SBW C.S.H.B. 2259 75(R)BILL ANALYSIS PENSIONS & INVESTMENTS C.S.H.B. 2259 By: Gray 3-26-97 Committee Report (Substituted) BACKGROUND Currently, the City of Galveston funds a separate pension system for it's police department. This fund is created by city ordinance. The fund is actuarially sound, however the fund is not under the jurisdiction of the state Pension Review Board. There is some concern about the stability of this pension system, because it is not under the jurisdiction of the state Pension Review Board. A number of other state statutes create and govern police pension systems in Texas. These systems are under the state Pension Review Board. PURPOSE This bill would allow municipalities with a population of 50,000 (but no greater than 400,000 operated by a city manager and not operating under a city retirement system) to create a police pension fund that would be subject to review by the state Pension Review Board. This would include the City of Galveston. The pension contributions made by fund members and by the municipality, as well as, the benefits paid by the fund would be set by state statute instead of by local ordinance. The initial contribution amounts and benefits paid by the new fund would be set at the same rates that are currently in existence for the Galveston police pension fund. The bill would allow municipalities that adopt the new statute to transfer the assets and membership of their existing police pension fund into the new fund. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1.01 CREATION OF POLICE PENSION FUND. This Act applies to municipalities of more than 50,000, but no greater than 400,000; operated by a city manager; not operating under a city retirement system. SECTION 1.02. ADOPTION OF POLICE PENSION FUND. A city may adopt this Act by a majority vote of the city's governing body. SECTION 1.03. DEFINITIONS. Defines terms used in the Act. SECTION 2.01. ADMINISTRATION. Creates a board of trustees to administer the pension fund. SECTION 2.02. COMPOSITION OF BOARD. The board of trustees for the fund shall be composed of seven members. The members of the board are the president of the local police association, one city financial staff member designated by the city manager, one legally qualified voter designated by the mayor, one legally qualified voter designated by the city council, and three members elected by the members of the fund. SECTION 2.03. ELECTED MEMBERS. The board shall provide by rule for the procedure for electing members. SECTION 2.04. ADMINISTRATIVE STAFF. The board may appoint and compensate a plan administrator. SECTION 2.05. INVESTMENT MANAGERS. The board may hire an investment manager to invest the assets of the fund. SECTION 2.06. INVESTMENT CONSULTANT. The board may hire an investment consultant to monitor the investment performance of the fund's investment manager or managers and provide other investment advice requested by the board. SECTION 2.07. LEGAL COUNSEL. The board may retain legal counsel to advise, assist, or represent the board in any legal matters affecting the operation of the fund. SECTION 2.08. INVESTMENTS OF THE BOARD. The board shall be the trustee of the funds of the police pension fund and shall the power to invest and reinvest, alter, and change such funds. The board shall invest the funds in whatever instruments or investments the board considers prudent. In making investments for the fund, the board shall discharge its duties for the exclusive purposes of providing benefits to members and their beneficiaries and defraying reasonable expenses of administering the fund. None of the funds or money covered by this Act shall be assignable. None of the funds or money covered by this Act shall be subject to execution, levy, attachment, garnishment, or other legal process. The right of a member to a pension, to the return of contributions, the pension, or retirement allowance itself, any optional benefit or death benefits, any other right accrued or accruing to any person under the provisions of this Act, and the money in the trust created by this Act shall be unassignable except as specifically provided in this Act or as provided under the terms of a qualified domestic relations order, as defined in Section 804 of the Texas Government Code, and shall not be subject to execution, levy, attachment, garnishment, the operation of bankruptcy or insolvency law, or any other process of law whatsoever. SECTION 2.08. INSURANCE. The board may purchase one or more insurance policies that provide for the reimbursement of a member, officer, or employee of the board for liability imposed as damages caused by, and for costs and expenses incurred by the individual in defense of, an alleged act, error, or omission committed in the individual's capacity as fiduciary or co-fiduciary of assets of the pension fund. The board may not purchase an insurance policy that provides for the reimbursement of a member, officer, or employee of the board for liability imposed or costs and expenses incurred because of the member's, officer's, or employee's personal dishonesty, fraudulent breach of trust, lack of good faith, intentional fraud or deception, or intentional failure to act prudently. If an insurance policy is unavailable, insufficient, inadequate, or otherwise not in effect, the board may indemnify a member, officer, or employee of the board for liability imposed as damages caused by, and for reasonable costs and expenses incurred by the individual in defense of, an alleged