By Barrientos S.B. No. 864
74R3834 CAS-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to participation in and benefits and administration of
1-3 retirement systems for police officers in certain municipalities.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Sections 1.02(2), (4), (6), (18), (24), and (25),
1-6 Chapter 452, Acts of the 72nd Legislature, Regular Session, 1991
1-7 (Article 6243n-1, Vernon's Texas Civil Statutes), are amended to
1-8 read as follows:
1-9 (2) "Actuarial equivalent" means any benefit of equal
1-10 present value to a standard benefit when computed as specified by
1-11 <on the basis of actuarial tables adopted by the police board in
1-12 the proper administration of the police retirement system
1-13 established under> this Act.
1-14 (4) "Average final compensation" means the monthly
1-15 average basic hourly earnings <compensation, pay, or salary,
1-16 exclusive> of <overtime and terminal pay, earned by> a member
1-17 during, as applicable:
1-18 (A) if the member has 120 months or more of
1-19 service during which the member made contributions to the police
1-20 system or the predecessor system, the 36 months which yielded the
1-21 highest average during the last 120 months of membership service
1-22 during which the member contributed to the police system or the
1-23 predecessor system;
1-24 (B) if the member has less than 120 months of
2-1 membership service during which the member contributed to the
2-2 police system or the predecessor system, but has at least 36 months
2-3 of membership service during which the member made contributions to
2-4 the police system or the predecessor system, <then> the average of
2-5 the 36 months which yielded the highest average; or
2-6 (C) if the member does not have 36 months of
2-7 membership service during which the member contributed to the
2-8 police system or the predecessor system, <then> the average of the
2-9 member's months of membership service during which the member made
2-10 contributions to the police system or the predecessor system.
2-11 (6) "Creditable service" means the number of months
2-12 <period of time> during which a member pays into and keeps on
2-13 deposit the amounts of money prescribed by this Act to be paid by
2-14 the member into the system or into the predecessor system,
2-15 including certain military service and certain probationary service
2-16 in excess of six months for which a member has purchased creditable
2-17 service in accordance with <the provisions of> Article V of this
2-18 Act, and excluding a month in which service amounted to fewer than
2-19 15 days. The<; provided, that the> months <period> beyond attained
2-20 age 62 are <may be> included within the meaning of creditable
2-21 service, regardless of payments into this system or into the
2-22 predecessor system if the police officer<:>
2-23 <(A)> is otherwise eligible for membership in
2-24 the system and<;>
2-25 <(B)> is an active police officer employed by
2-26 the city, except that those months are included within the meaning
2-27 of creditable service if the member did not contribute for the
3-1 months only if they occurred before September 1, 1995<; and>
3-2 <(C) has contributed into the system or into the
3-3 predecessor system for not less than 120 months>.
3-4 (18) "Normal retirement date" means the last <first>
3-5 day of the <month following the> earliest month in which the
3-6 member:
3-7 (A) <the member> has attained the age of 55 and
3-8 completed at least 20 years of creditable service;
3-9 (B) <the member has attained the age of 50 and
3-10 completed at least 25 years of creditable service;>
3-11 <(C) the member> has completed 25 <30> years of
3-12 creditable service at any age; or
3-13 (C) <(D) the member> has reached the age of 62.
3-14 (24) "Retirement" means separation <withdrawal> of a
3-15 member from active service in order to receive an annuity in
3-16 accordance with the provisions of the police retirement system
3-17 under this Act.
3-18 (25) "Retirement date" means the last <first> day of
3-19 the month of <next succeeding> the retirement of the member.
3-20 SECTION 2. Section 4.01(c), Chapter 452, Acts of the 72nd
3-21 Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's Texas
3-22 Civil Statutes), is amended to read as follows:
3-23 (c) Any person who becomes an employee of the city or
3-24 becomes a member of the police system's administrative staff after
3-25 the date of establishment of the police retirement system, if
3-26 eligible for membership, shall become a member as a condition of
3-27 employment and shall make the required deposits commencing with the
4-1 first pay period following a probationary period of six continuous
4-2 months from date of employment or eligibility, if later. <The
4-3 member shall remain a member of the system until the member is
4-4 entitled to service retirement and withdrawal benefits under the
4-5 provisions of Article VI of this Act or is entitled to disability
4-6 retirement benefits under the provisions of Article VII of this
4-7 Act.>
4-8 SECTION 3. Section 4.01(e)(1), Chapter 452, Acts of the 72nd
4-9 Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's Texas
4-10 Civil Statutes), is amended to read as follows:
4-11 (1) Membership in the police retirement system shall
4-12 consist of the following groups:
4-13 (A) Active--Contributory: the member who is in
4-14 a status which allows payroll contributions to the police
4-15 retirement system (75 percent of a normal work week or more per
4-16 week, permanent position, having completed a continuous period of
4-17 six months initially, to attain membership).
4-18 (B) Active--Noncontributory <I>: the member
4-19 whose current employment status does not allow contributions to the
4-20 police system and is thereby deactivated with the privilege of
4-21 immediate reentry, on appropriate change of status, to a period for
4-22 which the member will again be given creditable service, with
4-23 contributions resumed at time of status change.
4-24 (C) <Active--Noncontributory II: the member who
4-25 has completed 120 months of contributions at or beyond age 62 and
4-26 is no longer required to contribute as a condition of the member's
4-27 employment.>
5-1 <(D)> Inactive--Contributory: the member who is
5-2 on a leave of absence under Subsection (f) of this section, who is
5-3 allowed to make deposits to the police system during the member's
5-4 absence.
5-5 (D) <(E)> Vested--Noncontributory: the
5-6 terminated member who, being fully vested, retains the member's
5-7 contributions in the police system.
5-8 (E) <(F)> Retired: the member who is receiving
5-9 a retirement annuity.
5-10 SECTION 4. Section 4.01(f), Chapter 452, Acts of the 72nd
5-11 Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's Texas
5-12 Civil Statutes), is amended to read as follows:
5-13 (f)(1) A member shall cease to be a member of the police
5-14 retirement system and shall lose membership service if, through
5-15 death, dismissal, resignation, or from any other cause, the member
5-16 shall sever the member's service connection and withdraw the
5-17 member's accumulated deposits as provided under the withdrawal
5-18 allowance provisions of this Act; provided, however, that any
5-19 eligible member who has not previously received credit for one-half
5-20 of the member's previously forfeited membership service shall be
5-21 entitled to reinstatement of membership service if such eligible
5-22 member or eligible surviving spouse shall have deposited in the
5-23 system the accumulated deposits withdrawn and an interest charge
5-24 based on the amount withdrawn times an interest factor. The factor
5-25 is based on the compounded net annual rate of interest credited to
5-26 the member's accumulated contributions divided by 0.75, beginning
5-27 with the month and year in which the member withdrew the member's
6-1 contributions and ending with the month and year payment is made to
6-2 reinstate the service. The annual rate of interest applicable for
6-3 the year when payment is made is considered to be equal to the
6-4 prior year's rate of interest for the purpose of making the
6-5 determination.
