By Armbrister S.B. No. 1231
74R1460 GCH-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the powers and duties of and systems and programs under
1-3 the Employees Retirement System of Texas.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 805.002, Government Code, is amended by
1-6 amending Subsections (a), (b), (c), and (d) and adding Subsections
1-7 (g) and (h) to read as follows:
1-8 (a) Except as provided by Subsection (h), a <A> member of
1-9 both the employees retirement system and the teacher retirement
1-10 system who applies for service or disability retirement from either
1-11 system may transfer to that system service credit established in
1-12 the other system if the member has at least three years of service
1-13 credit in the system from which the member is retiring. A person
1-14 whose membership was transferred from the teacher retirement system
1-15 to the employees retirement system pursuant to Section 43(a),
1-16 Chapter 812, Acts of the 73rd Legislature, 1993, and who later
1-17 resumes membership in the teacher retirement system is eligible to
1-18 transfer service credit from the employees retirement system to the
1-19 teacher retirement system if the sum of the member's service credit
1-20 in the teacher retirement system and the service credit that was
1-21 transferred to the employees retirement system at the time of the
1-22 transfer of membership is at least three years.
1-23 (b) Except as provided by Subsection (h), a <A> member of
1-24 both the employees retirement system and the teacher retirement
2-1 system who has less than three years of service credit in the
2-2 system in which the person most recently received service credit
2-3 and at least three years of service credit in the other system may,
2-4 at the time the person applies for service or disability retirement
2-5 <from the other system>, transfer service credit to the other
2-6 <that> system from the system in which the person most recently
2-7 received service credit.
2-8 (c) Except as provided by Subsections (e) and (f), a member
2-9 of the employees retirement system or the teacher retirement system
2-10 who formerly was a member of the other system may reinstate or
2-11 purchase service credit in the other system for the purpose of
2-12 making a transfer under Subsection (a) if the member has at least
2-13 three years of service credit in the system in which the person
2-14 currently is a member. Except as provided by Subsections (e) and
2-15 (f), a member of the employees retirement system or the teacher
2-16 retirement system who formerly was a member of the other system,
2-17 who before September 1, 1993, transferred at least three years of
2-18 service credit to the system in which the person currently is a
2-19 member, and who has at least three years of service credit other
2-20 than the transferred credit in the system in which the person
2-21 currently is a member may reinstate or purchase service credit in
2-22 the other system for the purpose of making a transfer of all
2-23 service credit to that other system.
2-24 (d) Except as provided by Subsections (e) and (f), the
2-25 designated beneficiary of a member of the employees retirement
2-26 system or the teacher retirement system who dies while holding a
2-27 position included in the membership of the system may make a
3-1 transfer under Subsection (a) and a reinstatement or purchase under
3-2 Subsection (c) if the deceased member had at least three years of
3-3 service credit in the system in which the member was performing
3-4 service at the time of death. The designated beneficiary may make
3-5 a transfer under Subsection (b) if the deceased member had less
3-6 than three years of service credit in the system in which the
3-7 member was performing service at the time of death. If a member is
3-8 not survived by a designated beneficiary, an alternate beneficiary,
3-9 or a beneficiary provided by law or has failed to designate a
3-10 beneficiary after becoming a member or resuming membership, the
3-11 personal representative of the member's estate has the same right
3-12 under this subsection as a designated beneficiary. A transfer of
3-13 service by the beneficiary or personal representative of a deceased
3-14 member's estate is not permitted unless the transfer will result in
3-15 the payment of a death benefit annuity.
3-16 (g) To be eligible to make a transfer pursuant to Subsection
3-17 (d), a person must be the designated beneficiary of the deceased
3-18 member under both retirement systems.
3-19 (h) A member applying for occupational disability retirement
3-20 from the employees retirement system may transfer service credit
3-21 from the teacher retirement system only if the member was
3-22 contributing to the employees retirement system at the time the
3-23 disabling condition occurred.
3-24 SECTION 2. Section 805.003, Government Code, is amended to
3-25 read as follows:
3-26 Sec. 805.003. Payments to Reinstate or Purchase Service
3-27 Credit. The cost of reinstating or purchasing service credit under
4-1 Section 805.002 is determined according to the statutes that govern
4-2 the reinstatement or purchase of the type of service credit in the
4-3 system in which it is to be reinstated or purchased. All payments
4-4 for service credit reinstated or purchased under Section 805.002
4-5 must be made before retirement or the first payment of a death
4-6 benefit annuity, as applicable, or before a later date if allowed
4-7 for members of the retirement system in which the credit is to be
4-8 reinstated or purchased.
4-9 SECTION 3. Sections 805.007(a) and (b), Government Code, are
4-10 amended to read as follows:
4-11 (a) A person who transfers service credit under this chapter
4-12 forfeits all rights to benefits payable by the system from which it
4-13 is transferred and is not an annuitant of that system for any
4-14 purpose, including the payment of postretirement increases to
4-15 annuitants of that system. This subsection does not preclude a
4-16 person from receiving benefits as a beneficiary of an account not
4-17 related to the transferred service credit.
4-18 (b) Service credit transferred under this chapter is
4-19 considered as if it had been granted for service performed under
4-20 the system to which it has been transferred and is used in
4-21 satisfying minimum service requirements for retirement and in
4-22 determining the amount of benefits that are based on the amount of
4-23 a person's service credit:
4-24 (1) except that a person's average salary for the
4-25 purpose of computing an annuity may be determined only from service
4-26 credit that was originally established in one system and that
4-27 results in the higher average salary; <and>
5-1 (2) except as provided by Section 805.006; and
5-2 (3) except service credit transferred by a member
5-3 applying for occupational disability retirement.
5-4 SECTION 4. Section 805.008, Government Code, is amended to
5-5 read as follows:
5-6 Sec. 805.008. RESPONSIBILITY FOR BENEFIT PAYMENTS.
5-7 (a) Except as provided by Subsection (c), the <The> system from
5-8 which a person's service credit is transferred under this chapter
5-9 shall transfer to the other system, at the time the annuity based
5-10 on the service credit becomes payable, an amount equal to the
5-11 portion of the actuarial value of the annuity that represents the
5-12 percentage of the total amount of the person's service credited in
5-13 both systems that was credited in the system from which the credit
5-14 is being transferred.
