75R14617 GCH-D
By Armbrister S.B. No. 1102
Substitute the following for S.B. No. 1102:
By Telford C.S.S.B. No. 1102
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to systems and programs administered by the Employees
1-3 Retirement System of Texas.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 805.002(g), Government Code, is amended
1-6 to read as follows:
1-7 (g) To be eligible to make a transfer pursuant to Subsection
1-8 (d), a person must be the same beneficiary under both retirement
1-9 systems, except that if the only service credited in the system
1-10 from which service is being transferred is reinstated service and
1-11 no beneficiary designation was made at or after the time of
1-12 reinstatement, the beneficiary in the receiving system may make the
1-13 election.
1-14 SECTION 2. Sections 811.001(8) and (9), Government Code, are
1-15 amended to read as follows:
1-16 (8) "Custodial officer" means a member of the
1-17 retirement system who is employed by the institutional division or
1-18 the state jail division of the Texas Department of Criminal Justice
1-19 and certified by the department as having a normal job assignment
1-20 that requires frequent or infrequent regularly planned contact
1-21 with, and in close proximity to, inmates of the institutional
1-22 division or inmates or defendants confined in the state jail
1-23 division without the protection of bars, doors, security screens,
1-24 or similar devices and includes assignments normally involving
2-1 supervision or the potential for supervision of inmates in inmate
2-2 housing areas, educational or recreational facilities, industrial
2-3 shops, kitchens, laundries, medical areas, agricultural shops or
2-4 fields, or in other areas on or away from property of the
2-5 institutional division or the state jail division. The term
2-6 includes a member who transfers from the Texas Department of
2-7 Criminal Justice to the managed health care unit of The University
2-8 of Texas Medical Branch or the Texas Tech University Health
2-9 Sciences Center pursuant to Section 9.01, Chapter 238, Acts of the
2-10 73rd Legislature, Regular Session, 1993, elects at the time of
2-11 transfer to retain membership in the retirement system, and is
2-12 certified by the managed health care unit or the health sciences
2-13 center as having a normal job assignment described by this
2-14 subdivision.
2-15 (9) "Law enforcement officer" means a member of the
2-16 retirement system who has been commissioned as a law enforcement
2-17 officer by the Department of Public Safety, the Texas Alcoholic
2-18 Beverage Commission, [the State Purchasing and General Services
2-19 Commission, Capitol Area Security Force,] the State Board of
2-20 Pharmacy, or the Parks and Wildlife Department and who is
2-21 recognized as a commissioned law enforcement officer by the
2-22 Commission on Law Enforcement Officer Standards and Education.
2-23 SECTION 3. Section 813.104, Government Code, is amended to
2-24 read as follows:
2-25 Sec. 813.104. ALTERNATIVE PAYMENTS TO ESTABLISH OR
2-26 REESTABLISH SERVICE CREDIT. (a) The board of trustees may adopt
2-27 rules to provide procedures for making installment payments to
3-1 establish or reestablish credit in the retirement system as
3-2 alternatives to lump-sum payments otherwise authorized or required
3-3 by this subtitle. The methods may include payment by payroll
3-4 deduction. [A member who is otherwise eligible may establish or
3-5 reestablish service creditable in the retirement system by making
3-6 payments as provided by this section in lieu of lump-sum payments
3-7 otherwise authorized or required by this subtitle.]
3-8 (b) [A payment authorized by this section consists of the
3-9 contribution required to establish or reestablish at least one year
3-10 of service credit, including any required interest and membership
3-11 fees, except that a person's last in a series of payments under
3-12 this section may be for a period of remaining service that is less
3-13 than one year.]
3-14 [(c) The retirement system shall grant the applicable amount
3-15 of service credit after each payment is made under this section.]
3-16 [(d)] Except as provided by Subsection (c) [Subsection (e)],
3-17 payments may not be made under a rule adopted under this section:
3-18 (1) to establish or reestablish service credit of a
3-19 person who has retired or died; or
3-20 (2) to establish current service under Section
3-21 813.201.
3-22 (c) Under a rule adopted under this section, the [(e) The]
3-23 designated beneficiary of a deceased member or, if none exists, the
3-24 personal representative of the decedent's estate may establish or
3-25 reestablish service for which the member was eligible at the time
3-26 of death if the establishment of the service would result in the
3-27 payment of a death benefit annuity or an increase in the amount of
4-1 a death benefit annuity.
4-2 (d) [(f)] The payment for the establishment or
4-3 reestablishment of service under Subsection (c) [Subsection (e)]
4-4 must be made in a lump sum and completed before the first payment
4-5 of a death benefit annuity, but not later than the 60th day after
4-6 the date the retirement system receives notice of the death.
4-7 [(g) The retirement system may adopt rules to administer
4-8 this section.]
4-9 SECTION 4. Section 813.106, Government Code, is amended to
4-10 read as follows:
4-11 Sec. 813.106. SERVICE NOT PREVIOUSLY ESTABLISHED. The state
4-12 shall make contributions for service not previously established
4-13 that is established under Section 813.104 [or 813.105] in the
4-14 amount provided by Section 813.202(c) [813.202(e)] for membership
4-15 service or the amount provided by Section 813.302(d) for military
4-16 service, as applicable. The state contributions will be made at
4-17 the time the service credit is granted.
4-18 SECTION 5. Section 813.202, Government Code, is amended to
4-19 read as follows:
4-20 Sec. 813.202. MEMBERSHIP SERVICE NOT PREVIOUSLY ESTABLISHED.
4-21 (a) Except as provided by Section 813.402 [and Subsection (b)],
4-22 any member may establish service credit in the retirement system
4-23 for membership service not previously established.
4-24 (b) A [Membership service not previously credited because of
4-25 a waiting period required before September 1, 1958, may be
4-26 established only by a contributing member.]
4-27 [(c) Except as provided by Subsection (d), a] member may
5-1 establish credit under this section by depositing with the
5-2 retirement system in a lump sum a contribution computed as provided
5-3 by Section 813.404 or 813.505, plus all membership fees due, plus
5-4 interest computed on the basis of the state fiscal year at an
5-5 annual rate of 10 percent from the date the service was performed
5-6 to the date of deposit.
5-7 [(d) A member claiming credit for service not previously
5-8 creditable because of a waiting period required before September 1,
5-9 1958, is exempt from the payment of interest on the required
5-10 contribution if the member establishes the credit before the first
5-11 anniversary of the person's becoming a member of the retirement
5-12 system.]
5-13 (c) [(e)] The state shall contribute for service established
5-14 under this section an amount in the same ratio to the member's
5-15 contribution for the service as the state's contribution bears to
5-16 the contribution for current service required of a member of the
5-17 employee class at the time the service is established under this
5-18 section. The state's contribution must be paid from the fund or
5-19 account from which the member receives compensation at the time the
5-20 service is established or, if the member does not hold a position
5-21 at the time the service is established, from the fund or account
5-22 from which the member received compensation when the member most
5-23 recently held a position.
5-24 SECTION 6. Section 813.301(b), Government Code, is amended
5-25 to read as follows:
5-26 (b) A member may [not] establish one month of service credit
5-27 for each month or fraction of a month of duty, but not more than 60
6-1 months of service credit in the retirement system for military
6-2 service.
6-3 SECTION 7. Section 813.402, Government Code, is amended to
6-4 read as follows:
6-5 Sec. 813.402. CREDIT FOR YEAR IN WHICH ELIGIBLE FOR OFFICE.
6-6 (a) A [contributing] member may establish service credit in the
6-7 elected class for any calendar year during any part of which:
6-8 (1) the member held an office included in that class;
6-9 or
6-10 (2) the member was eligible to take the oath for an
6-11 office included in that class.
6-12 (b) A [contributing] member may establish credit under this
6-13 section by depositing with the retirement system in a lump sum a
6-14 contribution computed as provided by Section 813.404, plus all
6-15 membership fees due, plus interest computed at an annual rate of 10
6-16 percent from the fiscal year in which the service was performed to
6-17 the date of deposit.
