By Montford S.B. No. 1270
74R4631 GCH-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to participation and credit in, contributions to, and
1-3 benefits and administration of the Texas County and District
1-4 Retirement System.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 841.001, Government Code, is amended by
1-7 amending Subdivisions (5) and (6) and adding Subdivision (15) to
1-8 read as follows:
1-9 (5) "Compensation" means the payments that do not
1-10 exceed $150,000 in a calendar year, indexed in the same manner as
1-11 is provided by Section 401(a)(17) of the Internal Revenue Code of
1-12 1986 (26 U.S.C. Section 417) and that are made to an employee of a
1-13 participating subdivision by the subdivision for service, including
1-14 nonmonetary compensation, the value of which is determined by the
1-15 governing body of the subdivision.
1-16 (6) "Employee" means a person, other than a temporary
1-17 employee, who is certified by a subdivision as being employed in,
1-18 or elected or appointed to, a position or office in the subdivision
1-19 that normally requires services from the person for not less than
1-20 900 hours a year and for which the person is compensated by the
1-21 subdivision. The term includes a person employed on a probationary
1-22 basis except as provided by Section 842.107(c).
1-23 (15) "Temporary employee" means a person who is
1-24 scheduled to hold a position for less than six months and only:
2-1 (A) until another person can be hired;
2-2 (B) for the duration of a project scheduled to
2-3 end less than six months after the date of hiring;
2-4 (C) until a specific date less than six months
2-5 after the date of hiring; or
2-6 (D) until a volume of work is completed that is
2-7 estimated to be completed in less than six months after the date of
2-8 hiring.
2-9 SECTION 2. Section 842.101, Government Code, is amended by
2-10 adding Subsection (c) to read as follows:
2-11 (c) If a person's status as a temporary employee ceases, and
2-12 the person becomes an employee within the meaning of this subtitle,
2-13 the subdivision shall certify the change to the retirement system,
2-14 and the person becomes a member effective on the date of the
2-15 certification, but without credit for the period during which the
2-16 person was a temporary employee.
2-17 SECTION 3. The section heading of Section 842.110,
2-18 Government Code, is amended to read as follows:
2-19 Sec. 842.110. RESUMPTION OF SERVICE WITH SAME EMPLOYER BY
2-20 RETIREE
2-21 SECTION 4. Section 842.110, Government Code, is amended by
2-22 amending Subsections (a), (b), (g), and (h) and adding Subsection
2-23 (i) to read as follows:
2-24 (a) A person who has retired with a service retirement
2-25 benefit under this subtitle shall, if the person later becomes an
2-26 employee of a reemploying <any participating> subdivision, become a
2-27 member of the system on the date of reemployment <employment>, but
3-1 credits and benefits allowable to the person under this subtitle
3-2 are limited as provided by this section.
3-3 (b) The retirement system shall discontinue and suspend
3-4 payments of each service retirement annuity allowed because of the
3-5 person's previous service with a reemploying subdivision, beginning
3-6 with the month the retirement system determines that the person has
3-7 resumed employment with the reemploying subdivision <following the
3-8 month in which the person again becomes a member under Subsection
3-9 (a)>. After the determination, the <The> retirement system may not
3-10 make payments of the annuity for any month during which the person
3-11 remains an employee of the reemploying <a participating>
3-12 subdivision. The suspension of a benefit under this section does
3-13 not suspend payment of a benefit to an alternate payee under a
3-14 qualified domestic relations order.
3-15 (g) The additional service retirement benefit allowable to a
3-16 person to whom this section applies is, at the option of that
3-17 person, either a refund of accumulated contributions made since
3-18 reemployment plus any accrued interest on the accumulated
3-19 contributions allowed by the retirement system or a benefit
3-20 consisting of a basic annuity actuarially determined from the sum
3-21 of the member's deposits made and accumulated since the date of
3-22 last becoming a member and current service credit computed on the
3-23 amount of the deposits and a supplemental annuity actuarially
3-24 determined from the multiple matching credit applicable to the
3-25 amount of contributions made and accumulated with interest in the
3-26 person's individual account since last becoming a member. The
3-27 additional benefit is payable as a standard service retirement
4-1 benefit or, at the election of the member, any optional benefit
4-2 authorized under this subtitle that is the actuarial equivalent of
4-3 the standard retirement benefit. The first benefit payment date
4-4 under this section is the later of the end of the month following
4-5 the last month of employment or the end of the first month that
4-6 ends after the expiration of 45 <if the person files an application
4-7 not less than 60> days since the date the person filed an
4-8 application for payment. The first payment may not be made if the
4-9 person <before the payment date and> has <not> resumed employment
4-10 with a reemploying <any participating> subdivision in a position
4-11 that would make the person an employee.
4-12 (h) If a person becomes an employee of a reemploying <any
4-13 participating> subdivision within one calendar month after that
4-14 person's effective date of retirement from that reemploying
4-15 subdivision, the person is considered not to have retired, and the
4-16 person's membership shall be restored. The retirement system shall
4-17 deduct the sum of one-half of the basic annuity payments made
4-18 before the membership is restored from the person's individual
4-19 account in the employees saving fund and shall transfer that amount
4-20 to the current service annuity reserve fund. The retirement system
4-21 shall reduce the person's maximum prior service credit by an amount
4-22 equal to the sum of the prior service annuity payments made before
4-23 the membership is restored, divided by the product of the
4-24 subdivision's allocated prior service credit percentage multiplied
4-25 by the interest factor for interest from the subdivision's
4-26 participation date to the person's effective retirement date, both
4-27 of which were used in computing the amount of the prior service
5-1 annuity.
5-2 (i) In this section, "reemploying subdivision" is a
5-3 subdivision for which a person previously has performed creditable
5-4 service and is receiving or would receive a retirement benefit
5-5 except for this section.
5-6 SECTION 5. Subchapter B, Chapter 842, Government Code, is
5-7 amended by adding Sections 842.111 and 842.112 to read as follows:
5-8 Sec. 842.111. RESUMPTION OF SERVICE WITH DIFFERENT EMPLOYER
5-9 BY RETIREE. (a) If a person becomes an employee of a
5-10 participating subdivision after beginning to receive a retirement
5-11 benefit, no portion of which is based on service with that
5-12 subdivision, the person resumes membership in the retirement system
5-13 without suspension of the person's retirement annuity.
5-14 (b) Member contributions under Section 845.403 shall be made
5-15 on all compensation paid to the employee by the subdivision at the
5-16 same rate as is required of other employees of the subdivision.
5-17 The retirement system shall deposit the contributions on receipt in
5-18 an individual account for the member in the employees saving fund
5-19 and shall credit the account with interest at the same rate and in
5-20 the same manner as the accounts of other members are credited.
5-21 The compensation paid to the employee by the subdivision shall be
5-22 included in computing the monthly contributions the subdivision
5-23 makes to the subdivision accumulation fund.
5-24 (c) If a person with credited service under this section
5-25 dies before a payment under Subsection (d) is made, the person's
5-26 beneficiary or, if no beneficiary survives, the executor or
5-27 administrator of the person's estate, may elect payment as provided
6-1 by Section 844.105(c).
