board of trustees against personal
61-24 loss or accountability from liability resulting from a member's act
61-25 or omission as a member of the board of trustees.>
61-26 <Sec. 11. (a) If a fire fighter dies before retirement, the
61-27 fire fighter's surviving spouse, if married to the member on the
62-1 member's date of death, shall be entitled to receive an immediate
62-2 monthly pension, the amount of which shall be 75 percent of the
62-3 member's accrued unreduced pension as determined under Section 3(a)
62-4 of this Act when 20 years of service is assumed.>
62-5 <(b) On the death of a member who retired under Section 3(a)
62-6 or (f) or Section 6(a) or (b) of this Act, the surviving spouse, if
62-7 married to the person on the person's date of retirement, is
62-8 entitled to receive an immediate monthly pension equal to 75
62-9 percent of the pension being paid to the member.>
62-10 <(c) On the death of a fire fighter who terminated
62-11 employment with the fire department after 10 or more years of
62-12 service before age 52, the surviving spouse is entitled to receive
62-13 an immediate monthly pension equal to 75 percent of the pension the
62-14 member was either receiving or entitled to receive at age 52, if:>
62-15 <(1) the spouse was married to the member on the date
62-16 of the member's termination of employment, if the member's death
62-17 occurred before age 52; or>
62-18 <(2) the spouse was married to the member when the
62-19 member attained the age of 52, if the member's death occurred after
62-20 the member attained the age of 52.>
62-21 <(d) A deceased member's unmarried children under the age of
62-22 22 are entitled to receive, if there is no surviving spouse, a
62-23 total amount of monthly pension equal to 75 percent of the monthly
62-24 benefit based on the fire fighter's average monthly salary at the
62-25 time of death and the number of years and any fraction of a year of
62-26 the fire fighter's service, assuming 20 years of service if service
62-27 is less than 20 years. Each dependent child is entitled to receive
63-1 an equal share of the total amount of monthly pension. If there is
63-2 a surviving spouse, each deceased member's unmarried child under
63-3 the age of 22 is entitled to receive 15 percent of the monthly
63-4 benefit based on the fire fighter's average monthly salary at the
63-5 time of death and the number of years and any fraction of a year of
63-6 the fire fighter's service, assuming 20 years of service if service
63-7 is less than 20 years. The total amount of benefits being paid to
63-8 the children if there is a surviving spouse may not exceed the
63-9 total amount of benefits payable to dependent children if there is
63-10 no surviving spouse. Payments to a child shall be made whether or
63-11 not a spouse survives and shall continue after the death of a
63-12 surviving spouse but shall cease on the earliest of the child's
63-13 death, marriage, or attainment of age 22.>
63-14 <(e) The spouse's monthly benefit is payable for life if the
63-15 fire fighter was either retired or eligible to retire under Section
63-16 3(a) or (f) or Section 6(c) of this Act at the date of the fire
63-17 fighter's termination of service with the fire department.
63-18 Otherwise, the spouse's monthly benefit ceases on the earlier of
63-19 the spouse's death or remarriage. After all payments cease, any
63-20 excess of the member's total contributions at the date of the
63-21 member's death over any retirement and death benefits shall be paid
63-22 to the member's estate.>
63-23 <(f) If a deceased or retired member leaves no surviving
63-24 spouse or children eligible to receive a benefit under this section
63-25 but is survived by one or more dependent parents, the dependent
63-26 parent, or one of the surviving parents designated by the board of
63-27 trustees, is entitled to receive a monthly pension equal to the
64-1 amount that would have been payable to a surviving spouse. If a
64-2 deceased member leaves no surviving spouse, children, or dependent
64-3 parent eligible to receive a benefit as provided in this section,
64-4 the member's total contributions, less any amount previously paid
64-5 to the member, shall be paid to the member's estate.>
64-6 <(h) Benefits provided in this section shall be payable on
64-7 the first day of each month commencing with the month following the
64-8 one in which the member's death occurs.>
64-9 <(i) The board of trustees shall determine all questions of
64-10 dependency, and their determination shall be final and conclusive
64-11 on all parties. All unmarried children under age 22, in the
64-12 absence of a determination to the contrary, are considered
64-13 dependent.>
64-14 <(j) On a majority vote of the board of trustees, benefits
64-15 to children under age 22 may be increased to an amount not to
64-16 exceed the maximum approved by an actuary.>
64-17 <(k) On a majority vote of the board of trustees, benefits
64-18 to a surviving spouse may be increased to an amount not to exceed
64-19 the maximum approved by an actuary.>
64-20 <(l) The provisions of this section shall apply even though
64-21 the death was caused while the member was gainfully employed by
64-22 someone other than the respective fire department for which he was
64-23 employed.>
64-24 <Sec. 12. No portion of a firemen's relief and retirement
64-25 fund may, either before or after its order of disbursement by the
64-26 board of trustees to a retired or disabled fireman or the surviving
64-27 spouse, the guardian of any minor child or children, or the
65-1 dependent parent of any deceased, retired, or disabled fireman, be
65-2 ever held, seized, taken, subjected to, or detained, or levied on
65-3 by virtue of any execution, attachment, garnishment, injunction, or
65-4 other writ, order, or decree, or any process, or proceedings
65-5 whatsoever issued out of or by any court of this state for the
65-6 payment or satisfaction, in whole or in part, of any debt, damage,
65-7 claim, demand, or judgment against such fireman or the fireman's
65-8 surviving spouse, the guardian of the fireman's minor child or
65-9 children, the fireman's dependent father or mother, nor shall said
65-10 fund or any claim thereto be directly or indirectly assigned or
65-11 transferred, and any attempt to transfer or assign the same shall
65-12 be void. The fund shall be sacredly held, kept, and disbursed for
65-13 the purposes provided by this Act and for no other purpose
65-14 whatever.>
65-15 <Sec. 13. No firemen's relief and retirement fund for fully
65-16 paid firemen may ever be integrated with benefits payable under the
65-17 federal Social Security Act, and benefits which might be available
65-18 to a fireman under the federal Social Security Act may never be
65-19 taken into account in a city where firemen are eligible to enroll
65-20 for or receive retirement benefits under the Social Security Act
65-21 when determining the amount of benefits which a fireman may receive
65-22 from a firemen's relief and retirement fund for fully paid firemen.>
65-23 <Sec. 16. (a) If a fire fighter is absent from service with
65-24 the fire department for less than five years because of military
65-25 service and returns to service with the fire department not later
65-26 than the 180th day after the date of discharge or release from
65-27 military service, the fire fighter will receive service credit for
66-1 both the fire fighter's previous period of service with the fire
66-2 department and the period of military service, if the fire fighter
66-3 has left the fire fighter's contributions in the fund.>
66-4 <(b) If a fire fighter is absent from service with the fire
66-5 department for less than five years for reasons other than military
66-6 service and returns to service with the fire department, the fire
66-7 fighter will receive service credit for the fire fighter's previous
66-8 period of service with the fire department if the fire fighter has
