SBW H.B. 3170 75(R)BILL ANALYSIS
PENSIONS & INVESTMENTS
H.B. 3170
By: Yarbrough
3-26-97
Committee Report (Unamended)
BACKGROUND
Texas Revised Civil Statutes Annotated ("Revised Statutes") Article
6243e.2, creates and governs the firemen's relief and retirement fund in
cities having a population of not less than 1,200,000, providing
retirement and disability benefits for firefighters. This Article was
enacted in 1975, and was drawn from former Article 6243e, which allowed
creation of similar funds in a number of cities. The only pension fund
which was been created by and is presently governed by Article 6243e.2 is
the Houston Firemen's Relief and Retirement Fund.
PURPOSE
As proposed, H.B. 3170 would create Article 6243e.2(1) and repeal Article
6243e.2 to:
1.Reorganize and amend the existing statute to eliminate redundancy,
archaic provisions, complete gender neutrality, and codify benefit
increases that have been enacted non-legislatively through Section 29 of
the existing statute.
2.Provide several benefit enhancements for active and retired members and
their beneficiaries.
3.Establish a tenth position on the board of trustees of a firemen's
relief and retirement fund, to be held and elected by retired members with
twenty or more years of service. The existing board members are five
active firefighters, the mayor's representative and the city treasurer,
and two private citizens.
4.Allow the board to establish an excess benefit plan for participants
whose benefits exceed limits prescribed in Section 415 of the Internal
Revenue Code (IRC).
5.Provide protection for confidential information about members or
beneficiaries equivalent to that already provided for members of similar
funds created under Article 6243e.1.
New benefits created on the effective date of the legislation (November 1,
1997) would be the following:
_A one time $5,000 lump sum benefit paid to all current retirees,
surviving spouses, or members receiving disability benefits (excludes
deferred retirement recipients, DROP participants, and active members).
_The annual increase in service pensions paid to members over 50 and
certain on-duty disability pensions would be fixed at three percent,
rather than adjusted for inflation with a cap of three percent.
_Allows members who are totally disabled as a result of on-duty injuries
to receive annual increases regardless of their age.
_Allow the board to establish an account by which DROP participants can
maintain their retirement account with the Fund rather than have it
distributed or rolled over to another investment after leaving active
service.
_Allow members, prior to their death, to elect whether children who reach
the age of 18 can continue to receive a share of that member's survivor
benefit while in college, rather than have that share revert to their
siblings and/or the member's spouse.
Certain other benefit enhancements would be phased-in at future dates, as
follows:
_Effective July 1, 1998, a surviving spouse who was not married to the
member at the time of the member's retirement will be provided a survivor
benefit based on the number of years married to the member at the time of
the member's death. If married five or more years, the surviving spouse
will be entitled to the same benefits as if the spouse had been married to
the member at the time of retirement.
_Effective July 1, 1998, a $5,000 lump-sum death benefit will be paid on
behalf of active members, members receiving a service pension, or members
receiving a disability pension.
_Effective July 1, 1999, an additional monthly benefit of $100 will be
paid to all retirees entitled to a service pension or disability pension,
and to the persons receiving benefits as survivors of a firefighter. This
will apply only to members who have retired or become disabled prior to
July 1, 1999.
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. Amends Title 109, Revised Statutes, by adding Article
6243e.2(1), as follows:
Art. 6243e.2(1). FIREFIGHTERS' RELIEF AND RETIREMENT FUND IN
MUNICIPALITIES OF AT LEAST 1,600,000 POPULATION:
Section 1. DEFINITIONS.
(1) "Average monthly salary"
(2) "Board"or "board of trustees"
(3) "Code"
(4) "Deferred retiree"
(5) "Disabled child"
(6) "DROP"
(7) "DROP account"
(8) "Eligible Child"
(9) "Eligible parent"
(10)"Eligible spouse"
(A) for member who dies after June 30, 1998, or
(B) for a member who dies before July 1, 1998.
(11)"Firefighter"
(12)"Fund"
(13)"Member"
(14)"Off-duty disability"
(A) likely to be permanent; and
(B) cause other than performance of duties
(15)"On-duty disability"
(A) likely to be permanent; and
(B) results from performance of duties
(16)"Salary"
(17)"Years of participation"
Section 2. FUND AND BOARD OF TRUSTEES.