5-15 (b) Except as provided by Subsection (c), the <The> systems
5-16 jointly by rule shall adopt actuarial tables and investment
5-17 assumptions to be used in computing actuarial values under this
5-18 section.
5-19 (c) As an alternative to Subsections (a) and (b), the
5-20 systems by rule may require the system from which service credit is
5-21 transferred to pay monthly an amount equal to the portion of the
5-22 actual value of the monthly payment of the annuity that represents
5-23 the percentage of the total amount of service credit that is
5-24 transferred.
5-25 (d) For the purpose of computing an amount to be transferred
5-26 under this section, service credit in either system must be
5-27 considered as if it were credited under rules of the teacher
6-1 retirement system determining the amount of service creditable.
6-2 (e) <(d)> An amount transferred under this section is
6-3 payable from amounts credited to the person's individual account
6-4 and amounts credited to the account in which the system places
6-5 state contributions. Except as provided by Subsection (g), an <An>
6-6 amount received under this section shall be deposited in the
6-7 account from which the system receiving the amount pays annuities.
6-8 (f) <(e)> The system to which a transfer is made under this
6-9 section is responsible for paying the annuity for which the
6-10 transfer was made, including the entire amount of any increase in
6-11 the annuity granted after the transfer.
6-12 (g) At the time of the death of a person whose membership
6-13 was transferred from the teacher retirement system to the employees
6-14 retirement system pursuant to Section 43(a), Chapter 812, Acts of
6-15 the 73rd Legislature, 1993, the teacher retirement system shall
6-16 transfer to the employees retirement system the person's service
6-17 credit in the teacher retirement system and, if employment with the
6-18 transferring agency was continuous from the date of transfer to the
6-19 date of death:
6-20 (1) an amount determined under Subsections (a) and (b)
6-21 or under Subsection (c), if an annuity is paid under Chapter 814;
6-22 or
6-23 (2) the amount of money in the member savings account
6-24 plus an amount equal to five percent of the person's account
6-25 balance for each full year of service credited in the teacher
6-26 retirement system, if a death benefit other than an annuity is paid
6-27 under Chapter 814.
7-1 SECTION 5. Section 811.001(8), Government Code, is amended
7-2 to read as follows:
7-3 (8) "Custodial officer" means a member of the
7-4 retirement system who is employed by the institutional division or
7-5 the state jail division of the Texas Department of Criminal Justice
7-6 and is certified by the department and accepted by the retirement
7-7 system as eligible to receive service credit as a custodial officer
7-8 <as having a normal job assignment that requires frequent or
7-9 infrequent regularly planned contact with, and in close proximity
7-10 to, inmates of the institutional division or inmates or defendants
7-11 confined in the state jail division without the protection of bars,
7-12 doors, security screens, or similar devices and includes
7-13 assignments normally involving supervision or the potential for
7-14 supervision of inmates in inmate housing areas, educational or
7-15 recreational facilities, industrial shops, kitchens, laundries,
7-16 medical areas, agricultural shops or fields, or in other areas on
7-17 or away from property of the institutional division or the state
7-18 jail division>.
7-19 SECTION 6. Section 813.104, Government Code, is amended by
7-20 amending Subsection (d), relettering Subsection (e) as Subsection
7-21 (g), and adding new Subsections (e) and (f) to read as follows:
7-22 (d) Except as provided by Subsection (e), payments
7-23 <Payments> may not be made under this section:
7-24 (1) to establish or reestablish service credit of a
7-25 person who has retired or died; or
7-26 (2) to establish current service under Section
7-27 813.201.
8-1 (e) The designated beneficiary of a deceased member, or if
8-2 none exists, the personal representative of the decedent's estate,
8-3 may establish or reestablish service for which the member was
8-4 eligible at the time of death if the establishment of the service
8-5 would result in the payment of a death benefit annuity.
8-6 (f) The payment for the establishment or reestablishment of
8-7 service under Subsection (e) must be made in a lump sum and
8-8 completed before the first payment of a death benefit annuity, but
8-9 not later than the 60th day after the date the retirement system
8-10 receives notice of the death.
8-11 (g) <(e)> The retirement system may adopt rules to
8-12 administer this section.
8-13 SECTION 7. Subchapter D, Chapter 813, Government Code, is
8-14 amended by adding Section 813.305 to read as follows:
8-15 Sec. 813.305. MILITARY SERVICE CREDIT GOVERNED BY UNIFORMED
8-16 SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT. The retirement
8-17 system may adopt rules to comply with the Uniformed Services
8-18 Employment and Reemployment Rights Act (38 U.S.C. Section 4301 et
8-19 seq.) and other federal laws affecting the crediting of military
8-20 service.
8-21 SECTION 8. Section 813.506, Government Code, is amended to
8-22 read as follows:
8-23 Sec. 813.506. Custodial Officer Service. (a) The Texas
8-24 Department of Criminal Justice <Corrections> by rule shall adopt
8-25 standards for determining eligibility for service credit as a
8-26 custodial officer, based on the need to encourage early retirement
8-27 of persons whose duties are hazardous and require them to have
9-1 routine contact with inmates of or defendants confined in the state
9-2 jail division of the Texas Department of Criminal Justice
9-3 <Corrections> on a regular basis.
