1-1 AN ACT
1-2 relating to credit in, benefits from, and administration of certain
1-3 municipal retirement systems for police officers.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 4(a), Chapter 76, Acts of the 50th
1-6 Legislature, 1947 (Article 6243g-1, Vernon's Texas Civil Statutes),
1-7 is amended to read as follows:
1-8 (a) There is hereby created a Pension Board of the Pension
1-9 System, in which Board there is hereby vested the general
1-10 administration, management, and responsibility for the proper and
1-11 effective operation of the Pension System. The Board shall be
1-12 organized immediately after its members have qualified and taken
1-13 the oath of office and shall serve without compensation. Elected
1-14 members of the Pension Board are entitled to leave from the elected
1-15 member's police department employer to attend to the official
1-16 business of the Pension System. If the city employing the elected
1-17 members of the Pension Board withholds compensation of an elected
1-18 member who is attending to official business of the Pension System,
1-19 the Pension System may elect to adequately compensate the city for
1-20 the loss of service of the elected member. Once the Pension Board
1-21 (by an affirmative vote of at least four Board members) makes this
1-22 election, which amounts shall be remitted from the Fund to the
1-23 city, the city shall pay to the member his regular compensation as
1-24 if no loss of service occurred. The Board, by an affirmative vote
2-1 of at least four members, may elect to reimburse Board members who
2-2 are not employees of the city for their time while attending to
2-3 official business of the Pension System. The amount of any
2-4 reimbursement may not exceed $350 a month for each affected Board
2-5 member.
2-6 SECTION 2. Section 5(c), Chapter 76, Acts of the 50th
2-7 Legislature, 1947 (Article 6243g-1, Vernon's Texas Civil Statutes),
2-8 is amended to read as follows:
2-9 (c) The Pension Board shall establish the policies and
2-10 procedures for disbursements from the Fund [treasurer or the
2-11 Pension Board, as applicable, may make a disbursement from the
2-12 Fund only on regular voucher signed by the treasurer and
2-13 countersigned by the chairman or secretary of the Pension Board].
2-14 SECTION 3. Section 7, Chapter 76, Acts of the 50th
2-15 Legislature, 1947 (Article 6243g-1, Vernon's Texas Civil Statutes),
2-16 is amended to read as follows:
2-17 Sec. 7. (a) Beginning July 1, 1989, or on the effective
2-18 date of the 1989 amendment of this Act, whichever is later, the
2-19 city shall make contributions to the Fund after each payroll period
2-20 in an amount equal to the contribution rate certified by the
2-21 Pension Board, multiplied by the base salaries paid to members of
2-22 the Fund for that period. Such contribution rate, expressed as a
2-23 percentage, shall be based on the results of actuarial valuations
2-24 made at least every three (3) years, with the first such actuarial
2-25 valuation to be made as of January 1, 1982. The city's
2-26 contribution rate shall be comprised of the normal cost plus the
2-27 level percentage of salary payment required to amortize the
3-1 actuarial liability over a period of forty (40) years from January
3-2 1, 1983, calculated on the basis of an acceptable actuarial reserve
3-3 funding method approved by the Pension Board.
3-4 (b) Notwithstanding Subsection (a) of this section, if a
3-5 member of the Fund is appointed after August 31, 1997, to a
3-6 position within the police department, and the appointment is not
3-7 made based on the results of a competitive examination, the
3-8 contribution rate required of the city shall be increased by an
3-9 amount equal to any difference between:
3-10 (1) the city's contribution rate determined under
3-11 Subsection (a) of this section, computed based on the actual
3-12 monthly base salary for all members; and
3-13 (2) the city's contribution rate determined under
3-14 Subsection (a) of this section, computed for each member appointed
3-15 as described by this subsection based, for all months of
3-16 participation after the date of appointment, on the monthly base
3-17 salary being paid to the person who holds the position the member
3-18 held immediately before the member was appointed to the new
3-19 position.
3-20 SECTION 4. Section 11, Chapter 76, Acts of the 50th
3-21 Legislature, 1947 (Article 6243g-1, Vernon's Texas Civil Statutes),
3-22 is amended by amending Subsections (a), (g), and (h) and adding
3-23 Subsection (i) to read as follows:
3-24 (a) A person who became a member of the Pension System
3-25 before September 1, 1981, who did not elect before January 1, 1982,
3-26 to become a member of the plan governed by Article 6243g-3, Revised
3-27 Statutes, and who has been in the service of the city police
4-1 department for at least [the period of] twenty (20) years may
4-2 retire on or after September 1, 1997 [July 1, 1993], and shall be
4-3 entitled to a retirement pension of an amount equal to two and
4-4 one-half [one-fourth] percent (2.5%) [(2.25%)] of the member's
4-5 [his] base salary per month for the first twenty (20) years of
4-6 service, plus an additional amount equal to two percent (2%) of the
4-7 member's [his] base salary per month for each year of service in
4-8 the police department in excess of twenty (20) years, not to exceed
4-9 a total pension equal to eighty percent (80%) of base salary. For
4-10 this purpose, the [, such] base salary is [to be] the base salary
4-11 provided for the classified position in the police department held
4-12 by the member, provided that if the member has not held the same
4-13 classified position for three (3) years prior to the date of
4-14 retirement, the retirement pension shall be based on the average
4-15 monthly base salary of the member for the three (3) years preceding
4-16 retirement.
