1-1 By: Gallegos S.B. No. 900
1-2 (In the Senate - Filed March 3, 1997; March 6, 1997, read
1-3 first time and referred to Committee on Intergovernmental
1-4 Relations; April 18, 1997, reported favorably, as amended, by the
1-5 following vote: Yeas 9, Nays 0; April 18, 1997, sent to printer.)
1-6 COMMITTEE AMENDMENT NO. 1 By: Gallegos
1-7 Amend S.B. No. 900 as follows:
1-8 (1) In SECTION 3 of the bill, amended Section 12(d)(1),
1-9 Article 6243g, Vernon's Texas Civil Statutes, strike "compounded"
1-10 (introduced version, page 2, line 66).
1-11 (2) In SECTION 3 of the bill, amended Section 12(d)(1),
1-12 Article 6243g, Vernon's Texas Civil Statutes, between "Section
1-13 11(g)" and "of this Act", insert "or Section 31" (introduced
1-14 version, page 2, line 67).
1-15 (3) Strike SECTION 9 of the bill (introduced version, page
1-16 8, line 17 through line 47) and substitute the following:
1-17 SECTION 9. Subsections (b) and (g), Section 11, Chapter 358,
1-18 Acts of the 48th Legislature, 1943 (Article 6243g, Vernon's Texas
1-19 Civil Statutes), are amended to read as follows:
1-20 (b) Effective July 1, 1998, the amount of the monthly
1-21 pension for each Group A member shall equal the member's average
1-22 monthly salary multiplied by two and one-quarter percent (2-1/4%)
1-23 for each of the member's first twenty (20) years of credited
1-24 service and two and three-quarters percent (2-3/4%) for each
1-25 additional year of credited service of the member. From September
1-26 1, 1997, through June 30, 1998, the [The] amount of the monthly
1-27 pension for each such Group A member shall equal the member's
1-28 average monthly salary multiplied by two percent (2%) for each of
1-29 the member's first twenty (20) years of credited service and two
1-30 and one-half percent (2-1/2%) for each additional year of credited
1-31 service of such member. For purposes of this Subsection, such
1-32 average salary shall be computed by adding together the
1-33 seventy-eight (78) highest biweekly salaries paid to a member
1-34 during his period of credited service and dividing the sum by
1-35 thirty-six (36). Provided, however, that no Group A member's
1-36 pension shall be more than eighty percent (80%) of such average
1-37 salary; and no Group A member's pension shall be less than Eight
1-38 Dollars ($8) a month for each year of credited service, or One
1-39 Hundred Dollars ($100) a month total pension, whichever is the
1-40 greater amount.
1-41 (g) Pensions [Effective January 1, 1992, pensions] for all
1-42 Group A members or their survivors shall be adjusted annually
1-43 upward by three and one-half percent (3-1/2%), not compounded [or
1-44 downward in accordance with the percentage change in the Consumer
1-45 Price Index for All Urban Consumers (CPI) for the preceding year as
1-46 determined by the United States Department of Labor. The adjusted
1-47 pension may never be less than the basic pension that the retired
1-48 member or survivor would otherwise be entitled to receive without
1-49 regard to changes in the CPI. The adjusted pension may never be
1-50 greater than the basic pension plus increases of not to exceed four
1-51 percent (4%) annually, not compounded, notwithstanding a greater
1-52 increase in the CPI].
1-53 (4) Strike SECTION 12 of the bill (introduced version, page
1-54 9, line 57, through page 10, line 2) and substitute the following:
1-55 SECTION 12. Section 31, Chapter 358, Acts of the 48th
1-56 Legislature, 1943 (Article 6243g, Vernon's Texas Civil Statutes),
1-57 is amended to read as follows:
1-58 Sec. 31. POSTRETIREMENT ADJUSTMENTS. Pensions for all Group
1-59 B members or their survivors [All pensions] shall be adjusted
1-60 annually upward by three and one-half percent (3-1/2%), not
1-61 compounded [or downward in accordance with the percentage change in
1-62 the Consumer Price Index for All Urban Consumers (CPI) for the
1-63 preceding year as determined by the United States Department of
1-64 Labor. The adjusted pension shall never be less than the basic
2-1 pension which the retired member or survivor would otherwise be
2-2 entitled to receive without regard to changes in the CPI. The
2-3 adjusted pension shall never be greater than the basic pension plus
2-4 increases of not to exceed four percent (4%) annually, not
2-5 compounded, notwithstanding a greater increase in the CPI].
2-6 A BILL TO BE ENTITLED
2-7 AN ACT
2-8 relating to eligibility for, and payment of, benefits by certain
2-9 public retirement systems for municipal employees.
