SRC-JRN S.B. 1620 75(R)   BILL ANALYSIS


Senate Research Center   S.B. 1620
By: Duncan
State Affairs
4-14-97
As Filed


DIGEST 

Currently, Section 415 of the Internal Revenue Code of 1986, as amended,
imposes a limit on the pension amount that can be paid to a person who is
a public employee based on the person's age. Under Texas law, a member of
the Teacher Retirement System (TRS) is eligible to retire and receive a
standard service retirement annuity if the member is at least 50 years of
age and has at least 30 years of service credit.  This bill allows a
member of TRS to receive benefits in accordance with statutory formulas
for computing retirement annuities in the same manner that these benefits
are available to other TRS members. 

PURPOSE

As proposed, S.B. 1620 allows a member of the Teacher Retirement System
(TRS) whose pension is limited to receive benefits in accordance with
statutory formulas for computing retirement annuities in the same manner
that these benefits are available to other TRS members. 

RULEMAKING AUTHORITY

Rulemaking authority is granted to the board of trustees of the Teacher
Retirement System in SECTION 1 (Section 825.601(b), Government Code) of
this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter 825F, Government Code, by adding Section
825.601, as follows: 

Sec. 825.601. EXCESS BENEFIT ARRANGEMENT.  Provides that a separate,
nonqualified, unfunded excess benefit arrangement is created outside of
the trust fund of the Teacher Retirement System (TRS).  Requires the
excess benefit arrangement to be administered as a governmental excess
benefit arrangement pursuant to the provisions of Section 415(m) of the
Internal Revenue Code of 1986, as amended.  Provides that the purpose of
the excess benefit arrangement is to pay to annuitants of TRS benefits
otherwise payable by TRS that exceed the limitations on benefits imposed
by Section 415 of the Internal Revenue Code of 1986.  Provides that the
board of trustees of TRS is responsible for the administration of this
arrangement.  Authorizes the board of trustees to adopt rules to implement
this section, except as otherwise provided in this section.  Provides that
benefits under this section are exempt from execution to the same extent
as provided by Section 821.005 of this subtitle, except that the benefits
are completely unassignable. Provides that contributions to this
arrangement are not held in trust and are prohibited from being commingled
with other funds of TRS. 
 
(d) Provides that an annuitant is entitled to a certain monthly benefit
amount under this section.  Requires the benefit payable by this
arrangement to be paid at the time and in the form as the benefit under
TRS would be paid. 

(e) Requires the benefit payable to be paid using state contributions that
would otherwise be made to TRS under Section 825.404.  Requires an amount
determined by TRS necessary to pay benefits under this section to be paid
on a monthly basis to a separate account, authorized to include amounts
needed to pay reasonable and necessary expenses of this arrangement, in
lieu of the state contributions being paid to the state contribution
account.  Requires the  amount to be paid to the account at least 15 days
before a disbursement is to be made under this section. 

SECTION 2. Emergency clause.
  Effective date: upon passage.