9-4 (b) To be creditable as custodial officer service, service
9-5 performed must meet the requirements of the rules adopted under
9-6 Subsection (a) and must <may> be performed by persons <in one of
9-7 the following job categories:>
9-8 <(1) all persons> classified as Correctional Officer I
9-9 through warden, including training officers and special operations
9-10 reaction team officers<;>
9-11 <(2) all other employees assigned to work on a unit
9-12 and whose jobs require routine contact with inmates, including but
9-13 not limited to farm managers, livestock supervisors, maintenance
9-14 foremen, shop foremen, medical assistants, food service
9-15 supervisors, stewards, education consultants, commodity
9-16 specialists, and correctional counselors;>
9-17 <(3) employees assigned to administrative offices
9-18 whose jobs require routine contact with inmates, including but not
9-19 limited to investigators, compliance monitors, accountants
9-20 routinely required to audit unit operations, sociologists,
9-21 interviewers, classification officers, and supervising counselors;
9-22 and>
9-23 <(4) administrative positions whose jobs require
9-24 response to emergency situations involving inmates, including but
9-25 except as specified not limited to the director, deputy directors,
9-26 assistant directors, and not more than 25 administrative duty
9-27 officers>. An employee of the department on September 1, 1995, who
10-1 before that date was certified as eligible to receive service
10-2 credit as a custodial officer continues to accrue service credit as
10-3 a custodial officer for service performed on or after that date for
10-4 the department in a position for which employees were eligible for
10-5 certification under this section before September 1, 1995.
10-6 (c) The institutional division of the Texas Department of
10-7 Criminal Justice shall determine a person's eligibility to receive
10-8 credit as a custodial officer. A determination of the division may
10-9 not be appealed by an employee but is subject to change by the
10-10 retirement system.
10-11 (d) <(e)> As part of the audit of the institutional division
10-12 of the Texas Department of Criminal Justice by the state auditor in
10-13 accordance with Chapter 321, the state auditor <State Auditor> may
10-14 verify the accuracy of reports submitted to the retirement system
10-15 under this section. The state auditor shall review biennially the
10-16 standards adopted by the department under Subsection (a).
10-17 SECTION 9. Section 813.509, Government Code, is amended to
10-18 read as follows:
10-19 Sec. 813.509. Credit for Accumulated Sick Leave. (a) A
10-20 member who holds a position included in the employee class of
10-21 membership during the month that includes the effective date of the
10-22 member's retirement and who retires based on service or a
10-23 disability is entitled to service credit in the retirement system
10-24 for the member's sick leave that has accumulated and is unused on
10-25 the last day of employment. Sick leave is creditable in the
10-26 retirement system at the rate of one month of service credit for
10-27 each 20 days, or 160 hours, of accumulated sick leave. An
11-1 increment of less than 20 days is not creditable.
11-2 (b) A member who holds a position included in the employee
11-3 class may use sick leave creditable under this section to satisfy
11-4 service requirements for retirement under Section 814.104 or
11-5 814.107 if the sick leave attributed to the eligibility
11-6 requirements remains otherwise unused on the last day of
11-7 employment.
11-8 (c) Except as provided by Subsection (d), the <The>
11-9 disbursing officer of each department or agency shall, before the
11-10 11th day after the effective date of retirement of one or more
11-11 employees of the department or agency <of each month>, certify to
11-12 the retirement system:
11-13 (1) the name of each person whose retirement from the
11-14 department or agency, and from state service, became effective
11-15 during the preceding month; and
11-16 (2) the amount of the person's accumulated sick leave
11-17 on the last day of employment.
11-18 (d) The disbursing officer of a department or agency that
11-19 employs a member who applies for retirement under Subsection (b)
11-20 shall, not more than 90 or less than 30 days before the effective
11-21 date of the member's retirement, certify to the retirement system
11-22 the amount of the member's accumulated and unused sick leave. The
11-23 officer shall immediately notify the retirement system if the
11-24 member uses sick leave after the date of certification.
11-25 (e) <(c)> On receipt of a certification under Subsection (c)
11-26 or (d) <(b)>, the retirement system shall grant any credit to which
11-27 a retiring member or retiree who is a subject of the certification
12-1 is entitled. An increase in the computation of an annuity because
12-2 of credit provided by this section after a certification under
12-3 Subsection (c) begins with the first payment that becomes due after
12-4 certification.
12-5 (f) The retirement system shall cancel the retirement of a
12-6 person who used sick leave creditable under this section to qualify
12-7 for service retirement if the sick leave is otherwise used by the
12-8 person before the effective date of retirement.
12-9 (g) In this section, "sick leave" does not include credit
12-10 granted under an agency sick-leave pool or under the Family and
12-11 Medical Leave Act of 1993 (Pub. L. 103-3).
12-12 SECTION 10. Section 814.003, Government Code, is amended by
12-13 adding Subsection (e) to read as follows:
12-14 (e) If a person elects to receive a standard disability
12-15 retirement annuity and dies during the first calendar month that
12-16 begins after the effective date of the person's retirement, the
12-17 person is considered to have been a contributing member at the time
12-18 of death.
12-19 SECTION 11. Subchapter A, Chapter 814, Government Code, is
12-20 amended by adding Sections 814.006 and 814.007 to read as follows:
12-21 Sec. 814.006. SIMULTANEOUS DEATH OF MEMBER AND BENEFICIARY.
12-22 When a member or annuitant and the beneficiary of the member or
12-23 annuitant have died within a period of less than 120 hours, the
12-24 member or annuitant is considered to have survived the beneficiary
12-25 for the purpose of determining the rights to amounts payable under
12-26 this subtitle on the death of the member or annuitant.
12-27 Sec. 814.007. BENEFICIARY CAUSING DEATH OF MEMBER OR
13-1 ANNUITANT. (a) A benefit payable on the death of a member or
13-2 annuitant may not be paid to a person convicted of causing that
13-3 death but instead is payable as if the convicted person had
13-4 predeceased the decedent.
13-5 (b) A person who becomes eligible under this section to
13-6 select death or survivor benefits may select benefits as if the
13-7 person were the designated beneficiary.
13-8 (c) The retirement system shall reduce any annuity computed
13-9 in part on the age of the convicted person to a lump sum equal to
13-10 the present value of the remainder of the annuity. The reduced
13-11 amount is payable to a person entitled as provided by this section
13-12 to receive the benefit.
13-13 (d) The retirement system is not required to change the
13-14 recipient of benefits under this section unless it receives actual
13-15 notice of the conviction of a beneficiary. However, the retirement
13-16 system may delay payment of a benefit payable on the death of a
13-17 member or annuitant pending the results of a criminal investigation
13-18 and of legal proceedings relating to the cause of death.
