75R6109 ESH-F
By Maxey, Naishtat, Greenberg, Keel H.B. No. 1242
Substitute the following for H.B. No. 1242:
By Telford C.S.H.B. No. 1242
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to participation in, benefits under, and administration of
1-3 retirement systems for police officers in certain municipalities.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 1.02, Chapter 452, Acts of the 72nd
1-6 Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's Texas
1-7 Civil Statutes), is amended to read as follows:
1-8 Sec. 1.02. DEFINITIONS. The following words and phrases
1-9 have the meanings assigned by this section unless a different
1-10 meaning is plainly required by the context:
1-11 (1) "Accumulated deposits" means the amount standing
1-12 to the credit of a member derived from the deposits required to be
1-13 made by the member to the police retirement system or to the
1-14 predecessor system improved annually by interest credited at a rate
1-15 of five percent or the rate determined by the board that [which] is
1-16 credited as of December 31 to amounts standing to the credit of the
1-17 member on January 1 of the same calendar year.
1-18 (2) "Actuarial equivalent" means any benefit of equal
1-19 present value to a standard benefit when computed as specified by
1-20 this Act.
1-21 (3) "Actuary" means a technical advisor of the police
1-22 retirement board regarding the operations which are based on
1-23 mortality, service, and compensation experience who makes periodic
1-24 valuations of the assets and liabilities of the funds and other
2-1 evaluations as requested by the board.
2-2 (4) "Average final compensation" means the monthly
2-3 average of basic hourly earnings of a member during, as applicable:
2-4 (A) if the member has 120 months or more of
2-5 service during which the member made contributions to the [police]
2-6 system or the predecessor system, the 36 months which yielded the
2-7 highest average during the last 120 months of membership service
2-8 during which the member contributed to the [police] system or the
2-9 predecessor system;
2-10 (B) if the member has less than 120 months of
2-11 membership service during which the member contributed to the
2-12 [police] system or the predecessor system, but has at least 36
2-13 months of membership service during which the member made
2-14 contributions to the [police] system or the predecessor system, the
2-15 average of the 36 months which yielded the highest average; or
2-16 (C) if the member does not have 36 months of
2-17 membership service during which the member contributed to the
2-18 [police] system or the predecessor system, the average of the
2-19 member's months of membership service during which the member made
2-20 contributions to the [police] system or the predecessor system.
2-21 (5) "Basic hourly earnings" means the hourly rate of
2-22 the sum of base pay plus longevity pay but does not include any
2-23 other type of pay.
2-24 (6) "Beneficiary" means any person, trust, or estate
2-25 properly designated by a member or retired member to receive
2-26 benefits from the system.
2-27 (7) [(6)] "Creditable service" means the number of
3-1 months during which a member pays into and keeps on deposit the
3-2 amounts of money prescribed by this Act to be paid by the member
3-3 into the system or into the predecessor system, including certain
3-4 military service and certain probationary service in excess of six
3-5 months for which a member has purchased creditable service in
3-6 accordance with Article V of this Act, and excluding a month in
3-7 which service amounted to fewer than 15 days. The months beyond
3-8 attained age 62 are included within the meaning of creditable
3-9 service, regardless of payments into this system or into the
3-10 predecessor system if the police officer is otherwise eligible for
3-11 membership in the system, is a [an active] police officer employed
3-12 by the city, and did not contribute for the months only if they
3-13 occurred before September 1, 1995.
3-14 (8) "Death benefit" means a single sum payable as a
3-15 result of the death of a member or retired member.
3-16 (9) [(7)] "Deposits" means the amount required to be
3-17 paid by members in accordance with the provisions of this Act.
3-18 (10) [(8)] "Disability retirement" means the
3-19 employment termination [withdrawal] of a member from [active]
3-20 service with a disability retirement benefit [allowance] as
3-21 provided under this Act.
3-22 (11) "Employment termination" means:
3-23 (A) the voluntary termination of employment with
3-24 the city or the system; or
3-25 (B) the involuntary termination of employment
3-26 with the city or the system of a member who does not appeal the
3-27 termination through arbitration or through the civil service
4-1 commission or whose appeal has been denied by arbitration or by the
4-2 civil service commission.
4-3 (12) "Fund No. 1" means the part of the trust assets
4-4 consisting of [fund in which shall be kept] all accumulated
4-5 deposits of members who have not withdrawn from the [police]
4-6 system.
4-7 (13) [(12)] "Fund No. 2" means the part of the trust
4-8 assets consisting of [fund in which shall be kept] all money
4-9 contributed by the city, interest earned thereon, and all
4-10 accumulations and earnings of the system except those of Fund No.
4-11 1.
4-12 (14) [(13)] "Investment consultant" means a person who
4-13 monitors the investment performance of the system and provides
4-14 other services as requested by the board [of the police retirement
4-15 system].
4-16 (15) [(14)] "Investment manager" means a person or
4-17 persons who monitor and manage any portion of the investment
4-18 portfolio for the system [fund] making specified investment
4-19 decisions on behalf of the [police retirement] system.
4-20 (16) [(15)] "Life annuity," "retirement annuity," or
4-21 "annuity" means a series of equal monthly payments, payable for
4-22 life after retirement.
4-23 (17) [(16)] "Life annuity (modified cash refund)"
4-24 means a series of equal monthly payments, payable for life after
4-25 retirement. In the event of death of the retired member before
4-26 that member has received monthly payments equal to the amount of
4-27 that member's accumulated deposits at the date of retirement, the
5-1 excess, if any, of such accumulated deposits over the monthly
5-2 payments shall be refunded in one sum to the member's [designated]
5-3 beneficiary.
5-4 (18) [(17)] "Member" means any police officer or
5-5 employee of the police retirement system [system's administrative
5-6 staff] included in the system under this Act and approved for
5-7 membership by the police retirement board. In any case of doubt
5-8 regarding the eligibility of an employee to become or remain a
5-9 member of the system, the decision of the police retirement board
5-10 shall be final.
5-11 (19) [(18)] "Normal retirement date" means the last
5-12 day of the earliest month in which the member:
5-13 (A) has attained the age of 55 and completed at
5-14 least 20 years of creditable service;
5-15 (B) has completed 25 years of creditable service
5-16 at any age; or
5-17 (C) has reached the age of 62.
5-18 (20) [(19)] "Predecessor system" means the retirement
5-19 system for police officers in effect before January 1, 1980.
5-20 (21) [(20)] "Police officer" means any full-time
5-21 [regular and permanent] commissioned police officer employed by the
5-22 police department of the city [certain cities] pursuant to Chapter
5-23 143, Local Government Code.
5-24 (22) [(21)] "Police retirement board" or "board" means
5-25 the board of trustees of the police retirement system created by
5-26 Section 3.01 of this Act for the purpose of administering the
5-27 [retirement] system.
6-1 (23) [(22)] "Police retirement system" or "[police]
6-2 system" means a retirement and pensioning system for police
6-3 officers of certain cities and for employees of the system
6-4 established by Section 2.01 of this Act.
6-5 (24) "Retired member" means a member who is receiving
6-6 a service or disability retirement benefit.
6-7 (25) "Retirement" means employment termination
6-8 [separation of a member from active service] in order to receive an
6-9 annuity in accordance with the provisions of the police retirement
6-10 system under this Act.
6-11 (26) [(25)] "Retirement date" means the last day of
6-12 the month of the retirement of the member.
6-13 (27) [(26)] "Service" or "active service" means
6-14 service as a police officer of the city paid for by the city or
6-15 service as a member of the police retirement system's
6-16 administrative staff paid for by the system.
6-17 (28) "Spouse" means a spouse as recognized under the
6-18 laws of this state.
6-19 (29) "Survivor benefit" means a series of equal
6-20 monthly payments payable as a result of the death of a member after
6-21 becoming eligible for service retirement but before retirement and
6-22 computed as if the member had retired on the last day of the month
6-23 of death.
6-24 (30) "Vested" means a member has a right to leave the
6-25 member's accumulated deposits standing to the member's credit with
6-26 the system and receive a service retirement benefit on attaining
6-27 the age at which service retirement benefits become payable. A
7-1 member is vested on attaining 10 years of creditable service.
7-2 (31) [(27)] "Vested interest" means the amount of
7-3 benefit to which a member has a nonforfeitable right in accordance
7-4 with the provisions of this Act.
7-5 (32) [(28)] "Withdrawal" means employment termination
7-6 [the separation of any member from active service] for any cause
7-7 whatsoever prior to retirement date and the subsequent receipt or
7-8 direct rollover of the accumulated deposits standing to the
7-9 member's credit [withdrawal from membership] in the police
7-10 retirement system.
7-11 (33) [(29)] "Withdrawal benefit" [allowance"] means
7-12 the accumulated deposits of a member on withdrawal [withdrawing
7-13 from active service and membership in the system] which have been
7-14 made in one lump sum unless specifically provided otherwise in this
7-15 Act.
7-16 SECTION 2. Section 2.01, Chapter 452, Acts of the 72nd
7-17 Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's Texas
7-18 Civil Statutes), is amended to read as follows:
7-19 Sec. 2.01. ESTABLISHMENT AND APPLICABILITY. The retirement
7-20 system for police officers of the city and the trust forming a part
7-21 of that system are [is] hereby established on the passage of this
7-22 Act by the Legislature of the State of Texas. The police
7-23 retirement system and the related trust are [is] placed under the
7-24 management of the police retirement board for the purpose of
7-25 providing certain benefits on retirement for police officers, as
7-26 defined in this Act.
7-27 SECTION 3. Section 2.03, Chapter 452, Acts of the 72nd
8-1 Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's Texas
8-2 Civil Statutes), is amended to read as follows:
8-3 Sec. 2.03. PURPOSE. It is the express purpose of this Act
8-4 to have no duplication of benefits provided by the police
8-5 retirement system and the retirement system for other employees of
8-6 the city for a common period of service to the city. Any change in
8-7 employment status which results in transferring membership between
8-8 the police retirement system and the retirement system for other
8-9 employees of the city shall be handled in a policy determined to be
8-10 satisfactory by the police retirement board and by the board for
8-11 the retirement system for other employees of the city. Such policy
8-12 may include the transfer of member service and appropriate transfer
8-13 of Fund No. 1 and Fund No. 2 assets as determined by the retirement
8-14 boards.
8-15 SECTION 4. Section 3.02, Chapter 452, Acts of the 72nd
8-16 Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's Texas
8-17 Civil Statutes), is amended to read as follows:
8-18 Sec. 3.02. COMPOSITION OF BOARD. The police retirement
8-19 board shall be composed of 11 members as follows:
8-20 (1) one council member designated by the city council;
8-21 (2) the city manager or the city manager's designee;
8-22 (3) the director of finance or the director's
8-23 designee;
8-24 (4) four [active] police officer members elected by
8-25 the police officer members of the system, each to serve for a term
8-26 of four years. Vacancies occurring by death, resignation,
8-27 disability retirement, removal, or any other reason except
9-1 retirement shall be filled for the remainder of the term by a [an
9-2 active] police officer member appointed by the board; a police
9-3 officer [an active employee] member who retires, except for
9-4 disability retirement, will be eligible to complete the remainder
9-5 of the member's term;
9-6 (5) three legally qualified voters of the city,
9-7 resident for the preceding five years, to be appointed by the
9-8 police retirement board. The term of office of citizen members
9-9 shall be four years, and each member shall continue to serve until
9-10 the member's successor is duly selected and qualified. Vacancies
9-11 occurring by death, resignation, or removal shall be filled by
9-12 appointment by the remaining members of the police retirement
9-13 board; and
9-14 (6) one [police officer] retired member to be elected
9-15 by the retired members. The term of office of such member shall be
9-16 four years. Such member shall continue to serve until the member's
9-17 successor is duly elected and qualified. Vacancies occurring by
9-18 death, resignation, or removal of such retired [retiree] member
9-19 shall be filled by election by the retired members.
9-20 SECTION 5. Section 3.03, Chapter 452, Acts of the 72nd
9-21 Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's Texas
9-22 Civil Statutes), is amended to read as follows:
9-23 Sec. 3.03. ELECTION OF POLICE OFFICER MEMBERS. The [elected
9-24 active] police officer members of the board shall be elected in
9-25 accordance with the following provisions:
9-26 (1) Any [active] police officer member [officers of
9-27 the city] shall be eligible to run in the election for a position
10-1 on the board.
10-2 (2) Terms of office shall be four years. Members
10-3 shall serve during the term for which they are elected and until
10-4 their successors are elected and qualified, unless they are removed
10-5 or their active service as police officers with the city is
10-6 terminated for any reason other than retirement. If a [an active]
10-7 police officer member should elect service retirement under Article
10-8 VI of this Act while serving the term for which the member is
10-9 elected, the member shall continue to serve for the remainder of
10-10 the term.
10-11 (3) A vacancy occurring by reason of removal,
10-12 resignation, death, or any other reason except retirement shall be
10-13 filled for the remainder of the term by a [an active] police
10-14 officer member appointed by the remaining members of the police
10-15 retirement board.
10-16 (4) No later than the first day of November of each
10-17 odd-numbered year, the board shall appoint an election committee.
10-18 The election committee shall prepare the ballot containing the
10-19 names of all eligible candidates.
10-20 (5) The election committee shall publish a notice at
10-21 least two weeks prior to the election date, informing all [active]
10-22 police officer members of the election and the names of the police
10-23 officer members who have been certified as candidates.
10-24 (6) Elections for police officer members shall be held
10-25 on the first payday in December of each odd-numbered year. The
10-26 police officers receiving the highest number of votes shall be
10-27 deemed elected. In case of a tie vote, selection shall be by lot.
11-1 (7) The election committee shall canvass the returns,
11-2 certify the results, and announce the official results of the
11-3 election.
11-4 (8) The police retirement board shall approve written
11-5 procedures for the conduct of the election no later than August 1
11-6 of each odd-numbered year.
11-7 SECTION 6. Section 3.05(b), Chapter 452, Acts of the 72nd
11-8 Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's Texas
11-9 Civil Statutes), is amended to read as follows:
11-10 (b) The board shall appoint a pension officer. The pension
11-11 officer shall appoint other necessary staff members with approval
11-12 of the board. The pension officer, acting under the direction of
11-13 the board, shall keep all of the records of the police retirement
11-14 system and a record of the proceedings of the board. The pension
11-15 officer and other employees of the system [each staff member] shall
11-16 receive such compensation as the board may fix in each annual
11-17 budget or amendments thereto.
11-18 SECTION 7. Section 3.06, Chapter 452, Acts of the 72nd
11-19 Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's Texas
11-20 Civil Statutes), is amended to read as follows:
11-21 Sec. 3.06. RULES; QUORUM; REMOVAL. (a) Subject to the
11-22 limitations of this Act, the police retirement board shall from
11-23 time to time establish rules and regulations for the administration
11-24 of the police retirement system [fund or funds] authorized to be
11-25 created by this Act and for the transaction of the board's
11-26 business.
11-27 (b) Each member of the board shall be entitled to one vote.
12-1 Six members shall constitute a quorum. A majority vote of members
12-2 attending a meeting shall be necessary for a decision of the board.
12-3 (c) Any member who is absent from five consecutive board
12-4 meetings shall be removed from the [police] board, and the member
12-5 shall be replaced in accordance with Section 3.02 of this Act.
12-6 SECTION 8. Sections 3.08-3.12, Chapter 452, Acts of the 72nd
12-7 Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's Texas
12-8 Civil Statutes), are amended to read as follows:
12-9 Sec. 3.08. ADMINISTRATION OF POLICE RETIREMENT SYSTEM
12-10 [FUNDS]. (a) The board shall have charge of and administer the
12-11 police retirement system [funds] and shall order payments therefrom
12-12 under the provisions of this Act.
12-13 (b) The board shall obtain from the city all records
12-14 necessary to administer the system. Individual accounts shall be
12-15 maintained with each member of the police retirement system,
12-16 showing the amount of the member's accumulated deposits [and the
12-17 accumulated interest allocated and standing to the credit of the
12-18 member] as provided under the [police] system. Annually a
12-19 statement shall be given each member showing the total accumulation
12-20 of the member's credit.
12-21 (c) The board shall engage and employ a certified public
12-22 accountant or firm of certified public accountants to perform an
12-23 audit of the accounts of the board and the police retirement system
12-24 at least annually.
12-25 Sec. 3.09. ACTUARY; DUTIES. (a) The police retirement
12-26 board shall designate an actuary that shall be the technical
12-27 advisor to the board regarding the funds authorized by provisions
13-1 of this Act and shall perform such other duties as may be required
13-2 in connection therewith. As soon as practicable after the
13-3 establishment of the police retirement system, the actuary shall
13-4 recommend for adoption by the board tables and rates required by
13-5 the [police] system. The board shall adopt the tables and rates
13-6 and as soon as practicable thereafter the actuary shall make a
13-7 valuation, based on the tables and rates, of the assets and
13-8 liabilities of the [police] system.
13-9 (b) From time to time on the advice of the actuary and at
13-10 the direction of the board, the actuary shall make an actuarial
13-11 investigation of the mortality, service, and compensation
13-12 experience of members, retired members, [surviving spouses,] and
13-13 beneficiaries of the [police] system and shall recommend for
13-14 adoption by the board the tables and rates required by the
13-15 [police] system. The board shall adopt the tables and rates to be
13-16 used by the [police] system.
13-17 (c) The actuary shall make valuations of the assets and
13-18 liabilities of the [police] system based on tables and rates
13-19 adopted by the board at least every two years.
13-20 Sec. 3.10. INVESTMENT MANAGERS. The police retirement
13-21 board may hire an investment manager or investment managers who
13-22 shall have full authority to invest the assets and manage any
13-23 portion of the portfolio of the system [fund], as specified by the
13-24 manager's employment contract.
13-25 Sec. 3.11. INVESTMENT CONSULTANT. The board may hire an
13-26 investment consultant to monitor the investment performance of the
13-27 system's [fund's] investment manager or managers and provide other
14-1 investment advice requested by the board.
14-2 Sec. 3.12. LEGAL COUNSEL. The board may retain legal
14-3 counsel to advise, assist, or represent the board in any legal
14-4 matters affecting the operation of the system [fund]. The board
14-5 may litigate all matters for and on behalf of the police retirement
14-6 system.
14-7 SECTION 9. Sections 4.01(c)-(f), Chapter 452, Acts of the
14-8 72nd Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's
14-9 Texas Civil Statutes), are amended to read as follows:
14-10 (c) Any person who becomes an employee of the city or the
14-11 system [becomes a member of the police system's administrative
14-12 staff after the date of establishment of the police retirement
14-13 system], if eligible for membership, shall become a member as a
14-14 condition of employment and shall make the required deposits
14-15 commencing with the first pay period following a probationary
14-16 period of six continuous months from date of employment or
14-17 eligibility, if later.
14-18 (d) Police officers of the city and employees [staff
14-19 members] of the [police] system [who] may not become members of
14-20 the police retirement system if they are [shall include all]
14-21 part-time police officers or employees [and staff members] of the
14-22 [police] system who are expected to work less than [75 percent of]
14-23 a normal work week or if they are [and all] seasonal or [and]
14-24 temporary police officers or employees [and staff members] of the
14-25 [police] system. A [regular] full-time police officer of the city
14-26 or employee of the system eligible for membership in the system
14-27 [who is not included in this excepted classification] is one whose
15-1 position is classified in the annual budget, who is expected to be
15-2 employed throughout the full calendar year, and whose employment
15-3 is expected to continue [continues] from year to year. [If regular
15-4 police officers and staff members of the police system work at
15-5 least 75 percent of a normal work week but less than full-time, the
15-6 members shall make deposits as though they were working a normal
15-7 full-time work week (even though their rate of contribution may
15-8 thereby exceed six percent of actual, regular compensation), and
15-9 their average final compensation shall be computed on the basis of
15-10 the compensation for a normal work week. No deposits shall be made
15-11 nor membership service credit received for periods during which the
15-12 authorized normal work week is less than 75 percent of a normal
15-13 work week for a police officer or staff member of the retirement
15-14 system.]
15-15 (e)(1) Membership in the police retirement system shall
15-16 consist of the following groups:
15-17 (A) Active--Contributory: the member who is in
15-18 a status which allows payroll contributions to the police
15-19 retirement system (working [75 percent of] a normal work week,
15-20 holding a full-time [or more per week, permanent] position, and
15-21 having completed a continuous period of six months of service
15-22 initially, to attain membership).
15-23 (B) Active--Noncontributory: the member whose
15-24 current employment status does not allow contributions to the
15-25 [police] system (working less than a normal work week or on a leave
15-26 of absence under Subsection (f)(6)(A) of this section) and on
15-27 return to working a normal work week, [is thereby deactivated with
16-1 the privilege of immediate reentry, on appropriate change of
16-2 status, to a period for which] the member will again be given
16-3 creditable service, with contributions resumed at time of status
16-4 change.
16-5 (C) Inactive--Contributory: the member who is
16-6 on a uniformed service leave of absence under Subsection (f)(6)(B)
16-7 of this section, who is allowed to make deposits to the [police]
16-8 system during the member's absence.
16-9 (D) Vested--Noncontributory: the terminated
16-10 member who, being [fully] vested, leaves [retains] the member's
16-11 accumulated deposits [contributions] in the [police] system.
16-12 (E) Retired: the member who is receiving a
16-13 service or disability retirement annuity.
16-14 (2) It shall be the duty of the police retirement
16-15 board to determine the membership group to which each police
16-16 officer or employee [staff member] of the [police] system who
16-17 becomes a member of the police retirement system properly belongs.
16-18 (f)(1) A member shall cease to be a member of the police
16-19 retirement system and shall forfeit creditable [lose membership]
16-20 service if, after employment termination through [death,]
16-21 dismissal, resignation, or from any other cause, the member shall
16-22 [sever the member's service connection and] withdraw the member's
16-23 accumulated deposits as provided under the withdrawal benefit
16-24 [allowance] provisions of this Act; provided, however, that any
16-25 eligible member who has not previously received credit for one-half
16-26 of the member's previously forfeited creditable [membership]
16-27 service shall be entitled to reinstatement of previously forfeited
17-1 creditable [membership] service if such eligible member or eligible
17-2 surviving spouse shall have deposited in the system the accumulated
17-3 deposits withdrawn and an interest charge based on the amount
17-4 withdrawn times an interest factor. The factor is derived by
17-5 adjusting and compounding the [based on the compounded net] annual
17-6 rates [rate] of interest that were credited to the [member's]
17-7 accumulated deposits of members, where each annual rate is
17-8 adjusted by dividing it by 0.75. The period for compounding the
17-9 interest factor begins [contributions divided by 0.75, beginning]
17-10 with the beginning of the month and year in which the member
17-11 withdrew the member's accumulated deposits [contributions] and
17-12 ends [ending] with the beginning of the month and year payment is
17-13 made to the system to reinstate the service. The annual rate of
17-14 interest applicable for the year when payment is made is considered
17-15 to be equal to the prior year's rate of interest for the purpose of
17-16 making the determination.
17-17 (2) For purposes of this subsection, an [An] eligible
17-18 member is a police officer who has been reemployed by the city or a
17-19 system employee who has been [staff member] reemployed by the
17-20 [police] system, has completed at least 24 consecutive months of
17-21 service as a member since the member was reemployed, and is not
17-22 separated from active service. For purposes of this subsection, an
17-23 eligible surviving spouse is the surviving spouse of a member who
17-24 was an eligible member immediately before the time of death if the
17-25 member dies before making payment to the system of the amount
17-26 required by this subsection.
17-27 (3) In order to be eligible to reinstate previously
18-1 forfeited creditable [membership] service, an eligible member or
18-2 eligible surviving spouse must deposit the amount described in
18-3 Subdivision (1) of this subsection as a lump sum in the system. An
18-4 eligible surviving spouse may reinstate previously forfeited
18-5 creditable [membership] service not later than the date that is six
18-6 months after the date of the member's death and only if the lump
18-7 sum death benefit described by Section 6.05(a) or 6.06(a)(3) of
18-8 this Act is not paid.
18-9 (4) Any such member who has previously received credit
18-10 for one-half of previously forfeited creditable [membership]
18-11 service shall be entitled to reinstate the remaining one-half of
18-12 the member's previously forfeited creditable [membership] service
18-13 by payment of one-half of the amount previously withdrawn and an
18-14 interest charge as described in Subdivision (1) of this subsection.
18-15 (5) The method of determining the amount of the
18-16 required payment described by Subdivision (1) of this subsection
18-17 may be changed if:
18-18 (A) the effect of the change is disclosed by the
18-19 board's actuary;
18-20 (B) the change is adopted by the board as a
18-21 board rule; and
18-22 (C) the change applies to all payments for
18-23 reinstating previously forfeited creditable [membership] service
18-24 under this subsection made to the [retirement] system after the
18-25 effective date of the change.
18-26 (6)(A) A member granted a leave of absence or
18-27 withdrawing from service for a stated period of time, not to
19-1 exceed two years, who allows the member's accumulated deposits
19-2 [contributions] to the police retirement system to remain in the
19-3 system [fund], shall be eligible for continued membership on being
19-4 reemployed by the city as a police officer or by the system as an
19-5 employee of [reentering the service of the city or] the [police]
19-6 system. During that period the employee shall not receive
19-7 creditable service [service credit].
19-8 (B) Uniformed service [Military] leave of
19-9 absence shall not be included in the two-year period if the member
19-10 returns to active service with the city as a police officer or with
19-11 the system as an employee of the system within 90 days after the
19-12 expiration of the uniformed service [military] leave of absence.
19-13 A member of the [police] system on uniformed service [military]
19-14 leave of absence may make deposits to the [police] system during
19-15 the [military] leave of absence, in an amount each biweekly pay
19-16 period that is equal to the amount of the member's deposit for the
19-17 last complete biweekly pay period that the member was paid by the
19-18 city or the [police] system. If a member on a uniformed service
19-19 leave of absence makes biweekly deposits during the leave of
19-20 absence, the employer [The city] shall make a contribution to the
19-21 system [retirement fund] for the member [employed by the city]
19-22 each biweekly pay period in an amount the employer [city] would
19-23 have made if the member's biweekly pay had continued to be the
19-24 biweekly pay the member received for the last complete biweekly pay
19-25 period that the member was paid by the employer [city]. If the
19-26 member does not make deposits during a uniformed service [military]
19-27 leave of absence, the member may make payment within five years
20-1 after the member has returned to the employment of the city or the
20-2 system, equal to the deposits the member would have made if the
20-3 member had continued to be paid by the city or the system during
20-4 the member's [military] leave of absence at the same rate of pay
20-5 the member was receiving at the time the member's leave of absence
20-6 began. The payment may be a single payment or may be in
20-7 installments as long as each individual installment is not less
20-8 than 20 percent of the total amount to be paid. A member who
20-9 otherwise would be eligible to make payment under this subdivision
20-10 but who has not made payment and for whom it has been more than
20-11 five years since the member returned to the employment of the city
20-12 may make payment during the period beginning October 1, 1995, and
20-13 ending September 30, 1996. If a member makes payment of the
20-14 deposits after returning to the employment of the city or the
20-15 system, the employer [The city] will make a single contribution for
20-16 the member [employed by the city] equal to the deposits it would
20-17 have made on the member's behalf if the member had made deposits to
20-18 the system [fund] during the period of the member's [military]
20-19 leave.
20-20 SECTION 10. Article V, Chapter 452, Acts of the 72nd
20-21 Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's Texas
20-22 Civil Statutes), is amended to read as follows:
20-23 ARTICLE V
20-24 Sec. 5.01. CREDITABLE SERVICE. (a) The board shall
20-25 determine by appropriate rules and regulations, subject to the
20-26 provisions of this Act, in case of a member's absence, illness, or
20-27 other temporary separation from service, the portion of each
21-1 calendar year to be allowed as creditable service.
21-2 (b) No credit shall be allowed as service for any period
21-3 exceeding one month during which a member was absent continuously
21-4 without pay, except as provided in Subsection (f) of Section 4.01
21-5 of this Act, with respect to uniformed service [military] leave of
21-6 absence; as provided in Section 5.02 of this Act, with respect to
21-7 military service performed prior to [retirement] system membership;
21-8 or as provided in Section 5.03 of this Act, with respect to
21-9 probationary service in excess of six months.
21-10 (c) The board shall verify the records for service claims
21-11 filed by the members of the police retirement system, in accordance
21-12 with such administrative rules and regulations as the board may
21-13 from time to time adopt.
21-14 Sec. 5.02. MILITARY SERVICE CREDIT. (a) An eligible member
21-15 or eligible surviving spouse may establish creditable service for
21-16 military service performed [that is creditable] as provided under
21-17 this section according to the following conditions, limitations,
21-18 and restrictions:
21-19 (1) Military service creditable in the [retirement]
21-20 system is active federal duty service in the Armed Forces of the
21-21 United States, other than as a student at a service academy, as a
21-22 member of the reserves, or any continuous active military service
21-23 lasting less than 90 days, and such military service must have been
21-24 performed prior to becoming a member of the police retirement
21-25 system or its predecessor system.
21-26 (2) For purposes of this section, an [An] eligible
21-27 member must:
22-1 (A) have been released from military duty under
22-2 conditions not dishonorable; and
22-3 (B) be a police officer employed by the city or
22-4 an employee of [a staff member employed by] the [police] system[,]
22-5 who is not separated from active [police system] service.
22-6 (3) An eligible member or eligible surviving spouse
22-7 may not establish more than 24 months of creditable service in the
22-8 [retirement] system for military service.
22-9 (4) An eligible member or eligible surviving spouse
22-10 may establish creditable service under this section by contributing
22-11 to the [retirement] system a single payment equal to 25 percent of
22-12 the estimated cost of the additional projected retirement benefits
22-13 the member or surviving spouse will be entitled to receive. The
22-14 system will determine the required contribution based on a
22-15 procedure recommended by the actuary and approved by the board.
22-16 (5) After the eligible member or eligible surviving
22-17 spouse makes the deposit required by this section, the [retirement]
22-18 system shall grant the member one month of creditable service for
22-19 each month of military service established by this section.
22-20 (6) For purposes of this section, an eligible
22-21 surviving spouse is the surviving spouse of a member who was an
22-22 eligible member immediately before the time of death if the member
22-23 dies before making payment to the system of the amount required by
22-24 this section. An eligible surviving spouse may establish
22-25 creditable service for military service not later than the date
22-26 that is six months after the date of the member's death and only if
22-27 the lump-sum death benefit described by Section 6.05(a) or
23-1 6.06(a)(3) of this Act is not paid.
23-2 (b) The percent used to calculate the amount of the required
23-3 payment described by Subsection (a)(4) of this section may be
23-4 changed if:
23-5 (1) the effect of the change is disclosed by the
23-6 board's actuary;
23-7 (2) the change is adopted by the board [of trustees]
23-8 as a board rule; and
23-9 (3) the change applies to all payments for
23-10 establishing creditable service under this section made to the
23-11 [retirement] system after the effective date of the change.
23-12 Sec. 5.03. PROBATIONARY SERVICE CREDIT. (a) An eligible
23-13 member or eligible surviving spouse may establish creditable
23-14 service for probationary service performed [that is creditable] as
23-15 provided under this section according to the following conditions,
23-16 limitations, and restrictions:
23-17 (1) Probationary service creditable in the
23-18 [retirement] system is any probationary [nonmembership] service
23-19 following commission date for which the member does not have
23-20 creditable service.
23-21 (2) An eligible member or eligible surviving spouse
23-22 may establish creditable service under this section by contributing
23-23 to the [retirement] system a single payment equal to the
23-24 contribution the member would have made to the system for that
23-25 service at the time the service was performed and an interest
23-26 charge based on the contribution amount to be repaid times an
23-27 interest factor. The factor is derived by adjusting and
24-1 compounding the [based on the compounded] annual rates of interest
24-2 that were [which are equal to the rates which have been] credited
24-3 to the [member's] accumulated deposits of members, where each
24-4 annual rate is adjusted by dividing it by 0.75. The period for
24-5 compounding the interest factor begins [divided by 0.75, beginning]
24-6 with the beginning of the month and year at the end of the
24-7 probationary period for which creditable service is being
24-8 established to the beginning of the month and year [later time]
24-9 payment is made to the system [fund] for the purpose of
24-10 establishing said service. The annual rate of interest applicable
24-11 for the year when payment is made is considered to be equal to the
24-12 prior year's rate of interest for the purpose of making the
24-13 determination.
24-14 (3) After the eligible member or eligible surviving
24-15 spouse makes the deposit required by Subdivision (2) of this
24-16 subsection, the [retirement] system shall grant the member one
24-17 month of creditable service for each month of probationary service
24-18 established under this section.
24-19 (b) For purposes of this section, an eligible member is a
24-20 police officer employed by the city who is not separated from
24-21 active service.
24-22 (c) For purposes of this section, an eligible surviving
24-23 spouse is the surviving spouse of a member who was an eligible
24-24 member immediately before the time of death if the member dies
24-25 before making payment to the system of the amount required by this
24-26 section. An eligible surviving spouse may establish creditable
24-27 service for probationary service not later than the date that is
25-1 six months after the date of the member's death and only if the
25-2 lump-sum death benefit described by Section 6.05(a) or 6.06(a)(3)
25-3 of this Act is not paid.
25-4 (d) [Notwithstanding Subsection (c) of this section, if an
25-5 eligible member dies on or after December 1, 1994, but not later
25-6 than August 31, 1995, and has not made payment to the system of the
25-7 amount required by this section, an eligible surviving spouse may
25-8 establish creditable service for probationary service on or before
25-9 February 29, 1996.]
25-10 [(e)] The method of determining the amount of the required
25-11 payment described by Subsection (a)(2) of this section may be
25-12 changed if:
25-13 (1) the effect of the change is disclosed by the
25-14 board's actuary;
25-15 (2) the change is adopted by the board [of trustees]
25-16 as a board rule; and
25-17 (3) the change applies to all payments for
25-18 establishing creditable service under this section made to the
25-19 [retirement] system after the effective date of the change.
25-20 Sec. 5.04. CADET SERVICE CREDIT. (a) This section does not
25-21 take effect unless the city council irrevocably authorizes the city
25-22 to begin making contributions to the police retirement system in
25-23 accordance with Section 8.01(a) of this Act for police cadets
25-24 during their employment as cadets while members of a cadet class.
25-25 Police cadets whose cadet class begins after the city council makes
25-26 the irrevocable authorization shall make deposits to the police
25-27 retirement system in accordance with Section 8.01(a) of this Act,
26-1 and those cadets shall be members of the police retirement system
26-2 and shall receive creditable service for employment as cadets while
26-3 members of a cadet class, notwithstanding Sections 1.02(7), (18),
26-4 and (21) of this Act.
26-5 (b) Subsections (c), (d), (e), and (f) of this section take
26-6 effect on the date on which the changes made by those subsections
26-7 are approved by the board's actuary. The effective date of those
26-8 subsections may not be before the date the city council makes the
26-9 irrevocable authorization described by Subsection (a) of this
26-10 section.
26-11 (c) An eligible member or eligible surviving spouse may
26-12 establish creditable service for cadet service performed as
26-13 provided under this section according to the following conditions,
26-14 limitations, and restrictions:
26-15 (1) Cadet service creditable in the system is any
26-16 service while a member of a cadet class for which the member does
26-17 not have creditable service.
26-18 (2) An eligible member or eligible surviving spouse
26-19 may establish creditable service under this section by contributing
26-20 to the system a single payment equal to the contribution the member
26-21 would have made to the system for that service at the time the
26-22 service was performed and an interest charge based on the
26-23 contribution amount to be repaid times an interest factor. The
26-24 factor is derived by adjusting and compounding the annual rates of
26-25 interest that were credited to the accumulated deposits of members,
26-26 where each annual rate is adjusted by dividing it by 0.75. The
26-27 period for compounding the interest factor begins with the
27-1 beginning of the month and year at the end of the cadet class for
27-2 which creditable service is being established and ends with the
27-3 beginning of the month and year payment is made to the system for
27-4 the purpose of establishing said service. The annual rate of
27-5 interest applicable for the year when payment is made is considered
27-6 to be equal to the prior year's rate of interest for the purpose of
27-7 making the determination.
27-8 (3) After the eligible member or eligible surviving
27-9 spouse makes the deposit required by Subsection (c)(2) of this
27-10 section, the system shall grant the member one month of creditable
27-11 service for each month of cadet service established under this
27-12 section.
27-13 (d) For purposes of Subsection (c) of this section, an
27-14 eligible member is a police officer employed by the city who is not
27-15 separated from active service.
27-16 (e) For purposes of Subsection (c) of this section, an
27-17 eligible surviving spouse is the surviving spouse of a member who
27-18 was an eligible member immediately before the time of death if the
27-19 member dies before making payment to the system of the amount
27-20 required by this section. An eligible surviving spouse may
27-21 establish creditable service for cadet service not later than the
27-22 date that is six months after the date of the member's death and
27-23 only if the lump-sum death benefit described by Section 6.05(a) or
27-24 6.06(a)(3) of this Act is not paid.
27-25 (f) The method of determining the amount of the required
27-26 payment described by Subsection (c)(2) of this section may be
27-27 changed if:
28-1 (1) the effect of the change is disclosed by the
28-2 board's actuary;
28-3 (2) the change is adopted by the board as a board
28-4 rule; and
28-5 (3) the change applies to all payments for
28-6 establishing creditable service under this section made to the
28-7 system after the effective date of the change.
28-8 SECTION 11. Sections 6.01 and 6.02, Chapter 452, Acts of the
28-9 72nd Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's
28-10 Texas Civil Statutes), are amended to read as follows:
28-11 Sec. 6.01. SERVICE RETIREMENT BENEFITS AND INCREASES IN
28-12 [WITHDRAWAL] BENEFITS. (a) On retirement [from service] after
28-13 having reached the member's normal retirement date, members
28-14 entitled thereto shall receive a service [normal] retirement
28-15 benefit in the form of a life annuity (modified cash refund). Each
28-16 monthly payment of the life annuity (modified cash refund) shall be
28-17 equal to one-twelfth of the product of 2.88 [2.8] percent of a
28-18 member's average final compensation multiplied by the number of
28-19 months of creditable service. [If payments commence after the
28-20 member becomes 62 years of age and after completion of 120 months
28-21 of contributions, the amount of monthly payments shall be increased
28-22 at the rate of five-twelfths of one percent for each month after
28-23 age 62 for which the member earned creditable service but made no
28-24 contributions on the basis of the law in effect before September 1,
28-25 1995. The increased benefit shall not exceed 15 percent of the
28-26 amount which would otherwise have been paid if payments had
28-27 commenced at the member's retirement date. For a retirement date
29-1 after December 31, 1996, the amount of monthly payments may not be
29-2 increased for payments that commence after the member becomes 62
29-3 years of age.] The retirement benefit percent specified by this
29-4 section to calculate the amount of the monthly payment of the life
29-5 annuity (modified cash refund) may be changed after 1997 [1995] if:
29-6 (1) the change is approved by the board's actuary;
29-7 (2) the change is adopted by the board [of trustees]
29-8 as a board rule;
29-9 (3) the change applies to all present members, all
29-10 retired members, and all who become members after the effective
29-11 date of the change in the retirement benefit percent;
29-12 (4) a member's vested interest [accrued benefit] as of
29-13 the last day of the month immediately preceding the effective date
29-14 of the change in the retirement benefit percent is not reduced; and
29-15 (5) a retirement annuity being paid by the police
29-16 retirement system to members or to the surviving spouses or
29-17 beneficiaries of members who retired before the effective date of
29-18 the change in the retirement benefit percent is changed as
29-19 prescribed by Subsection (d)(8) of this section, except that a
29-20 reduction in annuities may not cause the member's, surviving
29-21 spouse's, or beneficiary's annuity payment to be reduced below the
29-22 base retirement amount calculated under this Act.
29-23 (b) An annuity shall be considered as a life annuity
29-24 (modified cash refund) with the first monthly payment due at the
29-25 end of the month immediately following [from] the member's
29-26 retirement date, but the amounts of these and all other benefits
29-27 payable under this Act shall be subject at all times to such
30-1 adjustments as may be required to ensure actuarial soundness as may
30-2 be approved by the actuary and adopted by the board, except that
30-3 annuities already granted may not be reduced below the base
30-4 retirement amount [figure] granted at time of retirement.
30-5 (c) Subject to the conditions, limitations, and restrictions
30-6 set forth in this subsection, as well as all other pertinent
30-7 conditions, limitations, and restrictions set forth elsewhere in
30-8 this Act, the board shall have the power to authorize an annual
30-9 cost of living adjustment (hereinafter referred to as "adjustment")
30-10 payment which, once authorized, shall be paid out [in 12 equal]
30-11 monthly and [installments] which shall be added to the current
30-12 monthly payment of all retirement annuities of each and every
30-13 member of the police retirement system who has retired or those of
30-14 the members' surviving spouses or beneficiaries who have become
30-15 entitled to benefits on or before December 31 of any preceding
30-16 year. Before January 1 of each year, the board shall make a
30-17 separate determination of whether to authorize the payment of an
30-18 annual adjustment and the amount of the adjustment, if any. These
30-19 adjustments shall be paid [in 12] monthly [installments] beginning
30-20 January 31 of the succeeding calendar year.
30-21 (d) In determining whether to authorize the payment and the
30-22 amount of any annual adjustment, the board shall be governed by the
30-23 following conditions, considerations, limitations, and
30-24 restrictions:
30-25 (1) Any and all determinations to authorize the
30-26 payment of any amount must be based on the ability of the system
30-27 [fund] to pay such an amount and shall not be based upon the
31-1 individual needs of any particular retired members, surviving
31-2 spouses, or beneficiaries.
31-3 (2) Prior to the board's authorizing the payment of an
31-4 annual adjustment, the actuary must approve and recommend such an
31-5 adjustment to the board and certify in writing to the board that
31-6 based on the sound application of actuarial assumptions and methods
31-7 consistent with sound actuarial principles and standards, it is
31-8 demonstrable that the system [fund] has and will continue to have
31-9 the ability to pay such an amount out of its realized income after
31-10 all other obligations of the system [fund] have been paid.
31-11 (3) The amount of the adjustment payment to the
31-12 retirement benefit [allowance] for each retired member, surviving
31-13 spouse, or beneficiary shall be increased or decreased by an
31-14 amount, not to exceed six percent, determined by the board and the
31-15 actuary based on the consumer price index, actuarial experience of
31-16 the system [fund], investment experience of the system [fund], and
31-17 cost-of-living increases granted in the past. Such increases
31-18 shall be prorated for a member who retired during the year in the
31-19 ratio that the number of the member's completed months after the
31-20 member's retirement in that year bears to 12. The cost-of-living
31-21 increase presented for approval by the board must be approved by
31-22 the system's [fund's] actuary.
31-23 (4) The board shall have the authority and the duty,
31-24 at any and all times and without notice to anyone, to decrease the
31-25 amount of the adjustment payment as much as is necessary to protect
31-26 the continuity of the police retirement system and to protect the
31-27 corpus of the system [fund] should the ability of the system [fund]
32-1 to continue to pay the adjustment be threatened by a change in the
32-2 economic situation of the United States, the State of Texas, the
32-3 city, or the system [fund] itself such as would dictate that a
32-4 prudent trustee should authorize such a decrease; provided that if
32-5 the threatened change should prove not to have had the predicted
32-6 harmful effect on the system [fund], then the board shall have the
32-7 authority to reinstate the payment of all or any portion of the
32-8 amount of the previously decreased adjustment payments. If at any
32-9 time the actuary in the actuary's discretion shall deem the
32-10 continuity of the system [fund] to be threatened by whatever cause,
32-11 the actuary shall have the power and authority to order the board
32-12 to make no further adjustment payments and the board shall have the
32-13 power and authority to see to it that no further adjustment
32-14 payments are made unless and until the actuary shall order either
32-15 that the same adjustment payments which were discontinued by the
32-16 actuary's order be reinstated retroactively, or that the adjustment
32-17 payments (of the same amount as those which were discontinued) be
32-18 reinstated prospectively from the date of the actuary's order to
32-19 reinstate or the actuary may recommend to the board that the
32-20 adjustment payments be decreased by whatever amount the actuary may
32-21 deem to be sufficient to protect the continuity of the system
32-22 [fund]. The board shall not have the power or authority to
32-23 authorize or permit the payment of any adjustment payments in
32-24 excess of that recommended by the actuary.
32-25 (5) [All monthly retirement annuities being paid by
32-26 the system to members where payments began prior to January 1,
32-27 1980, shall be increased retroactive to March 1, 1985, with the
33-1 first increased amounts being paid March 31, 1985, in accordance
33-2 with the following schedule:]
33-3 [Year of] [Percentage]
33-4 (]LRetirement ]LIncrease
33-5 [1970 and earlier] [160]
33-6 [1971] [105]
33-7 [1972] [100]
33-8 [1973] [65]
33-9 [1974] [55]
33-10 [1975] [50]
33-11 [1976] [45]
33-12 [1977] [40]
33-13 [1978] [35]
33-14 [1979] [25]
33-15 [(6)] Provided that the adjustment payments, if any,
33-16 shall be in addition to the benefits to which a retired member,
33-17 surviving spouse, or beneficiary is otherwise entitled under this
33-18 Act, and in no event shall a reduction in the adjustment payments
33-19 cause the retired member's, surviving spouse's, or beneficiary's
33-20 benefits to be reduced below the actual base retirement amount
33-21 calculated under the provisions of this Act.
33-22 (6) [(7) Retirement and disability annuities being
33-23 paid by the police retirement system to members or to the surviving
33-24 spouses or beneficiaries of members who retired before September 1,
33-25 1995, are increased beginning with the payments due at the end of
33-26 September in 1995. The amount of the increase for a member or the
33-27 surviving spouse or beneficiary of the member is equal to a
34-1 percentage multiplied by the annuity payment otherwise due. The
34-2 percentage is equal to 2.8 percent divided by the retirement
34-3 benefit percentage in effect on the date of the member's
34-4 retirement, minus one, and multiplied by 100.]
34-5 [(8)] Service [Retirement] and disability retirement
34-6 annuities and survivor benefits being paid by the police
34-7 retirement system to members or to the surviving spouses or
34-8 beneficiaries of members who retire before the effective date of
34-9 any change in the retirement benefit percent under this section
34-10 that occurs after 1995 shall be changed beginning with the first
34-11 payment due after the effective date of the change in the
34-12 retirement benefit percent. The amount of the change for a member
34-13 or the surviving spouse or beneficiary of the member is equal to a
34-14 percentage multiplied by the annuity payment otherwise due. The
34-15 percentage is equal to the new retirement benefit percentage
34-16 divided by the retirement benefit percent in effect immediately
34-17 before the effective date of the new retirement benefit percent,
34-18 minus one, and multiplied by 100.
34-19 (e) The following terms and definitions shall be used in
34-20 construing the meaning of this section:
34-21 (1) "Base retirement amount" means that monthly
34-22 retirement amount calculated under this Act at the time of actual
34-23 retirement, reduced for the optional form selected under Section
34-24 6.03(a) of this Act, and further reduced, if appropriate for the
34-25 optional form selected, if the member or the member's [designated]
34-26 beneficiary has died.
34-27 (2) "Consumer price index" means the Consumer Price
35-1 Index for All Urban Consumers published monthly by the Bureau of
35-2 Labor Statistics, United States Department of Labor, or its
35-3 successor in function.
35-4 (3) ["Fund" means for the purposes of this subsection
35-5 a combination of both Fund No. 1 and Fund No. 2 as defined in this
35-6 Act unless otherwise indicated.]
35-7 [(4)] "Continuity of the system" [fund"] means the
35-8 ability of the police retirement system [system's fund] to
35-9 continue to meet all of its purposes, to continue to thrive and
35-10 grow along with the economy of the United States, the State of
35-11 Texas, and the city, or to be able to sustain itself and its
35-12 beneficiaries during and throughout periods of deflation or
35-13 recession in that economy.
35-14 (f) For purposes of this section, compensation of each
35-15 noneligible member taken into account under this Act [the plan] may
35-16 not exceed $150,000 per calendar year, indexed pursuant to Section
35-17 401(a)(17) of the Internal Revenue Code of 1986 (26 U.S.C. Section
35-18 401). The $150,000 limit does not apply to an eligible member.
35-19 For purposes of this subsection, an eligible member is any
35-20 individual who first became a member before January 1, 1996. For
35-21 purposes of this subsection, a noneligible member is any other
35-22 member. [For purposes of this subsection, in determining the
35-23 compensation of a member Section 414(q)(6) of the Internal Revenue
35-24 Code of 1986 (26 U.S.C. Section 414) applies, except the term
35-25 "family member" includes only the spouse of the member and any
35-26 lineal descendants of the member who have not attained the age of
35-27 19 before the close of the year. Compensation in excess of the
36-1 limit shall be prorated among the family members in accordance with
36-2 Section 401(a)(17) of the Internal Revenue Code of 1986 (26 U.S.C.
36-3 Section 401).]
36-4 Sec. 6.02. ELIGIBILITY FOR SERVICE RETIREMENT. (a) Any
36-5 member shall be eligible for service [normal] retirement if the
36-6 member has attained the age of 55 years and completed at least 20
36-7 years of creditable service with the city, completed 25 years of
36-8 creditable service, or attained age 62.
36-9 (b) Any member, irrespective of the number of years of
36-10 creditable service, shall be eligible for service retirement at age
36-11 62. [After age 62, the member may continue in the employment of
36-12 the city as a police officer.] No member shall be paid any
36-13 benefits by the [police] system so long as the member is
36-14 [permanently] employed by the city as a police officer or by the
36-15 system as an employee of the system's administrative staff.
36-16 SECTION 12. Sections 6.03(a) and (b), Chapter 452, Acts of
36-17 the 72nd Legislature, Regular Session, 1991 (Article 6243n-1,
36-18 Vernon's Texas Civil Statutes), are amended to read as follows:
36-19 (a) In lieu of the life annuity (modified cash refund)
36-20 defined in Section 6.01 of this Act, a member attaining eligibility
36-21 for service [retirement, except for disability] retirement[,] may
36-22 file a duly acknowledged written designation which, if approved by
36-23 the board, shall entitle the member to receive the actuarial
36-24 equivalent of the life annuity by electing [or elect] one of the
36-25 following options:
36-26 OPTION I. Joint and 100 Percent Survivor Annuity. A reduced
36-27 annuity payable to the member but with the provision that on the
37-1 member's death, the annuity shall be continued throughout the life
37-2 of and be paid to such person that the member shall irrevocably
37-3 designate before the member's retirement date.
37-4 OPTION II. Joint and 50 Percent Survivor Annuity. A reduced
37-5 annuity payable to the member but with the provision that on the
37-6 member's death, one-half of the annuity shall be continued
37-7 throughout the life of and be paid to the person that the member
37-8 shall irrevocably designate before the member's retirement date.
37-9 OPTION III. Joint and 66-2/3 Percent Survivor Annuity. A
37-10 reduced annuity payable to the member but with the provision that
37-11 on the member's death, two-thirds of the annuity shall be continued
37-12 throughout the life of and be paid to the person that the member
37-13 shall irrevocably designate before the member's retirement date.
37-14 OPTION IV. Joint and 66-2/3 Percent Last Survivor Annuity.
37-15 A reduced annuity payable to the member but with the provision that
37-16 two-thirds of the annuity to which the member would be entitled
37-17 shall be continued throughout the life of and be paid to the
37-18 survivor after the death of either the member or the person that
37-19 the member shall irrevocably designate before the member's
37-20 retirement date.
37-21 OPTION V. [Level Income Option. If payment of a retirement
37-22 benefit commences prior to the earliest age at which the member
37-23 will become eligible for an old age insurance benefit under the
37-24 Social Security Act, the member may elect that the amount of the
37-25 payments be adjusted so that an increased amount will be paid prior
37-26 to such age and a reduced amount, if any, will be paid for life
37-27 after such age. The purpose of this adjustment is to enable the
38-1 member to receive from this plan and under the Social Security Act
38-2 an aggregate income in approximately a level amount for life. Such
38-3 adjusted payments shall be the actuarial equivalent of the pension
38-4 otherwise payable to such member.]
38-5 [OPTION VI. Joint and 66-2/3 Percent to Survivor/Level
38-6 Income Option. If payment of a retirement benefit commences prior
38-7 to the earliest age at which the member could become eligible for
38-8 an old age insurance benefit under the Social Security Act, the
38-9 member may elect that the amount of the payments be adjusted so
38-10 that an increased amount will be paid prior to such age and a
38-11 reduced amount will be paid for life after such age. The purpose
38-12 of this adjustment is to enable the member to receive from this
38-13 plan and under the Social Security Act an aggregate income in
38-14 approximately a level amount for life. If the member's death
38-15 occurs after age 62, two-thirds of the monthly annuity the member
38-16 was receiving at the time of the member's death shall be continued
38-17 throughout the life of and be paid to the person that the member
38-18 shall irrevocably designate before the member's retirement date.
38-19 If the member's death occurs before age 62, two-thirds of the
38-20 monthly annuity the member was receiving at the time of the
38-21 member's death shall be paid to the person that the member shall
38-22 irrevocably designate before the member's retirement date through
38-23 the end of the month when the member would have reached age 62.
38-24 The monthly annuity being paid to the person that the member shall
38-25 irrevocably designate before the member's retirement date will be
38-26 reduced at the end of the month following the month when the member
38-27 would have reached age 62 to two-thirds of the reduced benefit the
39-1 member would have begun to receive at age 62.]
39-2 [OPTION VII.] 15-Year Certain and Life Annuity. A reduced
39-3 annuity shall be payable to the member for life. In the event of
39-4 the member's death before 180 monthly payments have been made, the
39-5 remainder of the 180 payments are payable to the member's
39-6 beneficiary or, if one does not exist, to the member's estate.
39-7 [OPTION VIII. Any other form of benefit or benefits may be
39-8 paid either to the member or to the person or persons that the
39-9 member shall designate in writing, provided that the benefit plan
39-10 shall be certified by the actuary for the system to be the
39-11 actuarial equivalent of the life annuity with guaranteed refund of
39-12 the retired member's accumulated deposits.]
39-13 (b) The amount of the annuity payment in Options I, II, III,
39-14 IV, and V[, VI, VII, and VIII] shall be determined without
39-15 considering the minimum cumulative payment of the retired member's
39-16 [police officer's] accumulated deposits since that refund feature
39-17 will stay in effect as indicated in Subsection (b), Section 6.06
39-18 of this Act.
39-19 SECTION 13. Section 6.04(a), Chapter 452, Acts of the 72nd
39-20 Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's Texas
39-21 Civil Statutes), is amended to read as follows:
39-22 (a) On employment termination [separation from service by
39-23 resignation or dismissal before retirement], the member shall
39-24 receive the amount of the accumulated deposits standing to the
39-25 member's credit in one lump sum, except that if such member has had
39-26 at least 10 years of creditable service at the time the member
39-27 separates from service [employee's service is terminated], the
40-1 member shall have a [vested] right to elect to leave the member's
40-2 accumulated deposits with the police retirement system until such
40-3 time as the member shall have applied in writing for service
40-4 retirement [benefit payments] and shall have attained an age at
40-5 which the member shall have become entitled to receive a service
40-6 [monthly] retirement benefit [payments] under this Act, at which
40-7 time the member shall be entitled to a service retirement benefit
40-8 computed under the formula in Section 6.01(a) of this Act in effect
40-9 on the last day of the month immediately preceding the month of the
40-10 first benefit payment [allowance equal to that which the member
40-11 would have received if the member had attained the age at the time
40-12 of termination of the member's service which the member had
40-13 attained at the time of making such application].
40-14 SECTION 14. Sections 6.05 and 6.06, Chapter 452, Acts of the
40-15 72nd Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's
40-16 Texas Civil Statutes), are amended to read as follows:
40-17 Sec. 6.05. DEATH OF A MEMBER; TREATMENT OF ACCUMULATED
40-18 DEPOSITS. (a) In the event of death of a member who is ineligible
40-19 for retirement, the accumulated deposits standing to the member's
40-20 credit in Fund No. 1 and an equivalent amount from Fund No. 2 shall
40-21 be payable in a lump sum to the member's beneficiary or, if no
40-22 beneficiary, to the member's estate, unless the member shall have
40-23 directed otherwise in writing duly acknowledged and filed with the
40-24 board. The lump sum may not be less than $7,500. When the $7,500
40-25 minimum is payable, the amount payable from Fund No. 2 is $7,500
40-26 minus the accumulated deposits standing to the member's credit in
40-27 Fund No. 1.
41-1 (b) Seven years after [cessation of service of] a member
41-2 separates from service with less than 10 years' service, if no
41-3 previous demand has been made, any accumulated deposits standing
41-4 to the member's credit shall be returned to the member or to the
41-5 member's estate, but if the contributor or the member's personal
41-6 representative cannot be found or if the member dies without
41-7 leaving heirs or legatees, the member's accumulated deposits shall
41-8 thereafter become a part of Fund No. 2.
41-9 (c) In the event of death of a member receiving a retirement
41-10 benefit [allowance], the sum of $7,500 [$5,000] shall be payable
41-11 in a lump sum to the member's beneficiary or, if no beneficiary, to
41-12 the member's estate, unless the member shall have directed
41-13 otherwise in writing, duly acknowledged and filed with the board.
41-14 Sec. 6.06. SELECTING OPTIONS; DESIGNATING BENEFICIARIES.
41-15 (a)(1) Within one year prior to the date on which a member becomes
41-16 eligible for service retirement under any provision of this
41-17 article, the member may file with the board the member's written
41-18 statement either selecting one of the optional benefits authorized
41-19 by this Act and designating the beneficiary of the option if one is
41-20 selected or stating that the member has been afforded an
41-21 opportunity to select an option but does not desire to do so. An
41-22 option selection shall become effective at the member's date of
41-23 eligibility for service retirement. The member shall retain the
41-24 right to make a final selection until the date of retirement. The
41-25 final selection shall be binding on all parties.
41-26 (2) After filing the written statement selecting one
41-27 of the optional benefits, the member may continue in service and
42-1 thereafter retire any time after eligibility by filing a written
42-2 application for service retirement. If the member dies before
42-3 retirement but after becoming eligible for service retirement, the
42-4 [effective date of the] member's survivor [retirement is the last
42-5 day of the calendar month of death, and the] benefit is calculated
42-6 as if the member had retired on the last day of the calendar month
42-7 of death [that date] under the optional benefit selected.
42-8 (3) In the event a member who is eligible for service
42-9 retirement dies without making a written selection of one of the
42-10 options listed in Section 6.03 of this Act and if the member leaves
42-11 a [lawfully married] spouse surviving, then the surviving spouse of
42-12 such member may select the optional form of the survivor benefit
42-13 [annuity] in the same manner as if the member had made the
42-14 selection or may select a lump-sum payment equal to the accumulated
42-15 deposits standing to the member's credit in Fund No. 1 plus an
42-16 equivalent amount from Fund No. 2. If the member leaves no
42-17 [lawfully married] spouse surviving, then the member's [designated]
42-18 beneficiary, or if no beneficiary exists, the executor or
42-19 administrator of the estate of the member, is entitled to elect
42-20 either an Option V survivor benefit [VII] (15-Year Certain and Life
42-21 Annuity), effective the last day of the calendar month in which the
42-22 death of the member occurs, or a lump-sum payment equal to the
42-23 accumulated deposits standing to the member's credit in Fund No. 1
42-24 plus an equivalent amount from Fund No. 2. In the event of the
42-25 death of the [lawfully married] surviving spouse before having
42-26 received survivor benefits [retirement allowances] equal to the
42-27 amount of the member's accumulated deposits at date of the member's
43-1 death, the excess of such accumulated deposits over the survivor
43-2 benefits [retirement allowances] paid shall be refunded in one sum
43-3 to the member's estate.
43-4 (4) When monthly survivor benefits are payable as a
43-5 result of the death of a member before retirement, an additional
43-6 sum of $7,500 [$5,000] shall be payable as a death benefit to the
43-7 member's [designated] beneficiary or, if no beneficiary exists, to
43-8 the member's estate.
43-9 (b) In the event of death of the retired member under any
43-10 retirement option and the death of the person irrevocably
43-11 designated by the retired member when Option I, Option II, Option
43-12 III, Option IV, or Option VI, as that option existed before the
43-13 amendment of Section 6.03(a) of this Act by H.B. No. 1242 or S.B.
43-14 No. 588, Acts of the 75th Legislature, Regular Session, 1997, as
43-15 described in Section 6.03 of this Act is in effect, before monthly
43-16 retirement benefits [allowances] have been received that are equal
43-17 to or greater than the retired member's accumulated deposits, then
43-18 the member's estate will receive the excess of the retired member's
43-19 accumulated deposits over the retirement benefits [allowance] paid.
43-20 SECTION 15. Article VI, Chapter 452, Acts of the 72nd
43-21 Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's Texas
43-22 Civil Statutes), is amended by adding Section 6.07 to read as
43-23 follows:
43-24 Sec. 6.07. RETROACTIVE DEFERRED RETIREMENT OPTION PLAN.
43-25 (a) The retroactive deferred retirement option plan, referred to
43-26 as RETRO DROP, is an option a member eligible for service
43-27 retirement under Section 6.02 of this Act may elect at retirement
44-1 subject to the conditions of this section. A member who elects
44-2 RETRO DROP receives a lump sum and a monthly retirement benefit.
44-3 (b) The member shall select the RETRO DROP benefit
44-4 computation date. The date:
44-5 (1) must be the last day of the month used for the
44-6 purpose of determining the monthly retirement benefit;
44-7 (2) may not precede the normal retirement date as
44-8 defined by Section 1.02(19) of this Act, except that for purposes
44-9 of this subsection, creditable service does not include any
44-10 military service credit established under Section 5.02 of this Act;
44-11 and
44-12 (3) may not precede the date of retirement by more
44-13 than 36 months.
44-14 (c) On the election of RETRO DROP and the selection of the
44-15 RETRO DROP benefit computation date, the member's monthly life
44-16 annuity (modified cash refund) is computed according to Section
44-17 6.01 of this Act as if the member had retired on the RETRO DROP
44-18 benefit computation date but including any creditable service
44-19 established after that date under Section 5.02, Section 5.03, or
44-20 Section 5.04 of this Act. In lieu of the life annuity (modified
44-21 cash refund) defined by Section 6.01 of this Act, the member may
44-22 file a duly acknowledged written designation to elect one of the
44-23 annuity options described by Section 6.03 of this Act in effect at
44-24 retirement that are actuarially equivalent at the RETRO DROP
44-25 benefit computation date.
44-26 (d) The RETRO DROP lump-sum accumulation period includes
44-27 each month from the month following the RETRO DROP benefit
45-1 computation date through the month of retirement. The RETRO DROP
45-2 lump sum accumulates month by month during the accumulation period
45-3 as the sum of:
45-4 (1) the monthly annuity amounts that would have been
45-5 paid during the RETRO DROP lump-sum accumulation period;
45-6 (2) deposits made by the member to the police
45-7 retirement system as a percent of the basic hourly earnings of the
45-8 member during the RETRO DROP lump-sum accumulation period; and
45-9 (3) interest credited on the RETRO DROP lump sum
45-10 during the RETRO DROP lump-sum accumulation period.
45-11 (e) The first monthly annuity amount that would have been
45-12 paid during the RETRO DROP lump-sum accumulation period is the
45-13 amount defined by Subsection (c) of this section. Subsequent
45-14 monthly annuity amounts that would have been paid during the RETRO
45-15 DROP lump-sum accumulation period must include any cost-of-living
45-16 increases or special ad hoc increases in annuity amounts granted in
45-17 accordance with Sections 6.01(c) and (d) of this Act.
45-18 (f) The interest credited to the RETRO DROP lump sum shall
45-19 be credited on each December 31 in the RETRO DROP lump-sum
45-20 accumulation period in an amount equal to five percent of the
45-21 amount of the RETRO DROP lump sum as of January 1 of the same
45-22 calendar year. If the month of retirement is other than December,
45-23 the interest shall be credited for the partial year at the end of
45-24 the month of retirement in an amount equal to five-twelfths of one
45-25 percent of the amount of the RETRO DROP lump sum as of January 1 of
45-26 that year multiplied by the number of complete months of service
45-27 in that year. A complete month does not include a month in which
46-1 service amounted to fewer than 15 days.
46-2 (g) The first monthly annuity payment shall be on the last
46-3 day of the month immediately following the month of retirement.
46-4 The lump sum is due and payable to the member on the date selected
46-5 by the member. The date must be a business day and must be during
46-6 the period beginning on the last day of the month immediately
46-7 following the month of retirement and ending exactly two years
46-8 later. If the member dies before the date the member selected to
46-9 receive the lump sum, the lump sum is payable to the member's
46-10 beneficiary or, if no beneficiary exists, to the member's estate,
46-11 unless the member has directed otherwise in a duly acknowledged
46-12 writing filed with the board.
46-13 (h) The board may modify or eliminate the RETRO DROP
46-14 provisions of this section by the adoption of board rules until
46-15 August 31, 2002. At that time, the board's actuary shall study the
46-16 effects of the RETRO DROP provisions of this section and report
46-17 the results of the study to the board. Based on the report, the
46-18 board may decide to continue with, modify, or eliminate the RETRO
46-19 DROP provisions by the adoption of board rules.
46-20 SECTION 16. Section 7.01, Chapter 452, Acts of the 72nd
46-21 Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's Texas
46-22 Civil Statutes), is amended to read as follows:
46-23 Sec. 7.01. DISABILITY RETIREMENT. (a) Only members who are
46-24 classified as Active-Contributory, Active-Noncontributory [I], or
46-25 Inactive-Contributory, pursuant to Subsection (e) of Section 4.01
46-26 of this Act, are eligible for consideration for disability
46-27 retirement pursuant to this article.
47-1 (b)(1) If a member with less than 10 years of creditable
47-2 service has become mentally or physically incapacitated for the
47-3 performance of the [member's former] employment duties the member
47-4 had immediately before incapacitation as a direct result of
47-5 injuries sustained subsequent to the member's effective date of
47-6 membership in the police retirement system, the member may apply
47-7 for disability retirement. Such application made for or on behalf
47-8 of the injured member shall show that the injury sustained was as a
47-9 direct or proximate result of the performance of the member's
47-10 employment duties with the city or with the system and that it is
47-11 likely to result in the member's inability to perform the duties of
47-12 a position offered to the member in the system, the police
47-13 department, or any other department in the city that pays as much
47-14 or more than the current pay of the position the member was holding
47-15 on the date of the member's disability.
47-16 (2) On recommendation of physicians or vocational
47-17 rehabilitation experts appointed or selected by the board that the
47-18 member's incapacity is likely to result in the member's inability
47-19 to perform the duties of a position offered to the member in the
47-20 system, the police department, or any other department in the city
47-21 that pays as much or more than the current pay of the position the
47-22 member was holding at the date of the member's disability and after
47-23 considering any additional evidence which the board deems relevant,
47-24 the board may award such member disability retirement benefits.
47-25 The decision of the board is final.
47-26 (c) If a member with more than 10 years of creditable
47-27 service has become mentally or physically incapacitated for the
48-1 performance of the [member's former] employment duties the member
48-2 had immediately before incapacitation, [duties,] the member may
48-3 apply for disability retirement. Such application made for or on
48-4 behalf of the disabled member shall show that the incapacity is
48-5 likely to result in the member's inability to perform the duties of
48-6 a position offered to such member in the system, the police
48-7 department, or any other department in the city that pays as much
48-8 or more than the current pay of the position the member was holding
48-9 on the date of the member's disability. On recommendation of
48-10 physicians or vocational rehabilitation experts appointed or
48-11 selected by the board that the member's incapacity is likely to
48-12 result in the member's inability to perform the duties of a
48-13 position offered to the member in the system, the police
48-14 department, or any other department in the city that pays as much
48-15 or more than the current pay of the position the member was holding
48-16 on the date of the member's disability and after considering any
48-17 additional evidence which the board deems relevant, the board may
48-18 award such member disability retirement benefits. The decision of
48-19 the board is final.
48-20 SECTION 17. Section 7.02(a), Chapter 452, Acts of the 72nd
48-21 Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's Texas
48-22 Civil Statutes), is amended to read as follows:
48-23 (a) On award of disability retirement benefits, the member
48-24 shall receive a disability retirement benefit [allowance] computed
48-25 in the same manner that a service retirement benefit [allowance]
48-26 would be computed at the member's normal retirement date, based on
48-27 average final compensation and creditable service at date of
49-1 disability retirement without reduction for early retirement. If
49-2 the disability is a direct or proximate result of the performance
49-3 of the member's employment duties with the system or the city, then
49-4 the disability retirement benefit [allowance] will be subject to a
49-5 minimum benefit based on average final compensation at date of
49-6 disability retirement and 20 years of creditable service. The
49-7 options allowed are life annuity or its actuarial equivalent
49-8 payable in the form described as Option I, Option II, Option III,
49-9 Option IV, or Option V [VII] in Section 6.03 of this Act. The
49-10 disability benefits paid to the member will be paid from Fund No.
49-11 1 until the amount received equals the member's accumulated
49-12 deposits; thereafter the benefits will be paid from Fund No. 2.
49-13 SECTION 18. Sections 7.03(a)-(d), Chapter 452, Acts of the
49-14 72nd Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's
49-15 Texas Civil Statutes), are amended to read as follows:
49-16 (a)(1) A member receiving a disability retirement benefit
49-17 [allowance] is required to file a report to the board concerning
49-18 continued proof of disability one year after the date on which the
49-19 board originally awarded the member disability retirement. The
49-20 report shall include:
49-21 (A) a current statement of the member's physical
49-22 and/or mental condition, signed by the member's attending
49-23 physician; and
49-24 (B) a statement of all employment activities
49-25 pursued in the preceding one-year period and a copy of federal
49-26 income tax returns applicable to the one-year period.
49-27 (2) The board may verify all information submitted in
50-1 this report. A disabled member shall file an annual report
50-2 containing this same type of information every year thereafter on
50-3 the anniversary date of the member's disability retirement; the
50-4 annual report shall be filed no later than 60 days following the
50-5 due date.
50-6 (b) The pension officer is responsible for a yearly report
50-7 to the board listing those disabled members who should be examined.
50-8 The board shall have the right to order an examination of any
50-9 person on disability retirement after the member has received a
50-10 disability retirement benefit [allowance] for a one-year period and
50-11 continuing on an annual basis thereafter until the member reaches
50-12 the age of 62 years. If the member refuses to submit to an
50-13 examination by physicians or vocational rehabilitation experts
50-14 appointed or selected by the board or if the member refuses to
50-15 submit an annual report concerning continued proof of disability,
50-16 the disability retirement benefit [allowance] shall be discontinued
50-17 until such refusal is withdrawn.
50-18 (c)(1) If during the first 2-1/2 years, the annual medical
50-19 examination shows that the member is able to perform the duties of
50-20 a position offered to the member in the system, the police
50-21 department, or any other department in the city that pays as much
50-22 or more than the current pay of the position the member was holding
50-23 on the date of the member's disability, the board may discontinue
50-24 the disability retirement benefit [allowance]. If after the
50-25 disabled member has received disability benefits from the system
50-26 [fund] for at least 2-1/2 years, the member is able to perform the
50-27 duties of any occupation for which the member is reasonably suited
51-1 by education, training, or experience, the board shall review and
51-2 modify the disability benefit according to the following
51-3 provisions:
51-4 (A) if the member is able to earn at least as
51-5 much money in the member's new job as the member would have in the
51-6 member's most recent [former] position with the system or the
51-7 police department, the board may terminate the member's benefit;
51-8 (B) if the member is able to earn between
51-9 one-half as much money and as much money in the member's new job as
51-10 the member would have in the member's most recent [former] position
51-11 with the system or the police department, the board may reduce the
51-12 monthly disability benefit to one-half of its original amount; or
51-13 (C) if the member is not able to earn at least
51-14 one-half as much money in the member's new job as the member would
51-15 have in the member's most recent [former] position with the system
51-16 or the police department, the board may continue the benefit
51-17 unchanged.
51-18 (2) If the member who received a disability benefit
51-19 [allowance] pursuant to Subsection (b) of Section 7.01 of this Act
51-20 has the member's benefit [allowance] discontinued pursuant to this
51-21 provision and does not return to the employ of the system or the
51-22 police department, any remaining balance of Fund No. 1 benefits
51-23 will be refunded to the member. If the member who received a
51-24 disability benefit [allowance] pursuant to Subsection (c) of
51-25 Section 7.01 of this Act has the member's benefit [allowance]
51-26 discontinued[,] pursuant to this provision and does not return to
51-27 the employ of the system or the police department, the member's
52-1 accumulated deposits [contributions] shall remain in the system and
52-2 the member shall be considered a vested noncontributory member
52-3 unless the member elects a refund of the remaining accumulated
52-4 deposits.
52-5 (d) If a disabled member returns to [active] employment with
52-6 the city [service] as a police officer or to employment with the
52-7 system [with the city], the disability retirement benefit
52-8 [allowance] shall cease. Such person shall be reinstated as an
52-9 active member of the system and shall comply with all requirements.
52-10 Creditable service accumulated prior to disability shall be
52-11 restored to the full amount standing to the member's credit as of
52-12 the date the board found the member eligible for disability
52-13 retirement.
52-14 SECTION 19. Sections 8.01(a), (c), and (f), Chapter 452,
52-15 Acts of the 72nd Legislature, Regular Session, 1991 (Article
52-16 6243n-1, Vernon's Texas Civil Statutes), are amended to read as
52-17 follows:
52-18 (a) Deposits by the members to the police retirement system
52-19 shall be made at a rate of at least six percent of the basic hourly
52-20 earnings of each member. Deposits required to be made by members
52-21 shall be deducted from payroll. On recommendation of the board,
52-22 the [The] Active--Contributory members may [members,] by a majority
52-23 of those voting [vote in favor of an increase in contributions
52-24 above six percent, shall] increase the rate of member deposits
52-25 [each member's contribution] above six percent to [in] whatever
52-26 amount the board has recommended [recommends]. If the deposit
52-27 rate for members has been increased to a rate above six percent,
53-1 the rate may be decreased if the board recommends the decrease, the
53-2 board's actuary approves the decrease, and a majority of the
53-3 Active--Contributory members voting on the matter approve the
53-4 decrease [by majority vote]. The city shall contribute amounts
53-5 equal to 18 percent [a percentage, as specified by this
53-6 subsection,] of the basic hourly earnings of each member employed
53-7 by the city. [That percentage shall be 14 percent for the fiscal
53-8 year ending in 1995, 16 percent for the fiscal year ending in 1996,
53-9 and 18 percent for each subsequent fiscal year.] The city council
53-10 may authorize the city to make additional contributions to the
53-11 police retirement system in whatever amount the city council may
53-12 determine. Contributions by the city shall be made each pay
53-13 period.
53-14 (c) Contributions by the city shall be paid to the system
53-15 [retirement fund] after appropriation by the city council.
53-16 (f) The city shall make the police officer contributions to
53-17 the system [fund] required by Subsection (a) of this section. The
53-18 system shall make the administrative staff's contributions to the
53-19 system [fund]. Member contributions will be made by a reduction in
53-20 their monetary compensation. Contributions made shall be treated
53-21 as employer contributions in accordance with Section 414(h)(2),
53-22 Internal Revenue Code (26 U.S.C. Section 414(h)(2)), for the
53-23 purpose of determining tax treatment of the amounts under the
53-24 federal Internal Revenue Code. These contributions are not
53-25 includible [includable] in the gross income of the member until
53-26 such time as they are distributed or made available to the member.
53-27 Member contributions made as provided by this subsection shall be
54-1 deposited to the individual account of each affected member and
54-2 shall be treated as compensation of members for all other purposes
54-3 of this Act and for the purpose of determining contributions to the
54-4 federal Old-Age, Survivors, and Disability Insurance System (Social
54-5 Security). The provisions of this subsection shall remain in
54-6 effect as long as the plan covering members is a qualified
54-7 retirement plan under Section 401(a), Internal Revenue Code (26
54-8 U.S.C. Section 401(a)), and its related trust is tax exempt under
54-9 Section 501(a), Internal Revenue Code (26 U.S.C. Section 501(a)).
54-10 SECTION 20. Section 9.01, Chapter 452, Acts of the 72nd
54-11 Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's Texas
54-12 Civil Statutes), is amended by amending the heading and Subsections
54-13 (a), (b), and (d) and by adding Subsection (e) to read as follows:
54-14 Sec. 9.01. INVESTMENTS OF THE [POLICE] BOARD. (a) The
54-15 police retirement board shall be the trustee of the funds of the
54-16 police retirement system and shall have full power in its sole
54-17 discretion to invest and reinvest, alter, and change such funds.
54-18 The board shall invest the funds in whatever instruments or
54-19 investments the board considers prudent. In making investments for
54-20 the system [fund], the board shall discharge its duties:
54-21 (1) for the exclusive purposes of:
54-22 (A) providing benefits to members and their
54-23 beneficiaries; and
54-24 (B) defraying reasonable expenses of
54-25 administering the system [fund];
54-26 (2) with the care, skill, prudence, and diligence
54-27 under the circumstances then prevailing that a prudent person
55-1 acting in a like capacity and familiar with such matters would use
55-2 in the conduct of an enterprise of a like character and with like
55-3 aims;
55-4 (3) by diversifying the investments of the system
55-5 [fund] to minimize the risk of large losses, unless under the
55-6 circumstances it is clearly prudent not to do so; and
55-7 (4) in accordance with the laws, documents, and
55-8 instruments governing the system [fund].
55-9 (b) No member of the [board and no employee of the] board,
55-10 except as herein provided, shall have any interest in, directly or
55-11 indirectly, or receive any pay or emolument for the member's
55-12 services. No member of the board [or employee thereof] shall,
55-13 directly or indirectly, for himself or as an agent in any manner
55-14 use the funds or deposits of the police retirement system except to
55-15 make the current and necessary payments authorized by the board;
55-16 nor shall any member [or employee] of the board become an endorser
55-17 or surety or in any manner an obligor for money loaned by or
55-18 borrowed from the board.
55-19 (d) The right of a member to a [pension, an annuity, or a]
55-20 retirement benefit, [allowance, to] the return of accumulated
55-21 deposits, the payment of a RETRO DROP lump sum, or [contributions,
55-22 the pension, annuity, or retirement allowance itself, any optional
55-23 benefit or death benefits,] any other right accrued or accruing to
55-24 any person under the provisions of this Act, and the money in the
55-25 trust created by this Act shall be unassignable except as
55-26 specifically provided in this Act and shall not be subject to
55-27 execution, levy, attachment, garnishment, the operation of
56-1 bankruptcy or insolvency law, or any other process of law
56-2 whatsoever.
56-3 (e) Service retirement benefits, disability retirement
56-4 benefits, survivor benefits, death benefits, and withdrawal
56-5 benefits may be paid to a former spouse or other alternate payee
56-6 under the terms of a domestic relations order, but only if the
56-7 board determines that the order constitutes a qualified domestic
56-8 relations order within the meaning of Chapter 804, Government Code.
56-9 Benefit payments may be made to alternate payees only when and to
56-10 the extent permitted by the qualified domestic relations order.
56-11 The amount of any benefit payment under this Act made to an
56-12 alternate payee under a qualified domestic relations order shall
56-13 reduce and offset the amount otherwise payable to the member or
56-14 other beneficiary under this Act. On the death of an alternate
56-15 payee under a qualified domestic relations order, the interest of
56-16 the alternate payee in the benefits under this Act ends, and
56-17 remaining benefits shall be paid as if the qualified domestic
56-18 relations order had not existed.
56-19 SECTION 21. Section 10.01, Chapter 452, Acts of the 72nd
56-20 Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's Texas
56-21 Civil Statutes), is amended to read as follows:
56-22 Sec. 10.01. FALSE REPORT OR STATEMENT. Whoever with intent
56-23 to deceive shall make any statement or report required under this
56-24 Act which is untrue or shall falsify or permit to be falsified any
56-25 record or records of the police retirement system shall forfeit any
56-26 office or rights held by the person under the [police] system, and
56-27 such deception, falsification, or acquiescence in falsification
57-1 shall be deemed a misdemeanor and the violation thereof shall be
57-2 punishable by a fine not to exceed $1,000.
57-3 SECTION 22. Section 11.01(a)(1), Chapter 452, Acts of the
57-4 72nd Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's
57-5 Texas Civil Statutes), is amended to read as follows:
57-6 (1) "Annual benefit" means the total of all service
57-7 retirement annuity payments by the police retirement system on
57-8 behalf of a retired member during a calendar year.
57-9 SECTION 23. Sections 11.01(d)-(h), Chapter 452, Acts of the
57-10 72nd Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's
57-11 Texas Civil Statutes), are amended to read as follows:
57-12 (d) Except as provided by Subsections (f), (h), and (i) of
57-13 this section, an annual benefit payable by the [retirement] system
57-14 may not exceed [the lesser of:]
57-15 [(1)] $118,800, or another amount as adjusted each
57-16 January 1 by the secretary of the treasury under Section 415 of the
57-17 Internal Revenue Code of 1986 (26 U.S.C. Section 415) for
57-18 cost-of-living increases after January 1, 1994[; or]
57-19 [(2) 100 percent of the former member's highest
57-20 average annual compensation, including annual cost-of-living
57-21 increases after separation from service].
57-22 (e) If payment of a benefit begins before a member attains
57-23 age 62, the dollar limitation is the actuarial equivalent of an
57-24 annual benefit beginning at age 62 as described by Subsection
57-25 (d)[(1)] of this section for a person at age 62. A reduction under
57-26 this subsection may not reduce the dollar limitation below $75,000
57-27 if the benefit begins at or after age 55 or, if the benefit begins
58-1 before age 55, the actuarial equivalent of a $75,000 limitation
58-2 beginning at age 55. A reduction under this section may not reduce
58-3 the dollar limitation of any qualified participant below $66,000 or
58-4 another amount as determined for the applicable calendar year by
58-5 the secretary of the treasury under Section 415 of the Internal
58-6 Revenue Code of 1986 (26 U.S.C. Section 415) for cost-of-living
58-7 increases after January 1, 1994. For purposes of this subsection,
58-8 a qualified participant is a member whose creditable service
58-9 includes at least 15 years of service as a full-time employee of
58-10 the police department of the city or as a member of the Armed
58-11 Forces of the United States.
58-12 (f) If payment of a benefit begins after the member attains
58-13 age 65, the dollar limitation is the actuarial equivalent of an
58-14 annual benefit beginning at age 65 as described by Subsection
58-15 (d)[(1)] of this section.
58-16 (g) For purposes of this section, actuarial equivalence
58-17 shall be computed in the manner prescribed by Section 6.03 [or
58-18 7.02] of this Act except that the interest rate assumption under
58-19 Subsection (c) or (e) of this section is the greater of the rate
58-20 specified by Section 6.03 [or 7.02] or five percent, and the
58-21 interest rate assumption under Subsection (f) of this section is
58-22 the lesser of those rates.
58-23 (h) The limitations prescribed by Subsections (d), (e), and
58-24 (f) of this section do not apply to any portion of an annual
58-25 benefit payable by the [retirement] system that is attributable to
58-26 the balance in the member's individual account in Fund No. 1 as of
58-27 December 31, 1985, or from interest credited to the member's
59-1 account after December 31, 1985, as a result of deposits before
59-2 that date.
59-3 SECTION 24. Section 12.01, Chapter 452, Acts of the 72nd
59-4 Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's Texas
59-5 Civil Statutes), is amended by amending the heading and Subsections
59-6 (b), (c), and (g) to read as follows:
59-7 Sec. 12.01. DISTRIBUTION RULES FOR SERVICE RETIREMENT AND
59-8 DEATH ANNUITY PAYMENTS
59-9 (b) If, according to mortality tables adopted by the
59-10 Internal Revenue Service, at the time of the member's retirement
59-11 the joint life expectancy of the member making the selection and of
59-12 the [designated] beneficiary is less than the minimum period that
59-13 monthly payments would be required under the option selected, the
59-14 member must select another option so that the minimum period that
59-15 monthly payments would be required does not exceed the joint life
59-16 expectancy of the person making the selection and of the
59-17 [designated] beneficiary.
59-18 (c) If, according to mortality tables adopted by the
59-19 Internal Revenue Service, the life expectancy of a person to whom a
59-20 benefit will be paid as the result of a member's death before
59-21 retirement is less at the time of the member's death than the
59-22 minimum period that monthly payments would be required under the
59-23 option selected, the [retirement] system shall adjust the minimum
59-24 period that monthly payments will be required to a period that is
59-25 not less than 60 months and that is the greatest multiple of 12
59-26 months that does not exceed the life expectancy of the person to
59-27 whom the benefit will be paid. The amount of the monthly payment
60-1 shall be adjusted to the actuarial equivalent of the payments that
60-2 would be made for the greater number of months.
60-3 (g) Unless the member's spouse is the [designated]
60-4 beneficiary of an optional annuity that guarantees a fixed number
60-5 of monthly payments, the guaranteed number of payments may not
60-6 exceed the applicable period using the following table:
60-7 Maximum number
60-8 of guaranteed
60-9 Age of member at retirement: monthly payments:
60-10 less than 84 180
60-11 at least 84 but less than 91 120
60-12 91 or more 60
60-13 SECTION 25. Sections 12.02(b) and (e), Chapter 452, Acts of
60-14 the 72nd Legislature, Regular Session, 1991 (Article 6243n-1,
60-15 Vernon's Texas Civil Statutes), are amended to read as follows:
60-16 (b) If, according to mortality tables adopted by the
60-17 Internal Revenue Service, at the time of the member's retirement
60-18 the joint life expectancy of the member making the selection and of
60-19 the [designated] beneficiary is less than the minimum period that
60-20 monthly payments would be required under the option selected, the
60-21 member must select another option so that the minimum period that
60-22 monthly payments would be required does not exceed the joint life
60-23 expectancy of the person making the selection and of the
60-24 [designated] beneficiary.
60-25 (e) Unless the member's spouse is the [designated]
60-26 beneficiary of an optional annuity that guarantees a fixed number
60-27 of monthly payments, the guaranteed number of payments may not
61-1 exceed the applicable period using the following table:
61-2 Maximum number
61-3 of guaranteed
61-4 Age of member at retirement: monthly payments:
61-5 less than 84 180
61-6 at least 84 but less than 91 120
61-7 91 or more 60
61-8 SECTION 26. Section 13.01(a), Chapter 452, Acts of the 72nd
61-9 Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's Texas
61-10 Civil Statutes), is amended to read as follows:
61-11 (a) [This section applies to distributions made on or after
61-12 January 1, 1993.] Notwithstanding any provision of this Act [the
61-13 plan] to the contrary that would otherwise limit a distributee's
61-14 election under this section, a distributee may elect, at the time
61-15 and in the manner prescribed by the board [plan administrator], to
61-16 have any portion of an eligible rollover distribution paid directly
61-17 to an eligible retirement plan specified by the distributee in a
61-18 direct rollover.
61-19 SECTION 27. Sections 13.01(b)(1) and (4), Chapter 452, Acts
61-20 of the 72nd Legislature, Regular Session, 1991 (Article 6243n-1,
61-21 Vernon's Texas Civil Statutes), are amended to read as follows:
61-22 (1) "Eligible rollover distribution" means any
61-23 distribution of all or any portion of the balance to the credit of
61-24 the distributee, except that an eligible rollover distribution does
61-25 not include:
61-26 (A) any distribution that is one of a series of
61-27 substantially equal periodic payments made at least annually for
62-1 the life or life expectancy of the distributee or the joint lives
62-2 or joint life expectancies of the distributee and distributee's
62-3 [designated] beneficiary, or for a specified period of 10 years or
62-4 more;
62-5 (B) any distribution to the extent the
62-6 distribution is required under Section 401(a)(9) of the Internal
62-7 Revenue Code of 1986 (26 U.S.C. Section 401); or
62-8 (C) the portion of any distribution that is not
62-9 includible in gross income.
62-10 (4) "Direct rollover" means a payment by this system
62-11 [the plan] to the eligible retirement plan specified by the
62-12 distributee.
62-13 SECTION 28. This Act takes effect September 1, 1997.
62-14 SECTION 29. The importance of this legislation and the
62-15 crowded condition of the calendars in both houses create an
62-16 emergency and an imperative public necessity that the
62-17 constitutional rule requiring bills to be read on three several
62-18 days in each house be suspended, and this rule is hereby suspended.