6-18 SECTION 8. Section 813.504, Government Code, is amended to
6-19 read as follows:
6-20 Sec. 813.504. ELIGIBILITY FOR SERVICE CREDIT PREVIOUSLY
6-21 CANCELED. (a) A member of the employee class may reestablish
6-22 service credit previously canceled in the retirement system if at
6-23 least six months have elapsed since the end of the month in which
6-24 the cancellation became effective [the member, after cancellation
6-25 of the credit, holds a position for six months that is included in
6-26 the employee class].
6-27 (b) A former member of the employee class who does not
7-1 receive a disability retirement annuity from the retirement system
7-2 but who presents evidence satisfactory to the retirement system
7-3 that the person is disabled and cannot resume state employment may
7-4 reestablish service credit previously canceled in the retirement
7-5 system for the purpose of retiring with a service retirement
7-6 annuity.
7-7 SECTION 9. Sections 813.506(a) and (c), Government Code, are
7-8 amended to read as follows:
7-9 (a) The Texas Department of Criminal Justice, the managed
7-10 health care unit of The University of Texas Medical Branch, and the
7-11 Texas Tech Health Sciences Center by rule shall adopt standards for
7-12 determining eligibility for service credit as a custodial officer,
7-13 based on the need to encourage early retirement of persons whose
7-14 duties are hazardous and require them to have routine contact with
7-15 inmates of or defendants confined in the state jail division of the
7-16 Texas Department of Criminal Justice on a regular basis.
7-17 (c) The Texas Department of Criminal Justice, the managed
7-18 health care unit of The University of Texas Medical Branch, or the
7-19 Texas Tech Health Sciences Center, as applicable, shall determine a
7-20 person's eligibility to receive credit as a custodial officer. A
7-21 determination of the department or unit may not be appealed by an
7-22 employee but is subject to change by the retirement system.
7-23 SECTION 10. Section 813.509(a), Government Code, is amended
7-24 to read as follows:
7-25 (a) A member who holds a position included in the employee
7-26 class of membership during the month that includes the effective
7-27 date of the member's retirement and who retires based on service or
8-1 a disability is entitled to service credit in the retirement system
8-2 for the member's sick leave that has accumulated and is unused on
8-3 the last day of employment. Sick leave is creditable in the
8-4 retirement system at the rate of one month of service credit for
8-5 each 20 days, or 160 hours, of accumulated sick leave and one month
8-6 for each fraction of days or hours remaining after division of the
8-7 total hours of accumulated sick leave by 160. [An increment of
8-8 less than 20 days is not creditable.]
8-9 SECTION 11. Section 814.005(a), Government Code, is amended
8-10 to read as follows:
8-11 (a) A person may, on a form prescribed by and filed with the
8-12 retirement system, waive all or a portion of any benefits from the
8-13 retirement system to which the person is entitled. The retirement
8-14 system also shall give effect as a waiver to a full or partial
8-15 disclaimer executed in accordance with Section 37A, Texas Probate
8-16 Code, unless the benefit to be disclaimed is a lifetime annuity. A
8-17 person may revoke a waiver of benefits in the same manner as the
8-18 original waiver was made, unless the original waiver by its terms
8-19 was made irrevocable.
8-20 SECTION 12. Section 814.104, Government Code, is amended to
8-21 read as follows:
8-22 Sec. 814.104. ELIGIBILITY OF MEMBER FOR SERVICE RETIREMENT.
8-23 (a) Except as provided by Section 814.102 or by rule adopted under
8-24 Section 813.304(d) or 803.202(2), a member who has service credit
8-25 in the retirement system is eligible to retire and receive a
8-26 service retirement annuity[, if the member]:
8-27 (1) if the member is at least 60 years old and has 5
9-1 years of service credit in the employee class; or
9-2 (2) if the sum of the member's age and amount of
9-3 service credit in the employee class, including months of age and
9-4 credit, equals the number 80 [is at least 55 years old and has 25
9-5 years of service credit in the retirement system; or]
9-6 [(3) is at least 50 years old and has 30 years of
9-7 service credit in the retirement system].
9-8 (b) A member who is at least 55 years old and who has at
9-9 least 10 years of service credit as a commissioned peace officer
9-10 engaged in criminal law enforcement activities of the Department of
9-11 Public Safety, the Texas Alcoholic Beverage Commission, [the State
9-12 Purchasing and General Services Commission Capitol Area Security
9-13 Force,] the State Board of Pharmacy, or the Parks and Wildlife
9-14 Department, as an employee of the Railroad Commission of Texas who
9-15 is licensed by the Commission on Law Enforcement Officer Standards
9-16 and Education and has served at least five years as an investigator
9-17 for the oil field theft detection division, or as a custodial
9-18 officer, is eligible to retire and receive a service retirement
9-19 annuity.
9-20 SECTION 13. Subchapter B, Chapter 814, Government Code, is
9-21 amended by adding Section 814.1041 to read as follows:
9-22 Sec. 814.1041. TEMPORARY SERVICE RETIREMENT OPTION FOR
9-23 MEMBERS AFFECTED BY PRIVATIZATION OR OTHER REDUCTION IN WORKFORCE.
9-24 (a) This section applies only to members of the employee class
9-25 whose positions with the Texas Workforce Commission, the Texas
9-26 Department of Human Services, or the Texas Department of Mental
9-27 Health and Mental Retardation are eliminated as a result of
10-1 contracts with private service providers or other reductions in
10-2 services provided by those agencies and who separate from state
10-3 service at that time.
10-4 (b) A member described by Subsection (a) is eligible to
10-5 retire and receive a service retirement annuity if the member's age
10-6 and service credit, each increased by three years, would meet age
10-7 and service requirements for service retirement under Section
10-8 814.104(a) at the time the member separates from state service as
10-9 described by Subsection (a). The annuity of a person who retires
10-10 under this subsection is computed on the person's accrued service
10-11 credit increased by three years.
10-12 (c) A member described by Subsection (a) becomes eligible
10-13 to retire and receive a service retirement annuity on the date on
10-14 which the member would have met the age and service requirements
10-15 for service retirement under Section 814.104(a) had the member
10-16 remained employed by the state if, on the date of separation from
10-17 state service, the member's age and service credit, each increased
10-18 by five years, would meet age and service requirements for service
10-19 retirement under Section 814.104(a). The annuity of a person who
10-20 retires under this subsection is computed on the person's accrued
10-21 service credit.
10-22 (d) If a member described by Subsection (c) is reemployed by
10-23 the state before retirement, the time between the member's
10-24 separation from state service and reemployment may be used only to
10-25 compute eligibility for service retirement and may not be used to
10-26 compute the amount of any service retirement annuity.
10-27 (e) A member who applies to retire under this section and
11-1 the state agency from which the member separated from service shall
11-2 provide documentation required by the retirement system to
11-3 establish eligibility to retire under this section.
11-4 (f) This section applies only to positions eliminated by
11-5 privatization or other reductions in workforce before September 1,
11-6 1999.
11-7 SECTION 14. Section 814.105(a), Government Code, is amended
11-8 to read as follows:
11-9 (a) Except as otherwise provided by this section, the
11-10 standard service retirement annuity for service credited in the
11-11 employee class of membership is an amount computed as the member's
11-12 average monthly compensation for service in that class for the 36
11-13 highest months of compensation multiplied by 2.25 [2] percent for
11-14 each year of service credit in that class.
11-15 SECTION 15. Section 814.1081(a), Government Code, is amended
11-16 to read as follows:
11-17 (a) A person who retired and selected an optional service
11-18 retirement annuity approved by the board of trustees or an optional
11-19 service retirement annuity described by Section 814.108(c)(1) or
11-20 (c)(2)[, and who designated a person as beneficiary who was not at
11-21 the time of designation and is not currently the retiree's spouse
11-22 or child] may change the optional annuity selection to the
11-23 selection of a standard service retirement annuity by filing with
11-24 the retirement system a request to change the annuity selection, if
11-25 the retiree designated a person as beneficiary who:
11-26 (1) was not at the time of designation and is not
11-27 currently the retiree's spouse or child; or
12-1 (2) has executed since the designation a transfer and
12-2 release, approved by a court of competent jurisdiction pursuant to
12-3 a divorce decree, of the beneficiary's interest in the annuity and
12-4 is not currently the retiree's spouse or child.
12-5 SECTION 16. Section 815.003(d), Government Code, is amended
12-6 to read as follows:
12-7 (d) The board shall hold elections for the members and
12-8 retirees to nominate and elect a trustee before August 31 [1] of
12-9 each odd-numbered year. The board shall make ballots available to
12-10 members of the retirement system and retirees and all votes must be
12-11 cast on those ballots.
12-12 SECTION 17. Subchapter B, Chapter 815, Government Code, is
12-13 amended by adding Section 815.106 to read as follows:
12-14 Sec. 815.106. INFORMATION TO LEGISLATURE. (a) The
12-15 retirement system may not use any money under its control to
12-16 influence the outcome of an election or to support the passage or
12-17 defeat of legislation.
12-18 (b) This section does not prohibit the board of trustees, as
12-19 fiduciaries of the trust fund and as trustees of other programs
12-20 administered by the board, or the officers or employees of the
12-21 retirement system, as designees of the board, from making
12-22 recommendations to the legislature concerning the actuarial
12-23 soundness of a retirement system administered by the board, the
12-24 fiscal or legal implications of proposed legislation, or statutory
12-25 changes designed to more efficiently administer and effectuate the
12-26 purposes of a retirement system or other program administered by
12-27 the board. In addition, the board or an officer or employee of the
13-1 retirement system may provide to a member of the legislature or a
13-2 legislative committee, at the request of the member or committee,
13-3 any factual information that is not made confidential by law.
13-4 SECTION 18. Section 815.303(b), Government Code, is amended
13-5 to read as follows:
13-6 (b) To be eligible to lend securities under this section, a
13-7 bank or brokerage firm must:
13-8 (1) be experienced in the operation of a fully secured
13-9 securities loan program;
13-10 (2) maintain adequate capital in the prudent judgment
13-11 of the retirement system to assure the safety of the securities;
13-12 (3) execute an indemnification agreement satisfactory
13-13 in form and content to the retirement system fully indemnifying the
13-14 retirement system against loss resulting from borrower default in
13-15 its operation of a securities loan program for the system's
13-16 securities; and
13-17 (4) require any securities broker or dealer to whom it
13-18 lends securities belonging to the retirement system to deliver to
13-19 and maintain with the custodian collateral in the form of cash or
13-20 United States government securities in an amount equal to not less
13-21 than 100 percent of the market value, from time to time, of the
13-22 loaned securities.
13-23 SECTION 19. Section 815.307, Government Code, is amended to
13-24 read as follows:
13-25 Sec. 815.307. DUTY OF CARE. The assets of the retirement
13-26 system shall be invested and reinvested without distinction as to
13-27 their source in accordance with Section 67, Article XVI, Texas
14-1 Constitution. Investment decisions are subject to the standard
14-2 provided in the Texas Trust Code by Section 113.056(a), Property
14-3 Code. [In making investments for the retirement system, the board
14-4 of trustees or the executive director shall exercise the judgment
14-5 and care, under the circumstances prevailing at the time of the
14-6 investment, that persons of ordinary prudence, discretion, and
14-7 intelligence exercise in the management of their own affairs, not
14-8 in speculation but when making a permanent disposition of their
14-9 funds, considering the probable income from the disposition and the
14-10 probable safety of their capital.]
14-11 SECTION 20. Section 815.403(a), Government Code, is amended
14-12 to read as follows:
14-13 (a) During each fiscal year, the state shall contribute to
14-14 the retirement system:
14-15 (1) an amount equal to 7.4 percent of the total
14-16 compensation of all members of the retirement system for that year;
14-17 (2) money to pay lump-sum death benefits for retirees
14-18 under Section 814.501;
14-19 (3) an amount for the law enforcement and custodial
14-20 officer supplemental retirement fund equal to 2.13 percent of the
14-21 aggregate state compensation of all custodial and law enforcement
14-22 officers for that year;
14-23 (4) money necessary for the administration of the law
14-24 enforcement and custodial officer supplemental retirement fund;
14-25 and
14-26 (5) money for service credit not previously
14-27 established, as provided by Section 813.202(c) [813.202(e)] or
15-1 813.302(d).
15-2 SECTION 21. Subchapter F, Chapter 815, Government Code, is
15-3 amended by adding Section 815.5072 to read as follows:
15-4 Sec. 815.5072. EXCESS BENEFIT ARRANGEMENT. (a) A separate,
15-5 nonqualified, unfunded excess benefit arrangement is created
15-6 outside the trust fund of the retirement system. This excess
15-7 benefit arrangement shall be administered as a governmental excess
15-8 benefit arrangement under Section 415(m) of the Internal Revenue
15-9 Code of 1986 (26 U.S.C. Section 415(m)). The purpose of the excess
15-10 benefit arrangement is to pay to annuitants of the retirement
15-11 system benefits otherwise payable by the retirement system that
15-12 exceed the limitations on benefits imposed by Section 415(b)(1)(A)
15-13 of the Internal Revenue Code of 1986 (26 U.S.C. Section
15-14 415(b)(1)(A)).
15-15 (b) The board of trustees is responsible for the
15-16 administration of this arrangement. Except as otherwise provided
15-17 by this section, the board has the same rights, duties, and
15-18 responsibilities concerning the excess benefit arrangement as it
15-19 has to the trust fund.
15-20 (c) Benefits under this section are exempt from execution to
15-21 the same extent as provided by Section 811.005, except that the
15-22 benefits are completely unassignable. Contributions to this
15-23 arrangement are not held in trust and may not be commingled with
15-24 other funds of the retirement system.
15-25 (d) An annuitant is entitled to a monthly benefit under this
15-26 section in an amount equal to the amount by which the benefit
15-27 otherwise payable by the retirement system has been reduced by the
16-1 limitation on benefits imposed by Section 415(b)(1)(A) of the
16-2 Internal Revenue Code of 1986 (26 U.S.C. Section 415(b)(1)(A)).
16-3 The benefit payable by this arrangement is payable at the times and
16-4 in the form that the benefit payable under the trust fund is paid.
16-5 (e) The benefit payable under this section shall be paid
16-6 from state contributions that otherwise would be made to the trust
16-7 fund under Section 815.403. In lieu of deposit in the state
16-8 accumulation account, an amount determined by the retirement system
16-9 to be necessary to pay benefits under this section shall be paid
16-10 monthly to the credit of a dedicated account in the general revenue
16-11 fund maintained only for the excess benefit arrangement. The
16-12 account may include amounts needed to pay reasonable and necessary
16-13 expenses of administering this arrangement. The monthly amount to
16-14 be paid to the credit of the account shall be transferred to the
16-15 account at least 15 days before the date of a monthly disbursement
16-16 under this section.
16-17 (f) The board of trustees may adopt rules governing the
16-18 excess benefit arrangement that are necessary for the efficient
16-19 administration of the arrangement in compliance with Section 415(m)
16-20 of the Internal Revenue Code of 1986 (26 U.S.C. Section 415(m)).
16-21 SECTION 22. Section 815.510(a), Government Code, is amended
16-22 to read as follows:
16-23 (a) The Employees Retirement System of Texas shall submit a
16-24 report not later than the 25th day of the month following the end
16-25 of each fiscal year to the governor, the lieutenant governor, the
16-26 speaker of the house of representatives, the executive director of
16-27 the State Pension Review Board, the appropriate oversight
17-1 committees of the house and senate, and the Legislative Budget
17-2 Board. The report shall include the following:
17-3 (1) the current end-of-fiscal-year market value of the
17-4 trust fund;
17-5 (2) [the current book value of the trust fund;]
17-6 [(3)] the asset allocations of the trust fund
17-7 expressed in percentages of stocks, fixed income, cash, or other
17-8 financial investments; and
17-9 (3) [(4)] the investment performance of the trust fund
17-10 utilizing accepted industry measurement standards.