2-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
2-11 SECTION 1. Subsections (g) and (l), Section 2, Chapter 358,
2-12 Acts of the 48th Legislature, 1943 (Article 6243g, Vernon's Texas
2-13 Civil Statutes), are amended to read as follows:
2-14 (g) "Employee" means and includes any person whose name
2-15 appears on a regular full time payroll of any such city or Pension
2-16 System and who is paid a regular salary for his services.
2-17 Provided, that any elected official who becomes a member of the
2-18 Pension System as permitted by this amended Act shall be considered
2-19 to be and to have been an employee during the period of any service
2-20 as an elected official.
2-21 (l) "Pension Fund" or "fund" means assets consisting of the
2-22 contributions made by the city, contributions made by any member of
2-23 Group A, and any income derived from investments made from those
2-24 contributions, which are held in trust for the sole benefit of the
2-25 members of the Pension System.
2-26 SECTION 2. Subsections (a) and (b), Section 11, Chapter 358,
2-27 Acts of the 48th Legislature, 1943 (Article 6243g, Vernon's Texas
2-28 Civil Statutes), are amended to read as follows:
2-29 (a) Any [Group A] member of such Pension System who has
2-30 attained fifty (50) years of age and completed twenty-five (25) or
2-31 more years of credited service, [and any Group A member of such
2-32 Pension System] who has attained fifty-five (55) years of age and
2-33 completed twenty (20) or more years of credited service, [and any
2-34 Group A member of the Pension System] who has attained sixty (60)
2-35 years of age and completed ten (10) or more years of credited
2-36 service, or who has attained sixty-two (62) years of age and
2-37 completed five (5) or more years of credited service shall be
2-38 eligible for a pension.
2-39 (b) The amount of the monthly pension for each [such] Group
2-40 A member shall equal the member's average monthly salary multiplied
2-41 by two percent (2%) for each of the member's first twenty (20)
2-42 years of credited service and two and three-quarters [one-half]
2-43 percent (2-3/4%) [(2-1/2%)] for each additional year of credited
2-44 service of such member. For purposes of this Subsection, such
2-45 average salary shall be computed by adding together the
2-46 seventy-eight (78) highest biweekly salaries paid to a member
2-47 during his period of credited service and dividing the sum by
2-48 thirty-six (36). Provided, however, that no Group A member's
2-49 pension shall be more than eighty percent (80%) of such average
2-50 salary; and no Group A member's pension shall be less than Eight
2-51 Dollars ($8) a month for each year of credited service, or One
2-52 Hundred Dollars ($100) a month total pension, whichever is the
2-53 greater amount.
2-54 SECTION 3. Subsection (d), Section 12, Chapter 358, Acts of
2-55 the 48th Legislature, 1943 (Article 6243g, Vernon's Texas Civil
2-56 Statutes), is amended to read as follows:
2-57 (d)(1) Any Group A member receiving a disability pension in
2-58 accordance with this section or any Group B member receiving a
2-59 disability pension in accordance with Section 25 of this Act shall,
2-60 each April 1, submit a sworn affidavit stating his earnings for the
2-61 previous calendar year, if any, obtained from any gainful
2-62 occupation. If the earnings together with the disability pension
2-63 being received by any member exceed the monthly salary of such
2-64 member at the time of his separation from service, as adjusted
2-65 annually by compounded cost-of-living adjustments made in the
2-66 manner provided by Section 11(g) of this Act, the Pension Board
2-67 shall have authority to reduce the amount of pension. Failure to
2-68 submit an affidavit of earnings or submission of a materially false
2-69 affidavit shall be cause for suspension of the pension upon proper
3-1 action by the Pension Board.
3-2 (2) No member shall receive a disability and service
3-3 pension at the same time. If [However, in the event] a member who
3-4 is already eligible for retirement is granted a disability pension
3-5 and, thereafter, although his disability ceases to exist, he does
3-6 not return to work for the city, he shall be entitled to receive a
3-7 service pension, calculated in accordance with Section 11 for Group
3-8 A members and Section 24 for Group B members. Such service pension
3-9 shall be based on actual service up to the time of disability. If
3-10 a disability does not cease before a member becomes sixty-five (65)
3-11 years of age while continuing to receive a disability pension, the
3-12 Pension System shall reclassify the pension as a service pension,
3-13 without regard to whether the person is otherwise eligible to
3-14 receive a service pension.
3-15 (3) When any member has been retired for disability,
3-16 he shall be subject at all times to re-examination by the Pension
3-17 Board and shall submit himself to such further examination as the
3-18 Pension Board may require. If any such member shall refuse to
3-19 submit himself to any such examination, the Pension Board may,
3-20 within its discretion, order said payments stopped. If such a
3-21 member who has been retired under the provisions of this Section
3-22 should thereafter recover so that in the opinion of the Pension
3-23 Board he is able to perform the usual and customary duties formerly
3-24 handled by him for said city, and such member is reinstated or
3-25 tendered reinstatement to the position he had at the time of his
3-26 retirement, then the Pension Board shall order such pension
3-27 payments stopped.
