1-1 AN ACT
1-2 relating to systems and programs administered by the Teacher
1-3 Retirement System of Texas.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 822.005(c), Government Code, is amended
1-6 to read as follows:
1-7 (c) A person is not entitled to withdraw contributions who
1-8 is employed, has applied for employment, or has received a promise
1-9 of employment, in a position covered by the retirement system.
1-10 SECTION 2. Section 822.201(c), Government Code, is amended
1-11 to read as follows:
1-12 (c) Excluded from salary and wages are expense payments,
1-13 allowances, payments for unused vacation or sick leave, maintenance
1-14 or other nonmonetary compensation, fringe benefits, deferred
1-15 compensation other than as provided by Subsection (b)(3),
1-16 compensation that is not made pursuant to a valid employment
1-17 agreement, payments received by an employee in [the 1995-1996 or] a
1-18 [subsequent] school year that exceed $5,000 for teaching a driver
1-19 education and traffic safety course that is conducted outside
1-20 regular classroom hours, and any compensation not described in
1-21 Subsection (b).
1-22 SECTION 3. Section 823.004, Government Code, is amended to
1-23 read as follows:
1-24 Sec. 823.004. COMPUTATION OF AND PAYMENT FOR CREDIT. (a)
2-1 All credit for military service, out-of-state service,
2-2 developmental leave, service previously waived, and service
2-3 transferred to the retirement system under Chapter 805 shall be
2-4 computed on a September 1 through August 31 school year. Payments
2-5 for service described by this section must be completed not later
2-6 than the later of the member's retirement date or the last day of
2-7 the month in which the member submits a retirement application.
2-8 (b) The retirement system by rule may establish an
2-9 irrevocable employer pick-up of member contributions as described
2-10 by Section 414(h)(2) of the Internal Revenue Code of 1986 (26
2-11 U.S.C. Section 414(h)(2)) for the purchase of any service credit
2-12 authorized by law.
2-13 SECTION 4. Section 823.202(b), Government Code, is amended
2-14 to read as follows:
2-15 (b) A member may establish credit under this section by
2-16 depositing with the retirement system for each year of service
2-17 claimed an amount equal to:
2-18 (1) the contributions [and membership fees] that the
2-19 person would have paid had the person been a member of the
2-20 retirement system during that year; plus
2-21 (2) interest computed at an annual rate of five
2-22 percent of the amount of each payment that would have been due had
2-23 the person been a member, from the hypothetical payment due date to
2-24 the date of deposit.
2-25 SECTION 5. Section 823.301(b), Government Code, is amended
2-26 to read as follows:
2-27 (b) A member may not establish more than five years of
3-1 service credit in the retirement system under this subchapter for
3-2 military service. Service may be established in one-year
3-3 increments except as otherwise provided by this subchapter.
3-4 SECTION 6. Section 823.3021(d), Government Code, is amended
3-5 to read as follows:
3-6 (d) A member eligible to establish credit under this section
3-7 may not qualify for insurance coverage under the Texas Public
3-8 School [Retired] Employees Group Insurance Act (Article 3.50-4,
3-9 Insurance Code) unless the member retires with 10 or more years of
3-10 membership service credit for actual service in public schools and
3-11 complies with any other requirements for coverage provided by that
3-12 article.
3-13 SECTION 7. Section 823.303, Government Code, is amended to
3-14 read as follows:
3-15 Sec. 823.303. MILITARY LEAVE CREDIT. A member who performs
3-16 military service creditable in the retirement system but who does
3-17 not establish credit for the service by making the deposits
3-18 required by Section 823.302 is entitled to credit of a year for
3-19 each year of military service performed, if the member requests the
3-20 credit in writing before the later of the date of application for
3-21 retirement or the effective date of retirement. The credit is
3-22 usable only in determining eligibility for, but not the amount of,
3-23 benefits under Section 824.406.
3-24 SECTION 8. Sections 823.401(a) and (d), Government Code, are
3-25 amended to read as follows:
3-26 (a) Except as provided by Subsection (b), an eligible member
3-27 may establish equivalent membership service credit for employment
4-1 with a public school system maintained wholly or partly by another
4-2 state or territory of the United States or by the United States for
4-3 children of its citizens. A school receiving funds under 22 U.S.C.
4-4 Section 2701 is considered a public school for the purposes of this
4-5 section.
4-6 (d) A member may establish credit under this section by
4-7 depositing with the retirement system for each year of service
4-8 claimed a contribution computed at the rate of:
4-9 (1) 12 percent of the full-time rate of the member's
4-10 annual compensation, plus any additional eligible compensation
4-11 received, during the first year of service for which the member
4-12 received membership credit in the retirement system that is both
4-13 after the service for which credit is sought and after September 1,
4-14 1956; or
4-15 (2) 12 percent of the full-time rate of the member's
4-16 annual compensation, plus any additional eligible compensation
4-17 received, during the most recent year of service for which the
4-18 member received membership credit that is after the service for
4-19 which credit is sought, if the member has performed no service in
4-20 Texas since September 1, 1956.
4-21 SECTION 9. Section 823.402(e), Government Code, is amended
4-22 to read as follows:
4-23 (e) A member may establish credit under this section by
4-24 depositing with the retirement system for each year of
4-25 developmental leave claimed an amount equal to the sum of:
4-26 (1) the rate of member contributions required during
4-27 the year of leave, times the member's annual rate of compensation
5-1 during the member's most recent year of creditable service that
5-2 preceded the year of leave; plus
5-3 (2) the amount that the state would have contributed
5-4 had the member performed membership service during the year of
5-5 leave at the member's annual rate of compensation during the most
5-6 recent year of service that preceded the leave[; plus]
5-7 [(3) any membership fees in effect during the year of
5-8 leave].
5-9 SECTION 10. Section 823.501, Government Code, is amended by
5-10 amending Subsections (b) and (c) and adding Subsections (e) and (f)
5-11 to read as follows:
5-12 (b) A person eligible to reinstate service credit under this
5-13 section is one who is a contributing member of the retirement
5-14 system at the time the service is reinstated [resumes membership
5-15 service in the retirement system].
5-16 (c) A member may reinstate canceled credit under this
5-17 section by depositing with the retirement system:
5-18 (1) the amount withdrawn or refunded; plus
5-19 (2) [membership fees for the period that membership
5-20 was terminated; plus]
5-21 [(3)] a reinstatement fee of six percent, compounded
5-22 annually, of the amount withdrawn or refunded from the date of
5-23 withdrawal or refund to the date of redeposit.
5-24 (e) Service credit canceled by a withdrawal of contributions
5-25 not authorized by Section 822.005 is required to be reinstated
5-26 under this section.
5-27 (f) A contributing member may have an account that was
6-1 terminated by absence from service reactivated by requesting the
6-2 reactivation in writing. The beneficiary of a decedent who was a
6-3 contributing member at the time of death may have an account that
6-4 was terminated by the decedent's absence from service reactivated
6-5 by requesting the reactivation in writing before the first payment
6-6 of a death benefit.