13-19 (e) For the purposes of this section, a person has been
13-20 convicted of causing the death of a member or annuitant if the
13-21 person:
13-22 (1) pleads guilty or nolo contendere to, or is found
13-23 guilty by a court of, causing the death of the member or annuitant,
13-24 regardless of whether sentence is imposed or probated; and
13-25 (2) has no appeal of the conviction pending and the
13-26 time provided for appeal has expired.
13-27 SECTION 12. Section 814.105, Government Code, is amended by
14-1 adding Subsection (c) to read as follows:
14-2 (c) The computation of a standard service retirement annuity
14-3 for a retiring member or retiree who receives sick leave credit
14-4 under Section 813.509 shall, at the time the credit is granted,
14-5 include a projection of the person's compensation being paid
14-6 immediately before retirement to a period after retirement equal to
14-7 the number of months of sick leave credit.
14-8 SECTION 13. Sections 814.107(b) and (f), Government Code,
14-9 are amended to read as follows:
14-10 (b) The standard service retirement annuity payable for at
14-11 least 20 years of service credit as a law enforcement or custodial
14-12 officer is an amount computed on the basis of the member's average
14-13 monthly compensation for that service for the 36 highest months of
14-14 compensation, projected, if applicable, as provided by Section
14-15 814.105(c), times the sum of the percentage factor used in the
14-16 computation of a standard service retirement annuity under Section
14-17 814.105 plus .5 percent. <a percentage derived from the following
14-18 table:>
14-19 <Years of Law Enforcement or Percentage of Average>
14-20 <Custodial Officer Service Credit Monthly Compensation>
14-21 <at least 20 but less than 21 50 percent>
14-22 <at least 21 but less than 22 52 percent>
14-23 <at least 22 but less than 23 54 percent>
14-24 <at least 23 but less than 24 56 percent>
14-25 <at least 24 but less than 25 58 percent>
14-26 <at least 25 but less than 26 60 percent>
14-27 <at least 26 but less than 27 62 percent>
15-1 <at least 27 but less than 28 64 percent>
15-2 <at least 28 but less than 29 66 percent>
15-3 <at least 29 but less than 30 68 percent>
15-4 <at least 30 but less than 31 70 percent>
15-5 <at least 31 but less than 32 71 percent>
15-6 <at least 32 but less than 33 72 percent>
15-7 <at least 33 but less than 34 73 percent>
15-8 <at least 34 but less than 35 74 percent>
15-9 <at least 35 but less than 36 75 percent>
15-10 <at least 36 but less than 37 76 percent>
15-11 <at least 37 but less than 38 77 percent>
15-12 <at least 38 but less than 39 78 percent>
15-13 <at least 39 but less than 40 79 percent>
15-14 <40 or more 80 percent>
15-15 (f) The standard combined service retirement annuity payable
15-16 for at least 20 years of service credit as a law enforcement or
15-17 custodial officer may not exceed 100 <80> percent of the higher of
15-18 the average compensation computed under Section 814.105 or the
15-19 average compensation computed under Subsection (b).
15-20 SECTION 14. Section 814.108, Government Code, is amended by
15-21 adding Subsection (g) to read as follows:
15-22 (g) Except as provided by Section 814.1081, a person who
15-23 selected an optional service retirement annuity approved by the
15-24 board of trustees or an optional service retirement annuity
15-25 described by Subsection (c)(1) or (c)(2) may not change or revoke a
15-26 beneficiary designation after the person's effective date of
15-27 retirement.
16-1 SECTION 15. Sections 814.207(b), (d), and (e), Government
16-2 Code, are amended to read as follows:
16-3 (b) Except as provided by Subsection (c), an occupational
16-4 disability retirement annuity under this section is an amount, but
16-5 not more than 100 <80> percent, computed on the basis of the
16-6 officer's monthly compensation at the time of the disabling injury
16-7 or disease, times a percentage derived by application of <the table
16-8 provided by> Section 814.107(b).
16-9 (d) The portions <portion> of the annuity under this section
16-10 payable from the law enforcement and custodial officer supplemental
16-11 retirement fund are <is> the amount remaining after deduction of
16-12 any amount payable under Section 814.206, except the portion of an
16-13 amount that exceeds the minimum payments provided by Section
16-14 814.206(b) and that is made for service other than as a law
16-15 enforcement or custodial officer and any amount by which an annuity
16-16 is increased under Subsection (e).
16-17 (e) If a retiring member or retiree under this section
16-18 presents evidence satisfactory to the retirement system that the
16-19 person's condition makes the person incapable of gainful occupation
16-20 and is considered a total disability under federal social security
16-21 law, the retirement system shall increase the person's occupational
16-22 disability retirement annuity to 100 percent of the officer's
16-23 monthly compensation at the time of the disabling injury or
16-24 disease. <If Section 815.405 is held to be invalid by a court of
16-25 competent jurisdiction and the decision becomes final, an annuity
16-26 may not be paid under this section.>
16-27 SECTION 16. Section 814.301, Government Code, is amended by
17-1 adding Subsection (e) to read as follows:
17-2 (e) A beneficiary designation that names a former spouse as
17-3 beneficiary is invalid for purposes of this section unless the
17-4 designation is made after the date of the divorce.
17-5 SECTION 17. Section 814.302(a), Government Code, is amended
17-6 to read as follows:
17-7 (a) If a member eligible to select a death benefit plan
17-8 under Section 814.301 dies without having made a selection, or if a
17-9 selection cannot be made effective, the member's designated
17-10 beneficiary <surviving spouse> may select a plan in the same manner
17-11 as if the member had made the selection. If there is no designated
17-12 beneficiary <surviving spouse>, the personal representative of the
17-13 decedent's estate may make the selection for the benefit of the
17-14 decedent's heirs or devisees. In lieu of selecting a death benefit
17-15 plan, the designated beneficiary <surviving spouse> or, if there is
17-16 none, the personal representative of the decedent's estate, may
17-17 elect to receive a refund of contributions and any applicable
17-18 payment under Section 814.401.
