1-1 By: Telford, et al. (Senate Sponsor - Armbrister) H.B. No. 2644
1-2 (In the Senate - Received from the House April 18, 1997;
1-3 April 22, 1997, read first time and referred to Committee on State
1-4 Affairs; May 16, 1997, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 13, Nays 0; May 16, 1997,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR H.B. No. 2644 By: Armbrister
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to systems and programs administered by the Teacher
1-11 Retirement System of Texas.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 SECTION 1. Section 822.005(c), Government Code, is amended
1-14 to read as follows:
1-15 (c) A person is not entitled to withdraw contributions who
1-16 is employed, has applied for employment, or has received a promise
1-17 of employment, in a position covered by the retirement system.
1-18 SECTION 2. Section 822.201(c), Government Code, is amended
1-19 to read as follows:
1-20 (c) Excluded from salary and wages are expense payments,
1-21 allowances, payments for unused vacation or sick leave, maintenance
1-22 or other nonmonetary compensation, fringe benefits, deferred
1-23 compensation other than as provided by Subsection (b)(3),
1-24 compensation that is not made pursuant to a valid employment
1-25 agreement, [payments received in the 1995-1996 or a subsequent
1-26 school year for teaching a driver education and traffic safety
1-27 course,] and any compensation not described in Subsection (b).
1-28 SECTION 3. Section 823.004, Government Code, is amended to
1-29 read as follows:
1-30 Sec. 823.004. COMPUTATION OF AND PAYMENT FOR CREDIT. (a)
1-31 All credit for military service, out-of-state service,
1-32 developmental leave, service previously waived, and service
1-33 transferred to the retirement system under Chapter 805 shall be
1-34 computed on a September 1 through August 31 school year. Payments
1-35 for service described by this section must be completed not later
1-36 than the later of the member's retirement date or the last day of
1-37 the month in which the member submits a retirement application.
1-38 (b) The retirement system by rule may establish an
1-39 irrevocable employer pick-up of member contributions as described
1-40 by Section 414(h)(2) of the Internal Revenue Code of 1986 (26
1-41 U.S.C. Section 414(h)(2)) for the purchase of any service credit
1-42 authorized by law.
1-43 SECTION 4. Section 823.202(b), Government Code, is amended
1-44 to read as follows:
1-45 (b) A member may establish credit under this section by
1-46 depositing with the retirement system for each year of service
1-47 claimed an amount equal to:
1-48 (1) the contributions [and membership fees] that the
1-49 person would have paid had the person been a member of the
1-50 retirement system during that year; plus
1-51 (2) interest computed at an annual rate of five
1-52 percent of the amount of each payment that would have been due had
1-53 the person been a member, from the hypothetical payment due date to
1-54 the date of deposit.
1-55 SECTION 5. Section 823.301(b), Government Code, is amended
1-56 to read as follows:
1-57 (b) A member may not establish more than five years of
1-58 service credit in the retirement system under this subchapter for
1-59 military service. Service may be established in one-year
1-60 increments except as otherwise provided by this subchapter.
1-61 SECTION 6. Section 823.3021(d), Government Code, is amended
1-62 to read as follows:
1-63 (d) A member eligible to establish credit under this section
1-64 may not qualify for insurance coverage under the Texas Public
2-1 School [Retired] Employees Group Insurance Act (Article 3.50-4,
2-2 Insurance Code) unless the member retires with 10 or more years of
2-3 membership service credit for actual service in public schools and
2-4 complies with any other requirements for coverage provided by that
2-5 article.
2-6 SECTION 7. Section 823.303, Government Code, is amended to
2-7 read as follows:
2-8 Sec. 823.303. MILITARY LEAVE CREDIT. A member who performs
2-9 military service creditable in the retirement system but who does
2-10 not establish credit for the service by making the deposits
2-11 required by Section 823.302 is entitled to credit of a year for
2-12 each year of military service performed, if the member requests the
2-13 credit in writing before the later of the date of application for
2-14 retirement or the effective date of retirement. The credit is
2-15 usable only in determining eligibility for, but not the amount of,
2-16 benefits under Section 824.406.
2-17 SECTION 8. Sections 823.401(a) and (d), Government Code, are
2-18 amended to read as follows:
2-19 (a) Except as provided by Subsection (b), an eligible member
2-20 may establish equivalent membership service credit for employment
2-21 with a public school system maintained wholly or partly by another
2-22 state or territory of the United States or by the United States for
2-23 children of its citizens. A school receiving funds under 22 U.S.C.
2-24 Section 2701 is considered a public school for the purposes of this
2-25 section.
2-26 (d) A member may establish credit under this section by
2-27 depositing with the retirement system for each year of service
2-28 claimed a contribution computed at the rate of:
2-29 (1) 12 percent of the full-time rate of the member's
2-30 annual compensation, plus any additional eligible compensation
2-31 received, during the first year of service for which the member
2-32 received membership credit in the retirement system that is both
2-33 after the service for which credit is sought and after September 1,
2-34 1956; or
2-35 (2) 12 percent of the full-time rate of the member's
2-36 annual compensation, plus any additional eligible compensation
2-37 received, during the most recent year of service for which the
2-38 member received membership credit that is after the service for
2-39 which credit is sought, if the member has performed no service in
2-40 Texas since September 1, 1956.
2-41 SECTION 9. Section 823.402(e), Government Code, is amended
2-42 to read as follows:
2-43 (e) A member may establish credit under this section by
2-44 depositing with the retirement system for each year of
2-45 developmental leave claimed an amount equal to the sum of:
2-46 (1) the rate of member contributions required during
2-47 the year of leave, times the member's annual rate of compensation
2-48 during the member's most recent year of creditable service that
2-49 preceded the year of leave; plus
2-50 (2) the amount that the state would have contributed
2-51 had the member performed membership service during the year of
2-52 leave at the member's annual rate of compensation during the most
2-53 recent year of service that preceded the leave[; plus]
2-54 [(3) any membership fees in effect during the year of
2-55 leave].
2-56 SECTION 10. Section 823.501, Government Code, is amended by
2-57 amending Subsections (b) and (c) and adding Subsections (e) and (f)
2-58 to read as follows:
2-59 (b) A person eligible to reinstate service credit under this
2-60 section is one who is a contributing member of the retirement
2-61 system at the time the service is reinstated [resumes membership
2-62 service in the retirement system].
2-63 (c) A member may reinstate canceled credit under this
2-64 section by depositing with the retirement system:
2-65 (1) the amount withdrawn or refunded; plus
2-66 (2) [membership fees for the period that membership
2-67 was terminated; plus]
2-68 [(3)] a reinstatement fee of six percent, compounded
2-69 annually, of the amount withdrawn or refunded from the date of
3-1 withdrawal or refund to the date of redeposit.
3-2 (e) Service credit canceled by a withdrawal of contributions
3-3 not authorized by Section 822.005 is required to be reinstated
3-4 under this section.
3-5 (f) A contributing member may have an account that was
3-6 terminated by absence from service reactivated by requesting the
3-7 reactivation in writing. The beneficiary of a decedent who was a
3-8 contributing member at the time of death may have an account that
3-9 was terminated by the decedent's absence from service reactivated
3-10 by requesting the reactivation in writing before the first payment
3-11 of a death benefit.
3-12 SECTION 11. Section 823.502(c), Government Code, is amended
3-13 to read as follows:
3-14 (c) A person may resume membership and claim credit under
3-15 this section by depositing with the retirement system:
3-16 (1) an amount equal to service retirement benefits
3-17 received; plus
3-18 (2) a reinstatement fee of six percent, compounded
3-19 annually, of the amount determined under Subdivision (1) from the
3-20 date of the person's return to service to the date of redeposit;
3-21 plus
3-22 (3) an amount equal to the total contributions that
3-23 would have been deducted from the person's annual compensation each
3-24 year after the return to service had the person been a member of
3-25 the retirement system; plus
3-26 (4) a reinstatement fee of six percent, compounded
3-27 annually, of the amount determined under Subdivision (3) from the
3-28 end of each year of service after the return to service to the date
3-29 of deposit[; plus]
3-30 [(5) membership fees for the years after the return to
3-31 service].
3-32 SECTION 12. Section 824.101, Government Code, is amended by
3-33 amending Subsections (c) and (d) and adding Subsections (f) and (g)
3-34 to read as follows:
3-35 (c) Only one person may be designated as beneficiary of an
3-36 optional retirement annuity under Section 824.204(c)(1), (c)(2), or
3-37 (c)(5), and a designation of beneficiary under any [either] of
3-38 those options may not be made, changed, or revoked, except as
3-39 provided by Sections 824.1011 and 824.1012, after the later of the
3-40 date on which the retirement system makes the first annuity payment
3-41 to the retiree or the date the first payment becomes due. For
3-42 purposes of this section, the term "makes payment" includes the
3-43 depositing in the mail of a payment warrant or the crediting of an
3-44 account with payment through electronic funds transfer.
3-45 (d) Unless a contrary intention is clearly indicated by a
3-46 written designation of beneficiary and except as otherwise provided
3-47 by this section [law], the most recent designation of beneficiary
3-48 by a member or annuitant applies to all benefits payable on the
3-49 death of the member or annuitant.
3-50 (f) A beneficiary designation, change in beneficiary, or
3-51 revocation of beneficiary is not effective unless it is authorized
3-52 by this subchapter. Except as provided by Subsection (g), any
3-53 authorized beneficiary designation, change in beneficiary, or
3-54 revocation of beneficiary, including any modification ordered by a
3-55 court or contemplated in a trust or testamentary document, must be
3-56 executed by the member or annuitant in a form prescribed by the
3-57 retirement system and must be received by the retirement system
3-58 before the member's or annuitant's death or, for a beneficiary
3-59 named to receive continued optional service or disability
3-60 retirement payments, not later than the deadline established
3-61 elsewhere in this subtitle.
3-62 (g) Receipt by the retirement system of a certified copy of
3-63 a divorce decree between a member or annuitant and a designated
3-64 beneficiary revokes any designation of the former spouse as
3-65 beneficiary of any death benefits payable under Subchapter E or F
3-66 of this chapter that was effective before the date of divorce, if
3-67 the decree is received by the retirement system before the payment
3-68 of any part of the death benefit to any beneficiary.
3-69 SECTION 13. Section 824.1011(a), Government Code, is amended
4-1 to read as follows:
4-2 (a) A retiree who is receiving a standard service or
4-3 disability retirement annuity under Section 824.203 or 824.304(b)
4-4 and who marries after the date of the person's retirement may
4-5 replace the annuity by selecting an optional retirement annuity
4-6 under Section 824.204(c)(1), (c)(2), or (c)(5) or under Section
4-7 824.308(c)(1), (c)(2), or (c)(5), as applicable, and designating
4-8 the person's spouse as beneficiary before the first anniversary of
4-9 the marriage in the same manner as an annuity selection and
4-10 designation of beneficiary may be made before retirement.
4-11 SECTION 14. Subchapter B, Chapter 824, Government Code, is
4-12 amended by adding Section 824.1012 to read as follows:
4-13 Sec. 824.1012. CHANGE OF BENEFICIARY AFTER RETIREMENT. (a)
4-14 A retiree receiving an optional retirement annuity under Section
4-15 824.204(c)(1), (c)(2), or (c)(5) or Section 824.308(c)(1), (c)(2),
4-16 or (c)(5) may change the designated beneficiary as provided by this
4-17 section for the benefits payable after the retiree's death under
4-18 those sections.
4-19 (b) If the beneficiary designated at the time of the
4-20 retiree's retirement is the spouse or former spouse of the retiree:
4-21 (1) the spouse or former spouse must give written,
4-22 notarized consent to the change; or
4-23 (2) a court with jurisdiction over the marriage must
4-24 have ordered the change.
4-25 (c) A beneficiary designated under this section is entitled
4-26 on the retiree's death to receive monthly payments of the
4-27 survivor's portion of the retiree's optional retirement annuity for
4-28 the shorter of:
4-29 (1) the remainder of the life expectancy of the
4-30 beneficiary designated as of the effective date of the retiree's
4-31 retirement; or
4-32 (2) the remainder of the new beneficiary's life.
4-33 (d) A retiree may not change a beneficiary under this
4-34 section after retirement if the retiree has previously changed or
4-35 designated after retirement a beneficiary for optional retirement
4-36 annuity payments under this subtitle.
4-37 SECTION 15. Sections 824.202(a) and (c), Government Code,
4-38 are amended to read as follows:
4-39 (a) A member is eligible to retire and receive a standard
4-40 service retirement annuity if [the member]:
4-41 (1) the member is at least 65 years old and has at
4-42 least five years of service credit in the retirement system;
4-43 (2) the member is at least 60 years old and has at
4-44 least 20 years of service credit in the retirement system; [or]
4-45 (3) the member is at least 50 years old and has at
4-46 least 30 years of service credit in the retirement system; or
4-47 (4) the sum of the member's age and amount of service
4-48 credit in the retirement system equals the number 80.
4-49 (c) If a member is at least 55 years old and has at least 20
4-50 years of service credit in the retirement system, the member is
4-51 eligible to retire and receive a service retirement annuity reduced
4-52 from the standard service retirement annuity available under
4-53 Subsection (a)(2), to a percentage derived from the following
4-54 table:
4-55 Years of Service Age at Date of Retirement
4-56 55 56 57 58 59 60
4-57 at least 20 but less than 21 90% 92% 94% 96% 98% 100%
4-58 at least 21 but less than 22 92% 94% 96% 98% 100% 100%
4-59 [98%]
4-60 at least 22 but less than 23 94% 96% 98% 100% 100% 100%
4-61 [98%] [98%]
4-62 at least 23 but less than 24 96% 98% 100% 100% 100% 100%
4-63 [98%] [98%] [98%]
4-64 at least 24 but less than 25 98% 100% 100% 100% 100% 100%
4-65 [30]
4-66 [98%] [98%] [98%] [98%]
4-67 [30 or more 100% 100% 100% 100% 100% 100%]
4-68 SECTION 16. Section 824.203(d), Government Code, is amended
4-69 to read as follows:
5-1 (d) In no case may the standard service retirement annuity
5-2 be less than [$6.50 a month for each year of service credit or, for
5-3 a member who is at least 65 years old at the time of retirement,
5-4 less than the greater of $6.50 a month for each year of service
5-5 credit, or] $150 a month. The minimum benefits provided by this
5-6 section are subject to reduction in the same manner as other
5-7 benefits because of early retirement or selection of an optional
5-8 retirement annuity.
5-9 SECTION 17. Section 824.204(d), Government Code, is amended
5-10 to read as follows:
5-11 (d) If a person who is nominated by a retiree in the written
5-12 designation under Section 824.101 predeceases the retiree, the
5-13 reduced annuity of a retiree who has elected an optional service
5-14 retirement annuity under Subsection (c)(1), (c)(2), or (c)(5) [or
5-15 (2)] shall be increased to the standard service retirement annuity
5-16 that the retiree would otherwise be entitled to receive if the
5-17 retiree had not selected that annuity option. The standard service
5-18 retirement annuity shall be adjusted as appropriate for:
5-19 (1) early retirement as provided by Section 824.202;
5-20 and
5-21 (2) postretirement increases in retirement benefits
5-22 authorized by law after the date of retirement.
5-23 SECTION 18. Section 824.304, Government Code, is amended by
5-24 amending Subsection (b) and adding Subsection (d) to read as
5-25 follows:
5-26 (b) If a member has a total of at least 10 years of service
5-27 credit in the retirement system on the date of disability
5-28 retirement, the retirement system shall pay the person for the
5-29 duration of the disability a disability retirement annuity in an
5-30 amount equal to the greater of:
5-31 (1) a standard service retirement annuity computed
5-32 under Section 824.203; or
5-33 (2) [$6.50 a month for each year of service credit on
5-34 the date of retirement; or]
5-35 [(3)] $150 a month.
5-36 (d) The minimum benefits provided by this section are
5-37 subject to reduction in the same manner as other benefits because
5-38 of the selection of an optional retirement annuity.
5-39 SECTION 19. Sections 824.404(b), (c), and (d), Government
5-40 Code, are amended to read as follows:
5-41 (b) If the designated beneficiary is the spouse or a
5-42 dependent parent of the decedent, the beneficiary may elect to
5-43 receive for life a monthly benefit of $200 [$150], beginning
5-44 immediately or on the date the beneficiary becomes 65 years old,
5-45 whichever is later.
5-46 (c) If the designated beneficiary is the spouse of the
5-47 decedent and has one or more children less than 18 years old or has
5-48 custody of one or more children of the decedent who are less than
5-49 18 years old, the designated beneficiary may elect to receive:
5-50 (1) a monthly benefit of $300 [$250] payable until the
5-51 youngest child becomes 18 years old; and
5-52 (2) when the youngest child has attained the age of
5-53 18, a monthly benefit for life of $200 [$150], beginning on the
5-54 date the beneficiary becomes 65 years old.
5-55 (d) If the designated beneficiary or beneficiaries are the
5-56 decedent's dependent children who are less than 18 years old, their
5-57 guardian may elect to receive for them:
5-58 (1) a monthly benefit of $300 [$250], payable as long
5-59 as two or more children are less than 18 years old; and
5-60 (2) a monthly benefit of $200 [$150], payable as long
5-61 as only one child is less than 18 years old.
5-62 SECTION 20. Section 824.602, Government Code, is amended by
5-63 adding Subsection (l) to read as follows:
5-64 (l) This subchapter does not apply to payments under Section
5-65 824.804(b).
5-66 SECTION 21. Chapter 824, Government Code, is amended by
5-67 adding Subchapter I to read as follows:
5-68 SUBCHAPTER I. DEFERRED RETIREMENT OPTION PLAN
5-69 Sec. 824.801. DEFINITION. In this subchapter, "plan" means
6-1 the deferred retirement option plan provided by this subchapter.
6-2 Sec. 824.802. PARTICIPATION IN PLAN. (a) A contributing
6-3 member who is eligible under Section 824.202 to retire and receive
6-4 a standard service retirement annuity that is not reduced for
6-5 retirement at an early age and who has at least 25 years of service
6-6 credit in the retirement system may, if the member remains an
6-7 employee, elect to participate in the deferred retirement option
6-8 plan.
6-9 (b) An election to participate in the plan must be on a form
6-10 prescribed by and filed with the retirement system. An election
6-11 may be made only once and must state the period that the member
6-12 wishes to participate in the plan. The period must be a minimum of
6-13 12 consecutive months and be in 12-month increments. The maximum
6-14 period a member may participate in the plan is 60 consecutive
6-15 months. An election under this section is irrevocable after
6-16 filing. The filing of an election under this section is not
6-17 considered for any purpose an application for retirement, and a
6-18 person is not considered a retiree for any purpose because of the
6-19 filing.
6-20 (c) The effective date of a member's participation in the
6-21 plan is the first day of the month after the month in which an
6-22 election is received and approved by the retirement system. The
6-23 retirement system shall approve the election filed by a member who
6-24 is eligible to make the election.
6-25 Sec. 824.803. COMPUTATION OF PARTICIPANT'S SERVICE AND
6-26 ANNUITY. (a) A person participating in the plan remains a member
6-27 of the retirement system during the period of participation, unless
6-28 the member terminates membership under Section 822.003, but the
6-29 member may not, during participation, accrue additional service
6-30 credit. The member shall make employee contributions to the
6-31 retirement system, and the state and the member's employing
6-32 district, if applicable, shall make contributions for the member's
6-33 service performed during the member's participation in the plan.
6-34 Member contributions made during the period of participation in the
6-35 plan are not eligible for withdrawal by the participant and are
6-36 deposited in the retired reserve account. The member and the state
6-37 retain the obligation to contribute under Section 16, Texas Public
6-38 School Employees Group Insurance Act (Article 3.50-4, Insurance
6-39 Code), during the member's participation in this plan.
6-40 (b) For purposes of the plan, the computation of the service
6-41 retirement annuity of a member participating in the plan is
6-42 determined as of the effective date of participation. A
6-43 participating member is not eligible to receive a postretirement
6-44 increase made applicable to annuitants during the member's
6-45 participation in the plan.
6-46 (c) An election to participate in the plan constitutes a
6-47 deadline for the purchase of special service credit.
6-48 Sec. 824.804. BENEFITS UNDER PLAN. (a) On the effective
6-49 date of a member's participation in the plan, the retirement system
6-50 shall make the transfers required by Section 825.309 to the retired
6-51 reserve account as if the member had retired on that date. The
6-52 retirement system shall transfer monthly, during the period of the
6-53 member's participation in the plan, from the retired reserve
6-54 account to an account for the member in the deferred retirement
6-55 option account an amount equal to 79 percent of the amount the
6-56 member would have received that month under a standard service
6-57 retirement annuity if the member had retired on the effective date
6-58 of plan participation.
6-59 (b) When a member who has participated in the plan retires
6-60 from the retirement system, the person is entitled to the
6-61 accumulated amount in the member's account in the deferred
6-62 retirement option account, including creditable interest. The
6-63 amount is payable in a lump sum, in periodic installments, or as
6-64 provided by Section 825.509, at the option of the member. The
6-65 board of trustees by rule shall determine the number and frequency
6-66 of installment payments.
6-67 (c) If a member dies during participation in the plan or
6-68 after participation but before retirement, the decedent's
6-69 designated beneficiary is entitled to the accumulated amount in the
7-1 decedent's account in the deferred retirement option account,
7-2 including creditable interest. The beneficiary is also entitled to
7-3 a death benefit based on compensation and years of service on the
7-4 effective date of participation in the plan and on age on the date
7-5 of death.
7-6 (d) Payment of the benefit provided under the plan is in
7-7 addition to any annuity otherwise payable under this subtitle.
7-8 Sec. 824.805. TERMINATION OF PARTICIPATION IN PLAN. A
7-9 member terminates participation in the plan by:
7-10 (1) retirement;
7-11 (2) death; or
7-12 (3) expiration of the period for which participation
7-13 was approved.
7-14 Sec. 824.806. BENEFITS FOR SERVICE AFTER PLAN PARTICIPATION.
7-15 (a) Any eligible service credit accrued after termination of
7-16 participation in the plan and before retirement shall be credited
7-17 in the retirement system.
7-18 (b) At the time a member retires or dies, the retirement
7-19 system shall compute the value of the additional service credit at
7-20 the rate provided under Section 824.203, based on the lesser of the
7-21 three years of service after the member's termination of plan
7-22 participation, or the member's actual years of service after the
7-23 termination, in which the member received the highest annual
7-24 compensation. The retirement system shall add the amount computed
7-25 under this subsection to the amount determined on the effective
7-26 date of plan participation, and the sum is payable, subject to
7-27 actuarial reduction if applicable, as the monthly annuity payment.
7-28 Sec. 824.807. INTEREST. Interest is creditable to a
7-29 member's account in the deferred retirement option account at an
7-30 annual, prorated rate equal to five percent during the period of
7-31 participation in the plan and until all benefits are distributed.
7-32 SECTION 22. Section 825.206, Government Code, is amended by
7-33 adding Subsection (f) to read as follows:
7-34 (f) An actuarial audit shall be performed in conjunction
7-35 with an actuarial experience study or at least once every five
7-36 years. The audit must include:
7-37 (1) an analysis of the appropriateness of the
7-38 actuarial assumptions;
7-39 (2) a review of the assumptions and methodology for
7-40 compliance with the funding standards;
7-41 (3) verification of demographic data; and
7-42 (4) confirmation of the valuation results, including a
7-43 determination of actuarial accrued liability, normal cost, expected
7-44 employee contributions, and the effects of any recent legislation.
7-45 SECTION 23. Section 825.207, Government Code, is amended to
7-46 read as follows:
7-47 Sec. 825.207. COMPTROLLER [STATE TREASURER]. (a) Except as
7-48 provided by Section 825.302 or 825.303 or by Subsection (e) of this
7-49 section, the comptroller [state treasurer] is the custodian of all
7-50 securities and cash of the retirement system, including securities
7-51 held in the name of a nominee of the retirement system.
7-52 (b) The comptroller [state treasurer] shall pay money from
7-53 the accounts of the retirement system on warrants drawn by the
7-54 comptroller [of public accounts] and authorized by vouchers signed
7-55 by the executive director or other persons designated by the board
7-56 of trustees.
7-57 (c) The comptroller [state treasurer] annually shall furnish
7-58 to the board of trustees a sworn statement of the amount of the
7-59 retirement system's assets in the comptroller's [treasurer's]
7-60 custody.
7-61 (d) The comptroller [state treasurer] is not responsible,
7-62 under either civil or criminal law, for any action or losses with
7-63 respect to assets of the retirement system while the assets are in
7-64 the custody of a commercial bank as provided by Section 825.302 or
7-65 825.303 or by Subsection (e) of this section.
7-66 (e) The board of trustees may, in the exercise of its
7-67 constitutional discretion to manage the assets of the retirement
7-68 system, select one or more commercial banks, depository trust
7-69 companies, or other entities to serve as custodian or custodians of
8-1 all or part of the retirement system's assets.
8-2 SECTION 24. Sections 825.209(a), (b), and (c), Government
8-3 Code, are amended to read as follows:
8-4 (a) The comptroller [state treasurer] shall give a surety
8-5 bond in an [the] amount of at least $50,000.
8-6 (b) The executive director shall give a surety bond in an
8-7 [the] amount of at least $25,000.
8-8 (c) The board of trustees may require any trustee or
8-9 employee of the board[, other than the executive director,] to give
8-10 a surety bond in an amount determined by the board and may increase
8-11 the minimum amount of a bond required by Subsection (a) or (b).
8-12 SECTION 25. Section 825.301(a), Government Code, is amended
8-13 to read as follows:
8-14 (a) The board of trustees shall invest and reinvest assets
8-15 of the retirement system without distinction as to their source in
8-16 accordance with Section 67, Article XVI, Texas Constitution.
8-17 Investment decisions are subject to the standard provided in the
8-18 Texas Trust Code by Section 113.056(a), Property Code.
8-19 SECTION 26. Section 825.306, Government Code, is amended to
8-20 read as follows:
8-21 Sec. 825.306. CREDITING SYSTEM ASSETS. The assets of the
8-22 retirement system shall be credited, according to the purpose for
8-23 which they are held, to one of the following accounts:
8-24 (1) member savings account;
8-25 (2) state contribution account;
8-26 (3) retired reserve account;
8-27 (4) interest account; [or]
8-28 (5) expense account; or
8-29 (6) deferred retirement option account.
8-30 SECTION 27. Subchapter D, Chapter 825, Government Code, is
8-31 amended by adding Section 825.3121 to read as follows:
8-32 Sec. 825.3121. DEFERRED RETIREMENT OPTION ACCOUNT. (a) The
8-33 retirement system shall deposit in the deferred retirement option
8-34 account the amounts required to be deposited in the account by
8-35 Section 824.804(a) and interest as required by Section 824.807.
8-36 (b) The retirement system shall pay from the account all
8-37 benefits accrued during participation in the deferred retirement
8-38 option plan.
8-39 SECTION 28. Section 825.410, Government Code, is amended to
8-40 read as follows:
8-41 Sec. 825.410. PAYROLL DEDUCTIONS OR INSTALLMENT PAYMENTS FOR
8-42 SPECIAL SERVICE CREDIT. (a) Payments to establish special service
8-43 credit as authorized in Sections 805.002, [823.202,] 823.302,
8-44 823.304, 823.401, [823.402,] 823.501, and 825.403 may be made in a
8-45 lump sum by a monthly payroll deduction in an amount not less than
8-46 one-twelfth of the contribution required to establish at least one
8-47 year of service credit, or in equal monthly installments over a
8-48 period not to exceed the lesser of the number of years of credit to
8-49 be purchased or 60 months. Installment and payroll deduction
8-50 payments are due on the first day of each calendar month in the
8-51 payment period. If an installment or payroll deduction payment is
8-52 not made in full within 60 days after the due date, the retirement
8-53 system may refund all installment or payroll deduction payments
8-54 less fees paid on the lump sum due when installment or payroll
8-55 deduction payments began. Partial payment of an installment or
8-56 payroll deduction payment may be treated as nonpayment. A check
8-57 returned for insufficient funds or a closed account shall be
8-58 treated as nonpayment. When two or more consecutive monthly
8-59 payments have a returned check, a refund may be made. If the
8-60 retirement system refunds payments pursuant to this subsection, the
8-61 member is not permitted to use the installment method of payment or
8-62 the payroll deduction method, as applicable, for the same service
8-63 for [a period of] three years after [from] the date of the refund.
8-64 A member who requests and receives a refund of installment or
8-65 payroll deduction payments also is not permitted to use the same
8-66 method of payment for the same service for three years after the
8-67 date of the refund.
8-68 (b) Service credit shall be established pursuant to the
8-69 following provisions:
9-1 (1) The retirement system shall credit a member's
9-2 payments made under this section to a suspense account in the trust
9-3 fund until the sum of the payments equals the amount required for
9-4 one year of service credit, at which time the retirement system
9-5 shall deposit the payments in the appropriate accounts in the trust
9-6 fund and grant the applicable amount of service credit. No credit
9-7 shall be established for service pursuant to Section 823.501 or
9-8 Section 825.403 until a lump sum has been paid or all payroll
9-9 deduction or installment payments have been completed.
9-10 (2) No credit shall be established for other service
9-11 when the cost of establishing the service has been determined by
9-12 using withdrawn service to be reinstated pursuant to Section
9-13 823.501 or previously unreported service to be established pursuant
9-14 to Section 825.403 until a lump sum or all payroll deductions or
9-15 installments for the withdrawn or previously unreported service
9-16 have been paid.
9-17 (3) All other service shall be credited when
9-18 sufficient payroll deductions or installments have been completed
9-19 to satisfy the cost requirements for a year of service.
9-20 (c) All installment and payroll deduction payments must be
9-21 made on or before the service retirement date or the last day of
9-22 the month in which the member's application for service retirement
9-23 is submitted, whichever is later, or before the 31st day following
9-24 the date on which the medical board certifies a member's
9-25 disability. The installment payment method or payroll deduction
9-26 method may not be used to establish service credit after
9-27 retirement.
9-28 (d) If a member who has made at least one payroll deduction
9-29 or installment payment and who is using the payroll deduction or
9-30 installment method of payment dies before completing the
9-31 [installment] payments, the retirement system may:
9-32 (1) return to the beneficiary determined under
9-33 Sections 824.101 and 824.103 the [installment] payments less fees
9-34 paid on the lump sum due when [installment] payments began and less
9-35 payments which have resulted in credited service being established;
9-36 or
9-37 (2) permit the beneficiary determined under Sections
9-38 824.101 and 824.103 to complete payment of the unpaid balance
9-39 remaining at the time of the member's death.
9-40 (e) If the beneficiary requests a return of the installment
9-41 or payroll deduction payments under Subsection (d)(1), the
9-42 retirement system [TRS] shall return the payments in a lump sum.
9-43 No additional service credit shall be established that has not been
9-44 established in compliance with this section. If service credit has
9-45 been established by installment or payroll deduction payments, the
9-46 retirement system [TRS] shall not refund the payments, less any
9-47 applicable fees, used to establish such credit unless a refund of
9-48 total accumulated contributions is made to a member or beneficiary.
9-49 (f) If the beneficiary elects to complete the payments under
9-50 Subsection (d)(2), the beneficiary shall make full payment in a
9-51 lump sum of the unpaid balance before the issuance of any warrant
9-52 to him in full or partial payment of death or survivor benefits.
9-53 (g) A member seeking to establish service credit by using
9-54 the installment or payroll deduction payment method shall pay an
9-55 additional fee of nine percent per annum calculated on a declining
9-56 balance method on the lump sum due at the time the [installment]
9-57 payment process begins. For purposes of this subsection, the
9-58 installment or payroll deduction payment process begins on the
9-59 first business day of the month in which the first [installment]
9-60 payment becomes due. None of the additional fees shall be returned
9-61 to the member or a beneficiary.
9-62 (h) The board of trustees has authority to adopt rules to
9-63 implement this section, including rules establishing a minimum
9-64 amount for monthly installment or payroll deduction payments.
9-65 (i) The actuary designated by the board of trustees shall,
9-66 in investigating the experience of the members of the system, note
9-67 any significant increase in the establishment of special service
9-68 credit and determine the extent to which any increase has been
9-69 caused by the installment or payroll deduction payment method. If
10-1 the actuary certifies in writing to the retirement system that
10-2 sound actuarial funding of the retirement system's benefits is
10-3 endangered by continuation of the installment or payroll deduction
10-4 payment method, the board of trustees may determine that the
10-5 [installment] payment method will not be available, other than to
10-6 those who are using the method at the time of the determination.
10-7 (j) Payments to establish service credit by a member who
10-8 plans to retire in less than a year may be made by payroll
10-9 deduction for a period determined by the retirement system.
10-10 (k) Each employer shall establish a payroll deduction plan
10-11 to facilitate the payroll deductions authorized by this section and
10-12 shall cooperate with the retirement system in implementing the
10-13 payroll deduction method of payment for service credit.
10-14 SECTION 29. Section 825.512(e), Government Code, is amended
10-15 to read as follows:
10-16 (e) The retirement system shall submit an annual investment
10-17 performance report not later than the 45th day after the end of
10-18 [25th day of the month following] each fiscal year to the governor,
10-19 the lieutenant governor, the speaker of the house of
10-20 representatives, the executive director of the State Pension Review
10-21 Board, the legislative audit committee, the committees of the
10-22 senate and the house of representatives having jurisdiction over
10-23 appropriations, the committees of the senate and the house of
10-24 representatives having principal jurisdiction over legislation
10-25 governing the retirement system, and the Legislative Budget Board.
10-26 The report shall include a listing of all commissions and fees paid
10-27 by the system during the reporting period for the sale, purchase,
10-28 or management of system assets. The report shall be in a form
10-29 recommended by the evaluating firm.
10-30 SECTION 30. Subchapter F, Chapter 825, Government Code, is
10-31 amended by adding Section 825.516 to read as follows:
10-32 Sec. 825.516. NONPROFIT ASSOCIATION DUES. (a) A retiree
10-33 who is receiving an annuity from the retirement system may request
10-34 the system to withhold from the retiree's monthly annuity payment
10-35 membership dues for a nonprofit association of retired school
10-36 employees in this state. The request for withholding must be on a
10-37 form provided by the retirement system.
10-38 (b) After the retirement system receives a request
10-39 authorized by this section, the system shall make the requested
10-40 deductions until the earlier of:
10-41 (1) the date the annuity is terminated; or
10-42 (2) the first payment of the annuity after the date
10-43 the system receives a written request signed by the retiree
10-44 canceling the request for the withholding.
10-45 (c) The retirement system shall send all dues withheld under
10-46 this section to the nonprofit association after each monthly
10-47 payment of annuities.
10-48 SECTION 31. Subchapter F, Chapter 825, Government Code, is
10-49 amended by adding Section 825.517 to read as follows:
10-50 Sec. 825.517. EXCESS BENEFIT ARRANGEMENT. (a) A separate,
10-51 nonqualified, unfunded excess benefit arrangement is created
10-52 outside the trust fund of the retirement system. This excess
10-53 benefit arrangement shall be administered as a governmental excess
10-54 benefit arrangement under Section 415(m) of the Internal Revenue
10-55 Code of 1986 (26 U.S.C. Section 415(m)). The purpose of the excess
10-56 benefit arrangement is to pay to annuitants of the retirement
10-57 system benefits otherwise payable by the retirement system that
10-58 exceed the limitations on benefits imposed by Section 415(b)(1)(A)
10-59 of the Internal Revenue Code of 1986 (26 U.S.C. Section
10-60 415(b)(1)(A)).
10-61 (b) The board of trustees is responsible for the
10-62 administration of this arrangement. Except as otherwise provided
10-63 by this section, the board has the same rights, duties, and
10-64 responsibilities concerning the excess benefit arrangement as it
10-65 has to the trust fund.
10-66 (c) Benefits under this section are exempt from execution to
10-67 the same extent as provided by Section 821.005. Contributions to
10-68 this arrangement are not held in trust and may not be commingled
10-69 with other funds of the retirement system.
11-1 (d) An annuitant is entitled to a monthly benefit under this
11-2 section in an amount equal to the amount by which the benefit
11-3 otherwise payable by the retirement system has been reduced by the
11-4 limitation on benefits imposed by Section 415(b)(1)(A) of the
11-5 Internal Revenue Code of 1986 (26 U.S.C. Section 415(b)(1)(A)).
11-6 The benefit payable by this arrangement is payable at the times and
11-7 in the form that the benefit payable under the trust fund is paid.
11-8 (e) The benefit payable under this section shall be paid
11-9 from state contributions that otherwise would be made to the trust
11-10 fund under Section 825.404. In lieu of deposit in the state
11-11 contribution account, an amount determined by the retirement system
11-12 to be necessary to pay benefits under this section shall be paid
11-13 monthly to the credit of a dedicated account in the general revenue
11-14 fund maintained only for the excess benefit arrangement. The
11-15 account may include amounts needed to pay reasonable and necessary
11-16 expenses of administering this arrangement. The monthly amount to
11-17 be paid to the credit of the account shall be transferred to the
11-18 account at least 15 days before the date of a monthly disbursement
11-19 under this section.
11-20 (f) The board of trustees may adopt rules governing the
11-21 excess benefit arrangement that are necessary for the efficient
11-22 administration of the arrangement in compliance with Section 415(m)
11-23 of the Internal Revenue Code of 1986 (26 U.S.C. Section 415(m)).
11-24 SECTION 32. The heading of Article 3.50-4, Insurance Code,
11-25 is amended to read as follows:
11-26 ARTICLE 3.50-4. TEXAS PUBLIC SCHOOL [RETIRED] EMPLOYEES
11-27 GROUP INSURANCE PROGRAM
11-28 SECTION 33. Sections 7A(a) and (e), Article 3.50-4,
11-29 Insurance Code, are amended to read as follows:
11-30 (a) A public school district may elect to participate in the
11-31 program provided under this article. A district that elects to
11-32 participate must accept the schedule of costs adopted by the
11-33 trustee. A district [and] may [not] offer an alternative health
11-34 benefit plan to its active employees during the period of its
11-35 participation in the program if the trustee approves the plan as
11-36 providing contributions, participation, and a design that are in
11-37 accordance with sound group benefit underwriting principles.
11-38 (e) Each participating school district shall contribute for
11-39 each district employee covered by the program an amount equal to
11-40 not less than 75 percent of the cost for the employee only of the
11-41 plans of group coverages authorized by the trustee for active
11-42 employees. The district shall certify to the trustee the amount
11-43 the district will contribute monthly toward the cost of coverage.
11-44 The trustee shall determine if the amount is sufficient to
11-45 underwrite the plan for the district based on sound group benefit
11-46 underwriting principles. A determination by the trustee under this
11-47 subsection is final[, except that the school district's
11-48 contribution may not exceed the amount contributed for each state
11-49 employee by the state under the Texas Employees Uniform Group
11-50 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
11-51 Code)].
11-52 SECTION 34. Section 8, Article 3.50-4, Insurance Code, is
11-53 amended to read as follows:
11-54 Sec. 8. PURCHASE OF GROUP HEALTH CARE BENEFITS [INSURANCE].
11-55 (a) The trustee shall be designated as the group policyholder for
11-56 any plan or plans established in this article. The trustee has
11-57 authority to establish one or more plans that are self-insured.
11-58 (b) The [group insurance] coverages provided under the plan
11-59 or plans may include but are not limited to life insurance,
11-60 accidental death and dismemberment, hospital care and benefits,
11-61 surgical care and treatment, medical care and treatment, dental
11-62 care, eye care, obstetrical benefits, long-term care, prescribed
11-63 drugs, medicines, and prosthetic devices, and other supplemental
11-64 benefits, supplies, and services as provided by this article,
11-65 protection against loss of salary, and other coverages considered
11-66 advisable.
11-67 (c) The trustee may provide different plans for retirees and
11-68 surviving spouses covered by Medicare than the plans provided for
11-69 retirees and surviving spouses who are not covered by Medicare.
12-1 (d) Each basic plan must cover preexisting conditions.
12-2 (e) The trustee may contract for and make available to all
12-3 retirees, dependents, surviving spouses, and surviving dependent
12-4 children optional group health [insurance] benefit plans in
12-5 addition to the basic plans. The optional coverage may include a
12-6 smaller deductible, lower coinsurance, or additional categories of
12-7 benefits permitted under Subsection (b) of this section to provide
12-8 additional levels of coverages and benefits. The trustee may
12-9 utilize a portion of the funds received for the Texas Public School
12-10 Employees Group Insurance Program to offset some portion of costs
12-11 paid by the retiree for optional coverage if such utilization does
12-12 not reduce the period the program is projected to remain
12-13 financially solvent by more than one year in a biennium. Any
12-14 additional contributions for these optional plans shall be paid for
12-15 by the retiree, surviving spouse, or surviving dependent children.
12-16 (f) [The trustee shall enter into a contract or contracts
12-17 with a carrier or carriers for the plan or plans that will provide
12-18 that the method of paying expenses, paying claims, and establishing
12-19 reserves shall be under the minimum premium approach to financing;
12-20 and the contract shall be referred to as a minimum premium
12-21 contract.]
12-22 [(g)] New contracts for coverages under this program shall
12-23 be submitted for competitive bidding at least every six years.
12-24 [Contracts between the trustee and carriers for the group insurance
12-25 pool may provide for renegotiation.]
12-26 (g) [(h)] Each contract shall be based on the terms and
12-27 conditions agreed on between the trustee and the entity [carrier or
12-28 carriers] selected to provide the [insurance] coverage and
12-29 benefits. Any contract for group benefits [insurance] awarded by
12-30 the trustee must meet the minimum benefit and financial standards
12-31 adopted by the trustee.
12-32 (h) [(i)] The coverage provided by the plan or plans may be
12-33 secondary to all other benefit coverage to which the retiree,
12-34 surviving spouse, dependent, or surviving dependent child is
12-35 entitled. In the event the retiree, surviving spouse, dependent,
12-36 or surviving dependent child is entitled to receive medicare
12-37 hospital insurance benefits at no charge, then the coverage
12-38 provided by the plan or plans shall be secondary to medicare
12-39 hospital and medical insurance to the extent permitted by federal
12-40 law.
12-41 (i) [(j)] In contracting for any benefits [insurance] under
12-42 this article, competitive bidding shall be required under rules
12-43 adopted by the trustee. The rules must require that prospective
12-44 bidders provide information, for each area consisting of a county
12-45 and all adjacent counties, on the number and types of qualified
12-46 providers willing to participate in the coverage or plan for which
12-47 the bid is made. The rules may provide criteria to determine
12-48 qualified providers. The trustee shall consider the information
12-49 before awarding a contract but may not require a bidder to
12-50 demonstrate a minimum standard of provider participation. The
12-51 trustee is not required to select the lowest bid but may consider
12-52 also ability to service contracts, past experiences, financial
12-53 stability, and other relevant criteria. If the trustee awards a
12-54 contract to an entity [a carrier] whose bid deviates from that
12-55 advertised, the deviation shall be recorded and the reasons for the
12-56 deviation shall be fully justified in the minutes of the next
12-57 meeting of the trustee.
12-58 (j) [(k)] Notwithstanding any other provisions of this
12-59 article, the trustee providing programs of benefits under this
12-60 article is authorized to self-insure any and all programs available
12-61 under this article and may, at its discretion, engage private
12-62 entities to collect contributions from or to settle claims in
12-63 connection with plans established by the trustee under this section
12-64 [Section 8 of this article].
12-65 (k) [(l)] The trustee may contract directly with health care
12-66 providers, including health maintenance organizations, preferred
12-67 provider organizations, carriers, administrators, and other
12-68 qualified vendors, to provide benefits to participants in the
12-69 program. [Those benefits may include dental care, eye care,
13-1 hospital care, surgical care and treatment, medical care and
13-2 treatment, obstetrical care, and prescription drugs, medicines, and
13-3 prosthetic devices.]
13-4 SECTION 35. Section 15(c), Article 3.50-4, Insurance Code,
13-5 is amended to read as follows:
13-6 (c) Expenses for the development and administration of the
13-7 program shall be spent as provided by a budget adopted by the
13-8 trustee. [Expenses in any fiscal year may not exceed one percent
13-9 of the contributions to the program for that year by the state, the
13-10 active employees, and the covered participants in the program.]
13-11 SECTION 36. Section 16(b), Article 3.50-4, Insurance Code,
13-12 is amended to read as follows:
13-13 (b) The state shall contribute as the state's contribution
13-14 to the fund each fiscal year [the following amounts:]
13-15 [(1) for the state fiscal year beginning September 1,
13-16 1986, an amount equal to .35 percent of the salary of each active
13-17 employee;]
13-18 [(2) for the state fiscal year beginning September 1,
13-19 1987, an amount equal to .40 percent of the salary of each active
13-20 employee;]
13-21 [(3) for the state fiscal year beginning September 1,
13-22 1988, an amount equal to .45 percent of the salary of each active
13-23 employee;]
13-24 [(4) for the state fiscal year beginning September 1,
13-25 1989, an amount equal to .50 percent of the salary of each active
13-26 employee; and]
13-27 [(5) for the state fiscal year beginning September 1,
13-28 1990, and each subsequent fiscal year,] an amount equal to .50
13-29 percent of the salary of each active employee. The state may
13-30 contribute amounts in addition to the contribution required by this
13-31 subsection.
13-32 SECTION 37. Section 22.004, Education Code, is amended to
13-33 read as follows:
13-34 Sec. 22.004. GROUP HEALTH BENEFITS FOR SCHOOL EMPLOYEES.
13-35 (a) Each district shall make available to its employees group
13-36 health coverage provided by a risk pool established by one or more
13-37 school districts under Chapter 172, Local Government Code, or under
13-38 a policy of insurance or group contract issued by an insurer, a
13-39 company subject to Chapter 20, Insurance Code, or a health
13-40 maintenance organization under the Texas Health Maintenance
13-41 Organization Act (Chapter 20A, Vernon's Texas Insurance Code). The
13-42 coverage must meet the substantive coverage requirements of Article
13-43 3.51-6, Insurance Code, and any other law applicable to group
13-44 health insurance policies or contracts issued in this state. The
13-45 coverage must include major medical treatment but may exclude
13-46 experimental procedures. In this subsection, "major medical
13-47 treatment" means a medical, surgical, or diagnostic procedure for
13-48 illness or injury [or intervention that has a significant recovery
13-49 period, presents a significant risk, employs a general anesthetic,
13-50 or, in the opinion of the primary physician, involves a significant
13-51 invasion of bodily integrity that requires the extraction of bodily
13-52 fluids or an incision or that produces substantial pain,
13-53 discomfort, or debilitation]. The coverage may include managed
13-54 care or preventive care and must be comparable to the basic health
13-55 coverage provided under the Texas Employees Uniform Group Insurance
13-56 Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code). The
13-57 board of trustees of the Teacher Retirement System of Texas shall
13-58 adopt rules to determine whether a school district's group health
13-59 coverage is comparable to the basic health coverage specified by
13-60 this subsection. The rules must provide for consideration of the
13-61 following factors concerning the district's coverage in determining
13-62 whether the district's coverage is comparable to the basic health
13-63 coverage specified by this subsection:
13-64 (1) the deductible amount for service provided inside
13-65 and outside of the network;
13-66 (2) the coinsurance percentages for service provided
13-67 inside and outside of the network;
13-68 (3) the maximum amount of coinsurance payments a
13-69 covered person is required to pay;
14-1 (4) the cost of coverage;
14-2 (5) the amount of the copayment for an office visit;
14-3 (6) the schedule of benefits and the scope of
14-4 coverage;
14-5 (7) the lifetime maximum benefit amount; and
14-6 (8) verification that the coverage is issued by a
14-7 provider licensed to do business in this state by the Texas
14-8 Department of Insurance or that a district is capable of covering
14-9 the assumed liabilities in the case of coverage provided through
14-10 district self-insurance.
14-11 (b) The cost of the coverage may be shared by the employees
14-12 and the district.
14-13 (c) Each district shall report [certify] the district's
14-14 compliance with this subsection to the executive director of the
14-15 Teacher Retirement System of Texas not later than November 1 of
14-16 each year in the manner required by the board of trustees of the
14-17 Teacher Retirement System of Texas. The report [certification]
14-18 must be based on the district group health coverage plan in effect
14-19 on November 1 and must include:
14-20 (1) appropriate documentation of:
14-21 (A) [a copy of] the district's [current]
14-22 contract for group health coverage with a provider licensed to do
14-23 business in this state by the Texas Department of Insurance; or
14-24 (B) a resolution of the board of trustees of the
14-25 district authorizing a self-insurance plan for district employees
14-26 and of the district's review of district ability to cover the
14-27 liability assumed;
14-28 (2) the schedule of benefits;
14-29 (3) the premium rate sheet, including the amount paid
14-30 by the district and employee;
14-31 (4) the number of employees covered by each health
14-32 coverage plan offered by the district; and
14-33 (5) any other information considered appropriate by
14-34 the executive director of the Teacher Retirement System of Texas.
14-35 (d) Based on the criteria prescribed by Subsection (a), the
14-36 executive director of the Teacher Retirement System of Texas shall
14-37 certify whether a district's coverage is comparable to the basic
14-38 health coverage provided under the Texas Employees Uniform Group
14-39 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
14-40 Code). If the executive director of the Teacher Retirement System
14-41 of Texas determines that the group health coverage offered by a
14-42 district is not comparable, the executive director shall report
14-43 that information to the district and to the Legislative Budget
14-44 Board. The executive director shall submit a report to the
14-45 legislature not later than January 1 of each odd-numbered year
14-46 describing the status of each district's group health coverage
14-47 program based on the information contained in the report required
14-48 by Subsection (c) and the certification required by this section.
14-49 (e) [(b)] A school district may not contract with an
14-50 insurer, a company subject to Chapter 20, Insurance Code, or a
14-51 health maintenance organization to issue a policy or contract under
14-52 this section, or with any person to assist the school district in
14-53 obtaining or managing the policy or contract unless, before the
14-54 contract is entered into, the insurer, company, organization, or
14-55 person provides the district with an audited financial statement
14-56 showing the financial condition of the insurer, company,
14-57 organization, or person.
14-58 (f) [(c)] An insurer, a company subject to Chapter 20,
14-59 Insurance Code, or a health maintenance organization that issues a
14-60 policy or contract under this section and any person that assists
14-61 the school district in obtaining or managing the policy or contract
14-62 for compensation shall provide an annual audited financial
14-63 statement to the school district showing the financial condition of
14-64 the insurer, company, organization, or person.
14-65 (g) [(d)] An audited financial statement provided under this
14-66 section must be made in accordance with rules adopted by the
14-67 commissioner of insurance or state auditor, as applicable.
14-68 SECTION 38. (a) The Teacher Retirement System of Texas
14-69 shall adjust the monthly benefits of a person who retired under a
15-1 service retirement annuity after April 30, 1997, but before
15-2 September 1, 1997, to the amount that the person would have
15-3 received if Section 824.202, Government Code, as amended by this
15-4 Act, had been in effect on the effective date of the person's
15-5 retirement.
15-6 (b) The benefit recomputation under this section shall
15-7 include the appropriate reduction to an actuarial equivalent for
15-8 any optional retirement annuity selected under Section 824.204,
15-9 Government Code, at the time of retirement.
15-10 (c) Any adjustment required by this section becomes
15-11 effective with the monthly benefit payable at the end of September
15-12 1997.
15-13 SECTION 39. (a) Monthly payments of a death or retirement
15-14 benefit annuity by the Teacher Retirement System of Texas are
15-15 increased beginning with the payment due at the end of September
15-16 1997.
15-17 (b) The increase does not apply to payments under Section
15-18 824.304(a), 824.404, or 824.501, Government Code.
15-19 (c) The amount of the monthly increase is computed by
15-20 multiplying the previous monthly benefit by a percentage determined
15-21 in accordance with the following table:
15-22 LATEST RETIREMENT DATE OR, IF APPLICABLE, DATE OF DEATH INCREASE
15-23 Before September 1, 1971........................................ 5%
15-24 On or after September 1, 1971, but before September 1, 1972..... 6%
15-25 On or after September 1, 1972, but before September 1, 1973..... 5%
15-26 On or after September 1, 1973, but before September 1, 1974..... 8%
15-27 On or after September 1, 1974, but before September 1, 1975..... 5%
15-28 On or after September 1, 1975, but before September 1, 1976..... 2%
15-29 On or after September 1, 1976, but before September 1, 1977.... 14%
15-30 On or after September 1, 1977, but before September 1, 1978.... 13%
15-31 On or after September 1, 1978, but before September 1, 1979.... 12%
15-32 On or after September 1, 1979, but before September 1, 1981.... 10%
15-33 On or after September 1, 1981, but before September 1, 1984..... 9%
15-34 On or after September 1, 1984, but before September 1, 1985.... 10%
15-35 On or after September 1, 1985, but before September 1, 1986..... 9%
15-36 On or after September 1, 1986, but before September 1, 1987.... 10%
15-37 On or after September 1, 1987, but before September 1, 1988..... 8%
15-38 On or after September 1, 1988, but before September 1, 1989.... 10%
15-39 On or after September 1, 1989, but before September 1, 1990..... 9%
15-40 On or after September 1, 1990, but before September 1, 1992..... 6%
15-41 On or after September 1, 1992, but before September 1, 1993..... 5%
15-42 On or after September 1, 1993, but before September 1, 1994..... 7%
15-43 On or after September 1, 1994, but before September 1, 1995..... 5%
15-44 On or after September 1, 1995, but before September 1, 1996..... 3%
15-45 SECTION 40. The change in law made by this Act in Section
15-46 822.201(c), Government Code, applies to all determinations of
15-47 compensation that are made on or after the effective date of this
15-48 Act for the purpose of computing an annuity that begins on or after
15-49 that date or making contributions for the purchase of service
15-50 credit on or after that date.
15-51 SECTION 41. An employee of the Baylor College of Dentistry
15-52 who is not a faculty member, who was transferred to The Texas A&M
15-53 University System under Chapter 403, Acts of the 74th Legislature,
15-54 Regular Session, 1995, who previous to the transfer was a
15-55 participant in a retirement program similar to the optional
15-56 retirement program established under Chapter 830, Government Code,
15-57 and who at the time of transfer elected to participate in the
15-58 optional retirement program rather than the Teacher Retirement
15-59 System of Texas shall continue participation in that program as if
15-60 the person were eligible for participation beginning on the first
15-61 day of employment with The Texas A&M University System.
15-62 SECTION 42. Notwithstanding Section 824.6021, Government
15-63 Code, as added by this Act, a person who retired before September
15-64 1, 1997, is not subject to a loss of benefits under that section
15-65 for the first 90 days of employment on or after September 1, 1997,
15-66 or for the first 90 days of a contract that occur on or after that
15-67 date.
15-68 SECTION 43. This Act takes effect September 1, 1997.
15-69 SECTION 44. The importance of this legislation and the
16-1 crowded condition of the calendars in both houses create an
16-2 emergency and an imperative public necessity that the
16-3 constitutional rule requiring bills to be read on three several
16-4 days in each house be suspended, and this rule is hereby suspended.
16-5 * * * * *