66-9 left the fire fighter's contributions in the fund. Credit may not
66-10 be given for the period the fire fighter is absent from service as
66-11 described by this subsection.>
66-12 <(c) If a fire fighter who has less than 10 years of service
66-13 credit in the fund is absent from service with the fire department
66-14 for at least five years for any reason, the fund will refund the
66-15 fire fighter's accumulated contributions and the fire fighter will
66-16 forfeit the fire fighter's service credit with the fund. If, on
66-17 the expiration of two years after the five-year period of absence,
66-18 the fund is unable to refund the fire fighter's accumulated
66-19 contributions, the fire fighter's accumulated contributions will
66-20 escheat to the fund. However, if the fire fighter who was formerly
66-21 a member of the fund later claims the fire fighter's accumulated
66-22 contributions, the fund shall refund this amount to the fire
66-23 fighter.>
66-24 <(d) A fire fighter may not be granted service credit for
66-25 time during which the person receives a disability pension from the
66-26 fund.>
66-27 <Sec. 17. The board of trustees shall retain legal counsel
67-1 for matters affecting the operation of the fund.>
67-2 <Sec. 18. (a) The board of trustees of a fully paid fire
67-3 department may engage and employ professional investment counselors
67-4 to advise and assist the board in the investment of the assets of
67-5 the fund. The investment counseling service must be provided by a
67-6 nationally known organization whose business functions include
67-7 rendering continuous investment advisory service to public pension
67-8 and retirement funds. The city may pay the entire cost of this
67-9 counseling service; if not paid by the city, the cost may be paid
67-10 from the assets of the fund.>
67-11 <(b) The board shall appoint investment managers for the
67-12 fund by contracting for professional investment services with one
67-13 or more organizations, which may include a bank if it has a trust
67-14 department, that are in the business of managing investments.>
67-15 <(c) To be eligible for appointment under Subsection (b) of
67-16 this section, an investment manager must be:>
67-17 <(1) registered under the federal Investment Advisors
67-18 Act of 1940;>
67-19 <(2) a bank as defined by that Act; or>
67-20 <(3) an insurance company qualified to perform
67-21 investment services under the laws of more than one state.>
67-22 <(d) In a contract made under Subsection (b) of this
67-23 section, the board shall specify any policies, requirements, or
67-24 restrictions, including criteria for determining the quality of
67-25 investments and for the use of standard rating services, that the
67-26 board adopts for investments of the fund.>
67-27 <(e) The city may pay all or part of the cost of
68-1 professional investment management services under a contract under
68-2 Subsection (b) of this section. Any cost not paid directly by the
68-3 city is payable from assets of the fund.>
68-4 <(f) The board may at any time and shall at frequent
68-5 intervals monitor the investments made by any investment manager
68-6 for the fund. The board may contract for professional evaluation
68-7 services to fulfill this requirement.>
68-8 <(g) The city may pay all or part of the cost of
68-9 professional evaluation services under Subsection (f) of this
68-10 section. Any cost not paid directly by the city is payable from
68-11 assets of the fund.>
68-12 <(h) The board may enter into an investment custody account
68-13 agreement designating a state or national bank as custodian for all
68-14 assets allocated to or generated under the investment management
68-15 contract.>
68-16 <(i) Under a custody account agreement, the board shall
68-17 require the designated bank to perform the duties and assume the
68-18 responsibilities for assets under the contract for which the
68-19 agreement is established.>
68-20 <(j) The city may pay all or part of the cost of bank
68-21 services under a custody account agreement under Subsection (h) of
68-22 this section. Any cost not paid directly by the city is payable
68-23 from assets of the fund.>
68-24 <(k) An investment manager other than a bank having a
68-25 contract with the fund under Subsection (b) of this section may not
68-26 be a custodian of any assets of the fund.>
68-27 <(l) When demands of the fund require, the board shall
69-1 withdraw from a custodian of fund assets money for use in paying
69-2 benefits to members and other beneficiaries of the fund and for
69-3 reasonable expenses of administering the fund, as approved by the
69-4 board.>
69-5 <Sec. 19. (a) The board of trustees of a fire fighter's
69-6 relief and retirement fund coming under the provisions of this Act