17-11 SECTION 23. Subchapter F, Chapter 815, Government Code, is
17-12 amended by adding Section 815.512 to read as follows:
17-13 Sec. 815.512. PROTECTION FROM DOUBLE OR MULTIPLE LIABILITY.
17-14 The executive director may cause a suit concerning a claim to be
17-15 filed on behalf of the retirement system in a district court in
17-16 Travis County to protect the system from double or multiple
17-17 liability, if the executive director determines that a claim may
17-18 expose the retirement system to such liability.
17-19 SECTION 24. (a) Annuities that are described by Section
17-20 814.107, 814.207, 814.305, or 814.601(a), Government Code, and are
17-21 based on service retirements, disability retirements, or deaths
17-22 that occurred or occur after August 31, 1996, but before September
17-23 1, 1997, are increased by 12.5 percent.
17-24 (b) The increase in annuities under Subsection (a) of this
17-25 section is payable beginning with the first monthly payments of the
17-26 annuities that become due after the effective date of this Act.
17-27 (c) Except as provided by Subsection (d) of this section,
18-1 the board of trustees of the retirement system shall pay the
18-2 increased annuities provided by this section from the retirement
18-3 annuity reserve account of the retirement system and may transfer
18-4 to that account from the state accumulation account of the
18-5 retirement system any portion of the amount that exceeds the amount
18-6 in the retirement annuity reserve account available to finance the
18-7 increases in benefits, and that is actuarially determined to be
18-8 necessary to finance the increases, for the duration of the
18-9 annuities to which the increases apply.
18-10 (d) The increase in benefits payable to a law enforcement or
18-11 custodial officer who retired before the age of 50 or for service
18-12 established under Section 813.509, Government Code, is payable from
18-13 the law enforcement and custodial officer supplemental retirement
18-14 fund.
18-15 (e) The increase provided by Subsection (a) of this section
18-16 shall be computed on the service percentage value described by
18-17 Section 814.105(a), Government Code.
18-18 SECTION 25. The board of trustees of the Employees
18-19 Retirement System of Texas shall authorize a supplemental payment
18-20 under Section 814.603(d), Government Code, to be made in the fiscal
18-21 year beginning September 1, 1997, if the conditions required by
18-22 that subsection are met.
18-23 SECTION 26. Section 833.103(d), Government Code, is amended
18-24 to read as follows:
18-25 (d) A member may [not] establish one month of service credit
18-26 for each month or fraction of a month of duty, but not more than 48
18-27 months of service credit in the retirement system for military
19-1 service.
19-2 SECTION 27. Section 833.105, Government Code, is amended to
19-3 read as follows:
19-4 Sec. 833.105. ALTERNATIVE PAYMENTS TO ESTABLISH OR
19-5 REESTABLISH SERVICE CREDIT. (a) The board of trustees may adopt
19-6 rules to provide procedures for making installment payments to
19-7 establish or reestablish credit in the retirement system as
19-8 alternatives to lump-sum payments otherwise authorized or required
19-9 by this subtitle. The methods may include payment by payroll
19-10 deduction. [A member who is otherwise eligible may establish or
19-11 reestablish service creditable in the retirement system by making
19-12 payments as provided by this section in lieu of lump-sum payments
19-13 otherwise authorized or required by this subtitle.]
19-14 (b) Except as provided by Subsection (c), payments [A
19-15 payment authorized by this section consists of the contribution
19-16 required to establish or reestablish at least one year of service
19-17 credit, including any required interest and membership fees, except
19-18 that a person's last in a series of payments under this section may
19-19 be for a period of remaining service that is less than one year.]
19-20 [(c) The retirement system shall grant the applicable amount
19-21 of service credit after each payment is made under this section.]
19-22 [(d) Payments] may not be made under a rule adopted under
19-23 this section:
19-24 (1) to establish or reestablish service credit of a
19-25 person who has retired or died; or
19-26 (2) to establish current service under Section
19-27 833.101.
20-1 (c) Under a rule adopted under this section, the designated
20-2 beneficiary of a deceased member or, if none exists, the personal
20-3 representative of the decedent's estate may establish or
20-4 reestablish service for which the member was eligible at the time
20-5 of death if the establishment or reestablishment of the service
20-6 would result in the payment of a death benefit annuity.
20-7 (d) The payment for the establishment or reestablishment of
20-8 service under Subsection (c) must be made in a lump sum and
20-9 completed before the first payment of a death benefit annuity, but
20-10 not later than the 60th day after the date the retirement system
20-11 receives notice of the death.
20-12 [(e) The retirement system may adopt rules to administer
20-13 this section.]
20-14 SECTION 28. Subchapter A, Chapter 834, Government Code, is
20-15 amended by adding Section 834.005 to read as follows:
20-16 Sec. 834.005. DISCLAIMER OF BENEFITS. The retirement system
20-17 shall give effect to a full or partial disclaimer of benefits
20-18 executed in accordance with Section 37A, Texas Probate Code, unless
20-19 the benefit to be disclaimed is a lifetime annuity.
20-20 SECTION 29. Section 834.101(a), Government Code, is amended
20-21 to read as follows:
20-22 (a) A member is eligible to retire and receive a base
20-23 service retirement annuity if the member:
20-24 (1) is at least 65 years old, currently holds a
20-25 judicial office, and has at least 10 years of service credited in
20-26 the retirement system[, the most recently performed of which was
20-27 for a continuous period of at least one year];
21-1 (2) is at least 65 years old and has at least 12 years
21-2 of service[, continuous or otherwise,] credited in the retirement
21-3 system, regardless of whether the member currently holds a judicial
21-4 office; or
21-5 (3) has at least 20 years of service credited in the
21-6 retirement system, [the most recently performed of which was for a
21-7 continuous period of at least 10 years,] regardless of whether the
21-8 member currently holds a judicial office.
21-9 SECTION 30. Section 834.302, Government Code, is amended to
21-10 read as follows:
21-11 Sec. 834.302. SELECTION OF DEATH BENEFIT PLAN BY SURVIVOR OF
21-12 MEMBER. (a) If a member eligible to select a death benefit plan
21-13 under Section 834.301(a) dies without having made a selection, or
21-14 if a selection cannot be made effective, the member's designated
21-15 beneficiary [surviving spouse] may select a plan in the same manner
21-16 as if the member had made the selection. If there is no designated
21-17 beneficiary [surviving spouse], the personal representative of the
21-18 decedent's estate may make the selection.
21-19 (b) If a person dies who meets the description in Section
21-20 814.302(b), the person's designated beneficiary [surviving spouse]
21-21 or the guardian of surviving minor children may select a death
21-22 benefit plan under that subsection.
21-23 SECTION 31. Section 838.103(d), Government Code, is amended
21-24 to read as follows:
21-25 (d) A member may [not] establish one month of service credit
21-26 for each month or fraction of a month of duty, but not more than 48
21-27 months of service credit in the retirement system for military
22-1 service.
22-2 SECTION 32. Section 838.105, Government Code, is amended to
22-3 read as follows:
22-4 Sec. 838.105. ALTERNATIVE PAYMENTS TO ESTABLISH OR
22-5 REESTABLISH SERVICE CREDIT. (a) The board of trustees may adopt
22-6 rules to provide procedures for making installment payments to
22-7 establish or reestablish credit in the retirement system as
22-8 alternatives to lump-sum payments otherwise authorized or required
22-9 by this subtitle. The methods may include payment by payroll
22-10 deduction. [A member who is otherwise eligible may establish or
22-11 reestablish service creditable in the retirement system by making
22-12 payments as provided by this section in lieu of lump-sum payments
22-13 otherwise authorized or required by this subtitle.]
22-14 (b) Except as provided by Subsection (c), payments [A
22-15 payment authorized by this section consists of the contribution
22-16 required to establish or reestablish at least one year of service
22-17 credit, including any required interest and membership fees, except
22-18 that a person's last in a series of payments under this section may
22-19 be for a period of remaining service that is less than one year.]
22-20 [(c) The retirement system shall grant the applicable amount
22-21 of service credit after each payment is made under this section.]
22-22 [(d) Payments] may not be made under a rule adopted under
22-23 this section:
22-24 (1) to establish or reestablish service credit of a
22-25 person who has retired or died; or
22-26 (2) to establish current service under Section
22-27 838.101.
23-1 (c) Under a rule adopted under this section, the designated
23-2 beneficiary of a deceased member or, if none exists, the personal
23-3 representative of the decedent's estate may establish or
23-4 reestablish service for which the member was eligible at the time
23-5 of death if the establishment or reestablishment of the service
23-6 would result in the payment of a death benefit annuity.
23-7 (d) The payment for the establishment or reestablishment of
23-8 service under Subsection (c) must be made in a lump sum and
23-9 completed before the first payment of a death benefit annuity, but
23-10 not later than the 60th day after the date the retirement system
23-11 receives notice of the death.
23-12 [(e) The retirement system may adopt rules to administer
23-13 this section.]
23-14 SECTION 33. Subchapter A, Chapter 839, Government Code, is
23-15 amended by adding Section 839.004 to read as follows:
23-16 Sec. 839.004. DISCLAIMER OF BENEFITS. The retirement system
23-17 shall give effect to a full or partial disclaimer of benefits
23-18 executed in accordance with Section 37A, Texas Probate Code, unless
23-19 the benefit to be disclaimed is a lifetime annuity.
23-20 SECTION 34. Section 839.101(a), Government Code, is amended
23-21 to read as follows:
23-22 (a) A member is eligible to retire and receive a service
23-23 retirement annuity if the member:
23-24 (1) is at least 65 years old, currently holds a
23-25 judicial office, and has at least 10 years of service credited in
23-26 the retirement system[, the most recently performed of which was
23-27 for a continuous period of at least one year];
24-1 (2) is at least 65 years old and has at least 12 years
24-2 of service[, continuous or otherwise,] credited in the retirement
24-3 system, regardless of whether the member currently holds a judicial
24-4 office; or
24-5 (3) has at least 20 years of service credited in the
24-6 retirement system, [the most recently performed of which was for a
24-7 continuous period of at least 10 years,] regardless of whether the
24-8 member currently holds a judicial office.
24-9 SECTION 35. Section 839.302, Government Code, is amended to
24-10 read as follows:
24-11 Sec. 839.302. SELECTION OF DEATH BENEFIT PLAN BY SURVIVOR OF
24-12 MEMBER. If a member eligible to select a death benefit plan under
24-13 Section 839.301 dies without having made a selection or if a plan
24-14 selected cannot be made effective, the member's designated
24-15 beneficiary [surviving spouse] may select a plan in the same manner
24-16 as if the member had made the selection. If there is no
24-17 designated beneficiary [surviving spouse], the personal
24-18 representative of the decedent's estate may make the selection.
24-19 SECTION 36. Section 840.3012(b), Government Code, is amended
24-20 to read as follows:
24-21 (b) To be eligible to lend securities under this section, a
24-22 bank or brokerage firm must:
24-23 (1) be experienced in the operation of a fully secured
24-24 securities loan program;
24-25 (2) maintain adequate capital in the prudent judgment
24-26 of the retirement system to assure the safety of the securities;
24-27 (3) execute an indemnification agreement satisfactory
25-1 in form and content to the retirement system fully indemnifying the
25-2 retirement system against loss resulting from borrower default in
25-3 its operation of a securities loan program for the system's
25-4 securities; and
25-5 (4) require any securities broker or dealer to whom it
25-6 lends securities belonging to the retirement system to deliver to
25-7 and maintain with the custodian collateral in the form of cash or
25-8 United States government securities in an amount equal to not less
25-9 than 100 percent of the market value, from time to time, of the
25-10 loaned securities.
25-11 SECTION 37. Section 840.303, Government Code, is amended to
25-12 read as follows:
25-13 Sec. 840.303. DUTY OF CARE. The assets of the retirement
25-14 system shall be invested and reinvested without distinction as to
25-15 their source in accordance with Section 67, Article XVI, Texas
25-16 Constitution. Investment decisions are subject to the standard
25-17 provided in the Texas Trust Code by Section 113.056(a), Property
25-18 Code. [In making investments for the retirement system, the board
25-19 of trustees shall exercise the judgment and care, under the
25-20 circumstances prevailing at the time of the investment, that
25-21 persons of ordinary prudence, discretion, and intelligence exercise
25-22 in the management of their own affairs, not in speculation but when
25-23 making a permanent disposition of their funds, considering the
25-24 probable income from the disposition and the probable safety of
25-25 their capital.]
25-26 SECTION 38. Section 609.009, Government Code, is amended to
25-27 read as follows:
26-1 Sec. 609.009. TRUST FOR [OWNERSHIP UNDER] 457 PLAN. An
26-2 employee's deferred amounts and investment income under a 457 plan
26-3 and the qualified investment products in which the amounts are
26-4 invested are held in trust for the exclusive benefit of
26-5 participants and their beneficiaries in accordance with Section
26-6 457 of the Internal Revenue Code of 1986 (26 U.S.C. Section 457).
26-7 For purposes of this section, custodial accounts and contracts
26-8 described by Section 457 are treated as trusts. A trust does not
26-9 have to be established before January 1, 1999, for a 457 plan in
26-10 existence on August 20, 1996 [the property of the employing
26-11 political subdivision or state agency, as appropriate, until the
26-12 deferred amounts and investment income are distributed to the
26-13 employee].
26-14 SECTION 39. Sections 609.502(a) and (b), Government Code,
26-15 are amended to read as follows:
26-16 (a) The board of trustees of the Employees Retirement System
26-17 of Texas is the trustee and the plan administrator of a 401(k) plan
26-18 known as TexaSaver established under this subchapter.
26-19 (b) The board of trustees is the trustee and the plan
26-20 administrator of a 457 plan established under this subchapter.
26-21 SECTION 40. Section 609.509(b), Government Code, is amended
26-22 to read as follows:
26-23 (b) In a contract under Subsection (a), the board of
26-24 trustees may provide for the board to audit periodically the person
26-25 with whom the contract is made. The audit may cover:
26-26 (1) the proper handling and accounting of state or
26-27 trust funds; and
27-1 (2) other matters related to the proper performance of
27-2 the contract.
27-3 SECTION 41. Section 609.512(b), Government Code, is amended
27-4 to read as follows:
27-5 (b) The deferred compensation trust fund is in the state
27-6 treasury. The fund is for the benefit of the deferred compensation
27-7 plan described by Section 609.502(b) [609.502(a)].
27-8 SECTION 42. Sections 3(a)(2), (8), and (9), Texas Employees
27-9 Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
27-10 Texas Insurance Code), are amended to read as follows:
27-11 (2) "Annuitant" shall mean an officer or employee who
27-12 has at least three years of service as an eligible employee with a
27-13 department whose employees are authorized to participate in the
27-14 Texas employees uniform group insurance benefits program and who
27-15 retires under:
27-16 (A) the jurisdiction of the Employees Retirement
27-17 System of Texas and either receives an annuity or is eligible to
27-18 receive an annuity, pursuant to Subtitle B, D, or E of Title 8,
27-19 Government Code, or Chapter 803, Government Code, that is based on
27-20 at least 10 years of service credit or eligibility under Section
27-21 814.002 or 814.102, Government Code;
27-22 (B) the jurisdiction of the Teacher Retirement
27-23 System of Texas and either receives an annuity or is eligible to
27-24 receive an annuity, pursuant to Subtitle C, Title 8, Government
27-25 Code, or Chapter 803, Government Code, that is based on at least 10
27-26 years of service credit, whose last state employment prior to
27-27 retirement, including employment by a public community/junior
28-1 college, was as an employee of a department whose employees are
28-2 authorized to participate in the Texas employees uniform group
28-3 insurance program;
28-4 (C) the optional retirement program established
28-5 by Chapter 830, Government Code, and either receives an annuity or
28-6 is eligible to receive an annuity under that program, if the
28-7 [person's last state employment before retirement, including
28-8 employment by a public community/junior college, was as an employee
28-9 of a department whose employees are authorized to participate in
28-10 the Texas employees uniform group insurance program and if the]
28-11 person either:
28-12 (i) would have been eligible to retire and
28-13 receive a service retirement annuity from the Teacher Retirement
28-14 System of Texas or the Employees Retirement System of Texas based
28-15 on at least 10 years of service credit had the person not elected
28-16 to participate in the optional retirement program; or
28-17 (ii) is disabled as determined by the
28-18 Employees Retirement System of Texas; or
28-19 (D) any other federal or state statutory
28-20 retirement program to which an institution of higher education has
28-21 made employer contributions, if the employee has met service
28-22 requirements, age requirements, and other applicable requirements
28-23 comparable to the requirements for retirement under the Teacher
28-24 Retirement System of Texas, based on at least 10 years of service
28-25 credit.