6-2 (d) The additional service retirement benefit allowable to a
6-3 person to whom this section applies is, at the option of that
6-4 person, either a refund of accumulated contributions made since
6-5 reemployment plus any accrued interest on the accumulated
6-6 contributions allowed by the retirement system or a benefit
6-7 consisting of a basic annuity actuarially determined from the sum
6-8 of the member's deposits made and accumulated since the date of
6-9 last becoming a member and current service credit computed on the
6-10 amount of the deposits and a supplemental annuity actuarially
6-11 determined from the multiple matching credit applicable to the
6-12 amount of contributions made and accumulated with interest in the
6-13 person's individual account since last becoming a member. The
6-14 additional benefit is payable as a standard service retirement
6-15 benefit or, at the election of the member, any optional benefit
6-16 authorized under this subtitle that is the actuarial equivalent of
6-17 the standard retirement benefit. The first benefit payment date
6-18 under this section is the later of the end of the month following
6-19 the last month of employment or the end of the first month that
6-20 ends after the expiration of 45 days since the date the person
6-21 filed an application for payment. The first payment may not be
6-22 made if the person has resumed employment that would result in
6-23 suspension of a benefit.
6-24 (e) If a person becomes an employee of a subdivision after
6-25 beginning to receive a retirement benefit, no portion of which
6-26 benefit is based on service with that subdivision, and the person's
6-27 service retirement annuity is suspended under Section 842.110, as
7-1 it existed at the time service is resumed, the person may, on
7-2 written application to the retirement system, resume receiving the
7-3 suspended annuity.
7-4 Sec. 842.112. CORRECTION OF ERRORS. (a) If, as a result of
7-5 a reporting error on the part of a participating subdivision, a
7-6 person has not received credited service or current service credit
7-7 or has received less than the correct amount of current service
7-8 credit for months in which the person performed service as an
7-9 employee of the subdivision, the retirement system shall correct
7-10 the error as authorized by this section.
7-11 (b) A correction may not be made as to current service
7-12 performed, or current service credit that should have been
7-13 received, more than four years before the date an application, on
7-14 forms approved by the retirement system's board of trustees, for
7-15 the correction is received by the retirement system.
7-16 (c) A correction may not be made unless the retirement
7-17 system receives, in addition to the application, each of the items
7-18 required under Subsections (d), (e), and (f), and one of the
7-19 following:
7-20 (1) a written agreement, approved by the subdivision's
7-21 governing body, stating that an error has occurred and that the
7-22 subdivision has agreed to correct the error;
7-23 (2) a final judgment by a court of competent
7-24 jurisdiction in proceedings to which the subdivision was a party,
7-25 ordering that the subdivision correct the error; or
7-26 (3) an order in an administrative proceeding to which
7-27 the subdivision was a party, directing that the subdivision correct
8-1 the error, that is no longer subject to appeal.
8-2 (d) A correction may not be made unless the retirement
8-3 system receives a supplemental report properly signed on behalf of
8-4 the subdivision showing the corrections to credited service or
8-5 current service credit of the person.
8-6 (e) A correction may not be made unless the retirement
8-7 system receives payment from the person seeking the correction in
8-8 an amount equal to the contributions or additional contributions
8-9 the person would have made to the system if the service had been
8-10 correctly reported to the retirement system.
8-11 (f) A correction may not be made unless the retirement
8-12 system receives payment from the subdivision in an amount equal to
8-13 the additional contribution that the subdivision should have paid
8-14 to the retirement system based on the additional credited service
8-15 or current service credit.
8-16 (g) A subdivision that is the subject of an agreement,
8-17 judgment, or order described by Subsection (c) shall file the
8-18 supplemental report and submit the payments described by this
8-19 section within 30 days after the date the subdivision is notified
8-20 in writing by the retirement system that those items should be sent
8-21 to the retirement system.
8-22 (h) If, as a result of a reporting error on the part of a
8-23 participating subdivision, a person has not received prior service
8-24 credit, on written application to the retirement system,
8-25 accompanied by evidence of the prior service satisfactory to the
8-26 retirement system, the retirement system shall correct the error if
8-27 the retirement system receives the person's written application for
9-1 the correction within four years after the later of the date the
9-2 subdivision began participation or the person first became a member
9-3 of the retirement system.
9-4 SECTION 6. Section 842.202, Government Code, is amended to
9-5 read as follows:
9-6 Sec. 842.202. Waiver of Membership. (a) A person who would
9-7 make contributions to the retirement system because of Section
9-8 842.201 <is eligible under Section 842.201(a) to become a member of
9-9 the retirement system on the effective date of the commissioners
9-10 court order> may elect to not participate in the retirement system
9-11 as an employee and not make contributions or receive service credit
9-12 at any time after the effective date of the commissioners court
9-13 order <waive membership>.
9-14 (b) The board of trustees may prescribe the form for an
9-15 election <of a membership waiver> under this section, which must be
9-16 in writing and filed with the director <within 30 days after the
9-17 date specified in an order under Section 842.201(a)>.
9-18 SECTION 7. Section 842.203, Government Code, is amended to
9-19 read as follows:
9-20 Sec. 842.203. Subsequent Election to Become Member OR RESUME
9-21 CONTRIBUTIONS. (a) A person who has made an election not to
9-22 participate and make contributions <filed a waiver> under Section
9-23 842.202 may thereafter become a member of the retirement system or
9-24 resume making contributions if already a member, if the person
9-25 meets the requirements for membership that are applicable to new
9-26 employees of the subdivision at the time that the person applies
9-27 for participation <membership> that was previously waived.
10-1 Application for membership or resumption of contributions under
10-2 this section must be on a form prescribed by the board of trustees.
10-3 (b) The effective date of membership or resumption of
10-4 accumulation of credited service applied for under this section is
10-5 the first day of the first month for which a contribution is made
10-6 for the person and <after the month in which> the application is
10-7 filed, and no credit in the retirement system may be given for any
10-8 type of service prior to that <effective> date for which the person
10-9 has not already received credit in the retirement system.
10-10 SECTION 8. Section 844.003, Government Code, is amended by
10-11 amending Subsections (a), (c), and (d) and adding Subsections (e),
10-12 (f), and (g) to read as follows:
10-13 (a) Except as provided by Subsections (b) and (e) <(d)>, the
10-14 effective date of a member's service retirement is the date the
10-15 member designates at the time the member applies for retirement
10-16 under Section 844.101, but the date must be the last day of a
10-17 calendar month and may not precede the date the member terminates
10-18 employment with all participating subdivisions.
10-19 (c) Except as provided by Subsections (b) and (e) <(d)>, the
10-20 effective date of a member's disability retirement is the date
10-21 designated on the application for retirement filed by or for the
10-22 member as provided by Section 844.301, but the date may not precede
10-23 the date the member terminates employment with all participating
10-24 subdivisions.
10-25 (d) If a person who has attained age 70-1/2 terminates or
10-26 has terminated covered employment without applying for retirement
10-27 or a refund of accumulated contributions, the retirement system
11-1 shall attempt to send to that person the written notice described
11-2 by Subsection (e) as soon as is practical after the last to occur
11-3 of:
11-4 (1) the date the person attains age 70-1/2;
11-5 (2) the date the person terminates all covered
11-6 employment; or
11-7 (3) the date the person first becomes eligible for
11-8 retirement under this chapter <covered employment without applying
11-9 for retirement, the retirement system shall attempt to notify that
11-10 person in writing and advise the person that the person is required
11-11 to retire. If, before the 91st day after the date the retirement
11-12 system sends the notice, the person has not filed an application
11-13 with the board for retirement, the person is considered to have
11-14 retired on the last day of the month in which the person terminated
11-15 employment with all participating subdivisions and:>
11-16 <(1) to have elected to receive an annuity under
11-17 Section 844.103, if the person did not have a spouse on the date of
11-18 employment termination; or>
11-19 <(2) if the person had a spouse on the date of
11-20 employment termination, to have elected to receive an annuity under
11-21 Section 844.104(c)(1) and to have designated the person's spouse as
11-22 the beneficiary under the annuity>.
11-23 (e) The written notice shall advise the person that the
11-24 person is required to retire. If, before the 91st day after the
11-25 date the retirement system sends the notice, the person has not
11-26 filed an application for refund or retirement with the board of
11-27 trustees, the person is considered to have retired on the last day
12-1 of the month following the last to occur of the three dates
12-2 described by Subsection (d).
12-3 (f) If a person is considered by the retirement system to
12-4 have retired as a result of Subsection (e), the person also shall
12-5 be considered:
12-6 (1) to have elected to receive an annuity under
12-7 Section 844.103, if the person did not have a spouse on the date of
12-8 employment termination; or
12-9 (2) if the person had a spouse on the date of
12-10 employment termination, to have elected to receive an annuity under
12-11 Section 844.104(c)(1) and to have designated the person's spouse as
12-12 the beneficiary under the annuity.
12-13 (g) If a person who has less than four years of creditable
12-14 service and who has attained age 70-1/2 has terminated covered
12-15 employment without applying for a refund of accumulated
12-16 contributions and is not eligible to retire without additional
12-17 service or age, the retirement system shall attempt to send that
12-18 person written notice in accordance with this subsection as soon as
12-19 is practical after the person has been absent from covered
12-20 employment for five consecutive years or more. The written notice
12-21 shall advise the person that the person is required to receive a
12-22 refund of accumulated contributions in order to avoid a tax penalty
12-23 according to the Internal Revenue Code of 1986 (Title 26, United
12-24 States Code). If, before the 91st day after the date the
12-25 retirement system sends the notice, the person has not filed an
12-26 application for refund with the board of trustees, the person is
12-27 considered to have filed an application for refund and to have
13-1 elected to have withholding taxes withheld on that refund.
13-2 SECTION 9. Section 844.005, Government Code, is amended to
13-3 read as follows:
13-4 Sec. 844.005. When Annuity is Payable; CHANGES BEFORE FIRST
13-5 PAYMENT. (a) A retiree may change the retiree's choice of
13-6 retirement annuity payment plans or the designation of beneficiary
13-7 after the retiree's effective date of retirement by filing written
13-8 notice with the board of trustees before the later of the date on
13-9 which the retirement system makes the first payment or the date the
13-10 first annuity payment becomes due. After the first payment has
13-11 been made by the retirement system or has become due, a retiree may
13-12 not change the annuity payment plan selected and may not change the
13-13 designated beneficiary except under Section 844.006.
13-14 (b) For purposes of this section, the term "makes payment"
13-15 includes the depositing in the mail of a payment or the crediting
13-16 of an account with payment through electronic funds transfer.
13-17 (c) An annuity under this subtitle is payable for a period
13-18 beginning on the last day of the first month following the month in
13-19 which retirement occurs and ending, except as otherwise provided by
13-20 this subtitle, on the last day of the month immediately preceding
13-21 the month in which death occurs.
13-22 SECTION 10. Section 844.007, Government Code, is amended by
13-23 amending Subsections (b), (c), (d), and (f) to read as follows:
13-24 (b) Through December 31, 1995, current <Current> and
13-25 supplemental interest will be credited on the balance in the
13-26 member's individual account in the employees saving fund on January
13-27 1 of the year of retirement from that date to the effective date of
14-1 retirement at the rates allowed on individual accounts of members
14-2 as of December 31 of the preceding year. For periods that begin
14-3 after December 31, 1995, interest will be credited on the balance
14-4 in the member's individual account in the employees saving fund on
14-5 January 1 of the year of retirement from that date to the effective
14-6 date of retirement.
14-7 (c) An amount equal to the <current and supplemental>
14-8 interest computed under Subsection (b) will be credited to the
14-9 account in the subdivision accumulation fund for the subdivision
14-10 that employed the member.
14-11 (d) The current service credit and multiple matching credit
14-12 of the member will be computed as provided by Section 843.403,
14-13 except that they will include additional interest from the
14-14 beginning of the calendar year in which retirement occurs to the
14-15 effective date of retirement <at the same rates as additional
14-16 interest is computed under Subsection (b)>.
14-17 (f) If a distributive benefit is allowed before January 1,
14-18 1996, to persons who are annuitants on December 31 of the year in
14-19 which the person retires, the distributive benefit of a person who
14-20 retires at the end of any month in that year preceding December
14-21 31st will be reduced in the ratio that the number of months from
14-22 the first day of January of that year to the effective date of
14-23 retirement bears to 12 months.
14-24 SECTION 11. Section 844.008(a)(1), Government Code, is
14-25 amended to read as follows:
14-26 (1) "Annual benefit" means the total of all annuity
14-27 payments by the retirement system on behalf of a person who has
15-1 retired under this subtitle <to an annuitant> during a calendar
15-2 year, including any distributive benefit payments.
15-3 SECTION 12. Section 844.008(d), Government Code, is amended
15-4 to read as follows:
15-5 (d) Except as provided by Subsections (f), (h), and (i), an
15-6 annual benefit payable by the retirement system may not exceed the
15-7 lesser of:
15-8 (1) $112,221, or another amount as adjusted each
15-9 January 1 by the secretary of the treasury under Section 415 of the
15-10 Internal Revenue Code of 1986 (26 U.S.C. Section 415) for
15-11 cost-of-living increases after January 1, 1992; or
15-12 (2) 100 percent of the former member's highest average
15-13 annual compensation, including annual cost-of-living increases
15-14 after separation from service.
15-15 SECTION 13. Section 844.008, Government Code, is amended by
15-16 adding Subsections (l) and (m) to read as follows:
15-17 (l) The annual benefit payable by the retirement system that
15-18 is otherwise limited by Subsection (d) may be increased each year
15-19 in accordance with cost-of-living adjustments by the secretary of
15-20 the treasury of the dollar limitation or the compensation
15-21 limitation as long as it does not exceed the amount that would be
15-22 payable without limitation of Section 415 of the Internal Revenue
15-23 Code of 1986 (26 U.S.C. Section 415).
15-24 (m) The limitations provided by this section may not be
15-25 applied to reduce the benefit of any person whose retirement
15-26 benefits under this and all other defined benefit plans of the
15-27 member's employer do not exceed $10,000, plus the benefit provided
16-1 by Subsection (h), for the plan year or for any previous plan year
16-2 and who has not at any time participated in a defined contribution
16-3 plan maintained by the person's employer.
16-4 SECTION 14. Section 844.101, Government Code, is amended to
16-5 read as follows:
16-6 Sec. 844.101. Application for Service Retirement Annuity. A
16-7 member may apply for a service retirement annuity by filing an
16-8 application for retirement with the board of trustees not less than
16-9 15 <30 nor more than 90> days before the member's effective
16-10 retirement date <the member wishes to retire>.
16-11 SECTION 15. Section 844.104(c), Government Code, is amended
16-12 to read as follows:
16-13 (c) An eligible person may select any of the following
16-14 optional annuities, which are the actuarial equivalent of the
16-15 annuity to which the person is entitled and <optional annuity
16-16 approved by the board of trustees, the entire benefit of which is
16-17 certified by the actuary as the actuarial equivalent of the annuity
16-18 to which the person is entitled, or may select one of the following
16-19 options,> which provide that:
16-20 (1) after the retiree's death, the reduced annuity is
16-21 payable throughout the life of a person designated by the retiree;
16-22 (2) after the retiree's death, one-half of the reduced
16-23 annuity is payable throughout the life of a person designated by
16-24 the retiree;
16-25 (3) if the retiree dies before 60 monthly annuity
16-26 payments have been made, the remainder of the 60 payments are
16-27 payable to the retiree's beneficiary or, if one does not exist, to
17-1 the retiree's estate; <or>
17-2 (4) if the retiree dies before 120 monthly annuity
17-3 payments have been made, the remainder of the 120 payments are
17-4 payable to the retiree's beneficiary or, if one does not exist, to
17-5 the retiree's estate;
17-6 (5) after the retiree's death, one-fourth of the
17-7 reduced annuity is payable throughout the life of a person
17-8 designated by the retiree;
17-9 (6) after the retiree's death, three-fourths of the
17-10 reduced annuity is payable throughout the life of a person
17-11 designated by the retiree; or
17-12 (7) if the retiree dies before 180 monthly annuity
17-13 payments have been made, the remainder of the 180 payments are
17-14 payable to the retiree's beneficiary or, if one does not exist, to
17-15 the retiree's estate.
17-16 SECTION 16. Subchapter B, Chapter 844, Government Code, is
17-17 amended by adding Section 844.108 to read as follows:
17-18 Sec. 844.108. NO SURVIVING SPOUSE, EXECUTOR, OR
17-19 ADMINISTRATOR. (a) If a surviving spouse, or the executor or
17-20 administrator of a deceased member's estate, would be entitled to
17-21 make an election under Section 842.110(f), 842.111(d), 844.105(c),
17-22 844.106(c), 844.207(e), or 844.210(f), or if a surviving
17-23 beneficiary would be entitled to make an election under Section
17-24 844.209(b) because of the death of the member, the heirs of the
17-25 deceased member may make that election if:
17-26 (1) no surviving spouse exists or, if Section
17-27 844.209(b) is applicable, no surviving beneficiary exists;
18-1 (2) no petition for the appointment of a personal
18-2 representative of the member is pending or has been granted;
18-3 (3) 30 days have elapsed since the date of death of
18-4 the member;
18-5 (4) the value of the entire assets of the member's
18-6 estate, excluding homestead and exempt property, does not exceed
18-7 $50,000;
18-8 (5) there are not more than three heirs; and
18-9 (6) on file with the retirement system is a certified
18-10 copy of a small estates affidavit that has been approved and filed
18-11 in accordance with Section 137 of the Texas Probate Code, or an
18-12 original affidavit as described by Subsection (b).
18-13 (b) If no affidavit has been filed with the clerk of the
18-14 court having jurisdiction and venue as provided by Section 137 of
18-15 the Texas Probate Code, the retirement system may accept instead an
18-16 affidavit sworn to by two disinterested witnesses and by those
18-17 heirs who have legal capacity and, if the facts warrant, by the
18-18 natural guardian or next of kin of any minor or incompetent who is
18-19 also an heir. The affidavit shall include the names and addresses
18-20 of the heirs and witnesses, establish the facts listed in
18-21 Subsection (a), include a list of the assets and liabilities of the
18-22 estate, show the facts that constitute the basis for the right of
18-23 the heirs to receive the estate, and show the fractional interests
18-24 of the heirs in the estate as a result of those facts.
18-25 (c) If the retirement system, acting through the director or
18-26 a person designated by the director, approves the affidavit, the
18-27 heirs may make the election if each heir agrees to it.
19-1 (d) In this section "heirs" has the meaning assigned by
19-2 Section 3, Texas Probate Code, except that the term excludes any
19-3 person who has filed a proper disclaimer or renunciation with the
19-4 retirement system.
19-5 SECTION 17. Section 844.209, Government Code, is amended by
19-6 adding Subsection (f) to read as follows:
19-7 (f) If a member to whom Subsection (b) would be applicable
19-8 designates the member's estate or more than one but not more than
19-9 three persons to receive payment of the member's accumulated
19-10 contributions if the member dies before becoming eligible to make a
19-11 selection under Section 844.105, 844.106, 844.207, or 844.210, the
19-12 executor or administrator of the estate or, if there is no executor
19-13 or administrator, the surviving beneficiaries may by written notice
19-14 filed with the board elect to receive, in lieu of the accumulated
19-15 deposits, the optional benefit described by Section 844.104(c)(4).
19-16 If the estate is not the beneficiary, the election may only be made
19-17 if all of the beneficiaries agree in writing on the selection of
19-18 the option. If any surviving beneficiary dies before the first
19-19 payment of an annuity allowed under this section, the annuity will
19-20 be paid to those beneficiaries who are still surviving on the date
19-21 of the first payment.
19-22 SECTION 18. Section 844.301(b), Government Code, is amended
19-23 to read as follows:
19-24 (b) An application for a disability retirement annuity must
19-25 be filed <may> not <be made> less than 15 <30 nor more than 90>
19-26 days before the member's effective retirement date <the member
19-27 wishes to retire>.
20-1 SECTION 19. Section 844.305(c), Government Code, is amended
20-2 to read as follows:
20-3 (c) An eligible person may select any of the following
20-4 optional annuities, which are the actuarial equivalent of the
20-5 annuity to which the person is entitled and <optional annuity
20-6 approved by the board of trustees, the entire benefit of which is
20-7 certified by the actuary as the actuarial equivalent of the annuity
20-8 to which the person is entitled, or may select one of the following
20-9 options,> which provide that:
20-10 (1) after the retiree's death, the reduced annuity is
20-11 payable throughout the life of a person designated by the retiree;
20-12 (2) after the retiree's death, one-half of the reduced
20-13 annuity is payable throughout the life of a person designated by
20-14 the retiree;
20-15 (3) if the retiree dies before 60 monthly annuity
20-16 payments have been made, the remainder of the 60 payments are
20-17 payable to the retiree's beneficiary or, if one does not exist, to
20-18 the retiree's estate; <or>
20-19 (4) if the retiree dies before 120 monthly annuity
20-20 payments have been made, the remainder of the 120 payments are
20-21 payable to the retiree's beneficiary or, if one does not exist, to
20-22 the retiree's estate;
20-23 (5) after the retiree's death, one-fourth of the
20-24 reduced annuity is payable throughout the life of a person
20-25 designated by the retiree;
20-26 (6) after the retiree's death, three-fourths of the
20-27 reduced annuity is payable throughout the life of a person
21-1 designated by the retiree; or
21-2 (7) if the retiree dies before 180 monthly annuity
21-3 payments have been made, the remainder of the 180 payments are
21-4 payable to the retiree's beneficiary or, if one does not exist, to
21-5 the retiree's estate.
21-6 SECTION 20. Subchapter D, Chapter 844, Government Code, is
21-7 amended by adding Section 844.310 to read as follows:
21-8 Sec. 844.310. REPORT OF EARNINGS OF DISABILITY RETIREE. (a)
21-9 The retirement system may require a disability retiree who is less
21-10 than 60 years old to submit annually to the retirement system a
21-11 report of earnings. The retirement system shall examine each
21-12 report and may require at any time that a disability retiree
21-13 undergo a medical examination by one or more physicians the
21-14 retirement system designates, if the retiree has reported earnings
21-15 that the board of trustees considers to show an ability to engage
21-16 in gainful employment.
21-17 (b) The board of trustees may adopt rules establishing
21-18 limits on the annual earnings of disability retirees and such other
21-19 rules as are necessary to administer this section.
21-20 (c) If a disability retiree refuses to submit an annual
21-21 report of earnings, the retirement system shall discontinue the
21-22 retiree's annuity payments until the retirement system receives
21-23 that annual report and, if so requested, the retiree submits to a
21-24 medical examination by one or more physicians designated by the
21-25 retirement system.
21-26 SECTION 21. Subchapter E, Chapter 844, Government Code, is
21-27 amended by adding Section 844.404 to read as follows:
22-1 Sec. 844.404. PERSON CAUSING DEATH OF MEMBER OR ANNUITANT.
22-2 (a) A benefit payable on the death of a member or annuitant may
22-3 not be paid to a person convicted of causing that death but instead
22-4 is payable to a person who would be entitled to the benefit had the
22-5 convicted person predeceased the decedent. If no person would be
22-6 entitled to the benefit, the benefit is payable to the decedent's
22-7 estate.
22-8 (b) The retirement system is not required to pay a benefit
22-9 under Subsection (a) unless it receives actual notice of the
22-10 conviction of the person who would have been entitled to the
22-11 benefits. However, the retirement system may delay payment of a
22-12 benefit payable on the death of a member or annuitant pending the
22-13 results of a criminal investigation and of legal proceedings
22-14 relating to the cause of death.
22-15 (c) The retirement system shall convert the remainder of any
22-16 annuity that would otherwise have been payable throughout the life
22-17 of the convicted person to an actuarially equivalent annuity
22-18 payable to the decedent's estate in 60 monthly annuity payments.
22-19 The time of the actuarial equivalence is the earlier of the time
22-20 the retirement system receives the notice of the conviction under
22-21 Subsection (b) or the time the retirement system begins the delay
22-22 in payment of a benefit under Subsection (b).
22-23 (d) For the purposes of this section, a person has been
22-24 convicted of causing the death of a member or annuitant if the
22-25 person:
22-26 (1) has pleaded guilty or nolo contendere to or has
22-27 been found guilty by a court of an offense at the trial of which it
23-1 is established that the person's intentional, knowing, or reckless
23-2 act or omission resulted in the death of a person who was a member
23-3 or annuitant, regardless of whether sentence is imposed or
23-4 probated; and
23-5 (2) has no appeal of the conviction pending and the
23-6 time provided for appeal has expired.
23-7 SECTION 22. Subchapter E, Chapter 844, Government Code, is
23-8 amended by adding Section 844.405 to read as follows:
23-9 Sec. 844.405. TRUST AS BENEFICIARY. (a) Except as provided
23-10 by Subsection (b), a member or retiree may designate a trust as
23-11 beneficiary for the payment of benefits from the retirement system.
23-12 If a trust is designated beneficiary, the beneficiary of the trust
23-13 is considered the designated beneficiary for the purpose of
23-14 determining eligibility for and the amount and duration of
23-15 benefits. The trustee is entitled to exercise any rights granted a
23-16 designated beneficiary to elect benefit options and name subsequent
23-17 beneficiaries.
23-18 (b) A trust having more than one beneficiary may not receive
23-19 benefits to which multiple designated beneficiaries are not
23-20 eligible under this chapter.
23-21 SECTION 23. Subchapter E, Chapter 844, Government Code, is
23-22 amended by adding Section 844.406 to read as follows:
23-23 Sec. 844.406. SIMULTANEOUS DEATH OF MEMBER AND BENEFICIARY.
23-24 When a member or retiree and the spouse or beneficiary of the
23-25 member or retiree have died within a period of less than 120 hours
23-26 of each other, the member or retiree is considered to have survived
23-27 the spouse or beneficiary for the purpose of determining the rights
24-1 to amounts payable under this subtitle on the death of the member
24-2 or retiree.
24-3 SECTION 24. Section 844.502, Government Code, is amended to
24-4 read as follows:
24-5 Sec. 844.502. Extended Supplemental Death Benefit Coverage.
24-6 (a) A member included in the coverage of the supplemental death
24-7 benefit program who fails to earn compensation in a month for
24-8 service to a subdivision participating in the supplemental death
24-9 benefits fund is eligible to receive extended coverage in the
24-10 program on complying with the terms of this section.
24-11 (b) A member is entitled to receive extended program
24-12 coverage if the retirement system receives at its office:
24-13 (1) notification that, as a result of illness or
24-14 injury, the member is unable to engage in gainful employment or is
24-15 on leave of absence under the Family and Medical Leave Act of 1993
24-16 (Pub. L. 103-3); and
24-17 (2) evidence that the member made a required
24-18 contribution to the retirement system as an employee of a
24-19 subdivision participating in the supplemental death benefits fund
24-20 for the month immediately preceding the first full month in which
24-21 the member was unable to engage in gainful employment <may apply to
24-22 the retirement system for extended program coverage and submit
24-23 evidence of eligibility for extended coverage>.
24-24 (c) The retirement system may request additional evidence as
24-25 to illness or injury or of the required contribution as a condition
24-26 to granting the coverage <The board of trustees shall grant
24-27 extended coverage in the supplemental death benefit program to an
25-1 applicant, if the board finds:>
25-2 <(1) that as a result of illness or injury, the member
25-3 is unable to engage in gainful occupation; and>
25-4 <(2) that the member made a required contribution to
25-5 the retirement system as an employee of a subdivision participating
25-6 in the supplemental death benefits fund for the month immediately
25-7 preceding the first full month in which the member was unable to
25-8 engage in gainful occupation>.
25-9 (d) Once established, extended coverage of a person in the
25-10 supplemental death benefit program continues until the last day of
25-11 the month in which:
25-12 (1) the member returns to work as an employee of a
25-13 participating subdivision;
25-14 (2) the <board of trustees finds that the> member
25-15 becomes <is> able to engage in gainful employment <occupation>;
25-16 (3) the person's membership in the retirement system
25-17 is terminated; <or>
25-18 (4) the member retires under this subtitle; or
25-19 (5) the member's leave of absence under the Family and
25-20 Medical Leave Act of 1993 (Pub. L. 103-3) terminates.
25-21 (e) The director <board of trustees by rule> may require a
25-22 member to submit to the retirement system <it> annual proof of
25-23 continued inability to engage in gainful employment <occupation>.
25-24 The director <board> may require a member to undergo a medical
25-25 examination by a physician designated by the retirement system
25-26 <board>. Failure of a member to submit proof of inability to
25-27 engage in gainful employment or to undergo a medical examination as
26-1 required by this subsection is a ground for terminating the
26-2 member's extended coverage under this section <the board's finding
26-3 that the member has become able to engage in gainful occupation>.
26-4 (f) If a member included in the coverage of the supplemental
26-5 death benefit program becomes eligible <to apply> for extended
26-6 coverage but dies before meeting the requirements of Subsections
26-7 (b) and (c) <fails to comply with Subsections (b) and (c) before
26-8 the member's death>, the member will be considered to have had the
26-9 extended coverage if proof is furnished that the member could have
26-10 qualified for extended coverage but death occurred:
26-11 (1) before the requirements of Subsections (b) and (c)
26-12 had been met; and
26-13 (2) <if application had been made according to
26-14 Subsections (b) and (c) and that the death occurred> within six
26-15 months after the date the coverage of the supplemental death
26-16 benefit program was discontinued according to Section 844.501.