6-7 SECTION 11. Section 823.502(c), Government Code, is amended
6-8 to read as follows:
6-9 (c) A person may resume membership and claim credit under
6-10 this section by depositing with the retirement system:
6-11 (1) an amount equal to service retirement benefits
6-12 received; plus
6-13 (2) a reinstatement fee of six percent, compounded
6-14 annually, of the amount determined under Subdivision (1) from the
6-15 date of the person's return to service to the date of redeposit;
6-16 plus
6-17 (3) an amount equal to the total contributions that
6-18 would have been deducted from the person's annual compensation each
6-19 year after the return to service had the person been a member of
6-20 the retirement system; plus
6-21 (4) a reinstatement fee of six percent, compounded
6-22 annually, of the amount determined under Subdivision (3) from the
6-23 end of each year of service after the return to service to the date
6-24 of deposit[; plus]
6-25 [(5) membership fees for the years after the return to
6-26 service].
6-27 SECTION 12. Section 824.101, Government Code, is amended by
7-1 amending Subsections (c) and (d) and adding Subsections (f) and (g)
7-2 to read as follows:
7-3 (c) Only one person may be designated as beneficiary of an
7-4 optional retirement annuity under Section 824.204(c)(1), (c)(2), or
7-5 (c)(5), and a designation of beneficiary under any [either] of
7-6 those options may not be made, changed, or revoked, except as
7-7 provided by Sections 824.1011 and 824.1012, after the later of the
7-8 date on which the retirement system makes the first annuity payment
7-9 to the retiree or the date the first payment becomes due. For
7-10 purposes of this section, the term "makes payment" includes the
7-11 depositing in the mail of a payment warrant or the crediting of an
7-12 account with payment through electronic funds transfer.
7-13 (d) Unless a contrary intention is clearly indicated by a
7-14 written designation of beneficiary and except as otherwise provided
7-15 by this section [law], the most recent designation of beneficiary
7-16 by a member or annuitant applies to all benefits payable on the
7-17 death of the member or annuitant.
7-18 (f) A beneficiary designation, change in beneficiary, or
7-19 revocation of beneficiary is not effective unless it is authorized
7-20 by this subchapter. Except as provided by Subsection (g), any
7-21 authorized beneficiary designation, change in beneficiary, or
7-22 revocation of beneficiary, including any modification ordered by a
7-23 court or contemplated in a trust or testamentary document, must be
7-24 executed by the member or annuitant in a form prescribed by the
7-25 retirement system and must be received by the retirement system
7-26 before the member's or annuitant's death or, for a beneficiary
7-27 named to receive continued optional service or disability
8-1 retirement payments, not later than the deadline established
8-2 elsewhere in this subtitle.
8-3 (g) Receipt by the retirement system of a certified copy of
8-4 a divorce decree between a member or annuitant and a designated
8-5 beneficiary revokes any designation of the former spouse as
8-6 beneficiary of any death benefits payable under Subchapter E or F
8-7 of this chapter that was effective before the date of divorce, if
8-8 the decree is received by the retirement system before the payment
8-9 of any part of the death benefit to any beneficiary.
8-10 SECTION 13. Section 824.1011(a), Government Code, is amended
8-11 to read as follows:
8-12 (a) A retiree who is receiving a standard service or
8-13 disability retirement annuity under Section 824.203 or 824.304(b)
8-14 and who marries after the date of the person's retirement may
8-15 replace the annuity by selecting an optional retirement annuity
8-16 under Section 824.204(c)(1), (c)(2), or (c)(5) or under Section
8-17 824.308(c)(1), (c)(2), or (c)(5), as applicable, and designating
8-18 the person's spouse as beneficiary before the first anniversary of
8-19 the marriage in the same manner as an annuity selection and
8-20 designation of beneficiary may be made before retirement.
8-21 SECTION 14. Subchapter B, Chapter 824, Government Code, is
8-22 amended by adding Section 824.1012 to read as follows:
8-23 Sec. 824.1012. CHANGE OF BENEFICIARY AFTER RETIREMENT. (a)
8-24 A retiree receiving an optional retirement annuity under Section
8-25 824.204(c)(1), (c)(2), or (c)(5) or Section 824.308(c)(1), (c)(2),
8-26 or (c)(5) may change the designated beneficiary as provided by this
8-27 section for the benefits payable after the retiree's death under
9-1 those sections.
9-2 (b) If the beneficiary designated at the time of the
9-3 retiree's retirement is the spouse or former spouse of the retiree:
9-4 (1) the spouse or former spouse must give written,
9-5 notarized consent to the change; or
9-6 (2) a court with jurisdiction over the marriage must
9-7 have ordered the change.
9-8 (c) A beneficiary designated under this section is entitled
9-9 on the retiree's death to receive monthly payments of the
9-10 survivor's portion of the retiree's optional retirement annuity for
9-11 the shorter of:
9-12 (1) the remainder of the life expectancy of the
9-13 beneficiary designated as of the effective date of the retiree's
9-14 retirement; or
9-15 (2) the remainder of the new beneficiary's life.
9-16 (d) A retiree may not change a beneficiary under this
9-17 section after retirement if the retiree has previously changed or
9-18 designated after retirement a beneficiary for optional retirement
9-19 annuity payments under this subtitle.
9-20 SECTION 15. Sections 824.202(a) and (c), Government Code,
9-21 are amended to read as follows:
9-22 (a) A member is eligible to retire and receive a standard
9-23 service retirement annuity if [the member]:
9-24 (1) the member is at least 65 years old and has at
9-25 least five years of service credit in the retirement system;
9-26 (2) the member is at least 60 years old and has at
9-27 least 20 years of service credit in the retirement system; [or]
10-1 (3) the member is at least 50 years old and has at
10-2 least 30 years of service credit in the retirement system; or
10-3 (4) the sum of the member's age and amount of service
10-4 credit in the retirement system equals the number 80.
10-5 (c) If a member is at least 55 years old and has at least 20
10-6 years of service credit in the retirement system, the member is
10-7 eligible to retire and receive a service retirement annuity reduced
10-8 from the standard service retirement annuity available under
10-9 Subsection (a)(2), to a percentage derived from the following
10-10 table:
10-11 Years of Service Age at Date of Retirement
10-12 55 56 57 58 59 60
10-13 at least 20 but less than 21 90% 92% 94% 96% 98% 100%
10-14 at least 21 but less than 22 92% 94% 96% 98% 100% 100%
10-15 [98%]
10-16 at least 22 but less than 23 94% 96% 98% 100% 100% 100%
10-17 [98%] [98%]
10-18 at least 23 but less than 24 96% 98% 100% 100% 100% 100%
10-19 [98%] [98%] [98%]
10-20 at least 24 but less than 25 98% 100% 100% 100% 100% 100%
10-21 [30]
10-22 [98%] [98%] [98%] [98%]
10-23 [30 or more 100% 100% 100% 100% 100% 100%]
10-24 SECTION 16. Section 824.203(d), Government Code, is amended
10-25 to read as follows:
10-26 (d) In no case may the standard service retirement annuity
10-27 be less than [$6.50 a month for each year of service credit or, for
11-1 a member who is at least 65 years old at the time of retirement,
11-2 less than the greater of $6.50 a month for each year of service
11-3 credit, or] $150 a month. The minimum benefits provided by this
11-4 section are subject to reduction in the same manner as other
11-5 benefits because of early retirement or selection of an optional
11-6 retirement annuity.