69-7 shall employ an actuary who may be the consultant and technical
69-8 advisor to the board regarding the operation of the fund and may
69-9 perform such duties as may be required by the board.>
69-10 <(b) The actuary shall make a valuation at least once every
69-11 two years of the assets and liabilities of the fund on the basis of
69-12 assumptions and methods that are reasonable in the aggregate,
69-13 considering the experience of the program and reasonable
69-14 expectations, and that, in combination, offer the actuary's best
69-15 estimate of anticipated experience under the program.>
69-16 <(c) On the basis of the valuation, the actuary shall make
69-17 recommendations to the board to ensure the actuarial soundness of
69-18 the fund. In making recommendations, the actuary shall define each
69-19 actuarial term and enumerate and explain each actuarial assumption
69-20 used in making the valuation. This information must be included
69-21 either in the actuarial study or in a separate report made
69-22 available as a public record.>
69-23 <(d) The board shall file with the State Pension Review
69-24 Board a copy of each actuarial study and each separate report made
69-25 as required by law.>
69-26 <(e) An actuary employed under this section must be a fellow
69-27 of the Society of Actuaries, a member of the American Academy of
70-1 Actuaries, or an enrolled actuary under the federal Employee
70-2 Retirement Income Security Act of 1974.>
70-3 <(f) The city may pay all or part of the cost of the
70-4 actuarial services. Any cost not paid directly by the city is
70-5 payable from assets of the fund.>
70-6 <Sec. 20. The board of trustees of any city created and
70-7 constituted under the provisions of this Act shall have the power
70-8 and authority to recover by civil action from any offending party
70-9 or from his bondsmen, if any, any money paid out or obtained from
70-10 said fund through fraud, misrepresentation, defalcation, theft,
70-11 embezzlement, or misapplication and may institute, conduct, and
70-12 maintain the action in the name of the board of trustees for the
70-13 use and benefit of the fund.>
70-14 <Sec. 21. The board of trustees of a fully paid fire
70-15 department shall engage and employ a certified public accountant or
70-16 firm of certified public accountants to perform an audit of the
70-17 fire fighter's relief and retirement fund at least annually. The
70-18 city may pay the entire cost of such audits; if not paid by the
70-19 city, the cost may be paid from the assets of the fund.>
70-20 <Sec. 22. If, for any reason, the fund or funds made
70-21 available for any purpose covered by this Act shall be insufficient
70-22 to pay in full any allowance or disability benefits, then all
70-23 granted allowances, or disability benefits shall be proratably
70-24 reduced for the time the deficiency exists.>
70-25 <Sec. 23. The city shall pick up the fire fighter
70-26 contributions to the fund required by Section 10(a) of this Act, or
70-27 such contributions as are authorized by vote as provided by Section
71-1 10(a), whichever are higher. Fire fighter contributions will be
71-2 picked up by a reduction in the monetary compensation of the
71-3 affected fire fighters. Contributions picked up shall be treated
71-4 as employer contributions in accordance with Section 414(h)(2),
71-5 federal Internal Revenue Code, for the purpose of determining tax
71-6 treatment of the amounts under the federal Internal Revenue Code.
71-7 These contributions are not includable in the gross income of a
71-8 fire fighter until the time that they are distributed or made
71-9 available to the fire fighter. Fire fighter contributions picked
71-10 up as provided by this section shall be deposited to the individual
71-11 account of each affected fire fighter and shall be treated as the
71-12 monthly contributions of each individual fire fighter for all other
71-13 purposes of this Act. This section takes effect on January 1,
71-14 1986, and remains in effect as long as the plan covering fire
71-15 fighters of the city is a qualified retirement plan under Section
71-16 401(a), federal Internal Revenue Code, and its related trust is tax
71-17 exempt under Section 501(a), federal Internal Revenue Code, or
71-18 until a time that the board by a majority vote elects to
71-19 discontinue the pickup of fire fighter contributions by the city.>
71-20 SECTION 2. This Act takes effect September 1, 1995.
71-21 SECTION 3. The importance of this legislation and the
71-22 crowded condition of the calendars in both houses create an
71-23 emergency and an imperative public necessity that the
71-24 constitutional rule requiring bills to be read on three several
71-25 days in each house be suspended, and this rule is hereby suspended.