act, error, or omission committed in the individual's fiduciary or co-fiduciary capacity. The board may not indemnify a member, officer, or employee of the board for liability imposed or costs and expenses incurred because of the member's, officer's, or employee's personal dishonesty, fraudulent breach of trust, lack of good faith, intentional fraud or deception, or intentional failure to act prudently. A decision to indemnify shall be made by a majority of the board. If a proposed indemnification is of a board member, the member may not vote on the matter. The board may adopt a rule establishing a method for presentation, approval, and payment of claims for indemnification under this subsection. SECTION 3.01. TAX QUALIFICATION. It is intended that the provisions of this Act be construed and administered in a manner that the pension fund's benefit plan will be a qualified plan under Section 401(a) of the Internal Revenue Code. The board may adopt rules to qualify the plan if necessary, and such rules shall be considered part of the plan. SECTION 4.01. MEMBERSHIP IN PENSION FUND; ELIGIBILITY. Any person who has been duly appointed and enrolled as a policeman in a city electing to be covered by this Act shall automatically become a member of the pension fund of such city upon expiration of ninety days from the date such city adopts the pension fund created by this Act, except as provided under Section 14.01. In all instances where a person is already a member of and contributor to a city police pension fund, he shall retain and be entitled to all rights and privileges due him by virtue of having been such a member and contributor. Any person not a member of the pension fund when this Act becomes effective, who thereafter is duly appointed and enrolled as a policeman of a city adopting the fund created by this Act shall automatically become a member of the pension fund as a condition of his employment, except as provided under Section 13.01. SECTION 5.01 SERVICE. Except as provided below in Section 5.02, a member shall receive credit for service during all periods of employment by the city as a policeman. Such service credit shall be used in determining the eligibility for benefits and the amount of benefits to which the member is entitled under this Act. SECTION 5.02 VESTING. No right to retirement benefits provided under this Act vests until a member completes five years of service. SECTION 5.03 BREAK IN SERVICE. A member has a break in service if his employment with the city is terminated by reason of his quitting, retiring or being discharged and is thereafter rehired. An authorized leave of absence, as described below, shall not constitute a break in service provided the member returns to work at the end of such leave. A member who is granted a leave of absence for military service shall receive service credit for the period of such military service, provided that the member is honorably discharged, returns to active employment with the city within 90 days thereafter, and remains in the city's employ for at least one full year after the member's return. A member who is granted a leave of absence for reasons other than military service will receive service credit for such leave. A determination as to whether or not a member was absent or at work shall be made by the board on the basis of whether or not the member received compensation from the city for the period in question. The decision of the board based on the city's payroll records shall be final and binding upon such member and his beneficiaries. If a member has a break in service, the member shall lose credit for all his prior service unless the board makes a determination that the member should make a contribution to the plan in an amount to be determined by the board and certified by the plan actuary. Members shall not be given credit for time not employed in the police department. SECTION 6.01 PARTICIPATION IN FUND; WAGE DEDUCTIONS. Each member policeman in a city which adopts the pension fund created by this Act is required to participate in the fund, except in a time of national emergency, and the city shall be authorized to deduct a sum of not less than one percent nor more than ten percent of the member's monthly wages for participation in the fund. The percent deducted from monthly wages is to be determined by the board as provided in Section 2.01 within the minimum and maximum deductions herein provided or as otherwise provided under the provisions of Section 14.01. SECTION. 7.01. CITY PICK UP OF MEMBER CONTRIBUTIONS. Under the provisions of Section 414(h)(2) of the Internal Revenue Code, the city shall pick up and pay a member's required contribution. Although the contributions so picked up are designated as member contributions, such contributions shall be treated as contributions being paid by the city in lieu of contributions by the member for determining tax liability under the Internal Revenue Code, and such picked up contributions shall not be included in the gross income of the member until such amounts are distributed or made available to the member or member's beneficiary. The member shall not have the option to choose to receive the contributions so picked up directly, and the picked up contributions must be paid by the city to the fund. Member contributions so picked up shall be included in the compensation of the member for purposes of determining benefits and contributions under the fund. The city shall pay the member contributions from the same source of funds