(a)Provides for creation of a Firemen's Relief and Retirement Fund in
certain cities, population at least 1,600,000.
(b) Provides for the naming of a board of trustees of the fund ,
consisting of 10 trustees, including:
(1)the mayor or an appointed representative of the mayor;
(2)the city treasurer or the official performing the duties of city
treasurer;
(3)five active members of the fire department;
(4)a retired member of the Fund with at least twenty years of
participation in the fund; and
(5)two persons, each of whom is a registered voter in the city, has
resided there for at least three years prior to their appointment, and is
not a municipal official or employee.
(c)Requires trustees serving under Subsection (b)(3) be elected by ballot
to a three year term by the members of the fire department during the last
quarter of the year preceding the January in which the terms of a trustee
occupying one of those positions expires. Further provides that three of
such trustees shall be from the suppression division, one with the rank of
firefighter or engineer-operator (Position I), one with the rank of
captain or senior captain (Position II), and one with the rank of district
chief, deputy chief, or assistant chief (Position III). One such trustee
shall be from the fire prevention division (Position IV), and one shall be
from the fire alarm operators division or the repair division (Position
V).
(d)Provides that the trustee under Subsection (b)(4) be elected by ballot
of the retired members of the Fund with twenty years of participation
during the last quarter of every third year starting with 1997, to serve a
three year term starting in the following January.
(e)Provides that the trustees under Subsection (b)(5) shall be appointed
in December by the elected members of the Board to staggered two year
terms.
(f)Provides for replacement of trustees who resign, die, or otherwise
cease to serve. Elected members are replaced by election, held either as
a special election or in the next regular election. Appointed members are
replaced by appointment by the elected members. All replacement members
serve out the incomplete term of their predecessor.
(g) Provides for an oath of office, to be taken at the first meeting of a
trustee's term.
(h)Provides that the officers of the Board (chair, vice-chair, and
secretary) shall be elected by the board, and the city treasurer shall
serve as treasurer of the Fund under his or her official bond and oath of
office.
(i)Provides that trustees shall serve without compensation.
(j)Provides that a majority of trustees constitutes a quorum, that all
orders of the Board shall be by recorded vote, and that each decision of
the Board in a matter within its discretion shall be final, binding, and
conclusive, subject only to the rights of appeal provided in this Act.
(k)Provides that the Board shall manage the Fund, determine all
applications for benefits under the Fund, disability claims, and determine
the identity of beneficiaries.
(l)Provides for monthly Board meetings, special meetings called by the
chair, minutes of meeting, safekeeping and disbursement of funds, and
financial record keeping.
(m)Provides for the city to provide to the Fund information concerning
new fire fighters, compensation of members, death and termination of
members, and other information reasonably required by the Board to
administer the Fund and properly provide benefits.
(n)Provides that the Board shall provide an annual financial report to
the city treasurer, and provide other information or reports requested by
the city treasurer.
(o)Provides that the secretary of the Board shall forward copies of the
minutes of Board meetings to each fire station and division of the fire
department.
(p)Provides that the Board shall have duty and power to control and
manage the Fund, including discretionary authority to:
(1)adopt written rules and guideline concerning administration of the
Fund;
(2)interpret and construe all provisions of this Act and Fund documents,
subject to qualification requirements under Section 401 of the Internal
Revenue Code;
(3)correct any defect, supply any omission, and reconcile any
inconsistency that may appear in this Act in a manner and to the extent
that the Board considers expedient to administer this Act for the greatest
benefit of all members;
(4) hire and pay employees;
(5)determine all legal and factual questions relating to eligibility,
benefits, or administration of the Fund;
(6)establish and maintain necessary or appropriate records; and
(7)compel witnesses to appear before it with respect to matters
connected with the operation of this article.
(q)Provides that the chair may administer oaths to witnesses.
(r)Provides that the Board shall maintain at its offices copies of each
rule or guideline adopted under this section, and deliver a copy of each
to the city.
Section 3. OTHER POWERS OF THE BOARD.
(a)Provides that surplus funds may be invested in accordance with Chapter
802 of the Texas Government Code.