3-28 SECTION 4. Section 13, Chapter 358, Acts of the 48th
3-29 Legislature, 1943 (Article 6243g, Vernon's Texas Civil Statutes),
3-30 is amended to read as follows:
3-31 Sec. 13. MONTHLY ALLOWANCE TO SURVIVING SPOUSES [WIDOWS] AND
3-32 CHILDREN. If any Group A or Group B member of the Pension System,
3-33 as herein defined, shall die from any cause whatsoever after having
3-34 completed five (5) [ten (10)] years of service with the city, or
3-35 if, while in the service of the city, any such member shall die
3-36 from any cause growing out of or in consequence of the performance
3-37 of his duty, or shall die after he has been retired on pension
3-38 because of length of service or disability and shall leave a
3-39 surviving spouse [widow or widower], or a qualifying child or
3-40 children [under the age of eighteen (18) years], or both a spouse
3-41 [such widow or widower] and a qualifying child or children, said
3-42 Board shall order paid monthly allowances as follows:
3-43 (a) To the surviving spouse of a member who dies after
3-44 having completed five (5) years of service with the city but before
3-45 beginning to receive retirement benefits or who dies from a cause
3-46 growing out of or in consequence of the performance of duty with
3-47 the city [widow or widower], provided she or he shall have married
3-48 such member before the decedent terminated employment with the city
3-49 [prior to her or his retirement], a sum equal to one-half (1/2) of
3-50 the retirement benefits that the deceased Group A member would have
3-51 been entitled to had she or he been totally disabled at the time of
3-52 her or his retirement or death, but the allowance payable to the
3-53 surviving spouse [any such widow or widower] shall not in any event
3-54 be less than Fifty Dollars ($50) a month.
3-55 (b) To the surviving spouse of a person who dies after
3-56 having begun to receive retirement benefits, a sum equal to
3-57 seventy-five percent (75%) of the retirement benefits being
3-58 received at the time of the retiree's death, if the surviving
3-59 spouse married the decedent before the decedent terminated
3-60 employment with the city.
3-61 (c) If there is a surviving spouse, each dependent child
3-62 shall receive a death benefit equal to ten percent (10%) of the
3-63 pension the member would have received if the member had been
3-64 disabled at the time of death, to a maximum of twenty percent (20%)
3-65 for all dependent children.
3-66 (d) [(c)] If there is no surviving spouse, each dependent
3-67 child shall receive a death benefit equal to twenty percent (20%)
3-68 of the pension the member would have received if the member had
3-69 been disabled at the time of death, to a maximum of forty percent
4-1 (40%) for all dependent children.
4-2 (e) [(d)] Benefits payable to each dependent child shall be
4-3 paid if [until] the child:
4-4 (1) is younger than [becomes] eighteen (18) years of
4-5 age and unmarried;
4-6 (2) is a full-time student and younger than
4-7 twenty-three (23) years of age; or
4-8 (3) is permanently and totally disabled because of
4-9 illness, injury, or retardation.
4-10 (f) Benefits for a dependant child are [or marries and shall
4-11 be] payable to the guardian of the child. The term "guardian," as
4-12 used in this subsection, means the person who has the primary
4-13 responsibility for a child's care and support, for example, the
4-14 surviving spouse, legal guardian, managing conservator, or any
4-15 other person with a similar legal relationship to the child.
4-16 SECTION 5. Section 24, Chapter 358, Acts of the 48th
4-17 Legislature, 1943 (Article 6243g, Vernon's Texas Civil Statutes),
4-18 is amended to read as follows:
4-19 Sec. 24. AMOUNT OF PENSION. [(a)] The amount of the normal
4-20 pension payable to a retired Group B member shall equal the
4-21 member's average monthly salary multiplied by one and one-quarter
4-22 percent (1-1/4%) for each of the member's first ten (10) years of
4-23 credited service, one and three-fifths percent (1-3/5%) for each of
4-24 the next ten (10) years of credited service, and two [one and
4-25 three-quarters] percent (2%) [(1-3/4%)] for each additional year,
4-26 taken to the nearest twelfth (12th) of a year, in the period of
4-27 credited service. The normal pension of a retired Group B member
4-28 may not exceed eighty percent (80%) of the member's average monthly
4-29 salary computed under this section. Average monthly salary shall
4-30 be the average of the seventy-eight (78) highest biweekly salaries
4-31 during a member's period of credited service.