6-6 (2) An eligible member is a police officer who has
6-7 been reemployed by the city or a staff member reemployed by the
6-8 police system, <and> has completed at least 24 consecutive months
6-9 of service as a member since the member was reemployed, and is not
6-10 separated from active service <at a time when the board permits
6-11 members to reinstate their previously forfeited membership
6-12 service>. For purposes of this subsection, an eligible surviving
6-13 spouse is the surviving spouse of an eligible member if the member
6-14 dies before making payment to the system of the amount required by
6-15 this subsection <A terminated member officer with a vested
6-16 retirement account is also eligible to reinstate previously
6-17 forfeited membership service at a time when the board permits such
6-18 reinstatement>.
6-19 (3) In order to be eligible to reinstate previously
6-20 forfeited membership service, an eligible member or eligible
6-21 surviving spouse must deposit the amount described in Subdivision
6-22 (1) of this subsection as a lump sum in the system <within the time
6-23 period prescribed by the board>. An eligible surviving spouse may
6-24 reinstate previously forfeited membership service not later than
6-25 the date that is six months after the date of the member's death
6-26 and only if the benefit described by Section 6.05(a) or 6.06(a)(3)
6-27 of this Act is not paid.
7-1 (4) Any such member who has previously received credit
7-2 for one-half of previously forfeited membership service shall be
7-3 entitled to reinstate the remaining one-half of the member's
7-4 previously forfeited membership service by payment of one-half of
7-5 the amount previously withdrawn and an interest charge as described
7-6 in Subdivision (1) of this subsection.
7-7 (5) The method of determining the amount of the
7-8 required payment described by Subdivision (1) of this subsection
7-9 may be changed if:
7-10 (A) the effect of the change is disclosed by the
7-11 board's actuary;
7-12 (B) the change is adopted by the board as a
7-13 board rule; and
7-14 (C) the change applies to all payments for
7-15 reinstating previously forfeited membership service under this
7-16 subsection made to the retirement system after the effective date
7-17 of the change <From time to time the board, subject to the approval
7-18 of the system's actuary, may elect to permit members to reinstate
7-19 their previously forfeited membership service in accordance with
7-20 the terms of this subsection>.
7-21 (6)(A) A member granted a leave of absence or
7-22 withdrawing from <the> service for a stated period of time, not to
7-23 exceed two years, who allows the member's contributions to the
7-24 police retirement system to remain in the fund, shall be eligible
7-25 for continued membership on reentering the service of the city or
7-26 the police system. During that period the employee shall not
7-27 receive service credit.
8-1 (B) Military leave of absence shall not be
8-2 included in the two-year period if the member returns to active
8-3 service with the city within 90 days after the expiration of the
8-4 military leave of absence. A member of the police system on
8-5 military leave of absence may make deposits to the police system
8-6 during military leave of absence, in an amount each biweekly pay
8-7 period that is equal to the amount of the member's deposit for the
8-8 last complete biweekly pay period that the member was paid by the
8-9 city or the police system. The city shall make a contribution to
8-10 the retirement fund for the member employed by the city each
8-11 biweekly pay period in an amount the city would have made if the
8-12 member's biweekly pay had continued to be the biweekly pay the
8-13 member received for the last complete biweekly pay period that the
8-14 member was paid by the city. If the member does not make deposits
8-15 during a military leave of absence, the member may make <a single>
8-16 payment within five years after the member has returned to the
8-17 employment of the city, equal to the deposits the member would have
8-18 made if the member had continued to be paid by the city during the
8-19 member's military leave of absence at the same rate of pay the
8-20 member was receiving at the time the member's leave of absence
8-21 began. The payment may be a single payment or may be in
8-22 installments as long as each individual installment is not less
8-23 than 20 percent of the total amount to be paid. A member who
8-24 otherwise would be eligible to make payment under this subdivision
8-25 but who has not made payment and for whom it has been more than
8-26 five years since the member returned to the employment of the city
8-27 may make payment during the period beginning October 1, 1995, and
9-1 ending September 30, 1996. The city will make a single
9-2 contribution for the member employed by the city equal to the
9-3 deposits it would have made on the member's behalf if the member
9-4 had made deposits to the fund during the period of the member's
9-5 military leave.
9-6 SECTION 5. Sections 5.02 and 5.03, Chapter 452, Acts of the
9-7 72nd Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's
9-8 Texas Civil Statutes), are amended to read as follows:
9-9 Sec. 5.02. Military service credit. (a) An eligible member
9-10 or eligible surviving spouse may establish creditable service for
9-11 military service performed that is creditable as provided under
9-12 this section according to the following conditions, limitations,
9-13 and restrictions:
9-14 (1) Military service creditable in the retirement
9-15 system is active federal duty service in the Armed Forces of the
9-16 United States, other than as a student at a service academy, as a
9-17 member of the reserves, or any continuous active military service
9-18 lasting less than 90 days, and such military service must have been
9-19 performed prior to becoming a member of the police retirement
9-20 system or its predecessor system.
9-21 (2) An eligible <A> member <eligible to establish
9-22 military service credit> must:
9-23 (A) have been released from military duty under
9-24 conditions not dishonorable; and
9-25 (B) be a police officer employed by the city or
9-26 a staff member employed by the police system, who is not separated
9-27 from active police system service.
10-1 (3) An eligible <A> member or eligible surviving
10-2 spouse may not establish more than 24 months of creditable service
10-3 in the retirement system for military service.
10-4 (4) An eligible <A> member or eligible surviving
10-5 spouse may establish creditable service under this section by
10-6 contributing to the retirement system a single payment equal to 25
10-7 percent of the estimated cost of the additional projected
10-8 retirement benefits the member or surviving spouse will be entitled
10-9 to receive. The system will determine the required contribution
10-10 based on a procedure recommended by the actuary and approved by the
10-11 board.
10-12 (5) After the eligible member or eligible surviving
10-13 spouse makes the deposit required by this section, the retirement
10-14 system shall grant the member or surviving spouse one month of
10-15 creditable service for each month of military service established
10-16 by this section.
10-17 (6) For purposes of this section, an eligible
10-18 surviving spouse is the surviving spouse of an eligible member if
10-19 the member dies before making payment to the system of the amount
10-20 required by this section. An eligible surviving spouse may
10-21 establish creditable service for military service not later than
10-22 the date that is six months after the date of the member's death
10-23 and only if the death benefit described by Section 6.05(a) or
10-24 6.06(a)(3) of this Act is not paid.
10-25 (b) The percent used to calculate the amount of the required
10-26 payment described by Subsection (a)(4) of this section may be
10-27 changed if:
11-1 (1) the effect of the change is disclosed by the
11-2 board's actuary;
11-3 (2) the change is adopted by the board of trustees as
11-4 a board rule; and
11-5 (3) the change applies to all payments for
11-6 establishing creditable service under this section made to the
11-7 retirement system after the effective date of the change.
11-8 Sec. 5.03. Probationary service credit. (a) An eligible
11-9 member or eligible surviving spouse may establish creditable
11-10 service for probationary service performed that is creditable as
11-11 provided under this section according to the following conditions,
11-12 limitations, and restrictions:
11-13 (1) Probationary service creditable in the retirement
11-14 system is any nonmembership service following commission date.