(b)Provides that the Board may engage professional services, including
but not limited to:
(1)accountants to audit the Fund;
(2)professional investment managers pursuant to Section 802.204 of the
Texas Government Code;
(3)actuaries;
(4) attorneys to advise, assist, or represent the Fund; or,
(5)physicians to examine potential new members of the Fund and persons
seeking or receiving disability benefits;
(c)Provides that fees of professionals employed under Subsection 3(b) are
to be paid from the Fund, except that the costs of audits shall be paid
from the Fund only if not paid by the city.
(d)Provides that the Board may have an actuarial evaluation perform each
year, and may adopt a new actuarial valuation each year, except that an
actuarial evaluation that results in an increase in the city contribution
rate determined under Section 13(d) above the statutory minimum may be
adopted only once every three years unless the governing body of the city
consents to a more frequent increase.
(e)Provides that the Board may sue to recover money paid by or obtained
from the Fund through fraud, misrepresentation, defalcation, theft,
embezzlement, or misapplication.
(f)Provides that the chair may request, in writing, the city attorney to
represent the Fund in any legal matter, including litigation.
(g)Provides that the Board may purchase errors and omissions insurance
covering Board members and employees. Further provides that the Board may
elect to directly indemnify trustees and employees in lieu of insurance,
although such indemnity may not be provided for willful and malicious
conduct or gross negligence. The Board may establish a self-insurance
fund of as much as $5,000,000 in lieu of error and omissions insurance.
Indemnification or reimbursement from the self insurance fund shall be
made by majority vote of the Board members, but that a member for whom
such payment is to be made shall not vote.
Section 4. SERVICE PENSION BENEFITS.
(a)Provides service pensions for members who terminate active service
with at least twenty years of participation.
(b)Provides that members with twenty or more years of participation in
the Fund who terminate active service on or after the November 1, 1997
effective date of the Act shall receive a monthly service pension equal to
fifty percent of the member's Average Monthly Salary, plus three percent
for each year of participation more than twenty but less than thirty. A
member with thirty or more years of participation will receive the maximum
service pension of eighty percent of the member's Average Monthly Salary.
(c)Provides that the service pension for members who retired prior to the
effective date of the Act will be the service pension to which the member
was entitled under the prior law.
(d)Provides that members who were receiving a service or disability
pension prior to November 1, 1997, or beneficiaries of deceased such
members shall receive a $5000 one-time lump sum benefit on that date.
(e)Provides an additional $100 per month benefit, commencing July 1,
1999, for firefighters who have begun receiving a service or disability
pension prior to that dates, or their survivors. This $100 per month will
not be subject to the annual increase applicable to certain other
benefits.
(f)Provides that the benefit under Subsection (d) shall be paid to the
member, or the member's eligible spouse if the members is deceased. If
the member is deceased and there is no eligible spouse, then the benefit
is divided among the eligible children, or, if there are no eligible
children, any eligible parents.
Section 5. DEFERRED RETIREMENT OPTION PLAN
(a)Provides that an active member eligible for a service pension under
Section 4 may elect to participate in DROP while remaining an active
member. A member who does so may apply for a service pension upon
terminating active service, but such pension will be calculated as if the
member terminated service on the date the member elected to participate in
DROP. In effect, a member who enters DROP will cease to accumulate
service time and salary paid after the DROP election will not count in the
calculation of average monthly salary on which pension benefits are based.
DROP elections are generally irrevocable, except at set forth in section
5(l).
(b)Provides that a member may elect to participate in DROP at any time
after completing twenty years of participation, subject to Board approved
procedures. That election will be effective at the beginning of the month
following Board approval, at which time the payroll deductions from the
members salary paid to the Fund will be credited to the member's DROP
account. The member's DROP account will receive these credits until the
member terminates active service or at the end of five years, whichever
comes first.
(c)Provides that the member's DROP account will also be credited with an
amount equal to the monthly service pension which would be paid to the
member had the member terminated service on the date of the member's DROP
election. The member's DROP account will receive these credits until the
member terminates active service or at the end of five years, whichever
comes first.
(d)Provides that DROP accounts will be credited with interest equal to
the average annual earnings (or losses) of the Fund over the five previous
years. Thus, at the beginning of a year, the member will know what the
return on a DROP account will be. No credit will be given on DROP
accounts after the fifth anniversary of a member's DROP election if the
member remains in active service.
