AN ACT
1-1 relating to the retirement system for firefighters and police
1-2 officers in certain municipalities.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 1.02, Chapter 824, Acts of the 73rd
1-5 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
1-6 is amended to read as follows:
1-7 Sec. 1.02. Definitions. In this Act:
1-8 (1) "Active member" means a fire fighter or police
1-9 officer who is a current contributing member of the fund.
1-10 (2) "Average total salary" means the aggregate total
1-11 salary, as defined by Subdivision (17) of this section, received by
1-12 a member during the three years of the five-year period ending on
1-13 the date of the member's service or disability retirement or death
1-14 in which the member's total salary is highest, divided by three.
1-15 (3) "Beneficiary" means the surviving spouse,
1-16 dependent child, or dependent parent of a deceased member or
1-17 retiree.
1-18 (4) "Board" means the board of trustees of a fund to
1-19 which this Act applies.
1-20 (5) "Code" means the United States Internal Revenue
1-21 Code of 1986.
1-22 (6) "Department" means the fire department of a
1-23 municipality to which this Act applies, the police department of a
2-1 municipality to which this Act applies, or both the fire department
2-2 and the police department of such a municipality.
2-3 (7) "Dependent child" means a person under age 18, or
2-4 a totally disabled person, whose natural or adoptive parent is a
2-5 deceased member or deceased retiree if, for the year immediately
2-6 preceding the death of the member or retiree, the deceased member
2-7 or retiree claimed the person as a dependent on the member's or
2-8 retiree's federal income tax return.
2-9 (8) "Dependent parent" means a person who is the
2-10 natural parent of a deceased member or deceased retiree or who
2-11 adopted a deceased member or deceased retiree before the deceased
2-12 member's or retiree's 18th birthday if, for the year immediately
2-13 preceding the death of the member or retiree, the deceased member
2-14 or retiree claimed the person as a dependent on the member's or
2-15 retiree's federal income tax return.
2-16 (9) "Fire fighter" means an employee of the fire
2-17 department who is classified as a fire fighter by the personnel
2-18 department of the municipality.
2-19 (10) [(2)] "Fund" means the fire fighters and police
2-20 officers pension fund of a municipality to which this Act applies.
2-21 (11) "Member" means a fire fighter or police officer
2-22 who has become a member of the fund as provided by Section 4.01(a)
2-23 of this Act and has not retired, died, or forfeited the person's
2-24 interest in the fund.
2-25 (12) "Police officer" means an employee of the police
3-1 department who is classified as a police officer by the personnel
3-2 department of the municipality.
3-3 (13) "Retiree" means a member who has terminated
3-4 employment with the department with a right to a service retirement
3-5 pension as provided by Section 5.01 of this Act or a disability
3-6 retirement pension as provided by Section 5.03 of this Act.
3-7 (14) "Retirement" means the period that a retiree is
3-8 entitled to receive service retirement benefits or disability
3-9 retirement benefits.
3-10 (15) [(3)] "Retirement annuity" means monthly pension
3-11 benefits payable to a retiree.
3-12 (16) [(4)] "Surviving spouse" means a widow or a
3-13 widower of a member or retiree who was married to the member or
3-14 retiree at the time of the member's or retiree's death.
3-15 (17) [(5)] "Total salary" means all salary of a
3-16 member, except:
3-17 (A) [excluding] overtime pay, [and, for police
3-18 officers, excluding] field training officer's pay [and standby
3-19 pay], [which includes] bomb squad pay, SWAT team pay, K-9 pay, and
3-20 hostage team pay; and
3-21 (B) pay for unused accrued vacation and sick
3-22 leave, holiday pay, compensatory time pay, and bonus days leave, or
3-23 any similar items of compensation that may be paid in the future.
3-24 (18) "Years of service" means a member's total years
3-25 of service, including fractional years or full months of service,
4-1 computed as provided by Section 5.01(e) of this Act.
4-2 SECTION 2. Section 1.04, Chapter 824, Acts of the 73rd
4-3 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
4-4 is amended by amending Subsections (b) and (d) and adding
4-5 Subsection (e) to read as follows:
4-6 (b) The board shall hold in trust the assets of the fund for
4-7 the exclusive benefit of the members and retirees of the fund and
4-8 their beneficiaries and for defraying reasonable administrative
4-9 expenses of the fund.
4-10 (d) A public or private entity, agency, or authority may not
4-11 alter or impair any contract made by the board or under the
4-12 authority or direction of the board.
4-13 (e) The fund is independent of the control of a municipality
4-14 to which this Act applies.
4-15 SECTION 3. Section 2.01, Chapter 824, Acts of the 73rd
4-16 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
4-17 is amended to read as follows:
4-18 Sec. 2.01. Board of trustees. (a) The fund is governed by
4-19 a board of trustees consisting of the following nine members:
4-20 (1) the mayor of a municipality to which this Act
4-21 applies;
4-22 (2) two members of the governing body of a
4-23 municipality to which this Act applies, appointed by that governing
4-24 body;
4-25 (3) two active members who are fire fighters below the
5-1 rank of fire chief, elected by secret ballot by a majority of the
5-2 votes cast by [vote of] the members of the fire department [who are
5-3 contributing members of the fund];
5-4 (4) two active members who are police officers below
5-5 the rank of police chief, elected by secret ballot by a majority of
5-6 the votes cast by [vote of] the members of the police department
5-7 [who are contributing members of the fund];
5-8 (5) a retiree [or beneficiary] representative of the
5-9 fire department, elected by secret ballot by a majority [vote] of
5-10 the votes cast by the retirees of the fire department and[, or] the
5-11 surviving spouses who are receiving benefits with respect to
5-12 deceased members or [of the] retirees of[, from] the fire
5-13 department; and
5-14 (6) a retiree [or beneficiary] representative of the
5-15 police department, elected by secret ballot by a majority [vote] of
5-16 the votes cast by the retirees of the police department and[, or]
5-17 the surviving spouses who are receiving benefits with respect to
5-18 deceased members or [of the] retirees of[, from] the police
5-19 department.
5-20 (b) The board, through its secretary, shall administer the
5-21 required elections of the active member and retiree representatives
5-22 [retiree or beneficiary representatives] by mailing ballots to all
5-23 eligible members, [out-of-town] retirees, or beneficiaries. Only
5-24 retirees and surviving spouses who are currently receiving benefits
5-25 from the fund [of members properly enrolled on the pension rolls]
6-1 are eligible to vote for the [be elected as] retiree [or
6-2 beneficiary] representatives. If no candidate receives a majority
6-3 of the votes cast for any trustee position, the board shall hold a
6-4 run-off election in which the only candidates are the candidates
6-5 who received the highest and second-highest number of votes cast.
6-6 [(c) The fund is independent of the control of a
6-7 municipality to which this Act applies.]
6-8 SECTION 4. Subsection (e), Section 2.02, Chapter 824, Acts
6-9 of the 73rd Legislature, 1993 (Article 6243o, Vernon's Texas Civil
6-10 States), is amended to read as follows:
6-11 (e) The retiree [or beneficiary] representatives serve on
6-12 the board for staggered four-year terms, with one member's term
6-13 expiring every two years.
6-14 SECTION 5. Section 2.03, Chapter 824, Acts of the 73rd
6-15 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
6-16 is amended by amending the heading and Subsections (a), (b), and
6-17 (d) to read as follows:
6-18 Sec. 2.03. RESIGNATION OR REMOVAL OF TRUSTEES. (a) The
6-19 members of the board who are fire fighters or police officers may
6-20 resign or may be removed by a vote of the membership of their
6-21 respective departments.
6-22 (b) The members of the board who are retiree [or
6-23 beneficiary] representatives may resign or may be removed by a vote
6-24 of the group eligible to elect them.