11-7 SECTION 17. Section 824.204(d), Government Code, is amended
11-8 to read as follows:
11-9 (d) If a person who is nominated by a retiree in the written
11-10 designation under Section 824.101 predeceases the retiree, the
11-11 reduced annuity of a retiree who has elected an optional service
11-12 retirement annuity under Subsection (c)(1), (c)(2), or (c)(5) [or
11-13 (2)] shall be increased to the standard service retirement annuity
11-14 that the retiree would otherwise be entitled to receive if the
11-15 retiree had not selected that annuity option. The standard service
11-16 retirement annuity shall be adjusted as appropriate for:
11-17 (1) early retirement as provided by Section 824.202;
11-18 and
11-19 (2) postretirement increases in retirement benefits
11-20 authorized by law after the date of retirement.
11-21 SECTION 18. Section 824.304, Government Code, is amended by
11-22 amending Subsection (b) and adding Subsection (d) to read as
11-23 follows:
11-24 (b) If a member has a total of at least 10 years of service
11-25 credit in the retirement system on the date of disability
11-26 retirement, the retirement system shall pay the person for the
11-27 duration of the disability a disability retirement annuity in an
12-1 amount equal to the greater of:
12-2 (1) a standard service retirement annuity computed
12-3 under Section 824.203; or
12-4 (2) [$6.50 a month for each year of service credit on
12-5 the date of retirement; or]
12-6 [(3)] $150 a month.
12-7 (d) The minimum benefits provided by this section are
12-8 subject to reduction in the same manner as other benefits because
12-9 of the selection of an optional retirement annuity.
12-10 SECTION 19. Sections 824.404(b), (c), and (d), Government
12-11 Code, are amended to read as follows:
12-12 (b) If the designated beneficiary is the spouse or a
12-13 dependent parent of the decedent, the beneficiary may elect to
12-14 receive for life a monthly benefit of $200 [$150], beginning
12-15 immediately or on the date the beneficiary becomes 65 years old,
12-16 whichever is later.
12-17 (c) If the designated beneficiary is the spouse of the
12-18 decedent and has one or more children less than 18 years old or has
12-19 custody of one or more children of the decedent who are less than
12-20 18 years old, the designated beneficiary may elect to receive:
12-21 (1) a monthly benefit of $300 [$250] payable until the
12-22 youngest child becomes 18 years old; and
12-23 (2) when the youngest child has attained the age of
12-24 18, a monthly benefit for life of $200 [$150], beginning on the
12-25 date the beneficiary becomes 65 years old.
12-26 (d) If the designated beneficiary or beneficiaries are the
12-27 decedent's dependent children who are less than 18 years old, their
13-1 guardian may elect to receive for them:
13-2 (1) a monthly benefit of $300 [$250], payable as long
13-3 as two or more children are less than 18 years old; and
13-4 (2) a monthly benefit of $200 [$150], payable as long
13-5 as only one child is less than 18 years old.
13-6 SECTION 20. Section 824.602, Government Code, is amended by
13-7 adding Subsection (l) to read as follows:
13-8 (l) This subchapter does not apply to payments under Section
13-9 824.804(b).
13-10 SECTION 21. Chapter 824, Government Code, is amended by
13-11 adding Subchapter I to read as follows:
13-12 SUBCHAPTER I. DEFERRED RETIREMENT OPTION PLAN
13-13 Sec. 824.801. DEFINITION. In this subchapter, "plan" means
13-14 the deferred retirement option plan provided by this subchapter.
13-15 Sec. 824.802. PARTICIPATION IN PLAN. (a) A contributing
13-16 member who is eligible under Section 824.202 to retire and receive
13-17 a standard service retirement annuity that is not reduced for
13-18 retirement at an early age and who has at least 25 years of service
13-19 credit in the retirement system may, if the member remains an
13-20 employee, elect to participate in the deferred retirement option
13-21 plan.
13-22 (b) An election to participate in the plan must be on a form
13-23 prescribed by and filed with the retirement system. An election
13-24 may be made only once and must state the period that the member
13-25 wishes to participate in the plan. The period must be a minimum of
13-26 12 consecutive months and be in 12-month increments. The maximum
13-27 period a member may participate in the plan is 60 consecutive
14-1 months. An election under this section is irrevocable after
14-2 filing. The filing of an election under this section is not
14-3 considered for any purpose an application for retirement, and a
14-4 person is not considered a retiree for any purpose because of the
14-5 filing.
14-6 (c) The effective date of a member's participation in the
14-7 plan is the first day of the month after the month in which an
14-8 election is received and approved by the retirement system. The
14-9 retirement system shall approve the election filed by a member who
14-10 is eligible to make the election.
14-11 Sec. 824.803. COMPUTATION OF PARTICIPANT'S SERVICE AND
14-12 ANNUITY. (a) A person participating in the plan remains a member
14-13 of the retirement system during the period of participation, unless
14-14 the member terminates membership under Section 822.003, but the
14-15 member may not, during participation, accrue additional service
14-16 credit. The member shall make employee contributions to the
14-17 retirement system, and the state and the member's employing
14-18 district, if applicable, shall make contributions for the member's
14-19 service performed during the member's participation in the plan.
14-20 Member contributions made during the period of participation in the
14-21 plan are not eligible for withdrawal by the participant and are
14-22 deposited in the retired reserve account. The member and the state
14-23 retain the obligation to contribute under Section 16, Texas Public
14-24 School Employees Group Insurance Act (Article 3.50-4, Insurance
14-25 Code), during the member's participation in this plan.
14-26 (b) For purposes of the plan, the computation of the service
14-27 retirement annuity of a member participating in the plan is
15-1 determined as of the effective date of participation. A
15-2 participating member is not eligible to receive a postretirement
15-3 increase made applicable to annuitants during the member's
15-4 participation in the plan.
15-5 (c) An election to participate in the plan constitutes a
15-6 deadline for the purchase of special service credit.
15-7 Sec. 824.804. BENEFITS UNDER PLAN. (a) On the effective
15-8 date of a member's participation in the plan, the retirement system
15-9 shall make the transfers required by Section 825.309 to the retired
15-10 reserve account as if the member had retired on that date. The
15-11 retirement system shall transfer monthly, during the period of the
15-12 member's participation in the plan, from the retired reserve
15-13 account to an account for the member in the deferred retirement
15-14 option account an amount equal to 79 percent of the amount the
15-15 member would have received that month under a standard service
15-16 retirement annuity if the member had retired on the effective date
15-17 of plan participation.
15-18 (b) When a member who has participated in the plan retires
15-19 from the retirement system, the person is entitled to the
15-20 accumulated amount in the member's account in the deferred
15-21 retirement option account, including creditable interest. The
15-22 amount is payable in a lump sum, in periodic installments, or as
15-23 provided by Section 825.509, at the option of the member. The
15-24 board of trustees by rule shall determine the number and frequency
15-25 of installment payments.