4-17 (g) Notwithstanding any other provision of this Act, as
4-18 amended, regarding increases in pensions based on any increase or
4-19 decrease of the base salary or the average monthly base salary for
4-20 the classified position or positions from which the member retired,
4-21 the provisions of this subsection shall apply. Beginning on
4-22 January 1, 1987, the pension payable to each retired member of the
4-23 Pension System as of December 31, 1986, or the initial pension
4-24 payable to each active member who retires under the provisions of
4-25 this Act on or after January 1, 1987, which pension amounts are
4-26 referred to in this subsection as the basic pension, shall be
4-27 adjusted annually, effective April 1 of each year, upward at a rate
5-1 equal to two-thirds (2/3) of any percentage increase in the
5-2 Consumer Price Index for All Urban Consumers for the preceding
5-3 year, measured by the percentage change in the average indexes for
5-4 the two (2) respective preceding calendar years, as determined by
5-5 the United States Department of Labor. The adjusted pension shall
5-6 never be less than the basic pension that such retired member would
5-7 otherwise be entitled to receive without regard to changes in the
5-8 Consumer Price Index and shall be based on the Consumer Price Index
5-9 for All Urban Consumers as constructed on September 1, 1986,
5-10 provided such index continues to be published. In the event that
5-11 publication of the Consumer Price Index as constructed on September
5-12 1, 1986, is discontinued, then the current published Consumer Price
5-13 Index shall be used for the purposes of this section. The amount
5-14 of the annual adjustment may not be less than three percent (3%) or
5-15 more than eight percent (8%) of the pension being paid immediately
5-16 before the adjustment [adjusted pension shall never be greater than
5-17 the amount of the retired member's basic pension plus annual
5-18 increases of not more than eight percent (8%) per year, compounded,
5-19 and never less than the amount of the retired member's basic
5-20 pension plus annual increases of two and one-half percent (2.5%),
5-21 compounded], notwithstanding a greater or lesser increase in the
5-22 Consumer Price Index.
5-23 (h) A retiree who receives a service or disability
5-24 retirement pension under this Act is entitled to receive an
5-25 additional amount each month equal to $88.05, beginning on the
5-26 person's retirement date or on the effective date of the 1989
5-27 amendment of this Act, whichever is later, and continuing until the
6-1 end of the month in which the retiree dies. A surviving spouse who
6-2 receives a survivor's benefit under this Act is entitled to receive
6-3 an additional amount each month equal to $88.05, beginning with the
6-4 first payment of the survivor's benefit and continuing until the
6-5 end of the month in which the surviving spouse dies. This amount
6-6 is intended to defray the retiree's or surviving spouse's group
6-7 medical insurance costs and will be paid directly by the Pension
6-8 Fund to the retiree or surviving spouse for the person's lifetime.
6-9 (i) The Pension System shall recompute the retirement
6-10 benefit of each person who retired before September 1, 1997, with a
6-11 benefit of less than fifty percent (50%) of base salary for the
6-12 first twenty (20) years of service. The recomputation consists of
6-13 multiplying the difference between fifty percent (50%) and the
6-14 percentage used in computing the retiree's benefit for the first
6-15 twenty (20) years of service at the time of retirement by the base
6-16 salary of the retiree at the time of retirement and adding the
6-17 product of the multiplication to the retiree's current retirement
6-18 benefit. A recomputation under this subsection may not result,
6-19 however, in a benefit that would exceed the benefit to which an
6-20 active member would be entitled at retirement with the same amount
6-21 of service and base salary or in a benefit less than the benefit
6-22 the retiree is receiving at the time of the recomputation. The
6-23 resulting benefit is the retiree's benefit for all payments and
6-24 cost-of-living adjustments made after August 31, 1997, but the
6-25 retiree is not entitled to recomputation of any benefits paid
6-26 before September 1, 1997.
6-27 SECTION 5. Section 12, Chapter 76, Acts of the 50th
7-1 Legislature, 1947 (Article 6243g-1, Vernon's Texas Civil Statutes),
7-2 is amended to read as follows:
7-3 Sec. 12. DISABILITY BENEFITS. Any member of the police
7-4 department who becomes totally and permanently incapacitated for
7-5 the performance of his duty by reasons of any bodily injury
7-6 received in, or illness caused by, the performance of his duty
7-7 shall, upon presentation to the Pension Board of proof of permanent
7-8 disability, be retired and shall receive a retirement allowance
7-9 equal to the greater of fifty percent (50%) of the member's base
7-10 salary or the member's accrued service pension. A member of the
7-11 police department who becomes partially incapacitated for the
7-12 performance of duty by reason of any bodily injury received in, or
7-13 illness caused by, the performance of duty is entitled, on
7-14 presentation to the Pension Board of proof of partial disability,
7-15 to retire and receive a retirement allowance equal to thirty-five
7-16 percent (35%) of the member's base salary. If the injury or
7-17 illness involves a traumatic event that directly causes an
7-18 immediate cardiovascular condition resulting in partial or total
7-19 disability, the member is eligible for a partial or total
7-20 duty-connected disability pension [percentage of his disability.
7-21 Such allowance shall be computed on the same basis as a service
7-22 retirement with regard to length of service; for example, if the
7-23 member is fifty percent (50%) disabled he shall receive one-half
7-24 (1/2) the retirement allowance granted a member as a service
7-25 retirement for the period of service he has completed, provided
7-26 that in case of a disability retirement before the member has
7-27 completed twenty (20) years of service, he shall receive an
8-1 allowance based on the minimum allowed for twenty (20) years
8-2 service]. Such allowance as is granted by the Pension Board shall
8-3 be paid the member for the remainder of his life or so long as he
8-4 remains incapacitated. A member not otherwise eligible for a
8-5 service pension, with ten (10) years of credited service, who
8-6 suffers a partial disability on or after July 1, 1986, and who is
8-7 not eligible for a duty-connected disability pension, shall be
8-8 eligible for a pension equal to twenty percent (20%) of the
8-9 member's base salary [final compensation] payable for two (2) years
8-10 or for the member's life, whichever is less. A member not
8-11 otherwise eligible for a service pension who has ten (10) or more
8-12 years of credited service, who suffers a total disability on or
8-13 after July 1, 1986, and who is not eligible for a duty-connected
8-14 pension, shall be eligible for a pension computed on the same basis
8-15 as a service retirement based upon service accrued to the date of
8-16 disability. When any member has been retired for permanent, total
8-17 or partial disability, he shall be subject at all times to
8-18 re-examination by the Pension Board and shall submit himself to
8-19 such further examination as the Pension Board may require. If any
8-20 member refuses to submit himself to any such examination, the
8-21 Pension Board may, within its discretion, order the payments
8-22 stopped. If a member who has been retired under the provisions of
8-23 this Section should thereafter recover, so that in the opinion of
8-24 the Pension Board he is able to perform the usual and customary
8-25 duties formerly handled by him for the city in the police
8-26 department, and such member is reinstated or tendered reinstatement
8-27 to the position he held at the time of his retirement, then the
9-1 Pension Board shall order such payment stopped. No person shall be
9-2 retired either for total or partial disability unless he files with
9-3 the Pension Board an application for allowance, at which time the
9-4 Pension Board shall have him examined by a physician, to be chosen
9-5 and compensated by the Pension Board and who is to make a report to
9-6 the Pension Board.
9-7 SECTION 6. Section 13, Chapter 76, Acts of the 50th
9-8 Legislature, 1947 (Article 6243g-1, Vernon's Texas Civil Statutes),
9-9 is amended by adding Subsection (f) to read as follows:
9-10 (f) The Pension System shall recompute the benefit of each
9-11 person who on September 1, 1997, is entitled to a survivor's
9-12 benefit under Subsection (a) of this section and whose original
9-13 benefit was computed at a rate less than the rate that would be
9-14 used to compute the benefit of the survivor of a member who dies on
9-15 September 1, 1997. The recomputation consists of multiplying the
9-16 base salary of the member that was used in the original computation
9-17 by the difference between the rate that would be used to compute
9-18 the benefit of the survivor of a member who dies on September 1,
9-19 1997, and the rate used in computing the survivor's benefit at the
9-20 time of the deceased member's death and adding the product of the
9-21 multiplication to the survivor's current benefit. A recomputation
9-22 under this subsection may not result, however, in a benefit that
9-23 would exceed the benefit to which the survivor of a member who dies
9-24 on September 1, 1997, with the same amount of service and base
9-25 salary would be entitled or in a benefit less than the benefit the
9-26 survivor is receiving at the time of the recomputation. The
9-27 resulting benefit is the survivor's benefit for all payments and
10-1 cost-of-living adjustments made after August 31, 1997, but the
10-2 survivor is not entitled to recomputation of any benefits paid
10-3 before September 1, 1997.
10-4 SECTION 7. Section 15, Chapter 76, Acts of the 50th
10-5 Legislature, 1947 (Article 6243g-1, Vernon's Texas Civil Statutes),
10-6 is amended by amending Subsection (g) and adding Subsection (h) to
10-7 read as follows:
10-8 (g) A person who is reemployed by the city police department
10-9 within twenty-four (24) months from the date the person's
10-10 employment is terminated is required to pay the Pension Fund an
10-11 amount equal to any contributions previously refunded to the member
10-12 under Subsection (b) of this section. The person may execute a
10-13 promissory obligation to pay the Pension Fund within two (2) years
10-14 of the date of reemployment the full amount of the contributions
10-15 previously refunded to the member. A member who dies or retires
10-16 before a promissory obligation executed by the member and payable
10-17 to the Pension Fund is fully paid is not eligible, nor are the
10-18 member's beneficiaries eligible, for any benefits from the Pension
10-19 Fund until the promissory obligation is paid in full. A member who
10-20 has not repaid withdrawn contributions with interest at the time of
10-21 the member's retirement is entitled to receive credit for the
10-22 service attributable to the withdrawn contributions if, before the
10-23 end of the third month after the date the member ceases to be an
10-24 employee, the retiring member assigns to the Pension Fund any
10-25 accumulated sick and vacation pay from the city, and the amounts
10-26 assigned, combined with any cash payments by the retiring member,
10-27 are sufficient to repay the withdrawn contributions with interest
11-1 as determined by the Board.
11-2 (h) A person who voluntarily or involuntarily left the
11-3 employment of the police department other than as provided by
11-4 Section 12 or 22 and did not receive a refund of the person's total
11-5 contributions to the Pension System is entitled to have the service
11-6 for which the unrefunded contributions were made credited to the
11-7 person's retirement benefit, if the person:
11-8 (1) was reemployed before September 1, 1981, by the
11-9 police department of the city at least twenty-four (24) months
11-10 after the date of employment termination; and
11-11 (2) is employed by the department on September 1,
11-12 1997, and remains or remained employed continuously for five (5)
11-13 years after the date of reemployment.
11-14 SECTION 8. Section 23A, Chapter 76, Acts of the 50th
11-15 Legislature, 1947 (Article 6243g-1, Vernon's Texas Civil Statutes),
11-16 is amended to read as follows:
11-17 Sec. 23A. In the event that the pension fund is terminated
11-18 or partially terminated, or contributions to the pension fund are
11-19 discontinued completely, there shall be no reversion of funds to
11-20 the employer. The funds shall be used exclusively for police
11-21 pensions, and the affected employees' rights to the benefits, to
11-22 the extent funded, shall be nonforfeitable.
11-23 SECTION 9. Chapter 76, Acts of the 50th Legislature, 1947
11-24 (Article 6243g-1, Vernon's Texas Civil Statutes), is amended by
11-25 adding Sections 23C, 23D, and 23E to read as follows:
11-26 Sec. 23C. MAXIMUM BENEFITS FROM THE FUND. (a) The Fund
11-27 created by this Act is for the exclusive benefit of the members,
12-1 retirees, and their survivors. No part of the corpus or income of
12-2 the Fund may ever be used for, or diverted to, any purpose other
12-3 than the benefit of members, retirees, and their survivors as
12-4 provided in this Act.
12-5 (b) A member, retiree, or survivor of a member or retiree of
12-6 the Pension System may not accrue a retirement pension, disability
12-7 retirement allowance, death benefit allowance, DROP benefit, or any
12-8 other benefit under this Act in excess of the benefit limits
12-9 applicable to the Fund under Section 415 of the Internal Revenue
12-10 Code of 1986. The Board shall reduce the amount of any benefit
12-11 that exceeds those limits by the amount of the excess. If total
12-12 benefits under this Fund and the benefits and contributions to
12-13 which any member is entitled under any other qualified plans
12-14 maintained by the city that employs the member would otherwise
12-15 exceed the applicable limits under Section 415 of the Internal
12-16 Revenue Code of 1986, the benefits the member would otherwise
12-17 receive from the Fund shall be reduced to the extent necessary to
12-18 enable the benefits to comply with Section 415.
12-19 (c) Any member or survivor who receives any distribution
12-20 that is an eligible rollover distribution as defined by Section
12-21 402(c)(4) of the Internal Revenue Code of 1986 is entitled to have
12-22 that distribution transferred directly to another eligible
12-23 retirement plan of the member's or survivor's choice on providing
12-24 direction to the Pension System regarding that transfer in
12-25 accordance with procedures established by the Board.
12-26 (d) The total salary taken into account for any purpose for
12-27 any member or retiree of the Pension System may not exceed $200,000
13-1 for any year for an eligible participant, or $150,000 a year for an
13-2 ineligible participant. These dollar limits shall be adjusted from
13-3 time to time in accordance with guidelines provided by the
13-4 secretary of the treasury. For purposes of this subsection, an
13-5 eligible participant is a person who first became a member before
13-6 1996, and an ineligible participant is a member who is not an
13-7 eligible participant.
13-8 (e) Accrued benefits under this Act become 100 percent
13-9 vested for a member on the date the member has completed twenty
13-10 (20) years of service.
13-11 (f) Amounts representing forfeited nonvested benefits of
13-12 terminated members may not be used to increase benefits payable
13-13 from the Fund but may be used to reduce contributions for future
13-14 plan years.
13-15 (g) Distributions of benefits must begin not later than
13-16 April 1 of the year following the calendar year during which the
13-17 member becomes 70-1/2 years of age or terminates employment with
13-18 the employer, if later, and must otherwise conform to Section
13-19 401(a)(9) of the Internal Revenue Code of 1986.
13-20 (h) If the amount of any benefit is to be determined on the
13-21 basis of actuarial assumptions that are not otherwise specifically
13-22 set forth for that purpose in this Act, the actuarial assumptions
13-23 to be used are those earnings and mortality assumptions being used
13-24 on the date of the determination by the Fund's actuary and approved
13-25 by the Board. The actuarial assumptions being used at any
13-26 particular time shall be attached as an addendum to a copy of this
13-27 Act and treated for all purposes as a part of the Act. The
14-1 actuarial assumptions may be changed by the Fund's actuary at any
14-2 time if approved by the Board, but a change in actuarial
14-3 assumptions may not result in any decrease in benefits accrued as
14-4 of the effective date of the change.
14-5 (i) To the extent permitted by law, the Board may adjust the
14-6 benefits of retirees and survivors by increasing any benefit that
14-7 was reduced because of Section 415 of the Internal Revenue Code of
14-8 1986. If Section 415 is amended to permit the payment of amounts
14-9 previously precluded under that section, the Board may adjust the
14-10 benefits of retirees and survivors, including the restoration of
14-11 benefits previously denied. Benefits paid under this subsection
14-12 are not considered as extra compensation earned after retirement
14-13 but as the delayed payment of benefits earned before retirement.
14-14 Sec. 23D. EXCESS BENEFIT PLAN. (a) A separate,
14-15 nonqualified, unfunded excess benefit plan is created outside the
14-16 Fund.
14-17 (b) In this section:
14-18 (1) "Excess benefit plan" means the separate,
14-19 nonqualified, unfunded excess benefit plan created by this section
14-20 for the benefit of eligible members, as amended or restated from
14-21 time to time, that is intended to be a "qualified governmental
14-22 excess benefit arrangement" within the meaning of Section 415(m) of
14-23 the Internal Revenue Code of 1986.
14-24 (2) "Qualified plan" means the Fund and any other plan
14-25 maintained by the city for the exclusive benefit of some or all of
14-26 the members of the Fund that has been found by the Internal Revenue
14-27 Service to be qualified or has been treated by the city as a
15-1 qualified plan under Section 401 of the Internal Revenue Code of
15-2 1986.
15-3 (3) "Maximum benefit" means the retirement benefit a
15-4 retiree and the spouse, dependent child, or dependent parent of a
15-5 retiree or deceased member or retiree are entitled to receive from
15-6 all qualified plans in any month after giving effect to Section 23C
15-7 of this Act and any similar provisions of any other qualified plans
15-8 designed to conform to Section 415 of the Internal Revenue Code of
15-9 1986.
15-10 (4) "Excess benefit participant" means any retiree
15-11 whose retirement benefits as determined on the basis of all
15-12 qualified plans without regard to the limitations of Section 23C of
15-13 this Act and comparable provisions of other qualified plans, would
15-14 exceed the maximum benefit permitted under Section 415 of the
15-15 Internal Revenue Code of 1986.
15-16 (5) "Unrestricted benefit" means the monthly
15-17 retirement benefit a retiree and the spouse and dependent child or
15-18 dependent parent of a retiree or deceased member or retiree would
15-19 have received under the terms of all qualified plans except for the
15-20 restrictions of Section 23C of this Act and any similar provisions
15-21 of any other qualified plans designed to conform to Section 415 of
15-22 the Internal Revenue Code of 1986.
15-23 (c) An excess benefit participant who is receiving benefits
15-24 from the Fund is entitled to a monthly benefit under this excess
15-25 benefit plan in an amount equal to the lesser of:
15-26 (1) the member's unrestricted benefit less the maximum
15-27 benefit; or
16-1 (2) the amount by which the member's monthly benefit
16-2 from the Fund has been reduced because of the limitations of
16-3 Section 415 of the Internal Revenue Code of 1986.
16-4 (d) If a spouse, dependent child, or dependent parent is
16-5 entitled to preretirement or postretirement death benefits under a
16-6 qualified plan after the death of an excess benefit participant,
16-7 the surviving spouse, dependent child, or dependent parent is
16-8 entitled to a monthly benefit under the excess benefit plan equal
16-9 to the benefit determined in accordance with this Act without
16-10 regard to the limitations under Section 23C(a) of this Act or
16-11 Section 415 of the Internal Revenue Code of 1986, less the maximum
16-12 benefit.
16-13 (e) Any benefit to which a person is entitled under this
16-14 section shall be paid at the same time and in the same manner as
16-15 the benefit would have been paid from the Fund if payment of the
16-16 benefit from the Fund had not been precluded by Section 23C(a) of
16-17 this Act. An excess benefit participant or any beneficiary may
16-18 not, under any circumstances, elect to defer the receipt of all or
16-19 any part of a payment due under this section.
16-20 (f) The Board shall administer this plan, and the Board's
16-21 designee shall also carry out the business of the Board with
16-22 respect to this plan. Except as otherwise provided by this
16-23 section, the rights, duties, and responsibilities of the Board and
16-24 the Board's designee are the same for this plan as for the Fund.
16-25 (g) The consultants, independent auditors, attorneys, and
16-26 actuaries selected to perform services for the Fund also shall
16-27 perform services for this plan, but their fees for their services
17-1 may not be paid by the Fund. The actuary engaged to perform
17-2 services for the Fund shall advise the Board of the amount of
17-3 benefits that may not be provided from the Fund solely by reason of
17-4 the limitations of Section 415 of the Internal Revenue Code of 1986
17-5 and the amount of employer contributions that will be made to this
17-6 plan rather than to the Fund.
17-7 (h) Contributions may not be accumulated under this plan to
17-8 pay future retirement benefits. Instead, each payment of employer
17-9 contributions that would otherwise be made to the Fund under
17-10 Section 7 of this Act shall be reduced by the amount determined by
17-11 the Board or its designee as necessary to meet the requirements for
17-12 retirement benefits under this plan, including reasonable
17-13 administrative expenses, until the next payment of municipal
17-14 contributions is expected to be made to the Fund. The employer
17-15 shall then pay to this plan, from the withheld contributions, not
17-16 earlier than the 30th day before the date each distribution of
17-17 monthly retirement benefits is required to be made from this plan,
17-18 the amount necessary to satisfy the obligation to pay monthly
17-19 retirement benefits from this plan. The Board or its designee
17-20 shall satisfy the obligation of this plan to pay retirement
17-21 benefits from the employer contributions so transferred for that
17-22 month.
17-23 (i) Employer contributions otherwise required to be made to
17-24 the Fund under Section 7 of this Act and any other qualified plan
17-25 shall be divided into those contributions required to pay
17-26 retirement benefits under this section and those contributions paid
17-27 into and accumulated to pay the maximum benefits required under the
18-1 qualified plan. Employer contributions made to provide retirement
18-2 benefits under this section may not be commingled with the monies
18-3 of the Fund or any other qualified plan.
18-4 (j) Benefits under this section are exempt from execution,
18-5 attachment, garnishment, assignment, injunction, and other writ in
18-6 the same manner as retirement annuities under Section 23B and may
18-7 not be paid to any person other than the person who would have
18-8 received the benefits from the Fund except for Section 23C(a) of
18-9 this Act.
18-10 Sec. 23E. AGREEMENT TO CHANGE BENEFITS.
18-11 (a) Notwithstanding any law to the contrary, the Board, or a
18-12 designee of the Board, is responsible for representing the
18-13 interests of the Fund and all pension issues and benefits affecting
18-14 the Fund or its beneficiaries under this Act or Article 6243g-3,
18-15 Revised Statutes. The Board may enter into written agreements with
18-16 the city on behalf of the Fund and beneficiaries of the Fund if the
18-17 agreement is approved by the Board and signed by the mayor and the
18-18 Board or the Board's designee.
18-19 (b) A pension benefit or allowance provided by this Act or
18-20 Article 6243g-3, Revised Statutes, may be increased if the
18-21 increase:
18-22 (1) is first approved by a qualified actuary selected
18-23 by the Board;
18-24 (2) is approved by the Board and the city in a written
18-25 agreement as authorized by this section; and
18-26 (3) does not deprive a member, without the member's
18-27 written consent, of a right to receive benefits that have become
19-1 fully vested and matured in the member.
19-2 SECTION 10. Section 12(b), Article 6243g-3, Revised
19-3 Statutes, is amended to read as follows:
19-4 (b) If a member who has less than 20 years of credited
19-5 service ceases to be an employee, his service credits to the date
19-6 of termination shall be canceled unless [(i)] he again becomes an
19-7 employee within two years after such cessation of employment[;] or
19-8 [(ii)] he subsequently acquires five years of credited service;
19-9 and, except as otherwise provided by this subsection, the member
19-10 [provided that if he has withdrawn his contributions he] repays,
19-11 before the member retires and ceases to be an employee, any
19-12 withdrawn contributions [them] with interest at a rate determined
19-13 by the board. The member may execute a promissory note rather than
19-14 repay the contributions in cash, if the note obligates the member
19-15 to repay the contributions in full within two years after the date
19-16 of reemployment. A member who dies or retires before the
19-17 promissory note is fully paid is not eligible, nor are the member's
19-18 beneficiaries eligible, for any benefits from the Pension Fund
19-19 until the promissory note is paid in full. A member who has not
19-20 repaid withdrawn contributions with interest at the time of the
19-21 member's retirement is entitled to receive credit for the service
19-22 attributable to the withdrawn contributions if, before the end of
19-23 the third month after the date the member ceases to be an employee,
19-24 the retiring member assigns to the Pension Fund any accumulated
19-25 sick and vacation pay from the city, and the amounts assigned,
19-26 combined with any cash payments by the retiring member, are
19-27 sufficient to repay the withdrawn contributions with interest as
20-1 determined by the board.
20-2 SECTION 11. Section 13, Article 6243g-3, Revised Statutes,
20-3 is amended by amending Subsection (a) and adding Subsection (d) to
20-4 read as follows:
20-5 (a) A member who becomes totally and permanently
20-6 incapacitated for the performance of duty as a result of a bodily
20-7 injury received in, or illness caused by, [suffers a partial or
20-8 total disability resulting from] an individual and specific act the
20-9 type of which would normally occur while employed as a police
20-10 officer, shall be eligible for a duty-connected disability pension
20-11 on presentation to the pension board of proof of permanent
20-12 disability. If such act involves a traumatic event which directly
20-13 causes an immediate cardiovascular condition which results in
20-14 partial or total disability, the member shall be eligible for a
20-15 partial or total duty-connected disability pension. If the member
20-16 is determined to have a partial disability, the member is eligible
20-17 for a partial disability pension.
20-18 (d) A member retired for permanent total or partial
20-19 disability is subject at all times to reexamination by the pension
20-20 board and shall submit to further examination as the pension board
20-21 requires. The pension board may suspend or terminate pension
20-22 payments to a disability retiree who refuses to submit to required
20-23 examinations after retirement.
20-24 SECTION 12. Section 17, Article 6243g-3, Revised Statutes,
20-25 is amended by amending Subsections (b) and (c) and adding
20-26 Subsection (d) to read as follows:
20-27 (b) The [Effective July 1, 1991, the] amount of the monthly
21-1 service pension payable to a [retired] member who retires on or
21-2 after September 1, 1997 [July 1, 1988], is an amount equal to 2.5
21-3 [2.25] percent of the member's base salary per month for the first
21-4 20 years of service, plus an additional amount equal to two percent
21-5 of the member's base salary per month multiplied by the number of
21-6 years of the member's service in excess of 20 years, to the nearest
21-7 one-twelfth of a year. The pension may [, in the member's period
21-8 of credited service,] not [to] exceed a total [pension] equal to
21-9 80 percent of the member's base salary [final compensation], except
21-10 that if the member has not held the same classified position for
21-11 three years immediately preceding the date of retirement, the
21-12 retirement pension shall be based on the average monthly base
21-13 salary of the member for the three years immediately preceding the
21-14 date of retirement.
21-15 (c) A retiree who receives a service or disability
21-16 retirement pension under this article is entitled to receive an
21-17 additional amount each month equal to $88.05, beginning on the
21-18 person's retirement date or on the effective date of the 1989
21-19 amendment of this article, whichever is later, and continuing until
21-20 the end of the month in which the retiree dies. A surviving spouse
21-21 who receives a survivor's benefit under this article is entitled to
21-22 receive an additional amount each month equal to $88.05, beginning
21-23 with the first payment of the survivor's benefit and continuing
21-24 until the end of the month in which the surviving spouse dies.
21-25 This amount is intended to defray the retiree's or surviving
21-26 spouse's group medical insurance costs and will be paid directly by
21-27 the pension fund to the retiree or surviving spouse for the
22-1 person's lifetime.
22-2 (d) The pension system shall recompute the retirement
22-3 benefit of each person who retired before September 1, 1997, with a
22-4 benefit of less than 50 percent of base salary for the first 20
22-5 years of service. The recomputation consists of multiplying the
22-6 difference between 50 percent and the percentage used in computing
22-7 the retiree's benefit for the first 20 years of service at the time
22-8 of retirement by the base salary of the retiree at the time of
22-9 retirement and adding the product of the multiplication to the
22-10 retiree's current retirement benefit. A recomputation under this
22-11 subsection may not result, however, in a benefit that would exceed
22-12 the benefit to which an active member would be entitled at
22-13 retirement with the same amount of service and base salary or in a
22-14 benefit less than the benefit the retiree is receiving at the time
22-15 of the recomputation. The resulting benefit is the retiree's
22-16 benefit for all payments and cost-of-living adjustments made after
22-17 August 31, 1997, but the retiree is not entitled to recomputation
22-18 of any benefits paid before September 1, 1997.
22-19 SECTION 13. Section 18(c), Article 6243g-3, Revised
22-20 Statutes, as added by Chapter 852, Acts of the 73rd Legislature,
22-21 Regular Session, 1993, is amended to read as follows:
22-22 (c) If a non-retired member of the pension system who has
22-23 less than 20 years of credited service dies, either directly or
22-24 indirectly, as a result of the military service, the member's
22-25 spouse, dependent parent, or other dependents are entitled to
22-26 receive a refund of any contributions the member made to the
22-27 pension system.
23-1 SECTION 14. Section 21, Article 6243g-3, Revised Statutes,
23-2 is amended by adding Subsection (d) to read as follows:
23-3 (d) The pension system shall recompute the benefit of each
23-4 person who on September 1, 1997, is entitled to a survivor's
23-5 benefit under Subsection (b) of this section and whose original
23-6 benefit was computed at a rate less than the rate that would be
23-7 used to compute the benefit of the survivor of a member who dies on
23-8 September 1, 1997. The recomputation consists of multiplying the
23-9 base salary of the member that was used in the original computation
23-10 by the difference between the rate that would be used to compute
23-11 the benefit of the survivor of a member who dies on September 1,
23-12 1997, and the rate used in computing the survivor's benefit at the
23-13 time of the deceased member's death and adding the product of the
23-14 multiplication to the survivor's current benefit. A recomputation
23-15 under this subsection may not result, however, in a benefit that
23-16 would exceed the benefit to which the survivor of a member who dies
23-17 on September 1, 1997, with the same amount of service and base
23-18 salary would be entitled or in a benefit less than the benefit the
23-19 survivor is receiving at the time of the recomputation. The
23-20 resulting benefit is the survivor's benefit for all payments and
23-21 cost-of-living adjustments made after August 31, 1997, but the
23-22 survivor is not entitled to recomputation of any benefits paid
23-23 before September 1, 1997.
23-24 SECTION 15. Section 24, Article 6243g-3, Revised Statutes,
23-25 is amended to read as follows:
23-26 Sec. 24. ADJUSTMENT OF BENEFITS. Beginning September 1,
23-27 1995, a pension payable under this article may be adjusted annually
24-1 on April 1, in accordance with two-thirds (2/3) of the percentage
24-2 changes in the Consumer Price Index for All Urban Consumers, but
24-3 not below the original pension amount. The amount of the annual
24-4 adjustment under this section shall never be less than three [two
24-5 and one-half] percent (3%) or [(2.5%) compounded and shall never
24-6 be] more than eight percent (8%) of the pension being paid
24-7 immediately before the adjustment [compounded], notwithstanding a
24-8 greater or lesser increase in the consumer price index.
24-9 SECTION 16. Section 29, Article 6243g-3, Revised Statutes,
24-10 is amended to read as follows:
24-11 Sec. 29. Contribution by city. (a) Until January 1, 1983,
24-12 the city shall pay into the fund after each payroll period an
24-13 amount equal to 20 percent of the base salaries paid to members of
24-14 the fund. Beginning January 1, 1983, the city shall make monthly
24-15 contributions to the pension fund in an amount equal to the
24-16 percentage contribution rate multiplied by the salaries paid to
24-17 members, as defined by Section 1 of this article. Such
24-18 contribution rate, expressed as a percentage, shall be based on the
24-19 results of actuarial valuations made at least every three years,
24-20 with the first such actuarial valuation to be made as of January 1,
24-21 1982. The city's contribution rate shall be comprised of the
24-22 normal cost plus the level percentage of salary payment required to
24-23 amortize the actuarial liability over a period of 40 years from
24-24 January 1, 1983, calculated on the basis of an acceptable actuarial
24-25 reserve funding method approved by the pension board.
24-26 (b) Notwithstanding Subsection (a) of this section, if a
24-27 member of the fund is appointed after August 31, 1997, to a
25-1 position within the police department, and the appointment is not
25-2 made based on the results of a competitive examination, the
25-3 contribution rate of the city shall be increased by an amount equal
25-4 to any difference between:
25-5 (1) the city's contribution rate determined under
25-6 Subsection (a) of this section, computed based on the actual
25-7 monthly base salary for all members; and
25-8 (2) the city's contribution rate determined under
25-9 Subsection (a) of this section, computed for each member appointed
25-10 as described by this subsection based, for all months of
25-11 participation after the date of appointment, on the monthly base
25-12 salary being paid to the person who holds the position the member
25-13 held immediately before the member was appointed to the new
25-14 position.
25-15 SECTION 17. The following provisions are repealed:
25-16 (1) Section 6(b), Chapter 76, Acts of the 50th
25-17 Legislature, 1947 (Article 6243g-1, Vernon's Texas Civil Statutes);
25-18 (2) Section 11(b), Chapter 76, Acts of the 50th
25-19 Legislature, 1947 (Article 6243g-1, Vernon's Texas Civil Statutes);
25-20 (3) Sections 1(k) and (o), Article 6243g-3, Revised
25-21 Statutes; and
25-22 (4) Section 28(b), Article 6243g-3, Revised Statutes.
25-23 SECTION 18. Notwithstanding Section 11(h), Chapter 76, Acts
25-24 of the 50th Legislature, 1947 (Article 6243g-1, Vernon's Texas
25-25 Civil Statutes), and Section 17(c), Article 6243g-3, Revised
25-26 Statutes, as amended by this Act, a person receiving a survivor's
25-27 benefit under either of those sections on the effective date of the
26-1 amendments made by this Act to those provisions is entitled to the
26-2 additional amount provided by those sections beginning with the
26-3 first benefit payment that becomes due on or after the effective
26-4 date of those amendments.
26-5 SECTION 19. The change in law made by Section 17 of this Act
26-6 applies only to a contribution that becomes due and an annuity
26-7 payment that becomes due on or after the effective date of that
26-8 section. The retirement system shall recompute the annuities of
26-9 any annuitants whose benefits were not based on their salaries and
26-10 begin payments of the recomputed annuities with the first payments
26-11 that become due on or after the effective date of that section. A
26-12 recomputation under this section may not result in a benefit less
26-13 than the benefit the annuitant is receiving at the time of the
26-14 recomputation.
26-15 SECTION 20. (a) Except as provided by Subsection (b) of
26-16 this section, this Act takes effect September 1, 1997.
26-17 (b) If this Act receives the vote required by Section 39,
26-18 Article III, Texas Constitution, for accelerated effect, this
26-19 section and Section 23E, Chapter 76, Acts of the 50th Legislature,
26-20 1947 (Article 6243g-1, Vernon's Texas Civil Statutes), as added by
26-21 this Act, take effect July 1, 1997.
26-22 SECTION 21. The importance of this legislation and the
26-23 crowded condition of the calendars in both houses create an
26-24 emergency and an imperative public necessity that the
26-25 constitutional rule requiring bills to be read on three several
26-26 days in each house be suspended, and this rule is hereby suspended,
26-27 and that this Act take effect and be in force according to its
27-1 terms, and it is so enacted.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 1203 was passed by the House on May
5, 1997, by the following vote: Yeas 138, Nays 0, 1 present, not
voting.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 1203 was passed by the Senate on May
16, 1997, by the following vote: Yeas 30, Nays 0.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor