1-1 By: Barrientos S.B. No. 774
1-2 (In the Senate - Filed February 27, 1995; February 28, 1995,
1-3 read first time and referred to Committee on Intergovernmental
1-4 Relations; March 16, 1995, reported favorably by the following
1-5 vote: Yeas 9, Nays 0; March 16, 1995, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to participation in, contributions to, and benefits and
1-9 administration of retirement systems for firefighters in certain
1-10 municipalities.
1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12 SECTION 1. Chapter 183, Acts of the 64th Legislature, 1975
1-13 (Article 6243e.1, Vernon's Texas Civil Statutes), is amended to
1-14 read as follows:
1-15 ARTICLE 1. GENERAL PROVISIONS
1-16 Sec. 1.01. APPLICABILITY. This Act applies only to a
1-17 municipality having a population of more than 450,000 and less than
1-18 500,000.
1-19 Sec. 1.02. DEFINITIONS. In this Act:
1-20 (1) "Accumulated contributions" means all sums of
1-21 money, including interest, in the individual account of a member or
1-22 former firefighter, as shown on the books and records of the fund.
1-23 (2) "Actuarial equivalent" means a benefit that, at
1-24 the time that it begins being paid, has the same present value as
1-25 the benefit it replaces, based on the recommendations of the
1-26 actuary.
1-27 (3) "Board of trustees" means the board of
1-28 firefighters relief and retirement fund trustees of the fund
1-29 existing pursuant to this Act.
1-30 (4) "Board's actuary" means the actuary employed under
1-31 Section 12.03 of this Act.
1-32 (5) "Compensation" means a firefighter's monthly
1-33 salary, excluding overtime pay, any temporary pay in higher
1-34 classifications, educational incentive pay, assignment pay,
1-35 Christmas Day bonus pay, and pay for automobile and clothing
1-36 allowances.
1-37 (6) "Dependent child" or "dependent children" means a
1-38 deceased member's unmarried children under the age of 22, other
1-39 than a child who has been determined by the board of trustees not
1-40 to have been dependent on the deceased member.
1-41 (7) "Fire department" means a regularly organized fire
1-42 department of a city to which this Act applies.
1-43 (8) "Firefighter" means a commissioned civil service
1-44 and Texas state-certified member of a fire department.
1-45 (9) "Fund" means the firefighters relief and
1-46 retirement fund existing pursuant to this Act.
1-47 (10) "Internal Revenue Code" means the Internal
1-48 Revenue Code of 1986.
1-49 (11) "Member" means any firefighter or retiree
1-50 included in a fund under this Act.
1-51 (12) "Retiree" means a person who has retired under
1-52 Article 5 or 6 of this Act and is receiving or is entitled to
1-53 receive an annuity from the fund.
1-54 Sec. 1.03. CONTINUED EXISTENCE. A firefighters relief and
1-55 retirement fund is continued in existence in each municipality to
1-56 which this Act applies. The name of the fund shall be the name of
1-57 the municipality, followed by the words "firefighters relief and
1-58 retirement fund."
1-59 Sec. 1.04. EXEMPTION FROM EXECUTION. All retirement annuity
1-60 payments, other benefit payments, and a member's accumulated
1-61 contributions are unassignable and are exempt from execution,
1-62 garnishment, attachment, and state and local taxation.
1-63 ARTICLE 2. ADMINISTRATION
1-64 Sec. 2.01. RESPONSIBILITY. Each fund established under this
1-65 Act is a trust. The board of trustees is responsible for the
1-66 administration of the fund.
1-67 Sec. 2.02. COMPOSITION OF BOARD. The board of trustees is
1-68 composed of:
2-1 (1) the mayor of the municipality;
2-2 (2) the city treasurer or, if there is no treasurer,
2-3 the person who by law, charter provision, or ordinance performs the
2-4 duty of city treasurer; and
2-5 (3) three members of the fund to be selected by vote
2-6 of the firefighters and retirees in the manner provided by this
2-7 Act.
2-8 Sec. 2.03. ELECTED MEMBERS OF BOARD. (a) The elected
2-9 members of the board of trustees shall be elected and hold office
2-10 in accordance with this section.
2-11 (b) Between November 1 of each year and the first Monday in
2-12 January of the following year, the board of trustees shall hold an
2-13 election to elect one member of the board of trustees.
2-14 (c) Each election is by secret written ballot on a date the
2-15 board of trustees determines. Only persons who have been nominated
2-16 may be listed on the written ballot. Nominations may be made in
2-17 person, by mail, or by telephone to the office of the fund and must
2-18 be received between October 1 and October 15.
2-19 (d) The board of trustees shall certify the results of each
2-20 election. A newly elected board member takes office at the first
2-21 board meeting in January.
2-22 (e) The elected members of the board of trustees hold office
2-23 for staggered terms of three years, with the term of one trustee
2-24 expiring each year. Elected members of the board of trustees shall
2-25 serve during the term for which they are elected and until their
2-26 successors are elected and have qualified, unless a vacancy results
2-27 because of death, resignation, or removal.
2-28 (f) A vacancy in the position of an elected member of the
2-29 board of trustees shall be filled for the remainder of that
2-30 person's term at an election to be held on a date selected by the
2-31 board of trustees that must be within 60 days after the date of the
2-32 event that caused the vacancy.
2-33 (g) The firefighter or retiree receiving the highest number
2-34 of votes cast in an election under this section is elected, except
2-35 that if no person receives a majority of the votes cast, a runoff
2-36 election shall be held between the two persons receiving the
2-37 highest number of votes. A runoff election is held on a date
2-38 determined by the board of trustees, and the person receiving the
2-39 higher number of votes in the runoff election is elected.
2-40 (h) The administrative expenses of an election under this
2-41 section may be paid from the assets of the fund. Assets of the
2-42 fund may not be used to pay campaign expenses incurred by or for a
2-43 member. Administrative office supplies and equipment belonging to
2-44 the fund may not be used to assist any candidate or person seeking
2-45 to assist a candidate for a position on the board of trustees.
2-46 Sec. 2.04. COMPENSATION. A member of the board of trustees
2-47 may not receive compensation for service on the board.
2-48 Sec. 2.05. OFFICERS. The mayor is the presiding officer and
2-49 the city treasurer is the secretary-treasurer of the board of
2-50 trustees. The board shall elect annually from its membership an
2-51 alternate presiding officer who shall preside in the absence or
2-52 disability of the mayor.
2-53 Sec. 2.06. QUORUM AND VOTING. Each member of the board of
2-54 trustees is entitled to one vote. A majority vote of members of
2-55 the board of trustees attending a meeting at which a quorum is
2-56 present is necessary for a decision of the board. A resolution or
2-57 order of the board of trustees must be made by a vote recorded in
2-58 the minutes of its proceedings.
2-59 Sec. 2.07. MEETINGS; MINUTES. The board of trustees shall
2-60 hold regular monthly meetings at a time and place that it
2-61 designates and may hold special meetings on the call of the
2-62 presiding officer or alternate presiding officer. The board of
2-63 trustees shall keep accurate minutes of its meetings and records of
2-64 its proceedings.
2-65 Sec. 2.08. ADMINISTRATION OF FUNDS. The board of trustees
2-66 shall:
2-67 (1) keep separate from all other municipal funds all
2-68 money and other assets it receives for the benefit of the fund;
2-69 (2) keep a record of all claims, receipts, and
2-70 disbursements and make disbursements only on vouchers signed by
3-1 such persons as the board of trustees designates by resolution; and
3-2 (3) publish annually a report containing a balance
3-3 sheet showing the financial and actuarial condition of the fund, a
3-4 statement showing receipts and disbursements during the year
3-5 covered by the report, and such additional matters as may be
3-6 determined appropriate by the board of trustees.
3-7 Sec. 2.09. DETERMINATION BY BOARD. The board of trustees is
3-8 authorized to hear and determine all matters regarding:
3-9 (1) eligibility of any person to participate in a fund
3-10 under this Act;
3-11 (2) eligibility of any person to receive a service,
3-12 disability, or survivor's benefit and the amount of that benefit;
3-13 and
3-14 (3) whether a child or a parent of a deceased member
3-15 was dependent on the member for financial support.
3-16 Sec. 2.10. TESTIMONY. The board of trustees may compel
3-17 witnesses to attend and testify before it regarding all matters
3-18 related to the fund in the same manner as is provided for taking of
3-19 testimony before notaries public, and its presiding officer and
3-20 alternate presiding officer have the authority to administer oaths
3-21 to witnesses.
3-22 Sec. 2.11. RULEMAKING. The board of trustees shall adopt
3-23 rules and perform reasonable activities it considers necessary or
3-24 desirable for the efficient administration of the fund.
3-25 ARTICLE 3. MEMBERSHIP
3-26 Sec. 3.01. GENERAL REQUIREMENT. A person who begins service
3-27 as a firefighter in a municipality to which this Act applies and
3-28 who is not ineligible for membership in the fund becomes a member
3-29 of the fund as a condition of that person's appointment.
3-30 Sec. 3.02. APPOINTMENT TO CHIEF. A firefighter who is a
3-31 member of the fund continues to be a member if the firefighter is
3-32 appointed to the rank of chief or the rank immediately below chief.
3-33 Sec. 3.03. TERMINATION OF MEMBERSHIP. A person ceases to be
3-34 a member of the fund on the earlier of the date of:
3-35 (1) death; or
3-36 (2) refund or escheat of the person's contributions
3-37 while absent from service.
3-38 ARTICLE 4. SERVICE CREDIT
3-39 Sec. 4.01. GENERAL PROVISION. One month of service credit
3-40 is earned in the fund for each month in which a member of the fund
3-41 makes a contribution required under this Act.
3-42 Sec. 4.02. MILITARY SERVICE. A member of the fund retains
3-43 all accumulated service credit and is allowed service credit for
3-44 each month during which the member leaves employment with the fire
3-45 department and performs active duty service in the armed forces or
3-46 the armed forces reserves of the United States or their
3-47 auxiliaries, except that:
3-48 (1) the military service credit may not be for more
3-49 than five years and the person must return to service with the fire
3-50 department not later than the 180th day after the date of discharge
3-51 or release from military service or from hospitalization continuing
3-52 after discharge for a period of not more than one year;
3-53 (2) the member must leave the member's contributions
3-54 in the fund during the period of absence; and
3-55 (3) the member must file a written application with
3-56 the fund for the military service credit, accompanied by
3-57 satisfactory proof of the member's military service.
3-58 Sec. 4.03. FORMER SERVICE. A member of the fund who is
3-59 absent from service with the fire department for reasons other than
3-60 military service retains all accumulated service credit for the
3-61 member's former service with the fire department, but receives no
3-62 credit for the period of absence, if:
3-63 (1) the length of the absence is less than five years;
3-64 and
3-65 (2) the member leaves the member's contributions in
3-66 the fund during the absence.
3-67 Sec. 4.04. OTHER ABSENCE. If a member of the fund who has
3-68 less than 10 years of service credit in the fund is absent from
3-69 service with the fire department for at least five years for any
3-70 reason other than as provided by Section 4.02 of this Act, the fund
4-1 shall refund the member's accumulated contributions and cancel the
4-2 person's credited service.
4-3 Sec. 4.05. PERIODS OF DISABILITY. A firefighter may not be
4-4 granted service credit for time during which the person receives a
4-5 disability benefit from the fund.
4-6 ARTICLE 5. SERVICE RETIREMENT BENEFITS
4-7 Sec. 5.01. NORMAL SERVICE RETIREMENT ELIGIBILITY. A member
4-8 is eligible to retire and receive a normal service retirement
4-9 annuity if the member:
4-10 (1) has attained the age of 50 years and has at least
4-11 10 years of service credit in the fund; or
4-12 (2) has at least 25 years of service credit,
4-13 regardless of age.
4-14 Sec. 5.02. CONTINUED SERVICE. A member who continues to
4-15 serve actively in the fire department after the date the member
4-16 becomes eligible to retire shall continue to make contributions to
4-17 the fund and accrue service credit until the date of actual
4-18 retirement.
4-19 Sec. 5.03. DETERMINATION OF AVERAGE MONTHLY SALARY. A
4-20 member's average monthly salary is computed as the average of the
4-21 member's compensation for the 36 months of highest compensation
4-22 during the member's credited service. If a person has less than 36
4-23 months of credited service, the average monthly salary is computed,
4-24 as if the member had been employed by the fire department for 36
4-25 months, by attributing to a period that is immediately before the
4-26 member's employment and that is equal to the difference between the
4-27 number of months the member has been employed by the fire
4-28 department and 36 months of compensation the member would have
4-29 received at the rank the member held when the person became a
4-30 member.
4-31 Sec. 5.04. NORMAL SERVICE RETIREMENT BENEFIT. (a) The
4-32 service retirement annuity of a person who retires under Section
4-33 5.01 of this Act on or after January 1, 1995, is a monthly payment
4-34 that is equal to three percent of the member's average monthly
4-35 compensation multiplied by the member's number of years of service
4-36 credit and any fraction of a year of service credit.
4-37 (b) The three percent factor used in this section may be
4-38 changed to some other percent if the change:
4-39 (1) is first approved by the board's actuary;
4-40 (2) is approved by the board of trustees;
4-41 (3) applies only to firefighters who are employed on
4-42 an active, full-time basis in the fire department at the time of
4-43 the change and those who begin service with the fire department
4-44 after the change becomes effective; and
4-45 (4) does not reduce a member's benefit for service
4-46 credit accumulated before the date of the change.
4-47 (c) The service retirement annuity of a person who retired
4-48 before January 1, 1995, is a monthly payment based on the benefit
4-49 formula in effect at the time of the person's retirement, together
4-50 with any increases for retirees approved by the board of trustees
4-51 after the person's retirement.
4-52 Sec. 5.05. EARLY RETIREMENT. (a) A member is eligible to
4-53 retire and receive a reduced service retirement annuity if the
4-54 member:
4-55 (1) has attained the age of 48 years and has at least
4-56 10 years of service credit in the fund; or
4-57 (2) has at least 23 years of service credit,
4-58 regardless of age.
4-59 (b) The retirement annuity of a person who retires under
4-60 this section is a monthly payment equal to the payment described by
4-61 Section 5.04 of this Act, reduced according to tables recommended
4-62 by the board's actuary and adopted by the board of trustees for
4-63 early retirement.
4-64 Sec. 5.06. ELIGIBILITY AFTER 10 YEARS OF SERVICE. (a) A
4-65 member may terminate employment with the fire department and later
4-66 retire and receive a service retirement benefit if, at the time of
4-67 the member's retirement:
4-68 (1) the member has accumulated at least 10 years of
4-69 service credit in the fund and made required contributions to the
4-70 fund for at least 10 years;
5-1 (2) the member does not withdraw the member's
5-2 contributions from the fund at the time of or after the termination
5-3 of employment; and
5-4 (3) the member has either attained 50 years of age or
5-5 would have accumulated at least 25 years of service credit if the
5-6 member had not terminated employment with the fire department.
5-7 (b) The retirement benefit payable to a member on retirement
5-8 under this section is the service retirement benefit described by
5-9 Section 5.04 of this Act, computed on the basis of the formula in
5-10 effect at the time the member terminated employment with the fire
5-11 department.
5-12 Sec. 5.07. WITHDRAWAL OF CONTRIBUTIONS. A person who has
5-13 terminated employment with the fire department and left the
5-14 person's contributions with the fund under Section 5.06 of this Act
5-15 may at any time apply for and receive the person's accumulated
5-16 contributions under Section 9.06 of this Act, with the effect
5-17 provided by that section. If a person eligible for a refund of
5-18 contributions elects to have all or a portion of the accumulated
5-19 contributions paid directly to an eligible retirement plan and
5-20 specifies the eligible retirement plan to which the contributions
5-21 are to be paid on a form approved for that purpose by the fund, the
5-22 fund shall make the payment in the form of a direct
5-23 trustee-to-trustee transfer but is under no obligation to determine
5-24 whether the other plan in fact is an eligible retirement plan for
5-25 that purpose.
5-26 ARTICLE 6. DISABILITY RETIREMENT BENEFITS
5-27 Sec. 6.01. INITIAL ELIGIBILITY FOR DISABILITY RETIREMENT. A
5-28 firefighter is eligible to retire and receive a disability
5-29 retirement annuity if:
5-30 (1) application for retirement is made by the member
5-31 or the member's legal representative or if the board of trustees
5-32 determines that, although no application has been filed, retirement
5-33 is for the good of the fire department;
5-34 (2) the medical board certifies that the member is
5-35 unable to perform the duties of the member's occupation as a
5-36 firefighter and sends the member's application to the board of
5-37 trustees; and
5-38 (3) the board of trustees approves the disability
5-39 retirement.
5-40 Sec. 6.02. NO REQUIREMENT OF ON-THE-JOB INJURY. To qualify
5-41 for disability retirement, a person's disability does not have to
5-42 be incurred in connection with the person's performance of duties
5-43 as a firefighter and may be incurred while employed by some person
5-44 or entity other than the fire department.
5-45 Sec. 6.03. AMOUNT OF DISABILITY BENEFIT. Subject to
5-46 adjustment under Section 6.05 of this Act, the disability
5-47 retirement benefit payable to a member is the normal service
5-48 retirement benefit described by Section 5.04 of this Act, but not
5-49 less than the member would have received after 20 years of service
5-50 credit.
5-51 Sec. 6.04. TERMINATION DURING FIRST 2-1/2 YEARS. If, during
5-52 the first 2-1/2 years of disability retirement, a retiree recovers
5-53 to the extent that the person is able to perform the duties of the
5-54 person's job as a firefighter, the board of trustees may terminate
5-55 the retirement benefit and restore the person to active service at
5-56 not less than the same rank the person held at the time of
5-57 disability retirement.
5-58 Sec. 6.05. CONTINUATION AFTER FIRST 2-1/2 YEARS. After a
5-59 retiree has received disability retirement benefits from the fund
5-60 for at least 2-1/2 years, the board of trustees from time to time
5-61 may review the situation of the person to determine the status of
5-62 the disability. The board of trustees may ask the medical board
5-63 for its opinion of the status of the disability. If the board of
5-64 trustees determines that the person has recovered to the extent
5-65 that the person is able to be employed, the board of trustees may:
5-66 (1) continue to pay the full disability retirement
5-67 benefit;
5-68 (2) pay a reduced disability retirement benefit in an
5-69 amount commensurate with the person's disability as determined by
5-70 the board; or
6-1 (3) discontinue payment of a disability benefit.
6-2 Sec. 6.06. APPLICATION; PHYSICIAN'S STATEMENT; MEDICAL BOARD
6-3 ACTION. (a) An application for disability retirement must be
6-4 accompanied by a written statement, on a form approved by the board
6-5 of trustees, signed by a physician of the member's choice. The
6-6 member shall pay any costs of or fees for obtaining the physician's
6-7 statement and shall file the application and statement with the
6-8 fund. As soon as possible after the application is filed, the
6-9 medical board shall evaluate the medical and other pertinent
6-10 information concerning the member's application.
6-11 (b) The medical board may require any firefighter to obtain
6-12 additional medical opinions before issuing a certificate that the
6-13 member is unable, as a result of physical or mental disability, to
6-14 perform the duties of the member's occupation as a firefighter.
6-15 The fund shall pay any costs or fees of examination by a person
6-16 other than the member's own physician.
6-17 (c) A certificate from the medical board may include a
6-18 finding by that board that the disability is likely to be temporary
6-19 or is likely to be total and permanent.
6-20 (d) The board of trustees at any time may require a person
6-21 receiving a disability retirement benefit under this Act to appear
6-22 and undergo a medical examination by a physician selected by the
6-23 board of trustees or the medical board for that purpose. The
6-24 result of the examination and report by that physician shall be
6-25 considered by the board of trustees in determining whether the
6-26 disability retirement benefit will be continued, increased, if less
6-27 than the maximum provided by this Act, decreased, or discontinued.
6-28 Sec. 6.07. EVIDENCE OF INCOME OF DISABILITY RETIREE. The
6-29 board of trustees may require a person receiving disability
6-30 retirement benefits under this Act to provide evidence of annual
6-31 income. The board of trustees may consider the evidence in any
6-32 determination of ability to be employed. The board of trustees may
6-33 reduce or discontinue disability retirement benefit payments to a
6-34 person who fails or refuses to produce information which the board
6-35 of trustees has required under this section.
6-36 Sec. 6.08. REINSTATEMENT; SERVICE RETIREMENT ELIGIBILITY.
6-37 (a) The board of trustees may reinstate any disability retirement
6-38 benefit that previously has been terminated or reduced if the
6-39 disabled firefighter's condition has worsened as a result of the
6-40 same cause for which the person was previously granted disability
6-41 retirement.
6-42 (b) If a person's disability retirement benefit is reduced
6-43 or discontinued and the person is or subsequently becomes eligible
6-44 for service retirement under other provisions of this Act, the
6-45 person is entitled to the service retirement benefit on meeting all
6-46 requirements for that benefit, reduced by the amount of any
6-47 disability retirement benefit that the person continues to receive
6-48 from the fund.
6-49 Sec. 6.09. NO BENEFITS WHILE RECEIVING SALARY. A person may
6-50 not receive disability retirement benefits for any period during
6-51 which the person receives full salary or compensation from the fire
6-52 department, including payments received while on sick leave.
6-53 ARTICLE 7. SURVIVOR'S BENEFITS
6-54 Sec. 7.01. SURVIVING SPOUSE OF FIREFIGHTER. If a firefighter
6-55 dies before retirement, the firefighter's surviving spouse is
6-56 entitled to receive an immediate monthly benefit from the fund of
6-57 75 percent of the service retirement benefit that the firefighter
6-58 would have received if the firefighter had retired on the date of
6-59 death, but not less than 75 percent of the monthly payment the
6-60 decedent would have received based on 20 years of service credit.
6-61 Sec. 7.02. SURVIVING SPOUSE OF RETIREE. On the death of a
6-62 retiree, the retiree's surviving spouse, if married to the retiree
6-63 at the time of the retiree's retirement, is entitled to receive an
6-64 immediate monthly benefit from the fund of 75 percent of the
6-65 retirement benefit that was being paid to the retiree.
6-66 Sec. 7.03. SURVIVING SPOUSE OF FORMER FIREFIGHTER. (a) An
6-67 immediate monthly benefit is payable to the surviving spouse of a
6-68 former firefighter who:
6-69 (1) before termination of employment with the fire
6-70 department had accumulated at least 10 years of service credit in
7-1 the fund and had made required contributions to the fund for a
7-2 period of at least 10 years; and
7-3 (2) did not withdraw the member's contributions from
7-4 the fund at the time of or after the termination of employment.
7-5 (b) If the former firefighter died before attaining 50 years
7-6 of age, the benefit is payable only if the spouse was married to
7-7 the former firefighter on the date of the former firefighter's
7-8 termination of employment with the fire department.
7-9 (c) If the former firefighter died after attaining 50 years
7-10 of age, the benefit is payable only if the spouse was married to
7-11 the former firefighter when the member attained 50 years of age.
7-12 (d) The amount of the benefit payable under this section is
7-13 75 percent of the retirement benefit the former firefighter either
7-14 was receiving or was entitled to receive at age 50.
7-15 Sec. 7.04. TERMINATION OF SPOUSE'S BENEFIT. If, at the time
7-16 of termination of employment with the fire department, the deceased
7-17 firefighter or retiree met the requirements for normal retirement
7-18 eligibility as provided by Section 5.01 of this Act, the benefit
7-19 payable to a surviving spouse is payable throughout the surviving
7-20 spouse's remaining lifetime. Otherwise, the benefit ceases on the
7-21 earlier of the spouse's death or marriage to any other person.
7-22 Sec. 7.05. SURVIVING CHILDREN'S BENEFIT. (a) On the death
7-23 of a member, if there is no surviving spouse, a benefit is payable
7-24 to the decedent's surviving dependent children, if any. The total
7-25 monthly benefit payable under this subsection is 75 percent of the
7-26 monthly payment that the decedent would have received under the
7-27 service retirement benefit described by Section 5.04 of this Act,
7-28 but not less than 75 percent of the monthly payment the decedent
7-29 would have received based on 20 years of service credit. If there
7-30 is more than one dependent child of the decedent, each dependent
7-31 child is entitled to receive an equal share of the total monthly
7-32 payment under this subsection.
7-33 (b) On the death of a member under this Act, if there is a
7-34 surviving spouse, a benefit is payable to each of the decedent's
7-35 surviving dependent children, if any. The monthly amount of the
7-36 benefit payable to each child is 15 percent of the monthly payment
7-37 that the decedent would have received under the service retirement
7-38 benefit described by Section 5.04 of this Act, but not less than 15
7-39 percent of the monthly payment the decedent would have received
7-40 based on 20 years of service credit. If the decedent left more
7-41 than five surviving dependent children, the monthly benefit payable
7-42 to each dependent child shall be reduced so that the total monthly
7-43 benefit payable under this subsection does not exceed the total
7-44 monthly benefit that would have been payable if the decedent had
7-45 left no surviving spouse.
7-46 (c) Payments by the fund to a dependent child under this
7-47 section shall cease on the earliest of the date of the child's
7-48 death, marriage, or attainment of age 22.
7-49 Sec. 7.06. PAYMENTS TO DEPENDENT PARENTS; PAYMENT TO ESTATE.
7-50 If a deceased member leaves no surviving spouse and no surviving
7-51 children entitled to receive a benefit under this Act but is
7-52 survived by one or more dependent parents, the dependent parent, or
7-53 one of the surviving parents designated by the board of trustees,
7-54 is entitled to receive a monthly benefit payment equal to the
7-55 monthly amount that would have been payable to a surviving spouse
7-56 of the deceased. All payments under this section cease on the
7-57 death of the surviving dependent parent.
7-58 Sec. 7.07. INCREASE IN SURVIVORS' BENEFITS. On the
7-59 affirmative vote of a majority of the members of the board of
7-60 trustees either or both of the following actions may be taken:
7-61 (1) benefits to dependent children may be increased to
7-62 an amount not to exceed the amount recommended by the board's
7-63 actuary; or
7-64 (2) benefits to surviving spouses may be increased to
7-65 an amount not to exceed the maximum approved by the actuary.