28-26 (8) "Dependent" shall mean the spouse of an employee
28-27 or retired employee and:
29-1 (A) an unmarried child under 25 years of age,
29-2 including[: (A)] an adopted child and [(B)] a stepchild, foster
29-3 child, or other child who is in a regular parent-child
29-4 relationship;
29-5 (B) [and (C)] any such child, regardless of age,
29-6 who lives with or whose care is provided by an employee or
29-7 annuitant on a regular basis if such child is mentally retarded or
29-8 physically incapacitated to such an extent as to be dependent upon
29-9 the employee or retired employee for care or support, as the
29-10 trustee shall determine; and
29-11 (C) any such child who is unmarried, regardless
29-12 of age, for purposes of health benefits coverage under this Act, on
29-13 expiration of the child's continuation coverage under the
29-14 Consolidated Omnibus Budget Reconciliation Act of 1985.
29-15 (9) "Qualified carrier" shall mean:
29-16 (A) any insurance company authorized to do
29-17 business in this state by the Texas Department [State Board] of
29-18 Insurance to provide any of the types of insurance coverages,
29-19 benefits, or services provided for in this Act under any of the
29-20 insurance laws of the State of Texas, which has a surplus of $1
29-21 million, a successful operating history, and which has had
29-22 successful experience in providing and servicing any of the types
29-23 of group coverage provided for in this Act as determined by the
29-24 Texas Department [State Board] of Insurance;
29-25 (B) any corporation operating under Chapter 20
29-26 or 20A of the Insurance Code which provides any of the types of
29-27 coverage, benefits, or services provided for in this Act, a
30-1 successful operating history, and which has had successful
30-2 experience in providing and servicing any of the types of group
30-3 coverage provided for in this Act as determined by the Texas
30-4 Department [State Board] of Insurance; or
30-5 (C) any combination or carriers as herein
30-6 defined, upon such terms and conditions as may be prescribed by the
30-7 trustee, providing, however, that for purposes of this Act carriers
30-8 combining for the purpose of bidding and/or underwriting this
30-9 program shall not be considered in violation of Sections 15.01
30-10 through 15.34, Chapter 15, Title 2, Competition and Trade
30-11 Practices, Texas Business & Commerce Code.
30-12 SECTION 43. (a) Section 4B(e), Texas Employees Uniform
30-13 Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas
30-14 Insurance Code), as added by Chapter 242, Acts of the 72nd
30-15 Legislature, Regular Session, 1991, is amended to read as follows:
30-16 (e) The trustee may delegate [the duties of the executive
30-17 director under this section to another employee of the Employees
30-18 Retirement System of Texas and may delegate] its duties to hear
30-19 appeals to the executive director.
30-20 (b) Section 4B(e), Texas Employees Uniform Group Insurance
30-21 Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code), as
30-22 added by Chapter 391, Acts of the 72nd Legislature, Regular
30-23 Session, 1991, is redesignated as Section 4B(f) to read as follows:
30-24 (f) [(e)] The executive director may delegate the duties of
30-25 the executive director under this section to another person who is
30-26 employed by the Employees Retirement System of Texas.
30-27 SECTION 44. Section 4C(a), Texas Employees Uniform Group
31-1 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
31-2 Code), is amended to read as follows:
31-3 (a) The trustee may develop a system for an employee[,
31-4 school district employee,] or annuitant to electronically
31-5 authorize:
31-6 (1) enrollment in a coverage or benefit program;
31-7 (2) contributions to a coverage or benefit program;
31-8 and
31-9 (3) deductions or reductions to the compensation or
31-10 annuity of the employee[, school district employee,] or annuitant
31-11 for participation in a coverage or benefit program.
31-12 SECTION 45. Sections 5(b), (h), (i), and (j), Texas
31-13 Employees Uniform Group Insurance Benefits Act (Article 3.50-2,
31-14 Vernon's Texas Insurance Code), are amended to read as follows:
31-15 (b) In the event the trustee shall select a [as the] carrier
31-16 [one] whose bid was not the lowest of all bids submitted, such
31-17 selection shall be submitted together with justifications and
31-18 reasons therefor to the commissioner of insurance [State Board of
31-19 Insurance]. Such deviating selection shall not be deemed final and
31-20 binding unless and until the commissioner of insurance [a majority
31-21 of the State Board of Insurance] has certified [its] approval in
31-22 writing to the trustee, or upon the expiration of 30 days after
31-23 receipt thereof by the commissioner [State Board of Insurance] such
31-24 deviating selection shall be deemed approved.
31-25 (h) In the event the trustee determines that benefits shall
31-26 be provided from the Employees Life, Accident, and Health Insurance
31-27 and Benefits Fund, the trustee may contract with one or more [a]
32-1 qualified and experienced administering firms [firm] on a
32-2 competitive bid basis to administer the plans of coverage [claims
32-3 arising from the coverages] provided in Section 5 of the Act.
32-4 (i) The trustee shall select one or more [the desired]
32-5 administering firms [firm] to provide services which shall be in
32-6 the best interests of the employees covered by the Act. The
32-7 trustee is not required to select the lowest bid but shall take
32-8 into consideration such other factors as ability to service large
32-9 group programs, past experience, and other relevant criteria.
32-10 Should the trustee select a firm whose bid was not the lowest or
32-11 one whose bid differs from that specified, the reasons for such
32-12 action shall be fully justified and explained in the minutes of the
32-13 next meeting of the trustee.
32-14 (j) The trustee may not contract for or provide a plan of
32-15 [group] coverage [or with a health maintenance organization or
32-16 provide coverage directly from the fund] that:
32-17 (1) excludes or limits coverage or services for
32-18 acquired immune deficiency syndrome, as defined by the Centers for
32-19 Disease Control of the United States Public Health Service, or
32-20 human immunodeficiency virus infection; or
32-21 (2) provides coverage for serious mental illness that
32-22 is less extensive than the coverage provided for any [other]
32-23 physical illness.
32-24 SECTION 46. Section 5A(a), Texas Employees Uniform Group
32-25 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
32-26 Code), is amended to read as follows:
32-27 (a) The trustee may define the basic coverage in which every
33-1 full-time employee and every annuitant participates unless
33-2 participation is specifically waived. The trustee may define
33-3 different basic coverage plans for active full-time employees and
33-4 for annuitants. Basic coverage must include basic health coverage.
33-5 Basic health coverage may be offered through any health benefits
33-6 plan. [Basic coverage shall include, but not be limited to,
33-7 benefits and health care service required by state and federal
33-8 law.]
33-9 SECTION 47. Section 9, Texas Employees Uniform Group
33-10 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
33-11 Code), is amended to read as follows:
33-12 Sec. 9. ANNUAL ACCOUNTING; SPECIAL CONTINGENCY RESERVE. (a)
33-13 A carrier [Carriers] providing any policy purchased under this Act
33-14 shall provide an accounting to the trustee not later than 90 days
33-15 after the end of each policy year. The accounting shall set forth,
33-16 in a form approved by the trustee:
33-17 (1) the amounts of premiums actually accrued under the
33-18 policy from its date of issue to the end of the policy year;
33-19 (2) the total of all mortality and other claims,
33-20 charges, losses, costs, and expenses incurred for that period; and
33-21 (3) the amounts of the carrier's [insurers'] allowance
33-22 for a reasonable profit and contingencies for that period.
33-23 (b) An excess of the total of Subdivision (a)(1) of this
33-24 section over the sum of Subdivisions (a)(2) and (a)(3) of this
33-25 section shall be held by the carrier issuing a participating [the]
33-26 policy as a special contingency reserve to be used by the carrier
33-27 only for charges, claims, costs, and expenses under the policy.
34-1 The reserve shall bear interest at a rate determined in advance of
34-2 each policy year by the carrier and approved by the trustee as
34-3 being consistent with the rates generally used by the carrier for
34-4 similar funds held under other group insurance policies. When the
34-5 trustee determines that the special contingency reserve has
34-6 attained an amount estimated by it to make satisfactory provision
34-7 for adverse fluctuations in future charges, claims, costs, or
34-8 expenses under the policy, any further excess shall be deposited in
34-9 the State Treasury to the credit of the Employees Life, Accident,
34-10 and Health Insurance and Benefits Fund. When a policy is
34-11 discontinued, any balance remaining in the special contingency
34-12 reserve after all charges have been made shall be deposited in the
34-13 State Treasury to the credit of the fund. The carrier may make the
34-14 deposit in equal monthly installments over a period of not more
34-15 than two years.
34-16 SECTION 48. Section 10(b), Texas Employees Uniform Group
34-17 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
34-18 Code), is amended to read as follows:
34-19 (b) Policies [Exemption from Taxes on Premiums. Premiums or
34-20 contributions on policies], insurance contracts, certificates of
34-21 coverage, evidence of coverage, and agreements with health
34-22 maintenance organizations and plan administrators, or any other
34-23 coverages established under this Act, [or other coverages] shall
34-24 not be subject to any state tax, regulatory fee, or surcharge,
34-25 including premium or maintenance taxes or fees.
34-26 SECTION 49. Section 11, Texas Employees Uniform Group
34-27 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
35-1 Code), is amended by adding Subsections (d) and (e) to read as
35-2 follows:
35-3 (d) In addition to the authority granted under Article
35-4 3.50-6, Insurance Code, the trustee may adopt rules to provide for
35-5 payment of accelerated life insurance benefits to a terminally ill,
35-6 terminally injured, or permanently disabled participant in amounts
35-7 that benefit the participants without increasing the cost of
35-8 providing the benefits. The amount of any payment of an
35-9 accelerated benefit under rules adopted under this subsection must
35-10 be deducted from the amount that would otherwise be payable as a
35-11 death benefit.
35-12 (e)(1) In addition to retiree basic term life insurance
35-13 coverage, a participant in the optional group term life insurance
35-14 program may maintain optional term life insurance coverage after
35-15 retirement. The trustee may adopt rules for the implementation and
35-16 administration of this subsection.
35-17 (2) A participant may maintain after retirement the
35-18 amount of optional term life insurance coverage on the
35-19 participant's life on the date of retirement, not to exceed two
35-20 times the participant's annual salary on the last September 1
35-21 before retirement and subject to benefit reduction factors based on
35-22 age as determined by the trustee. The trustee shall determine the
35-23 rate for retiree optional term life insurance coverage. The rate
35-24 must be comparable to the rate for optional term life insurance
35-25 coverage for an active employee of the same age. Alternatively, a
35-26 retiree may choose another minimum optional term life insurance
35-27 coverage amount not subject to benefit reduction factors based on
36-1 age, with a coverage amount and premium rate determined by the
36-2 trustee.
36-3 (3) A retiree participating in optional term life
36-4 insurance coverage is not eligible for premium-waived extended
36-5 insurance benefits or accelerated life insurance benefits if the
36-6 total disability or terminal condition, respectively, begins after
36-7 the date of retirement. Accidental death and dismemberment
36-8 insurance coverage ceases on the date of retirement, regardless of
36-9 age.
36-10 (4) A participant who retired on or after December 31,
36-11 1995, but before September 1, 1997, and who elected at the time of
36-12 retirement to continue the maximum optional term life insurance
36-13 amount available to a retiree at the time, may reinstate,
36-14 prospectively, the level of optional group term life insurance in
36-15 force on the participant's life immediately before the
36-16 participant's retirement, not to exceed the maximum coverage set
36-17 for retirees in Subdivision (2) of this subsection. This
36-18 subdivision expires December 31, 1997.
36-19 SECTION 50. Section 12, Texas Employees Uniform Group
36-20 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
36-21 Code), is amended by adding Subsection (e) to read as follows:
36-22 (e) The trustee shall give effect to a full or partial
36-23 disclaimer of benefits executed in accordance with Section 37A,
36-24 Texas Probate Code.
36-25 SECTION 51. Sections 13(b) and (c), Texas Employees Uniform
36-26 Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas
36-27 Insurance Code), are amended to read as follows:
37-1 (b) Unless participation is waived specifically or unless an
37-2 employee or employee-annuitant is expelled from the program under
37-3 Section 13A of this Act, every full-time employee except one who is
37-4 described by Section 3(a)(5)(A)(x) of this Act shall be covered
37-5 automatically by the basic plan for active full-time employees and
37-6 every employee-annuitant shall be covered by the basic plan for
37-7 retired employee-annuitants. Coverage shall begin on the date he
37-8 becomes eligible, and each policy of insurance purchased by the
37-9 trustee shall provide for such automatic coverage.
37-10 (c) Unless expelled from the program under Section 13A of
37-11 this Act, each part-time employee and each employee of an
37-12 institution of higher education who is described by Section
37-13 3(a)(5)(A)(x) [3(a)(5)(A)(viii)] of this Act is eligible for
37-14 participation in the group programs provided under this Act upon
37-15 execution of appropriate application for coverage [payroll
37-16 deduction authorization for the required payment of premiums]. An
37-17 institution of higher education shall, at the time of employment,
37-18 notify each employee of the institution who is described by Section
37-19 3(a)(5)(A)(x) [3(a)(5)(A)(viii)] of this Act of the employee's
37-20 eligibility to participate in the group programs provided under
37-21 this Act.
37-22 SECTION 52. Section 13A(f), Texas Employees Uniform Group
37-23 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
37-24 Code), is amended to read as follows:
37-25 (f) An employee, annuitant, or dependent expelled from the
37-26 Texas employees uniform group insurance program may not participate
37-27 in any [a health maintenance organization or be insured under any
38-1 insurance or benefits] plan of coverage offered by the program for
38-2 a period determined by the trustee of not more than five years
38-3 from the date the expulsion from the program takes effect.
38-4 SECTION 53. Sections 15(b), (c), and (d), Texas Employees
38-5 Uniform Group Insurance Benefits Act (Article 3.50-2, Vernon's
38-6 Texas Insurance Code), are amended to read as follows:
38-7 (b) The state shall contribute to the cost of each
38-8 employee's individual and dependent group coverages the amounts
38-9 appropriated for the coverages in the General Appropriations Act.
38-10 The governing board of each state department and institution of
38-11 higher education participating in the program established under
38-12 this Act shall pay the trustee a like amount for each employee's
38-13 individual or dependent group coverages for their employees who
38-14 are, and retirees who were, compensated from funds not
38-15 appropriated in the General Appropriations Act. The departments
38-16 and institutions shall include the required contributions from
38-17 funds not appropriated in the General Appropriations Act in their
38-18 annual operating budgets. Each state department and institution of
38-19 higher education participating in the program shall assure current
38-20 participant coverages based on the records of the trustee, make
38-21 timely payments of amounts due the trustee from all fund sources
38-22 under the control of the department or institution, and reconcile
38-23 trustee and agency records of coverages and payments monthly.
38-24 There [From and after the effective date of this Act, there] is
38-25 hereby allocated [and appropriated] to the trustee, in accordance
38-26 with the provisions of this Act, from the several funds from which
38-27 [state] employees receive their respective salaries, a sum equal to
39-1 the total of all employer contributions computed in accordance with
39-2 the provisions of this Act and the rules and regulations of the
39-3 trustee promulgated pursuant thereto.
39-4 (c) All money hereby allocated [and appropriated] by the
39-5 state, including institutions of higher education, to the trustee
39-6 under this Act shall be paid to the trustee in monthly installments
39-7 based on the annual estimate by the trustee of the contributions to
39-8 be received for all [state] employees during said year; provided,
39-9 however, that in the event said estimate of the contributions of
39-10 the [state] employees shall vary from the actual amount of the
39-11 employer contributions during the year, such adjustments shall be
39-12 made at the close of each fiscal year as may be required. Each of
39-13 said monthly installments shall be paid into the appropriate fund
39-14 created by this Act in the amount certified by the trustee.
39-15 (d) The trustee shall certify to the governing boards of
39-16 those state departments and institutions of higher education
39-17 participating in the program established under this Act who provide
39-18 contributions for their employees' individual and dependent
39-19 coverages [employees] from operating budgets provided from sources
39-20 other than the General Appropriations Act the proportionate amounts
39-21 required [needed] to pay their respective contributions. Such
39-22 certifications shall be made at least 30 days prior to the meeting
39-23 at which the governing board adopts its operating budget.
39-24 SECTION 54. Sections 18(a) and (b), Texas Employees Uniform
39-25 Group Insurance Benefits Act (Article 3.50-2, Vernon's Texas
39-26 Insurance Code), are amended to read as follows:
39-27 (a) The group benefits advisory committee is composed of 26
40-1 [27] voting members as provided by this section. The office of the
40-2 attorney general, [the office of the state treasurer,] the office
40-3 of the comptroller, the Railroad Commission of Texas, the General
40-4 Land Office, and the Department of Agriculture are entitled to be
40-5 represented by one member each on the committee, who may be
40-6 appointed by the governing body of the state agency or elected by
40-7 and from the employees of the agency, as determined by rule by the
40-8 governing body of the agency. One employee shall be elected from
40-9 each of the remaining eight largest state agencies that are
40-10 governed by appointed officers by and from the employees of those
40-11 agencies. One nonvoting member shall be the executive director of
40-12 the Employees Retirement System of Texas. One member shall be an
40-13 expert in employee benefit issues from the private sector,
40-14 appointed by the governor. One member shall be an expert in
40-15 employee benefits issues from the private sector, appointed by the
40-16 lieutenant governor. One member shall be a retired state employee
40-17 appointed by the trustee. One member shall be a state employee of
40-18 a state agency other than one of the eight largest state agencies,
40-19 appointed by the trustee. Not more than one employee from a
40-20 particular state agency may serve on the committee. Each of the
40-21 seven largest institutions of higher education, as determined by
40-22 the number of employees on the payroll of an institution, shall
40-23 elect one member of the committee from among persons who have each
40-24 been nominated by a petition signed by at least 300 employees. Two
40-25 members shall be employees of institutions of higher education,
40-26 other than the seven largest institutions of higher education, who
40-27 are appointed by the Texas Higher Education Coordinating Board, but
41-1 not more than one employee shall be from any one institution. The
41-2 members shall elect a presiding officer from their membership to
41-3 serve a one-year term.
41-4 (b) All members of the committee shall be appointed or
41-5 elected for three-year terms. During a term of appointment or
41-6 election, state employee vacancies shall be filled by an employee
41-7 of the same agency from which the vacancy occurred[, being]
41-8 appointed by the governing body of the agency or institution
41-9 [trustees] for the balance of the vacated term. A vacancy in a
41-10 position held by a member of the private sector shall be filled by
41-11 the officer who originally made the appointment to that position.
41-12 SECTION 55. Section 19, Texas Employees Uniform Group
41-13 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
41-14 Code), is amended by amending Subsection (a) and adding Subsection
41-15 (d) to read as follows:
41-16 (a) Any employee or annuitant shall be entitled to secure
41-17 for his dependents any uniform group coverages provided for
41-18 employees under this Act, as shall be determined by the trustee,
41-19 except that a foster child is eligible for health insurance
41-20 coverage only if the child is not covered by another governmental
41-21 health program. If an employee or annuitant resides outside of a
41-22 health maintenance organization service area, the uniform group
41-23 coverages must be made available to a dependent without evidence of
41-24 insurability if the employee or annuitant applies for the coverage
41-25 for the dependent during the annual enrollment period. Payments
41-26 required of the employee in excess of employer contributions shall
41-27 be deducted from the monthly pay of the employee or from his
42-1 retirement benefits, or the employee's salary shall be reduced in
42-2 the appropriate amount, in such manner and form as the trustee
42-3 shall determine.
42-4 (d) A dependent child who is unmarried and whose coverage
42-5 under this Act ceases when the child reaches the age of 25 may, on
42-6 expiration of continuation coverage under the Consolidated Omnibus
42-7 Budget Reconciliation Act of 1985, reinstate health benefits
42-8 coverage under this Act, if the child, or the child's participating
42-9 parent, pays the full cost of the health benefits coverage. A
42-10 state contribution is not payable for coverage described by this
42-11 subsection. Coverage under this subsection ceases at the end of
42-12 the month in which the child marries.
42-13 SECTION 56. Section 659.102, Government Code, is amended to
42-14 read as follows:
42-15 Sec. 659.102. DEDUCTION FOR SUPPLEMENTAL OPTIONAL BENEFITS
42-16 PROGRAM. (a) An employee of a state agency may authorize in
42-17 writing a deduction each pay period from the employee's salary or
42-18 wage payment for coverage of the employee under an eligible
42-19 supplemental optional benefits program.
42-20 (b) The Employees Retirement System of Texas shall designate
42-21 supplemental optional benefits programs that are eligible under
42-22 this section and that promote the interests of the state and state
42-23 agency employees. In addition, institutions of higher education as
42-24 defined by Section 61.003, Education Code, or institutions as
42-25 defined by Section 3(a)(7), Texas State College and University
42-26 Employees Uniform Insurance Benefits Act (Article 3.50-3, Vernon's
42-27 Texas Insurance Code), may approve employee-funded dental plans as
43-1 an optional benefits program for their employees under this
43-2 section.
43-3 (c) The supplemental optional benefits program may include
43-4 permanent life insurance, catastrophic illness insurance,
43-5 disability insurance, or prepaid legal services.
43-6 SECTION 57. (a) Sections 803.403, 813.105, 833.106,
43-7 838.103(i), and 838.106, Government Code, are repealed.
43-8 (b) Section 5(e), Texas Employees Uniform Group Insurance
43-9 Benefits Act (Article 3.50-2, Vernon's Texas Insurance Code), is
43-10 repealed.
43-11 SECTION 58. (a) The change in law made by this Act in
43-12 Sections 811.001(9) and 814.104(b), Government Code, is intended to
43-13 reflect the current law providing for the commissioning and
43-14 administration of the Capitol area security force by the Department
43-15 of Public Safety. Service credit previously accrued by a member of
43-16 the Capitol area security force as a commissioned law enforcement
43-17 officer of the General Services Commission, or a predecessor
43-18 agency, remains credited as service by a law enforcement officer
43-19 unless canceled as otherwise provided by Subtitle B, Title 8,
43-20 Government Code.
43-21 (b) An employee of the Texas Education Agency whose
43-22 membership was transferred from the Teacher Retirement System of
43-23 Texas to the Employees Retirement System of Texas under Section 43,
43-24 Chapter 812, Acts of the 73rd Legislature, Regular Session, 1993,
43-25 who was a retiree of the Employees Retirement System of Texas at
43-26 the time of the transfer, and who continued to make contributions
43-27 to the Teacher Retirement System of Texas after the transfer may
44-1 remain as a member of the Teacher Retirement System of Texas exempt
44-2 from the transfer that occurred in 1993.
44-3 SECTION 59. This Act takes effect September 1, 1997.
44-4 SECTION 60. The importance of this legislation and the
44-5 crowded condition of the calendars in both houses create an
44-6 emergency and an imperative public necessity that the
44-7 constitutional rule requiring bills to be read on three several
44-8 days in each house be suspended, and this rule is hereby suspended.