(e)Provides for distribution of DROP account balances after termination
of service in addition to a service pension, which will be in a lump sum
equal to the DROP account balance unless the member elects installment or
partial distributions as permitted by sections 5(f) and 5(g).
(f)Provides the option to elect distribution of DROP account balances in
three substantially equal annual installments. No addition losses or
earnings will be credited to the DROP account after the termination of
active service.
(g)Provides for partial distributions of DROP account balances if the
Board adopts Subsections (h) and (i) by majority vote.
(h)Provides that such partial distributions may occur up to two times per
year in amounts designated by the member, and that the member may at any
time elect to receive the entire remaining account balance.
(i)Provides that the DROP accounts of members electing partial
distributions will continue to receive credits as set forth in section
5(d), subject to a one percent annual fee for administrative costs.
(j)Provides that elections relating to installment and partial
distributions under Subsections (h) and (i) shall satisfy Section
401(a)(9) of the Internal Revenue Code, which relates to minimum
distribution requirements.
(k)Provides that the service pension of a member who elects DROP will be
calculated as though the member retired on the DROP election date, with
salary and years of service after that date having no effect on the
pension calculation, unless the DROP election is revoked pursuant to
section 5(l)
(l)Provides for distribution of a member's DROP account balance in the
event of death to eligible beneficiaries.
(1)Provides that if the member is survived by both a spouse who was
married to the member at the time of the member's DROP election and
eligible children, half the account shall be paid to the spouse, and half
split among the children.
(2)Provides that if the member is survived by an eligible spouse, but no
eligible children, the spouse receives the entire account balance.
(3)Provides that if the member is survived by eligible children, but no
spouse, the children share the entire account balance.
(4)Provides that if the member is not survived by eligible children or
an eligible spouse, any dependent parents will share the entire account
balance.
(5)Provides that in the absence of any eligible beneficiary, a
beneficiary designation by the member shall direct payment of the account
balance, and that in the absence of such a designation, the account
balance shall be paid to the member's estate.
(6)Provides that if an eligible surviving spouse was not married to the
member at the time the member elected DROP, that spouse's share of the
DROP balance will be reduced. The spouse will receive a benefit equal to
the percentage of the period in between the member's election and the
member's termination of active service during which the spouse was married
to the member, with the remaining benefit distributed as though there was
no eligible spouse.
(m)Provides that distributions of DROP account balances to beneficiaries
of deceased members shall be in lump-sum form, payable promptly after the
member's death, and subject to Section 401(a)(9) of the Internal Revenue
Code.
(n)Provides that after a DROP election, a member is ineligible for
disability or enhanced death benefits unless the election is revoked. An
election may be revoked by a member who becomes totally incapacitated due
to an on-duty disability (see section 6(a)(2)). An election may also be
revoked by the survivors of a member who dies on duty or who dies as a
result of an on-duty disability. If a DROP election is revoked, the DROP
account balance is not distributed, and the member or the member's
beneficiaries are entitled only to the other benefits provided under this
Act as though the DROP election had never been made.
(o)Provides that a retired member who participated in DROP and returns to
active service will be subject to the terms of this section.
(p)Provides that the Board may cut off additional DROP elections after
August 31, 2000.
Section 6. DISABILITY PENSION BENEFITS.
(a)Provides for on-duty disability pensions in lieu of any other benefit
under this article.
(b)Provides that a member who suffers an on-duty disability that prevents
the member from performing the usual and customary duties of that member's
position will receive a disability pension equal to 50% of the member's
average monthly salary or the service pension the member would be entitled
to, whichever is greater.
(c)Provides that a member who suffers an on-duty disability that prevents
the member from performing any substantially gainful activity will receive
a disability pension equal to 75% of the member's average monthly salary
or the service pension the member would be entitled to, whichever is
greater.
(d)Provides a presumption concerning a full-time active member with at
least six years of service who becomes disabled from heart disease, lung
disease, or cancer, if that member passed a physical examination that
failed to reveal any indication of the condition. The presumption will be
that such condition constitutes an onduty disability, allowing disability
benefits under this provision, and use of such disability benefits to
calculate death benefits. No other statutory presumption regarding the
cause of illnesses will increase benefits under this article.