7-66 Sec. 7.08. PERSON CAUSING DEATH OF MEMBER OR BENEFICIARY.
7-67 (a) A benefit payable on the death of a member or beneficiary may
7-68 not be paid to a person convicted of causing that death, but
7-69 instead a benefit is payable as provided by Subsection (c) of this
7-70 section to a person who would be entitled to the benefit had the
8-1 convicted person predeceased the decedent. If no person would be
8-2 entitled to the benefit, the benefit is payable to the decedent's
8-3 estate.
8-4 (b) The fund is not required to pay a benefit under
8-5 Subsection (a) of this section unless it receives actual notice of
8-6 the conviction of the person who would have been entitled to the
8-7 benefits. However, the fund may delay payment of a benefit payable
8-8 on the death of a member pending the results of a criminal
8-9 investigation and of legal proceedings relating to the cause of
8-10 death.
8-11 (c) The benefit payable under Subsection (a) of this section
8-12 is a refund of the member's accumulated contributions and interest,
8-13 reduced by any annuity payments that may have been made as a result
8-14 of the member's retirement.
8-15 (d) For the purposes of this section, a person has been
8-16 convicted of causing the death of a member or beneficiary if the
8-17 person:
8-18 (1) has pleaded guilty or nolo contendere to or has
8-19 been found guilty by a court of an offense at the trial of which it
8-20 is established that the person's intentional, knowing, or reckless
8-21 act or omission resulted in the death of the person who was the
8-22 member or beneficiary, regardless of whether sentence is imposed or
8-23 probated; and
8-24 (2) has no appeal of the conviction pending and the
8-25 time provided for appeal has expired.
8-26 ARTICLE 8. DEFERRED RETIREMENT OPTION PLAN
8-27 Sec. 8.01. MEMBER REMAINING IN ACTIVE SERVICE. In lieu of
8-28 either leaving active service and beginning to receive a service
8-29 retirement annuity under Section 5.01 of this Act or remaining in
8-30 active service and continuing to accrue additional service credit
8-31 under Section 5.02 of this Act, a member who is eligible to receive
8-32 a normal service retirement benefit under Section 5.01 of this Act
8-33 may remain in active service, become a participant in the deferred
8-34 retirement option plan ("DROP") in accordance with Sections 8.02
8-35 and 8.03 of this Act, and defer the beginning of the person's
8-36 retirement annuity. Once an election to participate in the DROP
8-37 has been made, the election continues in effect as long as the
8-38 member remains in active service as a firefighter. When the member
8-39 leaves active service, the member may apply for a service
8-40 retirement annuity under Section 5.01 of this Act.
8-41 Sec. 8.02. ELECTION TO PARTICIPATE IN DROP. The election to
8-42 participate in the DROP shall be made in accordance with procedures
8-43 adopted by the board of trustees. The election may be made at any
8-44 time on or after the date the member becomes eligible for normal
8-45 service retirement under Section 5.01 of this Act and becomes
8-46 effective on the first day of the first month after the date of the
8-47 election. At the same time that a member makes an election to
8-48 participate in the DROP, the member must agree in writing to
8-49 terminate service with the fire department on a date not later than
8-50 the second anniversary of the effective date of the election under
8-51 this section. An agreement to terminate service is binding on the
8-52 member and the fire department, except that the member may
8-53 terminate active service at any time before the date selected. An
8-54 election to participate in the DROP has no effect on either the
8-55 municipality's or the member's contributions under Section 10.01 of
8-56 this Act.
8-57 Sec. 8.03. CREDITS TO MEMBER'S DROP ACCOUNT. Each month
8-58 after a member makes an election to participate in the DROP and
8-59 until the member's retirement, the board of trustees shall cause an
8-60 amount equal to the retirement annuity that the member would have
8-61 received under Section 5.04 of this Act for that month if the
8-62 member had left active service and been granted a retirement
8-63 annuity on the effective date of the election under Section 8.02 of
8-64 this Act to be credited to a separate DROP account maintained
8-65 within the fund for the benefit of the member. The member's
8-66 contributions under Section 10.01(d) of this Act made after the
8-67 effective date of the election to participate in the DROP shall
8-68 also be credited to the member's DROP account. Amounts held in a
8-69 member's DROP account shall be credited at the end of each calendar
8-70 month with interest at a rate equal to one-twelfth of five percent
9-1 until the member's retirement.
9-2 Sec. 8.04. AMOUNT OF CREDITS TO MEMBER'S DROP ACCOUNT. The
9-3 amount credited monthly to the member's DROP account:
9-4 (1) may not be increased as a result of any increase
9-5 in the formula used in computing service retirement benefits under
9-6 Section 5.04 of this Act that occurs after the effective date of
9-7 the member's election to participate in the DROP;
9-8 (2) shall be increased by any annual cost-of-living
9-9 adjustments under Section 9.04 of this Act that occur between the
9-10 effective date of the member's election to participate in the DROP
9-11 and the effective date of the member's retirement but only as to
9-12 amounts credited to the member's DROP account after a
9-13 cost-of-living adjustment; and
9-14 (3) is subject to the limitations prescribed by
9-15 Section 9.03 of this Act.
9-16 Sec. 8.05. DISTRIBUTIONS FROM MEMBER'S DROP ACCOUNT.
9-17 (a) On leaving active service as a firefighter and beginning to
9-18 receive a retirement annuity, a member who participates in the DROP
9-19 shall begin to receive the amount credited to the person's DROP
9-20 account under either of the following methods of distribution
9-21 selected by the member:
9-22 (1) a single-payment distribution made at a time
9-23 selected by the member but not later than April 1 of the year after
9-24 the member attains 70-1/2 years of age; or
9-25 (2) in not more than four payments, which may be equal
9-26 or unequal as the member may determine, all of which must occur not
9-27 later than April 1 of the year after the member attains 70-1/2
9-28 years of age.
9-29 (b) The DROP account balance of a member shall be credited
9-30 at the end of each calendar month with interest at a rate equal to
9-31 one-twelfth of five percent.
9-32 (c) A member may not receive a distribution from the
9-33 member's DROP account before termination of active service as a
9-34 firefighter. A member shall notify the fund in writing, on a form
9-35 that the board of trustees may prescribe, at least 30 days before
9-36 each distribution made under this section.
9-37 Sec. 8.06. ESTABLISHMENT OF DROP ACCOUNT AT RETIREMENT. In
9-38 lieu of electing to participate in the DROP before actual
9-39 retirement, a member who is eligible for normal service retirement
9-40 may elect to terminate active service as a firefighter and
9-41 establish a DROP account under this section. If a member so
9-42 elects:
9-43 (1) the board of trustees shall cause to be credited
9-44 to a DROP account maintained within the fund for the benefit of
9-45 that person an amount equal to the credits that the member's DROP
9-46 account would have received, including interest, if the member had
9-47 established the DROP account after becoming eligible for normal
9-48 service retirement, but not more than two years before the
9-49 effective date of the person's retirement;
9-50 (2) the date used in computations under Subdivision
9-51 (1) of this section as if the member had established the DROP
9-52 account on that date is the effective date of the member's election
9-53 to participate in the DROP;
9-54 (3) the member will receive payments from the member's
9-55 DROP account as the member may select under Section 8.05 of this
9-56 Act; and
9-57 (4) the member's DROP account shall be credited with
9-58 interest as provided by Section 8.05 of this Act.
9-59 Sec. 8.07. PAYMENTS FROM DROP ACCOUNT AT MEMBER'S DEATH.
9-60 (a) The provisions of Article 7 relating to death benefits of
9-61 qualified survivors do not apply to amounts credited to a member's
9-62 DROP account. Instead, a member who participates in the DROP may
9-63 designate a beneficiary to receive any balance in the member's DROP
9-64 account at the member's death. The beneficiary designation must be
9-65 made on a form prescribed by the board of trustees and filed with
9-66 the fund before the member's death. If the member is married at
9-67 the time of the designation, designation of a beneficiary other
9-68 than the member's spouse is valid only if the spouse consents to
9-69 the designation in writing on the same form that is used to
9-70 designate the beneficiary. Distributions from a member's DROP
10-1 account after the death of the member shall be made as provided by
10-2 this section.
10-3 (b) If a member who participates in the DROP dies while in
10-4 active service or if the member has not filed an election with the
10-5 board of trustees as described by Subsection (c) of this section,
10-6 distributions to the designated beneficiary will begin not more
10-7 than one year after the date of the member's death and shall be
10-8 made either as a single-payment distribution of the member's DROP
10-9 account balance or in not more than four equal annual installments
10-10 over a period of not more than 37 months.
10-11 (c) If a member who participates in the DROP dies after
10-12 terminating active service and has filed an election with the board
10-13 of trustees to be paid in not more than four equal annual
10-14 installments over a period of not more than 37 months, the balance
10-15 of the member's DROP account shall be distributed to the designated
10-16 beneficiary in the manner that the member selected.
10-17 (d) If the member has not designated a beneficiary to
10-18 receive distributions from the member's DROP account or if the
10-19 person so designated does not survive the member by at least 72
10-20 hours, the member's DROP account shall be distributed in a
10-21 single-sum payment as soon as administratively possible after the
10-22 member's death to any surviving spouse who survives the member by
10-23 at least 72 hours, if any, or to the member's estate if there is no
10-24 surviving spouse.
10-25 Sec. 8.08. SUBSEQUENT DISABILITY OF DROP PARTICIPANT. A
10-26 member who participates in the DROP becomes ineligible for any
10-27 disability benefits described by Article 6 of this Act. Instead,
10-28 if the board of trustees determines that the member would have been
10-29 eligible for disability retirement, the board of trustees shall
10-30 grant a normal service retirement annuity as described by Section
10-31 5.04 of this Act and shall pay the member both the service
10-32 retirement annuity and a distribution of the DROP account as
10-33 described by Section 8.05 of this Act.
10-34 Sec. 8.09. RETIREMENT BENEFIT PAYABLE TO DROP PARTICIPANT.
10-35 The retirement benefit payable under Article 5 or 6 of this Act to
10-36 a person who participates in the DROP:
10-37 (1) may not be increased as a result of any increase
10-38 in the formula used in computing service retirement benefits under
10-39 Section 5.04 of this Act that occurs after the effective date of
10-40 the member's election to participate in the DROP;
10-41 (2) may not be increased as a result of any increase
10-42 in the member's compensation that occurs after the effective date
10-43 of the member's election to participate in the DROP;
10-44 (3) shall be increased by any annual cost-of-living
10-45 adjustments under Section 9.04 of this Act that occur between the
10-46 effective date of the member's election to participate in the DROP
10-47 and the effective date of the member's retirement;
10-48 (4) may not be increased for additional service credit
10-49 after the effective date of the member's election to participate in
10-50 the DROP; and
10-51 (5) is subject to the limitations prescribed by
10-52 Section 9.03 of this Act.
10-53 Sec. 8.10. TERMINATION OR MODIFICATION OF DROP BY FUND. If
10-54 the board's actuary, not sooner than January 1, 2000, certifies to
10-55 the board that DROP participation is resulting in a significant
10-56 actuarial loss to the fund, the board of trustees may:
10-57 (1) reduce the interest paid on DROP accounts or take
10-58 other action that would reduce the future credits to DROP accounts,
10-59 but only for all DROP accounts that are established after the
10-60 effective date of the action by the board of trustees; or
10-61 (2) terminate the deferred retirement option plan for
10-62 all members who have not at that time established a DROP account.
10-63 ARTICLE 9. MISCELLANEOUS PROVISIONS REGARDING BENEFITS
10-64 Sec. 9.01. TIME FOR PAYMENT TO RETIRED MEMBERS. Benefits to
10-65 a person who retires under this Act are payable on the first day of
10-66 each month beginning with the month following the month in which
10-67 the person retires.
10-68 Sec. 9.02. TIME FOR PAYMENT TO SURVIVORS; PAYMENT TO ESTATE.
10-69 Benefits to a surviving spouse, dependent child, or dependent
10-70 parent under this Act are payable on the first day of each month
11-1 beginning with the month following the month in which the death of
11-2 the member or former firefighter occurs. After all payments cease,
11-3 any amount by which the member's or former firefighter's total
11-4 accumulated contributions at the date of that person's death exceed
11-5 the amount of all retirement and death benefits paid by the fund as
11-6 a result of the person's participation in the fund is payable to
11-7 the estate of the member or former firefighter.
11-8 Sec. 9.03. LIMITATION ON PAYMENT OF BENEFITS. (a) The
11-9 amount of the payment of any benefit under this Act that would
11-10 exceed the limitations set forth in this section shall be reduced
11-11 in accordance with this section.
11-12 (b) In this section:
11-13 (1) "Compensation" has the meaning provided by Section
11-14 415 of the Internal Revenue Code and the regulations adopted under
11-15 that section, instead of the meaning provided by Section 1.02 of
11-16 this Act, but as to any person who begins participation on or after
11-17 December 31, 1995, "compensation" excludes any payments received in
11-18 excess of $150,000 in a calendar year, indexed pursuant to Section
11-19 401(a)(17) of the Internal Revenue Code.
11-20 (2) "Highest average annual compensation" means the
11-21 average compensation for the three consecutive calendar years of
11-22 service with the fire department that produces the highest average.
11-23 (c) An annual benefit payable by the fund may not exceed 100
11-24 percent of the member's highest average annual compensation.
11-25 (d) If payment of a benefit begins before a member attains
11-26 age 55, the annual benefit may not exceed the greater of:
11-27 (1) the actuarial equivalent of a $75,000 annual
11-28 benefit beginning at age 55;
11-29 (2) the actuarial equivalent of a $90,000 annual
11-30 benefit beginning at age 62; or
11-31 (3) $50,000.
11-32 (e) If a member does not have at least 15 years of service
11-33 credit as a firefighter with the fire department, the $50,000
11-34 limitation provided by Subsection (d) of this section is
11-35 inapplicable.
11-36 (f) If payment of a benefit begins when or after a member
11-37 attains age 55 but before the member attains age 62, the annual
11-38 benefit may not exceed the greater of:
11-39 (1) the actuarial equivalent of a $90,000 annual
11-40 benefit beginning at age 62; or
11-41 (2) $75,000.
11-42 (g) If payment of a benefit begins when or after a member
11-43 attains age 62 but before the member attains age 65, the annual
11-44 benefit may not exceed $90,000.
11-45 (h) If payment of a benefit begins when or after a member
11-46 attains age 65, the annual benefit may not exceed the actuarial
11-47 equivalent of a $90,000 annual benefit beginning at age 65.
11-48 (i) The $90,000 and $50,000 limitations provided by this
11-49 section are automatically adjusted to the amounts determined by the
11-50 secretary of the treasury in effect at the time of the member's
11-51 retirement.
11-52 (j) To determine the actuarial equivalent of a benefit under
11-53 this section, the interest rate assumption is the rate not to
11-54 exceed five percent that is adopted by the board of trustees in the
11-55 proper administration of the fund.
11-56 (k) A person's vested accrued benefit in effect on September
11-57 1, 1995, may not be reduced under this section.
11-58 Sec. 9.04. COST-OF-LIVING ADJUSTMENT. (a) A person
11-59 receiving a retirement or survivor's benefit under this Act is
11-60 entitled to an annual cost-of-living adjustment of that person's
11-61 benefit based on any increase in the Consumer Price Index for All
11-62 Urban Consumers as determined by the United States Department of
11-63 Labor since the last increase in benefits under this section.
11-64 (b) An adjustment may not be made under this section unless
11-65 the board's actuary has advised the board of trustees that the
11-66 adjustment would not impair the financial stability of the fund and
11-67 the adjustment has been approved by the affirmative vote of a
11-68 majority of the board of trustees.
11-69 (c) The amount of an adjustment under this section shall be
11-70 determined by the board of trustees. An adjustment of a benefit
12-1 under this section may not reduce any person's benefit to an amount
12-2 less than the person received when the benefit first was paid to
12-3 that person.
12-4 Sec. 9.05. NO INTEGRATION WITH SOCIAL SECURITY. A benefit
12-5 payable under this Act may not be integrated with benefits payable
12-6 under the federal Social Security Act, as amended (42 U.S.C.
12-7 Section 301 et seq.), and benefits payable under the Social
12-8 Security Act may not be taken into account when determining the
12-9 amount of benefits to which a person is entitled under this Act.
12-10 Sec. 9.06. WITHDRAWAL OF CONTRIBUTIONS. (a) A living
12-11 person who has terminated all employment with the fire department
12-12 and who has not retired may withdraw, on application, all of the
12-13 accumulated contributions credited to that person's individual
12-14 account with the fund in excess of the amount of benefits that the
12-15 person previously has received from the fund. On withdrawal, the
12-16 person's account will be closed and all service credit the person
12-17 has accumulated will be canceled.
12-18 (b) If a member dies before retirement and no person is
12-19 entitled to a survivor's benefit under this Act, the person's
12-20 estate may, after application, withdraw all of the accumulated
12-21 contributions credited to that person's individual account with the
12-22 fund in excess of the amount of benefits that the person previously
12-23 has received from the fund.
12-24 Sec. 9.07. ESCHEAT OF CONTRIBUTIONS. If an application for
12-25 withdrawal of contributions under Section 9.06 of this Act from or
12-26 on behalf of a person who has ceased to be an employee of the fire
12-27 department or the person's estate has not been received by the fund
12-28 before the seventh anniversary of the termination of the person's
12-29 employment with the fire department for a reason other than
12-30 retirement, the person's accumulated contributions shall escheat to
12-31 the fund. If the person or the person's estate later applies for
12-32 the contributions, the fund shall refund the contributions
12-33 regardless of the earlier escheatment.
12-34 Sec. 9.08. INSUFFICIENT FUNDS; PRORATED REDUCTION IN
12-35 BENEFITS. If for any reason the funds available for any purpose
12-36 covered by this Act become insufficient to pay in full any benefit
12-37 payable under this Act, all benefits being paid by the fund shall
12-38 be reduced pro rata for the time the deficiency exists.
12-39 Sec. 9.09. REDUCTION IN BENEFIT PAYMENTS ON REQUEST. If a
12-40 person receiving a benefit from the fund requests in writing that
12-41 the amount of the benefit be reduced to a specified monthly
12-42 amount, the fund will pay the lesser amount specified in the
12-43 request. If the person subsequently requests in writing that the
12-44 benefit be increased to any specified amount that does not exceed
12-45 the amount originally payable, the fund will pay the increased
12-46 amount specified. If a person receiving a benefit from the fund
12-47 requests in writing that payment of the benefit be discontinued,
12-48 the fund shall discontinue payment of the benefit. If the person
12-49 subsequently requests that payment of the benefit be resumed, the
12-50 fund shall resume payment of the benefit. Any amounts not paid by
12-51 the fund pursuant to a request under this section are forfeited to
12-52 the fund and are not recoverable by any person.
12-53 ARTICLE 10. COLLECTION OF CONTRIBUTIONS; INTEREST
12-54 Sec. 10.01. MUNICIPAL AND MEMBER CONTRIBUTIONS. (a) Each
12-55 month before October 1, 1994, each municipality in which a fire
12-56 department to which this Act applies is located shall appropriate
12-57 and contribute to the fund an amount equal to 14 percent, or a
12-58 higher percentage that the municipality authorizes, of the
12-59 compensation of all members during that month.
12-60 (b) Each calendar month after September 30, 1994, and before
12-61 October 1, 1995, each municipality in which a fire department to
12-62 which this Act applies is located shall appropriate and contribute
12-63 to the fund an amount equal to 16.05 percent of the compensation of
12-64 all members during that month.
12-65 (c) Each month after September 30, 1995, each municipality
12-66 in which a fire department to which this Act applies is located
12-67 shall appropriate and contribute to the fund an amount equal to
12-68 18.05 percent of the compensation of all members during that month.
12-69 (d) Each firefighter shall pay into the fund each month
12-70 13.70 percent of the firefighter's compensation for that month.
13-1 (e) The governing body of each municipality may authorize
13-2 the municipality to make an additional contribution to the fund in
13-3 whatever amount the governing body may determine. The members of
13-4 the fund, by a majority vote in favor of an increase in
13-5 contributions above 13.70 percent, may increase each firefighter's
13-6 contribution above 13.70 percent to any percentage recommended by a
13-7 majority vote of the board of trustees.
13-8 Sec. 10.02. PICKUP OF FIREFIGHTER CONTRIBUTIONS. A
13-9 municipality to which this Act applies shall pick up the
13-10 firefighter contributions to the fund that are required or
13-11 authorized pursuant to Section 10.01 of this Act, whichever is
13-12 higher. Firefighter contributions will be picked up by a reduction
13-13 in the monetary compensation of the firefighters. Contributions
13-14 picked up shall be treated as employer contributions in accordance
13-15 with Section 414(h)(2) of the Internal Revenue Code for the purpose
13-16 of determining tax treatment of the amounts under that code. These
13-17 contributions will be deposited to the credit of the individual
13-18 accounts of the firefighters in the fund and shall be treated as
13-19 the monthly contributions of the firefighters for all purposes of
13-20 this Act. These contributions are not includable in the gross
13-21 income of a firefighter until the time that they are distributed or
13-22 made available to the firefighter or survivors of the firefighter.
13-23 The board of trustees may at any time, by majority vote,
13-24 discontinue the pickup of firefighter contributions by the
13-25 municipality.
13-26 Sec. 10.03. CONTRIBUTIONS AND INCOME AS ASSETS OF FUND. All
13-27 contributions paid to the fund under Sections 10.01 and 10.02 of
13-28 this Act become a part of the assets of the fund. All interest and
13-29 dividends on investments of the assets of the fund shall be
13-30 deposited into the fund and are part of it.
13-31 Sec. 10.04. INTEREST ON INDIVIDUAL ACCOUNTS. The fund shall
13-32 credit interest on December 31 of each year to the account of each
13-33 firefighter, and of each former firefighter, who has not retired in
13-34 an amount equal to five percent of the accumulated contributions,
13-35 including previously credited interest, on deposit on January 1 of
13-36 that year. The fund may not pay interest on a firefighter's or
13-37 former firefighter's contributions for part of a year or for any
13-38 period that is more than five calendar years after the date of
13-39 termination of employment.
13-40 ARTICLE 11. INVESTMENT OF ASSETS
13-41 Sec. 11.01. PERMITTED INVESTMENTS. When the board of
13-42 trustees determines that there is in the fund a surplus exceeding
13-43 the reasonable, safe amount necessary to take care of the current
13-44 demands on the fund, the surplus, or so much of it as the board of
13-45 trustees considers prudent, may be invested in:
13-46 (1) direct obligations of or obligations the principal
13-47 and interest of which are guaranteed or fully insured by the United
13-48 States or its agencies or instrumentalities;
13-49 (2) commercial paper rated as investment quality or
13-50 higher by a nationally recognized investment rating firm;
13-51 (3) short-term investment funds, mutual funds, or
13-52 their equivalent, that:
13-53 (A) are rated as investment quality or higher by
13-54 a nationally recognized investment rating firm; and
13-55 (B) do not exceed an average of 270 days to
13-56 maturity;
13-57 (4) fully collateralized or direct repurchase
13-58 agreements, including direct and reverse security repurchase
13-59 agreements and security lending agreements that:
13-60 (A) have a defined termination date;
13-61 (B) are secured by obligations described by this
13-62 section or by cash; and
13-63 (C) are pledged with a third party selected or
13-64 approved by a majority vote of the board of trustees;
13-65 (5) corporate bonds, including convertible bonds and
13-66 collateralized mortgage obligations, rated as investment quality or
13-67 higher by a nationally recognized investment rating firm;
13-68 (6) common and preferred stocks of companies
13-69 incorporated in the United States and foreign stocks that are
13-70 designated in United States dollars and that are registered with
14-1 the Securities and Exchange Commission and listed on a United
14-2 States exchange or by the National Association of Securities
14-3 Dealers Automated Quotations;
14-4 (7) major foreign equity fixed income market
14-5 investments; and
14-6 (8) convertible stocks and bonds recognized as
14-7 investment quality or higher by a nationally recognized investment
14-8 rating firm or by the investment manager.
14-9 Sec. 11.02. REDUCTION IN RATING. An investment in corporate
14-10 bonds that meets the requirements of Section 11.01(5) of this Act
14-11 at the time of purchase is not required to be sold because the
14-12 bonds' rating is subsequently reduced to a rating that is not more
14-13 than one major classification lower than the requirements.
14-14 Sec. 11.03. LIMITATIONS ON INVESTMENTS. The fund may not
14-15 own more than five percent of the voting stock of any one
14-16 corporation. Under an investment measure at cost:
14-17 (1) total fixed-income investments should not
14-18 represent less than 50 percent nor more than 80 percent of the
14-19 value of the investment portfolio;
14-20 (2) total investments in common stocks should not
14-21 represent less than 20 percent nor more than 50 percent of the
14-22 value of the investment portfolio;
14-23 (3) total investments in common stocks of foreign
14-24 corporations may not represent more than five percent of the value
14-25 of the investment portfolio; and
14-26 (4) total investments in any one corporation may not
14-27 represent more than three percent of the value of the investment
14-28 portfolio.
14-29 Sec. 11.04. FIDUCIARIES. (a) A person or financial
14-30 institution is a fiduciary of the fund to the extent that the
14-31 person or the financial institution:
14-32 (1) exercises any discretionary authority or
14-33 discretionary control over management of the fund or exercises any
14-34 authority or control over management or disposition of the assets
14-35 of the fund;
14-36 (2) renders or has authority or responsibility to
14-37 render investment advice for a fee or other compensation, direct or
14-38 indirect, concerning any money or other property of the fund; or
14-39 (3) has any discretionary authority or discretionary
14-40 responsibility over the administration of the fund.
14-41 (b) A fiduciary of the fund may not cause the fund to engage
14-42 in a transaction if the fiduciary knows or should know that the
14-43 transaction constitutes a direct or indirect:
14-44 (1) sale, exchange, or lease of any property from the
14-45 fund to a party for less than adequate consideration or from a
14-46 party to the fund for more than adequate consideration;
14-47 (2) loan of money or other extension of credit from
14-48 the fund to a party without the receipt of adequate security and a
14-49 reasonable rate of interest or from a party to the fund with
14-50 provision of excessive security or an unreasonably high rate of
14-51 interest;
14-52 (3) furnishing of goods, services, or facilities from
14-53 the fund to a party for less than adequate consideration or from a
14-54 party to the fund for more than adequate consideration; or
14-55 (4) transfer to or use by or for the benefit of a
14-56 party of any assets of the fund for less than adequate
14-57 consideration.
14-58 (c) A fiduciary of the fund may not:
14-59 (1) deal with the assets of the fund in the
14-60 fiduciary's own interest or for the fiduciary's own account;
14-61 (2) in the fiduciary's individual or any other
14-62 capacity act in any transaction involving the fund on behalf of a
14-63 party whose interests are adverse to the interests of the fund or
14-64 the interests of its participants or beneficiaries; or
14-65 (3) receive any consideration for the fiduciary's own
14-66 personal account from any party dealing with the fund in connection
14-67 with a transaction involving the assets of the fund.
14-68 (d) The board of trustees may purchase insurance
14-69 indemnifying the members of the board of trustees against personal
14-70 loss or accountability from liability resulting from a member's act
15-1 or omission as a member of the board of trustees.
15-2 ARTICLE 12. OFFICERS, EMPLOYEES, AND PROFESSIONALS
15-3 Sec. 12.01. ADMINISTRATOR AND EMPLOYEES. The board of
15-4 trustees shall appoint an administrator who shall administer the
15-5 fund under the supervision and direction of the board of trustees.
15-6 The board of trustees shall employ such other employees as are
15-7 required for the efficient administration of the fund.
15-8 Sec. 12.02. LEGAL COUNSEL. The board of trustees shall
15-9 retain legal counsel for matters affecting the operation of the
15-10 fund.
15-11 Sec. 12.03. ACTUARY. (a) The board of trustees shall
15-12 employ an actuary who may be the consultant and technical advisor
15-13 to the board of trustees regarding the operation of the fund and
15-14 may perform such duties as may be required by the board.
15-15 (b) The actuary shall make a valuation at least once every
15-16 two years of the assets and liabilities of the fund on the basis of
15-17 assumptions and methods that are reasonable in the aggregate,
15-18 considering the experience of the fund and reasonable expectations
15-19 and that, in combination, offer the actuary's best estimate of
15-20 anticipated experience under the fund.
15-21 (c) On the basis of the valuation, the actuary shall make
15-22 recommendations to the board of trustees to ensure the actuarial
15-23 soundness of the fund. In making recommendations, the actuary
15-24 shall define each actuarial term and enumerate and explain each
15-25 actuarial assumption used in making the valuation. This
15-26 information must be included either in the actuarial study or in a
15-27 separate report made available as a public record.
15-28 (d) The board of trustees shall file with the State Pension
15-29 Review Board a copy of each actuarial study and each separate
15-30 report made as required by law.
15-31 (e) An actuary employed under this section must be a fellow
15-32 of the Society of Actuaries, a member of the American Academy of
15-33 Actuaries, or an enrolled actuary under the federal Employee
15-34 Retirement Income Security Act of 1974 (29 U.S.C. Section 1001 et
15-35 seq.).
15-36 (f) The municipality may pay all or part of the cost of the
15-37 actuarial services. Any cost not paid directly by the municipality
15-38 is payable from assets of the fund.
15-39 Sec. 12.04. INVESTMENT COUNSELORS AND MANAGERS; CUSTODIAN OF
15-40 ASSETS. (a) The board of trustees may employ professional
15-41 investment counselors to advise and assist the board in the
15-42 investment of the assets of the fund. The investment counseling
15-43 service must be provided by a nationally known organization whose
15-44 business functions include rendering continuous investment advisory
15-45 service to public pension and retirement funds. The municipality
15-46 may pay the entire cost of this counseling service. If not paid by
15-47 the municipality, the cost may be paid from the assets of the fund.
15-48 (b) The board of trustees shall appoint investment managers
15-49 for the fund by contracting for professional investment services
15-50 with one or more organizations, which may include a bank if it has
15-51 a trust department, that are in the business of managing
15-52 investments.
15-53 (c) To be eligible for appointment under Subsection (b) of
15-54 this section, an investment manager must be:
15-55 (1) registered under the federal Investment Advisors
15-56 Act of 1940 (15 U.S.C. 801b-1 et seq.);
15-57 (2) a bank as defined by that Act; or
15-58 (3) an insurance company qualified to perform
15-59 investment services under the laws of more than one state.
15-60 (d) In a contract made under Subsection (b) of this section,
15-61 the board shall specify any policies, requirements, or
15-62 restrictions, including criteria for determining the quality of
15-63 investments and for the use of standard rating services, that the
15-64 board adopts for investments of the fund.
15-65 (e) The municipality may pay all or part of the cost of
15-66 professional investment management services under a contract under
15-67 Subsection (b) of this section. Any cost not paid directly by the
15-68 municipality is payable from assets of the fund.
15-69 (f) The board of trustees may at any time and shall at
15-70 frequent intervals monitor the investments made by any investment
16-1 manager for the fund. The board may contract for professional
16-2 evaluation services to fulfill this requirement.
16-3 (g) The municipality may pay all or part of the cost of
16-4 professional evaluation services under Subsection (f) of this
16-5 section. Any cost not paid directly by the municipality is payable
16-6 from assets of the fund.
16-7 (h) The board may enter into an investment custody account
16-8 agreement designating a state or national bank or a trust company
16-9 as custodian for all assets allocated to or generated under the
16-10 investment management contract.
16-11 (i) Under the custody account agreement, the board of
16-12 trustees shall require the designated custodian to perform the
16-13 duties and assume the responsibilities for assets under the
16-14 contract for which the agreement is established.
16-15 (j) The municipality may pay all or part of the cost of
16-16 services under a custody account agreement under Subsection (h) of
16-17 this section. Any cost not paid directly by the municipality is
16-18 payable from assets of the fund.
16-19 (k) An investment manager other than a bank having a
16-20 contract with the fund under Subsection (b) of this section may not
16-21 be a custodian of any assets of the fund.
16-22 (l) When demands of the fund require, the board shall
16-23 withdraw from a custodian of fund assets money for use in paying
16-24 benefits to members and other beneficiaries of the fund and for
16-25 reasonable expenses of administering the fund, as approved by the
16-26 board.
16-27 Sec. 12.05. MEDICAL BOARD. The board of trustees may
16-28 designate a medical board composed of three persons. To be
16-29 eligible to serve as a member of the medical board, a physician
16-30 must be licensed to practice medicine in this state and be of good
16-31 standing in the medical profession. The board of trustees also may
16-32 designate persons who are not physicians to serve on the medical
16-33 board. The medical board shall:
16-34 (1) review all medical examinations and reports
16-35 required by this Act;
16-36 (2) investigate essential statements and certificates
16-37 made by or on behalf of a member of the fund in connection with an
16-38 application for disability retirement; and
16-39 (3) report in writing to the board of trustees its
16-40 conclusions and recommendations on all matters referred to it.
16-41 Sec. 12.06. RETIREMENT COUNSELING. The board of trustees
16-42 may pay for the cost of counseling for members of the fund
16-43 regarding retirement matters.
16-44 Sec. 12.07. AUDITS; EMPLOYMENT OF CERTIFIED PUBLIC
16-45 ACCOUNTANTS. The board of trustees shall employ a certified public
16-46 accountant or firm of certified public accountants to perform an
16-47 audit of the fund at least annually. The municipality may pay the
16-48 entire cost of an audit. If not paid by the municipality, the cost
16-49 may be paid from the assets of the fund.
16-50 Sec. 12.08. CIVIL ACTIONS FOR MONEY WRONGFULLY PAID OUT OR
16-51 OBTAINED. The board of trustees may recover by civil action from
16-52 any offending party or from the party's sureties, if any, any money
16-53 paid out or obtained from the fund through fraud,
16-54 misrepresentation, defalcation, theft, embezzlement, or
16-55 misapplication and may institute, conduct, and maintain the action
16-56 in the name of the board of trustees for the use and benefit of the
16-57 fund.
16-58 <Sec. 1. In this Act:>
16-59 <(1) "Board" or "board of trustees" means the board of
16-60 fire fighter's relief and retirement fund trustees.>
16-61 <(2) "Fire fighter" means a commissioned civil service
16-62 and Texas state-certified member of a regularly organized fire
16-63 department of an incorporated city.>
16-64 <(3) "Fund" or "pension fund" means the fire fighter's
16-65 relief and retirement fund.>
16-66 <Sec. 2. (a) A fire fighter's relief and retirement fund is
16-67 created in all incorporated cities having a population of not less
16-68 than 450,000 nor more than 500,000, according to the last preceding
16-69 federal census, and having a fully paid fire department.>
16-70 <(b) The mayor of the city, the city treasurer, or if no
17-1 treasurer, then the city secretary, city clerk, or other person or
17-2 officer as by law, charter provision, or ordinance, performs the
17-3 duty of city treasurer, and three members of the regularly
17-4 organized active fire department, to be selected by vote of the
17-5 members of the fire department in the manner provided in this Act,
17-6 shall be and are constituted the "Board of Fire Fighter's Relief
17-7 and Retirement Fund Trustees" to receive, handle and control,
17-8 manage, and disburse the fund for the respective city or town. The
17-9 board shall have the power and authority to hear and determine all
17-10 applications for retirement, claims for disability, either partial
17-11 or total, and to designate the beneficiaries or persons entitled to
17-12 participate as provided by this Act. The board shall be known as
17-13 the "Board of Fire Fighter's Relief and Retirement Fund Trustees of
17-14 ______, Texas." The mayor shall be the chairman and the city
17-15 treasurer shall be the secretary-treasurer of the board of trustees
17-16 respectively. The fire department of any city that comes within
17-17 the provisions of this Act shall elect by ballot three of its
17-18 members, one to serve for one year, one to serve for two years, and
17-19 one to serve for three years, or until their successors may be
17-20 elected as provided in this Act, as members of the board of
17-21 trustees and shall immediately certify the election to the
17-22 governing body of the city. Annually thereafter, during the period
17-23 after December 1 of one year and before the first Monday in January
17-24 of the following year, the board of trustees shall call an election
17-25 by the members of the fund to elect by ballot and certify one fire
17-26 fighter member of such board of trustees for a three-year term. A
17-27 newly elected board member takes office at the first board meeting
17-28 in January.>
17-29 <(c) The administrative cost of an election under this
17-30 section may be paid from the assets of the fund. Assets of the
17-31 fund may not be used to pay campaign expenses incurred by or for a
17-32 member. Administrative office supplies and equipment belonging to
17-33 the fund may not be used to assist any candidate or person seeking
17-34 to assist a candidate for a position on the board of trustees.>
17-35 <(d) The board of trustees shall elect annually from among
17-36 their number a vice-chairman who shall act as chairman in the
17-37 absence or disability of the mayor-chairman. The board of trustees
17-38 shall hold regular monthly meetings at a time and place as it may
17-39 by resolution designate and may hold special meetings on call of
17-40 the chairman as he may deem necessary; shall keep accurate minutes
17-41 of its meetings and records of its proceedings; shall keep separate
17-42 from all other city funds all money for the use and benefit of the
17-43 fire fighter's relief and retirement fund; shall keep a record of
17-44 all claims, receipts, and disbursements in a book or books to be
17-45 furnished by the city for the purpose; shall make disbursements
17-46 from the fund only on regular voucher signed by the treasurer and
17-47 countersigned by the chairman or vice-chairman and at least one
17-48 other member of the board of trustees. The city treasurer, as the
17-49 treasurer of the board of trustees, shall be the custodian of the
17-50 fire fighter's relief and retirement fund for the city, except for
17-51 funds deposited in an investment custody account pursuant to an
17-52 investment custodial agreement described by Section 18(h) of this
17-53 Act, under penalty of his official bond and oath of office.>
17-54 <(e) No member of the board of trustees may receive
17-55 compensation for service on the board of trustees.>
17-56 <(f) The board of fire fighter's relief and retirement fund
17-57 trustees of each such city or town in this state shall annually and
17-58 not later than the 31st day of January of each year after this Act
17-59 takes effect, make and file with the city treasurer a detailed and
17-60 itemized report of all receipts and disbursements with respect to
17-61 the fund, together with a statement of their administration, and
17-62 shall make and file other reports and statements or furnish further
17-63 information as from time to time may be required or requested by
17-64 the city treasurer.>
17-65 <(g) The board of trustees shall have the power and
17-66 authority to compel witnesses to attend and testify before it with
17-67 respect to all matters connected with the operation of this Act in
17-68 the same manner as is or may be provided for the taking of
17-69 testimony before notaries public, and its chairman shall have the
17-70 power and authority to administer oaths to witnesses.>
18-1 <(h) A majority of all members shall constitute a quorum to
18-2 transact business, and any order of the board of trustees shall be
18-3 made by vote to be recorded in the minutes of its proceedings.>
18-4 <(i) If a vacancy occurs in the membership of the board of
18-5 trustees by reason of the death, resignation, removal, or
18-6 disability of an incumbent, the vacancy shall be filled in the
18-7 manner provided in this Act for the selection of the member to be
18-8 so succeeded.>
18-9 <Sec. 3. (a)(1) Any fire fighter who has been duly
18-10 appointed and enrolled and who has performed service in any rank,
18-11 as a fully paid fire fighter, in one or more fire departments in
18-12 any city in this state covered by the provisions of this Act may
18-13 retire and be entitled to receive from the fire fighter's relief
18-14 and retirement fund of that city a monthly pension equal to 2 1/2
18-15 percent of the fire fighter's average monthly salary multiplied by
18-16 the number of the person's years of service and any fraction of a
18-17 year of service, if the fire fighter:>
18-18 <(A) has attained the age of 52 years and
18-19 completed at least 10 years of service; or>
18-20 <(B) has served actively for a period of at
18-21 least 27 years, regardless of age.>
18-22 <(2) The maximum permissible employer-derived annual
18-23 benefit is the lesser of $90,000 or 100 percent of the
18-24 participant's highest average annual compensation. Highest average
18-25 annual compensation is the average compensation for the three
18-26 consecutive calendar years of service with the department that
18-27 produces the highest average. If the annual benefit begins before
18-28 age 62, the maximum permissible annual benefit may not exceed the
18-29 lesser of the actuarial equivalent of a $90,000 annual benefit
18-30 beginning at age 62 or the participant's highest average annual
18-31 compensation. This actuarial adjustment may not reduce the $90,000
18-32 limitation below $75,000 if the benefit begins at or after age 55.