15-26 (c) If a member dies during participation in the plan or
15-27 after participation but before retirement, the decedent's
16-1 designated beneficiary is entitled to the accumulated amount in the
16-2 decedent's account in the deferred retirement option account,
16-3 including creditable interest. The beneficiary is also entitled to
16-4 a death benefit based on compensation and years of service on the
16-5 effective date of participation in the plan and on age on the date
16-6 of death.
16-7 (d) Payment of the benefit provided under the plan is in
16-8 addition to any annuity otherwise payable under this subtitle.
16-9 Sec. 824.805. TERMINATION OF PARTICIPATION IN PLAN. A
16-10 member terminates participation in the plan by:
16-11 (1) retirement;
16-12 (2) death; or
16-13 (3) expiration of the period for which participation
16-14 was approved.
16-15 Sec. 824.806. BENEFITS FOR SERVICE AFTER PLAN PARTICIPATION.
16-16 (a) Any eligible service credit accrued after termination of
16-17 participation in the plan and before retirement shall be credited
16-18 in the retirement system.
16-19 (b) At the time a member retires or dies, the retirement
16-20 system shall compute the value of the additional service credit at
16-21 the rate provided under Section 824.203, based on the lesser of the
16-22 three years of service after the member's termination of plan
16-23 participation, or the member's actual years of service after the
16-24 termination, in which the member received the highest annual
16-25 compensation. The retirement system shall add the amount computed
16-26 under this subsection to the amount determined on the effective
16-27 date of plan participation, and the sum is payable, subject to
17-1 actuarial reduction if applicable, as the monthly annuity payment.
17-2 Sec. 824.807. INTEREST. Interest is creditable to a
17-3 member's account in the deferred retirement option account at an
17-4 annual, prorated rate equal to five percent during the period of
17-5 participation in the plan and until all benefits are distributed.
17-6 SECTION 22. Section 825.206, Government Code, is amended by
17-7 adding Subsection (f) to read as follows:
17-8 (f) An actuarial audit shall be performed in conjunction
17-9 with an actuarial experience study or at least once every five
17-10 years. The audit must include:
17-11 (1) an analysis of the appropriateness of the
17-12 actuarial assumptions;
17-13 (2) a review of the assumptions and methodology for
17-14 compliance with the funding standards;
17-15 (3) verification of demographic data; and
17-16 (4) confirmation of the valuation results, including a
17-17 determination of actuarial accrued liability, normal cost, expected
17-18 employee contributions, and the effects of any recent legislation.
17-19 SECTION 23. Section 825.207, Government Code, is amended to
17-20 read as follows:
17-21 Sec. 825.207. COMPTROLLER [STATE TREASURER]. (a) Except as
17-22 provided by Section 825.302 or 825.303 or by Subsection (e) of this
17-23 section, the comptroller [state treasurer] is the custodian of all
17-24 securities and cash of the retirement system, including securities
17-25 held in the name of a nominee of the retirement system.
17-26 (b) The comptroller [state treasurer] shall pay money from
17-27 the accounts of the retirement system on warrants drawn by the
18-1 comptroller [of public accounts] and authorized by vouchers signed
18-2 by the executive director or other persons designated by the board
18-3 of trustees.
18-4 (c) The comptroller [state treasurer] annually shall furnish
18-5 to the board of trustees a sworn statement of the amount of the
18-6 retirement system's assets in the comptroller's [treasurer's]
18-7 custody.
18-8 (d) The comptroller [state treasurer] is not responsible,
18-9 under either civil or criminal law, for any action or losses with
18-10 respect to assets of the retirement system while the assets are in
18-11 the custody of a commercial bank as provided by Section 825.302 or
18-12 825.303 or by Subsection (e) of this section.
18-13 (e) The board of trustees may, in the exercise of its
18-14 constitutional discretion to manage the assets of the retirement
18-15 system, select one or more commercial banks, depository trust
18-16 companies, or other entities to serve as custodian or custodians of
18-17 all or part of the retirement system's assets.
18-18 SECTION 24. Sections 825.209(a), (b), and (c), Government
18-19 Code, are amended to read as follows:
18-20 (a) The comptroller [state treasurer] shall give a surety
18-21 bond in an [the] amount of at least $50,000.
18-22 (b) The executive director shall give a surety bond in an
18-23 [the] amount of at least $25,000.
18-24 (c) The board of trustees may require any trustee or
18-25 employee of the board[, other than the executive director,] to give
18-26 a surety bond in an amount determined by the board and may increase
18-27 the minimum amount of a bond required by Subsection (a) or (b).
19-1 SECTION 25. Section 825.301(a), Government Code, is amended
19-2 to read as follows:
19-3 (a) The board of trustees shall invest and reinvest assets
19-4 of the retirement system without distinction as to their source in
19-5 accordance with Section 67, Article XVI, Texas Constitution.
19-6 Investment decisions are subject to the standard provided in the
19-7 Texas Trust Code by Section 113.056(a), Property Code.
19-8 SECTION 26. Section 825.306, Government Code, is amended to
19-9 read as follows:
19-10 Sec. 825.306. CREDITING SYSTEM ASSETS. The assets of the
19-11 retirement system shall be credited, according to the purpose for
19-12 which they are held, to one of the following accounts:
19-13 (1) member savings account;
19-14 (2) state contribution account;
19-15 (3) retired reserve account;
19-16 (4) interest account; [or]
19-17 (5) expense account; or
19-18 (6) deferred retirement option account.
19-19 SECTION 27. Subchapter D, Chapter 825, Government Code, is
19-20 amended by adding Section 825.3121 to read as follows:
19-21 Sec. 825.3121. DEFERRED RETIREMENT OPTION ACCOUNT. (a) The
19-22 retirement system shall deposit in the deferred retirement option
19-23 account the amounts required to be deposited in the account by
19-24 Section 824.804(a) and interest as required by Section 824.807.
19-25 (b) The retirement system shall pay from the account all
19-26 benefits accrued during participation in the deferred retirement
19-27 option plan.
20-1 SECTION 28. Section 825.410, Government Code, is amended to
20-2 read as follows:
20-3 Sec. 825.410. PAYROLL DEDUCTIONS OR INSTALLMENT PAYMENTS FOR
20-4 SPECIAL SERVICE CREDIT. (a) Payments to establish special service
20-5 credit as authorized in Sections 805.002, [823.202,] 823.302,
20-6 823.304, 823.401, [823.402,] 823.501, and 825.403 may be made in a
20-7 lump sum by a monthly payroll deduction in an amount not less than
20-8 one-twelfth of the contribution required to establish at least one
20-9 year of service credit, or in equal monthly installments over a
20-10 period not to exceed the lesser of the number of years of credit to
20-11 be purchased or 60 months. Installment and payroll deduction
20-12 payments are due on the first day of each calendar month in the
20-13 payment period. If an installment or payroll deduction payment is
20-14 not made in full within 60 days after the due date, the retirement
20-15 system may refund all installment or payroll deduction payments
20-16 less fees paid on the lump sum due when installment or payroll
20-17 deduction payments began. Partial payment of an installment or
20-18 payroll deduction payment may be treated as nonpayment. A check
20-19 returned for insufficient funds or a closed account shall be
20-20 treated as nonpayment. When two or more consecutive monthly
20-21 payments have a returned check, a refund may be made. If the
20-22 retirement system refunds payments pursuant to this subsection, the
20-23 member is not permitted to use the installment method of payment or
20-24 the payroll deduction method, as applicable, for the same service
20-25 for [a period of] three years after [from] the date of the refund.