11-15 (2) An eligible <A> member or eligible surviving
11-16 spouse may establish creditable service under this section by
11-17 contributing to the retirement system a single payment equal to the
11-18 contribution the member would have made to the system for that
11-19 service at the time the service was performed and an interest
11-20 charge based on the contribution amount to be repaid times an
11-21 interest factor based on the compounded annual rates of interest
11-22 which are equal to the rates which have been credited to the
11-23 member's accumulated deposits divided by 0.75, beginning with the
11-24 month and year at the end of the probationary period for which
11-25 creditable service is being established <the member is establishing
11-26 service> to the later time <the member is making> payment is made
11-27 to the fund for the purpose of establishing said service.
12-1 (3) After the eligible member or eligible surviving
12-2 spouse makes the deposit required by Subdivision (2) of this
12-3 subsection <section>, the retirement system shall grant the member
12-4 or surviving spouse one month of creditable service for each month
12-5 of probationary service established under this section.
12-6 (b) For purposes of this section, an eligible member is a
12-7 police officer employed by the city who is not separated from
12-8 active service.
12-9 (c) For purposes of this section, an eligible surviving
12-10 spouse is the surviving spouse of an eligible member if the member
12-11 dies before making payment to the system of the amount required by
12-12 this section. An eligible surviving spouse may establish
12-13 creditable service for probationary service not later than the date
12-14 that is not later than six months after the date of the member's
12-15 death and only if the death benefit described by Section 6.05(a) or
12-16 6.06(a)(3) of this Act is not paid.
12-17 (d) Notwithstanding Subsection (c) of this section, if an
12-18 eligible member dies on or after December 1, 1994, but not later
12-19 than August 31, 1995, and has not made payment to the system of the
12-20 amount required by this section, an eligible surviving spouse may
12-21 establish creditable service for probationary service on or before
12-22 February 29, 1996.
12-23 (e) The method of determining the amount of the required
12-24 payment described by Subsection (a)(2) of this section may be
12-25 changed if:
12-26 (1) the effect of the change is disclosed by the
12-27 board's actuary;
13-1 (2) the change is adopted by the board of trustees as
13-2 a board rule; and
13-3 (3) the change applies to all payments for
13-4 establishing creditable service under this section made to the
13-5 retirement system after the effective date of the change.
13-6 SECTION 6. Section 6.01, Chapter 452, Acts of the 72nd
13-7 Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's Texas
13-8 Civil Statutes), is amended by amending Subsections (a), (d), and
13-9 (e) and adding Subsection (f) to read as follows:
13-10 (a) On retirement from service after having reached the
13-11 member's normal retirement date, members entitled thereto shall
13-12 receive a normal retirement benefit in the form of a life annuity
13-13 (modified cash refund). Each monthly payment of the life annuity
13-14 (modified cash refund) shall be equal to one-twelfth of the product
13-15 of 2.8 <2.3> percent of a member's average final compensation
13-16 multiplied by the number of months of creditable service. If
13-17 payments commence after the member becomes 62 years of age and
13-18 after completion of 120 months of contributions, the amount of
13-19 monthly payments shall be increased at the rate of five-twelfths of
13-20 one percent for each month after <the later of> age 62 for which
13-21 the member earned creditable service but made no contributions on
13-22 the basis of the law in effect before September 1, 1995 <or the
13-23 completion of 120 months of contributions at which the payments
13-24 commence>. The increased benefit shall not exceed 15 percent of
13-25 the amount which would otherwise have been paid if payments had
13-26 commenced at the member's retirement date. For a retirement date
13-27 after December 31, 1996, the amount of monthly payments may not be
14-1 increased for payments that commence after the member becomes 62
14-2 years of age. The retirement benefit percent specified by this
14-3 section to calculate the amount of the monthly payment of the life
14-4 annuity (modified cash refund) may be changed after 1995 if:
14-5 (1) the change is approved by the board's actuary;
14-6 (2) the change is adopted by the board of trustees as
14-7 a board rule;
14-8 (3) the change applies to all present members, all
14-9 retired members, and all who become members after the effective
14-10 date of the change in the retirement benefit percent;
14-11 (4) a member's vested accrued benefit as of the last
14-12 day of the month immediately preceding the effective date of the
14-13 change in the retirement benefit percent is not reduced; and
14-14 (5) a retirement annuity being paid by the police
14-15 retirement system to members or to the surviving spouses or
14-16 beneficiaries of members who retired before the effective date of
14-17 the change in the retirement benefit percent is changed as
14-18 prescribed by Subsection (d)(8) of this section, except that a
14-19 reduction in annuities may not cause the member's, surviving
14-20 spouse's, or beneficiary's annuity payment to be reduced below the
14-21 base retirement amount calculated under this Act.
14-22 (d) In determining whether to authorize the payment and the
14-23 amount of any annual adjustment, the board shall be governed by the
14-24 following conditions, considerations, limitations, and
14-25 restrictions:
14-26 (1) Any and all determinations to authorize the
14-27 payment of any amount must be based on the ability of the fund to
15-1 pay such an amount and shall not be based upon the individual needs
15-2 of any particular retired members, surviving spouses, or
15-3 beneficiaries.
15-4 (2) Prior to the board's authorizing the payment of an
15-5 annual adjustment, the actuary must approve and recommend such an
15-6 adjustment to the board and certify in writing to the board that
15-7 based on the sound application of actuarial assumptions and methods
15-8 consistent with sound actuarial principles and standards, it is
15-9 demonstrable that the fund has and will continue to have the
15-10 ability to pay such an amount out of its realized income after all
15-11 other obligations of the fund have been paid.
15-12 (3) The amount of the adjustment payment to the
15-13 retirement allowance for each retired member, surviving spouse, or
15-14 beneficiary shall be increased or decreased by an amount, not to
15-15 exceed six percent, determined by the board and the actuary based
15-16 on the consumer price index, actuarial experience of the fund,
15-17 investment experience of the fund, and cost-of-living increases
15-18 granted in the past. Such increases shall be prorated for a member
15-19 who retired during the year in the ratio that the number of the
15-20 member's completed months after the member's retirement in that
15-21 year bears to 12. The cost-of-living increase presented for
15-22 approval by the board must be approved by the fund's actuary.
15-23 (4) The board shall have the authority and the duty,
15-24 at any and all times and without notice to anyone, to decrease the
15-25 amount of the adjustment payment as much as is necessary to protect
15-26 the continuity of the police retirement system and to protect the
15-27 corpus of the fund should the ability of the fund to continue to
16-1 pay the adjustment be threatened by a change in the economic
16-2 situation of the United States, the State of Texas, the city, or
16-3 the fund itself such as would dictate that a prudent trustee should
16-4 authorize such a decrease; provided that if the threatened change
16-5 should prove not to have had the predicted harmful effect on the
16-6 fund, then the board shall have the authority to reinstate the
16-7 payment of all or any portion of the amount of the previously
16-8 decreased adjustment payments. If at any time the actuary in the
16-9 actuary's discretion shall deem the continuity of the fund to be
16-10 threatened by whatever cause, the actuary shall have the power and
16-11 authority to order the board to make no further adjustment payments
16-12 and the board shall have the power and authority to see to it that
16-13 no further adjustment payments are made unless and until the
16-14 actuary shall order either that the same adjustment payments which
16-15 were discontinued by the actuary's order be reinstated
16-16 retroactively, or that the adjustment payments (of the same amount
16-17 as those which were discontinued) be reinstated prospectively from
16-18 the date of the actuary's order to reinstate or the actuary may
16-19 recommend to the board that the adjustment payments be decreased by
16-20 whatever amount the actuary may deem to be sufficient to protect
16-21 the continuity of the fund. The board shall not have the power or
16-22 authority to authorize or permit the payment of any adjustment
16-23 payments in excess of that recommended by the actuary.
