By Barrientos S.B. No. 192
75R2956 T
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to participation in, contributions to, and benefits and
1-3 administration of retirement systems for firefighters in certain
1-4 municipalities.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 5.05, Chapter 183, Acts of the 64th
1-7 Legislature (Article 6243e.1, Vernon's Texas Civil Statutes), is
1-8 amended to read as follows:
1-9 Sec. 5.05. EARLY RETIREMENT. (a) A member is eligible to
1-10 retire and receive a reduced [normal] service retirement annuity if
1-11 the member, while serving as a firefighter with the fire
1-12 department: [member:]
1-13 (1) [has] attained the age of 45 [48] years and had
1-14 [has] at least 10 years of service credit in the fund; or
1-15 (2) had [has] at least 20 [23] years of service
1-16 credit, regardless of age.
1-17 (b) The retirement annuity of a person who retires under
1-18 this section after September 1, 1997 is the same as for a normal
1-19 service retirement, but cannot be increased under Section 9.04
1-20 until the person would have met the requirements of Section 5.01 of
1-21 this Act if the person had remained in active service as a
1-22 firefighter. [a monthly payment equal to the payment described by
1-23 Section 5.04 of this Act, reduced according to tables recommended
1-24 by the board's actuary and adopted by the board of trustees for
2-1 early retirement.]
2-2 SECTION 2. Section 7.02, Chapter 183, Acts of the 64th
2-3 Legislature (Article 6243e.1, Vernon's Texas Civil Statutes), is
2-4 amended to read as follows:
2-5 Sec. 7.02. SURVIVING SPOUSE OF RETIREE. On the death of a
2-6 retiree, the retiree's surviving spouse [spouse, if married to the
2-7 retiree at the time of the retiree's retirement,] is entitled to
2-8 receive an immediate monthly benefit from the fund of 75 percent of
2-9 the retirement benefit that was being paid to the retiree
2-10 [retiree.] if either:
2-11 (1) the surviving spouse was married to the retiree at
2-12 the time of the retiree's retirement; or
2-13 (2) became married to the retiree after the retiree's
2-14 retirement and remained married to the retiree at least 24
2-15 consecutive months prior to the retiree's death.
2-16 SECTION 3. Section 7.04, Chapter 183, Acts of the 64th
2-17 Legislature (Article 6243e.1, Vernon's Texas Civil Statutes), is
2-18 amended to read as follows:
2-19 Sec. 7.04. TERMINATION OF SPOUSE'S BENEFIT. The [If, at the
2-20 time of termination of employment with the fire department, the
2-21 deceased firefighter or retiree met the requirements for normal
2-22 retirement eligibility as provided by Section 5.01 of this Act,
2-23 the] benefit payable to a surviving spouse is payable throughout
2-24 the surviving spouse's remaining lifetime. [Otherwise, the benefit
2-25 ceases on the earlier of the spouse's death or marriage to any
2-26 other person.] If, prior to September 1, 1997, the benefit payable
2-27 to a surviving spouse has terminated due to the spouse's marriage
3-1 to another person, the surviving spouse may again begin receiving
3-2 benefits (but not retroactively) beginning on the date the
3-3 surviving spouse files a written application with the board of
3-4 trustees, requesting resumption of benefits.
3-5 SECTION 4. Section 8.02, Chapter 183, Acts of the 64th
3-6 Legislature (Article 6243e.1, Vernon's Texas Civil Statutes), is
3-7 amended to read as follows:
3-8 Sec. 8.02. ELECTION TO PARTICIPATE IN DROP. The election to
3-9 participate in the DROP shall be made in accordance with procedures
3-10 adopted by the board of trustees. The election may be made at any
3-11 time on or after the date the member becomes eligible for normal
3-12 service retirement under Section 5.01 of this Act or early
3-13 retirement under Section 5.05 of this Act and becomes effective on
3-14 the first day of the first month after the date of the election.
3-15 At the same time that a member makes an election to participate in
3-16 the DROP, the member must agree in writing to terminate service
3-17 with the fire department on a date not later than the fifth
3-18 [second] anniversary of the effective date of the election under
3-19 this section. An agreement to terminate service is binding on the
3-20 member and the fire department, except that the member may
3-21 terminate active service at any time before the date selected. An
3-22 election to participate in the DROP has no effect on either the
3-23 municipality's or the member's contributions under Section 10.01 of
3-24 this Act.
3-25 SECTION 5. Section 8.06, Chapter 183, Acts of the 64th
3-26 Legislature (Article 6243e.1, Vernon's Texas Civil Statutes), is
3-27 amended to read as follows:
4-1 Sec. 8.06. ESTABLISHMENT OF DROP ACCOUNT AT RETIREMENT.
4-2 (a) In lieu of electing to participate in the DROP before actual
4-3 retirement, a member who is eligible for normal service retirement
4-4 or early retirement and who terminates or has terminated [may elect
4-5 to terminate] active service as a firefighter may [and] establish
4-6 a DROP account under this section.
4-7 (b) A member who already has terminated covered employment
4-8 and who subsequently becomes eligible to receive a normal service
4-9 retirement benefit under Section 5.06 is also entitled to establish
4-10 a DROP account under this section upon retiring under Section 5.06.
4-11 (c) If a member [so elects:] elects to participate in the
4-12 DROP pursuant to this section:
4-13 (1) the board of trustees shall cause to be credited
4-14 to a DROP account maintained within the fund for the benefit of
4-15 that person an amount equal to the credits that the member's DROP
4-16 account would have received, including interest, if the member had
4-17 established the DROP account after becoming eligible for normal
4-18 service retirement, but not more than five [two] years before the
4-19 effective date of the person's retirement;
4-20 (2) the date used in computations under Subdivision
4-21 (1) of this section as if the member had established the DROP
4-22 account on that date is the effective date of the member's
4-23 election to participate in the DROP;
4-24 (3) the member will receive payments from the member's
4-25 DROP account as the member may elect under Section 8.05 of this
4-26 Act; and
4-27 (4) the member's DROP account shall be credited with
5-1 interest as provided by Section 8.05 of this Act.
5-2 SECTION 6. Section 9.03(c), Chapter 183, Acts of the 64th
5-3 Legislature (Article 6243e.1, Vernon's Texas Civil Statutes), is
5-4 repealed.
5-5 SECTION 7. Section 9.04, Chapter 183, Acts of the 64th
5-6 Legislature (Article 6243e.1, Vernon's Texas Civil Statutes), is
5-7 amended by amending Subsection (a) and adding Subsection (d) to
5-8 read as follows:
5-9 (a) Subject to the provisions of Section 5.05 of this Act, a
5-10 [A] person receiving a retirement or survivor's benefit under this
5-11 Act is entitled to an annual cost-of-living adjustment of that
5-12 person's benefit based on any increase in the Consumer Price Index
5-13 for All Urban Consumers as determined by the United States
5-14 Department of Labor since the last increase in benefits under this
5-15 section.
5-16 (d) If the board's actuary has advised the board of trustees
5-17 that the adjustment authorized by this subsection would not impair
5-18 the financial stability of the fund, the adjusted retirement and/or
5-19 survivor's benefits payable under this act may be increased by an
5-20 amount or amounts determined by the affirmative vote of a majority
5-21 of the board of trustees.
5-22 SECTION 8. Section 11.01, Chapter 183, Acts of the 64th
5-23 Legislature (Article 6243e.1, Vernon's Texas Civil Statutes), is
5-24 amended to read as follows:
5-25 Sec. 11.01. Permitted Investments. When the board of
5-26 trustees determines that there is in the fund a surplus exceeding
5-27 the reasonable, safe amount necessary to take care of the current
6-1 demands on the fund, the surplus, or so much of it as the board of
6-2 trustees considers prudent, may be invested in:
6-3 (1) direct obligations of or obligations the principal
6-4 and interest of which are guaranteed [or fully insured] by the
6-5 United States or its agencies or instrumentalities;
6-6 (2) short-term investments funds, mutual funds, or
6-7 their equivalent that are rated as investment quality or higher by
6-8 a nationally recognized investment rating firm; [commercial paper
6-9 rated as investment quality or higher by a nationally recognized
6-10 investment rating firm;]
6-11 [(3) short-term investments funds, mutual funds, or
6-12 their equivalent, that:]
6-13 [(A) are rated as investment quality or higher by
6-14 a nationally recognized investment rating firm; and]
6-15 [(B) do not exceed an average of 270 days to
6-16 maturity;]
6-17 (3) [(4)] fully collateralized or direct repurchase
6-18 agreements, including direct and reverse security repurchase
6-19 agreements and security lending agreements that:
6-20 (A) have a defined termination date;
6-21 (B) are secured by obligations described by this
6-22 section or by cash; and
6-23 (C) are pledged with a third party selected or
6-24 approved by a majority vote of the board of trustees;
6-25 (4) [(5)] corporate bonds, including convertible
6-26 bonds, [bonds and] collateralized mortgage obligations, and
6-27 asset-backed securities; [rated as investment quality or higher by
7-1 a nationally recognized investment rating firm;]
7-2 (5) [(6)] common stocks, [and] preferred stocks and
7-3 convertible preferred stocks of companies incorporated in the
7-4 United States and foreign stocks that are designated in United
7-5 States dollars and that are registered with the Securities and
7-6 Exchange Commission and listed on a United States exchange or by
7-7 the National Association of Securities Dealers Automated
7-8 Quotations;
7-9 (6) [(7)] [major] foreign equity and fixed income
7-10 [market] investments; and
7-11 (7) mutual funds, common funds, and their equivalents,
7-12 that contain only items described above as being authorized
7-13 investments.
7-14 [(8) convertible stocks and bonds recognized as
7-15 investment quality or higher by a nationally recognized investment
7-16 rating firm or by the investment manager.]
7-17 SECTION 9. Section 11.02, Chapter 183, Acts of the 64th
7-18 Legislature (Article 6243e.1, Vernon's Texas Civil Statutes), is
7-19 repealed.
7-20 SECTION 10. Section 11.03, Chapter 183, Acts of the 64th
7-21 Legislature (Article 6243e.1, Vernon's Texas Civil Statutes), is
7-22 amended to read as follows:
7-23 Sec. 11.03. LIMITATIONS ON INVESTMENTS. The fund may not
7-24 own more than five percent of the voting stock of any one
7-25 corporation. Under an investment measure at market [cost]:
7-26 (1) total fixed-income investments should not
7-27 represent less than 30 [50 percent nor more than 80] percent of the
8-1 value of the investment portfolio;
8-2 (2) total investments in common stocks should not
8-3 represent [less than 20 percent nor] more than 70 [50] percent of
8-4 the value of the investment portfolio;
8-5 (3) total investments in common stocks and bonds of
8-6 foreign corporations may not represent more than 20 [five] percent
8-7 of the value of the investment portfolio; and
8-8 (4) total investments in any one corporation may not
8-9 represent more than five [three] percent of the value of the
8-10 investment portfolio.
8-11 SECTION 11. This Act takes effect September 1, 1997.
8-12 SECTION 12. The importance of this legislation and the
8-13 crowded condition of the calendars in both houses create an
8-14 emergency and an imperative public necessity that the
8-15 constitutional rule requiring bills to be read on three several
8-16 days in each house be suspended, and this rule is hereby suspended.