20-26 A member who requests and receives a refund of installment or
20-27 payroll deduction payments also is not permitted to use the same
21-1 method of payment for the same service for three years after the
21-2 date of the refund.
21-3 (b) Service credit shall be established pursuant to the
21-4 following provisions:
21-5 (1) The retirement system shall credit a member's
21-6 payments made under this section to a suspense account in the trust
21-7 fund until the sum of the payments equals the amount required for
21-8 one year of service credit, at which time the retirement system
21-9 shall deposit the payments in the appropriate accounts in the trust
21-10 fund and grant the applicable amount of service credit. No credit
21-11 shall be established for service pursuant to Section 823.501 or
21-12 Section 825.403 until a lump sum has been paid or all payroll
21-13 deduction or installment payments have been completed.
21-14 (2) No credit shall be established for other service
21-15 when the cost of establishing the service has been determined by
21-16 using withdrawn service to be reinstated pursuant to Section
21-17 823.501 or previously unreported service to be established pursuant
21-18 to Section 825.403 until a lump sum or all payroll deductions or
21-19 installments for the withdrawn or previously unreported service
21-20 have been paid.
21-21 (3) All other service shall be credited when
21-22 sufficient payroll deductions or installments have been completed
21-23 to satisfy the cost requirements for a year of service.
21-24 (c) All installment and payroll deduction payments must be
21-25 made on or before the service retirement date or the last day of
21-26 the month in which the member's application for service retirement
21-27 is submitted, whichever is later, or before the 31st day following
22-1 the date on which the medical board certifies a member's
22-2 disability. The installment payment method or payroll deduction
22-3 method may not be used to establish service credit after
22-4 retirement.
22-5 (d) If a member who has made at least one payroll deduction
22-6 or installment payment and who is using the payroll deduction or
22-7 installment method of payment dies before completing the
22-8 [installment] payments, the retirement system may:
22-9 (1) return to the beneficiary determined under
22-10 Sections 824.101 and 824.103 the [installment] payments less fees
22-11 paid on the lump sum due when [installment] payments began and less
22-12 payments which have resulted in credited service being established;
22-13 or
22-14 (2) permit the beneficiary determined under Sections
22-15 824.101 and 824.103 to complete payment of the unpaid balance
22-16 remaining at the time of the member's death.
22-17 (e) If the beneficiary requests a return of the installment
22-18 or payroll deduction payments under Subsection (d)(1), the
22-19 retirement system [TRS] shall return the payments in a lump sum.
22-20 No additional service credit shall be established that has not been
22-21 established in compliance with this section. If service credit has
22-22 been established by installment or payroll deduction payments, the
22-23 retirement system [TRS] shall not refund the payments, less any
22-24 applicable fees, used to establish such credit unless a refund of
22-25 total accumulated contributions is made to a member or beneficiary.
22-26 (f) If the beneficiary elects to complete the payments under
22-27 Subsection (d)(2), the beneficiary shall make full payment in a
23-1 lump sum of the unpaid balance before the issuance of any warrant
23-2 to him in full or partial payment of death or survivor benefits.
23-3 (g) A member seeking to establish service credit by using
23-4 the installment or payroll deduction payment method shall pay an
23-5 additional fee of nine percent per annum calculated on a declining
23-6 balance method on the lump sum due at the time the [installment]
23-7 payment process begins. For purposes of this subsection, the
23-8 installment or payroll deduction payment process begins on the
23-9 first business day of the month in which the first [installment]
23-10 payment becomes due. None of the additional fees shall be returned
23-11 to the member or a beneficiary.
23-12 (h) The board of trustees has authority to adopt rules to
23-13 implement this section, including rules establishing a minimum
23-14 amount for monthly installment or payroll deduction payments.
23-15 (i) The actuary designated by the board of trustees shall,
23-16 in investigating the experience of the members of the system, note
23-17 any significant increase in the establishment of special service
23-18 credit and determine the extent to which any increase has been
23-19 caused by the installment or payroll deduction payment method. If
23-20 the actuary certifies in writing to the retirement system that
23-21 sound actuarial funding of the retirement system's benefits is
23-22 endangered by continuation of the installment or payroll deduction
23-23 payment method, the board of trustees may determine that the
23-24 [installment] payment method will not be available, other than to
23-25 those who are using the method at the time of the determination.
23-26 (j) Payments to establish service credit by a member who
23-27 plans to retire in less than a year may be made by payroll
24-1 deduction for a period determined by the retirement system.
24-2 (k) Each employer shall establish a payroll deduction plan
24-3 to facilitate the payroll deductions authorized by this section and
24-4 shall cooperate with the retirement system in implementing the
24-5 payroll deduction method of payment for service credit.
24-6 SECTION 29. Section 825.512(e), Government Code, is amended
24-7 to read as follows:
24-8 (e) The retirement system shall submit an annual investment
24-9 performance report not later than the 45th day after the end of
24-10 [25th day of the month following] each fiscal year to the governor,
24-11 the lieutenant governor, the speaker of the house of
24-12 representatives, the executive director of the State Pension Review
24-13 Board, the legislative audit committee, the committees of the
24-14 senate and the house of representatives having jurisdiction over
24-15 appropriations, the committees of the senate and the house of
24-16 representatives having principal jurisdiction over legislation
24-17 governing the retirement system, and the Legislative Budget Board.
24-18 The report shall include a listing of all commissions and fees paid
24-19 by the system during the reporting period for the sale, purchase,
24-20 or management of system assets. The report shall be in a form
24-21 recommended by the evaluating firm.
24-22 SECTION 30. Subchapter F, Chapter 825, Government Code, is
24-23 amended by adding Section 825.516 to read as follows:
24-24 Sec. 825.516. NONPROFIT ASSOCIATION DUES. (a) A retiree
24-25 who is receiving an annuity from the retirement system may request
24-26 the system to withhold from the retiree's monthly annuity payment
24-27 membership dues for a nonprofit association of retired school
25-1 employees in this state. The request for withholding must be on a
25-2 form provided by the retirement system.
25-3 (b) After the retirement system receives a request
25-4 authorized by this section, the system shall make the requested
25-5 deductions until the earlier of:
25-6 (1) the date the annuity is terminated; or
25-7 (2) the first payment of the annuity after the date
25-8 the system receives a written request signed by the retiree
25-9 canceling the request for the withholding.
25-10 (c) The retirement system shall send all dues withheld under
25-11 this section to the nonprofit association after each monthly
25-12 payment of annuities.
