By Gray H.B. No. 2259
75R9972 ESH-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the establishment and administration of a retirement
1-3 fund for police officers in certain municipalities.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 ARTICLE 1. GENERAL PROVISIONS
1-6 SECTION 1.01. APPLICABILITY. This Act applies only to a
1-7 municipality that:
1-8 (1) has a population of more than 50,000 but less than
1-9 400,000;
1-10 (2) operates under a city manager form of government;
1-11 and
1-12 (3) has never elected to join, adopted, or been
1-13 required to operate under a public retirement system created by a
1-14 state statute applicable to municipal police officers.
1-15 SECTION 1.02. CREATION OF POLICE PENSION FUND. A police
1-16 pension fund is hereby authorized in a municipality that adopts
1-17 this Act. Once a pension fund is adopted in a municipality as
1-18 provided by Section 1.03 of this Act, any right or privilege
1-19 accruing to any member under the fund is a vested right according
1-20 to the terms of this Act and may not be denied or abridged through
1-21 any change in population or other condition of applicability
1-22 prescribed by Section 1.01 of this Act. The pension fund shall
1-23 continue to operate and function regardless of whether the
1-24 municipality continues to meet the conditions of applicability
2-1 defined by Section 1.01 of this Act.
2-2 SECTION 1.03. ADOPTION OF POLICE PENSION FUND. A
2-3 municipality may adopt this Act by a majority vote of the
2-4 municipality's governing body.
2-5 SECTION 1.04. DEFINITIONS. In this Act:
2-6 (1) "Accumulated contributions" means a member's
2-7 aggregate contributions made to the pension fund, including
2-8 interest, if any, as determined by the board of trustees.
2-9 (2) "Average monthly compensation" means the result
2-10 obtained by dividing the total compensation paid to a member during
2-11 a computation period by the product of the number of years in the
2-12 computation period multiplied by 12. The computation period is the
2-13 last 60 consecutive completed calendar months of employment with
2-14 the municipality or, if the member is employed by the municipality
2-15 for fewer than 60 calendar months, the computation period is all
2-16 completed months of employment with the municipality.
2-17 (3) "Board of trustees" or "board" means the board of
2-18 trustees of the police pension fund.
2-19 (4) "Compensation" means the total cash remuneration
2-20 paid to a member for personal services rendered to the municipality
2-21 as a police officer, including longevity pay, overtime pay,
2-22 deferred compensation, workers' compensation, payments for unused
2-23 vacation or unused sick leave, and picked-up contributions paid by
2-24 the municipality to the fund.
2-25 (5) "Disability" means the existence of a physical or
2-26 mental condition that in the judgment of the board totally and
2-27 permanently prevents the member from engaging in any work for pay
3-1 for the municipality, for any other employer, or in the member's
3-2 own employment or business. A disability that exists for a period
3-3 of six months is presumed to be permanent.
3-4 (6) "Member" means a properly appointed and enrolled
3-5 police officer of a municipality that has adopted this Act who is a
3-6 contributing member of the pension fund.
3-7 (7) "Pension fund" or "fund" means the police pension
3-8 fund created by this Act.
3-9 ARTICLE 2. ADMINISTRATION
3-10 SECTION 2.01. BOARD OF TRUSTEES. A board of trustees of the
3-11 police pension fund is created, in which is vested the general
3-12 administration, management, and responsibility for the proper and
3-13 effective operation of the fund. The board shall be organized
3-14 immediately after the members have qualified and taken the oath of
3-15 office. The board has all necessary powers to discharge the
3-16 board's duties, including the authority to adopt necessary rules
3-17 for the administration of the fund and to correct any defect,
3-18 supply any omission, and reconcile any inconsistency that may
3-19 appear in this Act in a manner and to the extent that the board
3-20 considers expedient for the administration of this Act for the
3-21 greatest benefit of all members of the fund.
3-22 SECTION 2.02. COMPOSITION OF BOARD. (a) The board of
3-23 trustees of the fund is composed of seven members as follows:
3-24 (1) the president of the municipality's police
3-25 association, to serve during the president's term of office, except
3-26 as provided by Subsection (b) of this section;
3-27 (2) one municipal financial staff employee designated
4-1 by the city manager, to serve at the pleasure of the city manager;
4-2 (3) one legally qualified voter designated by the
4-3 mayor, to serve a two-year term;
4-4 (4) one legally qualified voter designated by the city
4-5 council, to serve a two-year term; and
4-6 (5) three members of the fund elected by the members
4-7 of the fund, each to serve a three-year term.
4-8 (b) If the president of the municipality's police
4-9 association is prevented by the constitution or bylaws of the
4-10 association from serving as a member of the board of trustees or if
4-11 the president is not a member of the fund, the member of the fund
4-12 who holds the next highest ranking office in the association serves
4-13 on the board in place of the president of the association for the
4-14 term of the officer's office in the association.
4-15 (c) A member of the board of trustees serves until a
4-16 successor is selected and qualified. A vacancy occurring by death,
4-17 resignation, or removal is filled in the same manner used to fill
4-18 the position being vacated. A person appointed or elected to fill
4-19 a position vacated by death, resignation, or removal serves the
4-20 remainder of the term, if any, for the position being vacated, at
4-21 which time the person may be reappointed or stand for election for
4-22 a full term.
4-23 SECTION 2.03. ELECTED TRUSTEES. The board shall provide by
4-24 rule for the procedure for electing trustees described by Section
4-25 2.02(a)(5) of this Act.
4-26 SECTION 2.04. ADMINISTRATIVE STAFF. The board may appoint a
4-27 plan administrator and any other persons necessary to perform
5-1 administrative services for the board. The board may determine and
5-2 pay any necessary compensation for persons performing
5-3 administrative services for the plan and fund.
5-4 SECTION 2.05. INVESTMENT MANAGERS. The board may hire one
5-5 or more investment managers. An investment manager has authority
5-6 to invest the assets and manage the portfolio of the fund as
5-7 specified by the manager's employment contract.
5-8 SECTION 2.06. INVESTMENT CONSULTANT. The board may hire an
5-9 investment consultant to monitor the investment performance of an
5-10 investment manager of the fund and provide other investment advice
5-11 requested by the board.
5-12 SECTION 2.07. LEGAL COUNSEL. The board may retain legal
5-13 counsel to advise, assist, or represent the board in any legal
5-14 matters affecting the operation of the fund.
5-15 SECTION 2.08. INVESTMENTS OF THE BOARD. (a) The board is
5-16 the trustee of the assets of the fund and has full power in its
5-17 sole discretion to invest and reinvest, alter, and change those
5-18 assets. The board shall invest the assets in whatever instruments
5-19 or investments the board considers prudent. In making investments
5-20 for the fund, the board shall discharge its duties:
5-21 (1) for the exclusive purposes of:
5-22 (A) providing benefits to members and their
5-23 beneficiaries; and
5-24 (B) defraying reasonable expenses of
5-25 administering the fund;
5-26 (2) with the care, skill, prudence, and diligence
5-27 under the circumstances then prevailing that a prudent person
6-1 acting in a similar capacity and familiar with such matters would
6-2 use in the conduct of an enterprise of a similar character and with
6-3 similar aims;
6-4 (3) by diversifying the investments of the fund to
6-5 minimize the risk of large losses, unless under the circumstances
6-6 it is clearly prudent not to do so; and
6-7 (4) in accordance with the laws, documents, and
6-8 instruments governing the fund.
6-9 (b) The accounts of the fund and money held by the fund to
6-10 which this Act applies may not be assigned and are not subject to
6-11 execution, levy, attachment, garnishment, or other legal process.
6-12 (c) The right of a member to a pension, to the return of
6-13 contributions, the pension, or retirement allowance itself, any
6-14 optional benefit or death benefits, any other right accrued or
6-15 accruing to any person under this Act, and the money in the trust
6-16 created by this Act may not be assigned except as specifically
6-17 provided by this Act or as provided under the terms of a qualified
6-18 domestic relations order, as defined by Section 804.001, Government
6-19 Code, and are not subject to execution, levy, attachment,
6-20 garnishment, the operation of bankruptcy or insolvency law, or any
6-21 other process of law.
6-22 SECTION 2.09. INSURANCE. (a) The board may purchase from
6-23 an insurer authorized to do business in this state one or more
6-24 insurance policies that provide for the reimbursement of a member,
6-25 officer, or employee of the board for liability imposed as damages
6-26 caused by, and for costs and expenses incurred by the person in
6-27 defense of, an alleged act, error, or omission committed in the
7-1 person's capacity as fiduciary of assets of the fund. The board
7-2 may not purchase an insurance policy that provides for the
7-3 reimbursement of a member, officer, or employee of the board for
7-4 liability imposed or costs and expenses incurred because of the
7-5 member's, officer's, or employee's personal dishonesty, fraudulent
7-6 breach of trust, lack of good faith, intentional fraud or
7-7 deception, or intentional failure to act prudently. The board of
7-8 trustees shall use money in the fund to purchase an insurance
7-9 policy under this subsection.
7-10 (b) If an insurance policy described by Subsection (a) of
7-11 this section is not available, sufficient, adequate, or otherwise
7-12 in effect, the board may indemnify a member, officer, or employee
7-13 of the board for liability imposed as damages caused by, and for
7-14 reasonable costs and expenses incurred by the person in defense of,
7-15 an alleged act, error, or omission committed in the person's
7-16 fiduciary capacity. The board may not indemnify a member, officer,
7-17 or employee of the board for liability imposed or costs and
7-18 expenses incurred because of the member's, officer's, or employee's
7-19 personal dishonesty, fraudulent breach of trust, lack of good
7-20 faith, intentional fraud or deception, or intentional failure to
7-21 act prudently.
7-22 (c) A decision to indemnify under this section must be made
7-23 by a majority of the board. If a proposed indemnification is of a
7-24 board member, the member may not vote on the matter.
7-25 (d) The board may adopt a rule establishing a method for
7-26 presentation, approval, and payment of claims for indemnification
7-27 under this section.
8-1 ARTICLE 3. TAX QUALIFICATION
8-2 SECTION 3.01. TAX QUALIFICATION. The legislature intends
8-3 that this Act be construed and administered in a manner under which
8-4 the pension fund's benefit plan will be a qualified plan under
8-5 Section 401(a), Internal Revenue Code of 1986 (26 U.S.C. Section
8-6 401(a)). The board may adopt rules to qualify the plan if
8-7 necessary, and the rules are considered part of the plan.
8-8 ARTICLE 4. MEMBERSHIP
8-9 SECTION 4.01. MEMBERSHIP IN FUND; ELIGIBILITY. (a) A
8-10 person who has been properly appointed and enrolled as a police
8-11 officer in a municipality adopting this Act automatically becomes a
8-12 member of the pension fund of the municipality on the 91st day
8-13 after the date the municipality adopts the fund created by this
8-14 Act, except as provided under Section 11.01 of this Act. A person
8-15 who is already a member of and contributor to a municipality's
8-16 police pension fund retains and is entitled to all rights and
8-17 privileges due the person by virtue of having been such a member
8-18 and contributor.
8-19 (b) A person who is not a member of the pension fund on the
8-20 date for automatic membership under Subsection (a) of this section
8-21 and who becomes properly appointed and enrolled as a police officer
8-22 of a municipality adopting the fund created by this Act
8-23 automatically becomes a member of the fund as a condition of the
8-24 person's employment, except as provided under Section 11.01 of this
8-25 Act.
8-26 (c) A part-time police officer, a temporary police officer
8-27 performing emergency services, or a police officer compensated on a
9-1 fee basis is not eligible for membership in the pension fund.
9-2 ARTICLE 5. SERVICE CREDIT
9-3 SECTION 5.01. SERVICE. Except as provided by Section 5.02
9-4 of this Act, a member shall receive credit for service during all
9-5 periods of employment by the municipality as a police officer.
9-6 Service credit is used in determining the eligibility for benefits
9-7 and the amount of benefits to which the member is entitled under
9-8 this Act.
9-9 SECTION 5.02. VESTING. No right to retirement benefits
9-10 provided under this Act vests until a member completes five years
9-11 of service.
9-12 SECTION 5.03. BREAK IN SERVICE. (a) A member has a break
9-13 in service if the member's employment with the municipality is
9-14 terminated by reason of the member's quitting, retiring, or being
9-15 discharged and the member is rehired. An authorized leave of
9-16 absence, as described in Subsection (b) or (c) of this section,
9-17 does not constitute a break in service if the member returns to
9-18 work at the end of the leave.
9-19 (b) A member who is granted a leave of absence for military
9-20 service is entitled to receive service credit for the period of
9-21 military service if the member:
9-22 (1) is honorably discharged;
9-23 (2) returns to active employment with the municipality
9-24 not later than the 90th day after the date the member is
9-25 discharged; and
9-26 (3) is employed by the municipality for at least one
9-27 full year after the member's return.
10-1 (c) A member who is granted a leave of absence for reasons
10-2 other than military service is entitled to receive service credit
10-3 for the leave if:
10-4 (1) the leave of absence is for a period of three
10-5 months or less; and
10-6 (2) the member returns to active employment before the
10-7 expiration of the leave period.
10-8 (d) A determination as to whether a member was absent or at
10-9 work shall be made by the board on the basis of whether the member
10-10 received compensation from the municipality for the period in
10-11 question. The decision of the board based on the municipality's
10-12 payroll records is final and binding on the member and the member's
10-13 beneficiaries.
10-14 (e) A member who has a break in service loses credit for all
10-15 prior service unless the member makes a contribution to the fund in
10-16 an amount that may be authorized by the board and certified by the
10-17 actuary for the fund. Except as provided by Subsection (b) of this
10-18 section, a member may not be given credit for time not employed in
10-19 the police department.
10-20 ARTICLE 6. CONTRIBUTIONS
10-21 SECTION 6.01. PARTICIPATION IN FUND; WAGE DEDUCTIONS. Each
10-22 member shall make contributions to the fund, except in a time of
10-23 national emergency, and the municipality is authorized to deduct a
10-24 sum of not less than one percent and not more than 10 percent of
10-25 the member's monthly wages as contributions to the fund. The board
10-26 shall determine the percentage deducted from monthly wages, as
10-27 provided by Section 2.01 of this Act, within the minimum and
11-1 maximum deductions provided by this section or as otherwise
11-2 provided by Section 11.01 of this Act.
11-3 SECTION 6.02. PICKUP OF MEMBER CONTRIBUTIONS. (a) As
11-4 provided by Section 414(h)(2), Internal Revenue Code of 1986 (26
11-5 U.S.C. Section 414(h)(2)), the municipality shall pick up and pay a
11-6 member's required contribution. Although the contributions so
11-7 picked up are designated as member contributions, the contributions
11-8 shall be treated as contributions being paid by the municipality in
11-9 lieu of contributions by the member for determining tax liability
11-10 under the Internal Revenue Code of 1986 and are not included in the
11-11 gross income of the member until the amounts are distributed or
11-12 made available to the member or the member's beneficiary. The
11-13 member may not choose to receive the picked-up contributions
11-14 directly, and the picked-up contributions must be paid by the
11-15 municipality to the fund.
11-16 (b) Member contributions picked up under Subsection (a) of
11-17 this section are included in the compensation of the member for
11-18 purposes of determining benefits and contributions under the fund.
11-19 (c) The municipality shall pay the member contributions from
11-20 the same source of funds used in paying compensation to the member
11-21 by reducing the gross compensation of the member.
11-22 SECTION 6.03. CONTRIBUTIONS BY MUNICIPALITY. The
11-23 municipality, acting under the advice of the actuary for the fund,
11-24 shall contribute to the fund contributions expressed as a
11-25 percentage of payroll or compensation for each member, in such
11-26 amounts and at such times as are required to pay the municipality's
11-27 normal cost and interest on any unfunded actuarial requirement at
12-1 the rate of interest assumed in the actuarial valuation. The
12-2 municipality shall also include in the contribution to the fund
12-3 sufficient money to pay the costs of administration of the fund,
12-4 including the costs of periodic actuarial evaluations and annual
12-5 statements to the members of the fund.
12-6 SECTION 6.04. MUNICIPALITY'S LIABILITY. Notwithstanding any
12-7 other provision of this Act, the municipality may not be held
12-8 liable or responsible for any claim or asserted claim for benefits
12-9 under the fund, but all claims shall be paid from the money for
12-10 which provisions have been made under the terms of the plan and
12-11 fund.
12-12 SECTION 6.05. LOANS TO MEMBERS. A member may borrow from
12-13 the member's contributions to the fund as approved by the board
12-14 based on the rules adopted by the board in compliance with the
12-15 Internal Revenue Code of 1986. The rules must be applied in a
12-16 nondiscriminatory manner.
12-17 ARTICLE 7. RETIREMENT PENSIONS
12-18 SECTION 7.01. NORMAL PENSION. A member who retires on or
12-19 after the member's 65th birthday is entitled to receive a monthly
12-20 amount equal to the following:
12-21 (1) 1.35 percent of the member's average monthly
12-22 compensation multiplied by the number of years of service, not to
12-23 exceed 15 years; plus
12-24 (2) 1.65 percent of the member's average monthly
12-25 compensation multiplied by the number of years of service in excess
12-26 of 15 years, not to exceed an additional 15 years, for a total of
12-27 30 years.
13-1 SECTION 7.02. EARLY PENSION. (a) A member who terminates
13-2 service on or after the member's 55th birthday but before the
13-3 member's 65th birthday and who has at least 10 years of service
13-4 credited in the fund is entitled to receive a monthly amount equal
13-5 to a benefit determined as a fraction of the following amount:
13-6 (1) 1.35 percent of the member's average monthly
13-7 compensation multiplied by the sum of the number of full and
13-8 fractional years of service, not to exceed 15 years, plus the
13-9 number of years and full months from the date of termination of
13-10 employment to the member's 65th birthday; plus
13-11 (2) 1.65 percent of the member's average monthly
13-12 compensation multiplied by the sum of the number of full and
13-13 fractional years of service, not to exceed an additional 15 years,
13-14 for a total of 30 years, plus the number of years and full months
13-15 from date of termination of employment to the member's 65th
13-16 birthday.
13-17 (b) The fraction used to compute an early retirement benefit
13-18 is determined by dividing the number of full and fractional years
13-19 of service by the sum of the number of full and fractional years of
13-20 service plus the number of years and full months from date of
13-21 termination to the member's 65th birthday.
13-22 (c) If payment of an early pension begins before the
13-23 member's 65th birthday, the amount determined under Subsections (a)
13-24 and (b) of this section shall be reduced by 1/180th for each of the
13-25 first 60 months and 1/360th for each of the next 60 months by which
13-26 the starting date of pension payments precedes that birthday.
13-27 SECTION 7.03. SPECIAL EARLY PENSION. (a) A member who
14-1 terminates service with the municipality on or after the date the
14-2 member has 20 years of service credited in the fund shall receive a
14-3 monthly amount beginning the first day of the month following the
14-4 later of the member's 45th birthday or the date of termination of
14-5 service. If the member retires before reaching age 62, the
14-6 member's pension is determined by the following formulas:
14-7 (1) the pension benefit payable until the age of 62 is
14-8 equal to the following:
14-9 (A) 1.35 percent of the member's average monthly
14-10 compensation multiplied by the number of years of service, not to
14-11 exceed 15 years; plus
14-12 (B) 1.65 percent of the member's average monthly
14-13 compensation multiplied by the number of years of service in excess
14-14 of 15 years, not to exceed an additional 10 years, for a total of
14-15 25 years; plus
14-16 (C) 1.0 percent of the member's average monthly
14-17 compensation multiplied by the number of years of service in excess
14-18 of 25 years but not to exceed an additional five years, for a total
14-19 of 30 years; plus
14-20 (D) 1.075 percent of the member's average
14-21 monthly compensation multiplied by the number of years of service
14-22 limited to 20 years; plus
14-23 (E) 3.35 percent of the member's average monthly
14-24 compensation multiplied by the number of years of service in excess
14-25 of 20 years, not to exceed an additional five years; and
14-26 (2) the pension benefit payable after the member
14-27 reaches age 62 is equal to the following:
15-1 (A) 1.35 percent of the member's average monthly
15-2 compensation multiplied by the number of years of service, not to
15-3 exceed 15 years; plus
15-4 (B) 1.65 percent of the member's average monthly
15-5 compensation multiplied by the number of years of service in excess
15-6 of 15 years, not to exceed an additional 15 years, for a total of
15-7 30 years.
15-8 (b) A member who terminates service with the municipality on
15-9 or after the date the member has 20 years of service credited in
15-10 the fund and who retires on or after age 62 is entitled to receive
15-11 a monthly amount equal to:
15-12 (1) 1.35 percent of the member's average monthly
15-13 compensation multiplied by the number of years of service, not to
15-14 exceed 15 years; plus
15-15 (2) 1.65 percent of the member's average monthly
15-16 compensation multiplied by the number of years of service in excess
15-17 of 15 years, not to exceed an additional 15 years, for a total of
15-18 30 years.
15-19 SECTION 7.04. EXTRA-SPECIAL EARLY PENSION. (a) A member
15-20 who terminates service after having 25 years of service credited in
15-21 the fund and who retires before the age of 62 is entitled to
15-22 receive a monthly amount determined by the following formulas:
15-23 (1) the pension benefit payable up to the age of 62
15-24 equals the following:
15-25 (A) 1.35 percent of the member's average monthly
15-26 compensation multiplied by the number of years of service, not to
15-27 exceed 15 years; plus
16-1 (B) 1.65 percent of the member's average monthly
16-2 compensation multiplied by the number of years of service in excess
16-3 of 15 years, not to exceed an additional 10 years, for a total of
16-4 25 years; plus
16-5 (C) 1.0 percent of the member's average monthly
16-6 compensation multiplied by the number of years of service in excess
16-7 of 25 years, not to exceed an additional five years, for a total of
16-8 30 years; plus
16-9 (D) 1.075 percent of the member's average
16-10 monthly compensation multiplied by the number of years of service,
16-11 not to exceed 20 years; plus
16-12 (E) 3.35 percent of the member's average monthly
16-13 compensation multiplied by the number of years of service in excess
16-14 of 20 years, not to exceed an additional five years; and
16-15 (2) the pension benefit payable after the member
16-16 reaches age 62 is equal to the following:
16-17 (A) 1.35 percent of the member's average monthly
16-18 compensation multiplied by the number of years of service, not to
16-19 exceed 15 years; plus
16-20 (B) 1.65 percent of the member's average monthly
16-21 compensation multiplied by the number of years of service in excess
16-22 of 15 years, not to exceed an additional 15 years, for a total of
16-23 30 years.
16-24 (b) A member who meets the requirements for an extra-special
16-25 early pension and who retires on or after age 62 is entitled to
16-26 receive a monthly amount equal to the following:
16-27 (1) 1.35 percent of the member's average monthly
17-1 compensation multiplied by the number of years of service, not to
17-2 exceed 15 years; plus
17-3 (2) 1.65 percent of the member's average monthly
17-4 compensation multiplied by the number of years of service in excess
17-5 of 15 years, not to exceed an additional 15 years, for a total of
17-6 30 years.
17-7 SECTION 7.05. REEMPLOYMENT OF RETIRED MEMBERS ELIGIBLE TO
17-8 RECEIVE CERTAIN PENSIONS. If a retired member eligible to receive
17-9 a normal, early, special early, or deferred vested pension is
17-10 reemployed by the municipality, the payment of any pension, whether
17-11 or not payment has begun, to which the retired member is entitled
17-12 from the plan may not be suspended, whether or not the person again
17-13 becomes a member. The retired member shall be treated as a new
17-14 employee for purposes of determining the person's membership in
17-15 this plan and for purposes of determining the person's service
17-16 after reemployment. However, for purposes of computing any death
17-17 benefit under this plan, the previous period of service shall be
17-18 used if it produces a greater amount of death benefit than the
17-19 member's last period of service.
17-20 SECTION 7.06. MODIFICATION. The pensions provided by
17-21 Sections 7.01-7.04 of this Act are subject to modification as
17-22 provided by Section 11.01 of this Act.
17-23 ARTICLE 8. DEFERRED VESTED PENSION
17-24 SECTION 8.01. DEFERRED VESTED PENSION. (a) A member is
17-25 eligible for a deferred vested pension if the member's employment
17-26 is terminated, for reasons other than death or retirement under a
17-27 normal, early, special early, extra-special early, or disability
18-1 pension, on or after the completion of five or more years of
18-2 service.
18-3 (b) Payment of a deferred vested pension begins as of the
18-4 first day of the month following the member's 65th birthday, if the
18-5 member is then living. If the member has completed 10 years of
18-6 service, the member may request the deferred vested pension to
18-7 begin as of the first day of the month following the member's 55th
18-8 birthday or as of the first day of any subsequent month that
18-9 precedes the member's 65th birthday.
18-10 (c) If payment of a deferred vested pension begins before
18-11 the member's 65th birthday, the amount shall be reduced by 1/180th
18-12 for each of the first 60 months and 1/360th for each of the next 60
18-13 months by which the starting date of the pension payment precedes
18-14 the member's 65th birthday. The provisions of this section are
18-15 subject to change as provided by Section 11.01 of this Act.
18-16 ARTICLE 9. DISABILITY PENSIONS
18-17 SECTION 9.01. DISABILITY PENSIONS. (a) A member is
18-18 eligible for a disability pension if the member's employment is
18-19 terminated by reason of a disability before the member's 65th
18-20 birthday.
18-21 (b) Payment of a disability pension begins following a
18-22 12-month waiting period following the member's termination of
18-23 service based on disability, except that if disability is presumed
18-24 to be permanent before the completion of the 12-month period,
18-25 disability payments begin following the certification of the
18-26 disability.
18-27 (c) Payment of a disability pension may not begin until the
19-1 disability is certified to be continuous for a period of 90 days.
19-2 (d) Payment of a disability pension ends on the member's
19-3 death or the end of the member's disability. If the disability
19-4 ends on or after the member's 65th birthday, the member's
19-5 disability pension shall be continued in the same manner as if the
19-6 disability had continued.
19-7 SECTION 9.02. REEMPLOYMENT FOLLOWING DISABILITY. (a) If a
19-8 member who has received any disability pension payments recovers
19-9 and is reemployed by the municipality as a police officer not later
19-10 than the 30th day after the date of certification that the
19-11 disability has ended, the member's membership in the fund shall be
19-12 reinstated as of the date the person returns to active employment.
19-13 (b) The member shall receive credit for all service with the
19-14 municipality credited to the member at the inception date of the
19-15 member's disability.
19-16 (c) The board may extend the 30-day period when, in the
19-17 board's judgment, reasonable cause exists for extending the period.
19-18 SECTION 9.03. END OF DISABILITY BEFORE AGE 65. If a
19-19 member's disability ends before the member's 65th birthday and the
19-20 member is not reemployed by the municipality, the member shall be
19-21 treated as a terminated member and is not entitled to further
19-22 benefits except the excess, if any, of the member's accumulated
19-23 contributions less the total amount of disability benefits
19-24 received. However, if the member meets the requirements for an
19-25 early, special early, extra-special early, or deferred vested
19-26 pension on the date of termination for disability, the member is
19-27 entitled to receive a pension equal in amount to the early, special
20-1 early, extra-special early, or deferred vested pension the member
20-2 would have been entitled to as of the date of the member's
20-3 disability.
20-4 SECTION 9.04. INELIGIBILITY FOR DISABILITY PENSION. A
20-5 member is not eligible for a disability pension if the board
20-6 determines that the member's disability results from:
20-7 (1) addiction to narcotics or hallucinogenic drugs;
20-8 (2) an injury suffered while engaged in a felonious or
20-9 criminal act or enterprise;
20-10 (3) a self-inflicted injury;
20-11 (4) voluntary or involuntary service in the armed
20-12 forces of any nation; or
20-13 (5) an absence in excess of three months for which the
20-14 member received no earnings from the municipality, unless the
20-15 absence was due to sickness or accident that resulted in
20-16 disability.
20-17 SECTION 9.05. RULES CONCERNING DISABILITIES. The board may
20-18 establish rules as appropriate to certify a member's disability and
20-19 to verify the continued existence of the disability.
20-20 SECTION 9.06. AMOUNT OF DISABILITY PENSION. Subject to
20-21 Section 11.01 of this Act, a member who meets the requirements for
20-22 a disability pension is entitled to receive a monthly amount
20-23 determined as follows:
20-24 (1) the pension payable until age 65 equals 60 percent
20-25 of the member's monthly rate of pay at the time of the disability
20-26 minus any primary social security benefit actually paid to the
20-27 member and the amount of other payments the member is entitled to
21-1 receive from workers' compensation or any other disability plan,
21-2 except that a member's disability pension under this Act may not
21-3 exceed $1,500 per month; and
21-4 (2) the pension payable beginning at age 65 is an
21-5 amount computed in the same manner as for a normal retirement
21-6 pension considering the member's compensation and service as if:
21-7 (A) the member had continued employment with the
21-8 municipality until the member's 65th birthday; and
21-9 (B) the member's rate of pay had remained
21-10 constant from the time of disability until the member's 65th
21-11 birthday.
21-12 ARTICLE 10. SEVERANCE AND DEATH BENEFITS;
21-13 REFUND OF CONTRIBUTIONS
21-14 SECTION 10.01. SEVERANCE BENEFITS. (a) A member whose
21-15 employment with the municipality is terminated before the member
21-16 qualifies for a benefit is entitled to receive a refund of
21-17 accumulated contributions, payable in a lump sum or in installments
21-18 without interest.
21-19 (b) A member who receives a payment under this section
21-20 forfeits any further rights or benefits from the fund.
21-21 SECTION 10.02. REFUND OF CONTRIBUTIONS. (a) In lieu of any
21-22 other benefit to which a retired member may be entitled, a member
21-23 may elect to receive a refund of accumulated contributions, payable
21-24 in a lump sum or in installments without interest.
21-25 (b) A member who receives a payment under this section
21-26 forfeits any further rights or benefits from the fund.
21-27 SECTION 10.03. DEATH OF MEMBER WHILE ACTIVELY EMPLOYED BY
22-1 MUNICIPALITY. (a) If a member dies while actively employed by the
22-2 municipality, leaving a spouse or a dependent child under the age
22-3 of 18, the board shall order a monthly allowance as provided by
22-4 this section.
22-5 (b) The surviving spouse of an active member who, on the
22-6 date of the member's death, had completed five or more years of
22-7 service is eligible to receive a spouse's pension, payable monthly
22-8 in an amount equal to 50 percent of the amount computed for a
22-9 normal retirement pension but using the member's compensation and
22-10 service earned as of the date of death. Payment of a spouse's
22-11 pension continues until the death or remarriage of the spouse.
22-12 (c) If there is not a surviving spouse, each surviving
22-13 dependent child of the deceased member under the age of 18 is
22-14 eligible for a dependent child's pension, payable monthly in an
22-15 amount equal to 50 percent of the amount computed for a normal
22-16 retirement pension, but using the member's compensation and service
22-17 earned as of the date of death. If there is more than one such
22-18 child, the monthly amount shall be divided equally among the
22-19 children at the time the amount is paid. Payment of a dependent
22-20 child's pension continues until the child attains the age of 18 or
22-21 until the child's death, whichever occurs first.
22-22 (d) If a surviving spouse receiving a spouse's pension dies
22-23 leaving a surviving dependent child or children under the age of
22-24 18, the spouse's pension shall be continued to the child or
22-25 children under the terms of this section.
22-26 (e) If a member dies while actively employed by the
22-27 municipality after having completed five or more years of service
23-1 with the municipality and leaves no surviving spouse or dependent
23-2 children, the member's beneficiaries are eligible to receive a
23-3 death benefit equal to the greater of the member's total
23-4 accumulated contributions or $2,500.
23-5 (f) If a member dies while actively employed by the
23-6 municipality after having completed less than five years of service
23-7 with the municipality, the member's beneficiaries are eligible to
23-8 receive a death benefit equal to the member's accumulated
23-9 contributions.
23-10 (g) The total amount of death benefit payments payable under
23-11 Subsection (f) of this section may not be less than the greater of
23-12 $2,500 or the total amount of the member's accumulated
23-13 contributions. If a spouse or dependent child dies before
23-14 receiving the minimum amount and is not survived by another person
23-15 entitled to the death benefit, the balance of that amount is
23-16 payable in a lump sum to the estate of the decedent. If the spouse
23-17 remarries before receiving that amount and there are no surviving
23-18 dependent children to receive payment, the balance of the death
23-19 benefit is payable in a lump sum to the beneficiaries of the
23-20 member.
23-21 SECTION 10.04. DEATH OF RETIRED MEMBER. (a) If a member
23-22 dies under a normal, early, special early, extra-special early, or
23-23 disability pension, or retires under an early, special early,
23-24 extra-special early, or disability pension but dies before
23-25 beginning to receive the pension and is survived by a spouse, the
23-26 spouse is eligible for a monthly pension if the spouse was married
23-27 to the member before the member's termination of service with the
24-1 municipality's police department.
24-2 (b) The pension is equal to 50 percent of the pension to
24-3 which the member was entitled on the date of death. If the retired
24-4 member retired and began receiving a pension before the age of 62,
24-5 the monthly amount of the pension payable to the member's surviving
24-6 spouse after the date on which the retired member would have
24-7 attained age 62 shall be reduced to 50 percent of the pension which
24-8 the retired member would have received had the member attained age
24-9 62.
24-10 (c) If a retired member who is receiving disability
24-11 retirement benefits dies before the age of 65, the monthly amount
24-12 of the pension shall be equal to 50 percent of the pension the
24-13 member would have received had the member worked until the date of
24-14 death at the rate of pay in effect at the inception of the
24-15 disability.
24-16 (d) Payment of the pension continues until the date of death
24-17 or remarriage of the spouse, whichever occurs first.
24-18 (e) The total benefit payments payable under this section
24-19 may not be less than the greater of the retired member's total
24-20 accumulated contributions, or $2,500, less any previous payments
24-21 made to the retired member. If the spouse dies before receiving
24-22 that amount, the balance of the minimum amount of the death benefit
24-23 is payable in a lump sum to the spouse's estate. If the spouse
24-24 remarries before receiving the minimum amount or if the retired
24-25 member and the spouse are divorced on the retired member's date of
24-26 death, the balance of the minimum amount of the death benefit is
24-27 payable in a lump sum to the beneficiaries of the retired member.
25-1 (f) If a member dies under a normal, early, special early,
25-2 extra-special early, or disability pension, or retires under an
25-3 early, special early, extra-special early, or disability pension
25-4 but dies before beginning to receive the pension and does not leave
25-5 a surviving spouse, the beneficiaries of the retired member are
25-6 eligible for a death benefit equal to the greater of the member's
25-7 accumulated contribution or $2,500, less any payments previously
25-8 made to the deceased member.
25-9 (g) If a member who is entitled to or is receiving a
25-10 deferred vested pension dies, the member's beneficiaries are
25-11 eligible for a death benefit, payable in a lump sum, equal to the
25-12 deceased member's total accumulated contributions, less any pension
25-13 payments previously received.
25-14 SECTION 10.05. DESIGNATION OF BENEFICIARY BY BOARD. If a
25-15 member dies without having designated one or more beneficiaries,
25-16 the board may designate a beneficiary under rules adopted by the
25-17 board as provided by Section 2.01 of this Act.
25-18 SECTION 10.06. MODIFICATION OF SEVERANCE AND DEATH BENEFITS.
25-19 This article is subject to any modifications made in accordance
25-20 with Section 11.01 of this Act.
25-21 ARTICLE 11. MODIFICATIONS
25-22 SECTION 11.01. MODIFICATION OF BENEFITS, MEMBERSHIP
25-23 QUALIFICATIONS, ELIGIBILITY REQUIREMENTS, AND CONTRIBUTIONS.
25-24 (a) Notwithstanding any other provision of this Act, the board,
25-25 with the approval of at least four board members, may modify:
25-26 (1) benefits provided by this Act, except that any
25-27 increase in benefits is subject to Subsection (b) of this section;
26-1 (2) future membership qualifications;
26-2 (3) eligibility requirements for pensions or benefits;
26-3 or
26-4 (4) the percentage of wage deductions provided by
26-5 Section 6.01 of this Act, except that any increase in wage
26-6 deductions is subject to Subsection (b)(2) of this section.
26-7 (b) Notwithstanding any other provision of this Act, the
26-8 board, with the approval of a majority of the members of the fund,
26-9 may increase either of the following:
26-10 (1) benefits provided by this Act; or
26-11 (2) the percentage of wage deductions provided by
26-12 Section 6.01 of this Act, except that, if the actuary for the fund
26-13 certifies that an increase is necessary to maintain an actuarially
26-14 sound plan, the board may, with the approval of at least four board
26-15 members, increase the percentage of wage deductions.
26-16 (c) Notwithstanding any other provision of this Act, the
26-17 board, with the approval of at least four board members, may
26-18 provide for refunds, in whole or in part, with or without interest,
26-19 of accumulated contributions made to the fund by members who leave
26-20 the municipality's service before qualifying for a pension.
26-21 (d) Actions authorized under Subsection (a) or (b) of this
26-22 section may not be made unless first reviewed by a qualified
26-23 actuary selected by at least four board members. To qualify, an
26-24 actuary who is an individual must be a Fellow of the Society of
26-25 Actuaries, a Fellow of the Conference of Actuaries in Public
26-26 Practice, or a member of the American Academy of Actuaries. The
26-27 basis for the actuary's approval or disapproval of a board action
27-1 is not subject to judicial review.
27-2 ARTICLE 12. TRANSFER OF PENSION ASSETS; EMERGENCY
27-3 SECTION 12.01. TRANSFER OF PENSION ASSETS. On adoption of
27-4 this Act, a municipality shall transfer the assets and membership
27-5 of a predecessor police pension fund into the fund created by the
27-6 municipality's adoption of this Act. Members of the predecessor
27-7 fund retain and are entitled to all rights and privileges accrued
27-8 by virtue of contributing to that fund.
27-9 SECTION 12.02. EMERGENCY. The importance of this
27-10 legislation and the crowded condition of the calendars in both
27-11 houses create an emergency and an imperative public necessity that
27-12 the constitutional rule requiring bills to be read on three several
27-13 days in each house be suspended, and this rule is hereby suspended,
27-14 and that this Act take effect and be in force from and after its
27-15 passage, and it is so enacted.