(e)Provides for off-duty disability pensions if an off-duty disability
prevents the member from performing the usual and customary duties of that
member's position.
(1)Provides that the off-duty disability pension will be equal to 25%
plus 2.5% for each year of participation (up to a maximum of 50%), of the
member's average monthly salary, or
(2) the service pension the member would be entitled to, whichever is
greater.
(f)Provides that no disability pension will be paid for a member whose
disability is due to a condition that existed on the date the member
became a member of the Fund, and limits such a member to the service
pension, deferred pension, or refund of contributions the member would
otherwise be entitled to receive on terminating active service.
(1)Provides that a preexisting condition existed if a member had
symptoms that would cause an ordinarily prudent person to seek diagnosis,
care, or treatment within the five years preceding entry into the Fund.
(2)Provides that a preexisting condition exists if a member had a
condition for which medical advice or treatment was recommended by or
received from a physician within the five years preceding entry into the
Fund.
(g)Provides that no member may receive a disability pension before filing
an application for such benefits and certificates of disability signed by
the member and his or her physician or a physician appointed by the Board,
and authorizes the Board to require other evidence as it deems necessary
or desirable.
(h)Provides that the Board shall make its determinations relating to
disability benefits in accordance with uniform principles consistently
applied on the basis of medical or other evidence that it determines to be
necessary or desirable.
Section 7.DEATH BENEFITS.
(a)Provides that if a member dies who is receiving or is eligible to
receive a service pension, a disability pension, or a deferred pension,
the member's eligible survivors will receive a death benefits as follows:
(1)if an eligible spouse and an eligible child or children survive the
member, the spouse shall receive a death benefit equal to one half of the
benefit that would be due the member, and the other half of that benefit
shall be divided equally among the eligible children;
(2)if the member is not survived by eligible children, or there are no
remaining eligible children at any time, then the eligible spouse shall
receive the full amount that would be due the member;
(3)if the member is not survived by an eligible spouse, or upon the
death of the eligible spouse, the full amount that would be due the member
shall be divided equally among the eligible children; and
(4)if the member is not survived by an eligible spouse or eligible
children, then the amount the member would have received is divided among
any eligible parents.
(b)Provides that if an eligible spouse was not married to the member at
the time the member left active service, and was not married to the member
for at least five years, then the eligible spouse's death benefit shall be
reduced to that amount multiplied by the length of the marriage divided by
five years, and that the amount by which the spouse's benefit was reduced
shall be distributed to the other eligible beneficiaries, if any, as
though there was no eligible spouse.
(c)Provides a death benefit of 100% of a member's average monthly salary
if the member dies in the course of the member's duties as a Fire Fighter
or suffers an on-duty disability and subsequently dies from the bodily
injuries that caused that on-duty disability..
(d)Provides that death benefits shall commence immediately in the case of
members who were or would have been entitled to payment of a service
pension at the time of death, but will not commence until the date on
which the member would have turned 50 with respect to a member who was or
would have been entitled only to a deferred pension at the time of the
member's death.
(e)Provides a one-time lump-sum death benefit on the death on or after
July 1, 1998 of any member who was active, receiving a service pension, or
receiving a disability pension, to be distributed as follows:
(1)to the eligible spouse if there is such a spouse;
(2) if there is no eligible spouse, divided among the eligible children;
and
(3)if there was no eligible spouse and no eligible children, divided
equally among the parents of the member.
(f)Provides that a member in active service who dies will be treated as
having become disabled on the date of death, from the cause of death, for
purposed of calculating the death benefit for the beneficiaries of that
member.
(g)Provides that if a member in active service dies and leaves no
eligible survivors, of if the survivors unanimously elect, the death
benefit for that member will be the refund, if any, that the member would
have been entitled to under Section 8 if the member had terminated service
on the date of death. Members may select a beneficiary to be paid this
benefit, and if the member did not do so, the benefit will be paid to the
member's estate, but may not escheat to the state.
(h)Provides that no death benefits will be paid if a member dies as a
result of suicide before the completion of two years of participation, or
from a disability caused by a suicide attempt before the completion of two
years of participation.
(i)Provides that survivor benefits to a child shall cease when the child
ceases to be an eligible child.