25-13 SECTION 31. Subchapter F, Chapter 825, Government Code, is
25-14 amended by adding Section 825.517 to read as follows:
25-15 Sec. 825.517. EXCESS BENEFIT ARRANGEMENT. (a) A separate,
25-16 nonqualified, unfunded excess benefit arrangement is created
25-17 outside the trust fund of the retirement system. This excess
25-18 benefit arrangement shall be administered as a governmental excess
25-19 benefit arrangement under Section 415(m) of the Internal Revenue
25-20 Code of 1986 (26 U.S.C. Section 415(m)). The purpose of the excess
25-21 benefit arrangement is to pay to annuitants of the retirement
25-22 system benefits otherwise payable by the retirement system that
25-23 exceed the limitations on benefits imposed by Section 415(b)(1)(A)
25-24 of the Internal Revenue Code of 1986 (26 U.S.C. Section
25-25 415(b)(1)(A)).
25-26 (b) The board of trustees is responsible for the
25-27 administration of this arrangement. Except as otherwise provided
26-1 by this section, the board has the same rights, duties, and
26-2 responsibilities concerning the excess benefit arrangement as it
26-3 has to the trust fund.
26-4 (c) Benefits under this section are exempt from execution to
26-5 the same extent as provided by Section 821.005. Contributions to
26-6 this arrangement are not held in trust and may not be commingled
26-7 with other funds of the retirement system.
26-8 (d) An annuitant is entitled to a monthly benefit under this
26-9 section in an amount equal to the amount by which the benefit
26-10 otherwise payable by the retirement system has been reduced by the
26-11 limitation on benefits imposed by Section 415(b)(1)(A) of the
26-12 Internal Revenue Code of 1986 (26 U.S.C. Section 415(b)(1)(A)).
26-13 The benefit payable by this arrangement is payable at the times and
26-14 in the form that the benefit payable under the trust fund is paid.
26-15 (e) The benefit payable under this section shall be paid
26-16 from state contributions that otherwise would be made to the trust
26-17 fund under Section 825.404. In lieu of deposit in the state
26-18 contribution account, an amount determined by the retirement system
26-19 to be necessary to pay benefits under this section shall be paid
26-20 monthly to the credit of a dedicated account in the general revenue
26-21 fund maintained only for the excess benefit arrangement. The
26-22 account may include amounts needed to pay reasonable and necessary
26-23 expenses of administering this arrangement. The monthly amount to
26-24 be paid to the credit of the account shall be transferred to the
26-25 account at least 15 days before the date of a monthly disbursement
26-26 under this section.
26-27 (f) The board of trustees may adopt rules governing the
27-1 excess benefit arrangement that are necessary for the efficient
27-2 administration of the arrangement in compliance with Section 415(m)
27-3 of the Internal Revenue Code of 1986 (26 U.S.C. Section 415(m)).
27-4 SECTION 32. The heading of Article 3.50-4, Insurance Code,
27-5 is amended to read as follows:
27-6 ARTICLE 3.50-4. TEXAS PUBLIC SCHOOL [RETIRED] EMPLOYEES
27-7 GROUP INSURANCE PROGRAM
27-8 SECTION 33. Sections 7A(a) and (e), Article 3.50-4,
27-9 Insurance Code, are amended to read as follows:
27-10 (a) A public school district may elect to participate in the
27-11 program provided under this article. A district that elects to
27-12 participate must accept the schedule of costs adopted by the
27-13 trustee. A district [and] may [not] offer an alternative health
27-14 benefit plan to its active employees during the period of its
27-15 participation in the program if the trustee approves the plan as
27-16 providing contributions, participation, and a design that are in
27-17 accordance with sound group benefit underwriting principles.
27-18 (e) Each participating school district shall contribute for
27-19 each district employee covered by the program an amount equal to
27-20 not less than 75 percent of the cost for the employee only of the
27-21 plans of group coverages authorized by the trustee for active
27-22 employees. The district shall certify to the trustee the amount
27-23 the district will contribute monthly toward the cost of coverage.
27-24 The trustee shall determine if the amount is sufficient to
27-25 underwrite the plan for the district based on sound group benefit
27-26 underwriting principles. A determination by the trustee under this
27-27 subsection is final[, except that the school district's
28-1 contribution may not exceed the amount contributed for each state
28-2 employee by the state under the Texas Employees Uniform Group
28-3 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
28-4 Code)].
28-5 SECTION 34. Section 8, Article 3.50-4, Insurance Code, is
28-6 amended to read as follows:
28-7 Sec. 8. PURCHASE OF GROUP HEALTH CARE BENEFITS [INSURANCE].
28-8 (a) The trustee shall be designated as the group policyholder for
28-9 any plan or plans established in this article. The trustee has
28-10 authority to establish one or more plans that are self-insured.
28-11 (b) The [group insurance] coverages provided under the plan
28-12 or plans may include but are not limited to life insurance,
28-13 accidental death and dismemberment, hospital care and benefits,
28-14 surgical care and treatment, medical care and treatment, dental
28-15 care, eye care, obstetrical benefits, long-term care, prescribed
28-16 drugs, medicines, and prosthetic devices, and other supplemental
28-17 benefits, supplies, and services as provided by this article,
28-18 protection against loss of salary, and other coverages considered
28-19 advisable.
28-20 (c) The trustee may provide different plans for retirees and
28-21 surviving spouses covered by Medicare than the plans provided for
28-22 retirees and surviving spouses who are not covered by Medicare.
28-23 (d) Each basic plan must cover preexisting conditions.
28-24 (e) The trustee may contract for and make available to all
28-25 retirees, dependents, surviving spouses, and surviving dependent
28-26 children optional group health [insurance] benefit plans in
28-27 addition to the basic plans. The optional coverage may include a
29-1 smaller deductible, lower coinsurance, or additional categories of
29-2 benefits permitted under Subsection (b) of this section to provide
29-3 additional levels of coverages and benefits. The trustee may
29-4 utilize a portion of the funds received for the Texas Public School
29-5 Employees Group Insurance Program to offset some portion of costs
29-6 paid by the retiree for optional coverage if such utilization does
29-7 not reduce the period the program is projected to remain
29-8 financially solvent by more than one year in a biennium. Any
29-9 additional contributions for these optional plans shall be paid for
29-10 by the retiree, surviving spouse, or surviving dependent children.
29-11 (f) [The trustee shall enter into a contract or contracts
29-12 with a carrier or carriers for the plan or plans that will provide
29-13 that the method of paying expenses, paying claims, and establishing
29-14 reserves shall be under the minimum premium approach to financing;
29-15 and the contract shall be referred to as a minimum premium
29-16 contract.]
29-17 [(g)] New contracts for coverages under this program shall
29-18 be submitted for competitive bidding at least every six years.
29-19 [Contracts between the trustee and carriers for the group insurance
29-20 pool may provide for renegotiation.]
29-21 (g) [(h)] Each contract shall be based on the terms and
29-22 conditions agreed on between the trustee and the entity [carrier or
29-23 carriers] selected to provide the [insurance] coverage and
29-24 benefits. Any contract for group benefits [insurance] awarded by
29-25 the trustee must meet the minimum benefit and financial standards
29-26 adopted by the trustee.