17-19 SECTION 18. Sections 814.401(b) and (d), Government Code,
17-20 are amended to read as follows:
17-21 (b) The benefit provided by this section is payable to the
17-22 beneficiary designated by the member under Section 814.403(b) <a
17-23 person designated by the member in a signed document filed with the
17-24 retirement system>. If a member does not designate a beneficiary
17-25 or if the beneficiary designation cannot be made effective <does
17-26 not survive the member>, the benefit is payable to the member's
17-27 estate.
18-1 (d) A death benefit may not be paid under this section if,
18-2 at the time of death, a death benefit annuity <under Section
18-3 814.301> became effective.
18-4 SECTION 19. Section 814.403, Government Code, is amended to
18-5 read as follows:
18-6 Sec. 814.403. Return of Contributions. (a) Except as
18-7 provided by Subsection (d) <(c)>, if a member dies before
18-8 retirement, the amount in the member's individual account in the
18-9 employees saving account at the time of death is payable as a
18-10 lump-sum death benefit.
18-11 (b) Except as provided by Subsection (c), the <The> benefit
18-12 provided by this section is payable to a person designated by the
18-13 member in a signed and witnessed document filed with the retirement
18-14 system before the member's death. A designation, change, or
18-15 revocation of a beneficiary in a will or other document not filed
18-16 with the retirement system is not effective. If a member does not
18-17 designate a beneficiary or if the beneficiary designation cannot be
18-18 made effective <does not survive the member>, the benefit is
18-19 payable to the member's estate.
18-20 (c) A beneficiary designation that names a former spouse as
18-21 beneficiary is invalid for purposes of this section unless the
18-22 designation is made after the date of the divorce.
18-23 (d) A death benefit may not be paid under this section if,
18-24 at the time of death, a death benefit annuity <under Section
18-25 814.301> became effective.
18-26 SECTION 20. Section 814.501, Government Code, is amended by
18-27 amending Subsection (b) and adding Subsection (c) to read as
19-1 follows:
19-2 (b) The benefit provided by this section is payable to the
19-3 beneficiary designated by the member under Section 814.403(b) <a
19-4 person designated by the retiree in a signed and witnessed document
19-5 filed with the retirement system>. If a retiree does not designate
19-6 a beneficiary or if the beneficiary designation cannot be made
19-7 effective <does not survive the retiree>, the benefit is payable to
19-8 the retiree's estate.
19-9 (c) A beneficiary designation that names a former spouse as
19-10 beneficiary is invalid for purposes of this section unless the
19-11 designation is made after the date of the divorce.
19-12 SECTION 21. Sections 814.603(a) and (d), Government Code,
19-13 are amended to read as follows:
19-14 (a) The retirement system shall make a supplemental payment
19-15 as provided by Subsection (d) to persons whose annuities are
19-16 described by Section 814.107, 814.207, 814.305, or 814.601(a) and
19-17 that are based on service retirements, disability retirements, or
19-18 deaths. This supplemental payment is in addition to the regular
19-19 monthly annuity payment. Each person who receives an annuity
19-20 described by this subsection is entitled to receive one payment
19-21 equal to 10 percent of one month's annuity payment for each fiscal
19-22 year that preceded or includes the effective date of the
19-23 requirement or authorization under Subsection (d) and <before the
19-24 fiscal year beginning September 1, 1993,> in which the annuity has
19-25 been paid. A supplemental payment may not exceed 350 percent of a
19-26 monthly annuity. <Only a person whose annuity began in the fiscal
19-27 year ending August 31, 1993, or earlier is eligible for the
20-1 supplemental payment.> Supplemental payments under this subsection
20-2 must comply with Section 811.006.
20-3 (d) The retirement system shall make a supplemental payment
20-4 under this section in the fiscal year ending August 31, 1997. The
20-5 board of trustees may by rule authorize similar supplemental
20-6 payments in succeeding <the> fiscal years <year ending August 31,
20-7 1995>, if the payments are in compliance with Section 811.006.
20-8 SECTION 22. Section 815.006, Government Code, is amended to
20-9 read as follows:
20-10 Sec. 815.006. Compensation; Expenses. (a) Notwithstanding
20-11 Subchapter C of Chapter 659, trustees <Trustees> who are
20-12 contributing members of the retirement system serve without
20-13 compensation but are entitled to reimbursement for all actual and
20-14 necessary expenses that they incur in the performance of official
20-15 board duties.
20-16 (b) Notwithstanding Subchapter C of Chapter 659, subject
20-17 <Subject> to the approval of the board of trustees, trustees who
20-18 are not contributing members of the retirement system may receive:
20-19 (1) compensation; and
20-20 (2) reimbursement for all actual and necessary
20-21 expenses that they incur in the performance of official board
20-22 duties.
20-23 SECTION 23. The heading of Section 815.110, Government Code,
20-24 is amended to read as follows:
20-25 Sec. 815.110. AUDITS <MANAGEMENT AUDIT>.
20-26 SECTION 24. Section 815.110, Government Code, is amended by
20-27 adding Subsection (e) to read as follows:
21-1 (e) The board of trustees annually shall select an
21-2 independent auditor to perform a financial audit of the retirement
21-3 system. The selection shall be made under a competitive bidding
21-4 process in which the state auditor is eligible to bid.
21-5 SECTION 25. Section 815.301(b), Government Code, is amended
21-6 to read as follows:
21-7 (b) The board of trustees may delegate its authority under
21-8 Subsection (a) to the executive director. The board of trustees or
21-9 the executive director may, under the standard of care provided by
21-10 Section 815.307, invest and reinvest any of the retirement system's
21-11 assets and may commingle assets of the trust fund and the law
21-12 enforcement and custodial officer supplemental retirement fund with
21-13 the assets of the Judicial Retirement System of Texas Plan Two for
21-14 investment purposes, as long as proportionate ownership records are
21-15 maintained and credited. Investments may include home office
21-16 facilities, including land, equipment, and office building, used in
21-17 administering the retirement system.
21-18 SECTION 26. (a) Except as provided by Subsections (b) and
21-19 (c) of this section, annuities that are described by Section
21-20 814.107, 814.207, 814.305, or 814.601(a), Government Code, and are
21-21 based on service retirements, disability retirements, or deaths
21-22 that occurred before September 1, 1995, are increased by 12.5
21-23 percent.