4-32 SECTION 6. Subsection (a), Section 28, Chapter 358, Acts of
4-33 the 48th Legislature, 1943 (Article 6243g, Vernon's Texas Civil
4-34 Statutes), is amended to read as follows:
4-35 (a) The surviving spouse and/or dependent child or children
4-36 of a Group B member shall be eligible for a death benefit, if the
4-37 member died before September 1, 1997 [dies]:
4-38 (1) from any cause while in service of the city and
4-39 has five (5) years of credited service; or
4-40 (2) from any cause while in service of the city in
4-41 consequence of the performance of his duty.
4-42 SECTION 7. Subsection (a), Section 29, Chapter 358, Acts of
4-43 the 48th Legislature, 1943 (Article 6243g, Vernon's Texas Civil
4-44 Statutes), is amended to read as follows:
4-45 (a) A Group B member who terminated employment with the city
4-46 or the Pension System before September 1, 1997, may elect at the
4-47 time of retirement or termination of employment to have his normal
4-48 or early pension paid under one of the options provided by
4-49 Subsection (b) of this section.
4-50 SECTION 8. Chapter 358, Acts of the 48th Legislature, 1943
4-51 (Article 6243g, Vernon's Texas Civil Statutes), is amended by
4-52 adding Sections 31B, 31C, and 31D to read as follows:
4-53 Sec. 31B. DEFERRED RETIREMENT OPTION PLAN. (a) In this
4-54 section:
4-55 (1) "DROP" means the deferred retirement option plan
4-56 established under this Act.
4-57 (2) "DROP benefit" means a member's total DROP account
4-58 balance at the time the member terminates active service.
4-59 (3) "DROP member" means a Pension System member who is
4-60 participating in the DROP.
4-61 (b) The Board shall design and implement a deferred
4-62 retirement option plan for members of the Pension System.
4-63 (c) A member who is eligible to receive a normal retirement
4-64 pension under this Act and who remains in active service with the
4-65 city may file with the Pension System an election to participate in
4-66 the DROP and receive a DROP benefit. Except as otherwise provided
4-67 by this section, an election to participate in the DROP is
4-68 irrevocable. The effective date of a member's participation in the
4-69 DROP is the first day of the first month following the month in
5-1 which the Board approves the member's DROP election.
5-2 (d) Credits to a member's DROP account consist of:
5-3 (1) a monthly amount equal to the member's normal
5-4 accrued monthly retirement benefit on the effective date of the
5-5 member's participation in the DROP, adjusted for cost-of-living
5-6 adjustments that occur on or after the effective date of the DROP
5-7 and that otherwise would apply to the benefit;
5-8 (2) a Plan A member's regular biweekly contributions;
5-9 and
5-10 (3) interest on the member's DROP account balance
5-11 computed at a rate determined by the Board and compounded at
5-12 intervals designated by the Board, but at least once in each
5-13 thirteen-month period.
5-14 (e) Credits to a member's DROP account begin on the
5-15 effective date of the member's participation in the DROP and
5-16 continue until the DROP member terminates active service with the
5-17 city. Amounts are creditable for partial crediting periods.
5-18 Credits may not be made to a member's DROP account for a period
5-19 that occurs after the member terminates active service with the
5-20 city.
5-21 (f) A DROP member who terminates active service with the
5-22 city is entitled to receive the member's DROP benefit in a lump sum
5-23 or in periodic payments, plus a monthly retirement benefit. The
5-24 Board shall determine a reasonable time for lump-sum and periodic
5-25 DROP benefit payments and shall approve the monthly retirement
5-26 benefit. Normal retirement benefits cease to accrue on the
5-27 effective date of a member's participation in the DROP, and the
5-28 monthly retirement benefit approved by the Board for payment after
5-29 the member terminates active service is based on the member's 78
5-30 highest biweekly salaries.
5-31 (g) The beneficiaries of a deceased DROP member may
5-32 collectively revoke the deceased member's election to participate
5-33 in the DROP.
5-34 (h) A DROP member is ineligible for disability benefits
5-35 provided by this Act, except that a DROP member who incurs an
5-36 on-duty, service-related disability may revoke the member's DROP
5-37 election.
5-38 (i) A DROP election revocation must be made at a time and in
5-39 a manner determined by the Board. After revocation, the balance in
5-40 the DROP account reverts to the Pension System, a distribution of
5-41 DROP benefits may not be made to the member or the member's
5-42 beneficiaries, and the benefits based on the member's service will
5-43 be determined as if the member's DROP election had never occurred.
5-44 (j) If an unanticipated actuarial cost occurs in
5-45 administering the DROP, the Board, on the advice of the Pension
5-46 System's actuary, may take action necessary to mitigate the
5-47 unanticipated cost, including refusal to accept additional
5-48 elections to participate in the plan, but the Pension System shall
5-49 continue to administer the plan for the members participating in
5-50 the plan before the date of the mitigating action.
5-51 Sec. 31C. MAXIMUM BENEFITS FROM THE FUND. (a) The fund
5-52 created by this Act is for the exclusive benefit of the members,
5-53 retirees, and their survivors. No part of the corpus or income of
5-54 the fund may ever be used for, or diverted to, any purpose other
5-55 than the benefit of members, retirees, and their survivors as
5-56 provided in this Act.
5-57 (b) A member, retiree, or survivor of a member or retiree of
5-58 the Pension System may not accrue a retirement pension, disability
5-59 retirement allowance, death benefit allowance, DROP benefit, or any
5-60 other benefit under this Act in excess of the benefit limits
5-61 applicable to the fund under Section 415 of the Internal Revenue
5-62 Code of 1986. The Board shall reduce the amount of any benefit
5-63 that exceeds those limits by the amount of the excess. If total
5-64 benefits under this fund and the benefits and contributions to
5-65 which any member is entitled under any other qualified plans
5-66 maintained by the city that employs the member would otherwise
5-67 exceed the applicable limits under Section 415 of the Internal
5-68 Revenue Code of 1986, the benefits the member would otherwise
5-69 receive from the fund shall be reduced to the extent necessary to
6-1 enable the benefits to comply with Section 415.
6-2 (c) Any member or survivor who receives any distribution
6-3 that is an eligible rollover distribution as defined by Section
6-4 402(c)(4) of the Internal Revenue Code of 1986 is entitled to have
6-5 that distribution transferred directly to another eligible
6-6 retirement plan of the member's or survivor's choice on providing
6-7 direction to the Pension System regarding that transfer in
6-8 accordance with procedures established by the Board.
6-9 (d) The total salary taken into account for any purpose for
6-10 any member or retiree of the Pension System may not exceed $200,000
6-11 for any year for an eligible participant, or $150,000 a year for an
6-12 ineligible participant. These dollar limits shall be adjusted from
6-13 time to time in accordance with guidelines provided by the
6-14 secretary of the treasury. For purposes of this subsection, an
6-15 eligible participant is a person who first became a member before
6-16 1996, and an ineligible participant is a member who is not an
6-17 eligible participant.
6-18 (e) Accrued benefits under this Act become 100 percent
6-19 vested for a member on the date the member has completed five (5)
6-20 years of service.
6-21 (f) Amounts representing forfeited nonvested benefits of
6-22 terminated members may not be used to increase benefits payable
6-23 from the fund but may be used to reduce contributions for future
6-24 plan years.
6-25 (g) Distributions of benefits must begin not later than
6-26 April 1 of the year following the calendar year during which the
6-27 member becomes 70-1/2 years of age or terminates employment with
6-28 the employer, if later, and must otherwise conform to Section
6-29 401(a)(9) of the Internal Revenue Code of 1986.
6-30 (h) If the amount of any benefit is to be determined on the
6-31 basis of actuarial assumptions that are not otherwise specifically
6-32 set forth for that purpose in this Act, the actuarial assumptions
6-33 to be used are those earnings and mortality assumptions being used
6-34 on the date of the determination by the fund's actuary and approved
6-35 by the Board. The actuarial assumptions being used at any
6-36 particular time shall be attached as an addendum to a copy of this
6-37 Act and treated for all purposes as a part of the Act. The
6-38 actuarial assumptions may be changed by the fund's actuary at any
6-39 time if approved by the Board, but a change in actuarial
6-40 assumptions may not result in any decrease in benefits accrued as
6-41 of the effective date of the change.
6-42 (i) To the extent permitted by law, the Board may adjust the
6-43 benefits of retirees and survivors by increasing any benefit that
6-44 was reduced because of Section 415 of the Internal Revenue Code of
6-45 1986. If Section 415 is amended to permit the payment of amounts
6-46 previously precluded under that section, the Board may adjust the
6-47 benefits of retirees and survivors, including the restoration of
6-48 benefits previously denied. Benefits paid under this subsection
6-49 are not considered as extra compensation earned after retirement
6-50 but as the delayed payment of benefits earned before retirement.
6-51 Sec. 31D. EXCESS BENEFIT PLAN. (a) A separate,
6-52 nonqualified, unfunded excess benefit plan is created outside the
6-53 fund.
6-54 (b) In this section:
6-55 (1) "Excess benefit plan" means the separate,
6-56 nonqualified, unfunded excess benefit plan created by this section
6-57 for the benefit of eligible members, as amended or restated from
6-58 time to time, that is intended to be a "qualified governmental
6-59 excess benefit arrangement" within the meaning of Section 415(m) of
6-60 the Internal Revenue Code of 1986.
6-61 (2) "Qualified plan" means the fund and any other plan
6-62 maintained by the city for the exclusive benefit of some or all of
6-63 the members of the fund that has been found by the Internal Revenue
6-64 Service to be qualified or has been treated by the city as a
6-65 qualified plan under Section 401 of the Internal Revenue Code of
6-66 1986.
6-67 (3) "Maximum benefit" means the retirement benefit a
6-68 retiree and the spouse or dependent child of a retiree or deceased
6-69 member or retiree are entitled to receive from all qualified plans
7-1 in any month after giving effect to Section 31C of this Act and any
7-2 similar provisions of any other qualified plans designed to conform
7-3 to Section 415 of the Internal Revenue Code of 1986.
7-4 (4) "Excess benefit participant" means any retiree
7-5 whose retirement benefits, as determined on the basis of all
7-6 qualified plans without regard to the limitations of Section 31C of
7-7 this Act and comparable provisions of other qualified plans, would
7-8 exceed the maximum benefit permitted under Section 415 of the
7-9 Internal Revenue Code of 1986.
7-10 (5) "Unrestricted benefit" means the monthly
7-11 retirement benefit a retiree and the surviving spouse and dependent
7-12 child of a retiree or deceased member or retiree would have
7-13 received under the terms of all qualified plans except for the
7-14 restrictions of Section 31C of this Act and any similar provisions
7-15 of any other qualified plans designed to conform to Section 415 of
7-16 the Internal Revenue Code of 1986.
7-17 (c) An excess benefit participant who is receiving benefits
7-18 from the fund is entitled to a monthly benefit under this excess
7-19 benefit plan in an amount equal to the lesser of:
7-20 (1) the member's unrestricted benefit less the maximum
7-21 benefit; or
7-22 (2) the amount by which the member's monthly benefit
7-23 from the fund has been reduced because of the limitations of
7-24 Section 415 of the Internal Revenue Code of 1986.
7-25 (d) If a surviving spouse or dependent child is entitled to
7-26 preretirement or postretirement death benefits under a qualified
7-27 plan after the death of an excess benefit participant, the
7-28 surviving spouse or dependent child is entitled to a monthly
7-29 benefit under the excess benefit plan equal to the benefit
7-30 determined in accordance with this Act, without regard to the
7-31 limitations under Section 31C of this Act or Section 415 of the
7-32 Internal Revenue Code of 1986, less the maximum benefit.
7-33 (e) Any benefit to which a person is entitled under this
7-34 section shall be paid at the same time and in the same manner as
7-35 the benefit would have been paid from the fund if payment of the
7-36 benefit from the fund had not been precluded by Section 31C of this
7-37 Act. An excess benefit participant or any beneficiary may not,
7-38 under any circumstances, elect to defer the receipt of all or any
7-39 part of a payment due under this section.
7-40 (f) The Board shall administer this plan, and the executive
7-41 director also shall carry out the business of the Board with
7-42 respect to this plan. Except as otherwise provided by this
7-43 section, the rights, duties, and responsibilities of the Board and
7-44 the executive director are the same for this plan as for the fund.
7-45 (g) The consultants, independent auditors, attorneys, and
7-46 actuaries selected to perform services for the fund also shall
7-47 perform services for this plan, but their fees for their services
7-48 may not be paid by the fund. The actuary engaged to perform
7-49 services for the fund shall advise the Board of the amount of
7-50 benefits that may not be provided from the fund solely by reason of
7-51 the limitations of Section 415 of the Internal Revenue Code of 1986
7-52 and the amount of employer contributions that will be made to this
7-53 plan rather than to the fund.
7-54 (h) Contributions may not be accumulated under this plan to
7-55 pay future retirement benefits. Instead, each payment of employer
7-56 contributions that would otherwise be made to the fund under
7-57 Section 8 of this Act shall be reduced by the amount determined by
7-58 the executive director as necessary to meet the requirements for
7-59 retirement benefits under this plan, including reasonable
7-60 administrative expenses, until the next payment of municipal
7-61 contributions is expected to be made to the fund. The employer
7-62 shall then pay to this plan, from the withheld contributions, not
7-63 earlier than the 30th day before the date each distribution of
7-64 monthly retirement benefits is required to be made from this plan,
7-65 the amount necessary to satisfy the obligation to pay monthly
7-66 retirement benefits from this plan. The executive director shall
7-67 satisfy the obligation of this plan to pay retirement benefits from
7-68 the employer contributions so transferred for that month.
7-69 (i) Employer contributions otherwise required to be made to
8-1 the fund under Section 8 of this Act and any other qualified plan
8-2 shall be divided into those contributions required to pay
8-3 retirement benefits under this section and those contributions paid
8-4 into and accumulated to pay the maximum benefits required under the
8-5 qualified plan. Employer contributions made to provide retirement
8-6 benefits under this section may not be commingled with the money of
8-7 the fund or any other qualified plan.
8-8 (j) Benefits under this section are exempt from execution,
8-9 attachment, garnishment, assignment, injunction, and other writ in
8-10 the same manner as retirement annuities under Section 20 of this
8-11 Act and may not be paid to any person other than the person who
8-12 would have received the benefits from the fund except for Section
8-13 31C of this Act.
8-14 SECTION 9. Effective July 1, 1998, Subsections (b) and (g),
8-15 Section 11, Chapter 358, Acts of the 48th Legislature, 1943
8-16 (Article 6243g, Vernon's Texas Civil Statutes), are amended to read
8-17 as follows:
8-18 (b) The amount of the monthly pension for each such Group A
8-19 member shall equal the member's average monthly salary multiplied
8-20 by two and one-quarter percent (2-1/4%) [(2%)] for each of the
8-21 member's first twenty (20) years of credited service and two and
8-22 three-quarters [one-half] percent (2-3/4%) [(2-1/2%)] for each
8-23 additional year of credited service of such member. For purposes
8-24 of this Subsection, such average salary shall be computed by adding
8-25 together the seventy-eight (78) highest biweekly salaries paid to a
8-26 member during his period of credited service and dividing the sum
8-27 by thirty-six (36). Provided, however, that no Group A member's
8-28 pension shall be more than eighty percent (80%) of such average
8-29 salary; and no Group A member's pension shall be less than Eight
8-30 Dollars ($8) a month for each year of credited service, or One
8-31 Hundred Dollars ($100) a month total pension, whichever is the
8-32 greater amount.
8-33 (g) Pensions [Effective January 1, 1992, pensions] for all
8-34 Group A members or their survivors shall be adjusted annually
8-35 upward or downward in accordance with the percentage change in the
8-36 Consumer Price Index for All Urban Consumers (CPI) for the
8-37 preceding year as determined by the United States Department of
8-38 Labor. The adjusted pension may never be less than the basic
8-39 pension or deferred basic pension that the [retired] member or
8-40 survivor would otherwise be entitled to receive without regard to
8-41 changes in the CPI. The adjusted pension may never be greater than
8-42 the basic pension or deferred basic pension plus increases of not
8-43 to exceed four percent (4%) annually, [not] compounded,
8-44 notwithstanding a greater increase in the CPI.
8-45 SECTION 10. Effective July 1, 1998, Section 13, Chapter 358,
8-46 Acts of the 48th Legislature, Regular Session, 1943 (Article 6243g,
8-47 Vernon's Texas Civil Statutes), is amended to read as follows:
8-48 Sec. 13. MONTHLY ALLOWANCE TO SURVIVING SPOUSES [WIDOWS] AND
8-49 CHILDREN. If any Group A or Group B member of the Pension System,
8-50 as herein defined, shall die from any cause whatsoever after having
8-51 completed five (5) [ten (10)] years of service with the city, or
8-52 if, while in the service of the city, any such member shall die
8-53 from any cause growing out of or in consequence of the performance
8-54 of his duty, or shall die after he has been retired on pension
8-55 because of length of service or disability and shall leave a
8-56 surviving spouse [widow or widower], or a qualifying child or
8-57 children [under the age of eighteen (18) years], or both a
8-58 surviving spouse [such widow or widower] and a qualifying child or
8-59 children, said Board shall order paid monthly allowances as
8-60 follows:
8-61 (a) To the surviving spouse of a member who dies after
8-62 having completed five (5) years of active service with the city but
8-63 before beginning to receive retirement benefits [widow or widower],
8-64 provided she or he shall have married such member before the
8-65 decedent terminated employment with the city [prior to her or his
8-66 retirement], a sum equal to one-half (1/2) of the retirement
8-67 benefits that the deceased [Group A] member would have been
8-68 entitled to had she or he been totally disabled at the time of her
8-69 or his retirement or death, but the allowance payable to the
9-1 surviving spouse [any such widow or widower] shall not in any event
9-2 be less than Fifty Dollars ($50) a month.
9-3 (b) To the surviving spouse of a member who dies from a
9-4 cause growing out of or in consequence of the performance of duty
9-5 with the city, a sum equal to eighty percent (80%) of the deceased
9-6 member's final average salary.
9-7 (c) To the surviving spouse of a member who dies after
9-8 having begun to receive retirement benefits, a sum equal to
9-9 seventy-five percent (75%) of the retirement benefits being
9-10 received at the time of the retiree's death, if the surviving
9-11 spouse married the decedent before the decedent terminated
9-12 employment with the city.
9-13 (d) If there is a surviving spouse, each dependent child
9-14 shall receive a death benefit equal to ten percent (10%) of the
9-15 pension the member would have received if the member had been
9-16 disabled at the time of death, to a maximum of twenty percent (20%)
9-17 for all dependent children.
9-18 (e) [(c)] If there is no surviving spouse, each dependent
9-19 child shall receive a death benefit equal to twenty percent (20%)
9-20 of the pension the member would have received if the member had
9-21 been disabled at the time of death, to a maximum of forty percent
9-22 (40%) for all dependent children.
9-23 (f) [(d)] Benefits payable to each dependent child shall be
9-24 paid if [until] the child:
9-25 (1) is younger than [becomes] eighteen (18) years of
9-26 age and unmarried;
9-27 (2) is a full-time student and younger than
9-28 twenty-three (23) years of age; or
9-29 (3) is permanently and totally disabled because of
9-30 illness, injury, or retardation.
9-31 (g) Benefits for a dependent child are [or marries and shall
9-32 be] payable to the guardian of the child. The term "guardian," as
9-33 used in this subsection, means the person who has the primary
9-34 responsibility for a child's care and support, for example, the
9-35 surviving spouse, legal guardian, managing conservator, or any
9-36 other person with a similar legal relationship to the child.
9-37 SECTION 11. Effective July 1, 1998, Section 24, Chapter 358,
9-38 Acts of the 48th Legislature, 1943 (Article 6243g, Vernon's Texas
9-39 Civil Statutes), is amended to read as follows:
9-40 Sec. 24. AMOUNT OF PENSION. [(a)] The amount of the normal
9-41 pension payable to a retired Group B member shall equal the
9-42 member's average monthly salary multiplied by one and one-half
9-43 [one-quarter] percent (1-1/2%) [(1-1/4%)] for each of the member's
9-44 first ten (10) years of credited service, one and three-quarters
9-45 [three-fifths] percent (1-3/4%) [(1-3/5%)] for each of the next ten
9-46 (10) years of credited service, and two [one and three-quarters]
9-47 percent (2%) [(1-3/4%)] for each additional year, taken to the
9-48 nearest twelfth (12th) of a year, in the period of credited
9-49 service. The normal pension of a retired Group B member may not
9-50 exceed eighty percent (80%) of the member's average monthly salary
9-51 computed under this section. Average monthly salary shall be the
9-52 average of the seventy-eight (78) highest biweekly salaries during
9-53 a member's period of credited service.
9-54 SECTION 12. Section 31, Chapter 358, Acts of the 48th
9-55 Legislature, 1943 (Article 6243g, Vernon's Texas Civil Statutes),
9-56 is amended to read as follows:
9-57 Sec. 31. POSTRETIREMENT ADJUSTMENTS. Pensions for all Group
9-58 B members or their survivors [All pensions] shall be adjusted
9-59 annually upward or downward in accordance with the percentage
9-60 change in the Consumer Price Index for All Urban Consumers (CPI)
9-61 for the preceding year as determined by the United States
9-62 Department of Labor. The adjusted pension shall never be less than
9-63 the basic pension or deferred basic pension which the retired
9-64 member or survivor would otherwise be entitled to receive without
9-65 regard to changes in the CPI. The adjusted pension shall never be
9-66 greater than the basic pension or deferred basic pension, plus
9-67 increases of not to exceed four percent (4%) annually, [not]
9-68 compounded, notwithstanding a greater increase in the CPI.
9-69 SECTION 13. Section 23, Chapter 358, Acts of the 48th
10-1 Legislature, 1943 (Article 6243g, Vernon's Texas Civil Statutes),
10-2 is repealed.
10-3 SECTION 14. (a) Except as provided by Subsection (b) of
10-4 this section or as expressly provided in the changes in law made by
10-5 this Act, the changes in the benefits payable under Chapter 358,
10-6 Acts of the 48th Legislature, 1943 (Article 6243g, Vernon's Texas
10-7 Civil Statutes), apply only to retirements or deaths, as
10-8 applicable, that occur on or after the effective dates of the
10-9 changes.
10-10 (b) Section 13, Chapter 358, Acts of the 48th Legislature,
10-11 1943 (Article 6243g, Vernon's Texas Civil Statutes), as amended by
10-12 Section 4 of this Act, applies to deaths that occur on or after the
10-13 effective date of that section, without regard to the date of a
10-14 retiree's retirement.
10-15 (c) Except as otherwise provided by this Act, this Act takes
10-16 effect September 1, 1997.
10-17 SECTION 15. The importance of this legislation and the
10-18 crowded condition of the calendars in both houses create an
10-19 emergency and an imperative public necessity that the
10-20 constitutional rule requiring bills to be read on three several
10-21 days in each house be suspended, and this rule is hereby suspended.
10-22 * * * * *