29-27 (h) [(i)] The coverage provided by the plan or plans may be
30-1 secondary to all other benefit coverage to which the retiree,
30-2 surviving spouse, dependent, or surviving dependent child is
30-3 entitled. In the event the retiree, surviving spouse, dependent,
30-4 or surviving dependent child is entitled to receive medicare
30-5 hospital insurance benefits at no charge, then the coverage
30-6 provided by the plan or plans shall be secondary to medicare
30-7 hospital and medical insurance to the extent permitted by federal
30-8 law.
30-9 (i) [(j)] In contracting for any benefits [insurance] under
30-10 this article, competitive bidding shall be required under rules
30-11 adopted by the trustee. The rules must require that prospective
30-12 bidders provide information, for each area consisting of a county
30-13 and all adjacent counties, on the number and types of qualified
30-14 providers willing to participate in the coverage or plan for which
30-15 the bid is made. The rules may provide criteria to determine
30-16 qualified providers. The trustee shall consider the information
30-17 before awarding a contract but may not require a bidder to
30-18 demonstrate a minimum standard of provider participation. The
30-19 trustee is not required to select the lowest bid but may consider
30-20 also ability to service contracts, past experiences, financial
30-21 stability, and other relevant criteria. If the trustee awards a
30-22 contract to an entity [a carrier] whose bid deviates from that
30-23 advertised, the deviation shall be recorded and the reasons for the
30-24 deviation shall be fully justified in the minutes of the next
30-25 meeting of the trustee.
30-26 (j) [(k)] Notwithstanding any other provisions of this
30-27 article, the trustee providing programs of benefits under this
31-1 article is authorized to self-insure any and all programs available
31-2 under this article and may, at its discretion, engage private
31-3 entities to collect contributions from or to settle claims in
31-4 connection with plans established by the trustee under this section
31-5 [Section 8 of this article].
31-6 (k) [(l)] The trustee may contract directly with health care
31-7 providers, including health maintenance organizations, preferred
31-8 provider organizations, carriers, administrators, and other
31-9 qualified vendors, to provide benefits to participants in the
31-10 program. [Those benefits may include dental care, eye care,
31-11 hospital care, surgical care and treatment, medical care and
31-12 treatment, obstetrical care, and prescription drugs, medicines, and
31-13 prosthetic devices.]
31-14 SECTION 35. Section 15(c), Article 3.50-4, Insurance Code,
31-15 is amended to read as follows:
31-16 (c) Expenses for the development and administration of the
31-17 program shall be spent as provided by a budget adopted by the
31-18 trustee. [Expenses in any fiscal year may not exceed one percent
31-19 of the contributions to the program for that year by the state, the
31-20 active employees, and the covered participants in the program.]
31-21 SECTION 36. Section 16(b), Article 3.50-4, Insurance Code,
31-22 is amended to read as follows:
31-23 (b) The state shall contribute as the state's contribution
31-24 to the fund each fiscal year [the following amounts:]
31-25 [(1) for the state fiscal year beginning September 1,
31-26 1986, an amount equal to .35 percent of the salary of each active
31-27 employee;]
32-1 [(2) for the state fiscal year beginning September 1,
32-2 1987, an amount equal to .40 percent of the salary of each active
32-3 employee;]
32-4 [(3) for the state fiscal year beginning September 1,
32-5 1988, an amount equal to .45 percent of the salary of each active
32-6 employee;]
32-7 [(4) for the state fiscal year beginning September 1,
32-8 1989, an amount equal to .50 percent of the salary of each active
32-9 employee; and]
32-10 [(5) for the state fiscal year beginning September 1,
32-11 1990, and each subsequent fiscal year,] an amount equal to .50
32-12 percent of the salary of each active employee. The state may
32-13 contribute amounts in addition to the contribution required by this
32-14 subsection.
32-15 SECTION 37. Section 22.004, Education Code, is amended to
32-16 read as follows:
32-17 Sec. 22.004. GROUP HEALTH BENEFITS FOR SCHOOL EMPLOYEES.
32-18 (a) Each district shall make available to its employees group
32-19 health coverage provided by a risk pool established by one or more
32-20 school districts under Chapter 172, Local Government Code, or under
32-21 a policy of insurance or group contract issued by an insurer, a
32-22 company subject to Chapter 20, Insurance Code, or a health
32-23 maintenance organization under the Texas Health Maintenance
32-24 Organization Act (Chapter 20A, Vernon's Texas Insurance Code). The
32-25 coverage must meet the substantive coverage requirements of Article
32-26 3.51-6, Insurance Code, and any other law applicable to group
32-27 health insurance policies or contracts issued in this state. The
33-1 coverage must include major medical treatment but may exclude
33-2 experimental procedures. In this subsection, "major medical
33-3 treatment" means a medical, surgical, or diagnostic procedure for
33-4 illness or injury [or intervention that has a significant recovery
33-5 period, presents a significant risk, employs a general anesthetic,
33-6 or, in the opinion of the primary physician, involves a significant
33-7 invasion of bodily integrity that requires the extraction of bodily
33-8 fluids or an incision or that produces substantial pain,
33-9 discomfort, or debilitation]. The coverage may include managed
33-10 care or preventive care and must be comparable to the basic health
33-11 coverage provided under the Texas Employees Uniform Group Insurance
33-12 Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code). The
33-13 board of trustees of the Teacher Retirement System of Texas shall
33-14 adopt rules to determine whether a school district's group health
33-15 coverage is comparable to the basic health coverage specified by
33-16 this subsection. The rules must provide for consideration of the
33-17 following factors concerning the district's coverage in determining
33-18 whether the district's coverage is comparable to the basic health
33-19 coverage specified by this subsection:
33-20 (1) the deductible amount for service provided inside
33-21 and outside of the network;
33-22 (2) the coinsurance percentages for service provided
33-23 inside and outside of the network;
33-24 (3) the maximum amount of coinsurance payments a
33-25 covered person is required to pay;
33-26 (4) the amount of the copayment for an office visit;
33-27 (5) the schedule of benefits and the scope of
34-1 coverage;
34-2 (6) the lifetime maximum benefit amount; and
34-3 (7) verification that the coverage is issued by a
34-4 provider licensed to do business in this state by the Texas
34-5 Department of Insurance or is provided by a risk pool authorized
34-6 under Chapter 172, Local Government Code, or that a district is
34-7 capable of covering the assumed liabilities in the case of coverage
34-8 provided through district self-insurance.
34-9 (b) The cost of the coverage may be shared by the employees
34-10 and the district.
34-11 (c) Each district shall report [certify] the district's
34-12 compliance with this subsection to the executive director of the
34-13 Teacher Retirement System of Texas not later than November 1 of
34-14 each year in the manner required by the board of trustees of the
34-15 Teacher Retirement System of Texas. The report [certification]
34-16 must be based on the district group health coverage plan in effect
34-17 on November 1 and must include:
34-18 (1) appropriate documentation of:
34-19 (A) [a copy of] the district's [current]
34-20 contract for group health coverage with a provider licensed to do
34-21 business in this state by the Texas Department of Insurance or a
34-22 risk pool authorized under Chapter 172, Local Government Code; or
34-23 (B) a resolution of the board of trustees of the
34-24 district authorizing a self-insurance plan for district employees
34-25 and of the district's review of district ability to cover the
34-26 liability assumed;
34-27 (2) the schedule of benefits;
35-1 (3) the premium rate sheet, including the amount paid
35-2 by the district and employee;
35-3 (4) the number of employees covered by each health
35-4 coverage plan offered by the district; and
35-5 (5) any other information considered appropriate by
35-6 the executive director of the Teacher Retirement System of Texas.
35-7 (d) Based on the criteria prescribed by Subsection (a), the
35-8 executive director of the Teacher Retirement System of Texas shall
35-9 certify whether a district's coverage is comparable to the basic
35-10 health coverage provided under the Texas Employees Uniform Group
35-11 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
35-12 Code). If the executive director of the Teacher Retirement System
35-13 of Texas determines that the group health coverage offered by a
35-14 district is not comparable, the executive director shall report
35-15 that information to the district and to the Legislative Budget
35-16 Board. The executive director shall submit a report to the
35-17 legislature not later than January 1 of each odd-numbered year
35-18 describing the status of each district's group health coverage
35-19 program based on the information contained in the report required
35-20 by Subsection (c) and the certification required by this
35-21 subsection.
35-22 (e) [(b)] A school district may not contract with an
35-23 insurer, a company subject to Chapter 20, Insurance Code, or a
35-24 health maintenance organization to issue a policy or contract under
35-25 this section, or with any person to assist the school district in
35-26 obtaining or managing the policy or contract unless, before the
35-27 contract is entered into, the insurer, company, organization, or
36-1 person provides the district with an audited financial statement
36-2 showing the financial condition of the insurer, company,
36-3 organization, or person.
36-4 (f) [(c)] An insurer, a company subject to Chapter 20,
36-5 Insurance Code, or a health maintenance organization that issues a
36-6 policy or contract under this section and any person that assists
36-7 the school district in obtaining or managing the policy or contract
36-8 for compensation shall provide an annual audited financial
36-9 statement to the school district showing the financial condition of
36-10 the insurer, company, organization, or person.
36-11 (g) [(d)] An audited financial statement provided under this
36-12 section must be made in accordance with rules adopted by the
36-13 commissioner of insurance or state auditor, as applicable.
36-14 SECTION 38. (a) The Teacher Retirement System of Texas
36-15 shall adjust the monthly benefits of a person who retired under a
36-16 service retirement annuity after April 30, 1997, but before
36-17 September 1, 1997, to the amount that the person would have
36-18 received if Section 824.202, Government Code, as amended by this
36-19 Act, had been in effect on the effective date of the person's
36-20 retirement.
36-21 (b) The benefit recomputation under this section shall
36-22 include the appropriate reduction to an actuarial equivalent for
36-23 any optional retirement annuity selected under Section 824.204,
36-24 Government Code, at the time of retirement.
36-25 (c) Any adjustment required by this section becomes
36-26 effective with the monthly benefit payable at the end of September
36-27 1997.
37-1 SECTION 39. (a) Monthly payments of a death or retirement
37-2 benefit annuity by the Teacher Retirement System of Texas are
37-3 increased beginning with the payment due at the end of September
37-4 1997.
37-5 (b) The increase does not apply to payments under Section
37-6 824.304(a), 824.404, or 824.501, Government Code.
37-7 (c) The amount of the monthly increase is computed by
37-8 multiplying the previous monthly benefit by a percentage determined
37-9 in accordance with the following table:
37-10 LATEST RETIREMENT DATE OR, IF APPLICABLE, DATE OF DEATH INCREASE
37-11 Before September 1, 1971........................................ 5%
37-12 On or after September 1, 1971, but before September 1, 1972..... 6%
37-13 On or after September 1, 1972, but before September 1, 1973..... 5%
37-14 On or after September 1, 1973, but before September 1, 1974..... 8%
37-15 On or after September 1, 1974, but before September 1, 1975..... 5%
37-16 On or after September 1, 1975, but before September 1, 1976..... 2%
37-17 On or after September 1, 1976, but before September 1, 1977.... 14%
37-18 On or after September 1, 1977, but before September 1, 1978.... 13%
37-19 On or after September 1, 1978, but before September 1, 1979.... 12%
37-20 On or after September 1, 1979, but before September 1, 1981.... 10%
37-21 On or after September 1, 1981, but before September 1, 1984..... 9%
37-22 On or after September 1, 1984, but before September 1, 1985.... 10%
37-23 On or after September 1, 1985, but before September 1, 1986..... 9%
37-24 On or after September 1, 1986, but before September 1, 1987.... 10%
37-25 On or after September 1, 1987, but before September 1, 1988..... 8%
37-26 On or after September 1, 1988, but before September 1, 1989.... 10%
37-27 On or after September 1, 1989, but before September 1, 1990..... 9%
38-1 On or after September 1, 1990, but before September 1, 1992..... 6%
38-2 On or after September 1, 1992, but before September 1, 1993..... 5%
38-3 On or after September 1, 1993, but before September 1, 1994..... 7%
38-4 On or after September 1, 1994, but before September 1, 1995..... 5%
38-5 On or after September 1, 1995, but before September 1, 1996..... 3%
38-6 SECTION 40. The change in law made by this Act in Section
38-7 822.201(c), Government Code, applies to all determinations of
38-8 compensation that are made on or after the effective date of this
38-9 Act for the purpose of computing an annuity that begins on or after
38-10 that date or making contributions for the purchase of service
38-11 credit on or after that date.
38-12 SECTION 41. An employee of the Baylor College of Dentistry
38-13 who is not a faculty member, who was transferred to The Texas A&M
38-14 University System under Chapter 403, Acts of the 74th Legislature,
38-15 Regular Session, 1995, who previous to the transfer was a
38-16 participant in a retirement program similar to the optional
38-17 retirement program established under Chapter 830, Government Code,
38-18 and who at the time of transfer elected to participate in the
38-19 optional retirement program rather than the Teacher Retirement
38-20 System of Texas shall continue participation in that program as if
38-21 the person were eligible for participation beginning on the first
38-22 day of employment with The Texas A&M University System.
38-23 SECTION 42. This Act takes effect September 1, 1997. The
38-24 amendment made by this Act to Section 22.004, Education Code,
38-25 applies beginning with the 1998-1999 school year.
38-26 SECTION 43. The importance of this legislation and the
38-27 crowded condition of the calendars in both houses create an
39-1 emergency and an imperative public necessity that the
39-2 constitutional rule requiring bills to be read on three several
39-3 days in each house be suspended, and this rule is hereby suspended.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2644 was passed by the House on April
17, 1997, by a non-record vote; that the House refused to concur in
Senate amendments to H.B. No. 2644 on May 24, 1997, and requested
the appointment of a conference committee to consider the
differences between the two houses; and that the House adopted the
conference committee report on H.B. No. 2644 on May 29, 1997, by a
non-record vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 2644 was passed by the Senate, with
amendments, on May 20, 1997, by a viva-voce vote; at the request of
the House, the Senate appointed a conference committee to consider
the differences between the two houses; and that the Senate adopted
the conference committee report on H.B. No. 2644 on May 29, 1997,
by a viva-voce vote.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor