By Yarbrough H.B. No. 1554
75R2516 GCH-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to a deferred retirement option for certain law
1-3 enforcement and custodial officer members of the Employees
1-4 Retirement System of Texas.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Chapter 814, Government Code, is amended by
1-7 adding Subchapter H to read as follows:
1-8 SUBCHAPTER H. DEFERRED RETIREMENT OPTION PLAN
1-9 Sec. 814.701. DEFINITION. In this subchapter, "plan" means
1-10 the deferred retirement option plan provided by this subchapter.
1-11 Sec. 814.702. PARTICIPATION IN PLAN. (a) A contributing
1-12 member who is eligible under Section 814.107 to retire and receive
1-13 a service retirement annuity that is not actuarially reduced may,
1-14 if the member remains in a position with the state, elect to
1-15 participate in the deferred retirement option plan.
1-16 (b) An election to participate in the plan must be on a form
1-17 prescribed by and filed with the retirement system. An election
1-18 must state the period that the member wishes to participate in the
1-19 plan and must select a standard service retirement annuity or an
1-20 available optional service retirement annuity. The maximum period
1-21 a member may participate in the plan is five years. An election
1-22 under this section is irrevocable after filing.
1-23 (c) The effective date of a member's participation in the
1-24 plan is the first day of the month after the month in which an
2-1 election is filed and approved by the retirement system. The
2-2 retirement system shall approve each election filed by a member who
2-3 is eligible to make the election.
2-4 Sec. 814.703. COMPUTATION OF PARTICIPANT'S SERVICE AND
2-5 ANNUITY. (a) A person participating in the plan remains a member
2-6 of the retirement system during the period of participation, unless
2-7 the member terminates membership under Section 812.005, but the
2-8 member may not, during participation, accrue additional service
2-9 credit or make additional employee contributions to the retirement
2-10 system, and the state also ceases contributions for the member's
2-11 service performed during the member's participation in the plan.
2-12 (b) For purposes of the plan, the computation of the service
2-13 retirement annuity of a member participating in the plan is
2-14 determined as of the effective date of participation. A
2-15 participating member is not eligible to receive a postretirement
2-16 increase made applicable to annuitants during the member's
2-17 participation in the plan.
2-18 Sec. 814.704. BENEFITS UNDER PLAN. (a) On the effective
2-19 date of a member's participation in the plan, the retirement system
2-20 shall make the transfers required by Section 815.319(a) to the
2-21 retirement annuity reserve account as if the member had retired on
2-22 that date. The retirement system shall transfer monthly, during
2-23 the period of the member's participation in the plan, from the
2-24 retirement annuity reserve account to an account for the member in
2-25 the deferred retirement option account the amount the member would
2-26 have received that month if the member had retired on the effective
2-27 date of plan participation.
3-1 (b) When a member who has participated in the plan retires,
3-2 the person is entitled to the accumulated amount in the member's
3-3 account in the deferred retirement option account. The amount is
3-4 payable in a lump sum or in periodic installments at the option of
3-5 the member. The board of trustees by rule shall determine the
3-6 number and frequency of installment payments.
3-7 (c) If a member dies during participation in the plan or
3-8 after participation but before retirement, the decedent's
3-9 designated beneficiary is entitled to the accumulated amount in the
3-10 decedent's account in the deferred retirement option account as if
3-11 the decedent had retired immediately before dying.
3-12 (d) Payment of the benefit provided under the plan is in
3-13 addition to any annuity otherwise payable under this subtitle.
3-14 Sec. 814.705. TERMINATION OF PARTICIPATION IN PLAN. A
3-15 member terminates participation in the plan by:
3-16 (1) retirement;
3-17 (2) death; or
3-18 (3) expiration of the period for which participation
3-19 was approved.
3-20 Sec. 814.706. BENEFITS FOR SERVICE AFTER PLAN PARTICIPATION.
3-21 (a) A member whose participation in the plan terminates while the
3-22 member remains in a position with the state resumes accruing
3-23 service credit at that time, and the member and the state resume
3-24 the obligations of contributions for the service performed after
3-25 the termination of plan participation.
3-26 (b) At the time a member retires or dies, the retirement
3-27 system shall compute the value of the additional service credit at
4-1 the rate provided under Section 814.105 or 814.107, as applicable,
4-2 based on the lesser of the 36 months of service after the member's
4-3 termination of plan participation, or the member's actual years of
4-4 service after the termination, in which the member received the
4-5 highest annual compensation. The retirement system shall add the
4-6 amount computed under this subsection to the amount determined on
4-7 the effective date of plan participation, and the sum is payable,
4-8 subject to actuarial reduction if applicable, as the monthly
4-9 annuity payment.
4-10 Sec. 814.707. INTEREST. Interest is creditable to a
4-11 member's account in the deferred retirement option account annually
4-12 at a rate equal to the realized return on the retirement system's
4-13 investments for the preceding year.
4-14 SECTION 2. Section 815.310, Government Code, is amended to
4-15 read as follows:
4-16 Sec. 815.310. TRUST FUND. (a) A trust fund for the
4-17 Employees Retirement System of Texas is established with the
4-18 comptroller [state treasurer].
4-19 (b) All assets of the trust fund shall be credited,
4-20 according to the purpose for which they are held, to one of the
4-21 following accounts:
4-22 (1) employees saving account;
4-23 (2) state accumulation account;
4-24 (3) retirement annuity reserve account;
4-25 (4) interest account; [or]
4-26 (5) expense account; or
4-27 (6) deferred retirement option account.
5-1 SECTION 3. Subchapter D, Chapter 815, Government Code, is
5-2 amended by adding Section 815.316 to read as follows:
5-3 Sec. 815.316. DEFERRED RETIREMENT OPTION ACCOUNT. (a) The
5-4 retirement system shall deposit in the deferred retirement option
5-5 account the amounts required to be deposited in the account by
5-6 Section 814.704(a) and interest as required by Section 814.707.
5-7 (b) The retirement system shall pay from the account all
5-8 benefits accrued during participation in the deferred retirement
5-9 option plan.
5-10 SECTION 4. This Act takes effect September 1, 1997.
5-11 SECTION 5. The importance of this legislation and the
5-12 crowded condition of the calendars in both houses create an
5-13 emergency and an imperative public necessity that the
5-14 constitutional rule requiring bills to be read on three several
5-15 days in each house be suspended, and this rule is hereby suspended.