26-17 SECTION 25. Section 844.504, Government Code, is amended to
26-18 read as follows:
26-19 Sec. 844.504. Retiree Supplemental Death Benefit. If a
26-20 retiree dies who has credited service that has not been canceled by
26-21 a withdrawal of contributions and that results from employment
26-22 <whose most recent employment as a member of the retirement system
26-23 was> with a subdivision that has elected to provide, and continues
26-24 to provide, postretirement supplemental death benefits, a lump-sum
26-25 supplemental death benefit is payable from the fund in the amount
26-26 of $2,500. If a retiree dies who was employed <at the time of
26-27 retirement> by more than one subdivision that has elected to
27-1 provide, and continues to provide, postretirement supplemental
27-2 death benefits, the financing of the lump-sum benefit shall be
27-3 prorated among the employing subdivisions participating in the
27-4 fund. If a person dies while payment of a retirement annuity to
27-5 that person is suspended as a result of Section 842.110, the
27-6 supplemental death benefit under this section shall be paid if it
27-7 would have been payable except for the suspension, unless a
27-8 supplemental death benefit is payable under Section 844.503 as a
27-9 result of the member's death.
27-10 SECTION 26. Sections 844.605(a) and (b), Government Code,
27-11 are amended to read as follows:
27-12 (a) If the actuary determines that the obligations of a
27-13 participating subdivision to the subdivision accumulation fund
27-14 cannot be amortized within a period of 40 years <or that the
27-15 subdivision would have an amortization period of more than 25 years
27-16 if it adopted the optional benefit eligibility plan authorized by
27-17 Section 844.207>, the governing body of the subdivision may by
27-18 order or resolution provide additional contributions by adopting a
27-19 supplemental contribution rate under this section to reduce the
27-20 funding period <or finance the optional benefit eligibility plan>.
27-21 A supplemental contribution rate adopted under this section also
27-22 may be authorized by the governing body of a subdivision for the
27-23 purpose of restoring the level of benefits in effect for that
27-24 subdivision that existed on January 1, 1994.
27-25 (b) A supplemental contribution rate is the rate of
27-26 contribution by a subdivision to its account in the subdivision
27-27 accumulation fund, in addition to the contributions provided under
28-1 Section 845.404(a)(2), that the actuary determines and certifies is
28-2 required, together with the contributions provided under Section
28-3 845.404(a)(2), to amortize the obligations of the subdivision to
28-4 the subdivision accumulation fund within a period of 25 years. A
28-5 supplemental contribution rate may not exceed four <three> percent
28-6 of covered payroll.
28-7 SECTION 27. Subchapter G, Chapter 844, Government Code, is
28-8 amended by adding Section 844.608 to read as follows:
28-9 Sec. 844.608. REQUIRED DECREASE IN CONTRIBUTION RATE. (a)
28-10 Notwithstanding Sections 845.402(c) and (d), a subdivision's member
28-11 contribution rate may be reduced to one, two, three, four, five, or
28-12 six percent of the current service compensation of its employees,
28-13 except that the rate of member contributions may be reduced to less
28-14 than four percent only if the reduction is necessary under this
28-15 section.
28-16 (b) If the actuary determines that, despite all required
28-17 decreases described by Section 844.607, the obligations of a
28-18 participating subdivision to the subdivision accumulation fund
28-19 cannot be amortized within a period of 40 years, the retirement
28-20 system shall reduce the rate of member contributions to such lower
28-21 rate authorized by this section as, in the opinion of the actuary,
28-22 is required for the obligations of the subdivision to the
28-23 subdivision accumulation fund to be able to be amortized within a
28-24 period of 40 years. At the time the actuary determines that the
28-25 rate of employee contributions no longer must be reduced for the
28-26 obligations to be able to be amortized within 40 years, the
28-27 retirement system shall reinstate the employee contribution rate to
29-1 the rate that was in effect at the time of the reduction, unless
29-2 the governing body of the subdivision has elected to change to some
29-3 other rate authorized by Section 845.402. Any change under this
29-4 section shall be made on January 1 of the year following the
29-5 applicable determination by the actuary.
29-6 (c) Notwithstanding Section 845.404(a), the contributions
29-7 made by the subdivision shall be based on the rate of member
29-8 contributions that was in effect before a required reduction in
29-9 that rate under Subsection (b) and, if applicable, any supplemental
29-10 contribution rate adopted by the subdivision under Section 844.605.
29-11 SECTION 28. Section 844.702, Government Code, is amended to
29-12 read as follows:
29-13 Sec. 844.702. Member Contributions. (a) The governing body
29-14 of the subdivision may designate the rate of member contributions
29-15 for employees of the subdivision to take effect beginning on the
29-16 effective date of adoption of the plan provisions of this
29-17 subchapter. The subdivision may elect a rate of four, five, six,
29-18 or seven percent of the current service compensation of its
29-19 employees. The governing body of the subdivision may thereafter
29-20 increase or decrease the contribution rate to take effect on the
29-21 next January 1 after the date of adoption of the increase or
29-22 decrease, notwithstanding the provisions of Sections 845.402(c) and
29-23 (d).
29-24 (b) If necessary under Section 844.608(b) or 844.703(h), a
29-25 subdivision's member contribution rate may be reduced to one, two,
29-26 three, four, five, or six percent of the current service
29-27 compensation of its employees.
30-1 SECTION 29. Section 844.703, Government Code, is amended by
30-2 amending Subsections (c), (f), and (g) and adding Subsection (h) to
30-3 read as follows:
30-4 (c) The combined rates of a subdivision's normal
30-5 contributions and prior service contributions under this subchapter
30-6 may not exceed the rate determined as the employee contribution
30-7 rate plus three percent, except that the governing body of the
30-8 subdivision may elect to increase the maximum combined rate to not
30-9 more than the rate determined as the employee rate plus four
30-10 percent, if necessary in order to maintain the current level of
30-11 benefits or to restore the level of benefits in effect on January
30-12 1, 1994. A reduction of the member contribution rate for employees
30-13 of the subdivision does not reduce the maximum rate of contribution
30-14 of the subdivision.
30-15 (f) The governing body of the subdivision has 25 years
30-16 beginning with the effective date of the plan provisions of this
30-17 subchapter to amortize all unfunded obligations against the
30-18 subdivision's account in the subdivision accumulation fund. The
30-19 adoption of any of the following benefit increases after the
30-20 effective date of the plan provisions will result in a new
30-21 amortization period of 25 years beginning with the effective date
30-22 of the benefit increases:
30-23 (1) an increase in the percentage used in determining
30-24 multiple matching credits under Section 844.704(a);
30-25 (2) an increase in the percentage used in determining
30-26 allocated prior service credits under Section 844.704(b);
30-27 (3) the optional increase in retirement annuities
31-1 under Section 844.208;
31-2 (4) the optional benefit for a surviving beneficiary
31-3 of a member described by Section 844.209;
31-4 (5) the optional benefit eligibility plan described by
31-5 Section 844.210;
31-6 (6) the optional benefit eligibility plan described by
31-7 Section 844.211;
31-8 (7) the optional authorization of the reestablishment
31-9 of credited service previously forfeited under Section 843.003; or
31-10 (8) the optional election to have credits recomputed
31-11 on the basis of total compensation under Section 843.702.
31-12 (g) If the combined rates of the subdivision's normal
31-13 contributions and prior service contributions under this subchapter
31-14 exceed the maximum rate prescribed by Subsection (c) before the
31-15 adjustment prescribed by Subsection (d), the actuary shall
31-16 determine what lower percentage for determining multiple matching
31-17 credits of future member contributions is necessary to make the
31-18 combined rates of the subdivision not exceed the maximum rate
31-19 prescribed by Subsection (c). The actuary shall give written
31-20 notice of the determination to the director, who shall give written
31-21 notice to the governing body of the subdivision. The lower
31-22 percentage determined by the actuary and specified in the notice to
31-23 the governing body becomes effective as to all members who perform
31-24 current service for the affected subdivision on or after the first
31-25 day of the first calendar year that begins after the date of the
31-26 notice, unless before the effective date, the governing body of the
31-27 subdivision adopts an order or resolution, approved by the board of
32-1 trustees, authorizing a reduction in the percentage used in
32-2 determining multiple matching credits in accordance with Section
32-3 844.704(a) or authorizing a reduction in the rate of member
32-4 contributions in accordance with Section 844.702, or authorizing
32-5 both a reduction in the percentage used in determining multiple
32-6 matching credits and a reduction in the rate of member
32-7 contributions.
32-8 (h) If the combined rates of the subdivision's normal
32-9 contributions and prior service contributions under this subchapter
32-10 exceed the maximum rate prescribed by Subsection (c), and if all
32-11 reductions under Subsection (g), in the opinion of the actuary,
32-12 result in the combined rates of the subdivision remaining in excess
32-13 of the maximum rate prescribed by Subsection (c), the retirement
32-14 system shall reduce the rate of member contributions to a lower
32-15 rate authorized by Section 844.702 that, in the opinion of the
32-16 actuary, is required to produce a combined rate that does not
32-17 exceed the rate prescribed by Subsection (c). At the time the
32-18 actuary determines that the rate of employee contributions that was
32-19 in existence before a reduction under this subsection no longer
32-20 would result in a combined rate in excess of the maximum rate
32-21 prescribed by Subsection (c), the retirement system shall reinstate
32-22 the employee contribution to the rate that was in effect at the
32-23 time of the reduction, unless the governing body of the subdivision
32-24 has elected to change to some other rate authorized by Section
32-25 844.702(a). Any change under this section shall be made on January
32-26 1 of the year following the applicable determination by the
32-27 actuary. During the time that the member contribution rate is
33-1 reduced, the combined rates of the subdivision's normal
33-2 contributions and prior service contributions shall be equal to the
33-3 maximum rate prescribed by Subsection 844.703(c).
33-4 SECTION 30. Section 845.113(a), Government Code, is amended
33-5 to read as follows:
33-6 (a) The board of trustees shall maintain the offices of the
33-7 retirement system in Austin and may, but is not required to:
33-8 (1) cause the system to own real estate on or in which
33-9 those offices are located;
33-10 (2) contract for and construct a building or buildings
33-11 to house those offices, along with related structures such as
33-12 parking garages;
33-13 (3) lease office space from others;
33-14 (4) lease space in its offices, or in a building that
33-15 previously has been its offices, to other persons or entities;
33-16 (5) maintain, modify, or construct improvements on any
33-17 real estate, whether for the retirement system or a tenant; or
33-18 (6) sell real estate that previously has been the
33-19 retirement system's offices <contract for and construct a building
33-20 to house those offices>.
33-21 SECTION 31. Section 845.202(b), Government Code, is amended
33-22 to read as follows:
33-23 (b) The director shall<:>
33-24 <(1)> manage and administer the retirement system
33-25 under the supervision and direction of the board<; and>
33-26 <(2) invest the assets of the system>.
33-27 SECTION 32. Section 845.301, Government Code, is amended to
34-1 read as follows:
34-2 Sec. 845.301. Investment of Assets. (a) The board of
34-3 trustees shall invest and reinvest the assets of the retirement
34-4 system without distinction as to their source in any investment
34-5 asset that meets the standards of Subsection (e) <:>
34-6 <(1) interest-bearing bonds or other evidences of
34-7 indebtedness of this state, a county, school district, city, or
34-8 other municipal corporation of this state, the United States, or an
34-9 authority or an agency of the United States;>
34-10 <(2) securities for which the United States or any
34-11 authority or agency of the United States guarantees the payment of
34-12 principal and interest;>
34-13 <(3) interest-bearing bonds, notes, or other evidences
34-14 of indebtedness that are issued by a company:>
34-15 <(A) incorporated in the United States and that
34-16 are rated "A" or better by one or more nationally recognized rating
34-17 agencies approved by the board; or>
34-18 <(B) in whose stock the retirement system may
34-19 invest as provided by Subdivision (4);>
34-20 <(4) common or preferred stocks of a company
34-21 incorporated in the United States that has paid cash dividends on
34-22 its common stock for 10 consecutive years immediately before the
34-23 date of purchase and, unless the stocks are bank or insurance
34-24 stocks, that is listed on an exchange registered with the
34-25 Securities and Exchange Commission or its successor;>
34-26 <(5) obligations issued, assumed, or guaranteed by the
34-27 Inter-American Development Bank, the International Bank for
35-1 Reconstruction and Development (the World Bank), the African
35-2 Development Bank, the Asian Development Bank, and the International
35-3 Finance Corporation; or>
35-4 <(6) real estate mortgage investment conduit
35-5 securities (REMICs) or other participation certificates issued by
35-6 the Federal National Mortgage Corporation or by the Federal Home
35-7 Loan Mortgage Corporation, evidencing an undivided beneficial
35-8 interest in pools of real estate mortgage notes that are guaranteed
35-9 as to payment of principal and interest by the issuer, or by any
35-10 agency, authority, or instrumentality of the United States, and
35-11 that are to be held in trust by the issuer for the benefit of the
35-12 certificate holder.>
35-13 <(6) bonds issued, assumed, or guaranteed by the State
35-14 of Israel>.
35-15 (b) The board of trustees shall exercise control of the
35-16 investment operations by employing an investment officer, who shall
35-17 supervise the investment operations for the board of trustees.
35-18 (c) The board of trustees, acting on the recommendations of
35-19 the investment officer, may contract with private professional
35-20 investment managers to assist in investing the assets of the
35-21 retirement system.
35-22 (d) The board of trustees shall employ one or more
35-23 performance measurement services to evaluate and analyze the
35-24 investment results of those assets of the retirement system for
35-25 which reliable and appropriate measurement methodology and
35-26 procedures exist. Each service shall compare investment results
35-27 with the written investment objectives developed by the board of
36-1 trustees and shall also compare the investment of assets being
36-2 evaluated and analyzed with the investment of other public funds.
36-3 (e) In making investments for the retirement system, the
36-4 board of trustees shall exercise the judgment and care, under the
36-5 circumstances prevailing at the time of the investment, that
36-6 persons of ordinary prudence, discretion, and intelligence exercise
36-7 in the management of their own affairs, not in speculation but when
36-8 making a permanent disposition of their funds, considering the
36-9 probable income from the disposition and the probable safety of
36-10 their capital.
36-11 (f) The assets of the retirement system may be held in the
36-12 name of agents, nominees, depository trust companies, or other
36-13 entities designated by the board of trustees. The records and all
36-14 relevant reports or accounts of the retirement system must show the
36-15 ownership interests of the retirement system in these assets and
36-16 the facts regarding the system's holdings.
36-17 SECTION 33. Section 845.302, Government Code, is amended to
36-18 read as follows:
36-19 Sec. 845.302. CUSTODY AND INVESTMENT OF ASSETS PENDING
36-20 TRANSACTIONS <RESTRICTIONS ON INVESTMENTS>. The board of trustees,
36-21 in the exercise of its discretion to manage the assets of the
36-22 retirement system, may select one or more commercial banks,
36-23 depository trust companies, or other entities to serve as custodian
36-24 or custodians of the system's cash or securities pending completion
36-25 of an investment transaction and may authorize the custodian to
36-26 invest the cash so held in such short-term securities as the board
36-27 of trustees determines. <(a) The board of trustees may not invest
37-1 more than 20 percent of the retirement system's total assets in
37-2 preferred and common stocks of corporations.>
37-3 <(b) The board may not invest more than one percent of the
37-4 total assets of the system in the stock of one corporation.>
37-5 <(c) The system may not own more than five percent of the
37-6 voting stock of one corporation.>
37-7 SECTION 34. Section 845.303, Government Code, is amended to
37-8 read as follows:
37-9 Sec. 845.303. SECURITIES LENDING <DUTY OF CARE>. (a) The
37-10 board of trustees, in the exercise of its discretion to manage the
37-11 assets of the retirement system, may select one or more commercial
37-12 banks, depository trust companies, or other entities to serve as
37-13 custodian or custodians of the system's securities and to lend the
37-14 securities under rules adopted by the board of trustees and as
37-15 required by this section.
37-16 (b) To be eligible to lend securities under this section, a
37-17 bank or brokerage firm must:
37-18 (1) be experienced in the operations of a fully
37-19 secured securities lending program;
37-20 (2) maintain capital adequate in the prudent judgment
37-21 of the retirement system to assure the safety of the securities;
37-22 (3) execute an indemnification agreement satisfactory
37-23 in form and content to the retirement system fully indemnifying the
37-24 retirement system against loss resulting from its operation of a
37-25 securities lending program for the system's securities; and
37-26 (4) require any securities broker or dealer to whom it
37-27 lends securities belonging to the retirement system to deliver to
38-1 and maintain with the custodian collateral in the form of cash or
38-2 United States government securities, the market value of which must
38-3 equal not less than 100 percent of the market value, from time to
38-4 time, of the loaned securities. <In making investments for the
38-5 retirement system, the board of trustees shall exercise the
38-6 judgment and care, under the circumstances, that persons of
38-7 prudence, discretion, and intelligence exercise in the management
38-8 of their own affairs, considering the probable income from the
38-9 securities and probable safety of their capital.>
38-10 SECTION 35. Section 845.310(e), Government Code, is amended
38-11 to read as follows:
38-12 (e) If the board of trustees determines that the amount
38-13 credited to the distributive benefit account on December 31 of any
38-14 year is sufficient to do so, the board by resolution may:
38-15 (1) authorize the distribution to the subdivision
38-16 accumulation fund of all or part of the amount that is credited to
38-17 the account and that is equal to the amount in the subdivision
38-18 accumulation fund on January 1 of the year multiplied by:
38-19 (A) two percent or more when the current
38-20 interest rate is equal to the rate prescribed by Section
38-21 845.314(a); or
38-22 (B) two percent when the current interest rate
38-23 is less than the rate prescribed by Section 845.314(a);
38-24 (2) authorize the distribution and payment of all or
38-25 part of the money credited to the account to persons who were
38-26 annuitants on that day in the ratio that <of the rate of> the
38-27 monthly benefit of each annuitant would bear if not reduced under
39-1 Section 844.008 to the total of all annuity payments that would
39-2 have been made by the system, if not reduced under Section 844.008,
39-3 for the final month of the year; or
39-4 (3) authorize the distribution of all or part of the
39-5 amount credited to the account to:
39-6 (A) each member's individual account in the
39-7 employees saving fund as supplemental interest in the ratio of the
39-8 amount of current interest paid on the individual's account to the
39-9 current interest paid to all individual accounts for the year; and
39-10 (B) each participating subdivision's account in
39-11 the subdivision accumulation fund as supplemental interest in the
39-12 ratio of the current interest allowed on the account of the
39-13 subdivision to the total current interest paid to all subdivisions'
39-14 accounts for the year.
39-15 SECTION 36. Section 845.314(c), Government Code, is amended
39-16 to read as follows:
39-17 (c) The current interest rate is the lesser of:
39-18 (1) the interest rate prescribed by Subsection (a); or
39-19 (2) the interest rate computed by:
39-20 (A) adding the mean amounts in the current
39-21 service annuity reserve fund and the supplemental death benefits
39-22 fund during the year and multiplying the sum by the rate prescribed
39-23 by Subsection (a);
39-24 (B) multiplying the amount in the subdivision
39-25 accumulation fund on January 1 of the year by two percent;
39-26 (C) subtracting the sum of the amount computed
39-27 under Paragraphs (A) and (B), plus an amount equal to the sum of
40-1 all interest credited during the year to the employees saving fund
40-2 accounts of members as provided by Section 844.007(b) and to the
40-3 subdivision accumulation fund as provided by Section 844.007(c),
40-4 plus an amount equal to the amount to be transferred to the expense
40-5 fund for administrative expenditures of the retirement system for
40-6 the following year, from an amount equal to the amount in the
40-7 interest fund on December 31 of the year, before transfers of
40-8 interest to other funds are made;
40-9 (D) adding an amount equal to the amount in the
40-10 endowment fund on January 1 of the year, an amount equal to the
40-11 amount in the subdivision accumulation fund on January 1 of the
40-12 year, and an amount equal to the sum of the accumulated deposits in
40-13 the employees saving fund on January 1 of the year of all persons
40-14 who are members on December 31 of the year, before any transfers
40-15 for retirements effective December 31 are made; and
40-16 (E) dividing the amount computed under Paragraph
40-17 (C) by the amount computed under Paragraph (D) and expressing the
40-18 result to the nearest one-tenth of one percent.
40-19 SECTION 37. Subchapter F, Chapter 845, Government Code, is
40-20 amended by adding Section 845.504 to read as follows:
40-21 Sec. 845.504. REPORTS CONCERNING TAXABLE INCOME. At times
40-22 the retirement system considers necessary for the purpose of
40-23 computing limitations on payment of benefits under Section 844.008,
40-24 each subdivision shall certify to the retirement system in a manner
40-25 prescribed by the board the amount of income subject to federal
40-26 income tax that the subdivision paid to each of its employees for
40-27 the calendar year or other period of time for which the retirement
41-1 system requests that information.
41-2 SECTION 38. This Act takes effect September 1, 1995, except
41-3 Sections 32, 33, 34, and this section, which take effect
41-4 immediately.
41-5 SECTION 39. The importance of this legislation and the
41-6 crowded condition of the calendars in both houses create an
41-7 emergency and an imperative public necessity that the
41-8 constitutional rule requiring bills to be read on three several
41-9 days in each house be suspended, and this rule is hereby suspended,
41-10 and that this Act take effect and be in force according to its
41-11 terms, and it is so enacted.