1-1 By: Madla, Wentworth, Zaffirini, Luna S.B. No. 872
1-2 (In the Senate - Filed February 28, 1997; March 5, 1997, read
1-3 first time and referred to Committee on Intergovernmental
1-4 Relations; April 1, 1997, reported adversely, with favorable
1-5 Committee Substitute by the following vote: Yeas 11, Nays 0;
1-6 April 1, 1997, sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 872 By: Cain
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the retirement system for firefighters and police
1-11 officers in certain municipalities.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 SECTION 1. Section 1.02, Chapter 824, Acts of the 73rd
1-14 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
1-15 is amended to read as follows:
1-16 Sec. 1.02. Definitions. In this Act:
1-17 (1) "Active member" means a fire fighter or police
1-18 officer who is a current contributing member of the fund.
1-19 (2) "Average total salary" means the aggregate total
1-20 salary, as defined by Subdivision (17) of this section, received by
1-21 a member during the three years of the five-year period ending on
1-22 the date of the member's service or disability retirement or death
1-23 in which the member's total salary is highest, divided by three.
1-24 (3) "Beneficiary" means the surviving spouse,
1-25 dependent child, or dependent parent of a deceased member or
1-26 retiree.
1-27 (4) "Board" means the board of trustees of a fund to
1-28 which this Act applies.
1-29 (5) "Code" means the United States Internal Revenue
1-30 Code of 1986.
1-31 (6) "Department" means the fire department of a
1-32 municipality to which this Act applies, the police department of a
1-33 municipality to which this Act applies, or both the fire department
1-34 and the police department of such a municipality.
1-35 (7) "Dependent child" means a person under age 18, or
1-36 a totally disabled person, whose natural or adoptive parent is a
1-37 deceased member or deceased retiree if, for the year immediately
1-38 preceding the death of the member or retiree, the deceased member
1-39 or retiree claimed the person as a dependent on the member's or
1-40 retiree's federal income tax return.
1-41 (8) "Dependent parent" means a person who is the
1-42 natural parent of a deceased member or deceased retiree or who
1-43 adopted a deceased member or deceased retiree before the deceased
1-44 member's or retiree's 18th birthday if, for the year immediately
1-45 preceding the death of the member or retiree, the deceased member
1-46 or retiree claimed the person as a dependent on the member's or
1-47 retiree's federal income tax return.
1-48 (9) "Fire fighter" means an employee of the fire
1-49 department who is classified as a fire fighter by the personnel
1-50 department of the municipality.
1-51 (10) [(2)] "Fund" means the fire fighters and police
1-52 officers pension fund of a municipality to which this Act applies.
1-53 (11) "Member" means a fire fighter or police officer
1-54 who has become a member of the fund as provided by Section 4.01(a)
1-55 of this Act and has not retired, died, or forfeited the person's
1-56 interest in the fund.
1-57 (12) "Police officer" means an employee of the police
1-58 department who is classified as a police officer by the personnel
1-59 department of the municipality.
1-60 (13) "Retiree" means a member who has terminated
1-61 employment with the department with a right to a service retirement
1-62 pension as provided by Section 5.01 of this Act or a disability
1-63 retirement pension as provided by Section 5.03 of this Act.
1-64 (14) "Retirement" means the period that a retiree is
2-1 entitled to receive service retirement benefits or disability
2-2 retirement benefits.
2-3 (15) [(3)] "Retirement annuity" means monthly pension
2-4 benefits payable to a retiree.
2-5 (16) [(4)] "Surviving spouse" means a widow or a
2-6 widower of a member or retiree who was married to the member or
2-7 retiree at the time of the member's or retiree's death.
2-8 (17) [(5)] "Total salary" means all salary of a
2-9 member, except:
2-10 (A) [excluding] overtime pay, [and, for police
2-11 officers, excluding] field training officer's pay [and standby
2-12 pay], [which includes] bomb squad pay, SWAT team pay, K-9 pay, and
2-13 hostage team pay; and
2-14 (B) pay for unused accrued vacation and sick
2-15 leave, holiday pay, compensatory time pay, and bonus days leave, or
2-16 any similar items of compensation that may be paid in the future.
2-17 (18) "Years of service" means a member's total years
2-18 of service, including fractional years or full months of service,
2-19 computed as provided by Section 5.01(e) of this Act.
2-20 SECTION 2. Section 1.04, Chapter 824, Acts of the 73rd
2-21 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
2-22 is amended by amending Subsections (b) and (d) and adding
2-23 Subsection (e) to read as follows:
2-24 (b) The board shall hold in trust the assets of the fund for
2-25 the exclusive benefit of the members and retirees of the fund and
2-26 their beneficiaries and for defraying reasonable administrative
2-27 expenses of the fund.
2-28 (d) A public or private entity, agency, or authority may not
2-29 alter or impair any contract made by the board or under the
2-30 authority or direction of the board.
2-31 (e) The fund is independent of the control of a municipality
2-32 to which this Act applies.
2-33 SECTION 3. Section 2.01, Chapter 824, Acts of the 73rd
2-34 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
2-35 is amended to read as follows:
2-36 Sec. 2.01. Board of trustees. (a) The fund is governed by
2-37 a board of trustees consisting of the following nine members:
2-38 (1) the mayor of a municipality to which this Act
2-39 applies;
2-40 (2) two members of the governing body of a
2-41 municipality to which this Act applies, appointed by that governing
2-42 body;
2-43 (3) two active members who are fire fighters below the
2-44 rank of fire chief, elected by secret ballot by a majority of the
2-45 votes cast by [vote of] the members of the fire department [who are
2-46 contributing members of the fund];
2-47 (4) two active members who are police officers below
2-48 the rank of police chief, elected by secret ballot by a majority of
2-49 the votes cast by [vote of] the members of the police department
2-50 [who are contributing members of the fund];
2-51 (5) a retiree [or beneficiary] representative of the
2-52 fire department, elected by secret ballot by a majority [vote] of
2-53 the votes cast by the retirees of the fire department and [, or]
2-54 the surviving spouses who are receiving benefits with respect to
2-55 deceased members or [of the] retirees of[, from] the fire
2-56 department; and
2-57 (6) a retiree [or beneficiary] representative of the
2-58 police department, elected by secret ballot by a majority [vote] of
2-59 the votes cast by the retirees of the police department and[, or]
2-60 the surviving spouses who are receiving benefits with respect to
2-61 deceased members or [of the] retirees of[, from] the police
2-62 department.
2-63 (b) The board, through its secretary, shall administer the
2-64 required elections of the active member and retiree representatives
2-65 [retiree or beneficiary representatives] by mailing ballots to all
2-66 eligible members, [out-of-town] retirees, or beneficiaries. Only
2-67 retirees and surviving spouses who are currently receiving benefits
2-68 from the fund [of members properly enrolled on the pension rolls]
2-69 are eligible to vote for the [be elected as] retiree [or
3-1 beneficiary] representatives. If no candidate receives a majority
3-2 of the votes cast for any trustee position, the board shall hold a
3-3 run-off election in which the only candidates are the candidates
3-4 who received the highest and second-highest number of votes cast.
3-5 [(c) The fund is independent of the control of a
3-6 municipality to which this Act applies.]
3-7 SECTION 4. Subsection (e), Section 2.02, Chapter 824, Acts
3-8 of the 73rd Legislature, 1993 (Article 6243o, Vernon's Texas Civil
3-9 States), is amended to read as follows:
3-10 (e) The retiree [or beneficiary] representatives serve on
3-11 the board for staggered four-year terms, with one member's term
3-12 expiring every two years.
3-13 SECTION 5. Section 2.03, Chapter 824, Acts of the 73rd
3-14 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
3-15 is amended by amending the heading and Subsections (a), (b), and
3-16 (d) to read as follows:
3-17 Sec. 2.03. RESIGNATION OR REMOVAL OF TRUSTEES. (a) The
3-18 members of the board who are fire fighters or police officers may
3-19 resign or may be removed by a vote of the membership of their
3-20 respective departments.
3-21 (b) The members of the board who are retiree [or
3-22 beneficiary] representatives may resign or may be removed by a vote
3-23 of the group eligible to elect them.
3-24 (d) A removal election under this section must be held
3-25 within 30 days after the date the board certifies that a proper
3-26 petition for a removal election has been signed by at least 20
3-27 percent of the membership from which the trustee was elected. A
3-28 trustee's term of service ends on the entry of an order by the
3-29 board declaring that a majority of the votes cast in [the results
3-30 of] a removal election under this section favor removal.
3-31 SECTION 6. Subsection (a), Section 2.04, Chapter 824, Acts
3-32 of the 73rd Legislature, 1993 (Article 6243o, Vernon's Texas Civil
3-33 Statutes), is amended to read as follows:
3-34 (a) The board shall elect from among the trustees a
3-35 chairman, a vice-chairman, and a secretary.
3-36 SECTION 7. Sections 2.06 and 2.07, Chapter 824, Acts of the
3-37 73rd Legislature, 1993 (Article 6243o, Vernon's Texas Civil
3-38 Statutes), are amended to read as follows:
3-39 Sec. 2.06. Meetings; QUORUM. (a) The board shall hold
3-40 regular monthly meetings and special meetings at the call of the
3-41 chairman or on written demand by a majority of the members of the
3-42 board.
3-43 (b) A quorum of the board is five members. When a quorum is
3-44 present, action of the board that requires a vote may be taken by a
3-45 majority of the members present. Any action taken by less than a
3-46 quorum is not binding on the board.
3-47 Sec. 2.07. Committees of board. (a) The chairman of the
3-48 board may appoint committees that report to the board.
3-49 (b) Only members of the board may be appointed to committees
3-50 under this section.
3-51 (c) Committees shall be composed of [not fewer than] three
3-52 or four [nor more than five] members of the board, except as
3-53 otherwise specifically provided by the board.
3-54 (d) Only members of committees may vote as committee
3-55 members.
3-56 (e) The board may direct staff and advisors to assist the
3-57 committees.
3-58 (f) [All members of the board may attend committee meetings.]
3-59 [(g)] Members of committees serve at the pleasure of the
3-60 board.
3-61 (g) [(h)] Permanent or standing committees may [not] be
3-62 appointed.
3-63 SECTION 8. Subsections (a) and (b), Section 3.01, Chapter
3-64 824, Acts of the 73rd Legislature, 1993 (Article 6243o, Vernon's
3-65 Texas Civil Statutes), are amended to read as follows:
3-66 (a) The board has complete authority and power to:
3-67 (1) administer the fund for the exclusive benefit of
3-68 all members, retirees, and beneficiaries;
3-69 (2) order payments from the fund as required by this
4-1 Act; [and]
4-2 (3) control the fund independently;
4-3 (4) conduct all litigation on behalf of the fund; and
4-4 (5) purchase with fund assets from one or more
4-5 insurers licensed to do business in this state one or more
4-6 insurance policies that provide for reimbursement of the fund and
4-7 any trustee, officer, or employee of the board for liability
4-8 imposed or damages because of an alleged act, error, or omission
4-9 committed in the trustee's, officer's, or employee's capacity as a
4-10 fiduciary of assets of the fund and for costs and expenses incurred
4-11 as a trustee, officer, or employee in defense of a claim for an
4-12 alleged act, error, or omission, as long as the insurance policy
4-13 does not provide for reimbursement of a trustee, officer, or
4-14 employee for liability imposed or expenses incurred because of the
4-15 trustee's, officer's, or employee's personal dishonesty, fraud,
4-16 lack of good faith, or intentional failure to act prudently.
4-17 (b) The board shall adopt rules necessary for the board's
4-18 effective operation, including rules relating to:
4-19 (1) the disbursement of the fund's assets;
4-20 (2) the designation of beneficiaries of the fund; and
4-21 (3) the name of the board and the fund.
4-22 SECTION 9. Subsections (a) and (d), Section 3.02, Chapter
4-23 824, Acts of the 73rd Legislature, 1993 (Article 6243o, Vernon's
4-24 Texas Civil Statutes), are amended to read as follows:
4-25 (a) The board shall consider all cases for membership in the
4-26 fund and for the retirement and benefits of the members of the fund
4-27 and all applications for benefits by surviving spouses, dependent
4-28 children, and dependent parents.
4-29 (d) The chairman of the board may issue process for
4-30 witnesses, administer oaths to those witnesses, and examine any
4-31 witness in any manner affecting retirement or a benefit under this
4-32 Act. The process for witnesses may be served on any member of the
4-33 fire or police department or any other person the board considers
4-34 to be an appropriate person. On the failure of any witness to
4-35 attend and testify, that person may be compelled to attend and
4-36 testify as in any judicial proceeding[, according to the practice
4-37 in a justice court].
4-38 SECTION 10. Section 3.03, Chapter 824, Acts of the 73rd
4-39 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
4-40 is amended to read as follows:
4-41 Sec. 3.03. Orders for disbursements. (a) The board shall
4-42 issue orders for disbursements signed by the chairman or
4-43 vice-chairman of the board and the secretary of the board to the
4-44 appropriate persons. The order shall state the purposes for the
4-45 payments. The board shall keep a record of those orders.
4-46 (b) Disbursements [At each monthly board meeting, the board
4-47 shall send to the treasurer of the board a written list of persons
4-48 entitled to the payment from the fund, stating the amount and
4-49 reason for payment. The list must be certified and signed by the
4-50 chairman or vice-chairman of the board and the secretary of the
4-51 board.]
4-52 [(c) The fund] may not be made [disbursed] without a record
4-53 vote of the board.
4-54 [(d) A quorum of the board is five members. When a quorum
4-55 is present, action of the board that requires a vote may be taken
4-56 by a majority of the members present.]
4-57 SECTION 11. Subsection (a), Section 4.01, Chapter 824, Acts
4-58 of the 73rd Legislature, 1993 (Article 6243o, Vernon's Texas Civil
4-59 Statutes), is amended to read as follows:
4-60 (a) A person becomes a member of the fund as a condition of
4-61 continued employment if the person[:]
4-62 [(1)] has served eight months as a fire fighter or
4-63 police officer or as a trainee in a fire fighter or police officer
4-64 training academy of a municipality to which this Act applies. A
4-65 person may not become eligible for disability retirement benefits
4-66 unless the person[;]
4-67 [(2) was not younger than 18 at the time of
4-68 appointment; and]
4-69 [(3)] has provided an authorization for release of
5-1 medical information for any medical records dated on or after the
5-2 date of initial application for employment or has agreed in writing
5-3 to provide that authorization when requested by the board or, in
5-4 the alternative if required by the board, has submitted to a
5-5 physical examination by a physician selected by the board.
5-6 SECTION 12. Section 4.03, Chapter 824, Acts of the 73rd
5-7 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
5-8 is amended by amending the heading and Subsections (a), (b), and
5-9 (d) through (g) to read as follows:
5-10 Sec. 4.03. UNIFORMED [MILITARY] SERVICE. (a) A member of
5-11 the fund who enters any uniformed [active military] service of the
5-12 United States may not:
5-13 (1) be required to make the monthly payments into the
5-14 fund provided by this Act as long as the member is engaged in
5-15 active service with the uniformed [military] service; or
5-16 (2) lose any seniority rights or retirement benefits
5-17 provided by this Act by virtue of that [military] service.
5-18 (b) Not later than the 90th day after the date of the
5-19 member's reinstatement to an active status in the fire or police
5-20 department, the member must file with the secretary of the board a
5-21 written statement of intent to pay into the fund an amount equal to
5-22 what the member would have paid if the member had remained on
5-23 active status in the department during the period of the member's
5-24 absence in the uniformed [military] service.
5-25 (d) Except as provided by Subsection (f) of this section, if
5-26 the member does not comply with Subsections (b) and (c) of this
5-27 section, the member shall lose all credit toward the member's
5-28 retirement annuity for the length of time the member was engaged in
5-29 active service in any uniformed [military] service.
5-30 (e) The amount of credit purchased under this section may
5-31 not exceed the length of the active service in a uniformed
5-32 [military] service required to be credited [authorized] by law.
5-33 (f) If a person who became a member before October 1, 1997,
5-34 does not make the payment required under Subsection (c) of this
5-35 section within the required amount of time and the member would
5-36 otherwise be [is] eligible for credit under federal law, the member
5-37 may receive credit for the uniformed service if the member [shall]
5-38 also pays [pay] interest, compounded annually, on the then current
5-39 rate of a member's contribution from the date the payment was
5-40 required to the date the payment was made. The board shall set the
5-41 rate of interest.
5-42 (g) A disability resulting from either injury or disease
5-43 contracted while engaged in any uniformed [military] service does
5-44 not entitle a member to a disability retirement annuity.
5-45 SECTION 13. Subsections (a) and (c), Section 4.04, Chapter
5-46 824, Acts of the 73rd Legislature, 1993 (Article 6243o, Vernon's
5-47 Texas Civil Statutes), are amended to read as follows:
5-48 (a) There shall be deducted from the total salary [wages] of
5-49 each fire fighter and police officer in the employment of a
5-50 municipality to which this Act applies a percentage of the member's
5-51 total salary according to the following schedule:
5-52 (1) 11.16 percent for full pay periods after September
5-53 30, 1993, but before October 1, 1994;
5-54 (2) 11.32 percent for full pay periods after September
5-55 30, 1994, but before October 1, 1995;
5-56 (3) 11.50 percent for full pay periods after September
5-57 30, 1995, but before October 1, 1996;
5-58 (4) 11.66 percent for full pay periods after September
5-59 30, 1996, but before October 1, 1997;
5-60 (5) 11.82 percent for full pay periods after September
5-61 30, 1997, but before October 1, 1998;
5-62 (6) 12 percent for full pay periods after September
5-63 30, 1998, but before October 1, 1999;
5-64 (7) 12.16 percent for full pay periods after September
5-65 30, 1999, but before October 1, 2000;
5-66 (8) 12.32 percent for full pay periods after September
5-67 30, 2000, but before October 1, 2001; and
5-68 (9) 12.50 percent for full pay periods after September
5-69 30, 2001.
6-1 (c) Contributions picked up by the municipality shall be
6-2 treated as employer contributions [in accordance with Section
6-3 414(h)(2), Internal Revenue Code of 1986 (26 U.S.C. Section 414),]
6-4 for the purpose of determining tax treatment of the amounts under
6-5 the code [Internal Revenue Code of 1986]. Those contributions are
6-6 not included in the gross income of the employee until the time
6-7 they are distributed or made available to the employee.
6-8 SECTION 14. Subsections (b) and (c), Section 4.05, Chapter
6-9 824, Acts of the 73rd Legislature, 1993 (Article 6243o, Vernon's
6-10 Texas Civil Statutes), are amended to read as follows:
6-11 (b) The payments into the fund by the municipality, both as
6-12 to deductions and double-matching amounts, shall be made on the
6-13 same day the contributions are deducted from the members' total
6-14 salary [pay].
6-15 (c) Any donations made to the fund and all amounts [funds]
6-16 received from any source for the fund shall be deposited in the
6-17 fund at the earliest opportunity.
6-18 SECTION 15. Section 5.01, Chapter 824, Acts of the 73rd
6-19 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
6-20 is amended to read as follows:
6-21 Sec. 5.01. Retirement benefits. (a) If a member of the
6-22 fund has contributed a portion of that member's salary as provided
6-23 by this Act and has contributed and served for 20 years or more in
6-24 the fire or police department, the board shall, on the application
6-25 of the member for a retirement annuity, authorize a retirement
6-26 annuity to the member.
6-27 (b) The board shall compute the retirement annuity of a
6-28 member who retires after September 30, 1991, but before October 1,
6-29 1995, on the basis of the average of the member's total salary for
6-30 the highest three years of the last five years, computed from the
6-31 date of retirement, of the member's pay at the rate of two percent
6-32 for each of the first 20 years served, plus 3 1/2 percent for each
6-33 of the next 10 years served, plus one percent for each of the next
6-34 five years served, with fractional years prorated based on full
6-35 months served as a contributing member, but the annuity may not
6-36 exceed, as of the date of retirement, 80 percent of the average so
6-37 determined.
6-38 (c) The board shall compute the retirement annuity of a
6-39 member who retires after September 30, 1995, but before October 1,
6-40 1997, on the basis of the average of the member's total salary for
6-41 the highest three years of the last five years, computed from the
6-42 date of retirement, of the member's pay at the rate of two percent
6-43 for each of the first 20 years served, plus four percent for each
6-44 of the next five years served, plus 3 1/2 percent for each of the
6-45 next five years served, plus one percent for each of the next five
6-46 years served, with fractional years prorated based on full months
6-47 served as a contributing member. In making the computation for a
6-48 year, the year is considered to begin on the first day a
6-49 contribution is made. An annuity under this subsection may not
6-50 exceed, as of the date of retirement, 82.5 percent of the average
6-51 determined under this subsection.
6-52 (d) The board shall compute the retirement annuity of a
6-53 member who retires after September 30, 1997, at the rate of two
6-54 percent of the member's average total salary for each of the first
6-55 20 years of service, plus four percent of average total salary for
6-56 each of the next 10 years of service, plus one percent of average
6-57 total salary for each of the next five years of service, with
6-58 fractional years of service prorated based on full months served as
6-59 a contributing member. In making the computation for a year, the
6-60 year is considered to begin on the first day a contribution is
6-61 made. A retirement annuity under this subsection may not exceed,
6-62 as of the date of retirement, 85 percent of the member's average
6-63 total salary.
6-64 (e) A member may not receive an award from the fund for
6-65 service retirement until the member has [served] at least 20 years
6-66 of service in the fire or police department and has also
6-67 contributed the required amount of money for at least 20 years. In
6-68 determining the number of years of service in a department, the
6-69 member shall be given full credit for the period the member was an
7-1 active member plus the time the member was actively engaged in
7-2 service with any uniformed [military] service in accordance with
7-3 Section 4.03 of this Act and for absences taken under the Family
7-4 and Medical Leave Act (29 U.S.C. Section 2601 et seq.), in
7-5 accordance with Section 4.02 of this Act. Disciplinary suspensions
7-6 of 15 days or less may not be subtracted from a member's service
7-7 credit under this Act if the member has paid into the fund, within
7-8 30 days after the later of the termination date of each suspension
7-9 or the exhaustion of any appeal with respect to the suspension, a
7-10 sum of money equal to the amount of money that would have been
7-11 deducted from that person's salary during that period of suspension
7-12 if it had not been for that suspension. A municipality to which
7-13 this Act applies shall double-match a payment made under this
7-14 subsection. Members [(e) Except as provided by Subsection (f) of
7-15 this section, members] of the fund at the time of their retirement
7-16 shall also receive service credit for all unused sick leave
7-17 accumulated by them under Chapter 143, Local Government Code, but
7-18 only to the extent the unused sick leave exceeds 90 days [and its
7-19 subsequent amendments, with fractional years prorated based on full
7-20 months of sick leave].
7-21 (f) All monthly pensions being paid by the fund to retirees
7-22 who retired before October 1, 1989, are increased, effective with
7-23 the first monthly payment due on or after October 1, 1997. The
7-24 amount of the increase depends on the fiscal year ending September
7-25 30 in which the retiree retired and is a percentage of the pension
7-26 payment that would have been payable on October 1, 1997, except for
7-27 this increase. The percentage is set forth in the following
7-28 schedule:
7-29 Municipality Fiscal Year Percentage
7-30 of Retirement Increase
7-31 1988 1.0%
7-32 1987 2.0%
7-33 1986 3.0%
7-34 1985 4.0%
7-35 1984 5.0%
7-36 1983 6.0%
7-37 1982 7.0%
7-38 1981 8.0%
7-39 1980 9.0%
7-40 1979 or earlier 10.0%
7-41 [The retirement annuity for a member under Subsection (e) of this
7-42 section may not exceed, as of the date of retirement, 82.5 percent
7-43 of the average, determined under that subsection and under the
7-44 ordinances of a municipality to which this Act applies, that
7-45 exceeds 90 days of accumulated sick leave.]
7-46 SECTION 16. Subsections (c), (d), and (e), Section 5.015,
7-47 Chapter 824, Acts of the 73rd Legislature, 1993 (Article 6243o,
7-48 Vernon's Texas Civil Statutes), are amended to read as follows:
7-49 (c) To be eligible to make a Back DROP election under this
7-50 section, a member of the fund must have [contributed a portion of
7-51 that member's salary, as provided by this Act, and have contributed
7-52 and served] at least 20 years and 1 month of service in the fire or
7-53 police department.
7-54 (d) The amount of a lump-sum payment to which a member
7-55 making a Back DROP election is entitled shall be computed in the
7-56 manner provided by this subsection. The member's retirement
7-57 annuity [average annual salary] shall be computed in the manner
7-58 provided by Section 5.01(c) or (d) of this Act, as applicable,
7-59 except that the retirement date used in making that computation is
7-60 the retirement date computed as provided by this subsection. The
7-61 member's retirement annuity as so computed [average annual salary]
7-62 shall be divided by 12 to compute the member's [average] monthly
7-63 pension [salary]. The member's [average] monthly pension [salary]
7-64 multiplied by the number of full months elected by the member under
7-65 Subsection (b)(1) of this section is the amount of the lump-sum
7-66 payment to which the member is entitled. Solely for purposes of
7-67 [In] computing the member's monthly pension [average annual salary]
7-68 under this subsection, the member's retirement date is the member's
7-69 Back DROP retirement date, which is the member's actual retirement
8-1 date less the amount of time for:
8-2 (1) any service in excess of 35 years of service;
8-3 (2) any service [credit] given for sick leave unused
8-4 on the date of actual retirement; and
8-5 (3) any [service credit, for] service in excess of 20
8-6 years but not in excess of the amount permitted under Subsection
8-7 (b)(1) of this section that [,] the member elects for computing the
8-8 amount of the lump-sum payment.
8-9 (e) For purposes of computing the monthly pension [annuity]
8-10 of a member making a Back DROP election, the member's retirement
8-11 annuity [average annual salary] shall be computed in the manner
8-12 provided by Section 5.01(c) or (d) of this Act, as applicable,
8-13 except that the retirement date used in making that computation is
8-14 the member's actual retirement date[, plus time representing any
8-15 service credit given for sick leave unused on the actual retirement
8-16 date,] less the amount of time the member elects under Subsection
8-17 (b)(1) of this section. The annuity may not exceed the limitation
8-18 provided by Section 5.01(c) or (d) of this Act, as applicable. The
8-19 member's retirement annuity [average annual salary] shall be
8-20 divided by 12 to compute the member's monthly pension [annuity].
8-21 SECTION 17. Subsections (a), (b), and (c), Section 5.03,
8-22 Chapter 824, Acts of the 73rd Legislature, 1993 (Article 6243o,
8-23 Vernon's Texas Civil Statutes), are amended to read as follows:
8-24 (a) An active [A] member of the fund is eligible to retire
8-25 and receive a disability retirement annuity if the member:
8-26 (1) makes a written application for disability
8-27 retirement with the board;
8-28 (2) is permanently disabled through injury or disease
8-29 so as to be unable to perform the duties of any available position
8-30 in the department [incapacitate the member from the performance of
8-31 duties] and has been off active duty for a continuous period of not
8-32 less than 30 days before the date of the application for disability
8-33 retirement; [and]
8-34 (3) has had all member contributions required by this
8-35 Act made on the member's behalf;
8-36 (4) is not on indefinite suspension as described in
8-37 Subsection (d) of this section; and
8-38 (5) has authorized the release to the board of all
8-39 medical records dated on or after the date of initial application
8-40 for employment with the department [is a member in good standing of
8-41 the fire or police department in which the member is employed at
8-42 the time of retirement].
8-43 (b) A member of the fund who has a disability resulting from
8-44 injury or disease incurred before the member became a fire fighter
8-45 or police officer or while a member of any uniformed [while the
8-46 member was engaged in active military] service is not entitled to a
8-47 disability retirement annuity based on that disability.
8-48 (c) Except as provided by Subsection (d) of this section, a
8-49 member of the fund who is on suspension and who receives a total
8-50 and permanent disability resulting from an injury or disease
8-51 incurred while the member is on suspension is eligible for a
8-52 disability retirement annuity if the suspended member makes up each
8-53 deducted contribution lost by reason of the suspension not later
8-54 than the 30th day after the later of the termination date of the
8-55 suspension or the exhaustion of any appeal with respect to the
8-56 suspension [date the contribution would have been deducted from the
8-57 member's pay]. A municipality to which this Act applies shall
8-58 double-match all contributions made by a member under this
8-59 subsection.
8-60 SECTION 18. Subsection (a), Section 5.04, Chapter 824, Acts
8-61 of the 73rd Legislature, 1993 (Article 6243o, Vernon's Texas Civil
8-62 Statutes), is amended to read as follows:
8-63 (a) A member who is eligible to receive a monthly disability
8-64 retirement annuity is entitled to receive from the fund:
8-65 (1) 50 percent of the average of the member's total
8-66 salary for the highest three years of the last five years, computed
8-67 from the date of retirement, divided by 12; or
8-68 (2) [,] if the member has served less than three years
8-69 before the date of retirement, 50 percent of the member's average
9-1 monthly total salary, [excluding overtime pay,] or a theoretical
9-2 monthly average if service is less than a full month.
9-3 SECTION 19. Subsections (a) and (c), Section 5.05, Chapter
9-4 824, Acts of the 73rd Legislature, 1993 (Article 6243o, Vernon's
9-5 Texas Civil Statutes), are amended to read as follows:
9-6 (a) The board may cause a disability retiree to undergo a
9-7 medical examination or examinations by any reputable physician or
9-8 physicians selected by the board. Based on the examination, the
9-9 board shall determine whether the disability retirement annuity
9-10 shall be continued, decreased, restored to the original amount if
9-11 it had been decreased, or discontinued, except that a disability
9-12 retirement annuity may not be completely discontinued unless the
9-13 disability retiree has first been accepted for reinstatement in
9-14 that person's former position or status in the fire or police
9-15 department by the chief of the respective department.
9-16 (c) For those retired because of disability on or after
9-17 August 30, 1971, the monthly disability retirement annuity may not
9-18 be reduced to less than two percent, for each year that the retiree
9-19 has served and contributed a portion of salary, of the average of
9-20 the member's total salary for the highest three years of the last
9-21 five years, computed from the date of retirement, divided by 12, or
9-22 if the member has served less than three years before the date of
9-23 retirement, 50 percent of the member's average monthly total
9-24 salary, [excluding overtime pay,] or a theoretical monthly average
9-25 if service is less than a full month. All fractional years shall
9-26 be prorated based on full months served on the fire or police
9-27 department as a contributing member of the fund before the date of
9-28 retirement.
9-29 SECTION 20. Section 5.07, Chapter 824, Acts of the 73rd
9-30 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
9-31 is amended to read as follows:
9-32 Sec. 5.07. Outside income pension reduction. (a) The board
9-33 shall require each disability retiree retiring after August 29
9-34 [22], 1979, to provide the board annually not later than May 1 of
9-35 each year with a true and complete copy of the retiree's income tax
9-36 return for the previous year.
9-37 (b) If the retiree received income from other employment,
9-38 including self-employment, during the preceding year, the board may
9-39 reduce the retiree's disability retirement annuity by the amount of
9-40 $1 for each month for each $2 of income earned by the retiree from
9-41 the other employment during each month of the previous year, except
9-42 that the disability retirement annuity may not be decreased below
9-43 an amount based on two percent of the retiree's average total
9-44 salary[, excluding overtime pay,] computed at the time of
9-45 retirement under Section 5.04 of this Act for each year of service
9-46 in the department.
9-47 SECTION 21. Subsection (a), Section 5.09, Chapter 824, Acts
9-48 of the 73rd Legislature, 1993 (Article 6243o, Vernon's Texas Civil
9-49 Statutes), is amended to read as follows:
9-50 (a) At or before its regular meeting in the month of March,
9-51 the board annually shall review the Consumer's Price Index for All
9-52 Urban Consumers (CPI-U), U.S. City Average [Moderate Income
9-53 Families in Large Cities--All Items] or the nearest equivalent
9-54 published by the United States Bureau of Labor Statistics for the
9-55 preceding calendar year. If that index shows an increase during
9-56 the preceding calendar year in the cost of living as compared with
9-57 that index at the close of the previous year, the board shall order
9-58 an increase of all retirement annuities of all retirees and
9-59 beneficiaries by a percentage that varies by the date on which the
9-60 member retired, or in the case of a member who died before
9-61 retirement, the date on which the member died. If the member's
9-62 retirement or death before retirement occurred before August 30,
9-63 1971, the annuity shall be increased by a percentage equal to the
9-64 percentage increase in the cost of living index. If the member's
9-65 retirement or death before retirement occurred on or after August
9-66 30, 1971, but before October 1, 1989, the retirement annuity shall
9-67 be increased by a percentage that is 87.5 percent of the percentage
9-68 increase in the cost of living index, for any year in which the
9-69 cost of living index increases by eight percent or less and by 75
10-1 percent of the percentage increase in the cost of living index if
10-2 the cost of living index increases by more than eight percent. If
10-3 the member's retirement or death before retirement occurred on or
10-4 after October 1, 1989, the retirement annuity shall be increased by
10-5 a percentage that is 75 percent of the percentage increase in the
10-6 cost of living index. A percentage increase in retirement
10-7 annuities shall be rounded to the nearest one-tenth percentage
10-8 point for a cost of living increase [by the number of full
10-9 percentage points closest to the exact amount of the increase of
10-10 that index, except that any increased retirement annuities are
10-11 payable only at the rate of 75 percent of the applicable
10-12 cost-of-living percentage for those retirees, and the beneficiaries
10-13 of those retirees, who were retired on and after August 30, 1971.
10-14 The annual cost-of-living adjustment for a retiree or a beneficiary
10-15 of a retiree who retired on or after September 1, 1971, but before
10-16 October 1, 1989, shall be computed at the rate of 87.5 percent of
10-17 the consumer price index specified by this subsection if the index
10-18 is eight percent or less, with the maximum cost-of-living
10-19 adjustment capped at the rate of six percent, but at the rate of 75
10-20 percent of the index if the index is greater than eight percent for
10-21 those retirees, with no cap on the rate of the cost-of-living
10-22 adjustment].
10-23 SECTION 22. Section 5.11, Chapter 824, Acts of the 73rd
10-24 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
10-25 is amended to read as follows:
10-26 Sec. 5.11. Coordination with federal law. (a) A member or
10-27 beneficiary of a member of the fund may not accrue a service
10-28 retirement annuity,[;] disability retirement annuity,[;] death
10-29 benefit, whether death occurs in the line of duty or otherwise,[;]
10-30 or any other benefit under this Act in excess of the benefit limits
10-31 applicable to the fund under Section 415 of the code. The board
10-32 shall reduce the amount of any benefit that exceeds those limits by
10-33 the amount of the excess. If the total benefits under this fund
10-34 and the benefits and contributions to which any member is entitled
10-35 under any other qualified plans maintained by the municipality that
10-36 employs the member would otherwise exceed the applicable limits
10-37 under Section 415 of the code, the benefits the member would
10-38 otherwise receive from the fund shall be reduced to the extent
10-39 necessary to enable the benefits to comply with Section 415 of the
10-40 code.
10-41 (b) Any member or beneficiary who receives any distribution
10-42 from any plan within the system that is an eligible rollover
10-43 distribution as defined by Section 402(c)(4) of the code is
10-44 entitled to have that distribution transferred directly to another
10-45 eligible retirement plan of the member's or beneficiary's choice on
10-46 providing direction to the fund regarding that transfer in
10-47 accordance with procedures established by the board.
10-48 (c) The total salary taken into account for any purpose for
10-49 any member of the fund [Annual compensation for which benefits may
10-50 be paid under this Act] may not exceed $200,000 per year for an
10-51 eligible participant or $150,000 per year for an ineligible
10-52 participant. These dollar limits shall be periodically adjusted in
10-53 accordance with guidelines provided by the United States secretary
10-54 of the treasury. For purposes of this subsection, an eligible
10-55 participant is any person who first became a member before 1996,
10-56 and an ineligible participant is any member who is not an eligible
10-57 participant [for each member or another limit applicable under
10-58 Section 401(a)(17) of the code].
10-59 (d) [(c)] Accrued benefits under this Act become 100 percent
10-60 vested for [all members on termination of the fund or on occurrence
10-61 of another event described in Section 401(a)(17) of the code and
10-62 become 100 percent vested for] a member on:
10-63 (1) the date the member has completed 20 years of
10-64 service;
10-65 (2) the earlier termination or partial termination, if
10-66 it affects the member, of the fund; or
10-67 (3) the complete discontinuance of contributions by
10-68 the municipality to the fund.
10-69 (e) [(d)] Amounts representing forfeited nonvested benefits
11-1 of terminated members may not be used to increase benefits payable
11-2 from the fund but may be used to reduce contributions for future
11-3 plan years.
11-4 (f) [(e)] Distribution of benefits must begin not later than
11-5 April 1 of the year following the calendar year during which the
11-6 member becomes 70 1/2 years of age and must otherwise conform to
11-7 Section 401(a)(9) of the code.
11-8 (g) If the amount of any benefit is to be determined on the
11-9 basis of actuarial assumptions that are not otherwise specifically
11-10 set forth for that purpose in this Act, the actuarial assumptions
11-11 to be used are those earnings and mortality assumptions being used
11-12 on the date of the determination by the fund's actuary and approved
11-13 by the board. The actuarial assumptions being used at any
11-14 particular time shall be attached as an addendum to a copy of this
11-15 Act and treated for all purposes as a part of this Act. The
11-16 actuarial assumptions may be changed by the fund's actuary at any
11-17 time if approved by the board, but a change in actuarial
11-18 assumptions may not result in any decrease in benefits accrued as
11-19 of the effective date of the change [(f) The fund shall be
11-20 administered in a manner complying with Section 401(a)(25) of the
11-21 code, relating to actuarial assumptions].
11-22 (h) [(g)] This section applies to any benefit regardless of
11-23 when accrued.
11-24 (i) [(h)] The board may adopt rules to administer this
11-25 section. A rule adopted by the board under this subsection is
11-26 final and binding.
11-27 [(i) In this section, "code" means the Internal Revenue Code
11-28 of 1986 and its subsequent amendments.]
11-29 (j) To the extent permitted by law, the board may adjust the
11-30 benefits of retired members and beneficiaries by increasing any
11-31 retirement benefit that was reduced because of Section 415 of the
11-32 code. If Section 415 of the code is amended to permit the payment
11-33 of amounts previously precluded [as inflationary indexing] under
11-34 Section 415 of the code[. If the definition of compensation is
11-35 amended under that section to include amounts previously excluded
11-36 as compensation], the board may adjust the benefits of retired
11-37 members and beneficiaries, including the restoration [payment] of
11-38 benefits previously denied [excluded]. Benefits paid under this
11-39 subsection are not considered as extra compensation earned after
11-40 retirement but as the delayed payment of benefits earned before
11-41 retirement.
11-42 (k) The board by rule shall implement this Act in a manner
11-43 that preserves the tax qualification of the fund under the code and
11-44 may revise any provision or program to the extent necessary to
11-45 retain tax qualification.
11-46 (l) In this section, "qualified plan" has the meaning
11-47 assigned by Section 8.02 of this Act.
11-48 SECTION 23. Article 5, Chapter 824, Acts of the 73rd
11-49 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
11-50 is amended by adding Section 5.12 to read as follows:
11-51 Sec. 5.12. 13TH CHECK. (a) In any fiscal year ending after
11-52 1996 for which the board determines that the average annual
11-53 investment yield on the market value of fund investments for the
11-54 preceding five fiscal years exceeded the annual investment yield
11-55 projected by the actuary for that preceding five-fiscal-year period
11-56 by at least 100 basis points, the board may authorize the
11-57 disbursement of a 13th pension check.
11-58 (b) The 13th pension check is paid to each retiree receiving
11-59 an annuity at the time of disbursement and is in an amount equal to
11-60 the pension check paid immediately before the disbursement of the
11-61 retiree's 13th check, except the amount of any such check shall be
11-62 prorated for any retiree who has been receiving an annuity for less
11-63 than one year so that the amount of the check is one-twelfth of the
11-64 check that would have been paid to a retiree receiving an annuity
11-65 for a full year times the number of full months the retiree has
11-66 received an annuity.
11-67 (c) Authorization of a 13th check for any year is subject to
11-68 the discretion of the board. Authorization for one year does not
11-69 obligate the board to authorize a 13th check for any other year.
12-1 (d) In this section, "annual investment yield" means the
12-2 yield on the fund's investment portfolio for a particular year, as
12-3 a percentage of the portfolio, after reduction for costs of
12-4 investing the portfolio, but without reduction for the fund's
12-5 operating expenses.
12-6 SECTION 24. Section 6.02, Chapter 824, Acts of the 73rd
12-7 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
12-8 is amended to read as follows:
12-9 Sec. 6.02. Death benefit annuity for surviving spouses and
12-10 children. (a) Subject to Sections 6.03 and 6.08 of this Act, if
12-11 an active [If a contributing] member [in good standing] or a
12-12 retiree dies [before or after retirement,] leaving a surviving
12-13 spouse or[,] one or more children under the age of 18 [17] years,
12-14 [or one or more unmarried children 17 years of age or older but
12-15 under 19 years of age who attend a public or private educational
12-16 institution,] the surviving spouse and the children are entitled to
12-17 receive from the fund an aggregate death benefit annuity of the
12-18 same percentage of the member's average total salary that the
12-19 member would have been entitled to receive as a retirement annuity
12-20 if the member could have retired on the date of death, except that
12-21 the percentage may not exceed the percentage to which a member with
12-22 25 years of service credit would be entitled. One-half of the
12-23 death benefit annuity under this subsection shall be awarded to the
12-24 [eligible] surviving spouse and one-half to the dependent
12-25 [eligible] child or children.
12-26 (b) A child who is born [resulting from any marriage
12-27 occurring] after the date of retirement of the member [from a
12-28 spouse who was not the spouse on the date of retirement] is not
12-29 entitled to a death benefit [retirement] annuity under this Act
12-30 unless the member was married to the other parent of the child on
12-31 the date of retirement. A surviving spouse of a retiree who was
12-32 not married to the retiree until after the retiree's retirement is
12-33 entitled to receive only the benefit, if any, provided under
12-34 Section 6.08 of this Act.
12-35 (c) If there are no children, the surviving spouse is
12-36 entitled to receive from the fund a death benefit annuity in the
12-37 same amount the member would have been entitled to receive as a
12-38 retirement annuity if the member could have retired on the date of
12-39 death, except that the percentage used in computing the amount the
12-40 member would have been entitled to receive may not exceed the
12-41 percentage to which a member with 25 years of service would have
12-42 been entitled [an amount not to exceed 60 percent of the average
12-43 total salary of the deceased member computed as provided under
12-44 Subsection (a) of this section].
12-45 (d) If there is no surviving spouse, the dependent children
12-46 are entitled to receive from the fund an aggregate death benefit
12-47 annuity of one-half of the amount the member would have been
12-48 entitled to receive as a retirement annuity if the member could
12-49 have retired on the date of death, except that the percentage used
12-50 in computing the amount the member would have been entitled to
12-51 receive may not exceed the percentage to which a member with 25
12-52 years of service would have been entitled. However, [not more than
12-53 30 percent of the average total salary computed as provided under
12-54 Subsection (a) of this section, except that] if the board
12-55 determines on investigation that the eligible children are
12-56 destitute, the board may increase the death benefit annuity under
12-57 this subsection to two-thirds of the amount the member would have
12-58 been entitled to receive as a retirement annuity if the member
12-59 could have retired on the date of death, except that the percentage
12-60 used in computing the amount the member would have been entitled to
12-61 receive may not exceed the percentage to which a member with 25
12-62 years of service would have been entitled [to an amount not to
12-63 exceed 40 percent of that average total salary]. The amount
12-64 awarded under this subsection to any child shall be paid by the
12-65 board to the legal guardian of the child.
12-66 (e) [A surviving spouse of a member of the fund who died
12-67 before retirement is entitled to at least 50 percent of the
12-68 member's average total salary that the member would have been
12-69 entitled to receive as a retirement annuity.]
13-1 [(f) A surviving spouse of a member of the fund is entitled
13-2 to a death benefit annuity based on the member's retirement
13-3 benefits in effect on the date of retirement.]
13-4 [(g)] A child of the member who is so mentally or physically
13-5 disabled as to be incapable of being self-supporting to any extent,
13-6 if otherwise qualified and regardless of age, has the rights of a
13-7 child under 18 [17] years of age, except that any death benefit
13-8 annuity paid under this subsection to any mentally or physically
13-9 disabled child shall be reduced to the extent of any state pension
13-10 or aid, including Medicaid, or any state-funded assistance received
13-11 by the child, regardless of whether the funds were made available
13-12 to the state by the federal government. In no other instance under
13-13 this Act is a child entitled to any benefit after becoming 18 [19]
13-14 years of age.
13-15 SECTION 25. Section 6.03, Chapter 824, Acts of the 73rd
13-16 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
13-17 is amended by amending the heading and Subsections (b) and (c) to
13-18 read as follows:
13-19 Sec. 6.03. [LIMITATION ON AMOUNT OF SURVIVING SPOUSE'S]
13-20 DEATH BENEFIT ANNUITY FOR SPOUSE OF MEMBER KILLED IN LINE OF DUTY.
13-21 (b) The board shall consider the finding of a municipality
13-22 to which this Act applies that a member was killed in the line of
13-23 duty as a guideline for its determination in applying this section.
13-24 On an application for survivor's benefits by a surviving spouse or
13-25 dependent child, the fund shall pay the normal benefits payable
13-26 under Section 6.02 of this Act. When a benefit is payable under
13-27 this section, the death benefit annuity shall be recomputed,
13-28 applying Subsection (c) of this section, and any deficiency payment
13-29 shall be paid to the eligible beneficiaries.
13-30 (c) Notwithstanding the formulas for computing the total
13-31 amounts of annuities otherwise provided by this Act [section], if a
13-32 member is killed in the line of duty, the member's surviving spouse
13-33 and dependent children are entitled to a death benefit annuity
13-34 equal to the total salary of the member at the time of death.
13-35 Rules provided by this section relating to qualification and
13-36 disqualification for and apportionment of benefits apply to a death
13-37 benefit annuity computed under this subsection. A death benefit
13-38 annuity computed under this subsection is divided in the manner
13-39 described by Section 6.02(a) of this Act and is subject to the same
13-40 cost-of-living adjustments that apply to pensions for service
13-41 retirement.
13-42 SECTION 26. Subsection (e), Section 6.04, Chapter 824, Acts
13-43 of the 73rd Legislature, 1993 (Article 6243o, Vernon's Texas Civil
13-44 Statutes), is amended to read as follows:
13-45 (e) The benefit provided under Subsections (c) and (d) of
13-46 this section shall be provided [applied] prospectively beginning
13-47 October 1, 1995, and the surviving spouse or dependent child is not
13-48 entitled to receive any benefits or increases in benefits relating
13-49 to any period before October 1, 1995.
13-50 SECTION 27. Section 6.05, Chapter 824, Acts of the 73rd
13-51 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
13-52 is amended to read as follows:
13-53 Sec. 6.05. Affidavit of marital status. (a) A surviving
13-54 spouse, a dependent child [beneficiary under this Act], or the
13-55 guardian of a surviving spouse or dependent child [beneficiary] may
13-56 be required by the board to file an affidavit [annually] concerning
13-57 the person's marital status or the marital status of the person's
13-58 wards in any case in which marriage could affect the benefits of
13-59 the surviving spouse or dependent child [or to give an affidavit to
13-60 the board at other times when probable cause exists to suspect the
13-61 possibility of marriage].
13-62 (b) If the surviving spouse, dependent child, [beneficiary]
13-63 or guardian fails or refuses to file an affidavit required under
13-64 Subsection (a) of this section or if an incomplete, incorrect, or
13-65 false affidavit is filed, the board may suspend annuity payments to
13-66 that person indefinitely until the person complies with the
13-67 requests and orders of the board.
13-68 SECTION 28. Section 6.07, Chapter 824, Acts of the 73rd
13-69 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
14-1 is amended to read as follows:
14-2 Sec. 6.07. Surviving spouse's right to single entitlement.
14-3 A surviving spouse, whether or [who is] not a member of the fund,
14-4 is not entitled to more than one death benefit annuity from the
14-5 fund. A surviving spouse who has been married to more than one
14-6 deceased member or retiree is entitled to receive a death benefit
14-7 annuity with respect to the deceased member or retiree that will
14-8 provide the highest benefit.
14-9 SECTION 29. Subsection (b), Section 6.09, Chapter 824, Acts
14-10 of the 73rd Legislature, 1993 (Article 6243o, Vernon's Texas Civil
14-11 Statutes), is amended to read as follows:
14-12 (b) An application for benefits under Subsection (a) of this
14-13 section must be accompanied by a copy of the deceased member's or
14-14 retiree's tax return filed for the last year ending before the
14-15 member's or retiree's death or an explanation satisfactory to the
14-16 board of why the tax return cannot be provided. The board may, on
14-17 its own initiative, make a thorough investigation, determine the
14-18 facts as to the dependency with respect to an application for
14-19 benefits made under Subsection (a) of this section, and at any
14-20 time, on the request of any beneficiary or any contributor to the
14-21 fund, reopen any award made to any member or dependent of any
14-22 member who is receiving annuity payments under this section and
14-23 discontinue those payments as to all or any of them. The findings
14-24 of the board under this section and all annuities granted under
14-25 this section are final on all parties unless set aside or revoked
14-26 by a court of competent jurisdiction.
14-27 SECTION 30. Section 6.10, Chapter 824, Acts of the 73rd
14-28 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
14-29 is amended to read as follows:
14-30 Sec. 6.10. SUSPENSION RIGHTS [OF DEPENDENT PARENTS]. If a
14-31 member dies who is under suspension at the time of death, including
14-32 an indefinite suspension that has not become final, the member's
14-33 beneficiaries [dependent parents] have the same rights as the
14-34 beneficiaries of any other member under this Act.
14-35 SECTION 31. Subsection (a), Section 6.11, Chapter 824, Acts
14-36 of the 73rd Legislature, 1993 (Article 6243o, Vernon's Texas Civil
14-37 Statutes), is amended to read as follows:
14-38 (a) If an active [a] member [of the fire or police
14-39 department in active service] dies and does not leave a [an
14-40 eligible] surviving spouse, a child under 18 [17] years of age, [a
14-41 child under 19 years of age who is attending school,] a mentally or
14-42 physically disabled child, or a dependent father or mother, the
14-43 estate of the deceased member is entitled to a death benefit
14-44 payment from the fund in the amount of $10,000 [from the fund] or
14-45 the refund of the member's contributions that were picked up by the
14-46 municipality [as provided by Section 4.07 of this Act], whichever
14-47 amount is greater.
14-48 SECTION 32. Article 6, Chapter 824, Acts of the 73rd
14-49 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
14-50 is amended by adding Section 6.12 to read as follows:
14-51 Sec. 6.12. 13TH CHECK. For any year in which the board
14-52 authorizes disbursement of a 13th pension check to retirees under
14-53 Section 5.12 of this Act, the board shall also authorize
14-54 disbursement of a 13th check to each beneficiary receiving an
14-55 annuity at the time of the disbursement. The amount of the 13th
14-56 check is determined in the same manner as the amount of a 13th
14-57 check is determined for a retiree.
14-58 SECTION 33. Subsection (c), Section 7.04, Chapter 824, Acts
14-59 of the 73rd Legislature, 1993 (Article 6243o, Vernon's Texas Civil
14-60 Statutes), is amended to read as follows:
14-61 (c) The board may directly manage the investments of the
14-62 fund or may choose and contract for professional management
14-63 services. If the fund owns real estate, it may, at its discretion,
14-64 establish organizations [corporations] described by Section
14-65 501(c)(2) or (25) of the code[, Internal Revenue Code of 1986 (26
14-66 U.S.C. Section 501), and its subsequent amendments,] to hold title
14-67 to the real estate.
14-68 SECTION 34. Subsection (a), Section 7.05, Chapter 824, Acts
14-69 of the 73rd Legislature, 1993 (Article 6243o, Vernon's Texas Civil
15-1 Statutes), is amended to read as follows:
15-2 (a) The board may contract for professional investment
15-3 management services, financial consultants, independent auditors,
15-4 attorneys, and actuaries. Only the board may enter into those
15-5 contracts and may establish a reasonable fee for compensation.
15-6 SECTION 35. Subsection (a), Section 7.51, Chapter 824, Acts
15-7 of the 73rd Legislature, 1993 (Article 6243o, Vernon's Texas Civil
15-8 Statutes), is amended to read as follows:
15-9 (a) A member of the board or the executive director may not
15-10 buy, sell, or exchange any property to or from the fund, deal with
15-11 the assets of the fund in the person's own interest or for the
15-12 person's own account, or receive any consideration for the person's
15-13 personal account from any person dealing with the fund in
15-14 connection with the income or assets of the fund [have a direct or
15-15 indirect interest, including a financial interest, engage in a
15-16 business transaction or professional activity, or incur an
15-17 obligation of any nature that is in substantial conflict with the
15-18 proper discharge of the member's or the executive director's
15-19 fiduciary duties].
15-20 SECTION 36. Chapter 824, Acts of the 73rd Legislature, 1993
15-21 (Article 6243o, Vernon's Texas Civil Statutes), is amended by
15-22 adding Article 8 to read as follows:
15-23 ARTICLE 8. EXCESS BENEFIT PLAN
15-24 FOR FIRE FIGHTERS AND POLICE OFFICERS
15-25 Sec. 8.01. CREATION OF PLAN. A separate, nonqualified,
15-26 unfunded excess benefit plan containing the provisions of this
15-27 subchapter is created outside the fund. The plan is intended to be
15-28 a "qualified governmental excess benefit arrangement" within the
15-29 meaning of Section 415(m) of the code.
15-30 Sec. 8.02. DEFINITIONS. In this article:
15-31 (1) "Excess benefit participant" means any member
15-32 whose retirement benefits as determined on the basis of all
15-33 qualified plans, without regard to the limitations of Section
15-34 5.11(a) of this Act and comparable provisions of other qualified
15-35 plans, would exceed the maximum benefit under Section 415 of the
15-36 code.
15-37 (2) "Excess benefit plan" means the excess benefit
15-38 plan created by this article for the benefit of eligible members.
15-39 (3) "Maximum benefit" means the retirement benefit a
15-40 member or the member's spouse, dependent child, or dependent parent
15-41 is entitled to receive from all qualified plans in any month after
15-42 applying Section 5.11(a) of this Act and any similar provisions of
15-43 any other qualified plans designed to conform to Section 415 of the
15-44 code.
15-45 (4) "Qualified plan" means the fund and any other plan
15-46 that is maintained by the municipality for the exclusive benefit of
15-47 some or all of the members of the fund and that has been found by
15-48 the Internal Revenue Service to be qualified or has been treated by
15-49 the municipality as a qualified plan under Section 401 of the code.
15-50 (5) "Unrestricted benefit" means the monthly
15-51 retirement benefit a member or the member's spouse, dependent
15-52 child, or dependent parent would have received under the terms of
15-53 all qualified plans except for the restrictions of Section 5.11(a)
15-54 of this Act and any similar provisions of any other qualified plans
15-55 designed to conform to Section 415 of the code.
15-56 Sec. 8.03. EXCESS BENEFIT ENTITLEMENT. (a) An excess
15-57 benefit participant who is receiving benefits from the fund is
15-58 entitled to a monthly benefit under the excess benefit plan in an
15-59 amount equal to the lesser of:
15-60 (1) the member's unrestricted benefit less the maximum
15-61 benefit; or
15-62 (2) the amount by which the member's monthly benefit
15-63 from the fund has been reduced because of the limitations under
15-64 Section 415 of the code.
15-65 (b) In the case of the death of an excess benefit
15-66 participant whose spouse, dependent child, or dependent parent is
15-67 entitled to preretirement or postretirement death benefits under a
15-68 qualified plan, the spouse, dependent child, or dependent parent is
15-69 entitled to a monthly benefit under the excess benefit plan equal
16-1 to the benefit determined in accordance with Article 6 of this Act
16-2 without regard to the limitations under Section 5.11(a) of this Act
16-3 or Section 415 of the code, less the maximum benefit.
16-4 (c) Any benefit to which any person is entitled under this
16-5 section shall be paid at the same time and in the same manner as
16-6 the benefit would have been paid from the fund if payment of the
16-7 benefit from the fund had not been precluded by Section 5.11(a) of
16-8 this Act. An excess benefit participant or any beneficiary may not
16-9 elect to defer the receipt of all or any part of a payment due
16-10 under this article.
16-11 Sec. 8.04. MANNER OF ADMINISTRATION. (a) The board shall
16-12 administer the excess benefit plan. Except as otherwise provided
16-13 by this section, the board has the same rights, duties, and
16-14 responsibilities regarding the excess benefit plan as the board has
16-15 for the fund.
16-16 (b) A consultant, independent auditor, attorney, or actuary
16-17 selected to perform services for the fund under Section 7.05 of
16-18 this Act shall also perform services for the excess benefit plan,
16-19 but the person's fees for services for the excess benefit plan may
16-20 not be paid by the fund. The actuary employed under Section 7.05
16-21 of this Act shall advise the board of the amount of benefits that
16-22 may not be provided from the fund solely by reason of the
16-23 limitations of Section 415 of the code and the amount of municipal
16-24 contributions that will be made to the excess benefit plan rather
16-25 than to the fund.
16-26 Sec. 8.05. FUNDING OF BENEFITS. (a) Contributions may not
16-27 be accumulated under the excess benefit plan to pay future
16-28 retirement benefits. Instead, each payment of municipal
16-29 contributions that would otherwise be made to the fund under
16-30 Section 4.05 of this Act shall be reduced by the amount determined
16-31 by the board as necessary to meet the requirements for retirement
16-32 benefits under the excess benefit plan, including reasonable
16-33 administrative expenses, until the next payment of municipal
16-34 contributions is expected to be made to the fund. The municipality
16-35 shall then pay to the excess benefit plan out of the withheld
16-36 contributions, not earlier than the 14th day before the date of
16-37 each distribution of monthly retirement benefits is required to be
16-38 made from the excess benefit plan, the amount necessary to satisfy
16-39 the obligation to pay monthly retirement benefits from the excess
16-40 benefit plan. The board shall satisfy the obligation of the excess
16-41 benefit plan to pay retirement benefits out of the municipal
16-42 contributions transferred for that month.
16-43 (b) Municipal contributions otherwise required to be made to
16-44 the fund under Section 4.05 of this Act and any other qualified
16-45 plan shall be divided into contributions required to pay retirement
16-46 benefits under this article and contributions paid into and
16-47 accumulated to pay the maximum benefits required under the
16-48 qualified plan. Municipal contributions made to provide retirement
16-49 benefits under this article may not be commingled with the money of
16-50 the fund or any other qualified plan.
16-51 Sec. 8.06. EXEMPTIONS. Benefits under this article are
16-52 exempt from garnishment, assignment, attachment, judgment, and
16-53 other legal process to the same extent as retirement annuities
16-54 under Section 1.05 of this Act.
16-55 SECTION 37. Subsection (g), Section 5.015 and Subsection
16-56 (c), Section 7.51, Chapter 824, Acts of the 73rd Legislature, 1993
16-57 (Article 6243o, Vernon's Texas Civil Statutes), are repealed.
16-58 SECTION 38. The amendments to Chapter 824, Acts of the 73rd
16-59 Legislature, 1993 (Article 6243o, Vernon's Texas Civil Statutes),
16-60 by this Act may not be applied to reduce the benefits or length of
16-61 payment of benefits to a beneficiary who was receiving an annuity
16-62 under Chapter 824, Acts of the 73rd Legislature, 1993 (Article
16-63 6243o, Vernon's Texas Civil Statutes), before October 1, 1997.
16-64 SECTION 39. This Act takes effect October 1, 1997.
16-65 SECTION 40. The importance of this legislation and the
16-66 crowded condition of the calendars in both houses create an
16-67 emergency and an imperative public necessity that the
16-68 constitutional rule requiring bills to be read on three several
16-69 days in each house be suspended, and this rule is hereby suspended.