used in paying compensation to the member by effecting an equal cash reduction in gross compensation of the member. SECTION 8.01. CONTRIBUTIONS BY CITY. The city shall contribute to the fund contributions expressed as a percentage of payroll or compensation for each member, in such amounts and at such times as are required to pay the city's normal cost and interest on any unfunded actuarial requirement at the rate of interest assumed in the actuarial valuation. The city shall also cause to be included in the contribution to the fund sufficient funds to pay the costs of administration of the fund. The city shall not be held liable or responsible for any claim or asserted claim for benefits under the fund, but all claims shall be paid from the funds for which provisions have been made under the terms of the plan and fund. SECTION 9.01. LOANS TO MEMBERS. A member may borrow from such member's contributions to the fund as approved by the board based on the rules adopted by the board in compliance with the Internal Revenue Code. The rules must be applied in a nondiscriminatory manner. SECTION 10.01. NORMAL AND LATE PENSION. A member who retires on or after his 65th birthday shall receive a monthly amount equal to the following: (a) 1.35% of the member's Average Monthly Compensation multiplied by the number of years of service, limited to 15 years; plus (b) 1.65% of the member's Average Monthly Compensation multiplied by the number of years of service in excess of 15 years, limited to 15 additional years (for a total of 30 years). SECTION 10.02. EARLY PENSION. A member who terminates service on or after his 55th birthday but before his 65th birthday and has ten years of service with the city shall receive a monthly amount equal to a benefit determined as a fraction of the following amount: (1) 1.35% of the member's Average Monthly Compensation, multiplied by the sum of the number of full and fractional years of service plus the number of years and full months from the date of termination of employment to his 65th birthday, the sum not to exceed 15 years, plus (2) 1.65% of the member's Average Monthly Compensation multiplied by the sum of the number of full and fractional years of service plus the number of years and full months from date of termination of employment to his 65th birthday in excess of 15 years, the sum not to exceed 15 additional years (for a total of 30 years). The fraction shall be (1) divided by (2) where (1) is the number of full and fractional years of service, and (2) is the sum of the number of full and fractional years of service plus the number of years and full months from date of termination to the member's 65th birthday. If payment of an Early Pension commences prior to the member's 65th birthday, the amount determined above shall be reduced by 1/180th for each of the first 60 months and 1/360th for each of the next 60 months by which the starting date of pension payments precedes such birthday. SECTION 10.03. SPECIAL EARLY PENSION. A member who terminates service with the city on or after such member has completed 20 years of service with the city shall receive a monthly amount commencing the first day of the month next following the date such member attains age 45 (or the date of retirement if later). If the member retires prior to reaching age 62, such member's pension shall be determined by formulas 1 and 2 below: (1) pension benefit payable up to age of 62 equals the following: (i) 1.35% of the member's Average Monthly Compensation, multiplied by the number of years of service, limited to 15 years, plus (ii) 1.65% of the member's Average Monthly Compensation multiplied by the number of years of service in excess of 15 years but not greater than an additional 10 years (for a total of 25 years), plus (iii) 1.0% of the member's Average Monthly Compensation multiplied by the number of years of service in excess of 25 years but not greater than an additional 5 years (for a total of 30 years), plus (iv) 1.075% of the member's Average Monthly Compensation multiplied by the number of years of service limited to 20 years, plus (v) 3.35% of his Average Monthly Compensation multiplied by the number of years of service in excess of 20 years but not greater than an additional five years. (2) pension benefit payable after member reaches age 62 is equal to the following: (i) 1.35% of the member's Average Monthly Compensation multiplied by the number of years of service, limited to 15 years, plus (ii) 1.65% of the member's Average Monthly Compensation multiplied by the number of years of service in excess of 15 years but not greater than an additional 15 years (for a total of 30 years). A member who terminates service with the city on or after the member has completed 20 years of service with the city and who retires on or after age 62 shall receive a monthly amount equal to the following: (1) 1.35% of the member's Average Monthly Compensation multiplied by the number of years of service, limited to 15 years, plus (2) 1.65% of the member's Average Monthly Compensation multiplied by the number of years of service in excess of 15 years but not greater than an additional 15 years (for a total of 30 years). SECTION 10.04. EXTRA-SPECIAL EARLY PENSION. A member who terminates service after completing 25 years of service with the city and who retires prior to the age of 62 shall receive a monthly amount determined by formulas 1 and 2 below: (1) pension benefit payable up to the age of 62 equals the following: (i) 1.35% of the member's Average Monthly Compensation, multiplied by the number of years of service, limited to 15 years, plus (ii) 1.65% of the member's Average Monthly Compensation, multiplied by the number of years of service in excess of 15 years but not greater than an additional 10 years (for a total of 25 years), plus (iii) 1.0% of the member's Average Monthly Compensation, multiplied by the number of years of service in excess of 25 years but not greater than an additional five years (for a total of 30 years), plus (iv) 1.075% of the member's Average Monthly Compensation, multiplied by the number of years of service, limited to 20 years, plus (v) 3.35% of the member's Average Monthly Compensation, multiplied by the number of years of service in excess of 20 years but not greater than an additional five years. (2) pension benefit payable after member reaches age 62 is equal to the following: (i) 1.35% of the member's Average Monthly Compensation multiplied by the number of years of service, limited to 15 years, plus (ii) 1.65% of the member's Average Monthly Compensation multiplied by the number of years of service in excess of 15 years but not greater than an additional 15 years (for a total of 30 years). A member who meets the requirements for an Extra-Special Early Pension and who retires on or after age 62 shall receive a monthly amount equal to the following: (1) 1.35% of the member's Average Monthly Compensation multiplied by the number of years of service, limited to 15 years, plus (2) 1.65% of the member's Average Monthly Compensation multiplied by the number of years of service, in excess of 15 years but not greater than an additional 15 years (for a total of 30 years). SECTION 10.05 REEMPLOYMENT OF RETIRED MEMBERS ELIGIBLE TO RECEIVE NORMAL, LATE, EARLY, SPECIAL EARLY OR DEFERRED VESTED PENSIONS: If a retired member eligible to receive a Normal, Late, Early, Special Early, or Deferred Vested Pension is reemployed by the city, payment of any pension, whether or not such payment has commenced, to which such retired member is entitled from the plan shall not be suspended, whether or not he again becomes a member. Such retired member shall be treated as a new employee for purposes of determining his membership in this plan and for purposes of determining his service after such reemployment. However, for purposes of computing any death benefit hereunder, the previous period of service shall be used if it produces a greater amount of death benefit than his last period of service. SECTION 10.06. MODIFICATION. The pensions referenced in Sections 10.01 through 10.04 are subject to modification under the provisions of Section 14.01. SECTION 11.01. DEFERRED VESTED PENSION. A member shall be eligible for a Deferred Vested Pension if the member's employment is terminated, for reasons other than death or Normal, Late, Early, Special Early, Extra-Special Early, or Disability Pension, on or after the completion of five or more years of service. Payment of a Deferred Vested Pension shall commence as of the first day of the month next following the member's 65th birthday, if such member is then living. If the member has completed 10 years of service, such member may request the Deferred Vested Pension to commence as of the first day of the month next following such member's 55th birthday, or as of the first day of any subsequent month which precedes such member's 65th birthday. If payment of such pension commences prior to the member's 65th birthday, the amount shall be reduced by 1/180th for each of the first 60 months and 1/360th for each of the next 60 months by which the starting date of the pension payment precedes the member's 65th birthday. The provisions of this Section are subject to change under the provisions of Section 14.01. SECTION 12.01. DISABILITY PENSIONS. A member shall be eligible for a Disability Pension if such member's employment is terminated by a reason of total and permanent disability prior to the member's 65th birthday. Payment of a Disability Pension shall commence following a 12-month waiting period following the member's retirement based on disability. If disability is presumed to be permanent prior to the completion of a 12-month period, disability payments shall commence following certification of the disability. In no case shall such payments commence until disability has been certified to be continuous for a period of 90 days. Such payments shall cease on the member's death or the cessation of the member's disability. If disability ceases on or after the member's 65th birthday, such member's disability shall be continued in the same manner as if the disability had continued. If a member, who has received any Disability Pension payments, recovers and is reemployed by the city as a policeman within 30 days following certification that such disability has ceased, membership in the fund shall be reinstated as of the date the employee returns to active employment and such employee shall receive credit for all prior service with the city credited to him at the inception date of his disability. The board may extend the 30-day period when, in its sole discretion, reasonable cause exists for so doing. If a member's disability ceases prior to the member's 65th birthday, and the member is not reemployed by the city, the member shall be treated as a terminated member and shall be entitled to no further benefits except the excess, if any, of his accumulated contribution, over the total amount of all disability benefits received. However, if the member meets the requirements for Early, Special Early, Extra-Special Early, or Deferred Vested Pension on the date of termination for disability, such member shall be entitled to receive a pension equal in amount to the Early, Special Early, Extra-Special Early, or Deferred Vested Pension such member would have been entitled to as of the date of his disability. No member shall qualify for a Disability Pension if the board determines that the disability results from: (1) addiction to narcotics or hallucinogenic drugs; (2) an injury suffered while engaged in a felonious or criminal act or enterprise; (3) self-inflicted injury; (4) voluntary or involuntary service in the armed forces; (5) service in the armed forces of any foreign country; or (6) an absence in excess of three months for which he received no earnings from the city, unless such absence was due to sickness or accident which resulted in disability. The board may establish such rules and regulations as appropriate to certify a member's disability and to verify the continued existence of such disability. Subject to Section 14.01, a member who meets the requirements for a Disability Pension shall receive a monthly amount which shall be determined in accordance with (1) and (2) below: (1) Prior to Age 65: Sixty percent of the employee's monthly rate of pay at the time of the disability minus any primary Social Security benefit actually paid to the member. If the member is entitled to receive payments from worker's compensation or any other disability plan, the member's disability benefit payable hereunder shall be reduced by the amount of such other payments. In no event shall a member's Disability Pension hereunder exceed $1,500 per month. (2) On and After Age 65: An amount computed in the same manner as for a Normal Pension considering the employee's compensation and service as if such employee continued employment with the city up to the member's 65th birthday. The rate of pay will be deemed to have remained constant from time of disability until the member's 65th birthday. SECTION 13.01. SEVERANCE AND DEATH BENEFITS. (a) If a member's employment with the city is terminated before the member qualifies for a benefit, the member is entitled to receive a refund of accumulated contributions, payable in a lump sum or in installments without interest. The payment shall result in a forfeiture of any further rights or benefits from the fund. In lieu of any other benefit to which a retired member may be entitled, such member may elect to receive a refund of accumulated contributions, payable in a lump sum or in installments without interest. Such payment shall result in a forfeiture of any further rights or benefits from the fund. If a member dies while actively employed by the city, leaving a spouse or a dependent child under the age of 18 years of age, the board shall order the following monthly allowances: (1) The surviving spouse of an active member who, on the date of the member's death, had completed five or more years of service, shall be eligible for a Spouse's Pension, payable monthly in an amount equal to 50% of an amount calculated under the formula for a Normal Pension but using the member's compensation and service earned as of the date of death. Payment of such pension shall continue until the death or remarriage of said spouse. (2) In the event there is no spouse surviving to receive the Spouse's Pension, each surviving dependent child of the deceased member under the age of 18 years shall be eligible for a Dependent Child's Pension, payable monthly in an amount equal to 50% of an amount calculated under the formula for a Normal Pension, but using the member's compensation and service earned as of the date of death. If there is more than one such child under the age of 18, said monthly amount shall be divided equally among such children at the time such amount is paid. Payment of said pension shall be payable until each such child attains the age of 18 or until each such child's death, whichever occurs first. (3) If a surviving spouse, receiving a Spouse's Pension, dies leaving a surviving child under the age of 18, said Spouse's Pension shall be continued to said child or children in under the terms of this section. If a member dies while actively employed by the city after having completed five or more years of service with the city and leaving no surviving spouse or dependent children, the member's beneficiaries shall be eligible for a death benefit equal to the member's total accumulated contribution or $2,500, whichever is greater. If a member dies while actively employed by the city after having completed less than five years of service with the city, the beneficiaries of such member shall be eligible for a death benefit equal to the member's accumulated contribution. The total amount of death benefit payments payable ) shall not be less than $2,500 or the total amount of the member's accumulated contribution, whichever is greater. If a spouse or dependent child dies before receiving the minimum amount, the balance of such amount shall be payable in a lump sum to the estate of the spouse or dependent child, whichever last survived. If the spouse remarries before receiving such amount and there are no surviving dependent children to receive payment, the balance of the death benefit shall be payable in a lump sum to the beneficiaries of the member. If a member dies after commencement of a Normal, Early, Special Early, Extra-Special Early, or Disability Pension, or retires under an Early, Special Early, Extra-Special Early, or Disability Pension, but dies prior to the commencement of the pension and the member is survived by a spouse, the spouse shall be eligible for a monthly pension if the spouse were married to the member prior to the member's retirement from the city's police department. The pension shall be equal to 50% of the pension which the member was receiving on the date of his death. If: (1) the retired member retired and commenced receipt of a pension prior to attaining age 62, the monthly amount of such pension payable to the member's surviving spouse from and after the date upon which the retired member would have attained age 62, shall be reduced to 50% of the pension which the retired member would have received had he attained age 62, and (2) a retired member who is receiving disability Retirement benefits dies prior to the age of 65, the monthly amount of the pension shall be equal to 50% of the pension the member would have received had he worked until the date of his death at the rate of pay in effect at the inception of his disability. Payment of the pension shall continue until the date of death or remarriage of the spouse, whichever occurs first. The total benefit payments payable under this Section shall not be less than the retired member's total accumulated contribution, or $2,500.00, whichever is greater (less any previous payments made to the retired member). If the spouse dies before receiving such minimum amount, the balance of the minimum amount of death benefit may be payable in a lump sum to the spouse's estate. If the spouse remarries before receiving such minimum amount or the retired member and spouse are divorced on the retired member's date of death, the balance of such minimum amount of death benefit shall be payable in a lump sum to the beneficiaries of the retired member. If a member dies after commencement of a Normal, Early, Special Early, Extra-Special Early, or Disability Pension, or retires under an Early, Special Early, Extra-Special Early, or Disability Pension, but dies prior to the commencement of such pension and leaves no surviving spouse, the beneficiaries of such retired member shall be eligible for a death benefit equal to the greater of the member's accumulated contribution or $2,500, whichever is greater, less any payments previously made to such deceased member. If a member dies before or after commencement of a Deferred Vested Pension, the beneficiaries of such member who, on the date of the member's death were receiving or entitled to receive a Deferred Vested Pension, shall be eligible for a death benefit, payable in a lump sum, equal to the deceased member's total accumulated contribution, less any pension payments previously received. If a member dies without having designated a beneficiary or beneficiaries, then the board is empowered to designate a beneficiary under rules duly adopted by the board as provided in Section 2.01. The provisions of this Section shall be subject to any modifications made under the provisions of Section 14.01. SECTION 14.01. MODIFICATION OF BENEFITS, MEMBERSHIP QUALIFICATIONS, ELIGIBILITY REQUIREMENTS, AND CONTRIBUTIONS. The board, with the approval of at least four board members, may modify any of the following: (1) benefits provided by this Act; provided, however, that any increase in benefits is subject to the provisions of subsection 14.01(b); (2) future membership qualifications; or (3) eligibility requirements for pensions or benefits; or (4) the percentage of wage deductions provided in Section 5.01; provided that any increase in such deduction is subject to the provisions of subsection 14.01(b). Notwithstanding any other provision of this Act and, except as provided below, the board, with the approval of a majority of the members of the fund, may increase either of the following: (1) benefits provided by this Act; or (2) the percentage of wage deductions provided in Section 5.01; provided however that, in the event that the plan actuary certifies that an increase would be necessary to maintain an actuarially sound plan, the board may, with the approval of at least four board members, increase such percentage of wage deductions. Notwithstanding any other provision of this Act, the board, with the approval of at least four board members, may provide for refunds, in whole or in part, with or without interest, of accumulated contributions made to the fund by members who leave the city service before qualifying for a pension. Actions authorized shall not be made unless first reviewed by a qualified actuary selected by at least four board members. To qualify, an actuary, if an individual, must be a Fellow of the Society of Actuaries, or a Fellow of the Conference of Actuaries in Public Practice, or a member of the American Academy of Actuaries. The basis for the actuary's approval or disapproval of a board action is not subject to judicial review. SECTION 15.01. TRANSFER OF PENSION ASSETS. Upon adoption of this Act, a city may transfer the assets and membership of a predecessor police pension fund into the fund created by the city's adoption of this Act. Members of the prior plan shall retain and be entitled to all rights and privileges accrued by virtue of contributing to such plan. SECTION 15.02 EMERGENCY CLAUSE Effective upon passage. COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute bill narrows the language down in SECTION 1.01 to specifically apply to the City of Galveston.