18-33 If the annual benefit begins before age 55, the maximum permissible
18-34 annual benefit may not exceed the greater of (1) the actuarial
18-35 equivalent of a $75,000 annual benefit beginning at age 55, (2) the
18-36 actuarial equivalent of a $90,000 annual benefit beginning at age
18-37 62, or (3) $50,000. To determine actuarial equivalence of a
18-38 benefit beginning before age 62, the interest rate assumption is
18-39 the rate adopted by the board of trustees in the proper
18-40 administration of the fund, but not less than five percent. If the
18-41 annual benefit begins after age 65, the benefit may not exceed the
18-42 lesser of the actuarial equivalent of a $90,000 annual benefit
18-43 beginning at age 65 or the participant's highest average annual
18-44 compensation. To determine actuarial equivalence of a benefit
18-45 beginning after age 65, the interest rate assumption is the rate
18-46 adopted by the board of trustees in the proper administration of
18-47 the fund, but not more than five percent.>
18-48 <(3) Both the $90,000 limitation and the $50,000
18-49 limitation will be automatically adjusted to new dollar limitation
18-50 amounts as determined by the commissioner of the Internal Revenue
18-51 Service for subsequent calendar years effective as of January 1 of
18-52 those years. A new limitation will apply to limitation years ending
18-53 within the calendar year of the date of the adjustments.>
18-54 <(4) The $50,000 limitation applies only to
18-55 participants whose service used in determining benefits under this
18-56 section includes at least 20 years of service as a full-time fire
18-57 fighter of the city.>
18-58 <(b) The factor of 2 1/2 percent may be changed from 2 1/2
18-59 percent, provided that:>
18-60 <(1) the change is first approved by the board's
18-61 actuary;>
18-62 <(2) the change is approved by the board of trustees;>
18-63 <(3) the change applies only to active full-time
18-64 firemen in the department at the time of the change and those who
18-65 enter the department after the change is effective; and>
18-66 <(4) a person's vested accrued benefit cannot be
18-67 decreased.>
18-68 <(c) The average monthly salary means the monthly average of
18-69 the fireman's total salary for the highest 36 months during his
18-70 period of service, excluding overtime pay, any temporary pay in
19-1 higher classifications, educational incentive pay, assignment pay,
19-2 Christmas Day bonus pay, and pay for automobile and clothing
19-3 allowances. If at the time of death or disability a fire fighter
19-4 has less than 36 months of service, his average salary will be
19-5 computed as if he had been employed for the previous 36 months.
19-6 For the period before his employment, the average salary will be
19-7 computed as if the fire fighter had held the same rank he held when
19-8 he became a member of the fund at the amount of salary for
19-9 retirement fund benefit and contribution purposes that he would
19-10 have received if he had been employed by the fire department during
19-11 that period.>
19-12 <(d) Any person who continues to serve actively beyond the
19-13 date he would normally retire shall continue to make contributions
19-14 to the fund and accrue pension credits to the date of actual
19-15 retirement.>
19-16 <(e) Benefits shall be payable on the first day of each
19-17 month commencing with the month following the date as of which the
19-18 member retired.>
19-19 <(f) Any person who has been appointed and enrolled and
19-20 either has attained the age of 50 years and served actively for a
19-21 period of at least 10 years, or has served at least 25 years,
19-22 regardless of age, in any rank, as a fully paid fire fighter, in
19-23 one or more regularly organized fire departments in any city
19-24 covered by this Act may retire and be entitled to receive from the
19-25 fire fighter's relief and retirement fund of that city a monthly
19-26 pension equal to the pension described under Section 3(a) of this
19-27 Act, reduced according to tables recommended by the board of
19-28 trustees' actuary and adopted by the board for early retirement.>
19-29 <Sec. 4. Any fireman and beneficiaries of a fireman who
19-30 retires or has retired or who receive benefits under Section 3, 6,
19-31 or 11 of this Act, shall be entitled to an annual cost-of-living
19-32 adjustment of his pension allowance and their benefits based on the
19-33 Consumer Price Index for All Urban Consumers as determined by the
19-34 United States Department of Labor. The adjustment must first be
19-35 approved by a majority of the members of the board of firemen's
19-36 relief and retirement fund trustees of the city and the board of
19-37 trustees' actuary. The adjusted pension allowance and adjusted
19-38 benefits shall never be less than the amount granted the fireman or
19-39 his beneficiaries on the date of his retirement or death without
19-40 regard to changes in the consumer price index. The adjusted
19-41 pension allowance or adjusted benefits may be increased by an
19-42 amount to be determined by a majority of the board of firemen's
19-43 relief and retirement fund trustees of the city and the board of
19-44 trustees' actuary.>
19-45 <Sec. 5. (a)(1) A fire fighter's normal retirement age is
19-46 the earliest age at which the fire fighter will be at least 52
19-47 years of age and will have completed at least 10 years of service
19-48 or the earliest age at which the fire fighter would have completed
19-49 at least 27 years of service had the fire fighter not terminated
19-50 employment.>
19-51 <(2) Any fire fighter who terminates employment after
19-52 having served for a period of at least 10 years in any fire
19-53 department covered by this Act and who has contributed to the fire
19-54 fighter's relief and retirement fund of the city for a period of at
19-55 least 10 years, shall be entitled to receive a pension allowance
19-56 beginning at the end of the month in which the fire fighter attains
19-57 a normal retirement age, provided that the following conditions are
19-58 met:>
19-59 <(A) on termination of employment, the fire
19-60 fighter shall leave his contributions in the fund, and shall not be
19-61 required to make any further contributions to the fund;>
19-62 <(B) the pension allowance shall be based on the
19-63 monthly average of the fire fighter's total salary for the highest
19-64 36 months during the fire fighter's service excluding overtime pay,
19-65 any temporary pay in higher classifications, educational incentive
19-66 pay, assignment pay, Christmas Day bonus pay, and pay for
19-67 automobile and clothing allowances; and>
19-68 <(C) the pension allowance shall be calculated
19-69 by the formula, as set out in Section 3(a) of this Act, in effect
19-70 at the time the fire fighter terminated his employment.>
20-1 <(b) In the event a fire fighter who terminates employment
20-2 with the fire department under this section dies either before age
20-3 52 or after attaining the age of 52 and beginning to receive
20-4 benefits under this section, the fire fighter's surviving spouse is
20-5 entitled to receive an immediate monthly benefit as described under
20-6 Section 11(c) of this Act, if the spouse was married to the fire
20-7 fighter:>
20-8 <(1) on the fire fighter's date of termination, if the
20-9 fire fighter's death occurred before age 52; or>
20-10 <(2) when the fire fighter attained the age of 52, if
20-11 the fire fighter's death occurred after attaining the age of 52.>
20-12 <(c) Any fireman qualifying for a pension allowance under
20-13 Subsection (a) of this section may, on or after termination of his
20-14 employment, elect to withdraw his contributions from the fund,
20-15 thereby forfeiting any rights he may have had in the fund.>
20-16 <(d) The provisions of this section shall not become
20-17 operable until a majority of the members of the board of firemen's
20-18 relief and retirement fund trustees of the city and an actuary so
20-19 approve.>
20-20 <Sec. 6. (a) If a person serving as an active fire fighter
20-21 duly enrolled in a fire department covered by this Act becomes
20-22 disabled for either physical or mental reasons before meeting the
20-23 requirements to qualify for a service retirement benefit described
20-24 by Section 3(a) of this Act, the board of trustees shall, on his
20-25 request, or without his request if it shall deem proper and for the
20-26 good of the department, retire the fire fighter from active service
20-27 and order that he be paid from the fire fighter's relief and
20-28 retirement fund of the city a monthly amount equal to his accrued
20-29 unreduced pension as determined under Section 3(a) of this Act. If
20-30 a fire fighter becomes disabled as described in this section, the
20-31 amount to be paid shall not be less than the amount computed under
20-32 Section 3(a) of this Act when 20 years of service is assumed. In
20-33 order for a fire fighter to receive these benefits for the first
20-34 2-1/2 years, the fire fighter must be unable to perform the duties
20-35 of the person's occupation as a fire fighter.>
20-36 <(b) In order to receive benefits under Subsection (a) of
20-37 this section after this 2-1/2 year period, the disabled person must
20-38 be unable to be gainfully employed. The board may require any
20-39 person receiving disability benefits provided for in this Act to
20-40 provide evidence of annual income. The evidence may be considered
20-41 in any determination of ability to be gainfully employed. The
20-42 board may, in its discretion, reduce or discontinue disability
20-43 payments to a person on the failure or refusal of the person to
20-44 provide such evidence as is directed by the board.>
20-45 <(c) If a person serving as an active fire fighter enrolled
20-46 in a regularly active fire department becomes totally and
20-47 permanently disabled from any cause for either physical or mental
20-48 reasons after meeting the requirements to qualify for a service
20-49 retirement benefit as described under Section 3(a) of this Act, the
20-50 person is eligible to receive a disability pension under Subsection
20-51 (a) of this section. In this Act, a total disability is a
20-52 disability caused by illness or bodily injury that makes a person
20-53 unable to work for pay or profit or to engage in any business or
20-54 occupation for which the person is suited by education, training,
20-55 or experience. A total disability is permanent when it has
20-56 continued without break for at least nine months and is expected to
20-57 continue indefinitely.>
20-58 <(d) If, during the first 2-1/2 years, the fire fighter
20-59 recovers to the extent that the person is able to perform the
20-60 duties of the person's job as a fire fighter, the board of trustees
20-61 may terminate the fire fighter's disability benefit and restore the
20-62 person to active service at not less than the same rank the person
20-63 held at the time of retirement for disability.>
20-64 <(e) After the disabled fire fighter has received disability
20-65 benefits from the fund for at least 2-1/2 years, the board of
20-66 trustees may review the situation of the disabled fire fighter to
20-67 determine the status of the fire fighter's disability. If the fire
20-68 fighter has recovered to the extent that the fire fighter is able
20-69 to be gainfully employed, the board of trustees may, at its
20-70 discretion:>
21-1 <(1) continue to pay a full disability benefit to the
21-2 disabled fire fighter;>
21-3 <(2) elect to pay the disabled fire fighter a partial
21-4 disability benefit in an amount commensurate with the person's
21-5 disability as determined by the board;>
21-6 <(3) discontinue payment of a disability benefit to
21-7 the fire fighter; or>
21-8 <(4) discontinue payment of a disability benefit to
21-9 the fire fighter and restore the fire fighter to active service at
21-10 not less than the same rank the person held at the time of
21-11 retirement for disability.>
21-12 <(f) The board of trustees may reinstate any disability
21-13 benefit that has been previously terminated or reduced if the
21-14 disabled fire fighter's condition has worsened due to the same
21-15 cause for which the person was originally disabled.>
21-16 <(g) This section applies even if a fire fighter is disabled
21-17 while gainfully employed by someone other than the fire department
21-18 by which the person is also employed.>
21-19 <(h) No person may receive retirement benefits under this
21-20 section for any period during which that person received full
21-21 salary or compensation, including payment received while on sick
21-22 leave.>
21-23 <(i) A fire fighter may not be retired for disability except
21-24 as provided by this Act or receive any allowance for disability
21-25 from the fund until a certificate of disability or eligibility has
21-26 been signed by a physician of the member's choice and filed with
21-27 and approved by the board of trustees. The member shall pay any
21-28 costs imposed by a physician the member chooses to certify a
21-29 disability or eligibility. The board of trustees, at its cost, may
21-30 obtain additional medical opinions before approving or disapproving
21-31 a disability retirement.>
21-32 <(j) The board of trustees at any time may require any fire
21-33 fighter retired for disability under this Act to appear and undergo
21-34 a medical examination by the city physician or any other physician
21-35 appointed or selected by the board of trustees for that purpose.
21-36 The result of the examination and report by the physician shall be
21-37 considered by the board of trustees in determining whether the
21-38 disability retirement benefit will be continued, increased (if less
21-39 than the maximum provided by this Act), decreased, or discontinued
21-40 in accordance with this section. If any fire fighter receiving a
21-41 disability retirement benefit under this Act, after due notice from
21-42 the board of trustees to appear and be reexamined, fails to appear
21-43 or refuses to submit to reexamination, unless excused by the board,
21-44 the board may reduce or entirely discontinue the benefit.>
21-45 <(k) If a fire fighter who is covered by this Act has ever
21-46 experienced a reduction in the fire fighter's disability benefit on
21-47 the grounds that the fire fighter was receiving a workers'
21-48 compensation benefit at the same time the fire fighter was
21-49 receiving a disability benefit under this Act, the fund shall:>
21-50 <(1) pay the fire fighter, beginning with the fire
21-51 fighter's next monthly benefit payment, the full, unreduced
21-52 disability benefit that the fire fighter is entitled to under this
21-53 Act; and>
21-54 <(2) pay the fire fighter, as soon as it is reasonably
21-55 possible, a lump-sum amount equal to the difference between the
21-56 reduced disability payments the fire fighter has received and the
21-57 full, unreduced disability payments that the fire fighter would
21-58 have been entitled to receive during this period of time except for
21-59 the reduction in the amount of workers' compensation benefits.>
21-60 <(l) If a fire fighter's monthly disability benefit is
21-61 reduced or discontinued under this section, the fire fighter is
21-62 entitled to receive a pension allowance under Section 5(a)(2) of
21-63 this Act if the fire fighter meets the conditions of that
21-64 subdivision.>
21-65 <Sec. 10. (a) The city shall contribute and appropriate
21-66 each month to the fund an amount equal to 14 percent of the total
21-67 monthly payroll, excluding overtime pay, any temporary pay in
21-68 higher classifications of the fire department of the city,
21-69 educational incentive pay, assignment pay, Christmas Day bonus pay,
21-70 and pay for automobile and clothing allowances. Each full-time
22-1 fireman shall pay into the pension fund 13.70 percent of his total
22-2 monthly salary, excluding overtime pay, any temporary pay in higher
22-3 classifications, educational incentive pay, assignment pay,
22-4 Christmas Day bonus pay, and pay for automobile and clothing
22-5 allowances. The governing body of the city may authorize the city
22-6 to make an additional contribution to its fire fighter's relief and
22-7 retirement fund in whatever amount the governing body of the city
22-8 may fix. The firemen, by a majority vote in favor of an increase
22-9 in contributions above the 13.70 percent, shall increase each
22-10 member's contribution above 13.70 percent in whatever amount the
22-11 pension board recommends.>
22-12 <(b) Money deducted from salaries or compensation as
22-13 provided by this section and the payments and contributions
22-14 provided by this section shall become and form a part of the
22-15 firemen's relief and retirement fund of the city in which the
22-16 contributing firemen serve.>
22-17 <(c) Any person who enters service as a fire fighter in any
22-18 city that has a fire fighter's relief and retirement fund to which
22-19 the person is eligible for membership shall become a member of the
22-20 fund as a condition of that person's appointment, and shall, by
22-21 acceptance of the appointment, agree to make the contributions
22-22 required by this Act of fire fighter members of the fund and is
22-23 eligible to participate in the benefits of membership in the fund
22-24 as provided in this Act. However, no person is eligible to
22-25 membership in the fund who has reached the person's 30th birthday
22-26 at the time the person enters service as a fire fighter, and any
22-27 person who enters service as a fire fighter may be denied or
22-28 excused from membership in the fund if the board of trustees of the
22-29 fund determines that the person is not of sound health. The person
22-30 being considered for membership shall pay the cost of any physical
22-31 examination required by the board of trustees for this purpose. A
22-32 fire fighter who is a member of the fund shall continue to be a
22-33 member of the fund if the fire fighter is appointed to the rank of
22-34 chief or the rank immediately below chief.>
22-35 <(d) Each person who is an active member of a firemen's
22-36 relief and retirement fund previously organized and existing under
22-37 the laws of this state at the effective date of this amendment
22-38 shall continue as a member of the fund, and he shall retain and be
22-39 allowed credit for all service to which he was entitled in the fund
22-40 of which he was a member immediately prior to the effective date of
22-41 this amendment.>
22-42 <(e)(1) The severance benefit of a fire fighter who
22-43 terminates the fire fighter's employment before eligibility for
22-44 retirement shall be an amount equal to the amount of the fire
22-45 fighter's monthly contributions, with interest, made while a
22-46 participating member of the fire fighter's relief and retirement
22-47 fund, in excess of the amount of benefits that the member
22-48 previously received from the fund. If the member's employment is
22-49 terminated by death before retirement and the member leaves no
22-50 surviving beneficiary entitled to pension benefits, the member's
22-51 estate shall receive the amount of the member's contributions, with
22-52 interest, in excess of the amount of benefits that the member
22-53 previously received from the fund. In each instance in which a
22-54 member's contributions are to be paid to a fire fighter or a fire
22-55 fighter's estate or surviving relative, the payment will include
22-56 accumulated interest computed as provided by this section.>
22-57 <(2) On December 31, 1993, the fund shall credit
22-58 interest to the account of each fire fighter who had contributions
22-59 on deposit with the fund on January 1, 1993, and has not retired,
22-60 died, or withdrawn those contributions. The amount of interest
22-61 credited on December 31, 1993, will be computed by multiplying five
22-62 percent by an amount equal to one-half of the member's
22-63 contributions on deposit on January 1, 1993, and then multiplying
22-64 that product by the number of whole calendar years that the fire
22-65 fighter has been a member of the fund on December 31, 1993.>
22-66 <(3) Beginning December 31, 1994, the fund shall
22-67 credit interest on December 31 of each year to the account of each
22-68 fire fighter in an amount equal to five percent of the accumulated
22-69 contributions, including previously credited interest, on deposit
22-70 on January 1 of that year.>
23-1 <(4) The fund may not pay interest on a fire fighter's
23-2 contributions for part of a year or for any period that is more
23-3 than five calendar years after the date of termination of
23-4 employment.>
23-5 <(f) These provisions apply to all active full-time members
23-6 of the fire department and to those persons who shall become
23-7 members of the fire department at any time in the future.>
23-8 <(g) When, in the opinion of the board of trustees, there is
23-9 on hand in the fire fighter's relief and retirement fund of any
23-10 city under this Act a surplus over and above a reasonable and safe
23-11 amount to take care of the current demands on the fund, the
23-12 surplus, or so much of it as in the judgment of the board is deemed
23-13 safe, may be invested in:>
23-14 <(1) direct obligations of or obligations the
23-15 principal and interest of which are guaranteed or fully insured by
23-16 the United States or its agencies or instrumentalities;>
23-17 <(2) commercial paper rated as investment quality or
23-18 higher by a nationally recognized investment rating firm;>
23-19 <(3) short-term investment funds, mutual funds, or
23-20 their equivalent, that:>
23-21 <(A) are rated as investment quality or higher
23-22 by a nationally recognized investment rating firm; and>
23-23 <(B) do not exceed an average of 270 days to
23-24 maturity;>
23-25 <(4) fully collateralized or direct repurchase
23-26 agreements, including direct and reverse security repurchase
23-27 agreements and security lending agreements, that:>
23-28 <(A) have a defined termination date;>
23-29 <(B) are secured by obligations described by
23-30 Subdivision (1) of this subsection or by cash; and>
23-31 <(C) are pledged with a third party selected or
23-32 approved by a majority of the board of trustees;>
23-33 <(5) corporate bonds, including convertible bonds and
23-34 collateralized mortgage obligations, rated as investment quality or
23-35 higher by a nationally recognized investment rating firm;>
23-36 <(6) common and preferred stock of companies
23-37 incorporated in the United States and foreign stocks that are
23-38 designated in United States dollars and that are registered with
23-39 the Securities and Exchange Commission and listed on a United
23-40 States exchange or by the National Association of Securities
23-41 Dealers Automated Quotations;>
23-42 <(7) major foreign equity and fixed income market
23-43 investments; and>
23-44 <(8) convertible stocks and bonds rated as investment
23-45 quality or higher by a nationally recognized investment rating firm
23-46 or by the investment manager.>
23-47 <(h) An investment in corporate bonds that meets the
23-48 requirements of Subsection (g)(3) of this section at the time of
23-49 purchase is not required to be sold because the bonds' rating is
23-50 subsequently reduced to a rating that is not more than one major
23-51 classification lower than the requirements. Interest or dividends
23-52 on investments shall be deposited into the fund and become part of
23-53 it. The fund may not own more than five percent of the voting
23-54 stock of any one corporation. Under an investment measure at cost:>
23-55 <(1) total fixed-income investments should not
23-56 represent less than 50 percent nor more than 80 percent of the
23-57 value of the investment portfolio;>
23-58 <(2) total investments in common stocks should not
23-59 represent less than 20 percent nor more than 50 percent of the
23-60 value of the investment portfolio;>
23-61 <(3) total investments in common stocks of foreign
23-62 corporations may not represent more than five percent of the value
23-63 of the investment portfolio; and>
23-64 <(4) total investments in any one corporation may not
23-65 represent more than three percent of the value of the investment
23-66 portfolio.>
23-67 <(i) A person or financial institution is a fiduciary of a
23-68 fire fighter's relief and retirement fund established under this
23-69 Act to the extent that the person or the financial institution:>
23-70 <(1) exercises any discretionary authority or
24-1 discretionary control over management of the fire fighter's relief
24-2 and retirement fund or exercises any authority or control over
24-3 management or disposition of the assets of the fund;>
24-4 <(2) renders or has authority or responsibility to
24-5 render investment advice for a fee or other compensation, direct or
24-6 indirect, concerning any money or other property of the fund; or>
24-7 <(3) has any discretionary authority or discretionary
24-8 responsibility over the administration of the fund.>
24-9 <(j) A fiduciary of a fire fighter's relief and retirement
24-10 fund established under this Act may not cause the fund to engage in
24-11 a transaction if the fiduciary knows or should know that the
24-12 transaction constitutes a direct or indirect:>
24-13 <(1) sale, exchange, or lease of any property from the
24-14 fund to a party for less than adequate consideration or from a
24-15 party to the fund for more than adequate consideration;>
24-16 <(2) loan of money or other extension of credit from
24-17 the fund to a party without the receipt of adequate security and a
24-18 reasonable rate of interest or from a party to the fund with
24-19 provision of excessive security or an unreasonably high rate of
24-20 interest;>
24-21 <(3) furnishing of goods, services, or facilities from
24-22 the fund to a party for less than adequate consideration or from a
24-23 party to the fund for more than adequate consideration; or>
24-24 <(4) transfer to or use by or for the benefit of a
24-25 party of any assets of the fund for less than adequate
24-26 consideration.>
24-27 <(k) A fiduciary of a fire fighter's relief and retirement
24-28 fund established under this Act may not:>
24-29 <(1) deal with the assets of the fund in the
24-30 fiduciary's own interest or for the fiduciary's own account;>
24-31 <(2) in the fiduciary's individual or any other
24-32 capacity act in any transaction involving the fund on behalf of a
24-33 party whose interests are adverse to the interests of the fund or
24-34 the interest of its participants or beneficiaries; or>
24-35 <(3) receive any consideration for the fiduciary's own
24-36 personal account from any party dealing with the fund in connection
24-37 with a transaction involving the assets of the fund.>
24-38 <(l) The board of trustees may purchase insurance
24-39 indemnifying the members of the board of trustees against personal
24-40 loss or accountability from liability resulting from a member's act
24-41 or omission as a member of the board of trustees.>
24-42 <Sec. 11. (a) If a fire fighter dies before retirement, the
24-43 fire fighter's surviving spouse, if married to the member on the
24-44 member's date of death, shall be entitled to receive an immediate
24-45 monthly pension, the amount of which shall be 75 percent of the
24-46 member's accrued unreduced pension as determined under Section 3(a)
24-47 of this Act when 20 years of service is assumed.>
24-48 <(b) On the death of a member who retired under Section 3(a)
24-49 or (f) or Section 6(a) or (b) of this Act, the surviving spouse, if
24-50 married to the person on the person's date of retirement, is
24-51 entitled to receive an immediate monthly pension equal to 75
24-52 percent of the pension being paid to the member.>
24-53 <(c) On the death of a fire fighter who terminated
24-54 employment with the fire department after 10 or more years of
24-55 service before age 52, the surviving spouse is entitled to receive
24-56 an immediate monthly pension equal to 75 percent of the pension the
24-57 member was either receiving or entitled to receive at age 52, if:>
24-58 <(1) the spouse was married to the member on the date
24-59 of the member's termination of employment, if the member's death
24-60 occurred before age 52; or>
24-61 <(2) the spouse was married to the member when the
24-62 member attained the age of 52, if the member's death occurred after
24-63 the member attained the age of 52.>
24-64 <(d) A deceased member's unmarried children under the age of
24-65 22 are entitled to receive, if there is no surviving spouse, a
24-66 total amount of monthly pension equal to 75 percent of the monthly
24-67 benefit based on the fire fighter's average monthly salary at the
24-68 time of death and the number of years and any fraction of a year of
24-69 the fire fighter's service, assuming 20 years of service if service
24-70 is less than 20 years. Each dependent child is entitled to receive
25-1 an equal share of the total amount of monthly pension. If there is
25-2 a surviving spouse, each deceased member's unmarried child under
25-3 the age of 22 is entitled to receive 15 percent of the monthly
25-4 benefit based on the fire fighter's average monthly salary at the
25-5 time of death and the number of years and any fraction of a year of
25-6 the fire fighter's service, assuming 20 years of service if service
25-7 is less than 20 years. The total amount of benefits being paid to
25-8 the children if there is a surviving spouse may not exceed the
25-9 total amount of benefits payable to dependent children if there is
25-10 no surviving spouse. Payments to a child shall be made whether or
25-11 not a spouse survives and shall continue after the death of a
25-12 surviving spouse but shall cease on the earliest of the child's
25-13 death, marriage, or attainment of age 22.>
25-14 <(e) The spouse's monthly benefit is payable for life if the
25-15 fire fighter was either retired or eligible to retire under Section
25-16 3(a) or (f) or Section 6(c) of this Act at the date of the fire
25-17 fighter's termination of service with the fire department.
25-18 Otherwise, the spouse's monthly benefit ceases on the earlier of
25-19 the spouse's death or remarriage. After all payments cease, any
25-20 excess of the member's total contributions at the date of the
25-21 member's death over any retirement and death benefits shall be paid
25-22 to the member's estate.>
25-23 <(f) If a deceased or retired member leaves no surviving
25-24 spouse or children eligible to receive a benefit under this section
25-25 but is survived by one or more dependent parents, the dependent
25-26 parent, or one of the surviving parents designated by the board of
25-27 trustees, is entitled to receive a monthly pension equal to the
25-28 amount that would have been payable to a surviving spouse. If a
25-29 deceased member leaves no surviving spouse, children, or dependent
25-30 parent eligible to receive a benefit as provided in this section,
25-31 the member's total contributions, less any amount previously paid
25-32 to the member, shall be paid to the member's estate.>
25-33 <(h) Benefits provided in this section shall be payable on
25-34 the first day of each month commencing with the month following the
25-35 one in which the member's death occurs.>
25-36 <(i) The board of trustees shall determine all questions of
25-37 dependency, and their determination shall be final and conclusive
25-38 on all parties. All unmarried children under age 22, in the
25-39 absence of a determination to the contrary, are considered
25-40 dependent.>
25-41 <(j) On a majority vote of the board of trustees, benefits
25-42 to children under age 22 may be increased to an amount not to
25-43 exceed the maximum approved by an actuary.>
25-44 <(k) On a majority vote of the board of trustees, benefits
25-45 to a surviving spouse may be increased to an amount not to exceed
25-46 the maximum approved by an actuary.>
25-47 <(l) The provisions of this section shall apply even though
25-48 the death was caused while the member was gainfully employed by
25-49 someone other than the respective fire department for which he was
25-50 employed.>
25-51 <Sec. 12. No portion of a firemen's relief and retirement
25-52 fund may, either before or after its order of disbursement by the
25-53 board of trustees to a retired or disabled fireman or the surviving
25-54 spouse, the guardian of any minor child or children, or the
25-55 dependent parent of any deceased, retired, or disabled fireman, be
25-56 ever held, seized, taken, subjected to, or detained, or levied on
25-57 by virtue of any execution, attachment, garnishment, injunction, or
25-58 other writ, order, or decree, or any process, or proceedings
25-59 whatsoever issued out of or by any court of this state for the
25-60 payment or satisfaction, in whole or in part, of any debt, damage,
25-61 claim, demand, or judgment against such fireman or the fireman's
25-62 surviving spouse, the guardian of the fireman's minor child or
25-63 children, the fireman's dependent father or mother, nor shall said
25-64 fund or any claim thereto be directly or indirectly assigned or
25-65 transferred, and any attempt to transfer or assign the same shall
25-66 be void. The fund shall be sacredly held, kept, and disbursed for
25-67 the purposes provided by this Act and for no other purpose
25-68 whatever.>
25-69 <Sec. 13. No firemen's relief and retirement fund for fully
25-70 paid firemen may ever be integrated with benefits payable under the
26-1 federal Social Security Act, and benefits which might be available
26-2 to a fireman under the federal Social Security Act may never be
26-3 taken into account in a city where firemen are eligible to enroll
26-4 for or receive retirement benefits under the Social Security Act
26-5 when determining the amount of benefits which a fireman may receive
26-6 from a firemen's relief and retirement fund for fully paid firemen.>
26-7 <Sec. 16. (a) If a fire fighter is absent from service with
26-8 the fire department for less than five years because of military
26-9 service and returns to service with the fire department not later
26-10 than the 180th day after the date of discharge or release from
26-11 military service, the fire fighter will receive service credit for
26-12 both the fire fighter's previous period of service with the fire
26-13 department and the period of military service, if the fire fighter
26-14 has left the fire fighter's contributions in the fund.>
26-15 <(b) If a fire fighter is absent from service with the fire
26-16 department for less than five years for reasons other than military
26-17 service and returns to service with the fire department, the fire
26-18 fighter will receive service credit for the fire fighter's previous
26-19 period of service with the fire department if the fire fighter has
26-20 left the fire fighter's contributions in the fund. Credit may not
26-21 be given for the period the fire fighter is absent from service as
26-22 described by this subsection.>
26-23 <(c) If a fire fighter who has less than 10 years of service
26-24 credit in the fund is absent from service with the fire department
26-25 for at least five years for any reason, the fund will refund the
26-26 fire fighter's accumulated contributions and the fire fighter will
26-27 forfeit the fire fighter's service credit with the fund. If, on
26-28 the expiration of two years after the five-year period of absence,
26-29 the fund is unable to refund the fire fighter's accumulated
26-30 contributions, the fire fighter's accumulated contributions will
26-31 escheat to the fund. However, if the fire fighter who was formerly
26-32 a member of the fund later claims the fire fighter's accumulated
26-33 contributions, the fund shall refund this amount to the fire
26-34 fighter.>
26-35 <(d) A fire fighter may not be granted service credit for
26-36 time during which the person receives a disability pension from the
26-37 fund.>
26-38 <Sec. 17. The board of trustees shall retain legal counsel
26-39 for matters affecting the operation of the fund.>
26-40 <Sec. 18. (a) The board of trustees of a fully paid fire
26-41 department may engage and employ professional investment counselors
26-42 to advise and assist the board in the investment of the assets of
26-43 the fund. The investment counseling service must be provided by a
26-44 nationally known organization whose business functions include
26-45 rendering continuous investment advisory service to public pension
26-46 and retirement funds. The city may pay the entire cost of this
26-47 counseling service; if not paid by the city, the cost may be paid
26-48 from the assets of the fund.>
26-49 <(b) The board shall appoint investment managers for the
26-50 fund by contracting for professional investment services with one
26-51 or more organizations, which may include a bank if it has a trust
26-52 department, that are in the business of managing investments.>
26-53 <(c) To be eligible for appointment under Subsection (b) of
26-54 this section, an investment manager must be:>
26-55 <(1) registered under the federal Investment Advisors
26-56 Act of 1940;>
26-57 <(2) a bank as defined by that Act; or>
26-58 <(3) an insurance company qualified to perform
26-59 investment services under the laws of more than one state.>
26-60 <(d) In a contract made under Subsection (b) of this
26-61 section, the board shall specify any policies, requirements, or
26-62 restrictions, including criteria for determining the quality of
26-63 investments and for the use of standard rating services, that the
26-64 board adopts for investments of the fund.>
26-65 <(e) The city may pay all or part of the cost of
26-66 professional investment management services under a contract under
26-67 Subsection (b) of this section. Any cost not paid directly by the
26-68 city is payable from assets of the fund.>
26-69 <(f) The board may at any time and shall at frequent
26-70 intervals monitor the investments made by any investment manager
27-1 for the fund. The board may contract for professional evaluation
27-2 services to fulfill this requirement.>
27-3 <(g) The city may pay all or part of the cost of
27-4 professional evaluation services under Subsection (f) of this
27-5 section. Any cost not paid directly by the city is payable from
27-6 assets of the fund.>
27-7 <(h) The board may enter into an investment custody account
27-8 agreement designating a state or national bank as custodian for all
27-9 assets allocated to or generated under the investment management
27-10 contract.>
27-11 <(i) Under a custody account agreement, the board shall
27-12 require the designated bank to perform the duties and assume the
27-13 responsibilities for assets under the contract for which the
27-14 agreement is established.>
27-15 <(j) The city may pay all or part of the cost of bank
27-16 services under a custody account agreement under Subsection (h) of
27-17 this section. Any cost not paid directly by the city is payable
27-18 from assets of the fund.>
27-19 <(k) An investment manager other than a bank having a
27-20 contract with the fund under Subsection (b) of this section may not
27-21 be a custodian of any assets of the fund.>
27-22 <(l) When demands of the fund require, the board shall
27-23 withdraw from a custodian of fund assets money for use in paying
27-24 benefits to members and other beneficiaries of the fund and for
27-25 reasonable expenses of administering the fund, as approved by the
27-26 board.>
27-27 <Sec. 19. (a) The board of trustees of a fire fighter's
27-28 relief and retirement fund coming under the provisions of this Act
27-29 shall employ an actuary who may be the consultant and technical
27-30 advisor to the board regarding the operation of the fund and may
27-31 perform such duties as may be required by the board.>
27-32 <(b) The actuary shall make a valuation at least once every
27-33 two years of the assets and liabilities of the fund on the basis of
27-34 assumptions and methods that are reasonable in the aggregate,
27-35 considering the experience of the program and reasonable
27-36 expectations, and that, in combination, offer the actuary's best
27-37 estimate of anticipated experience under the program.>
27-38 <(c) On the basis of the valuation, the actuary shall make
27-39 recommendations to the board to ensure the actuarial soundness of
27-40 the fund. In making recommendations, the actuary shall define each
27-41 actuarial term and enumerate and explain each actuarial assumption
27-42 used in making the valuation. This information must be included
27-43 either in the actuarial study or in a separate report made
27-44 available as a public record.>
27-45 <(d) The board shall file with the State Pension Review
27-46 Board a copy of each actuarial study and each separate report made
27-47 as required by law.>
27-48 <(e) An actuary employed under this section must be a fellow
27-49 of the Society of Actuaries, a member of the American Academy of
27-50 Actuaries, or an enrolled actuary under the federal Employee
27-51 Retirement Income Security Act of 1974.>
27-52 <(f) The city may pay all or part of the cost of the
27-53 actuarial services. Any cost not paid directly by the city is
27-54 payable from assets of the fund.>
27-55 <Sec. 20. The board of trustees of any city created and
27-56 constituted under the provisions of this Act shall have the power
27-57 and authority to recover by civil action from any offending party
27-58 or from his bondsmen, if any, any money paid out or obtained from
27-59 said fund through fraud, misrepresentation, defalcation, theft,
27-60 embezzlement, or misapplication and may institute, conduct, and
27-61 maintain the action in the name of the board of trustees for the
27-62 use and benefit of the fund.>
27-63 <Sec. 21. The board of trustees of a fully paid fire
27-64 department shall engage and employ a certified public accountant or
27-65 firm of certified public accountants to perform an audit of the
27-66 fire fighter's relief and retirement fund at least annually. The
27-67 city may pay the entire cost of such audits; if not paid by the
27-68 city, the cost may be paid from the assets of the fund.>
27-69 <Sec. 22. If, for any reason, the fund or funds made
27-70 available for any purpose covered by this Act shall be insufficient
28-1 to pay in full any allowance or disability benefits, then all
28-2 granted allowances, or disability benefits shall be proratably
28-3 reduced for the time the deficiency exists.>
28-4 <Sec. 23. The city shall pick up the fire fighter
28-5 contributions to the fund required by Section 10(a) of this Act, or
28-6 such contributions as are authorized by vote as provided by Section
28-7 10(a), whichever are higher. Fire fighter contributions will be
28-8 picked up by a reduction in the monetary compensation of the
28-9 affected fire fighters. Contributions picked up shall be treated
28-10 as employer contributions in accordance with Section 414(h)(2),
28-11 federal Internal Revenue Code, for the purpose of determining tax
28-12 treatment of the amounts under the federal Internal Revenue Code.
28-13 These contributions are not includable in the gross income of a
28-14 fire fighter until the time that they are distributed or made
28-15 available to the fire fighter. Fire fighter contributions picked
28-16 up as provided by this section shall be deposited to the individual
28-17 account of each affected fire fighter and shall be treated as the
28-18 monthly contributions of each individual fire fighter for all other
28-19 purposes of this Act. This section takes effect on January 1,
28-20 1986, and remains in effect as long as the plan covering fire
28-21 fighters of the city is a qualified retirement plan under Section
28-22 401(a), federal Internal Revenue Code, and its related trust is tax
28-23 exempt under Section 501(a), federal Internal Revenue Code, or
28-24 until a time that the board by a majority vote elects to
28-25 discontinue the pickup of fire fighter contributions by the city.>
28-26 SECTION 2. This Act takes effect September 1, 1995.
28-27 SECTION 3. The importance of this legislation and the
28-28 crowded condition of the calendars in both houses create an
28-29 emergency and an imperative public necessity that the
28-30 constitutional rule requiring bills to be read on three several
28-31 days in each house be suspended, and this rule is hereby suspended.
28-32 * * * * *