(j)Provides that an eligible spouse shall continue to receive death
benefits upon remarriage, but that a person may receive survivor benefits
as an eligible spouse of only one member.
Section 8.DEFERRED PENSION AT AGE 50; REFUND OF CONTRIBUTIONS.
(a)Provides that a member with at least ten but less than twenty years of
participation may receive a deferred pension of 1.7% of average monthly
salary multiplied by the years of participation. Such deferred pension
will be paid beginning at age 50.
(b)Provides that a member eligible for a deferred pension may instead
elect upon termination of active service to receive a refund of the
contributions made by the member, plus five percent interest, not
compounded.
(c)Provides that a member with less than ten years of participation may,
upon termination of active service, receive only a refund of the member's
contributions, without interest.
Section 9.PROOF OF CONTINUED DISABILITY.
(a)Provides that the Board may require any member receiving a disability
pension or any person receiving death benefits as a disabled child to
undergo a physical examination by a physician selected by the Board.
(b)Provides that persons receiving disability pensions or death benefits
as a disabled child shall submit an annual report of employment activity
and earning in a form prescribed by the Board.
(c)Provides that the Board may use the results of physical examinations
of and reports from persons receiving disability pensions or death
benefits as a disabled child in determining whether such benefits should
adjusted, and that failure to appear for examinations or provide the
annual report may result in reduction or discontinuation of such benefits.
Section 10:NON-STATUTORY BENEFIT INCREASES.
Provides for increases in benefits if:
(1) the increase is approved by a qualified actuary;
(2)a majority of the participating members of the Fund approve the
increase by secret ballot;
(3)the increase does not deprive any member of a fully vested and matured
right to receive benefits without that member's written consent; and
(4)the increase is approved by the State Pension Review Board, which may
not unreasonably withhold such approval.
Section 11. GENERAL PROVISIONS FOR CALCULATION AND PAYMENT OF BENEFITS.
(a)Provides that no member or beneficiary may receive benefits under this
Act under the provisions of more than one section in a particular
capacity. However, a member may receive benefits due the member as a
result of the member's own service and benefits due as a beneficiary or
survivor of another member.
(b)Provides that a member's benefits on termination of active service
will be based on the benefits in effect at the time of termination, and
will not be adjusted as a result of subsequent increases in the benefits
payable under the Act unless those increases are expressly made applicable
to previously retired members.
(c)Provides that the benefits payable to a member (or that member's
survivors) with who had 30 or more years of participation, or is or would
be fifty years old, or received an on-duty disability pension, shall be
increased by three percent annually in October, and on the member's
fiftieth birthday.
(d)Provides that time spent in military service during war or national
emergency shall count as continuous service, and that other than in
connection with such service, a member shall maintain credit for previous
service only if the member returns to active service within five years of
termination.
(e)Provides that the chief may recall retired members in case of great
conflagration, but that such members shall have no claim against the Fund
or the city for payment for such duty.
(f)Provides that benefits will be payable beginning on the date a member
ceases to carry out regular duties, even if the member remaining on the
payroll of the fire department or receives sick pay, vacation pay, or
other pay, and that in the event of a delay in such payments in connection
with a disability determination under Section 6(e), the amount accrued
since the date of termination of regular duties will be paid upon approval
of the disability pension.
(g)Provides for designation of a trustee by a member for any potential
beneficiary other than an eligible spouse on a form approved by the Board.
(h)Provides for payments on behalf of beneficiaries by making such
payments to the guardian of the estate of the minor, and on behalf of any
other person with a legal disability to the court-appointed conservator or
guardian of that person's estate. Any such payment shall fully discharge
the Fund's obligation to the minor or legally disable person.
(i)Provides that any person receiving benefits may elect to reduce or
forego a portion of that person's benefit.
(j)Provides that an election under Subsection (i) becomes irrevocable on
the date of approval by the Board.
(k)Provides that benefits under the Act shall not be integrated with
Social Security benefits, and that the availability of Social Security
benefits shall not be taken into consideration in determining the amount
of benefits due a member.
(l)Provides that if the Fund lacks sufficient money to pay in full the
benefits due under the Act, all disability and pension benefits shall be
reduced pro rata.
