SRC-AAA S.B. 192 75(R) BILL ANALYSIS Senate Research CenterS.B. 192 By: Barrientos Intergovernmental Relations 2-11-97 As Filed DIGEST Currently, the law sets the ages for retirement of firefighters at 48 years of age; terminates benefits for spouses who get married without a chance to resume benefits; and permits investments in commercial paper. This bill provides for firefighter's early retirement within five years of current full retirement, extends the deferred retirement option plan (DROP) to five years, delays COLAs until full retirement age, offers benefits to surviving spouse of retirees married after retirement, and ignores remarriage for continuation of survivor spousal benefits. PURPOSE As proposed, S.B. 192 streamlines the way firefighters participate, contribute and earn retirement benefits. This bill also deals with the administration of those benefits. RULEMAKING AUTHORITY This bill does not grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 5.05, Article 6243e.1, V.T.C.S., to provide that a firefighter or retiree included in a fund under this Act (member) is eligible to receive reduced retirement, if while serving as a firefighter, the member attained the age of 45 years and had 10 years of service credit or had 20 years of service credit. Provides that the retirement annuity of a person who retires after September 1, 1997 is the same as for a normal service retirement, but cannot be increased under Section 9.04 until the person would have met the requirements of Section 5.01 of this Act if the person had remained in active service as a firefighter. Deletes the calculation for a retirement annuity. SECTION 2. Amends Section 7.02, Article 6243e.1, V.T.C.S., by deleting the requirement that a surviving spouse who is to receive monthly benefits be married to the retiree at the time of the retiree's retirement. Provides certain criteria for the surviving spouse to collect the retirement benefit of deceased retiree. SECTION 3. Amends Section 7.04, Article 6243e.1, V.T.C.S., to provide that if prior to September 1, 1997 the benefit payable to the surviving spouse has terminated because of that person's subsequent marriage, the surviving spouse may again receive benefits, but not retroactively, beginning on the date upon which written application to the board of trustees. Makes conforming changes. SECTION 4. Amends Section 8.02, Article 6243e.1, V.T.C.S., to provide that the election to participate in the deferred retirement option plan (election) may also be made at any time on or after early retirement. Requires the firefighter or retiree included in a fund under this Act upon election, in writing, to terminate service with the fire department no later than the fifth, rather than the second, anniversary of the effective date of the election. SECTION 5. Amends Section 8.06, Article 6243e.1, V.T.C.S., to establish when a firefighter or retiree included in a fund under this Act (member) is authorized to establish a deferred retirement option plan account. Requires board of trustees to credit a deferred retirement option plan (DROP) account if a member is eligible for normal service retirement not more than five years before the member's date of retirement. Makes conforming changes. SECTION 6. Repealer: Section 9.03, Article 6243e.1, V.T.C.S. (Firefighters Relief and Retirement Fund in Cities of 450,000 to 500,000). SECTION 7. Amends Section 9.04, Article 6243e.1, V.T.C.S., to provide that Subsection (a) is subject to the provisions of Section 5.05 of this Act. Authorizes the survivor's benefits payable to be increased by a majority of the board of trustees, if an adjustment would not impair the financial stability of the funds. SECTION 8. Amends Section 11.01, Article 6243e.1, V.T.C.S., to set forth which funds a board of trustees may invest. Deletes certain investments the board may invest. Makes conforming changes. SECTION 9. Repealer: Section 11.02, Article 6243e.1, V.T.C.S. (Firefighters Relief and Retirement Fund in Cities of 450,000 to 500,000). SECTION 10. Amends Section 11.03, Article 6243e.1, V.T.C.S., to establish the authorized percentages of investments to be made of the total value of the investment portfolio. SECTION 11. Effective date: September 1, 1997. SECTION 12. Emergency clause.