By Madla S.B. No. 872
75R7955 T
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the retirement system for fire fighters and police
1-3 officers in certain municipalities.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Chapter 824, Acts of the 37th Legislature,
1-6 Regular Session, 1993 (Article 6243o, Vernon's Texas Civil
1-7 Statutes), is amended to read as follows:
1-8 ARTICLE 1. GENERAL PROVISIONS
1-9 SECTION 1.01. PURPOSE. The purpose of the fund is to
1-10 provide for the protection of pensions in a municipality to which
1-11 this Act applies for fire fighters and police officers and their
1-12 beneficiaries because of the hazardous nature of the professions of
1-13 fire fighting and law enforcement.
1-14 SECTION 1.02. Definitions. In this Act:
1-15 [(1) "Board" means the board of trustees of a fund to
1-16 which this Act applies.]
1-17 (1) "Active Fire Fighter" or "Active Police Officer"
1-18 means respectively a fire fighter or a police officer who is a
1-19 current contributing member of the fund. An "Active Member" is
1-20 either an active fire fighter or an active police officer.
1-21 (2) "Annual Investment Yield" means the yield on the
1-22 fund's investment portfolio for a particular year, as a percentage
1-23 of such portfolio, after reduction for costs of investing the
1-24 portfolio, but without reduction for the fund's operating expenses.
2-1 (3) "Average Total Salary" means the aggregate total
2-2 salary as defined in subsection (18) received by the member during
2-3 the three years of the five year period ending on the date of the
2-4 member's service or disability retirement or death, if earlier, in
2-5 which total salary was highest, divided by three.
2-6 (4) "Beneficiary" means the surviving spouse,
2-7 dependent child, or dependent parent of a deceased member or
2-8 retiree.
2-9 (5) [(1)] "Board" means the board of trustees of a
2-10 fund to which this Act applies.
2-11 (6) "Code" means the United States Internal Revenue
2-12 Code of 1986, as amended, and any successor.
2-13 (7) "Department" means the fire department of a
2-14 municipality to which this statute applies, the police department
2-15 of a municipality to which this statute applies, or both the fire
2-16 department and the police department of such a municipality.
2-17 (8) "Dependent Child" means a person under age 18, or
2-18 a totally disabled person, whose natural or adoptive parent is a
2-19 deceased member or deceased retiree if, for the year immediately
2-20 preceding the death of the member or retiree, the deceased member
2-21 or retiree claimed such person as a dependent on his or her federal
2-22 income tax return.
2-23 (9) "Dependent Parent" means a natural parent of a
2-24 deceased member or deceased retiree or a person who adopted a
2-25 deceased member or deceased retiree before the deceased member or
2-26 retiree's eighteenth (18th) birthday if, for the year immediately
2-27 preceding the death of the member or retiree, the deceased member
3-1 or retiree claimed such parent as a dependent on his or her federal
3-2 income tax return.
3-3 (10) "Fire Fighter" means an employee of the fire
3-4 department who is classified as a fire fighter by the personnel
3-5 department of the municipality.
3-6 [(2)] (11) "Fund" means the fire fighters and police
3-7 officers pension fund of a municipality to which this Act applies.
3-8 (12) "Member" means a fire fighter or police officer
3-9 who has become a member of the fund in accordance with section
3-10 4.01(a) and has not either become a retiree or forfeited his or her
3-11 interest in the fund.
3-12 (13) "Police Officer" means an employee of the police
3-13 department who is classified as a police officer by the personnel
3-14 department of the municipality.
3-15 (14) "Retiree" means a member who has terminated
3-16 employment with the department with a right to a service retirement
3-17 pension pursuant to section 5.01 or a disability retirement pension
3-18 pursuant to section 5.03.
3-19 (15) "Retirement" means the period that a retiree is
3-20 entitled to receive service retirement benefits or disability
3-21 retirement benefits.
3-22 [(3)] (16) "Retirement Annuity" means monthly pension
3-23 [benefits.] benefits payable to a Retiree.
3-24 (17) [(4)] "Surviving Spouse" means a widow or widower
3-25 of a member or retiree who was married to the member or retiree at
3-26 the time of the death of the member or retiree. For purposes of
3-27 determining whether a member or retiree was married, a common law
4-1 marriage shall not be recognized unless a declaration of informal
4-2 marriage was made, before the death of the member or retiree, in
4-3 accordance with Section 1.92 of the Family Code and its subsequent
4-4 amendments.
4-5 [(5) "Total Salary" means all salary, excluding
4-6 overtime pay, and for police officers, excluding field training
4-7 officer's pay and standby pay, which includes] (18) "Total
4-8 Salary" means all salary of a member except (i) overtime pay, field
4-9 training officer's pay, bomb squad pay, SWAT team pay, K-9 pay, and
4-10 hostage team pay; and (ii) pay for unused accrued vacation and sick
4-11 leave, holiday pay, compensatory time pay and bonus days leave, or
4-12 any similar items of compensation that may be paid in the future.
4-13 (19) "Years of Service" means a member's total years
4-14 of service, including fractional years or full months of service,
4-15 computed as provided in section 5.01(e).
4-16 SECTION 1.03. APPLICABILITY. This Act applies to paid fire
4-17 and police departments of a municipality with a population between
4-18 750,000 and 1,000,000, according to the most recent federal census.
4-19 SECTION 1.04. Statutory trust. (a) The fund is a statutory
4-20 trust and is not a subdivision of government.
4-21 (b) The board shall hold in trust the assets of the fund for
4-22 the exclusive benefit of the members and retirees of the fund and
4-23 their beneficiaries and for defraying reasonable administrative
4-24 expenses of the fund.
4-25 (c) The fund may not be diverted, transferred, or used for
4-26 any purpose inconsistent with this Act and with the instruments
4-27 governing the fund.
5-1 (d) A public or private entity, agency or authority may not
5-2 alter or impair any contract made by the board or under the
5-3 authority or direction of the board.
5-4 (e) The fund is independent of the control of a municipality
5-5 to which this Act applies.
5-6 SECTION 1.05. Exemptions. A retirement annuity from the
5-7 fund is exempt from garnishment, assignment, attachment, judgments,
5-8 other legal process, and inheritance or other taxes established by
5-9 this state.
5-10 SECTION 1.06. Other pension system established by state law.
5-11 Notwithstanding any other law, if the employees of the fire or
5-12 police department who have been members of the fund are included in
5-13 another pension system established by state law, the board shall
5-14 act for any similar board created by that law with regard to the
5-15 receipt and payment of amounts owed to the employees under this
5-16 Act. Employees of a department who are members of the fund and are
5-17 not included in the other pension system may not participate in any
5-18 payment under this section.
5-19 ARTICLE 2. ADMINISTRATIVE PROVISIONS
5-20 SECTION 2.01. Board of trustees. (a) The fund is governed
5-21 by a board of trustees consisting of the following nine members:
5-22 (1) the mayor of a municipality to which this Act
5-23 applies;
5-24 (2) two members of the governing body of a
5-25 municipality to which this Act applies, appointed by that governing
5-26 body;
5-27 (3) two active fire fighters below the rank of fire
6-1 chief, elected by secret ballot by a majority [vote of] of the
6-2 votes cast by the members of the fire [department who are
6-3 contributing members of the fund;] department;
6-4 (4) two active police officers below the rank of
6-5 police chief, elected by secret ballot by a majority [vote of] of
6-6 the votes cast by the members of the police [department who are
6-7 contributing members of the fund]; department;
6-8 (5) a retiree [or] and beneficiary representative who
6-9 is a retiree of the fire department, elected by secret ballot by a
6-10 majority [vote of the retirees, or the] of the votes cast by the
6-11 retirees of the fire department and the surviving spouses, who are
6-12 receiving benefits with respect to deceased members or retirees
6-13 from the fire department, and surviving spouses of [the retirees,
6-14 from] retirees of the fire [department;] department who vote in the
6-15 election; and
6-16 (6) a retiree [or] and beneficiary representative who
6-17 is a retiree of the police department, elected by secret ballot by
6-18 a majority [vote] of the [retirees, or] votes cast by the retirees
6-19 from the police department and the surviving spouses [of the
6-20 retirees,] who are receiving benefits with respect to deceased
6-21 members or retirees from the police department.
6-22 (b) The board, through its secretary, shall administer the
6-23 required elections of the retiree [or] and beneficiary
6-24 representatives by mailing ballots to [out-of-town retirees] all
6-25 eligible members, retirees, or beneficiaries. Only retirees and
6-26 surviving spouses [of members properly enrolled on the pension
6-27 rolls] who are currently receiving benefits from the fund are
7-1 eligible to [be elected as] vote for retiree or beneficiary
7-2 representatives. If no candidate receives a majority of the votes
7-3 cast for any trustee position, the board shall hold a run-off
7-4 election in which the only eligible candidates shall be the two (2)
7-5 candidates who received the greatest number of votes cast.
7-6 [(c) The fund is independent of the control of a
7-7 municipality to which this Act applies.]
7-8 SECTION 2.02. Terms of trustees. (a) The mayor of a
7-9 municipality to which this Act applies serves on the board for the
7-10 term of the mayor's office.
7-11 (b) The two members of the municipal governing body serve on
7-12 the board for the term of the office to which they are elected.
7-13 (c) The two active fire fighters below the rank of fire
7-14 chief serve on the board for staggered four-year terms, with one
7-15 member's term expiring every two years.
7-16 (d) The two active police officers below the rank of police
7-17 chief serve on the board for staggered four-year terms, with one
7-18 member's term expiring every two years.
7-19 (e) The retiree or beneficiary representatives serve on the
7-20 board for staggered four-year terms, with one member's term
7-21 expiring every two years.
7-22 SECTION 2.03. RESIGNATION OR REMOVAL OF TRUSTEES. (a) The
7-23 members of the board who are fire fighters or police officers may
7-24 resign or may be removed by a vote of the membership of their
7-25 respective departments.
7-26 (b) The members of the board who are retiree or beneficiary
7-27 representatives may resign or may be removed by a vote of the group
8-1 eligible to elect them.
8-2 (c) A petition for removal under this section must be filed
8-3 with the board within 45 days after the date the first signature on
8-4 the petition is obtained. A signature is invalid if it is not
8-5 dated.
8-6 (d) A removal election under this section must be held
8-7 within 30 days after the date the board certifies that a proper
8-8 petition for a removal election has been signed by at least 20
8-9 percent of the membership from which the trustee was elected. A
8-10 trustee's term of service ends on the entry of an order by the
8-11 board declaring [the results of] that a majority of the votes cast
8-12 in a removal election under this section favor removal.
8-13 (e) On the date the board enters an order under [Subsection]
8-14 subsection (d) of this section, the board shall call a special
8-15 election to be held not less than 20 nor more than 30 days after
8-16 that date to fill the vacancy for the unexpired term of the trustee
8-17 who was removed. The trustee who was removed is not eligible to
8-18 run in the special election but is eligible to run in all
8-19 subsequent board elections for the category in which the trustee
8-20 was removed.
8-21 SECTION 2.04. Officers. (a) The board shall elect from
8-22 among the trustees a chairman, a vice-chairman, and a secretary.
8-23 (b) The treasurer of the board is the treasurer of a
8-24 municipality to which this Act applies.
8-25 SECTION 2.05. Employees. The board may employ an executive
8-26 director and staff as needed to administer the fund.
8-27 SECTION 2.06. Meetings. The board shall hold regular
9-1 monthly meetings and special meetings at the call of the chairman
9-2 or on written demand by a majority of the members of the board. A
9-3 quorum of the board is five members. When a quorum is present,
9-4 action of the board that requires a vote may be taken by a majority
9-5 of the members present. Any action taken by less than a quorum
9-6 shall not be binding on the board.
9-7 SECTION 2.07. Committees of board. (a) The chairman of the
9-8 board may appoint committees that report to the board.
9-9 (b) Only members of the board may be appointed to committees
9-10 under this section.
9-11 (c) Committees shall be composed of not fewer than three nor
9-12 more than [five] four members of the board, except as otherwise
9-13 specifically provided by the board.
9-14 (d) Only members of committees may vote as committee
9-15 members.
9-16 (e) The board may direct staff and advisors to assist the
9-17 committees.
9-18 (f) [All members of the board may attend committee meetings.
9-19 (g)] Members of committees serve at the pleasure of the board.
9-20 [(h)] (g) Permanent or standing committees may [not] be
9-21 appointed.
9-22 ARTICLE 3. GENERAL POWERS AND DUTIES OF BOARD
9-23 SECTION 3.01. General powers and duties of board. (a) The
9-24 board has complete authority and power to:
9-25 (1) administer the [fund;] fund for the exclusive
9-26 benefit of all members, retirees, and beneficiaries;
9-27 (2) order payments from the fund as required by this
10-1 Act; [and]
10-2 (3) control the fund [independently.] independently;
10-3 (4) conduct all litigation on behalf of the fund; and
10-4 (5) purchase with fund assets from one (1) or more
10-5 insurers licensed to do business in the State of Texas one (1) or
10-6 more policies of insurance that provide for reimbursement of the
10-7 fund and any trustee, officer, or employee of the board for
10-8 liability imposed or damages because of an alleged act, error, or
10-9 omission committed in the trustee's, officer's or employee's
10-10 capacity as fiduciary or co-fiduciary of assets of the fund and for
10-11 costs and expenses incurred as a trustee, officer, or employee in
10-12 defense of a claim for an alleged act, error, or omission, so long
10-13 as such policy of insurance does not provide for reimbursement of a
10-14 trustee, officer, or employee for liability imposed or expenses
10-15 incurred because of such trustee's, officer's, or employee's
10-16 personal dishonesty, fraud, lack of good faith, or intentional
10-17 failure to act prudently.
10-18 (b) The board shall adopt rules necessary to its effective
10-19 operation, including, but not limited to, rules relating to:
10-20 (1) the disbursement of the fund's assets;
10-21 (2) the designation of beneficiaries of the fund; and
10-22 (3) the name of the board and the fund.
10-23 (c) The board shall report annually to the governing body of
10-24 the municipality regarding the condition of the fund and the
10-25 receipts and disbursements of the fund.
10-26 SECTION 3.02. Applications; Hearings. (a) The board shall
10-27 consider all cases for membership in the fund and for the
11-1 retirement and benefits of the members of the fund and all
11-2 applications for benefits by surviving spouses, dependent children,
11-3 and dependent parents.
11-4 (b) The board shall give notice to persons asking for
11-5 membership in the fund or for a benefit to appear before the board
11-6 and offer sworn evidence.
11-7 (c) Any contributing member of the fund who is in good
11-8 standing in the fire or police department may:
11-9 (1) appear in person or by attorney to contest the
11-10 application for membership participation in the fund or for an
11-11 annuity or benefit by any person claiming to be entitled to an
11-12 annuity or benefit, either as a member or beneficiary; and
11-13 (2) offer supporting testimony.
11-14 (d) The chairman of the board may issue process for
11-15 witnesses, administer oaths to those witnesses, and examine any
11-16 witness in any manner affecting retirement or a benefit under this
11-17 Act. The process for witnesses may be served on any member of the
11-18 fire or police [department.] department, and on any other person
11-19 the board deems to be an appropriate person. On the failure of any
11-20 witness to attend and testify, that person may be compelled to
11-21 attend and testify as in any judicial [proceeding, according to the
11-22 practice in a justice court.] proceeding.
11-23 SECTION 3.03. Orders for disbursements. (a) The board
11-24 shall issue orders for disbursements signed by the chairman or
11-25 vice-chairman of the board and the secretary of the board to the
11-26 appropriate persons. The order shall state the purposes for the
11-27 payments. The board shall keep a record of those orders.
12-1 (b) [At each monthly board meeting, the board shall send to
12-2 the treasurer of the board a written list of persons entitled to
12-3 the payment from the fund, stating the amount and reason for
12-4 payment. The list must be certified and signed by the chairman or
12-5 vice-chairman of the board and the secretary of the board.
12-6 (c) The fund] Disbursements may not be [disbursed] made without a
12-7 record vote of the board.
12-8 [(d) A quorum of the board is five members. When a quorum
12-9 is present, action of the board that requires a vote may be taken
12-10 by a majority of the members present.]
12-11 ARTICLE 4. MEMBERSHIP AND CONTRIBUTIONS
12-12 SECTION 4.01. Membership. (a) A person becomes a member of
12-13 the fund as a condition of continued employment if the [person:
12-14 (1)] person has served eight months as a fire fighter or police
12-15 officer or as a trainee in a fire fighter or police officer
12-16 training academy of a municipality to which this Act [applies;]
12-17 [(2) was not younger than 18 at the time of
12-18 appointment; and]
12-19 [(3)] applies. However, a person will not become
12-20 eligible for disability retirement benefits unless the person has
12-21 provided an authorization for release of medical information for
12-22 any medical records dated on or after the date of initial
12-23 application for employment or has agreed in writing to provide that
12-24 authorization when requested by the board or, in the alternative if
12-25 required by the board, has submitted to a physical examination by a
12-26 physician selected by the board.
12-27 (b) Notwithstanding [Subsection] subsection (a) of this
13-1 section, a person duly appointed and enrolled in a classified
13-2 position in either the fire department or police department who was
13-3 barred from entry in the fund solely because the person had
13-4 attained the age of 36 on the date that the person would have
13-5 otherwise become eligible after October 15, 1990, to be a member of
13-6 the fund and for that reason became a member of the Texas Municipal
13-7 Retirement System and who is otherwise eligible for and complies
13-8 with each requirement for membership in the fund shall become a
13-9 member of the fund as a condition of continued employment. The
13-10 person must make application to the fund not later than the 90th
13-11 day after the date on which the person receives notification of
13-12 this provision.
13-13 (c) A person who becomes a member of the fund under
13-14 [Subsection] subsection (b) of this section shall be given service
13-15 credit from the date the person would have become eligible to be a
13-16 member of the fund if not for the age requirement and must pay into
13-17 the fund, in accordance with procedures established by the board,
13-18 pension contributions for all service credit allowed based on
13-19 amounts that would have been deducted if the person had been
13-20 allowed to enter the fund on that date.
13-21 (d) A person who became a member of the Texas Municipal
13-22 Retirement System on or before October 15, 1990, may elect to
13-23 become a member of the fund on or before the 90th day after the
13-24 date the person receives notice of this provision. If the person
13-25 does not elect to become a member during that period, the person
13-26 may not become a member of the fund and waives any claim against
13-27 the fund. If the person elects to become a member of the fund, the
14-1 person must comply with each requirement for membership and must
14-2 pay into the fund, in accordance with procedures established by the
14-3 board, a sum of money equal to the amount of money that would have
14-4 been deducted from that person's salary during the period beginning
14-5 October 16, 1990, and ending on the date the person becomes a
14-6 member of the fund. The person also may purchase service credit
14-7 for the period beginning on the date the person would have
14-8 otherwise become eligible to be a member of the fund if not for the
14-9 age prohibition, through October 15, 1990. Service credit may be
14-10 obtained only in increments of full months with the minimum being
14-11 one month.
14-12 (e) A person who becomes a member of the fund under
14-13 [Subsection] subsection (b) or (d) of this section must, as a
14-14 condition of employment, provide an authorization for release of
14-15 medical information for any medical records dated on or after the
14-16 date of initial application for employment when requested by the
14-17 board or in the alternative, as required by the board, must submit
14-18 to a physical examination by a physician selected by the board.
14-19 (f) A municipality to which this Act applies shall match an
14-20 amount equal to twice the amount of each payment a member makes to
14-21 the fund under this section.
14-22 (g) The drawing of compensation by an officer or employee in
14-23 the fire or police department for service in that department does
14-24 not of itself make that person a member of the fund.
14-25 (h) The regularity of an appointment as a fire fighter or
14-26 police officer of a municipality to which this Act applies may not
14-27 be presumed from the serving of the full probationary period, if
15-1 any. The service of the probationary period by an officer or
15-2 employee as a fire fighter or police officer of a municipality to
15-3 which this Act applies does not constitute the creation of a
15-4 position or office to which a proper appointment has been made for
15-5 purposes of this Act.
15-6 SECTION 4.02. Family and medical leave. (a) If a member
15-7 takes unpaid leave as provided by the Family and Medical Leave Act
15-8 (29 U.S.C. Section 2601 et seq.), that member is entitled to make
15-9 voluntary contributions for the leave period in the same amount as
15-10 the member would have paid if the member had not taken the leave.
15-11 Those payments must be made not later than the 30th day after the
15-12 date the member returns from that leave. A computation of
15-13 contributions under this section shall be made in the same manner
15-14 as other computations under this Act. A municipality to which this
15-15 Act applies shall match an amount equal to twice the amount of each
15-16 payment a member makes to the fund under this subsection.
15-17 (b) If the member does not comply with [Subsection]
15-18 subsection (a) of this section, the member loses all credit toward
15-19 the member's retirement annuity for the period the member was on
15-20 leave.
15-21 SECTION 4.03. [MILITARY] UNIFORMED SERVICE. (a) A member
15-22 of the fund who enters [active military] any uniformed service of
15-23 the United States may not:
15-24 (1) be required to make the monthly payments into the
15-25 fund provided by this Act as long as the member is engaged in
15-26 active [military] service with the uniformed service; or
15-27 (2) lose any seniority rights or retirement benefits
16-1 provided by this Act by virtue of that [military] service.
16-2 (b) Not later than the 90th day after the date of the
16-3 member's reinstatement to an active status in the fire or police
16-4 department, the member must file with the secretary of the board a
16-5 written statement of intent to pay into the fund an amount equal to
16-6 what the member would have paid if the member had remained on
16-7 active status in the department during the period of the member's
16-8 absence in [military] the uniformed service.
16-9 (c) The member must make the payment described by
16-10 [Subsection] subsection (b) of this section in full within an
16-11 amount of time after the member's return that is equal to three
16-12 times the amount of time the member was absent, except that the
16-13 maximum period for payment may not exceed five years.
16-14 (d) Except as provided by [Subsection] subsection (f) of
16-15 this section, if the member does not comply with Subsections (b)
16-16 and (c) of this section, the member shall lose all credit toward
16-17 the member's retirement annuity for the length of time the member
16-18 was engaged in active [military] service in any uniformed service.
16-19 (e) The amount of credit purchased under this section may
16-20 not exceed the length of the active [military service authorized]
16-21 service in a uniformed service required to be credited by law.
16-22 (f) If a person who became a member before October 1, 1997,
16-23 does not make the payment required under [Subsection] subsection
16-24 (c) of this section within the required amount of time and the
16-25 member [is] would otherwise be eligible for credit under federal
16-26 law, the member [shall] may still receive credit for the uniformed
16-27 service if the member also [pay] pays interest, compounded
17-1 annually, on the then current rate of a member's contribution from
17-2 the date the payment was required to the date the payment was made.
17-3 The board shall set the rate of interest.
17-4 (g) A disability resulting from either injury or disease
17-5 contracted while engaged in [military] any uniformed service does
17-6 not entitle a member to a disability retirement annuity.
17-7 (h) A municipality to which this Act applies shall
17-8 double-match payments made to the fund under this section.
17-9 SECTION 4.04. Member contributions. (a) There shall be
17-10 deducted from the [wages] total salary of each fire fighter and
17-11 police officer in the employment of a municipality to which this
17-12 Act applies a percentage of the member's total salary according to
17-13 the following schedule:
17-14 (1) 11.16 percent for full pay periods after September
17-15 30, 1993, but before October 1, 1994;
17-16 (2) 11.32 percent for full pay periods after September
17-17 30, 1994, but before October 1, 1995;
17-18 (3) 11.50 percent for full pay periods after September
17-19 30, 1995, but before October 1, 1996;
17-20 (4) 11.66 percent for full pay periods after September
17-21 30, 1996, but before October 1, 1997;
17-22 (5) 11.82 percent for full pay periods after September
17-23 30, 1997, but before October 1, 1998;
17-24 (6) 12.00 percent for full pay periods after September
17-25 30, 1998, but before October 1, 1999;
17-26 (7) 12.16 percent for full pay periods after September
17-27 30, 1999, but before October 1, 2000;
18-1 (8) 12.32 percent for full pay periods after September
18-2 30, 2000, but before October 1, 2001; and
18-3 (9) 12.50 percent for full pay periods after September
18-4 30, 2001.
18-5 (b) The municipality has always picked up and shall continue
18-6 to pick up the member contributions that are required by
18-7 [Subsection] subsection (a) of this section.
18-8 (c) Contributions picked up by the municipality shall be
18-9 treated as employer contributions [in accordance with Section
18-10 414(h)(2), Internal Revenue Code of 1986 (26 U.S.C. Section 414),]
18-11 for the purpose of determining tax treatment of the amounts under
18-12 the [Internal Revenue Code of 1986.] Code. Those contributions are
18-13 not included in the gross income of the employee until the time
18-14 they are distributed or made available to the employee.
18-15 SECTION 4.05. Municipal contributions. (a) A municipality
18-16 to which this Act applies shall pay into the fund an amount equal
18-17 to double the sum total of all member contributions made in
18-18 accordance with [Section] section 4.04 of this Act.
18-19 (b) The payments into the fund by the municipality, both as
18-20 to deductions and double-matching amounts, shall be made on the
18-21 same day the contributions are deducted from the members' [pay.]
18-22 total salary.
18-23 (c) Any donations made to the fund and all [funds] amounts
18-24 received from any source for the fund shall be deposited in the
18-25 fund at the earliest opportunity.
18-26 (d) The municipality's double-matching amount under this
18-27 section is in place of all other payments previously required by
19-1 law to be made by the municipality.
19-2 (e) The municipal contribution and retirement annuities are
19-3 a part of the compensation for services rendered to the
19-4 municipality. This Act is of the essence of the contract of
19-5 employment and appointment of the fire fighters and police officers
19-6 of a municipality to which this Act applies.
19-7 SECTION 4.06. Deficiency payment by municipality. A
19-8 municipality to which this Act applies shall pay the deficiency, if
19-9 any, between the amount available to pay all retirement annuities
19-10 and other benefits owed under this Act and the amount required by
19-11 this Act to pay those benefits.
19-12 SECTION 4.07. Refund of contributions. (a) During the
19-13 first five years of membership, a member of the fund is not
19-14 entitled to any refund from the fund of any portion of the money
19-15 deducted from the [member's] member's pay for the benefit of the
19-16 fund. That money is the property of the fund for the benefit of
19-17 the members qualifying for benefits and for their beneficiaries.
19-18 (b) A member of the fund who terminates employment before
19-19 the member's right to benefits under the fund has vested but who
19-20 has contributed to the fund for at least five years is entitled to
19-21 a refund of the [member's] member's contributions that were picked
19-22 up by the municipality. That refund shall be paid without
19-23 interest. A refund under this section is not available to a member
19-24 who terminates employment to receive a disability pension or to a
19-25 survivor beneficiary under this Act. A person's acceptance of a
19-26 refund under this subsection precludes the person from any other
19-27 right or benefit under this Act.
20-1 ARTICLE 5. MEMBER BENEFITS
20-2 SECTION 5.01. Retirement benefits. (a) If a member of the
20-3 fund has contributed a portion of that member's salary as provided
20-4 by this Act and has contributed and served for 20 years or more in
20-5 the fire or police department, the board shall, on the application
20-6 of the member for a retirement annuity, authorize a retirement
20-7 annuity to the member.
20-8 (b) The board shall compute the retirement annuity of a
20-9 member who retires after September 30, 1991, but before October 1,
20-10 1995, on the basis of the average of the member's total salary for
20-11 the highest three years of the last five years, computed from the
20-12 date of retirement, of the [member's] member's pay at the rate of
20-13 two percent for each of the first 20 years served, plus 3 1/2
20-14 percent for each of the next 10 years served, plus one percent for
20-15 each of the next five years served, with fractional years prorated
20-16 based on full months served as a contributing member, but the
20-17 annuity may not exceed, as of the date of retirement, 80 percent of
20-18 the average so determined.
20-19 (c) The board shall compute the retirement annuity of a
20-20 member who retires after September 30, 1995, but before October 1,
20-21 1997, on the basis of the average of the member's total salary for
20-22 the highest three years of the last five years computed from the
20-23 date of retirement, of the [member's] member's pay at the rate of
20-24 two percent for each of the first 20 years served, plus four
20-25 percent for each of the next five years served, plus 3 1/2 percent
20-26 for each of the next five years served, plus one percent for each
20-27 of the next five years served, with fractional years prorated based
21-1 on full months served as a contributing member. In making the
21-2 computation for a year, the year is considered to begin on the
21-3 first day a contribution is made. An annuity under this subsection
21-4 may not exceed, as of the date of retirement, 82.5 percent of the
21-5 average determined under this subsection.
21-6 (d) The board shall compute the retirement annuity of a
21-7 member who retires after September 30, 1997, at the rate of two
21-8 percent of the member's average total salary for each of the first
21-9 20 years of service, plus four percent of average total salary for
21-10 each of the next ten years of service, plus one percent of average
21-11 total salary for each of the next five years of service, with
21-12 fractional years of service prorated based on full months of
21-13 service. In making the computation for a year, the year is
21-14 considered to begin on the first day a contribution is made. A
21-15 retirement annuity under this subsection may not exceed, as of the
21-16 date of retirement, 85 percent of the member's average total
21-17 salary.
21-18 (e) A member may not receive an award from the fund for
21-19 service retirement until the member has [served] at least 20 years
21-20 of service in the fire or police department and has also
21-21 contributed the required amount of money for at least 20 years. In
21-22 determining the number of years of service in a department, the
21-23 member shall be given full credit for the period such member was an
21-24 active member plus the time the member was actively engaged in
21-25 [military] service with any uniformed service in accordance with
21-26 [Section] section 4.03 of this Act and for absences taken under the
21-27 Family and Medical Leave Act (29 U.S.C. Section 2601 et seq.), in
22-1 accordance with [Section] section 4.02 of this Act. Disciplinary
22-2 suspensions of 15 days or less may not be subtracted from a
22-3 member's service credit under this Act if the member has paid into
22-4 the [fund] fund, within 30 days after the later of the termination
22-5 date of each [suspension] suspension, or the exhaustion of any
22-6 appeal with respect to the suspension, a sum of money equal to the
22-7 amount of money that would have been deducted from that person's
22-8 salary during that period of suspension if it had not been for that
22-9 suspension. A municipality to which this Act applies shall
22-10 double-match a payment made under this subsection. [(e) Except
22-11 as provided by Subsection (f) of this section, members] Members of
22-12 the fund at the time of their retirement also shall receive service
22-13 credit for all unused sick leave accumulated by them under Chapter
22-14 143, Local Government Code, and its subsequent amendments[, with
22-15 fractional years prorated based on full months of sick leave.] at
22-16 the time of retirement, but only to the extent such unused sick
22-17 leave exceeds 90 days.
22-18 [(f) The retirement annuity for a member under Subsection
22-19 (e) of this section may not exceed, as of the date of retirement,
22-20 82.5 percent of the average, determined under that subsection and
22-21 under the ordinances of a municipality to which this Act applies,
22-22 that exceeds 90 days of accumulated sick leave.]
22-23 (f) All monthly pensions being paid by the fund to retirees
22-24 who retired before October 1, 1989, shall be increased, effective
22-25 with the first monthly payment due on or after October 1, 1997.
22-26 The amount of the increase depends on the fiscal year ending
22-27 September 30 in which the retiree retired and shall be a percentage
23-1 of the pension payment that would have been payable on October 1,
23-2 1997, but for this increase. The percentage is set forth in the
23-3 following schedule:
23-4 Municipality Fiscal Year Percentage
23-5 of Retirement Increase
23-6 1988 1.0%
23-7 1987 2.0%
23-8 1986 3.0%
23-9 1985 4.0%
23-10 1984 5.0%
23-11 1983 6.0%
23-12 1982 7.0%
23-13 1981 8.0%
23-14 1980 9.0%
23-15 1979 or earlier 10.0%
23-16 SECTION 5.015. Backward deferred retirement option plan
23-17 (BACK DROP). (a) At the time a member applies for retirement
23-18 benefits under [Section] section 5.01 of this Act, the member may
23-19 elect a Backward Deferred Retirement Option Plan (Back DROP) with a
23-20 lump-sum payment and a reduced annuity benefit as provided by this
23-21 section.
23-22 (b) The Back DROP election:
23-23 (1) results in a lump-sum payment for a number of full
23-24 months of service elected by the member that does not exceed the
23-25 lesser of the number of months of service credit the member has in
24-1 excess of 20 years or 24 months; and
24-2 (2) must be made at the time of application for
24-3 retirement.
24-4 (c) To be eligible to make a Back DROP election under this
24-5 section, a member of the fund must have [contributed a portion of
24-6 that member's salary, as provided by this Act, and have contributed
24-7 and served] at least 20 years and 1 month of service in the fire or
24-8 police department.
24-9 (d) The amount of a lump-sum payment to which a member
24-10 making a Back DROP election is entitled shall be computed in the
24-11 manner provided by this subsection. The member's [average annual
24-12 salary] retirement annuity shall be computed in the manner provided
24-13 by [Section] section 5.01(c) or (d) of this Act, whichever is
24-14 applicable, except that the retirement date used in making that
24-15 computation is the retirement date computed as provided by this
24-16 subsection. The member's [average annual salary] retirement
24-17 annuity as so computed shall be divided by 12 to compute the
24-18 member's average monthly [salary.] pension. The member's average
24-19 monthly [salary] pension multiplied by the number of full months
24-20 elected by the member under [Subsection] subsection (b)(1) of this
24-21 section is the amount of the lump-sum payment to which the member
24-22 is entitled. [In] Solely for purposes of computing the [member's
24-23 average annual salary] monthly pension under this subsection, the
24-24 member's retirement date is the member's Back DROP retirement date,
24-25 which is the member's actual retirement date less the amount of
24-26 time for:
24-27 (1) any service in excess of 35 years of service;
25-1 (2) any service [credit] given for sick leave unused
25-2 on the date of actual retirement; and
25-3 (3) [service credit, for] any service in excess of 20
25-4 years but not in excess of the amount permitted under [Subsection
25-5 (b)(1)] subsection (b)(1) of this section, the member elects for
25-6 computing the amount of the lump-sum payment.
25-7 (e) For purposes of computing the monthly [annuity] pension
25-8 of a member making a Back DROP election, the member's [average
25-9 annual salary] retirement annuity shall be computed in the manner
25-10 provided by [Section] section 5.01(c) or (d) of this Act, whichever
25-11 is applicable, except that the retirement date used in making that
25-12 computation is the member's actual retirement [date, plus time
25-13 representing any service credit given for sick leave unused on the
25-14 actual retirement date,] date less the amount of time the member
25-15 elects under [Subsection] subsection (b)(1) of this section. The
25-16 annuity may not exceed the limitation provided by [Section] section
25-17 5.01(c) or (d) of this [Act.] Act, whichever is applicable. The
25-18 member's [average annual salary] retirement annuity shall be
25-19 divided by 12 to compute the member's monthly [annuity.] pension.
25-20 (f) A member may defer receiving the lump-sum payment under
25-21 this section for a period of not longer than 12 months after the
25-22 member's retirement date. Interest may not be paid on the deferred
25-23 amount at the time of distribution.
25-24 [(g) The board by administrative rule shall implement this
25-25 section in a manner that preserves the eligibility of the tax
25-26 qualification under the Internal Revenue Code of 1986 and may
25-27 revise the program as necessary to retain tax qualification.]
26-1 SECTION 5.02. Retirement benefits after cessation of
26-2 membership. (a) A person who has qualified for a retirement
26-3 annuity under this Act but who has subsequently ceased to be a
26-4 member of the fund or a properly enrolled member of the fire or
26-5 police department, by whatever means or for whatever reason, is
26-6 entitled to a retirement annuity from the fund that accrued to that
26-7 person before the time that person ceased to be a member of the
26-8 fund or a properly enrolled member of the fire or police department
26-9 if the person or the [person's] person's beneficiary in the event
26-10 of the [person's] person's death files an application for the
26-11 retirement annuity with the board within four years after the date
26-12 that person ceased to be a member of the fund or a properly
26-13 enrolled member of the fire or police department.
26-14 (b) A retirement annuity under [Subsection] subsection (a)
26-15 of this section begins the first full calendar month after the
26-16 month in which the application is filed with the board.
26-17 (c) The amount of the retirement annuity under [Subsection]
26-18 subsection (a) of this section is the lesser of:
26-19 (1) the amount established as of the date the person
26-20 ceased to be a member of the fund or a properly enrolled member of
26-21 the fire or police department; or
26-22 (2) the amount established as of the date the person,
26-23 or the person's beneficiary filed an application under this
26-24 section.
26-25 SECTION 5.03. Eligibility for disability retirement.
26-26 (a) [A] An active member of the fund is eligible to retire and
26-27 receive a disability retirement annuity if the member:
27-1 (1) makes a written application for disability
27-2 retirement with the board;
27-3 (2) is permanently disabled through injury or disease
27-4 so as to [incapacitate the member from the performance of duties]
27-5 be unable to perform the duties of any available position in the
27-6 department and has been off active duty for a continuous period of
27-7 not less than 30 days before the date of the application for
27-8 disability retirement; [and]
27-9 [(3) is a member in good standing of the fire or
27-10 police department in which the member is employed at the time of
27-11 retirement]
27-12 (3) has had all member contributions required by this
27-13 Act made on his behalf;
27-14 (4) is not on indefinite suspension as described in
27-15 subsection (d) of this section; and
27-16 (5) has authorized the release to the board of all
27-17 medical records dated on or after the date of initial application
27-18 for employment with the department.
27-19 (b) A member of the fund who has a disability resulting from
27-20 injury or disease incurred [while the member was engaged in active
27-21 military] before he became a fire fighter or police officer or
27-22 while a member of any uniformed service is not entitled to a
27-23 disability retirement annuity based on that disability.
27-24 (c) Except as provided by [Subsection] subsection (d) of
27-25 this section, a member of the fund who is on suspension and who
27-26 receives a total and permanent disability resulting from an injury
27-27 or disease incurred while the member is on suspension is eligible
28-1 for a disability retirement annuity if the suspended member makes
28-2 up each deducted contribution lost by reason of the suspension not
28-3 later than the 30th day after the [date the contribution would have
28-4 been deducted from the member's pay.] later of the termination date
28-5 of the suspension or the exhaustion of any appeal with respect to
28-6 the suspension. A municipality to which this Act applies shall
28-7 double-match all contributions made by a member under this
28-8 subsection.
28-9 (d) A member of the fund who is on indefinite suspension is
28-10 not eligible for a disability retirement annuity until the final
28-11 determination of the suspension and all appeals of that
28-12 determination are exhausted. A member of the fund who is on
28-13 indefinite suspension is not entitled to a disability retirement
28-14 annuity if the member is finally discharged. A member of the fund
28-15 who is on indefinite suspension but who is restored to duty or who
28-16 is given a suspension for a specific period is eligible for a
28-17 disability retirement annuity as provided by [Subsection]
28-18 subsection (a) of this section.
28-19 (e) A member of the fund who applies for disability
28-20 retirement under this section is subject to medical examination as
28-21 determined by the board.
28-22 (f) This section does not affect any rights under [Section]
28-23 section 5.02 of this Act.
28-24 SECTION 5.04. Disability retirement benefits. (a) A member
28-25 who is eligible to receive a disability retirement annuity is
28-26 entitled to receive from the fund 50 percent of the average of the
28-27 member's total salary for the highest three years of the last five
29-1 years, computed from the date of retirement or, if the member has
29-2 served less than three years before the date of retirement, 50
29-3 percent of the [member's] member's average monthly total salary,
29-4 [excluding overtime pay], or a theoretical monthly average if
29-5 service is less than a full month.
29-6 (b) All fractional years under this section are prorated
29-7 based on full months served on the fire or police department as a
29-8 contributing member of the fund.
29-9 (c) The amount of 50 percent of the average total salary is
29-10 the maximum amount of disability retirement annuity for total and
29-11 permanent disability.
29-12 SECTION 5.05. Medical reexamination and reduction of
29-13 disability retirement benefits. (a) The board may cause a
29-14 disability retiree to undergo a medical examination or examinations
29-15 by any reputable physician or physicians selected by the board.
29-16 Based on the examination, the board shall determine whether the
29-17 disability retirement annuity shall be continued, decreased,
29-18 restored to the original amount if it had been decreased, or
29-19 discontinued, except that a disability retirement annuity may not
29-20 be completely discontinued unless the disability retiree has first
29-21 been accepted for reinstatement in that person's former position or
29-22 status in the fire or police department by the chief of the
29-23 respective department.
29-24 (b) For those retired because of disability before August
29-25 30, 1971, the board may change the disability retirement annuity
29-26 provided by this Act, in accordance with any change in the degree
29-27 of disability, except that the percentage used to compute the
30-1 annuity may not, except in the case of discontinuance, be reduced
30-2 to less than two percent of the base pay of a private each month,
30-3 for each year that the retiree has served and contributed a portion
30-4 of salary as provided by this Act, based on the greater of:
30-5 (1) the rate of pay at the time of the original
30-6 granting of the disability retirement annuity; or
30-7 (2) a minimum base pay of $200 each month.
30-8 (c) For those retired because of disability on or after
30-9 August 30, 1971, the disability retirement annuity may not be
30-10 reduced to less than two percent, for each year that the retiree
30-11 has served and contributed a portion of salary, of the average of
30-12 the [member's] member's total salary for the highest three years of
30-13 the last five years, computed from the date of retirement, or if
30-14 the member has served less than three years before the date of
30-15 retirement, 50 percent of the [member's] member's average monthly
30-16 total salary [excluding overtime pay], or a theoretical monthly
30-17 average if service is less than a full month. All fractional years
30-18 shall be prorated based on full months served on the fire or police
30-19 department as a contributing member of the fund before the date of
30-20 retirement.
30-21 (d) If a disability retiree, after notice, fails to undergo
30-22 a medical examination as provided by this section, the board may
30-23 reduce or entirely discontinue the retiree's disability annuity
30-24 payments.
30-25 SECTION 5.06. Removal of disability and waiver on
30-26 reinstatement. (a) If a disability retiree applies for
30-27 reinstatement to the department from which that person retired, the
31-1 disability retiree, in addition to complying with any applicable
31-2 civil service laws, shall file a written application with the board
31-3 for a discontinuance of that person's disability retirement
31-4 annuity, subject to medical examination, indicating that the person
31-5 has recovered from the disability for which that person has been
31-6 receiving disability retirement annuity payments and certifying to
31-7 the board that the chief of the department from which that person
31-8 was retired approves that person's reinstatement.
31-9 (b) The applicant must execute a waiver on a form prescribed
31-10 by the board in which the applicant waives a second disability
31-11 retirement annuity resulting from the same disability that was the
31-12 basis of the first disability at a higher rate than the applicant
31-13 was receiving at the time of the reinstatement for a period of
31-14 three years after reinstatement. After three years of reinstated
31-15 service, any subsequent disability retirement annuity is computed
31-16 as any other disability retirement annuity.
31-17 (c) If the applicant is required to undergo retraining and
31-18 is compensated during a period before being officially reinstated,
31-19 the applicant's monthly disability retirement annuity shall be
31-20 reduced by the amount of any monthly departmental payroll benefit,
31-21 to the extent that the latter is greater.
31-22 (d) The board may approve the discontinuance of a disability
31-23 retirement annuity as provided by this Act.
31-24 SECTION 5.07. Outside income pension reduction. (a) The
31-25 board shall require each disability retiree retiring after August
31-26 [22,] 29, 1979, to provide the board annually not later than May 1
31-27 of each year with a true and complete copy of the retiree's income
32-1 tax return for the previous year.
32-2 (b) If the retiree received income from other employment,
32-3 including self-employment, during the preceding year, the board may
32-4 reduce the retiree's disability retirement annuity by the amount of
32-5 $1 for each month for each $2 of income earned by the retiree from
32-6 the other employment during each month of the previous year, except
32-7 that the disability retirement annuity may not be decreased below
32-8 an amount based on two percent of the retiree's average [salary,
32-9 excluding overtime pay,] total salary computed at the time of
32-10 retirement under [Section] section 5.04 of this Act for each year
32-11 of service in the department.
32-12 SECTION 5.08. DISCRETION OF DEPARTMENT CHIEF FOR EMPLOYMENT
32-13 OF [DISABILITY.] DISABILITY RETIREE. (a) A disability retirement
32-14 annuity may not be granted or continued if the chief of the
32-15 member's department will provide the member employment within the
32-16 department commensurate with that person's physical and mental
32-17 capabilities.
32-18 (b) A determination under this section is solely within the
32-19 discretion of the department chief and must be reasonably
32-20 exercised.
32-21 SECTION 5.09. Cost-of-living increases. (a) At or before
32-22 its regular meeting in the month of March, the board annually shall
32-23 review the Consumer's Price Index for [Moderate Income Families in
32-24 Large Cities-All Items] All Urban Customers (CPI-U), U.S. City
32-25 Average or the nearest equivalent published by the United States
32-26 Bureau of Labor Statistics for the preceding calendar year. If
32-27 that index shows an increase during the preceding calendar year in
33-1 the cost of living as compared with that index at the close of the
33-2 previous year, the board shall order an increase of all retirement
33-3 annuities [by the number of full percentage points closest to the
33-4 exact amount of the increase of that index, except that any
33-5 increased retirement annuities are payable only at the rate of 75
33-6 percent of the applicable cost-of-living percentage for those
33-7 retirees, and the beneficiaries of those retirees, who were retired
33-8 on and after August 30, 1971. The annual cost-of-living adjustment
33-9 for a retiree or a beneficiary of a retiree who retired on or after
33-10 September 1, 1971, but before October 1, 1989, shall be computed at
33-11 the rate of 87.5 percent of the consumer price index specified by
33-12 this subsection if the index is eight percent or less, with the
33-13 maximum cost-of-living adjustment capped at the rate of six
33-14 percent, but at the rate of 75 percent of the index if the index is
33-15 greater than eight percent for those retirees, with no cap on the
33-16 rate of the cost-of-living adjustment.] of all retirees and
33-17 beneficiaries by a percentage which varies by the date on which the
33-18 member retired, or in the case of a member who died before
33-19 retirement, the date on which the member died. If the member's
33-20 retirement, or death before retirement occurred before August 30,
33-21 1971, the retirement annuity shall be increased by a percentage
33-22 equal to the percentage increase in the cost of living index. If
33-23 the member's retirement, or death before retirement, occurred on or
33-24 after August 30, 1971, but no later than September 30, 1989, the
33-25 retirement annuity shall be increased by a percentage that is 87.5
33-26 percent of the percentage increase in the cost of living index, for
33-27 any year in which the relevant increase in the cost of living index
34-1 increased by 8 percent or less and by 75 percent of the relevant
34-2 increase in the cost of living index if the cost of living
34-3 increased by more than 8 percent. If the member's retirement, or
34-4 death before retirement, occurred after September 30, 1989, the
34-5 retirement annuity shall be increased by a percentage which is 75
34-6 percent of the percentage increased in the cost of living index.
34-7 These percentage increases in retirement annuities shall be rounded
34-8 to the nearest whole percentage point for cost of living raises
34-9 that are effective before October 1, 1997, and to the nearest one
34-10 tenth percentage point for cost of living increases effective on or
34-11 after October 1, 1997.
34-12 (b) The retirement annuities to which this section applies
34-13 shall be computed as of the month of January before that March
34-14 board meeting and shall continue in effect for at least one full
34-15 year until there has been an additional increase to that
34-16 cost-of-living index and the board enters another order as provided
34-17 by this section.
34-18 (c) The cost-of-living increase paid to any retiree or
34-19 beneficiary of a member or retiree during the first full year after
34-20 the effective date of the retirement shall be prorated on the basis
34-21 of full months retired.
34-22 SECTION 5.10. Increase in existing retirement annuities.
34-23 Effective October 1, 1993, all retirement annuities for members who
34-24 retired before October 1, 1989, or to the combined beneficiaries of
34-25 the retirees are increased by $100 per month.
34-26 SECTION 5.11. Coordination with federal law. (a) A member
34-27 or beneficiary of a member of the fund may not accrue a service
35-1 retirement annuity; disability retirement annuity; death benefit,
35-2 whether death occurs in the line of duty or otherwise; or any other
35-3 benefit under this Act in excess of the benefit limits applicable
35-4 to the fund under Section 415 of the [code.] Code. The board shall
35-5 reduce the amount of any benefit that exceeds those limits by the
35-6 amount of the excess. If the total benefits under this fund and
35-7 the benefits and contributions to which any member is entitled
35-8 under any other qualified plans maintained by the municipality that
35-9 employs the member would otherwise exceed the applicable limits
35-10 under Section 415 of the Code, the benefits the member would
35-11 otherwise receive from the fund shall be reduced to the extent
35-12 necessary to enable to benefits to comply with Section 415 of the
35-13 Code.
35-14 (b) Any member or beneficiary who receives any distribution
35-15 from any plan within the system that is an eligible rollover
35-16 distribution as defined by Section 402(c)(4) of the Code is
35-17 entitled to have that distribution transferred directly to another
35-18 eligible retirement plan of the member's or beneficiary's choice on
35-19 providing direction to the fund regarding that transfer in
35-20 accordance with procedures established by the board.
35-21 [(b) Annual compensation for which benefits may be paid
35-22 under this Act] (c) The total salary taken into account for any
35-23 purpose for any member of the fund may not exceed $200,000 [for
35-24 each member or another limit applicable under Section 401(a)(17) of
35-25 the code.] any year for an eligible participant, or $150,000 per
35-26 year for an ineligible participant. These dollar limits shall be
35-27 adjusted from time to time in accordance with guidelines provided
36-1 by the Secretary of the Treasury. For purposes of this paragraph,
36-2 an eligible participant is any person who first became a member
36-3 before 1996, and an ineligible participant is any member who is not
36-4 an eligible participant.
36-5 [(c)] (d) Accrued benefits under this Act become 100 percent
36-6 vested for [all members on termination of the fund or on occurrence
36-7 of another event described in Section 401(a)(17) of the code and
36-8 become 100 percent vested for] a member on the date the member has
36-9 completed 20 years of [service.] service or upon the earlier
36-10 termination, or partial termination (if it affects the member) of
36-11 the fund or on the complete discontinuance of contributions by the
36-12 municipality to the fund.
36-13 [(d)] (e) Amounts representing forfeited nonvested benefits
36-14 of terminated members may not be used to increase benefits payable
36-15 from the fund but may be used to reduce contributions for future
36-16 plan years.
36-17 [(e)] (f) Distribution of benefits must begin not later than
36-18 April 1 of the year following the calendar year during which the
36-19 member becomes 70-1/2 years of age and must otherwise conform to
36-20 Section 401(a)(9) of the [code.] Code.
36-21 [(f) The fund shall be administered in a manner complying
36-22 with Section 401(a)(25) of the code, relating to actuarial
36-23 assumptions.]
36-24 (g) If the amount of any benefit is to be determined on the
36-25 basis of actuarial assumptions that are not otherwise specifically
36-26 set forth for that purpose in this Act, the actuarial assumptions
36-27 to be used are those earnings and mortality assumptions being used
37-1 on the date of the determination by the fund's actuary and approved
37-2 by the board. The actuarial assumptions being used at any
37-3 particular time shall be attached as an addendum to a copy of this
37-4 Act and treated for all purposes as a part of the Act. The
37-5 actuarial assumptions may be changed by the fund's actuary at any
37-6 time if approved by the board, but no such change in actuarial
37-7 assumptions may result in any decrease in benefits accrued as of
37-8 the effective date of the change.
37-9 [(g)] (h) This section applies to any benefit regardless of
37-10 when accrued.
37-11 [(h)] (i) The board may adopt rules to administer this
37-12 section. A rule adopted by the board under this subsection is
37-13 final and binding.
37-14 [(i) In this section, "code" means the Internal Revenue Code
37-15 of 1986 and its subsequent amendments.]
37-16 (j) To the extent permitted by law, the board may adjust the
37-17 benefits of retired members and beneficiaries by increasing any
37-18 retirement benefit that was reduced [as inflationary indexing] due
37-19 to Section 415 of the Code. If Section 415 of the Code is amended
37-20 to permit the payment of amounts previously precluded under Section
37-21 415 of the [code. If the definition of compensation is amended
37-22 under that section to include amounts previously excluded as
37-23 compensation,] Code, the board may adjust the benefits of retired
37-24 members and beneficiaries, including the [payment] restoration of
37-25 benefits previously [excluded.] denied. Benefits paid under this
37-26 subsection are not considered as extra compensation earned after
37-27 retirement but as the delayed payment of benefits earned before
38-1 retirement.
38-2 (k) The board by administrative rule shall implement this
38-3 Act in a manner that preserves the tax qualification of the fund
38-4 under the Code and may revise any provision or program to the
38-5 extent necessary to retain tax qualification.
38-6 SECTION 5.12. THIRTEENTH CHECK. Effective for any fiscal
38-7 year ending after 1996 for which the board determines that the
38-8 average annual investment yield on the market value of fund
38-9 investments for the rolling five fiscal year period just ended
38-10 exceeded the annual investment yield projected by the actuary for
38-11 that rolling five fiscal year period by at least one hundred basis
38-12 points, the board may authorize the disbursement of a thirteenth
38-13 pension check. The thirteenth pension check shall be paid to each
38-14 retiree in pay status at the time of disbursement and shall be in
38-15 an amount equal to the pension check paid immediately before the
38-16 disbursement of the retiree's thirteenth check, except the amount
38-17 of any such check shall be prorated for any retiree who has been in
38-18 pay status for less than one year so that the amount of the check
38-19 shall be one twelfth of the check that would have been paid to a
38-20 retiree in pay status for a full year times the number of full
38-21 months the retiree was in pay status. Authorization of a
38-22 thirteenth check for any such year is subject to the discretion of
38-23 the board and such authorization for one year shall not obligate
38-24 the board to authorize a thirteenth check for any other year.
38-25 ARTICLE 6. DEPENDENT'S BENEFITS
38-26 SECTION 6.01. Member's beneficiary rights. A member of the
38-27 fund has, in addition to all rights accruing from the person's
39-1 membership, the same right to receive benefits as a beneficiary
39-2 that a nonmember who is a beneficiary has in similar circumstances
39-3 if the member's spouse also is a member of the fund.
39-4 SECTION 6.02. Death benefit annuity for surviving spouses
39-5 and children. [(a) If a contributing member in good standing or
39-6 a] (a) Subject to section 6.03 and 6.08, if an active member or
39-7 retiree dies [before or after retirement,] leaving a surviving
39-8 [spouse,] spouse or one or more children under the age of [17] 18
39-9 years, [or one or more unmarried children 17 years of age or older
39-10 but under 19 years of age who attend a public or private
39-11 educational institution,] the surviving spouse and the children are
39-12 entitled to receive from the fund an aggregate death benefit
39-13 annuity of the same percentage of the member's average total salary
39-14 that the member would have been entitled to receive as a retirement
39-15 [annuity,] annuity if he or she could have retired on the date of
39-16 death, except that the percentage may not exceed the percentage to
39-17 which a member with 25 years of service credit would be entitled.
39-18 One-half of the death benefit annuity under this subsection shall
39-19 be awarded to the [eligible] surviving spouse and one-half to the
39-20 [eligible] dependent child or children.
39-21 (b) A child [resulting from any marriage occurring] who is
39-22 born after the date of retirement of the member [from a spouse who
39-23 was not the spouse on the date of retirement] is not entitled to a
39-24 [retirement] death benefit annuity under this Act unless the member
39-25 was married to the other parent of the child on the date of
39-26 retirement. A surviving spouse of a retiree who was not married to
39-27 the retiree until after his or her retirement is entitled to
40-1 receive only the benefit, if any, provided under section 6.08 of
40-2 this Act.
40-3 (c) If there are no children, the surviving spouse is
40-4 entitled to receive [an amount not to exceed 60 percent of the
40-5 average total salary of the deceased member computed as provided
40-6 under Subsection (a) of this section.] from the fund a death
40-7 benefit annuity in the same amount the member would have been
40-8 entitled to receive as a retirement annuity if he or she could have
40-9 retired at the date of death, except that the percentage used in
40-10 computing the amount the member would have been entitled to receive
40-11 may not exceed the percentage to which a member with 25 years of
40-12 service would have been entitled.
40-13 (d) If there is no surviving spouse, the dependent children
40-14 are entitled to receive [not more than 30 percent of the average
40-15 total salary computed as provided under Subsection (a) of this
40-16 section, except that] from the fund an aggregate death benefit
40-17 annuity of one half (1/2) of the amount the member would have been
40-18 entitled to receive as a retirement annuity if he or she could have
40-19 retired at the date of death, except that the percentage used in
40-20 computing the amount the member would have been entitled to receive
40-21 may not exceed the percentage to which a member with 25 years of
40-22 service would have been entitled. However, if the board
40-23 determines on investigation that the eligible children are
40-24 destitute, the board may increase the death benefit annuity [to an
40-25 amount not to exceed 40 percent of that average total salary.]
40-26 under the preceding sentence to two thirds (2/3) of the amount the
40-27 member would have been entitled to receive as a retirement annuity
41-1 if he or she could have retired at the date of death, except that
41-2 the percentage used in computing the amount the member would have
41-3 been entitled to receive may not exceed the percentage to which a
41-4 member with 25 years of service would have been entitled. The
41-5 amount awarded under this subsection to any child shall be paid by
41-6 the board to the legal guardian of the child.
41-7 (e) A [surviving spouse of a member of the fund who died
41-8 before retirement is entitled to at least 50 percent of the
41-9 member's average total salary that the member would have been
41-10 entitled to receive as a retirement annuity.]
41-11 [(f) A surviving spouse of a member of the fund is entitled
41-12 to a death benefit annuity based on the member's retirement
41-13 benefits in effect on the date of retirement.]
41-14 [(g) A] child of the member who is so mentally or physically
41-15 disabled as to be incapable of being self-supporting to any extent,
41-16 if otherwise qualified and regardless of age, has the rights of a
41-17 child under [17] 18 years of age, except that any death benefit
41-18 annuity paid under this subsection to any mentally or physically
41-19 disabled child shall be reduced to the extent of any state pension
41-20 or aid, including Medicaid, or any state-funded assistance received
41-21 by the child, regardless of whether the funds were made available
41-22 to the state by the federal government. In no other instance under
41-23 this Act is a child entitled to any benefit after becoming [19] 18
41-24 years of age.
41-25 SECTION 6.03. [LIMITATION ON AMOUNT OF SURVIVING SPOUSE'S]
41-26 DEATH BENEFIT [ANNUITY.] ANNUITY FOR SPOUSE OF MEMBER KILLED IN
41-27 LINE OF DUTY. (a) The death benefit annuity of a surviving spouse
42-1 of a member of the fund who is killed in the line of duty is
42-2 governed by this section.
42-3 (b) The board shall consider the finding of a municipality
42-4 to which this Act applies that a member was killed in the line of
42-5 duty as a guideline for its determination in applying this section.
42-6 On an application for survivor's benefits by a surviving spouse or
42-7 dependent child, the fund shall pay the normal benefits payable
42-8 under [Section] section 6.02 of this Act. When a benefit is
42-9 payable under this section, the death benefit annuity shall be
42-10 recomputed, applying [Subsection] subsection (c) of this section,
42-11 and any deficiency payment shall be paid to the eligible
42-12 beneficiaries.
42-13 (c) Notwithstanding the formulas for computing the total
42-14 amounts of annuities otherwise provided by this [section,] Article,
42-15 if a member is killed in the line of duty, the member's surviving
42-16 spouse and dependent children are entitled to a death benefit
42-17 annuity equal to the total salary of the member at the time of
42-18 death. Rules provided by this section relating to qualification
42-19 and disqualification for and apportionment of benefits apply to a
42-20 death benefit annuity computed under this subsection. A death
42-21 benefit annuity computed under this subsection is divided in the
42-22 same manner as described in section 6.02(a) and is subject to the
42-23 same cost-of-living adjustments that apply to pensions for service
42-24 retirement.
42-25 SECTION 6.04. Remarriage; benefits after termination of
42-26 marriage. (a) If a surviving spouse remarries or a dependent
42-27 child marries before October 1, 1995, the right of a surviving
43-1 spouse or dependent child to annuity payments under this Act
43-2 terminates on the remarriage of the surviving spouse or on the
43-3 marriage of the child, as applicable, under either statutory law or
43-4 common law as prescribed by [Section] section 6.06 of this Act.
43-5 (b) The right of a surviving spouse or dependent child to
43-6 annuity payments under this Act is not affected by the surviving
43-7 spouse's remarriage or dependent child's marriage under either
43-8 statutory or common law if the marriage or remarriage takes place
43-9 on or after October 1, 1995.
43-10 (c) If after October 1, 1995, there is a termination of the
43-11 remarriage of a surviving spouse or of the marriage of a dependent
43-12 child, that person is entitled, on application, to 100 percent of
43-13 the annuity that was in effect on the date of termination of
43-14 benefits.
43-15 (d) A surviving spouse or dependent child who is unmarried
43-16 but receiving reduced benefits because of a prior marriage that
43-17 caused the benefits to be terminated is entitled to 100 percent of
43-18 the annuity that was in effect on the original date of termination
43-19 of benefits.
43-20 (e) The benefit provided under Subsections (c) and (d) of
43-21 this section shall be [applied] provided prospectively beginning
43-22 October 1, 1995, and the surviving spouse or dependent child is not
43-23 entitled to receive any benefits or increases in benefits relating
43-24 to any period before October 1, 1995.
43-25 SECTION 6.05. Affidavit of marital status. (a) A surviving
43-26 spouse, a dependent [beneficiary] child under this Act, or the
43-27 guardian of a surviving spouse or dependent [beneficiary] child may
44-1 be required by the board to file an affidavit [annually] concerning
44-2 the person's marital status or the marital status of the person's
44-3 wards or to give an affidavit to the board [at other times when
44-4 probable cause exists to suspect the possibility of marriage.] in
44-5 any case in which marriage could affect the benefits of the
44-6 surviving spouse or dependent child.
44-7 (b) If the dependent [beneficiary] spouse, child, or
44-8 guardian fails or refuses to file an affidavit required under
44-9 [Subsection] subsection (a) of this section or if an incomplete,
44-10 incorrect, or false affidavit is filed, the board may suspend
44-11 annuity payments to that person indefinitely until the person
44-12 complies with the requests and orders of the board.
44-13 SECTION 6.06. Common-law marriages. Common-law marriages
44-14 are not recognized under this Act and benefits may not be conferred
44-15 on common-law spouses as beneficiaries unless a declaration of
44-16 informal marriage was made under Section 1.92, Family Code, and its
44-17 subsequent amendments before the member's death.
44-18 SECTION 6.07. Surviving spouse's right to single
44-19 entitlement. A surviving [spouse who is] spouse, whether or not a
44-20 member of the [fund] fund, is not entitled to more than one death
44-21 benefit annuity from the fund. However, any surviving spouse who
44-22 has been married to more than one deceased member or retiree is
44-23 entitled to receive a death benefit annuity with respect to the
44-24 deceased member or retiree that will provide the highest benefit.
44-25 SECTION 6.08. Lump-sum death benefit. (a) Except as
44-26 provided by [Subsection] subsection (b) of this section, a
44-27 surviving spouse whose status as such resulted from any marriage
45-1 after the date of the retirement of the member is entitled to a
45-2 lump-sum death benefit because of the member's death in the amount
45-3 of:
45-4 (1) $10,000 if the marriage occurred 10 years or more
45-5 before the member's death;
45-6 (2) $7,500 if the marriage occurred 7-1/2 years
45-7 before but less than 10 years before the member's death;
45-8 (3) $5,000 if the marriage occurred five years or more
45-9 but less than 7-1/2 years before the member's death; and
45-10 (4) $2,500 if the marriage occurred 2-1/2 years or
45-11 more but less than five years before the member's death.
45-12 (b) A surviving spouse under this section is not entitled to
45-13 a lump-sum death benefit if a child is entitled to receive benefits
45-14 under this Act.
45-15 SECTION 6.09. Death benefit annuities to dependent parents.
45-16 (a) If a contributing member in good standing of the fire or
45-17 police department or a retiree dies before or after retirement and
45-18 leaves no surviving spouse or child but leaves surviving a father
45-19 and mother wholly dependent on that person for [support,] support
45-20 (dependent parents), the dependent father and mother are entitled
45-21 to receive one-third of the average total salary of the deceased
45-22 member based on the same number of years of the [member's] member's
45-23 pay as is currently provided for computations of retirement
45-24 annuities under [Section] section 5.01(a) of this Act, the annuity
45-25 to be equally divided between the father and mother as long as they
45-26 are wholly dependent. If there is only one dependent, either
45-27 father or mother, the board shall grant the surviving dependent an
46-1 annuity not to exceed one-fourth that average total salary as
46-2 computed under this subsection.
46-3 (b) An application for benefits under subsection (a) shall
46-4 be accompanied by a copy of the deceased member's or retiree's tax
46-5 return filed for the last year ending before his death or an
46-6 explanation satisfactory to the board of why the tax return can not
46-7 be provided. The board may, on its own initiative, make a thorough
46-8 investigation, determine the facts as to the dependency with
46-9 respect to an application for benefits made under [Subsection]
46-10 subsection (a) of this section, and at any time, on the request of
46-11 any beneficiary or any contributor to the fund, reopen any award
46-12 made to any member or dependent of any member who is receiving
46-13 annuity payments under this section and discontinue those payments
46-14 as to all or any of them. The findings of the board under this
46-15 section and all annuities granted under this section are final on
46-16 all parties unless set aside or revoked by a court of competent
46-17 jurisdiction.
46-18 SECTION 6.10. SUSPENSION [RIGHTS OF DEPENDENT PARENTS.]
46-19 RIGHTS. [(a)] If a member dies who is under suspension at the
46-20 time of death, including an indefinite suspension that has not
46-21 become final, the member's [dependent parents] beneficiaries have
46-22 the same rights as any beneficiaries of any other member under this
46-23 Act.
46-24 SECTION 6.11. Death benefit for active member's estate. (a)
46-25 If [a] an active member [of the fire or police department in active
46-26 service] dies and does not leave [an eligible] a surviving spouse,
46-27 a child under [17] 18 years of age, [a child under 19 years of age
47-1 who is attending school,] a mentally or physically disabled child,
47-2 or a dependent father or mother, the estate of the deceased member
47-3 is entitled to a death benefit payment from the fund in the amount
47-4 of $10,000 from the fund or the refund of the member's
47-5 contributions [as provided by Section 4.07 of this Act,] that were
47-6 picked up by the municipality, whichever amount is greater.
47-7 (b) The death benefit under this section is not payable if
47-8 the deceased member of the fund is survived by one or more
47-9 beneficiaries.
47-10 SECTION 6.12. THIRTEENTH CHECK. For any year in which the
47-11 board authorizes disbursement of a thirteenth pension check to
47-12 retirees pursuant to section 5.12 of this Act, the board shall also
47-13 authorize disbursement of a thirteenth check to each beneficiary in
47-14 pay status at the time of the disbursement. The amount of the
47-15 thirteenth check shall be determined in the same manner as the
47-16 amount of a thirteenth check is determined for a retiree.
47-17 SECTION 6.13. NO REDUCTION IN BENEFITS. The amendments to
47-18 this Act that are effective on October 1, 1997, shall not reduce
47-19 the benefits or length of payment of any benefits for any
47-20 Beneficiary who is in pay status before October 1, 1997.
47-21 ARTICLE 7. INVESTMENTS AND FINANCIAL PROVISIONS
47-22 SECTION 7.01. Treasurer's duties. (a) All money of the
47-23 fund is payable to the treasurer of the fund for the use of the
47-24 fund.
47-25 (b) The duties imposed on the treasurer under this Act are
47-26 additional duties for which the treasurer is liable under oath and
47-27 bond as the treasurer of a municipality to which this Act applies.
48-1 (c) The treasurer is not entitled to compensation for
48-2 serving as the treasurer of the fund.
48-3 SECTION 7.02. Accounts. The accounts of the fund and of the
48-4 members shall be kept separately.
48-5 SECTION 7.03. Reserve retirement fund. (a) The board shall
48-6 determine a reasonably safe amount of surplus necessary to defray
48-7 reasonable expenses of administering the fund.
48-8 (b) All other assets shall be designated as reserve
48-9 retirement funds.
48-10 (c) Only the board may invest and manage the reserve
48-11 retirement funds for the sole benefit of the plan participants and
48-12 their beneficiaries.
48-13 SECTION 7.04. Investment powers of the board. (a) The
48-14 board shall cause the reserve retirement funds to be invested in a
48-15 manner that a prudent investor would invest, considering the
48-16 purposes, terms, distribution requirements, and other circumstances
48-17 of an enterprise with a like character and like aims.
48-18 (b) The board shall diversify the investment of the fund to
48-19 minimize the risk of large losses unless under the circumstances it
48-20 is clearly prudent not to do so. In determining whether the board
48-21 has exercised prudence concerning an investment decision, the
48-22 investment of all assets of the fund, rather than the prudence of a
48-23 single investment of the fund, shall be considered.
48-24 (c) The board may directly manage the investments of the
48-25 fund or may choose and contract for professional management
48-26 services. If the fund owns real estate, it may, at its discretion,
48-27 establish [corporations] organizations described by Section
49-1 501[(c)](c)(2) or (25), Internal Revenue Code of 1986 (26 U.S.C.
49-2 Section 501), and its subsequent amendments, to hold title to the
49-3 real estate.
49-4 (d) The board shall have the ultimate responsibility for the
49-5 investment of the reserve retirement funds. The board may purchase
49-6 securities or engage in limited partnerships or make other
49-7 investments not specifically provided by this Act and shall have
49-8 the authority of exercising discretion in determining the nature,
49-9 type, quality, and size of any investment consistent with the
49-10 investment policies it establishes.
49-11 SECTION 7.05. Professional consultants. (a) The board may
49-12 contract for professional investment management services, financial
49-13 consultants, independent auditors, attorneys, and actuaries. Only
49-14 the board may enter into those contracts and may establish a
49-15 reasonable fee for compensation.
49-16 (b) The board may designate its own custodian or master
49-17 custodian to perform the customary duties involving the safekeeping
49-18 of the assets and the execution of transactions of either domestic
49-19 or foreign securities. The board may engage in a securities
49-20 lending program consistent with the benefits to plan participants
49-21 and their beneficiaries.
49-22 SECTION 7.06. Investment manager qualifications. In
49-23 appointing investment managers, the board shall require that the
49-24 investment manager be:
49-25 (1) registered under the Investment Advisors Act of
49-26 1940 (15 U.S.C. Section 80b-1 et seq.) and its subsequent
49-27 amendments;
50-1 (2) a bank as defined by that Act; or
50-2 (3) an insurance company qualified to perform
50-3 investment services under the laws of more than one state.
50-4 ARTICLE 7A. STANDARDS OF CONDUCT AND
50-5 FINANCIAL DISCLOSURE REQUIREMENTS
50-6 SECTION 7.51. Policy. (a) A member of the board or the
50-7 executive director may not [have a direct or indirect interest,
50-8 including a financial interest, engage in a business transaction or
50-9 professional activity, or incur an obligation of any nature that is
50-10 in substantial conflict with the proper discharge of the member's
50-11 or the executive director's fiduciary duties.] buy, sell or
50-12 exchange any property to or from the fund, deal with the assets of
50-13 the fund in his or her own interest or for his or her own account,
50-14 or receive any consideration for his or her personal account from
50-15 any person dealing with the fund in connection with the income or
50-16 assets of the fund.
50-17 [(b) To implement Subsection] (b) To implement subsection
50-18 (a) of this section and to strengthen the faith and confidence of
50-19 the members and beneficiaries of the fund, the board shall develop
50-20 standards of conduct and financial disclosure requirements to be
50-21 observed by each member of the board and by the executive director
50-22 in the performance of official duties.
50-23 [(c) The standards of conduct and financial disclosure
50-24 requirements must provide for:]
50-25 [(1) general definitions;]
50-26 [(2) the manner of determining substantial conflict;]
50-27 [(3) the manner of determining who is considered a
51-1 dependent child of a board member or the executive director;]
51-2 [(4) each member of the board and the executive
51-3 director to file a financial disclosure statement;]
51-4 [(5) a review board to be appointed;]
51-5 [(6) the composition of the review board;]
51-6 [(7) a custodian of records to be designated;]
51-7 [(8) the manner in which records must be retained;]
51-8 [(9) the information, generally, that must be included
51-9 in a financial statement;]
51-10 [(10) the time for filing a financial statement;]
51-11 [(11) the form in which a financial statement must be
51-12 presented;]
51-13 [(12) compliance with this section;]
51-14 [(13) public access to financial statements;]
51-15 [(14) sanctions for a violation of this section that
51-16 must include removal of a member of the board or the executive
51-17 director in the case of a serious violation;]
51-18 [(15) standards of conduct for board members and the
51-19 executive director;]
51-20 [(16) other matters relating to conduct of board
51-21 members and the executive director and financial disclosure the
51-22 board considers appropriate.]
51-23 ARTICLE 8. EXCESS BENEFIT PLAN
51-24 FOR FIRE FIGHTERS AND POLICE OFFICERS
51-25 SECTION 8.01. CREATION OF PLAN. There is created outside
51-26 the fund a separate, nonqualified excess benefit plan containing
51-27 the following terms and provisions:
52-1 SECTION 8.02. DEFINITIONS. All definitions prescribed by
52-2 section 1.02 of this Act are applicable to the plan created
52-3 pursuant to this section except if a different definition is set
52-4 forth in this section or the context in which a term is used in
52-5 this section indicates a different meaning is clearly intended than
52-6 that prescribed by section 1.02 of this Act.
52-7 (1) "Excess Benefit Plan" means the separate,
52-8 nonqualified, unfunded excess benefit plan created by this section
52-9 for the benefit of eligible members, as amended or restated from
52-10 time to time, which is intended to be a "qualified governmental
52-11 excess benefit arrangement" within the meaning of Section 415(m) of
52-12 the Code.
52-13 (2) "Qualified Plan" means the fund and any other plan
52-14 maintained by the city for the exclusive benefit of some or all of
52-15 the members of the fund if the plan has been found by the Internal
52-16 Revenue Service to be qualified or has been treated by the city as
52-17 a qualified plan under Section 401 of the Code.
52-18 (3) "Maximum Benefit" means the retirement benefit a
52-19 member and the spouse, dependent child, or dependent parent of a
52-20 member is entitled to receive from all qualified plans in any month
52-21 after giving effect to section 5.11(a) of this Act and any similar
52-22 provisions of any other qualified plans designed to conform to
52-23 Section 415 of the Code.
52-24 (4) "Excess Benefit Participant" means any member
52-25 whose retirement benefits as determined on the basis of all
52-26 qualified plans without regard to the limitations of section
52-27 5.11(a) of this Act and comparable provisions of other qualified
53-1 plans, would exceed the maximum benefit permitted under Section 415
53-2 of the Code.
53-3 (5) "Unrestricted Benefit" means the monthly
53-4 retirement benefit a member and the spouse and dependent child or
53-5 dependent parent of a member would have received under the terms of
53-6 all qualified plans except for the restrictions of section 5.11(a)
53-7 of this Act and any similar provisions of any other qualified plans
53-8 designed to conform to Section 415 of the Code.
53-9 SECTION 8.03. EXCESS BENEFIT ENTITLEMENT. (a) An excess
53-10 benefit participant who is receiving benefits from the fund is
53-11 entitled to a monthly benefit under this excess benefit plan in an
53-12 amount equal to the lesser of:
53-13 (1) the member's unrestricted benefit less the maximum
53-14 benefit; or
53-15 (2) the amount by which the member's monthly benefit
53-16 from the fund has been reduced due to the limitations of Section
53-17 415 of the Code.
53-18 (b) In the case of the death of an excess benefit
53-19 participant whose spouse, dependent child, or dependent parent is
53-20 entitled to preretirement or postretirement death benefits under a
53-21 qualified plan, such surviving spouse, dependent child, or
53-22 dependent parent is entitled to a monthly benefit under the excess
53-23 benefit plan equal to the benefit determined in accordance with
53-24 Article 6 of this Act without regard to the limitations under
53-25 section 5.11(a) of this Act or Section 415 of the Code, less the
53-26 maximum benefit.
53-27 (c) Any benefit to which any person is entitled under this
54-1 section shall be paid at the same time and in the same manner as
54-2 such benefit would have been paid from the fund if payment of such
54-3 benefit from the fund had not been precluded by section 5.11(a) of
54-4 this Act. Under no circumstances may any excess benefit
54-5 participant or any beneficiary be permitted to elect to defer the
54-6 receipt of all or any part of a payment due under this Article.
54-7 SECTION 8.04. MANNER OF ADMINISTRATION. (a) This plan
54-8 shall be administered by the board. Except as provided to the
54-9 contrary by this section, the rights, duties, and responsibilities
54-10 of the board shall be the same for this excess benefit plan as for
54-11 the fund.
54-12 (b) The consultants, independent auditors, attorneys, and
54-13 actuaries selected to perform services for the fund pursuant to
54-14 section 7.05 shall also perform services for this excess benefit
54-15 plan, but their fees for this service may not be paid by the fund.
54-16 The actuary engaged pursuant to section 7.05 of this Act shall
54-17 advise the board of the amount of benefits that may not be provided
54-18 from the fund solely by reason of the limitations of Section 415 of
54-19 the Code and thus the amount of city contributions that will be
54-20 made to this excess benefit plan rather than to the fund.
54-21 SECTION 8.05. FUNDING OF BENEFITS. (a) Contributions may
54-22 not be accumulated under this excess benefit plan to pay future
54-23 retirement benefits. Instead, each payment of municipal
54-24 contributions that would otherwise be made to the fund pursuant to
54-25 section 4.05 of this Act, shall be reduced by the amount determined
54-26 by the board as necessary to meet the requirements for retirement
54-27 benefits under this excess benefit plan (including reasonable
55-1 administrative expenses) until the next payment of municipal
55-2 contributions is expected to be made to the fund. The city shall
55-3 then pay to this excess benefit plan, out of the withheld
55-4 contributions, no earlier than the 14th day before the date of each
55-5 distribution of monthly retirement benefits is required to be made
55-6 from this excess benefit plan, the amount necessary to satisfy the
55-7 obligation to pay monthly retirement benefits from this excess
55-8 benefit plan. The board shall satisfy the obligation of this
55-9 excess benefit plan to pay retirement benefits out of the municipal
55-10 contributions so transferred for that month.
55-11 (b) Municipal contributions otherwise required to be made to
55-12 the fund pursuant to section 4.05 of this Act and any other
55-13 qualified plan shall be divided into those contributions required
55-14 to pay retirement benefits pursuant to this section and those
55-15 contributions paid into and accumulated to pay the maximum benefits
55-16 required under the qualified plan. Municipal contributions made to
55-17 provide retirement benefits pursuant to this section may not be
55-18 commingled with the monies of the fund or any other qualified plan.
55-19 SECTION 8.06. EXEMPTIONS. Benefits under this Article are
55-20 exempt from garnishment, assignment, attachment, judgment, and
55-21 other legal process in the same manner as retirement annuities
55-22 mentioned in section 1.05.
55-23 SECTION 2. This Act takes effect September 1, 1997.
55-24 SECTION 3. The importance of this legislation and the
55-25 crowded condition of the calendars in both houses create an
55-26 emergency and an imperative public necessity that the
55-27 constitutional rule requiring bills to be read on three several
56-1 days in each house be suspended, and this rule is hereby suspended.