16-24 (5) All monthly retirement annuities being paid by the
16-25 system to members where payments began prior to January 1, 1980,
16-26 shall be increased retroactive to March 1, 1985, with the first
16-27 increased amounts being paid March 31, 1985, in accordance with the
17-1 following schedule:
17-2 Year of Percentage
17-3 Retirement Increase
17-4 1970 and earlier 160
17-5 1971 105
17-6 1972 100
17-7 1973 65
17-8 1974 55
17-9 1975 50
17-10 1976 45
17-11 1977 40
17-12 1978 35
17-13 1979 25
17-14 (6) Provided that the adjustment payments, if any,
17-15 shall be in addition to the benefits to which a retired member,
17-16 surviving spouse, or beneficiary is otherwise entitled under this
17-17 Act, and in no event shall a reduction in the adjustment payments
17-18 cause the retired member's, surviving spouse's, or beneficiary's
17-19 benefits to be reduced below the actual base retirement amount
17-20 <figure> calculated under the provisions of this Act.
17-21 (7) Retirement and disability annuities being paid by
17-22 the police retirement system to members or to the surviving spouses
17-23 or beneficiaries of members who retired before September 1, 1995,
17-24 are increased beginning with the payments due at the end of
17-25 September in 1995. The amount of the increase for a member or the
17-26 surviving spouse or beneficiary of the member is equal to a
17-27 percentage multiplied by the annuity payment otherwise due. The
18-1 percentage is equal to 2.8 percent divided by the retirement
18-2 benefit percentage in effect on the date of the member's
18-3 retirement, minus one, and multiplied by 100.
18-4 (8) Retirement and disability annuities being paid by
18-5 the police retirement system to members or to the surviving spouses
18-6 or beneficiaries of members who retire before the effective date of
18-7 any change in the retirement benefit percent under this section
18-8 that occurs after 1995 shall be changed beginning with the first
18-9 payment due after the effective date of the change in the
18-10 retirement benefit percent. The amount of the change for a member
18-11 or the surviving spouse or beneficiary of the member is equal to a
18-12 percentage multiplied by the annuity payment otherwise due. The
18-13 percentage is equal to the new retirement benefit percentage
18-14 divided by the retirement benefit percent in effect immediately
18-15 before the effective date of the new retirement benefit percent,
18-16 minus one, and multiplied by 100.
18-17 (e) The following terms and definitions shall be used in
18-18 construing the meaning of this section:
18-19 (1) "Base retirement amount <figure>" means that
18-20 monthly retirement amount figure calculated under <the provisions
18-21 of> this Act at the time of actual retirement, reduced for the
18-22 optional form selected under Section 6.03(a) of this Act, and
18-23 further reduced, if appropriate, for the optional form selected, if
18-24 the member or the member's designated beneficiary has died <to
18-25 which, for the purposes of this subsection, a retired member is
18-26 entitled over a 12-month period>.
18-27 (2) "Consumer price index" means the Consumer Price
19-1 Index for All Urban Consumers <annual average over a calendar year
19-2 of the consumer price index (all items, United States city
19-3 average)> published monthly by the Bureau of Labor Statistics,
19-4 United States Department of Labor, or its successor in function.
19-5 (3) <"Adjustment payment" means an annual
19-6 cost-of-living adjustment payment which is paid out in 12 equal
19-7 monthly installments which are added on to the current monthly
19-8 payment figure of retirement annuities, pensions, or allowances of
19-9 retired members, surviving spouses, or beneficiaries of the police
19-10 retirement system who have become entitled to benefits under this
19-11 Act.>
19-12 <(4) "Averaging or leveling" means a precedence
19-13 whereby the fluctuations in the consumer price index over a stated
19-14 period of time may be first averaged out for the entire period to
19-15 determine the average amount over that period that may be paid out
19-16 as an annual adjustment payment; provided that in no event shall
19-17 such an averaging or leveling principle be used to justify an
19-18 annual increase in the annual adjustment payment which is equal to
19-19 more than six percent of the current annual retirement figure.>
19-20 <(5) "Base period" means the six years immediately
19-21 preceding the year for which the annual adjustment payment is
19-22 computed.>
19-23 <(6)> "Fund" means for the purposes of this subsection
19-24 a combination of both Fund No. 1 and Fund No. 2 as defined in this
19-25 Act unless otherwise indicated.
19-26 (4) <(7)> "Continuity of the fund" means the ability
19-27 of the police retirement system's fund to continue to meet all of
20-1 its purposes, to continue to thrive and grow along with the economy
20-2 of the United States, the State of Texas, and the city, or to be
20-3 able to sustain itself and its beneficiaries during and throughout
20-4 periods of deflation or recession in that economy.
20-5 (f) For purposes of this section, compensation of each
20-6 noneligible member taken into account under the plan may not exceed
20-7 $150,000 per calendar year, indexed pursuant to Section 401(a)(17)
20-8 of the Internal Revenue Code of 1986 (26 U.S.C. Section 401). The
20-9 $150,000 limit does not apply to an eligible member. For purposes
20-10 of this subsection, an eligible member is any individual who first
20-11 became a member before January 1, 1996. For purposes of this
20-12 subsection, a noneligible member is any other member. For
20-13 purposes of this subsection, in determining the compensation of a
20-14 member Section 414(q)(6) of the Internal Revenue Code of 1986 (26
20-15 U.S.C. Section 414) applies, except the term "family member"
20-16 includes only the spouse of the member and any lineal descendants
20-17 of the member who have not attained the age of 19 before the close
20-18 of the year. Compensation in excess of the limit shall be prorated
20-19 among the family members in accordance with Section 401(a)(17) of
20-20 the Internal Revenue Code of 1986 (26 U.S.C. Section 401).
20-21 SECTION 7. Section 6.02, Chapter 452, Acts of the 72nd
20-22 Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's Texas
20-23 Civil Statutes), is amended to read as follows:
20-24 Sec. 6.02. Eligibility for retirement. (a) Any member
20-25 shall be eligible for normal retirement if the member has <shall
20-26 have: (i)> attained the age of 55 years and completed at least 20
20-27 years of creditable service with the city,<; (ii) attained the age
21-1 of 50 and completed at least 25 years of creditable service with
21-2 the city; (iii)> completed 25 <30> years of creditable service,<;>
21-3 or <(iv)> attained age 62.
21-4 (b) Any member, irrespective of the number of years of
21-5 creditable service, shall be eligible for retirement at age 62.
21-6 After<; after> age 62, the member may continue in the employment of
21-7 the city as a police officer <but shall no longer contribute to the
21-8 police system except as provided in Subsection (g), Section 4.01 of
21-9 this Act>. No member shall be paid any benefits by the police
21-10 system so long as the member is permanently employed by the city as
21-11 a police officer.
21-12 <(c) Any member shall be eligible for an early retirement
21-13 benefit if the member elects early retirement from service after
21-14 having completed at least 25 years of creditable service but prior
21-15 to attaining the age of 50. The member's early retirement benefit
21-16 is reduced to be the actuarial equivalent of what the normal
21-17 retirement benefit would have been based on pay and service at the
21-18 member's early retirement date.>
21-19 SECTION 8. Section 6.03, Chapter 452, Acts of the 72nd
21-20 Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's Texas
21-21 Civil Statutes), is amended by adding Subsection (c) to read as
21-22 follows:
21-23 (c) In computing the actuarial equivalent for optional forms
21-24 of annuity payment for retirement and death benefits under this
21-25 section, the UP-1984 Table shall be used with no age setback for
21-26 members and an age setback of seven years for beneficiaries, and
21-27 interest shall be computed at a rate of 8.5 percent.
22-1 SECTION 9. Section 6.04, Chapter 452, Acts of the 72nd
22-2 Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's Texas
22-3 Civil Statutes), is amended to read as follows:
22-4 Sec. 6.04. Termination prior to retirement; treatment of
22-5 accumulated deposits. (a) On separation from service by
22-6 resignation or dismissal before retirement, the member shall
22-7 receive the amount of the accumulated deposits standing to the
22-8 member's credit in one lump sum, except that<. But> if such member
22-9 has had at least 10 years of creditable service at the time the
22-10 employee's service is terminated, the member shall have a vested
22-11 right to elect to leave the member's accumulated deposits with the
22-12 police retirement system until such time as the member shall have
22-13 applied in writing for benefit payments and shall have attained an
22-14 age at which the member shall have become entitled to receive
22-15 monthly retirement benefit payments under this Act, at which time
22-16 the member shall be entitled to a retirement allowance equal to
22-17 that which the member would have received if the member had
22-18 attained the age at the time of termination of the member's service
22-19 which the member had attained at the time of making such
22-20 application.
22-21 (b) If a member who has attained age 70-1/2 separates or has
22-22 separated from service without applying for retirement or a refund
22-23 of accumulated deposits, the police retirement system shall attempt
22-24 to send to that member a written notice as soon as practical after
22-25 the later of the date the member attains age 70-1/2 or the date the
22-26 member separates from service. The written notice must advise the
22-27 member of the requirement under Section 401(a)(9) of the Internal
23-1 Revenue Code of 1986 (26 U.S.C. Section 401) to retire and begin
23-2 receiving a monthly retirement benefit. If, before the 91st day
23-3 after the date the police retirement system sends the notice, the
23-4 member has not filed an application for retirement or a refund, the
23-5 member is considered to have retired on the last day of the third
23-6 month following the later of the two dates specified by this
23-7 subsection. If applicable, the retirement option shall be
23-8 determined in accordance with the member's written selection of
23-9 optional benefit and designation of beneficiary under Section
23-10 6.06(a)(1) of this Act. Otherwise, the member shall receive the
23-11 life annuity under Section 6.01 of this Act.
23-12 SECTION 10. Section 6.05(c), Chapter 452, Acts of the 72nd
23-13 Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's Texas
23-14 Civil Statutes), is amended to read as follows:
23-15 (c) In the event of death of a member receiving a retirement
23-16 allowance, the sum of $5,000 <$2,000> shall be payable in a lump
23-17 sum to the member's beneficiary or, if no beneficiary, to the
23-18 member's estate, unless the member shall have directed otherwise in
23-19 writing, duly acknowledged and filed with the board.
23-20 SECTION 11. Sections 6.06(a)(3) and (4), Chapter 452, Acts
23-21 of the 72nd Legislature, Regular Session, 1991 (Article 6243n-1,
23-22 Vernon's Texas Civil Statutes), are amended to read as follows:
23-23 (3) In the event a member who is eligible for
23-24 retirement dies without making a written selection of one of the
23-25 options listed in Section 6.03 of this Act and if the member leaves
23-26 a lawfully married spouse surviving, then the surviving spouse of
23-27 such member may select the optional annuity in the same manner as
24-1 if the member had made the selection or may select a lump-sum
24-2 payment equal to the accumulated deposits standing to the member's
24-3 credit in Fund No. 1 plus an equivalent amount from Fund No. 2. If
24-4 the member leaves no lawfully married spouse surviving, then the
24-5 member's designated beneficiary, or if no beneficiary exists, the
24-6 executor or administrator of the estate of the member, is entitled
24-7 to elect either Option VII (15-Year Certain and Life Annuity),
24-8 effective the last day <at the beginning> of the calendar month
24-9 <succeeding that> in which the death of the member occurs or a
24-10 lump-sum payment equal to the accumulated deposits standing to the
24-11 member's credit in Fund No. 1 plus an equivalent amount from Fund
24-12 No. 2. In the event of the death of the lawfully married surviving
24-13 spouse before having received retirement allowances equal to the
24-14 amount of the member's accumulated deposits at date of the member's
24-15 death, the excess of such accumulated deposits over the retirement
24-16 allowances paid shall be refunded in one sum to the member's
24-17 estate.
24-18 (4) When monthly survivor benefits are <deemed>
24-19 payable as a result of the death of a member before retirement, an
24-20 additional sum of $5,000 <$2,000> shall be payable as a death
24-21 benefit to the member's designated beneficiary or, if no
24-22 beneficiary exists, to the member's estate.
24-23 SECTION 12. Sections 7.01(b) and (c), Chapter 452, Acts of
24-24 the 72nd Legislature, Regular Session, 1991 (Article 6243n-1,
24-25 Vernon's Texas Civil Statutes), are amended to read as follows:
24-26 (b)(1) If a member with less than 10 years of creditable
24-27 service has become mentally or physically incapacitated for the
25-1 performance of the member's former employment duties as a direct
25-2 result of injuries sustained subsequent to the member's effective
25-3 date of membership in the police retirement system, the member may
25-4 apply for disability retirement. Such application made for or on
25-5 behalf of the injured member shall show that the injury sustained
25-6 was as a direct or proximate result of the performance of the
25-7 member's employment duties with the city and that it is likely to
25-8 result in the member's inability to perform the duties of a
25-9 position offered to the member in the police department or any
25-10 other department in the city that pays as much or more than the
25-11 current pay of the position the member was holding on the date of
25-12 the member's disability.
25-13 (2) On recommendation of physicians or vocational
25-14 rehabilitation experts appointed or selected by the board that the
25-15 member's incapacity is likely to result in the member's inability
25-16 to perform the duties of a position offered to the member in the
25-17 police department or any other department in the city that pays as
25-18 much or more than the current pay of the position the member was
25-19 holding at the date of the member's disability and after
25-20 considering any additional evidence which the board deems relevant,
25-21 the board may award such member disability retirement benefits.
25-22 The decision of the board is final.
25-23 (c) If a member with more than 10 years of creditable
25-24 service has become mentally or physically incapacitated for the
25-25 performance of the member's former employment duties, the member
25-26 may apply for disability retirement. Such application made on
25-27 behalf of the disabled member shall show that the incapacity is
26-1 likely to result in the member's inability to perform the duties of
26-2 a position offered to such member in the police department or any
26-3 other department in the city that pays as much or more than the
26-4 current pay of the position the member was holding on the date of
26-5 the member's disability. On recommendation of physicians or
26-6 vocational rehabilitation experts appointed or selected by the
26-7 board that the member's incapacity is likely to result in the
26-8 member's inability to perform the duties of a position offered to
26-9 the member in the police department or any other department in the
26-10 city that pays as much or more than the current pay of the position
26-11 the member was holding on the date of the member's disability and
26-12 after considering any additional evidence which the board deems
26-13 relevant, the board may award such member disability retirement
26-14 benefits. The decision of the board is final.
26-15 SECTION 13. Section 7.02, Chapter 452, Acts of the 72nd
26-16 Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's Texas
26-17 Civil Statutes), is amended to read as follows:
26-18 Sec. 7.02. Computation of disability benefit. (a) On award
26-19 of disability retirement benefits, the member shall receive a
26-20 disability retirement allowance computed in the same manner that a
26-21 retirement allowance would be computed at the member's normal
26-22 retirement date, based on compensation and service at date of
26-23 disability retirement without reduction for early retirement. If
26-24 the disability is a direct or proximate result of the performance
26-25 of the member's employment duties with the city, then the
26-26 disability retirement allowance will be subject to a minimum
26-27 benefit based on compensation at date of disability retirement and
27-1 20 years of service. The options allowed are life annuity or its
27-2 actuarial equivalent payable in the form described as Option I,
27-3 Option II, Option III, Option IV, or Option VII in Section 6.03 of
27-4 this Act. The disability benefits paid to the member will be paid
27-5 from Fund No. 1 until the amount received equals the member's
27-6 accumulated deposits; thereafter the benefits will be paid from
27-7 Fund No. 2.
27-8 (b) For purposes of this section, in computing the actuarial
27-9 equivalent for optional forms of annuity payment for disability
27-10 benefits under this section, 82.5 percent of the 1965 Railroad
27-11 Retirement Board Disabled Annuitants Mortality Table shall be used
27-12 for members, the UP-1984 Table with an age setback of six years
27-13 shall be used for beneficiaries, and interest shall be computed at
27-14 a rate of 8.5 percent.
27-15 SECTION 14. Section 7.03(c)(1), Chapter 452, Acts of the
27-16 72nd Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's
27-17 Texas Civil Statutes), is amended to read as follows:
27-18 (1) If during the first 2-1/2 years the annual
27-19 medical examination shows that the member is able to perform the
27-20 duties of a position offered to the member in the police department
27-21 or any other department in the city that pays as much or more than
27-22 the current pay of the position the member was holding on the date
27-23 of the member's disability, the board may discontinue the
27-24 disability retirement allowance. If after the disabled member has
27-25 received disability benefits from the fund for at least 2-1/2
27-26 years, the member is able to perform the duties of any occupation
27-27 for which the member is reasonably suited by education, training,
28-1 or experience, the board shall review and modify the disability
28-2 benefit according to the following provisions:
28-3 (A) if the member is able to earn at least as
28-4 much money in the member's new job as the member would have in the
28-5 member's former position with the police department, the board may
28-6 <shall> terminate the member's benefit;
28-7 (B) if the member is able to earn between
28-8 one-half as much money and as much money in the member's new job as
28-9 the member would have in the member's former position with the
28-10 police department, the board may <shall> reduce the monthly
28-11 disability benefit to one-half of its original amount; or
28-12 (C) if the member is not able to earn at least
28-13 one-half as much money in the member's new job as the member would
28-14 have in the member's former position with the police department,
28-15 the board may <shall> continue the benefit unchanged.
28-16 SECTION 15. Section 8.01, Chapter 452, Acts of the 72nd
28-17 Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's Texas
28-18 Civil Statutes), is amended by amending Subsection (a) and adding
28-19 Subsections (g)-(i) to read as follows:
28-20 (a) Deposits by the members to the police retirement system
28-21 shall be made at a rate of at least <based on> six percent of the
28-22 basic hourly earnings of each member<, exclusive of overtime,
28-23 incentive, or terminal pay>. Deposits required to be made by
28-24 members shall be deducted from payroll. The Active-Contributory
28-25 members, by a majority vote in favor of an increase in
28-26 contributions above <the> six percent, shall increase each member's
28-27 contribution above six percent in whatever amount the board
29-1 recommends. If the deposit rate for members has been increased to
29-2 a rate above six percent, the rate may be decreased if the board
29-3 recommends the decrease, the board's actuary approves the decrease,
29-4 and the Active-Contributory members approve the decrease by
29-5 majority vote <No deposits shall be made beyond age 62 except as
29-6 provided in Subsection (g) of Section 4.01 of this Act>. The city
29-7 shall contribute amounts equal to a percentage, as specified by
29-8 this subsection, <12 percent> of the basic hourly earnings of each
29-9 member employed by the city<, exclusive of overtime, incentive, or
29-10 terminal pay>. That percentage shall be 14 percent for the fiscal
29-11 year ending in 1995, 16 percent for the fiscal year ending in 1996,
29-12 and 18 percent for each subsequent fiscal year. The city council
29-13 may authorize the city to make additional contributions to the
29-14 police retirement system in whatever amount the city council may
29-15 determine. Contributions by the city shall be made each pay
29-16 period.
29-17 (g) If the police retirement system is terminated, further
29-18 contributions may not be made by the city, and further deposits may
29-19 not be made by the members for service after the date of
29-20 termination. Members do not accrue any additional benefits after
29-21 the date of termination. The benefit accrued by each member on the
29-22 termination of the plan or the complete discontinuance of
29-23 contributions under the plan and the benefit of any affected member
29-24 on the partial termination of the plan, to the extent funded,
29-25 become nonforfeitable notwithstanding the length of a member's
29-26 service. The benefit accrued by a member also becomes
29-27 nonforfeitable, if not already nonforfeitable, at the normal
30-1 retirement date.
30-2 (h) A forfeiture from a member terminating employment and
30-3 withdrawing the member's accumulated deposits may not be applied to
30-4 increase the benefit that any other member would receive from the
30-5 system. The actuary shall anticipate the effect of forfeitures in
30-6 determining the costs under the system.
30-7 (i) The assets of the police retirement system shall be held
30-8 in trust for the exclusive benefit of the members and their
30-9 beneficiaries. The corpus or income may not be used for or
30-10 diverted to a purpose other than the exclusive benefit of members
30-11 or their beneficiaries, whether by operation or natural termination
30-12 of the system, by power of revocation or amendment, by the
30-13 happening of a contingency, by collateral arrangement, or by other
30-14 means.
30-15 SECTION 16. Section 10.01, Chapter 452, Acts of the 72nd
30-16 Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's Texas
30-17 Civil Statutes), is amended to read as follows:
30-18 Sec. 10.01. False report or statement. Whoever with intent
30-19 to deceive shall make any statement or report required under this
30-20 Act which is untrue or shall falsify or permit to be falsified any
30-21 record or records of the police retirement system shall forfeit any
30-22 office or rights held by the person under the police system, and
30-23 such deception, falsification, or acquiescence in falsification
30-24 shall be deemed a misdemeanor and the violation thereof shall be
30-25 punishable by a fine not to exceed $1,000 <$200>.
30-26 SECTION 17. Chapter 452, Acts of the 72nd Legislature,
30-27 Regular Session, 1991 (Article 6243n-1, Vernon's Texas Civil
31-1 Statutes), is amended by adding Articles XI-XIII to read as
31-2 follows:
31-3 ARTICLE XI
31-4 Sec. 11.01. LIMITATION ON PAYMENT OF BENEFITS. (a) In this
31-5 section:
31-6 (1) "Annual benefit" means the total of all annuity
31-7 payments by the police retirement system on behalf of a retired
31-8 member during a calendar year.
