SRC-TNM S.B. 1188 75(R)   BILL ANALYSIS


Senate Research Center   S.B. 1188
By: Armbrister
State Affairs
4-15-97
As Filed


DIGEST 

Currently, the interest rate charged for members of certain retirement
systems establishing credit for membership not previously established and
for members establishing credit for military service not previously
established is computed at an annual rate of of five percent from the date
of withdrawal to the date of deposit.  S.B. 1188 would amend the
procedures for purchasing creditable service in the Employees Retirement
System of Texas and the Teacher Retirement System of Texas. 

PURPOSE

As proposed, S.B. 1188 outlines provisions regarding the purchase of
service credit in the Employees Retirement System of Texas and the Teacher
Retirement System of Texas. 

RULEMAKING AUTHORITY

Rulemaking authority is granted to the Employees Retirement System of
Texas under SECTION 3 (Section 813.107(d), Government Code) and the
Teacher Retirement System of Texas under SECTION 7 (Section 825.411(h),
Government Code) of this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 813.102(b), Government Code, to authorize a
member to reestablish credit by depositing with the Employees Retirement
System of Texas (ERS) the amount withdrawn from a membership class, plus
all membership fees due, plus interest computed on the basis of the state
fiscal year at an annual rate based on actuarial recommendations, rather
than of five percent, from the date of withdrawal to the date of
redeposit. 

SECTION 2. Amends Sections 813.105(a) and (f), to require ERS to permit a
member to purchase service credit over a period of up to five years under
an agreement under this section except as provided by Subsection (c).
Sets forth the authorization of a member who, while making payment under
this section, ceases to hold a position or withdraws the authority for
payroll deductions. Deletes text authorizing ERS to refund payments
credited to the suspense account and not transferred to trust fund
accounts if a remaining payment becomes delinquent by more than 60 days. 

SECTION 3. Amends Chapter 813B, Government Code, by adding Section
813.107, as follows: 

Sec. 813.107. INFORMATION REGARDING ESTABLISHMENT OF SERVICE.  Sets forth
requirements for ERS.  Provides that a member who received a cost estimate
under Subsection (b) is entitled to renew the installment plan in the
following fiscal year without a lapse in payment or deduction if the
member timely notifies ERS of the member's desire to renew the plan.
Authorizes ERS to adopt rules to administer this section. 

SECTION 4. Amends Section 813.202(c), Government Code, authorize a member
to establish credit under this section by depositing with ERS in a lump
sum a contribution computed as provided by Section 813.404 or 813.505,
plus all membership fees due, plus interest computed on the basis of the
state fiscal year at an annual rate based on actuarial recommendations,
rather than of 10 percent, from the date the service was performed to the
date of deposit. 

SECTION 5. Amends Section 813.302(c), Government Code, to make a
conforming change. 
 
SECTION 6. Amends Section 813.405(b), Government Code, to make a
conforming change. 

SECTION 7. Amends Chapter 825E, Government Code, by adding Section
825.411, as follows: 

Sec. 825.411. PAYROLL DEDUCTIONS FOR SERVICE CREDIT. Sets forth
requirements and outlines provisions regarding payroll deductions for
service credit.  Authorizes the Teacher Retirement System of Texas to
adopt rules to administer this section. 

SECTION 8. Effective date: September 1, 1997.

SECTION 9. Emergency clause.