(m)Provides that no person shall receive benefits as a result of the
death of a member or other beneficiary if that person caused the death,
and that such benefits will be paid as if the person causing the death had
predeceased the member or beneficiary. In addition, the Board may suspend
payment of such benefits to a person who is indicted in connection with
the death, which suspended benefits shall be paid, with interest earned by
the Fund if the person is not convicted. "Convicted" shall include a
guilty or no contest plea to, or a conviction of an offense establishing
that the person's intentional or knowing act or omission caused the death,
regardless of a probated or suspended sentence, once direct appeals have
been exhausted or waived.
Section 12.APPEALS OF BENEFIT DECISIONS.
(a)Provides that a member entitled to a service or disability pension, or
the member's beneficiaries, who is aggrieved by the decision or order of
the Board, either as a result of rejection or the amount allowed, may
appeal to the district court in the county where the Fund is located by
giving written notice of intent to appeal, including a statement of that
intent and a brief statement of the grounds and reasons for the appeal.
The notice is to be served personally on the chair, secretary, or
treasurer within twenty days of the decision or order. After service of
the notice, the appealing party shall file with the district court a copy
of the notice and an affidavit proving service.
(b)Provides that within thirty days of the notice of appeal the secretary
or treasurer shall file with the district court a transcript of all papers
and proceedings in the case before the Board. When both the notice and
the transcript have been filed, the court shall docket the appeal, assign
it a number, fix a date for hearing, and notify the appellant and the
Board of that date.
(c)Provides that the court may require further or additional proof or
information, either documentary or under oath, prior to rendering a
decision on the appeal. When a decision is rendered, the court shall give
each party a copy of the decision and direct the Board as to the
disposition of the case. The final order or decision of the district
court is appealable in the same manner as civil cases generally.
Section 13.MEMBERSHIP AND CONTRIBUTIONS.
(a)Provides that each new Fire Fighter under the age of 36 shall become a
member of the Fund. By accepting employment, the member agrees to make
the required contributions to the Fund and becomes entitled to participate
in the benefits provided by this Act.
(b)Provides that the Board may establish certain physical requirements
for membership in the Fund. Copies of the results of the physical
examinations conducted on behalf of the city shall be provided to the
Board within ten days of the examination to determine eligibility and
existence of preexisting conditions. The Board may require additional
examinations if necessary to determine whether the applicant meets the
physical requirements for membership, at the Fund's expense. With a
reasonable time after receiving the results of such physical examinations,
the Board shall determine whether the applicant meets the physical
requirements, and shall inform the applicant and the fire chief of its
decision within ten days. If the Board rejects the applicant, the
applicant may request examination by a board of three physicians appointed
by the Board at the expense of the applicant. If that board finds that
the applicant meets the physical requirements, the Board shall accept the
applicant as a member. Acceptance of any application is effective when
the applicant is appointed to the position of probationary fire fighter.
(c)Provides that each member shall contribute 7.7% of the member's salary
to the Fund, to be deducted by the city and forwarded to the Fund.
(d)Provides that the city shall make a monthly contribution to the Fund
equal to the contribution rate certified by the Board multiplied by the
aggregate salaries paid to members of the Fund in that month. The Board
shall certify a contribution rate for the city for each year based on the
results of actuarial valuations that are to be made at least once every
three years, and the rate shall be "comprised of the normal cost plus the
level percentage of Salary payment required to amortize the unfunded
actuarial liability of the Fund, calculated on the basis of an acceptable
actuarial reserve funding method approved by the Board. The city
contribution plus any payment to an excess benefit arrangement under
Section 14(c) shall not be less than twice the amount of member
contributions.
(e)Provides that if members of the Fund are appointed to positions in the
fire department, which appointments are not based on competitive
examinations, the minimum contribution rate of the city shall be increased
by the difference between:
(1)the city's contribution rate as calculated in Section 13(d) (not
subject to the minimum contribution provision); and
(2)the city's contribution rate as it would be calculated under Section
13(d) (not subject to the minimum contribution provision) if the
noncompetitively appointed members were paid the same salary as the person
who holds the competitively appointed position that such member occupied
immediately before the member's appointment.
(f)Provides that money deducted and contributed from member salaries and
contributed by the city shall become part of the Fund, but that any
contributions under an excess benefit plan shall not become part of the
Fund's trust fund assets.
(g)Provides that a city may "pick up" member's contributions in
accordance with Section 414(h)(2) of the Internal Revenue Code, which will
affect member's salaries for federal tax purposes, but not for purposes
of calculation of pension or other benefits.
Section 14.INTERNAL REVENUE CODE LIMITATIONS.
(a)Provides that accrual of benefits due any member, when added to other
pension benefits from other plan of the municipality qualified under
Section 401 of the Internal Revenue Code, shall not exceed the limits
imposed by Section 415 of the Internal Revenue Code, if satisfaction of
Section 415 is required to maintain the Fund's qualified status under
Section 401 of the Internal Revenue Code, and that any limitation of
accrual must be certified by an actuary selected by the Board.
(b)Provides that the Fund shall be administered in compliance with
Internal Revenue Service and Department of the Treasury regulations,
rulings, and notices applicable to public retirement systems.
(c)Provides that the Board may establish a qualified governmental excess
benefit arrangement through a separate trust funded entirely by municipal
contributions, allowing payment to members of pension benefits that would
otherwise exceed the limitations imposed by Section 415 of the Internal
Revenue Code
Section 15.EXEMPTION OF BENEFITS FROM JUDICIAL PROCESS.
Provides that benefits payable by the Fund shall be exempt from judicial
process, assignment, or conveyance.
Section 16.SERVICE CREDIT FOR MEMBERS PREVIOUSLY MEMBERS OF SIMILAR FUNDS.
(a)Provides that persons who become fire fighters in the municipality may
receive service credit for prior employment with a fire department of
another city with similar funds benefitting only that city's firefighters
if the person participated in the other fund and:
(1)is under the age of 36 at the time of application;
(2)passes a physical examination;
(3)pays into the Fund an amount equal to the contribution the fire
fighter would have made if he or she had been employed by the municipality
rather than the other city;
(4)the fire fighter applies for the credit within 60 days of becoming a
member of the Fund; and,
(5)the fire fighter moved directly from the fire department for which
credit is sought into the fire department of the municipality without any
intervening employment or extended interruption.
(b)Provides that prior service credit for service in more than one
department will be available only if there are no interruptions in
employment.
(c)Provides that the municipality shall pay into the Fund an amount equal
to the amount it would have contributed had the fire fighter been employed
by it rather than the department(s) which are the basis of the request for
prior service credit, plus six percent compound interest.
(d)Provides that a firefighter may not participate in the Fund under this
section until the firefighter has fully complied with this article and the
city has made its contribution under Subsection (c).
(e)Provides that a firefighter eligible for prior service credit may
participate in the Fund without obtaining such credit, and if the
firefighter does not comply with the requirements and time limitation set
forth in this section, the firefighter is ineligible for the credit.
Section 17.CONFIDENTIALITY OF INFORMATION ABOUT MEMBERS OR BENEFICIARIES.
(a) Provides that information contained in Fund records concerning an
individual firefighter is confidential and may not be disclosed in a form
identifiable with a specific individual unless:
(1)the information is disclosed to:
(A)the individual;
(B)the individual's attorney or other legal representative;
(C)the individual's spouse or former spouse if the Board determines
that the information is relevant to that person's interest in amounts
payable by the Fund; or
(D)a person with written authorization from the individual to receive
the information; or
(2)the information is disclosed under an authorization of the Board that
specifies the reasons for the disclosure.
(b)Provides that this section does no prevent the disclosure of the
status or identity of an individual as a member, former member, retiree,
deceased member, or beneficiary of the Fund.
(c)Provides that a determination and disclosure under subsection (a)(2)
may be made without notice to the individual member, retiree, or
beneficiary.
SECTION 2.
(a)Provides that Article 6243e.2(1) restates and amends Article 6243e.2,
as that law existed prior to its repeal by this act, and continues in
effect each fund established under that law.
(b)Provides that a member of a board of trustees of a fund created under
Article 6243e.2 continues to serve until the expiration of the term for
which the member was elected or appointed in accordance with Article
6243e.2
SECTION 3.Chapter 432, Acts of the 64th Legislature, 1975(Article 6243e.2,
Texas Civil Statutes) is repealed.
SECTION 4.Effective date: November 1, 1997.
SECTION 5.Emergency clause.