31-9 (2) "Compensation" has the meaning assigned by Section
31-10 415 of the Internal Revenue Code of 1986 (26 U.S.C. Section 415),
31-11 and the regulations adopted under that section, not exceeding the
31-12 limitations prescribed by Section 401(a)(17) of that code.
31-13 (3) "Highest average annual compensation" means the
31-14 average compensation for the three consecutive calendar years of
31-15 service that produces the highest average.
31-16 (4) "Qualified joint and survivor annuity" means an
31-17 annuity for the life of a member with a survivor annuity for the
31-18 life of the member's spouse that is not less than 50 percent and
31-19 not more than 100 percent of the amount of the annuity payable
31-20 during the joint lives of the member and spouse and is the
31-21 actuarial equivalent of a life annuity for the member.
31-22 (b) If the amount of any benefit payment under this Act
31-23 would exceed the limitations provided by this section, the police
31-24 retirement system shall reduce the amount of the benefit in
31-25 accordance with this section.
31-26 (c) Except as otherwise provided by this section, a benefit
31-27 is adjusted to the actuarial equivalent of a life annuity for the
32-1 purpose of determining limitations under this section. An
32-2 actuarial adjustment to a benefit is not required to establish the
32-3 value of a qualified joint and survivor annuity and the value of
32-4 postretirement cost-of-living increases made in accordance with
32-5 Section 415 of the Internal Revenue Code of 1986 (26 U.S.C. Section
32-6 415).
32-7 (d) Except as provided by Subsections (f), (h), and (i) of
32-8 this section, an annual benefit payable by the retirement system
32-9 may not exceed the lesser of:
32-10 (1) $118,800, or another amount as adjusted each
32-11 January 1 by the secretary of the treasury under Section 415 of the
32-12 Internal Revenue Code of 1986 (26 U.S.C. Section 415) for
32-13 cost-of-living increases after January 1, 1994; or
32-14 (2) 100 percent of the former member's highest average
32-15 annual compensation, including annual cost-of-living increases
32-16 after separation from service.
32-17 (e) If payment of a benefit begins before a member attains
32-18 age 62, the dollar limitation is the actuarial equivalent of an
32-19 annual benefit beginning at age 62 as described by Subsection
32-20 (d)(1) of this section for a person at age 62. A reduction under
32-21 this subsection may not reduce the dollar limitation below $75,000
32-22 if the benefit begins at or after age 55 or, if the benefit begins
32-23 before age 55, the actuarial equivalent of a $75,000 limitation
32-24 beginning at age 55. A reduction under this section may not reduce
32-25 the dollar limitation of any qualified participant below $66,000 or
32-26 another amount as determined for the applicable calendar year by
32-27 the secretary of the treasury under Section 415 of the Internal
33-1 Revenue Code of 1986 (26 U.S.C. Section 415) for cost-of-living
33-2 increases after January 1, 1994. For purposes of this subsection,
33-3 a qualified participant is a member whose creditable service
33-4 includes at least 15 years of service as a full-time employee of
33-5 the police department of the city or as a member of the armed
33-6 forces of the United States.
33-7 (f) If payment of a benefit begins after the member attains
33-8 age 65, the dollar limitation is the actuarial equivalent of an
33-9 annual benefit beginning at age 65 as described by Subsection
33-10 (d)(1) of this section.
33-11 (g) For purposes of this section, actuarial equivalence
33-12 shall be computed in the manner prescribed by Section 6.03 or 7.02
33-13 of this Act except that the interest rate assumption under
33-14 Subsection (c) or (e) of this section is the greater of the rate
33-15 specified by Section 6.03 or 7.02 or five percent, and the interest
33-16 rate assumption under Subsection (f) of this section is the lesser
33-17 of those rates.
33-18 (h) The limitations prescribed by Subsections (d), (e), and
33-19 (f) of this section do not apply to any portion of an annual
33-20 benefit payable by the retirement system that is attributable to
33-21 the balance in the member's individual account in Fund No. 1 as of
33-22 December 31, 1985, or from interest credited to the member's
33-23 account after December 31, 1985, as a result of deposits before
33-24 that date.
33-25 (i) The limitations prescribed by this section apply to the
33-26 aggregate of the benefits attributable to city contributions under
33-27 the police retirement system and any other defined benefit plan
34-1 maintained by the city. All member contributions to the police
34-2 retirement system that are not picked up, within the meaning of
34-3 Section 414(h) of the Internal Revenue Code of 1986 (26 U.S.C.
34-4 Section 414), when aggregated with all other annual additions made
34-5 under any defined contribution plan maintained by the city satisfy
34-6 the limitations prescribed by Section 415(c) of the Internal
34-7 Revenue Code of 1986 (26 U.S.C. Section 415). All benefits
34-8 described by the first sentence of this subsection and all annual
34-9 additions, as described by the second sentence of this subsection,
34-10 satisfy the combined limitation prescribed by Section 415(e) of the
34-11 Internal Revenue Code of 1986 (26 U.S.C. Section 415).
34-12 (j) If the Internal Revenue Code of 1986 (Title 26, United
34-13 States Code) is amended in a manner that limitations similar to
34-14 those provided by this section are not required of governmental
34-15 retirement plans to remain qualified plans, the board by rule may
34-16 eliminate all or any portion of the limitations provided by this
34-17 section.
34-18 (k) The annual benefit payable by the police retirement
34-19 system that is otherwise limited by this section may be increased
34-20 each year in accordance with cost-of-living adjustments by the
34-21 secretary of the treasury as long as it does not exceed the amount
34-22 that would be payable without limitation under Section 415 of the
34-23 Internal Revenue Code of 1986 (26 U.S.C. Section 415).
34-24 ARTICLE XII
34-25 Sec. 12.01. DISTRIBUTION RULES FOR RETIREMENT AND DEATH
34-26 ANNUITY PAYMENTS. (a) If a member selects, or if a member's death
34-27 before retirement results in the payment of, an optional annuity
35-1 providing for payment of a fixed number of monthly payments to the
35-2 member's beneficiary or estate if the member dies before the total
35-3 number of payments has been completed, the option is limited as
35-4 provided by Subsections (b), (c), (d), and (e) of this section.
35-5 (b) If, according to mortality tables adopted by the
35-6 Internal Revenue Service, at the time of the member's retirement
35-7 the joint life expectancy of the member making the selection and of
35-8 the designated beneficiary is less than the minimum period that
35-9 monthly payments would be required under the option selected, the
35-10 member must select another option so that the minimum period that
35-11 monthly payments would be required does not exceed the joint life
35-12 expectancy of the person making the selection and of the designated
35-13 beneficiary.
35-14 (c) If, according to mortality tables adopted by the
35-15 Internal Revenue Service, the life expectancy of a person to whom a
35-16 benefit will be paid as the result of a member's death before
35-17 retirement is less at the time of the member's death than the
35-18 minimum period that monthly payments would be required under the
35-19 option selected, the retirement system shall adjust the minimum
35-20 period that monthly payments will be required to a period that is
35-21 not less than 60 months and that is the greatest multiple of 12
35-22 months that does not exceed the life expectancy of the person to
35-23 whom the benefit will be paid. The amount of the monthly payment
35-24 shall be adjusted to the actuarial equivalent of the payments that
35-25 would be made for the greater number of months.
35-26 (d) If the member making the selection designates the
35-27 member's estate as beneficiary and if, according to mortality
36-1 tables adopted by the Internal Revenue Service, the life expectancy
36-2 of that member is less than the minimum period that monthly
36-3 payments would be required under the option selected, the member
36-4 must select another option so that the minimum period that monthly
36-5 payments would be required does not exceed the member's life
36-6 expectancy at the time of the member's retirement.
36-7 (e) If an estate will be paid monthly benefits as the result
36-8 of a member's death before retirement for a period that would
36-9 exceed 60 months, the period for which the payments will be made
36-10 shall be reduced to 60 months, and the amount of the monthly
36-11 payment to the estate is the actuarial equivalent of the payments
36-12 that would have been made for the greater number of months.
36-13 (f) If a member selects an optional annuity that is payable
36-14 after the retiree's death throughout the life of a beneficiary who
36-15 is not the retiree's spouse, payments to the beneficiary after the
36-16 retiree's death may not exceed the applicable percentage of the
36-17 annuity payment that would have been payable to the retiree using
36-18 the following table:
36-19 Excess of age of member Applicable
36-20 over age of beneficiary: percentage:
36-21 10 years or less 100 percent
36-22 more than 10 years but less than 25 years 67 percent
36-23 25 years or more 50 percent
36-24 (g) Unless the member's spouse is the designated beneficiary
36-25 of an optional annuity that guarantees a fixed number of monthly
36-26 payments, the guaranteed number of payments may not exceed the
36-27 applicable period using the following table:
37-1 Maximum number
37-2 of guaranteed
37-3 Age of member at retirement: monthly payments:
37-4 less than 84 180
37-5 at least 84 but less than 91 120
37-6 91 or more 60
37-7 Sec. 12.02. DISTRIBUTION RULES FOR DISABILITY ANNUITY
37-8 PAYMENTS. (a) If a member selects an optional annuity providing
37-9 for payment of a fixed number of monthly annuity payments to the
37-10 member's beneficiary or estate if the member dies before the total
37-11 number of payments has been completed, the option is limited as
37-12 provided by Subsections (b) and (c) of this section.
37-13 (b) If, according to mortality tables adopted by the
37-14 Internal Revenue Service, at the time of the member's retirement
37-15 the joint life expectancy of the member making the selection and of
37-16 the designated beneficiary is less than the minimum period that
37-17 monthly payments would be required under the option selected, the
37-18 member must select another option so that the minimum period that
37-19 monthly payments would be required does not exceed the joint life
37-20 expectancy of the person making the selection and of the designated
37-21 beneficiary.
37-22 (c) If the member making the selection designates the
37-23 member's estate as beneficiary and if, according to mortality
37-24 tables adopted by the Internal Revenue Service, the life expectancy
37-25 of that member is less than the minimum period that monthly
37-26 payments would be required under the option selected, the member
37-27 must select another option so that the minimum period that monthly
38-1 payments would be required does not exceed the member's life
38-2 expectancy at the time of the member's retirement.
38-3 (d) If a member selects an optional annuity that is payable
38-4 after the retiree's death throughout the life of a beneficiary who
38-5 is not the retiree's spouse, payments to the beneficiary after the
38-6 retiree's death may not exceed the applicable percentage of the
38-7 annuity payment that would have been payable to the retiree using
38-8 the following table:
38-9 Excess of age of member Applicable
38-10 over age of beneficiary: percentage:
38-11 10 years or less 100 percent
38-12 more than 10 but less than 25 years 67 percent
38-13 25 years or more 50 percent
38-14 (e) Unless the member's spouse is the designated beneficiary
38-15 of an optional annuity that guarantees a fixed number of monthly
38-16 payments, the guaranteed number of payments may not exceed the
38-17 applicable period using the following table:
38-18 Maximum number
38-19 of guaranteed
38-20 Age of member at retirement: monthly payments:
38-21 less than 84 180
38-22 at least 84 but less than 91 120
38-23 91 or more 60
38-24 ARTICLE XIII
38-25 Sec. 13.01. TRANSFER OF ELIGIBLE ROLLOVER DISTRIBUTIONS.
38-26 (a) This section applies to distributions made on or after January
38-27 1, 1993. Notwithstanding any provision of the plan to the contrary
39-1 that would otherwise limit a distributee's election under this
39-2 section, a distributee may elect, at the time and in the manner
39-3 prescribed by the plan administrator, to have any portion of an
39-4 eligible rollover distribution paid directly to an eligible
39-5 retirement plan specified by the distributee in a direct rollover.
39-6 (b) In this section:
39-7 (1) "Eligible rollover distribution" means any
39-8 distribution of all or any portion of the balance to the credit of
39-9 the distributee, except that an eligible rollover distribution does
39-10 not include:
39-11 (A) any distribution that is one of a series of
39-12 substantially equal periodic payments made at least annually for
39-13 the life or life expectancy of the distributee or the joint lives
39-14 or joint life expectancies of the distributee and distributee's
39-15 designated beneficiary, or for a specified period of 10 years or
39-16 more;
39-17 (B) any distribution to the extent the
39-18 distribution is required under Section 401(a)(9) of the Internal
39-19 Revenue Code of 1986 (26 U.S.C. Section 401); or
39-20 (C) the portion of any distribution that is not
39-21 includible in gross income.
39-22 (2) "Eligible retirement plan" means:
39-23 (A) an individual retirement account described
39-24 by Section 408(a) of the Internal Revenue Code of 1986 (26 U.S.C.
39-25 Section 408), an individual retirement annuity described in Section
39-26 408(b) of the Internal Revenue Code of 1986 (26 U.S.C. Section
39-27 408), an annuity plan described in Section 403(a) of the Internal
40-1 Revenue Code of 1986 (26 U.S.C. Section 403), or a qualified trust
40-2 described in Section 401(a) of the Internal Revenue Code of 1986
40-3 (26 U.S.C. Section 401), that accepts the distributee's eligible
40-4 rollover distribution; or
40-5 (B) an individual retirement account or
40-6 individual retirement annuity, in the case of an eligible rollover
40-7 distribution to a surviving spouse.
40-8 (3) "Distributee" means a member or former member, the
40-9 member's or former member's surviving spouse, or the member's or
40-10 former member's spouse or former spouse who is the alternate payee
40-11 under a qualified domestic relations order, as prescribed by
40-12 Section 804.003, Government Code.
40-13 (4) "Direct rollover" means a payment by the plan to
40-14 the eligible retirement plan specified by the distributee.
40-15 SECTION 18. Sections 1.02(9), (10), and (23), and Section
40-16 4.01(g), Chapter 452, Acts of the 72nd Legislature, Regular
40-17 Session, 1991 (Article 6243n-1, Vernon's Texas Civil Statutes), are
40-18 repealed.
40-19 SECTION 19. This Act takes effect September 1, 1995.
40-20 SECTION 20. The importance of this legislation and the
40-21 crowded condition of the calendars in both houses create an
40-22 emergency and an imperative public necessity that the
40-23 constitutional rule requiring bills to be read on three several
40-24 days in each house be suspended, and this rule is hereby suspended.