1-1 By: Greenberg, et al. (Senate Sponsor - Armbrister) H.B. No. 1780
1-2 (In the Senate - Received from the House May 9, 1997;
1-3 May 12, 1997, read first time and referred to Committee on State
1-4 Affairs; May 16, 1997, reported favorably by the following vote:
1-5 Yeas 13, Nays 0; May 16, 1997, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to the purchase of service credit in the Employees
1-9 Retirement System of Texas and the Teacher Retirement System of
1-10 Texas.
1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12 SECTION 1. Section 813.104, Government Code, is amended to
1-13 read as follows:
1-14 Sec. 813.104. ALTERNATIVE PAYMENTS TO ESTABLISH OR
1-15 REESTABLISH SERVICE CREDIT. (a) The board of trustees may adopt
1-16 rules to provide procedures for making installment payments to
1-17 establish or reestablish credit in the retirement system as
1-18 alternatives to lump-sum payments otherwise authorized or required
1-19 by this subtitle. The methods may include payment by payroll
1-20 deduction. [A member who is otherwise eligible may establish or
1-21 reestablish service creditable in the retirement system by making
1-22 payments as provided by this section in lieu of lump-sum payments
1-23 otherwise authorized or required by this subtitle.]
1-24 (b) [A payment authorized by this section consists of the
1-25 contribution required to establish or reestablish at least one year
1-26 of service credit, including any required interest and membership
1-27 fees, except that a person's last in a series of payments under
1-28 this section may be for a period of remaining service that is less
1-29 than one year.]
1-30 [(c) The retirement system shall grant the applicable amount
1-31 of service credit after each payment is made under this section.]
1-32 [(d)] Except as provided by Subsection (c) [Subsection (e)],
1-33 payments may not be made under a rule adopted under this section:
1-34 (1) to establish or reestablish service credit of a
1-35 person who has retired or died; or
1-36 (2) to establish current service under Section
1-37 813.201.
1-38 (c) Under a rule adopted under this section, the [(e) The]
1-39 designated beneficiary of a deceased member or, if none exists, the
1-40 personal representative of the decedent's estate may establish or
1-41 reestablish service for which the member was eligible at the time
1-42 of death if the establishment of the service would result in the
1-43 payment of a death benefit annuity or an increase in the amount of
1-44 a death benefit annuity.
1-45 (d) [(f)] The payment for the establishment or
1-46 reestablishment of service under Subsection (c) [Subsection (e)]
1-47 must be made in a lump sum and completed before the first payment
1-48 of a death benefit annuity, but not later than the 60th day after
1-49 the date the retirement system receives notice of the death.
1-50 [(g) The retirement system may adopt rules to administer
1-51 this section.]
1-52 SECTION 2. Section 813.106, Government Code, is amended to
1-53 read as follows:
1-54 Sec. 813.106. SERVICE NOT PREVIOUSLY ESTABLISHED. The state
1-55 shall make contributions for service not previously established
1-56 that is established under Section 813.104 [or 813.105] in the
1-57 amount provided by Section 813.202(e) for membership service or the
1-58 amount provided by Section 813.302(d) for military service, as
1-59 applicable. The state contributions will be made at the time the
1-60 service credit is granted.
1-61 SECTION 3. Section 813.510(d), Government Code, is amended
1-62 to read as follows:
1-63 (d) An election under this section must be filed with the
1-64 retirement system on a form provided by the system. Credit may be
2-1 established under this section by a lump-sum payment or by payments
2-2 authorized by Section 813.104 [or 813.105].
2-3 SECTION 4. Subchapter E, Chapter 825, Government Code, is
2-4 amended by adding Section 825.411 to read as follows:
2-5 Sec. 825.411. PAYROLL DEDUCTIONS FOR SERVICE CREDIT. (a) A
2-6 contributing member who is otherwise eligible may establish or
2-7 reestablish service creditable in the retirement system by making
2-8 payments as provided by this section in lieu of lump-sum payments
2-9 otherwise authorized or required by this subtitle or payments under
2-10 Section 825.410. Except as provided by Subsection (c), the
2-11 retirement system shall permit a member to purchase service credit
2-12 over a period of up to five years under an agreement under this
2-13 section.
2-14 (b) A payment authorized by this section consists of a
2-15 monthly payroll deduction in an amount not less than one-twelfth of
2-16 the contribution required to establish at least one year of service
2-17 credit, including any required interest and membership fee, except
2-18 as provided by Subsection (c).
2-19 (c) Payments to establish service credit by a member who
2-20 plans to retire in less than a year may be made by payroll
2-21 deduction for a period determined by the retirement system.
2-22 (d) Payroll deductions for payments under this section shall
2-23 be made and submitted to the retirement system at the times and in
2-24 the manner provided for member contributions under Section 825.403.
2-25 (e) The retirement system shall credit a member's payments
2-26 made under this section to a suspense account in the trust fund
2-27 until the sum of the payments equals the amount required for one
2-28 year of service credit, at which time the retirement system shall
2-29 deposit the payments in the appropriate accounts in the trust fund
2-30 and grant the applicable amount of service credit.
2-31 (f) A member who, while making payments under this section,
2-32 ceases to hold a position covered by the retirement system or
2-33 withdraws the authority for payroll deductions may:
2-34 (1) contract with the retirement system for an
2-35 alternative method of continuing the payments;
2-36 (2) receive a prorated amount of service based on the
2-37 payments made; or
2-38 (3) receive a refund of payments credited to the
2-39 suspense account and not transferred to a trust fund account.
2-40 (g) Payments may not be made under this section to establish
2-41 service credit of a person who has retired or died, except that a
2-42 beneficiary may make payment in a lump sum for the remainder of
2-43 service credit for which payments were begun before the member's
2-44 death.
2-45 (h) The retirement system may adopt rules to administer this
2-46 section.
2-47 SECTION 5. Section 813.105, Government Code, is repealed.
2-48 SECTION 6. This Act takes effect September 1, 1997.
2-49 SECTION 7. The importance of this legislation and the
2-50 crowded condition of the calendars in both houses create an
2-51 emergency and an imperative public necessity that the
2-52 constitutional rule requiring bills to be read on three several
2-53 days in each house be suspended, and this rule is hereby suspended.
2-54 * * * * *