6-25 (d) A removal election under this section must be held
7-1 within 30 days after the date the board certifies that a proper
7-2 petition for a removal election has been signed by at least 20
7-3 percent of the membership from which the trustee was elected. A
7-4 trustee's term of service ends on the entry of an order by the
7-5 board declaring that a majority of the votes cast in [the results
7-6 of] a removal election under this section favor removal.
7-7 SECTION 6. Subsection (a), Section 2.04, Chapter 824, Acts
7-8 of the 73rd Legislature, 1993 (Article 6243o, Vernon's Texas Civil
7-9 Statutes), is amended to read as follows:
7-10 (a) The board shall elect from among the trustees a
7-11 chairman, a vice-chairman, and a secretary.
7-12 SECTION 7. Sections 2.06 and 2.07, Chapter 824, Acts of the
7-13 73rd Legislature, 1993 (Article 6243o, Vernon's Texas Civil
7-14 Statutes), are amended to read as follows:
7-15 Sec. 2.06. Meetings; QUORUM. (a) The board shall hold
7-16 regular monthly meetings and special meetings at the call of the
7-17 chairman or on written demand by a majority of the members of the
7-18 board.
7-19 (b) A quorum of the board is five members. When a quorum is
7-20 present, action of the board that requires a vote may be taken by a
7-21 majority of the members present. Any action taken by less than a
7-22 quorum is not binding on the board.
7-23 Sec. 2.07. Committees of board. (a) The chairman of the
7-24 board may appoint committees that report to the board.
7-25 (b) Only members of the board may be appointed to committees
8-1 under this section.
8-2 (c) Committees shall be composed of [not fewer than] three
8-3 or four [nor more than five] members of the board, except as
8-4 otherwise specifically provided by the board.
8-5 (d) Only members of committees may vote as committee
8-6 members.
8-7 (e) The board may direct staff and advisors to assist the
8-8 committees.
8-9 (f) [All members of the board may attend committee meetings.]
8-10 [(g)] Members of committees serve at the pleasure of the
8-11 board.
8-12 (g) [(h)] Permanent or standing committees may [not] be
8-13 appointed.
8-14 SECTION 8. Subsections (a) and (b), Section 3.01, Chapter
8-15 824, Acts of the 73rd Legislature, 1993 (Article 6243o, Vernon's
8-16 Texas Civil Statutes), are amended to read as follows:
8-17 (a) The board has complete authority and power to:
8-18 (1) administer the fund for the exclusive benefit of
8-19 all members, retirees, and beneficiaries;
8-20 (2) order payments from the fund as required by this
8-21 Act; [and]
8-22 (3) control the fund independently;
8-23 (4) conduct all litigation on behalf of the fund; and
8-24 (5) purchase with fund assets from one or more
8-25 insurers licensed to do business in this state one or more
9-1 insurance policies that provide for reimbursement of the fund and
9-2 any trustee, officer, or employee of the board for liability
9-3 imposed or damages because of an alleged act, error, or omission
9-4 committed in the trustee's, officer's, or employee's capacity as a
9-5 fiduciary of assets of the fund and for costs and expenses incurred
9-6 as a trustee, officer, or employee in defense of a claim for an
9-7 alleged act, error, or omission, as long as the insurance policy
9-8 does not provide for reimbursement of a trustee, officer, or
9-9 employee for liability imposed or expenses incurred because of the
9-10 trustee's, officer's, or employee's personal dishonesty, fraud,
9-11 lack of good faith, or intentional failure to act prudently.
9-12 (b) The board shall adopt rules necessary for the board's
9-13 effective operation, including rules relating to:
9-14 (1) the disbursement of the fund's assets;
9-15 (2) the designation of beneficiaries of the fund; and
9-16 (3) the name of the board and the fund.
9-17 SECTION 9. Subsections (a) and (d), Section 3.02, Chapter
9-18 824, Acts of the 73rd Legislature, 1993 (Article 6243o, Vernon's
9-19 Texas Civil Statutes), are amended to read as follows:
9-20 (a) The board shall consider all cases for membership in the
9-21 fund and for the retirement and benefits of the members of the fund
9-22 and all applications for benefits by surviving spouses, dependent
9-23 children, and dependent parents.
9-24 (d) The chairman of the board may issue process for
9-25 witnesses, administer oaths to those witnesses, and examine any
10-1 witness in any manner affecting retirement or a benefit under this
10-2 Act. The process for witnesses may be served on any member of the
10-3 fire or police department or any other person the board considers
10-4 to be an appropriate person. On the failure of any witness to
10-5 attend and testify, that person may be compelled to attend and
10-6 testify as in any judicial proceeding[, according to the practice
10-7 in a justice court].
10-8 SECTION 10. Section 3.03, Chapter 824, Acts of the 73rd
10-9 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
10-10 is amended to read as follows:
10-11 Sec. 3.03. Orders for disbursements. (a) The board shall
10-12 issue orders for disbursements signed by the chairman or
10-13 vice-chairman of the board and the secretary of the board to the
10-14 appropriate persons. The order shall state the purposes for the
10-15 payments. The board shall keep a record of those orders.
10-16 (b) Disbursements [At each monthly board meeting, the board
10-17 shall send to the treasurer of the board a written list of persons
10-18 entitled to the payment from the fund, stating the amount and
10-19 reason for payment. The list must be certified and signed by the
10-20 chairman or vice-chairman of the board and the secretary of the
10-21 board.]
10-22 [(c) The fund] may not be made [disbursed] without a record
10-23 vote of the board.
10-24 [(d) A quorum of the board is five members. When a quorum
10-25 is present, action of the board that requires a vote may be taken
11-1 by a majority of the members present.]
11-2 SECTION 11. Subsection (a), Section 4.01, Chapter 824, Acts
11-3 of the 73rd Legislature, 1993 (Article 6243o, Vernon's Texas Civil
11-4 Statutes), is amended to read as follows:
11-5 (a) A person becomes a member of the fund as a condition of
11-6 continued employment if the person[:]
11-7 [(1)] has served eight months as a fire fighter or
11-8 police officer or as a trainee in a fire fighter or police officer
11-9 training academy of a municipality to which this Act applies. A
11-10 person may not become eligible for disability retirement benefits
11-11 unless the person[;]
11-12 [(2) was not younger than 18 at the time of
11-13 appointment; and]
11-14 [(3)] has provided an authorization for release of
11-15 medical information for any medical records dated on or after the
11-16 date of initial application for employment or has agreed in writing
11-17 to provide that authorization when requested by the board or, in
11-18 the alternative if required by the board, has submitted to a
11-19 physical examination by a physician selected by the board.
11-20 SECTION 12. Section 4.03, Chapter 824, Acts of the 73rd
11-21 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
11-22 is amended by amending the heading and Subsections (a), (b), and
11-23 (d) through (g) to read as follows:
11-24 Sec. 4.03. UNIFORMED [MILITARY] SERVICE. (a) A member of
11-25 the fund who enters any uniformed [active military] service of the
12-1 United States may not:
12-2 (1) be required to make the monthly payments into the
12-3 fund provided by this Act as long as the member is engaged in
12-4 active service with the uniformed [military] service; or
12-5 (2) lose any seniority rights or retirement benefits
12-6 provided by this Act by virtue of that [military] service.
12-7 (b) Not later than the 90th day after the date of the
12-8 member's reinstatement to an active status in the fire or police
12-9 department, the member must file with the secretary of the board a
12-10 written statement of intent to pay into the fund an amount equal to
12-11 what the member would have paid if the member had remained on
12-12 active status in the department during the period of the member's
12-13 absence in the uniformed [military] service.
12-14 (d) Except as provided by Subsection (f) of this section, if
12-15 the member does not comply with Subsections (b) and (c) of this
12-16 section, the member shall lose all credit toward the member's
12-17 retirement annuity for the length of time the member was engaged in
12-18 active service in any uniformed [military] service.
12-19 (e) The amount of credit purchased under this section may
12-20 not exceed the length of the active service in a uniformed
12-21 [military] service required to be credited [authorized] by law.
12-22 (f) If a person who became a member before October 1, 1997,
12-23 does not make the payment required under Subsection (c) of this
12-24 section within the required amount of time and the member would
12-25 otherwise be [is] eligible for credit under federal law, the member
13-1 may receive credit for the uniformed service if the member [shall]
13-2 also pays [pay] interest, compounded annually, on the then current
13-3 rate of a member's contribution from the date the payment was
13-4 required to the date the payment was made. The board shall set the
13-5 rate of interest.
13-6 (g) A disability resulting from either injury or disease
13-7 contracted while engaged in any uniformed [military] service does
13-8 not entitle a member to a disability retirement annuity.
13-9 SECTION 13. Subsections (a) and (c), Section 4.04, Chapter
13-10 824, Acts of the 73rd Legislature, 1993 (Article 6243o, Vernon's
13-11 Texas Civil Statutes), are amended to read as follows:
13-12 (a) There shall be deducted from the total salary [wages] of
13-13 each fire fighter and police officer in the employment of a
13-14 municipality to which this Act applies a percentage of the member's
13-15 total salary according to the following schedule:
13-16 (1) 11.16 percent for full pay periods after September
13-17 30, 1993, but before October 1, 1994;
13-18 (2) 11.32 percent for full pay periods after September
13-19 30, 1994, but before October 1, 1995;
13-20 (3) 11.50 percent for full pay periods after September
13-21 30, 1995, but before October 1, 1996;
13-22 (4) 11.66 percent for full pay periods after September
13-23 30, 1996, but before October 1, 1997;
13-24 (5) 11.82 percent for full pay periods after September
13-25 30, 1997, but before October 1, 1998;
14-1 (6) 12 percent for full pay periods after September
14-2 30, 1998, but before October 1, 1999;
14-3 (7) 12.16 percent for full pay periods after September
14-4 30, 1999, but before October 1, 2000;
14-5 (8) 12.32 percent for full pay periods after September
14-6 30, 2000, but before October 1, 2001; and
14-7 (9) 12.50 percent for full pay periods after September
14-8 30, 2001.
14-9 (c) Contributions picked up by the municipality shall be
14-10 treated as employer contributions [in accordance with Section
14-11 414(h)(2), Internal Revenue Code of 1986 (26 U.S.C. Section 414),]
14-12 for the purpose of determining tax treatment of the amounts under
14-13 the code [Internal Revenue Code of 1986]. Those contributions are
14-14 not included in the gross income of the employee until the time
14-15 they are distributed or made available to the employee.
14-16 SECTION 14. Subsections (b) and (c), Section 4.05, Chapter
14-17 824, Acts of the 73rd Legislature, 1993 (Article 6243o, Vernon's
14-18 Texas Civil Statutes), are amended to read as follows:
14-19 (b) The payments into the fund by the municipality, both as
14-20 to deductions and double-matching amounts, shall be made on the
14-21 same day the contributions are deducted from the members' total
14-22 salary [pay].
14-23 (c) Any donations made to the fund and all amounts [funds]
14-24 received from any source for the fund shall be deposited in the
14-25 fund at the earliest opportunity.
15-1 SECTION 15. Section 5.01, Chapter 824, Acts of the 73rd
15-2 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
15-3 is amended to read as follows:
15-4 Sec. 5.01. Retirement benefits. (a) If a member of the
15-5 fund has contributed a portion of that member's salary as provided
15-6 by this Act and has contributed and served for 20 years or more in
15-7 the fire or police department, the board shall, on the application
15-8 of the member for a retirement annuity, authorize a retirement
15-9 annuity to the member.
15-10 (b) The board shall compute the retirement annuity of a
15-11 member who retires after September 30, 1991, but before October 1,
15-12 1995, on the basis of the average of the member's total salary for
15-13 the highest three years of the last five years, computed from the
15-14 date of retirement, of the member's pay at the rate of two percent
15-15 for each of the first 20 years served, plus 3 1/2 percent for each
15-16 of the next 10 years served, plus one percent for each of the next
15-17 five years served, with fractional years prorated based on full
15-18 months served as a contributing member, but the annuity may not
15-19 exceed, as of the date of retirement, 80 percent of the average so
15-20 determined.
15-21 (c) The board shall compute the retirement annuity of a
15-22 member who retires after September 30, 1995, but before October 1,
15-23 1997, on the basis of the average of the member's total salary for
15-24 the highest three years of the last five years, computed from the
15-25 date of retirement, of the member's pay at the rate of two percent
16-1 for each of the first 20 years served, plus four percent for each
16-2 of the next five years served, plus 3 1/2 percent for each of the
16-3 next five years served, plus one percent for each of the next five
16-4 years served, with fractional years prorated based on full months
16-5 served as a contributing member. In making the computation for a
16-6 year, the year is considered to begin on the first day a
16-7 contribution is made. An annuity under this subsection may not
16-8 exceed, as of the date of retirement, 82.5 percent of the average
16-9 determined under this subsection.
16-10 (d) The board shall compute the retirement annuity of a
16-11 member who retires after September 30, 1997, at the rate of two
16-12 percent of the member's average total salary for each of the first
16-13 20 years of service, plus four percent of average total salary for
16-14 each of the next 10 years of service, plus one percent of average
16-15 total salary for each of the next five years of service, with
16-16 fractional years of service prorated based on full months served as
16-17 a contributing member. In making the computation for a year, the
16-18 year is considered to begin on the first day a contribution is
16-19 made. A retirement annuity under this subsection may not exceed,
16-20 as of the date of retirement, 85 percent of the member's average
16-21 total salary.
16-22 (e) A member may not receive an award from the fund for
16-23 service retirement until the member has [served] at least 20 years
16-24 of service in the fire or police department and has also
16-25 contributed the required amount of money for at least 20 years. In
17-1 determining the number of years of service in a department, the
17-2 member shall be given full credit for the period the member was an
17-3 active member plus the time the member was actively engaged in
17-4 service with any uniformed [military] service in accordance with
17-5 Section 4.03 of this Act and for absences taken under the Family
17-6 and Medical Leave Act (29 U.S.C. Section 2601 et seq.), in
17-7 accordance with Section 4.02 of this Act. Disciplinary suspensions
17-8 of 15 days or less may not be subtracted from a member's service
17-9 credit under this Act if the member has paid into the fund, within
17-10 30 days after the later of the termination date of each suspension
17-11 or the exhaustion of any appeal with respect to the suspension, a
17-12 sum of money equal to the amount of money that would have been
17-13 deducted from that person's salary during that period of suspension
17-14 if it had not been for that suspension. A municipality to which
17-15 this Act applies shall double-match a payment made under this
17-16 subsection. Members [(e) Except as provided by Subsection (f) of
17-17 this section, members] of the fund at the time of their retirement
17-18 shall also receive service credit for all unused sick leave
17-19 accumulated by them under Chapter 143, Local Government Code, but
17-20 only to the extent the unused sick leave exceeds 90 days [and its
17-21 subsequent amendments, with fractional years prorated based on full
17-22 months of sick leave].
17-23 (f) All monthly pensions being paid by the fund to retirees
17-24 who retired before October 1, 1989, are increased, effective with
17-25 the first monthly payment due on or after October 1, 1997. The
18-1 amount of the increase depends on the fiscal year ending September
18-2 30 in which the retiree retired and is a percentage of the pension
18-3 payment that would have been payable on October 1, 1997, except for
18-4 this increase. The percentage is set forth in the following
18-5 schedule:
18-6 Municipality Fiscal Year Percentage
18-7 of Retirement Increase
18-8 1988 1.0%
18-9 1987 2.0%
18-10 1986 3.0%
18-11 1985 4.0%
18-12 1984 5.0%
18-13 1983 6.0%
18-14 1982 7.0%
18-15 1981 8.0%
18-16 1980 9.0%
18-17 1979 or earlier 10.0%
18-18 [The retirement annuity for a member under Subsection (e) of this
18-19 section may not exceed, as of the date of retirement, 82.5 percent
18-20 of the average, determined under that subsection and under the
18-21 ordinances of a municipality to which this Act applies, that
18-22 exceeds 90 days of accumulated sick leave.]
18-23 SECTION 16. Subsections (c), (d), and (e), Section 5.015,
18-24 Chapter 824, Acts of the 73rd Legislature, 1993 (Article 6243o,
18-25 Vernon's Texas Civil Statutes), are amended to read as follows:
19-1 (c) To be eligible to make a Back DROP election under this
19-2 section, a member of the fund must have [contributed a portion of
19-3 that member's salary, as provided by this Act, and have contributed
19-4 and served] at least 20 years and 1 month of service in the fire or
19-5 police department.
19-6 (d) The amount of a lump-sum payment to which a member
19-7 making a Back DROP election is entitled shall be computed in the
19-8 manner provided by this subsection. The member's retirement
19-9 annuity [average annual salary] shall be computed in the manner
19-10 provided by Section 5.01(c) or (d) of this Act, as applicable,
19-11 except that the retirement date used in making that computation is
19-12 the retirement date computed as provided by this subsection. The
19-13 member's retirement annuity as so computed [average annual salary]
19-14 shall be divided by 12 to compute the member's [average] monthly
19-15 pension [salary]. The member's [average] monthly pension [salary]
19-16 multiplied by the number of full months elected by the member under
19-17 Subsection (b)(1) of this section is the amount of the lump-sum
19-18 payment to which the member is entitled. Solely for purposes of
19-19 [In] computing the member's monthly pension [average annual salary]
19-20 under this subsection, the member's retirement date is the member's
19-21 Back DROP retirement date, which is the member's actual retirement
19-22 date less the amount of time for:
19-23 (1) any service in excess of 35 years of service;
19-24 (2) any service [credit] given for sick leave unused
19-25 on the date of actual retirement; and
20-1 (3) any [service credit, for] service in excess of 20
20-2 years but not in excess of the amount permitted under Subsection
20-3 (b)(1) of this section that[,] the member elects for computing the
20-4 amount of the lump-sum payment.
20-5 (e) For purposes of computing the monthly pension [annuity]
20-6 of a member making a Back DROP election, the member's retirement
20-7 annuity [average annual salary] shall be computed in the manner
20-8 provided by Section 5.01(c) or (d) of this Act, as applicable,
20-9 except that the retirement date used in making that computation is
20-10 the member's actual retirement date[, plus time representing any
20-11 service credit given for sick leave unused on the actual retirement
20-12 date,] less the amount of time the member elects under Subsection
20-13 (b)(1) of this section. The annuity may not exceed the limitation
20-14 provided by Section 5.01(c) or (d) of this Act, as applicable. The
20-15 member's retirement annuity [average annual salary] shall be
20-16 divided by 12 to compute the member's monthly pension [annuity].
20-17 SECTION 17. Subsections (a), (b), and (c), Section 5.03,
20-18 Chapter 824, Acts of the 73rd Legislature, 1993 (Article 6243o,
20-19 Vernon's Texas Civil Statutes), are amended to read as follows:
20-20 (a) An active [A] member of the fund is eligible to retire
20-21 and receive a disability retirement annuity if the member:
20-22 (1) makes a written application for disability
20-23 retirement with the board;
20-24 (2) is permanently disabled through injury or disease
20-25 so as to be unable to perform the duties of any available position
21-1 in the department [incapacitate the member from the performance of
21-2 duties] and has been off active duty for a continuous period of not
21-3 less than 30 days before the date of the application for disability
21-4 retirement; [and]
21-5 (3) has had all member contributions required by this
21-6 Act made on the member's behalf;
21-7 (4) is not on indefinite suspension as described in
21-8 Subsection (d) of this section; and
21-9 (5) has authorized the release to the board of all
21-10 medical records dated on or after the date of initial application
21-11 for employment with the department [is a member in good standing of
21-12 the fire or police department in which the member is employed at
21-13 the time of retirement].
21-14 (b) A member of the fund who has a disability resulting from
21-15 injury or disease incurred before the member became a fire fighter
21-16 or police officer or while a member of any uniformed [while the
21-17 member was engaged in active military] service is not entitled to a
21-18 disability retirement annuity based on that disability.
21-19 (c) Except as provided by Subsection (d) of this section, a
21-20 member of the fund who is on suspension and who receives a total
21-21 and permanent disability resulting from an injury or disease
21-22 incurred while the member is on suspension is eligible for a
21-23 disability retirement annuity if the suspended member makes up each
21-24 deducted contribution lost by reason of the suspension not later
21-25 than the 30th day after the later of the termination date of the
22-1 suspension or the exhaustion of any appeal with respect to the
22-2 suspension [date the contribution would have been deducted from the
22-3 member's pay]. A municipality to which this Act applies shall
22-4 double-match all contributions made by a member under this
22-5 subsection.
22-6 SECTION 18. Subsection (a), Section 5.04, Chapter 824, Acts
22-7 of the 73rd Legislature, 1993 (Article 6243o, Vernon's Texas Civil
22-8 Statutes), is amended to read as follows:
22-9 (a) A member who is eligible to receive a monthly disability
22-10 retirement annuity is entitled to receive from the fund:
22-11 (1) 50 percent of the average of the member's total
22-12 salary for the highest three years of the last five years, computed
22-13 from the date of retirement, divided by 12; or
22-14 (2) [,] if the member has served less than three years
22-15 before the date of retirement, 50 percent of the member's average
22-16 monthly total salary, [excluding overtime pay,] or a theoretical
22-17 monthly average if service is less than a full month.
22-18 SECTION 19. Subsections (a) and (c), Section 5.05, Chapter
22-19 824, Acts of the 73rd Legislature, 1993 (Article 6243o, Vernon's
22-20 Texas Civil Statutes), are amended to read as follows:
22-21 (a) The board may cause a disability retiree to undergo a
22-22 medical examination or examinations by any reputable physician or
22-23 physicians selected by the board. Based on the examination, the
22-24 board shall determine whether the disability retirement annuity
22-25 shall be continued, decreased, restored to the original amount if
23-1 it had been decreased, or discontinued, except that a disability
23-2 retirement annuity may not be completely discontinued unless the
23-3 disability retiree has first been accepted for reinstatement in
23-4 that person's former position or status in the fire or police
23-5 department by the chief of the respective department.
23-6 (c) For those retired because of disability on or after
23-7 August 30, 1971, the monthly disability retirement annuity may not
23-8 be reduced to less than two percent, for each year that the retiree
23-9 has served and contributed a portion of salary, of the average of
23-10 the member's total salary for the highest three years of the last
23-11 five years, computed from the date of retirement, divided by 12, or
23-12 if the member has served less than three years before the date of
23-13 retirement, 50 percent of the member's average monthly total
23-14 salary, [excluding overtime pay,] or a theoretical monthly average
23-15 if service is less than a full month. All fractional years shall
23-16 be prorated based on full months served on the fire or police
23-17 department as a contributing member of the fund before the date of
23-18 retirement.
23-19 SECTION 20. Section 5.07, Chapter 824, Acts of the 73rd
23-20 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
23-21 is amended to read as follows:
23-22 Sec. 5.07. Outside income pension reduction. (a) The board
23-23 shall require each disability retiree retiring after August 29
23-24 [22], 1979, to provide the board annually not later than May 1 of
23-25 each year with a true and complete copy of the retiree's income tax
24-1 return for the previous year.
24-2 (b) If the retiree received income from other employment,
24-3 including self-employment, during the preceding year, the board may
24-4 reduce the retiree's disability retirement annuity by the amount of
24-5 $1 for each month for each $2 of income earned by the retiree from
24-6 the other employment during each month of the previous year, except
24-7 that the disability retirement annuity may not be decreased below
24-8 an amount based on two percent of the retiree's average total
24-9 salary[, excluding overtime pay,] computed at the time of
24-10 retirement under Section 5.04 of this Act for each year of service
24-11 in the department.
24-12 SECTION 21. Subsection (a), Section 5.09, Chapter 824, Acts
24-13 of the 73rd Legislature, 1993 (Article 6243o, Vernon's Texas Civil
24-14 Statutes), is amended to read as follows:
24-15 (a) At or before its regular meeting in the month of March,
24-16 the board annually shall review the Consumer's Price Index for All
24-17 Urban Consumers (CPI-U), U.S. City Average [Moderate Income
24-18 Families in Large Cities--All Items] or the nearest equivalent
24-19 published by the United States Bureau of Labor Statistics for the
24-20 preceding calendar year. If that index shows an increase during
24-21 the preceding calendar year in the cost of living as compared with
24-22 that index at the close of the previous year, the board shall order
24-23 an increase of all retirement annuities of all retirees and
24-24 beneficiaries by a percentage that varies by the date on which the
24-25 member retired, or in the case of a member who died before
25-1 retirement, the date on which the member died. If the member's
25-2 retirement or death before retirement occurred before August 30,
25-3 1971, the annuity shall be increased by a percentage equal to the
25-4 percentage increase in the cost of living index. If the member's
25-5 retirement or death before retirement occurred on or after August
25-6 30, 1971, but before October 1, 1989, the retirement annuity shall
25-7 be increased by a percentage that is 87.5 percent of the percentage
25-8 increase in the cost of living index, for any year in which the
25-9 cost of living index increases by eight percent or less and by 75
25-10 percent of the percentage increase in the cost of living index if
25-11 the cost of living index increases by more than eight percent. If
25-12 the member's retirement or death before retirement occurred on or
25-13 after October 1, 1989, the retirement annuity shall be increased by
25-14 a percentage that is 75 percent of the percentage increase in the
25-15 cost of living index. A percentage increase in retirement
25-16 annuities shall be rounded to the nearest one-tenth percentage
25-17 point for a cost of living increase [by the number of full
25-18 percentage points closest to the exact amount of the increase of
25-19 that index, except that any increased retirement annuities are
25-20 payable only at the rate of 75 percent of the applicable
25-21 cost-of-living percentage for those retirees, and the beneficiaries
25-22 of those retirees, who were retired on and after August 30, 1971.
25-23 The annual cost-of-living adjustment for a retiree or a beneficiary
25-24 of a retiree who retired on or after September 1, 1971, but before
25-25 October 1, 1989, shall be computed at the rate of 87.5 percent of
26-1 the consumer price index specified by this subsection if the index
26-2 is eight percent or less, with the maximum cost-of-living
26-3 adjustment capped at the rate of six percent, but at the rate of 75
26-4 percent of the index if the index is greater than eight percent for
26-5 those retirees, with no cap on the rate of the cost-of-living
26-6 adjustment].
26-7 SECTION 22. Section 5.11, Chapter 824, Acts of the 73rd
26-8 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
26-9 is amended to read as follows:
26-10 Sec. 5.11. Coordination with federal law. (a) A member or
26-11 beneficiary of a member of the fund may not accrue a service
26-12 retirement annuity,[;] disability retirement annuity,[;] death
26-13 benefit, whether death occurs in the line of duty or otherwise,[;]
26-14 or any other benefit under this Act in excess of the benefit limits
26-15 applicable to the fund under Section 415 of the code. The board
26-16 shall reduce the amount of any benefit that exceeds those limits by
26-17 the amount of the excess. If the total benefits under this fund
26-18 and the benefits and contributions to which any member is entitled
26-19 under any other qualified plans maintained by the municipality that
26-20 employs the member would otherwise exceed the applicable limits
26-21 under Section 415 of the code, the benefits the member would
26-22 otherwise receive from the fund shall be reduced to the extent
26-23 necessary to enable the benefits to comply with Section 415 of the
26-24 code.
26-25 (b) Any member or beneficiary who receives any distribution
27-1 from any plan within the system that is an eligible rollover
27-2 distribution as defined by Section 402(c)(4) of the code is
27-3 entitled to have that distribution transferred directly to another
27-4 eligible retirement plan of the member's or beneficiary's choice on
27-5 providing direction to the fund regarding that transfer in
27-6 accordance with procedures established by the board.
27-7 (c) The total salary taken into account for any purpose for
27-8 any member of the fund [Annual compensation for which benefits may
27-9 be paid under this Act] may not exceed $200,000 per year for an
27-10 eligible participant or $150,000 per year for an ineligible
27-11 participant. These dollar limits shall be periodically adjusted in
27-12 accordance with guidelines provided by the United States secretary
27-13 of the treasury. For purposes of this subsection, an eligible
27-14 participant is any person who first became a member before 1996,
27-15 and an ineligible participant is any member who is not an eligible
27-16 participant [for each member or another limit applicable under
27-17 Section 401(a)(17) of the code].
27-18 (d) [(c)] Accrued benefits under this Act become 100 percent
27-19 vested for [all members on termination of the fund or on occurrence
27-20 of another event described in Section 401(a)(17) of the code and
27-21 become 100 percent vested for] a member on:
27-22 (1) the date the member has completed 20 years of
27-23 service;
27-24 (2) the earlier termination or partial termination, if
27-25 it affects the member, of the fund; or
28-1 (3) the complete discontinuance of contributions by
28-2 the municipality to the fund.
28-3 (e) [(d)] Amounts representing forfeited nonvested benefits
28-4 of terminated members may not be used to increase benefits payable
28-5 from the fund but may be used to reduce contributions for future
28-6 plan years.
28-7 (f) [(e)] Distribution of benefits must begin not later than
28-8 April 1 of the year following the calendar year during which the
28-9 member becomes 70 1/2 years of age and must otherwise conform to
28-10 Section 401(a)(9) of the code.
28-11 (g) If the amount of any benefit is to be determined on the
28-12 basis of actuarial assumptions that are not otherwise specifically
28-13 set forth for that purpose in this Act, the actuarial assumptions
28-14 to be used are those earnings and mortality assumptions being used
28-15 on the date of the determination by the fund's actuary and approved
28-16 by the board. The actuarial assumptions being used at any
28-17 particular time shall be attached as an addendum to a copy of this
28-18 Act and treated for all purposes as a part of this Act. The
28-19 actuarial assumptions may be changed by the fund's actuary at any
28-20 time if approved by the board, but a change in actuarial
28-21 assumptions may not result in any decrease in benefits accrued as
28-22 of the effective date of the change [(f) The fund shall be
28-23 administered in a manner complying with Section 401(a)(25) of the
28-24 code, relating to actuarial assumptions].
28-25 (h) [(g)] This section applies to any benefit regardless of
29-1 when accrued.
29-2 (i) [(h)] The board may adopt rules to administer this
29-3 section. A rule adopted by the board under this subsection is
29-4 final and binding.
29-5 [(i) In this section, "code" means the Internal Revenue Code
29-6 of 1986 and its subsequent amendments.]
29-7 (j) To the extent permitted by law, the board may adjust the
29-8 benefits of retired members and beneficiaries by increasing any
29-9 retirement benefit that was reduced because of Section 415 of the
29-10 code. If Section 415 of the code is amended to permit the payment
29-11 of amounts previously precluded [as inflationary indexing] under
29-12 Section 415 of the code[. If the definition of compensation is
29-13 amended under that section to include amounts previously excluded
29-14 as compensation], the board may adjust the benefits of retired
29-15 members and beneficiaries, including the restoration [payment] of
29-16 benefits previously denied [excluded]. Benefits paid under this
29-17 subsection are not considered as extra compensation earned after
29-18 retirement but as the delayed payment of benefits earned before
29-19 retirement.
29-20 (k) The board by rule shall implement this Act in a manner
29-21 that preserves the tax qualification of the fund under the code and
29-22 may revise any provision or program to the extent necessary to
29-23 retain tax qualification.
29-24 (l) In this section, "qualified plan" has the meaning
29-25 assigned by Section 8.02 of this Act.
30-1 SECTION 23. Article 5, Chapter 824, Acts of the 73rd
30-2 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
30-3 is amended by adding Section 5.12 to read as follows:
30-4 Sec. 5.12. 13TH CHECK. (a) In any fiscal year ending after
30-5 1996 for which the board determines that the average annual
30-6 investment yield on the market value of fund investments for the
30-7 preceding five fiscal years exceeded the annual investment yield
30-8 projected by the actuary for that preceding five-fiscal-year period
30-9 by at least 100 basis points, the board may authorize the
30-10 disbursement of a 13th pension check.
30-11 (b) The 13th pension check is paid to each retiree receiving
30-12 an annuity at the time of disbursement and is in an amount equal to
30-13 the pension check paid immediately before the disbursement of the
30-14 retiree's 13th check, except the amount of any such check shall be
30-15 prorated for any retiree who has been receiving an annuity for less
30-16 than one year so that the amount of the check is one-twelfth of the
30-17 check that would have been paid to a retiree receiving an annuity
30-18 for a full year times the number of full months the retiree has
30-19 received an annuity.
30-20 (c) Authorization of a 13th check for any year is subject to
30-21 the discretion of the board. Authorization for one year does not
30-22 obligate the board to authorize a 13th check for any other year.
30-23 (d) In this section, "annual investment yield" means the
30-24 yield on the fund's investment portfolio for a particular year, as
30-25 a percentage of the portfolio, after reduction for costs of
31-1 investing the portfolio, but without reduction for the fund's
31-2 operating expenses.
31-3 SECTION 24. Section 6.02, Chapter 824, Acts of the 73rd
31-4 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
31-5 is amended to read as follows:
31-6 Sec. 6.02. Death benefit annuity for surviving spouses and
31-7 children. (a) Subject to Sections 6.03 and 6.08 of this Act, if
31-8 an active [If a contributing] member [in good standing] or a
31-9 retiree dies [before or after retirement,] leaving a surviving
31-10 spouse or[,] one or more children under the age of 18 [17] years,
31-11 [or one or more unmarried children 17 years of age or older but
31-12 under 19 years of age who attend a public or private educational
31-13 institution,] the surviving spouse and the children are entitled to
31-14 receive from the fund an aggregate death benefit annuity of the
31-15 same percentage of the member's average total salary that the
31-16 member would have been entitled to receive as a retirement annuity
31-17 if the member could have retired on the date of death, except that
31-18 the percentage may not exceed the percentage to which a member with
31-19 25 years of service credit would be entitled. One-half of the
31-20 death benefit annuity under this subsection shall be awarded to the
31-21 [eligible] surviving spouse and one-half to the dependent
31-22 [eligible] child or children.
31-23 (b) A child who is born [resulting from any marriage
31-24 occurring] after the date of retirement of the member [from a
31-25 spouse who was not the spouse on the date of retirement] is not
32-1 entitled to a death benefit [retirement] annuity under this Act
32-2 unless the member was married to the other parent of the child on
32-3 the date of retirement. A surviving spouse of a retiree who was
32-4 not married to the retiree until after the retiree's retirement is
32-5 entitled to receive only the benefit, if any, provided under
32-6 Section 6.08 of this Act.
32-7 (c) If there are no children, the surviving spouse is
32-8 entitled to receive from the fund a death benefit annuity in the
32-9 same amount the member would have been entitled to receive as a
32-10 retirement annuity if the member could have retired on the date of
32-11 death, except that the percentage used in computing the amount the
32-12 member would have been entitled to receive may not exceed the
32-13 percentage to which a member with 25 years of service would have
32-14 been entitled [an amount not to exceed 60 percent of the average
32-15 total salary of the deceased member computed as provided under
32-16 Subsection (a) of this section].
32-17 (d) If there is no surviving spouse, the dependent children
32-18 are entitled to receive from the fund an aggregate death benefit
32-19 annuity of one-half of the amount the member would have been
32-20 entitled to receive as a retirement annuity if the member could
32-21 have retired on the date of death, except that the percentage used
32-22 in computing the amount the member would have been entitled to
32-23 receive may not exceed the percentage to which a member with 25
32-24 years of service would have been entitled. However, [not more than
32-25 30 percent of the average total salary computed as provided under
33-1 Subsection (a) of this section, except that] if the board
33-2 determines on investigation that the eligible children are
33-3 destitute, the board may increase the death benefit annuity under
33-4 this subsection to two-thirds of the amount the member would have
33-5 been entitled to receive as a retirement annuity if the member
33-6 could have retired on the date of death, except that the percentage
33-7 used in computing the amount the member would have been entitled to
33-8 receive may not exceed the percentage to which a member with 25
33-9 years of service would have been entitled [to an amount not to
33-10 exceed 40 percent of that average total salary]. The amount
33-11 awarded under this subsection to any child shall be paid by the
33-12 board to the legal guardian of the child.
33-13 (e) [A surviving spouse of a member of the fund who died
33-14 before retirement is entitled to at least 50 percent of the
33-15 member's average total salary that the member would have been
33-16 entitled to receive as a retirement annuity.]
33-17 [(f) A surviving spouse of a member of the fund is entitled
33-18 to a death benefit annuity based on the member's retirement
33-19 benefits in effect on the date of retirement.]
33-20 [(g)] A child of the member who is so mentally or physically
33-21 disabled as to be incapable of being self-supporting to any extent,
33-22 if otherwise qualified and regardless of age, has the rights of a
33-23 child under 18 [17] years of age, except that any death benefit
33-24 annuity paid under this subsection to any mentally or physically
33-25 disabled child shall be reduced to the extent of any state pension
34-1 or aid, including Medicaid, or any state-funded assistance received
34-2 by the child, regardless of whether the funds were made available
34-3 to the state by the federal government. In no other instance under
34-4 this Act is a child entitled to any benefit after becoming 18 [19]
34-5 years of age.
34-6 SECTION 25. Section 6.03, Chapter 824, Acts of the 73rd
34-7 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
34-8 is amended by amending the heading and Subsections (b) and (c) to
34-9 read as follows:
34-10 Sec. 6.03. [LIMITATION ON AMOUNT OF SURVIVING SPOUSE'S]
34-11 DEATH BENEFIT ANNUITY FOR SPOUSE OF MEMBER KILLED IN LINE OF DUTY.
34-12 (b) The board shall consider the finding of a municipality
34-13 to which this Act applies that a member was killed in the line of
34-14 duty as a guideline for its determination in applying this section.
34-15 On an application for survivor's benefits by a surviving spouse or
34-16 dependent child, the fund shall pay the normal benefits payable
34-17 under Section 6.02 of this Act. When a benefit is payable under
34-18 this section, the death benefit annuity shall be recomputed,
34-19 applying Subsection (c) of this section, and any deficiency payment
34-20 shall be paid to the eligible beneficiaries.
34-21 (c) Notwithstanding the formulas for computing the total
34-22 amounts of annuities otherwise provided by this Act [section], if a
34-23 member is killed in the line of duty, the member's surviving spouse
34-24 and dependent children are entitled to a death benefit annuity
34-25 equal to the total salary of the member at the time of death.
35-1 Rules provided by this section relating to qualification and
35-2 disqualification for and apportionment of benefits apply to a death
35-3 benefit annuity computed under this subsection. A death benefit
35-4 annuity computed under this subsection is divided in the manner
35-5 described by Section 6.02(a) of this Act and is subject to the same
35-6 cost-of-living adjustments that apply to pensions for service
35-7 retirement.
35-8 SECTION 26. Subsection (e), Section 6.04, Chapter 824, Acts
35-9 of the 73rd Legislature, 1993 (Article 6243o, Vernon's Texas Civil
35-10 Statutes), is amended to read as follows:
35-11 (e) The benefit provided under Subsections (c) and (d) of
35-12 this section shall be provided [applied] prospectively beginning
35-13 October 1, 1995, and the surviving spouse or dependent child is not
35-14 entitled to receive any benefits or increases in benefits relating
35-15 to any period before October 1, 1995.
35-16 SECTION 27. Section 6.05, Chapter 824, Acts of the 73rd
35-17 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
35-18 is amended to read as follows:
35-19 Sec. 6.05. Affidavit of marital status. (a) A surviving
35-20 spouse, a dependent child [beneficiary under this Act], or the
35-21 guardian of a surviving spouse or dependent child [beneficiary] may
35-22 be required by the board to file an affidavit [annually] concerning
35-23 the person's marital status or the marital status of the person's
35-24 wards in any case in which marriage could affect the benefits of
35-25 the surviving spouse or dependent child [or to give an affidavit to
36-1 the board at other times when probable cause exists to suspect the
36-2 possibility of marriage].
36-3 (b) If the surviving spouse, dependent child, [beneficiary]
36-4 or guardian fails or refuses to file an affidavit required under
36-5 Subsection (a) of this section or if an incomplete, incorrect, or
36-6 false affidavit is filed, the board may suspend annuity payments to
36-7 that person indefinitely until the person complies with the
36-8 requests and orders of the board.
36-9 SECTION 28. Section 6.07, Chapter 824, Acts of the 73rd
36-10 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
36-11 is amended to read as follows:
36-12 Sec. 6.07. Surviving spouse's right to single entitlement.
36-13 A surviving spouse, whether or [who is] not a member of the fund,
36-14 is not entitled to more than one death benefit annuity from the
36-15 fund. A surviving spouse who has been married to more than one
36-16 deceased member or retiree is entitled to receive a death benefit
36-17 annuity with respect to the deceased member or retiree that will
36-18 provide the highest benefit.
36-19 SECTION 29. Subsection (b), Section 6.09, Chapter 824, Acts
36-20 of the 73rd Legislature, 1993 (Article 6243o, Vernon's Texas Civil
36-21 Statutes), is amended to read as follows:
36-22 (b) An application for benefits under Subsection (a) of this
36-23 section must be accompanied by a copy of the deceased member's or
36-24 retiree's tax return filed for the last year ending before the
36-25 member's or retiree's death or an explanation satisfactory to the
37-1 board of why the tax return cannot be provided. The board may, on
37-2 its own initiative, make a thorough investigation, determine the
37-3 facts as to the dependency with respect to an application for
37-4 benefits made under Subsection (a) of this section, and at any
37-5 time, on the request of any beneficiary or any contributor to the
37-6 fund, reopen any award made to any member or dependent of any
37-7 member who is receiving annuity payments under this section and
37-8 discontinue those payments as to all or any of them. The findings
37-9 of the board under this section and all annuities granted under
37-10 this section are final on all parties unless set aside or revoked
37-11 by a court of competent jurisdiction.
37-12 SECTION 30. Section 6.10, Chapter 824, Acts of the 73rd
37-13 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
37-14 is amended to read as follows:
37-15 Sec. 6.10. SUSPENSION RIGHTS [OF DEPENDENT PARENTS]. If a
37-16 member dies who is under suspension at the time of death, including
37-17 an indefinite suspension that has not become final, the member's
37-18 beneficiaries [dependent parents] have the same rights as the
37-19 beneficiaries of any other member under this Act.
37-20 SECTION 31. Subsection (a), Section 6.11, Chapter 824, Acts
37-21 of the 73rd Legislature, 1993 (Article 6243o, Vernon's Texas Civil
37-22 Statutes), is amended to read as follows:
37-23 (a) If an active [a] member [of the fire or police
37-24 department in active service] dies and does not leave a [an
37-25 eligible] surviving spouse, a child under 18 [17] years of age, [a
38-1 child under 19 years of age who is attending school,] a mentally or
38-2 physically disabled child, or a dependent father or mother, the
38-3 estate of the deceased member is entitled to a death benefit
38-4 payment from the fund in the amount of $10,000 [from the fund] or
38-5 the refund of the member's contributions that were picked up by the
38-6 municipality [as provided by Section 4.07 of this Act], whichever
38-7 amount is greater.
38-8 SECTION 32. Article 6, Chapter 824, Acts of the 73rd
38-9 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
38-10 is amended by adding Section 6.12 to read as follows:
38-11 Sec. 6.12. 13TH CHECK. For any year in which the board
38-12 authorizes disbursement of a 13th pension check to retirees under
38-13 Section 5.12 of this Act, the board shall also authorize
38-14 disbursement of a 13th check to each beneficiary receiving an
38-15 annuity at the time of the disbursement. The amount of the 13th
38-16 check is determined in the same manner as the amount of a 13th
38-17 check is determined for a retiree.
38-18 SECTION 33. Subsection (c), Section 7.04, Chapter 824, Acts
38-19 of the 73rd Legislature, 1993 (Article 6243o, Vernon's Texas Civil
38-20 Statutes), is amended to read as follows:
38-21 (c) The board may directly manage the investments of the
38-22 fund or may choose and contract for professional management
38-23 services. If the fund owns real estate, it may, at its discretion,
38-24 establish organizations [corporations] described by Section
38-25 501(c)(2) or (25) of the code[, Internal Revenue Code of 1986 (26
39-1 U.S.C. Section 501), and its subsequent amendments,] to hold title
39-2 to the real estate.
39-3 SECTION 34. Subsection (a), Section 7.05, Chapter 824, Acts
39-4 of the 73rd Legislature, 1993 (Article 6243o, Vernon's Texas Civil
39-5 Statutes), is amended to read as follows:
39-6 (a) The board may contract for professional investment
39-7 management services, financial consultants, independent auditors,
39-8 attorneys, and actuaries. Only the board may enter into those
39-9 contracts and may establish a reasonable fee for compensation.
39-10 SECTION 35. Subsection (a), Section 7.51, Chapter 824, Acts
39-11 of the 73rd Legislature, 1993 (Article 6243o, Vernon's Texas Civil
39-12 Statutes), is amended to read as follows:
39-13 (a) A member of the board or the executive director may not
39-14 buy, sell, or exchange any property to or from the fund, deal with
39-15 the assets of the fund in the person's own interest or for the
39-16 person's own account, or receive any consideration for the person's
39-17 personal account from any person dealing with the fund in
39-18 connection with the income or assets of the fund [have a direct or
39-19 indirect interest, including a financial interest, engage in a
39-20 business transaction or professional activity, or incur an
39-21 obligation of any nature that is in substantial conflict with the
39-22 proper discharge of the member's or the executive director's
39-23 fiduciary duties].
39-24 SECTION 36. Chapter 824, Acts of the 73rd Legislature, 1993
39-25 (Article 6243o, Vernon's Texas Civil Statutes), is amended by
40-1 adding Article 8 to read as follows:
40-2 ARTICLE 8. EXCESS BENEFIT PLAN
40-3 FOR FIRE FIGHTERS AND POLICE OFFICERS
40-4 Sec. 8.01. CREATION OF PLAN. A separate, nonqualified,
40-5 unfunded excess benefit plan containing the provisions of this
40-6 subchapter is created outside the fund. The plan is intended to be
40-7 a "qualified governmental excess benefit arrangement" within the
40-8 meaning of Section 415(m) of the code.
40-9 Sec. 8.02. DEFINITIONS. In this article:
40-10 (1) "Excess benefit participant" means any member
40-11 whose retirement benefits as determined on the basis of all
40-12 qualified plans, without regard to the limitations of Section
40-13 5.11(a) of this Act and comparable provisions of other qualified
40-14 plans, would exceed the maximum benefit under Section 415 of the
40-15 code.
40-16 (2) "Excess benefit plan" means the excess benefit
40-17 plan created by this article for the benefit of eligible members.
40-18 (3) "Maximum benefit" means the retirement benefit a
40-19 member or the member's spouse, dependent child, or dependent parent
40-20 is entitled to receive from all qualified plans in any month after
40-21 applying Section 5.11(a) of this Act and any similar provisions of
40-22 any other qualified plans designed to conform to Section 415 of the
40-23 code.
40-24 (4) "Qualified plan" means the fund and any other plan
40-25 that is maintained by the municipality for the exclusive benefit of
41-1 some or all of the members of the fund and that has been found by
41-2 the Internal Revenue Service to be qualified or has been treated by
41-3 the municipality as a qualified plan under Section 401 of the code.
41-4 (5) "Unrestricted benefit" means the monthly
41-5 retirement benefit a member or the member's spouse, dependent
41-6 child, or dependent parent would have received under the terms of
41-7 all qualified plans except for the restrictions of Section 5.11(a)
41-8 of this Act and any similar provisions of any other qualified plans
41-9 designed to conform to Section 415 of the code.
41-10 Sec. 8.03. EXCESS BENEFIT ENTITLEMENT. (a) An excess
41-11 benefit participant who is receiving benefits from the fund is
41-12 entitled to a monthly benefit under the excess benefit plan in an
41-13 amount equal to the lesser of:
41-14 (1) the member's unrestricted benefit less the maximum
41-15 benefit; or
41-16 (2) the amount by which the member's monthly benefit
41-17 from the fund has been reduced because of the limitations under
41-18 Section 415 of the code.
41-19 (b) In the case of the death of an excess benefit
41-20 participant whose spouse, dependent child, or dependent parent is
41-21 entitled to preretirement or postretirement death benefits under a
41-22 qualified plan, the spouse, dependent child, or dependent parent is
41-23 entitled to a monthly benefit under the excess benefit plan equal
41-24 to the benefit determined in accordance with Article 6 of this Act
41-25 without regard to the limitations under Section 5.11(a) of this Act
42-1 or Section 415 of the code, less the maximum benefit.
42-2 (c) Any benefit to which any person is entitled under this
42-3 section shall be paid at the same time and in the same manner as
42-4 the benefit would have been paid from the fund if payment of the
42-5 benefit from the fund had not been precluded by Section 5.11(a) of
42-6 this Act. An excess benefit participant or any beneficiary may not
42-7 elect to defer the receipt of all or any part of a payment due
42-8 under this article.
42-9 Sec. 8.04. MANNER OF ADMINISTRATION. (a) The board shall
42-10 administer the excess benefit plan. Except as otherwise provided
42-11 by this section, the board has the same rights, duties, and
42-12 responsibilities regarding the excess benefit plan as the board has
42-13 for the fund.
42-14 (b) A consultant, independent auditor, attorney, or actuary
42-15 selected to perform services for the fund under Section 7.05 of
42-16 this Act shall also perform services for the excess benefit plan,
42-17 but the person's fees for services for the excess benefit plan may
42-18 not be paid by the fund. The actuary employed under Section 7.05
42-19 of this Act shall advise the board of the amount of benefits that
42-20 may not be provided from the fund solely by reason of the
42-21 limitations of Section 415 of the code and the amount of municipal
42-22 contributions that will be made to the excess benefit plan rather
42-23 than to the fund.
42-24 Sec. 8.05. FUNDING OF BENEFITS. (a) Contributions may not
42-25 be accumulated under the excess benefit plan to pay future
43-1 retirement benefits. Instead, each payment of municipal
43-2 contributions that would otherwise be made to the fund under
43-3 Section 4.05 of this Act shall be reduced by the amount determined
43-4 by the board as necessary to meet the requirements for retirement
43-5 benefits under the excess benefit plan, including reasonable
43-6 administrative expenses, until the next payment of municipal
43-7 contributions is expected to be made to the fund. The municipality
43-8 shall then pay to the excess benefit plan out of the withheld
43-9 contributions, not earlier than the 14th day before the date of
43-10 each distribution of monthly retirement benefits is required to be
43-11 made from the excess benefit plan, the amount necessary to satisfy
43-12 the obligation to pay monthly retirement benefits from the excess
43-13 benefit plan. The board shall satisfy the obligation of the excess
43-14 benefit plan to pay retirement benefits out of the municipal
43-15 contributions transferred for that month.
43-16 (b) Municipal contributions otherwise required to be made to
43-17 the fund under Section 4.05 of this Act and any other qualified
43-18 plan shall be divided into contributions required to pay retirement
43-19 benefits under this article and contributions paid into and
43-20 accumulated to pay the maximum benefits required under the
43-21 qualified plan. Municipal contributions made to provide retirement
43-22 benefits under this article may not be commingled with the money of
43-23 the fund or any other qualified plan.
43-24 Sec. 8.06. EXEMPTIONS. Benefits under this article are
43-25 exempt from garnishment, assignment, attachment, judgment, and
44-1 other legal process to the same extent as retirement annuities
44-2 under Section 1.05 of this Act.
44-3 SECTION 37. Subsection (g), Section 5.015 and Subsection
44-4 (c), Section 7.51, Chapter 824, Acts of the 73rd Legislature, 1993
44-5 (Article 6243o, Vernon's Texas Civil Statutes), are repealed.
44-6 SECTION 38. The amendments to Chapter 824, Acts of the 73rd
44-7 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
44-8 by this Act may not be applied to reduce the benefits or length of
44-9 payment of benefits to a beneficiary who was receiving an annuity
44-10 under Chapter 824, Acts of the 73rd Legislature, 1993 (Article
44-11 6243o, Vernon's Texas Civil Statutes), before October 1, 1997.
44-12 SECTION 39. This Act takes effect October 1, 1997.
44-13 SECTION 40. The importance of this legislation and the
44-14 crowded condition of the calendars in both houses create an
44-15 emergency and an imperative public necessity that the
44-16 constitutional rule requiring bills to be read on three several
44-17 days in each house be suspended, and this rule is hereby suspended.
_______________________________ _______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 872 passed the Senate on
April 4, 1997, by a viva-voce vote.
_______________________________
Secretary of the Senate
I hereby certify that S.B. No. 872 passed the House on
April 18, 1997, by a non-record vote.
_______________________________
Chief Clerk of the House
Approved:
_______________________________
Date
_______________________________
Governor