21-24 (b) Annuities are increased under Subsection (a) of this
21-25 section only if the actuary for the Employees Retirement System of
21-26 Texas certifies, based on an August 31, 1995, actuarial valuation,
21-27 that all annuity increases and annuity recomputations required or
22-1 authorized by this Act, together with all other actuarial
22-2 liabilities resulting from legislation that is enacted by the 74th
22-3 Legislature in 1995 before August 31 and that has or will become
22-4 law, will not cause the time required to amortize the unfunded
22-5 actuarial liabilities of the retirement system to be increased to a
22-6 period that exceeds 31 years. For purposes of this subsection, a
22-7 bill will become law if it has not taken effect but either has been
22-8 signed by the governor or the time provided for gubernatorial
22-9 action under Section 14, Article IV, Texas Constitution, has
22-10 expired without the governor having vetoed the bill. The increase
22-11 in annuities under Subsection (a) of this section is payable
22-12 beginning with the first monthly payments of the annuities that
22-13 become due after the month in which the actuarial certification
22-14 required by this subsection is made to the board of trustees of the
22-15 retirement system.
22-16 (c) Retirements that occurred under the provisions of
22-17 Section 814.1051 or 814.1071, Government Code, are not increased by
22-18 this section.
22-19 (d) The board of trustees of the retirement system shall pay
22-20 the increased annuities provided by this section from the
22-21 retirement annuity reserve account of the retirement system and may
22-22 transfer to that account from the state accumulation account of the
22-23 retirement system any portion of the amount that exceeds the amount
22-24 in the retirement reserve account available to finance the
22-25 increases in benefits, and that is actuarially determined to be
22-26 necessary to finance the increases, for the duration of the
22-27 annuities to which the increases apply.
23-1 SECTION 27. Subchapter A, Chapter 830, Government Code, is
23-2 amended by adding Section 830.0011 to read as follows:
23-3 Sec. 830.0011. DEFINITION. Notwithstanding Section 821.001,
23-4 in this chapter "retirement system" means the Teacher Retirement
23-5 System of Texas or the Employees Retirement System of Texas, as the
23-6 context requires.
23-7 SECTION 28. Subchapter B, Chapter 833, Government Code, is
23-8 amended by adding Section 833.1031 to read as follows:
23-9 Sec. 833.1031. MILITARY SERVICE CREDIT GOVERNED BY UNIFORMED
23-10 SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT. The retirement
23-11 system may adopt rules to comply with the Uniformed Services
23-12 Employment and Reemployment Rights Act (38 U.S.C. Section 4301 et
23-13 seq.) and other federal laws affecting the crediting of military
23-14 service.
23-15 SECTION 29. Subchapter B, Chapter 838, Government Code, is
23-16 amended by adding Section 838.1031 to read as follows:
23-17 Sec. 838.1031. MILITARY SERVICE CREDIT GOVERNED BY UNIFORMED
23-18 SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT. The retirement
23-19 system may adopt rules to comply with the Uniformed Services
23-20 Employment and Reemployment Rights Act (38 U.S.C. Section 4301 et
23-21 seq.) and other federal laws affecting the crediting of military
23-22 service.
23-23 SECTION 30. Sections 3(a)(2) and (5), Texas Employees
23-24 Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
23-25 Texas Insurance Code), are amended to read as follows:
23-26 (2) "Annuitant" shall mean an officer or employee who
23-27 retires under:
24-1 (A) the jurisdiction of the Employees Retirement
24-2 System of Texas and either receives an annuity or is eligible to
24-3 receive an annuity, pursuant to Subtitle B, D, or E of Title 8,
24-4 Government Code, or Chapter 803, Government Code, that is based on
24-5 at least 10 years of service credit or eligibility under Section
24-6 814.002 or 814.102, Government Code;
24-7 (B) the jurisdiction of the Teacher Retirement
24-8 System of Texas and either receives an annuity or is eligible to
24-9 receive an annuity, pursuant to Subtitle C, Title 8, Government
24-10 Code, or Chapter 803, Government Code, that is based on at least 10
24-11 years of service credit, whose last state employment prior to
24-12 retirement, including employment by a public community/junior
24-13 college, was as an employee of a department whose employees are
24-14 authorized to participate in the Texas employees uniform group
24-15 insurance program <the Teacher Retirement System of Texas, school
24-16 districts established within state eleemosynary institutions, the
24-17 Texas Rehabilitation Commission, the Central Education Agency, the
24-18 Texas Higher Education Coordinating Board, or an institution of
24-19 higher education>;
24-20 (C) the optional retirement program established
24-21 by Chapter 830, Government Code, and either receives an annuity or
24-22 is eligible to receive an annuity under that program, if the
24-23 person's last state employment before retirement, including
24-24 employment by a public community/junior college, was as an <officer
24-25 or> employee of a department whose employees are authorized to
24-26 participate in the Texas employees uniform group insurance program
24-27 and if the person either:
25-1 (i) would have been eligible to retire and
25-2 receive a service retirement annuity from the Teacher Retirement
25-3 System of Texas or the Employees Retirement System of Texas based
25-4 on at least 10 years of service credit had the person not elected
25-5 to participate in the optional retirement program; or
25-6 (ii) is disabled as determined by the
25-7 Employees Retirement System of Texas <the Texas Higher Education
25-8 Coordinating Board or an institution of higher education>; or
25-9 (D) any other federal or state statutory
25-10 retirement program to which an institution of higher education has
25-11 made employer contributions, if the employee has met service
25-12 requirements, age requirements, and other applicable requirements
25-13 comparable to the requirements for retirement under the Teacher
25-14 Retirement System of Texas, based on at least 10 years of service
25-15 credit<, and if the person either:>
25-16 <(i) would have been eligible to retire
25-17 and receive a service retirement annuity from the Teacher
25-18 Retirement System of Texas based on at least 10 years of service
25-19 credit had the person not elected to participate in the optional
25-20 retirement program; or>
25-21 <(ii) is disabled>.
25-22 (5)(A) "Employee" shall mean any appointive or
25-23 elective <state> officer or employee in the service of the State of
25-24 Texas, including an employee of an institution of higher education:
25-25 (i) who is retired or retires and is an
25-26 annuitant under either the jurisdiction of the Employees Retirement
25-27 System of Texas, pursuant to Subtitle B, D, or E, or <Chapter 803,
26-1 Title 8, Government Code, who is retired or retires and is an
26-2 annuitant> under the jurisdiction of the Teacher Retirement System
26-3 of Texas, pursuant to Subtitle C, Title 8, Government Code, or
26-4 pursuant to Chapter 803, Government Code, and whose last employment
26-5 with the state prior to retirement, including employment by a
26-6 public community/junior college, was as an employee of a
26-7 department whose employees are authorized to participate in the
26-8 Texas employees uniform group insurance program <the Teacher
26-9 Retirement System of Texas, school districts established within
26-10 state eleemosynary institutions, the Texas Rehabilitation
26-11 Commission, the Central Education Agency, the Texas Higher
26-12 Education Coordinating Board, or an institution of higher
26-13 education, or who is retired or retires and is an annuitant under
26-14 the optional retirement program established by Chapter 830,
26-15 Government Code, if the person's last state employment before
26-16 retirement, including employment by a public community/junior
26-17 college, was as an officer or employee of the Texas Higher
26-18 Education Coordinating Board, or an institution of higher
26-19 education, and if the person either:>
26-20 <(a) would have been eligible to
26-21 retire and receive a service retirement annuity from the Teacher
26-22 Retirement System of Texas had the person not elected to
26-23 participate in the optional retirement program; or>
26-24 <(b) is disabled>;
26-25 (ii) who is retired or retires and is an
26-26 annuitant under the optional retirement program established by
26-27 Chapter 830, Government Code, if the person's last state employment
27-1 before retirement, including employment by a public
27-2 community/junior college, was as an employee of a department whose
27-3 employees are authorized to participate in the Texas employees
27-4 uniform group insurance program, and if the person either:
27-5 (a) would have been eligible to
27-6 retire and receive a service retirement annuity from the Teacher
27-7 Retirement System of Texas or the Employees Retirement System of
27-8 Texas had the person not elected to participate in the optional
27-9 retirement program; or
27-10 (b) is disabled as determined by the
27-11 Employees Retirement System of Texas;
27-12 (iii) who receives <his> compensation for
27-13 services rendered to the State of Texas, other than an employee of
27-14 an institution of higher education described by this subdivision,
27-15 on a warrant issued pursuant to a payroll certified by a department
27-16 or by an elected or duly appointed officer of this state;
27-17 (iv) <(iii)> who receives payment for the
27-18 performance of personal services on a warrant issued pursuant to a
27-19 payroll certified by a department and drawn by the State
27-20 Comptroller of Public Accounts upon the State Treasurer against
27-21 appropriations made by the Texas Legislature from any state funds
27-22 or against any trust funds held by the State Treasurer or who is
27-23 paid from funds of an official budget of a state department, rather
27-24 than from funds of the General Appropriations Act;
27-25 (v) <(iv)> who is appointed, subject to
27-26 confirmation of the senate, as a member of a board or commission
27-27 with administrative responsibility over a statutory agency having
28-1 statewide jurisdiction whose employees are covered by this Act;
28-2 (vi) <(v)> who is a member of the
28-3 governing body of an institution of higher education, as that term
28-4 is defined by this Act <Section 61.003, Education Code, including
28-5 subsequent amendments to that section>;
28-6 (vii) <(vi)> who is a member of the State
28-7 Board of Education;
28-8 (viii) <(vii)> who receives compensation
28-9 for services rendered to an institution of higher education on a
28-10 warrant or check issued pursuant to a payroll certified by an
28-11 institution of higher education or by an elected or duly appointed
28-12 officer of this state, and who is eligible for participation in the
28-13 Teacher Retirement System of Texas; or
28-14 (ix) <(viii)> who receives compensation
28-15 for services rendered to an institution of higher education as
28-16 provided by this subdivision but is not permitted to be a member of
28-17 the Teacher Retirement System of Texas because the person is solely
28-18 employed by an institution of higher education that as a condition
28-19 of employment requires the person to be enrolled as a student in an
28-20 institution of higher education in graduate-level courses and who
28-21 is employed by the institution at least 20 hours a week.
28-22 (B) Persons performing personal services for the
28-23 State of Texas as independent contractors shall never be considered
28-24 employees of the state for purposes of this Act.
28-25 SECTION 31. Section 4B, Texas Employees Uniform Group
28-26 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
28-27 Code), is amended by adding Subsection (a-1) and amending
29-1 Subsection (c) to read as follows:
29-2 (a-1) If the executive director determines that a
29-3 participant has obtained coverage under any program provided under
29-4 the authority of this Act through the use of any material
29-5 misrepresentation or fraud or has fraudulently induced the
29-6 extension of coverage by making a material misrepresentation or by
29-7 supplying false information on any application for coverage or
29-8 related documentation or in any communication, the executive
29-9 director may rescind the coverage to the date of the inception of
29-10 the coverage or to the date of the fraudulent act or material
29-11 misrepresentation, deny any claim arising out of the fraudulently
29-12 induced coverage, or both. Remedies available to the executive
29-13 director under this subsection are in addition to and independent
29-14 of any expulsion action that may be instituted under Section 13A of
29-15 this Act. A decision of the executive director under this
29-16 subsection may be appealed to the trustee as provided by Subsection
29-17 (c) of this section.
29-18 (c) A decision by the executive director under Subsection
29-19 (a) or (a-1) of this section may be appealed only to the trustee.
29-20 An appeal to the trustee is a contested case under the
29-21 administrative procedure law, Chapter 2001, Government Code.
29-22 Standing to pursue an administrative appeal under this section is
29-23 limited to employees, annuitants, and covered dependents
29-24 participating in the Texas employees uniform group insurance
29-25 program or, after the death of a participant, to the participant's
29-26 estate, personal representative, heirs at law, or designated
29-27 beneficiary <Administrative Procedure and Texas Register Act
30-1 (Article 6252-13a, Vernon's Texas Civil Statutes)>.
30-2 SECTION 32. Section 5(f), Texas Employees Uniform Group
30-3 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
30-4 Code), is amended to read as follows:
30-5 (f) The trustee, in its sole discretion and in accordance
30-6 with the requirements of this section, shall determine those plans
30-7 of coverages for which the trustee does not intend to purchase
30-8 insurance and which it intends to provide directly from the
30-9 Employees Life, Accident, and Health Insurance and Benefits Fund.
30-10 Any plan of coverages for which the trustee does not purchase
30-11 insurance but provides under this Act on a self-funded basis is
30-12 exempt from any other insurance law unless the law expressly
30-13 applies to this plan or this Act. The trustee shall make an
30-14 estimate of the unrestricted balance of the fund. Unless such
30-15 estimated unrestricted balance is equal to at least 10 percent of
30-16 the total benefits expected to be provided directly from the fund
30-17 as a result of claims incurred during the fiscal year, the trustee
30-18 shall include in the contributions required the amount necessary to
30-19 establish an unrestricted balance in the fund of not less than 10
30-20 percent. The unrestricted balance shall be placed in a contingency
30-21 reserve fund to provide for adverse fluctuations in future charges,
30-22 claims, costs, or expenses of the program.
30-23 SECTION 33. Section 13A, Texas Employees Uniform Group
30-24 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
30-25 Code), is amended to read as follows:
30-26 Sec. 13A. Expulsion From Group Insurance Program.
30-27 (a) After notice and hearing as provided by this section, the
31-1 trustee may expel from participation in the Texas employees uniform
31-2 group insurance program any employee, annuitant, or dependent who
31-3 submits a fraudulent claim or application for coverage under or has
31-4 defrauded or attempted to defraud any health maintenance
31-5 organization or insurance or benefits plan offered under the
31-6 program.
31-7 (b) On receipt of a complaint or on its own motion, the
31-8 trustee may call and hold a hearing to determine whether <or not>
31-9 an employee, annuitant, or dependent has submitted a fraudulent
31-10 claim or application for coverage under or has defrauded or
31-11 attempted to defraud any health maintenance organization or
31-12 insurance or benefits plan offered under the Texas employees
31-13 uniform group insurance program.
31-14 (c) A proceeding under this section is a contested case
31-15 under the administrative procedure law, Chapter 2001, Government
31-16 Code <Administrative Procedure and Texas Register Act (Article
31-17 6252-13a, Vernon's Texas Civil Statutes)>.
31-18 (d) At the conclusion of the hearing, if the trustee issues
31-19 a decision that finds that the accused employee, annuitant, or
31-20 dependent submitted a fraudulent claim or application for coverage
31-21 or has defrauded or attempted to defraud any health maintenance
31-22 organization or insurance or benefits plan offered under the Texas
31-23 employees uniform group insurance program, the trustee shall expel
31-24 the employee, annuitant, or dependent from participation in the
31-25 program.
31-26 (e) An appeal of a decision of the trustee under this
31-27 section is under the substantial evidence rule.
32-1 (f) An employee, annuitant, or dependent expelled from the
32-2 Texas employees uniform group insurance program may not participate
32-3 in a health maintenance organization or be insured under <by> any
32-4 <health> insurance or benefits plan offered by the program for a
32-5 period determined by the trustee of not more than five years from
32-6 the date the expulsion from the program takes effect.
32-7 SECTION 34. Section 14(a), Texas Employees Uniform Group
32-8 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
32-9 Code), is amended to read as follows:
32-10 (a) The trustee shall use the amount appropriated for
32-11 employer contributions in accordance with Section 15 of this Act
32-12 <and Subsection (a-1) of this section> to fund the basic coverage.
32-13 The trustee may equitably allocate to each health benefits plan the
32-14 employer contributions that would be required to fund basic health
32-15 coverage for participants in the plans to the extent funds are
32-16 available. In allocating the employer contributions among plans,
32-17 the trustee shall consider the relevant risk characteristics of
32-18 each plan's enrollment, including demographic variations in the use
32-19 and cost of health care and the prevailing cost patterns in the
32-20 area in which the plan operates. The allocation must be reasonable
32-21 and set in a manner which assures employees a fair choice among
32-22 health benefit plans providing a basic plan. The contribution set
32-23 for each employee shall be within the total amount appropriated in
32-24 the General Appropriations Act.
32-25 SECTION 35. Section 609.507, Government Code, is amended to
32-26 read as follows:
32-27 Sec. 609.507. Financial Institution as Qualified Vendor.
33-1 <(a)> Each bank or savings and loan association that is a
33-2 qualified vendor is not required to comply with Chapter 404 with
33-3 regard to deferrals and investment income, but shall comply with
33-4 plan rules that deal with vendors and investment products <shall:>
33-5 <(1) treat deferred amounts and investment income as
33-6 state funds; and>
33-7 <(2) comply with Chapter 404.>
33-8 <(b) The state treasurer shall monitor each bank or savings
33-9 and loan association that is a qualified vendor for compliance with
33-10 Chapter 404. The state treasurer shall immediately notify the
33-11 board of trustees of a violation of that chapter that the treasurer
33-12 observes.>
33-13 <(c) The board of trustees is entitled to rely on the
33-14 supervision of the state treasurer>.
33-15 SECTION 36. The following provisions are repealed:
33-16 (1) Section 814.107(h), Government Code;
33-17 (2) Section 815.108, Government Code;
33-18 (3) Section 815.403(g), Government Code; and
33-19 (4) Section 14(a-1), Texas Employees Uniform Group
33-20 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
33-21 Code).
33-22 SECTION 37. This Act takes effect September 1, 1995.
33-23 SECTION 38. The importance of this legislation and the
33-24 crowded condition of the calendars in both houses create an
33-25 emergency and an imperative public necessity that the
33-26 constitutional rule requiring bills to be read on three several
33-27 days in each house be suspended, and this rule is hereby suspended.