By Armbrister S.B. No. 1122
75R6946 GCH-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to systems and programs administered by the Teacher
1-3 Retirement System of Texas.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 822.005(c), Government Code, is amended
1-6 to read as follows:
1-7 (c) A person is not entitled to withdraw contributions who
1-8 is employed, has applied for employment, or has received a promise
1-9 of employment, in a position covered by the retirement system.
1-10 SECTION 2. Section 822.201(c), Government Code, is amended
1-11 to read as follows:
1-12 (c) Excluded from salary and wages are expense payments,
1-13 allowances, payments for unused leave, including unused vacation
1-14 leave, unused [or] sick leave, unused compensatory time, or other
1-15 unused leave, maintenance or other nonmonetary compensation, fringe
1-16 benefits, insurance benefits, deferred compensation other than as
1-17 provided by Subsection (b)(3), compensation that is not made
1-18 pursuant to a valid employment agreement, payments received in the
1-19 1995-1996 or a subsequent school year for teaching a driver
1-20 education and traffic safety course, and any compensation not
1-21 described in Subsection (b).
1-22 SECTION 3. Section 823.202(b), Government Code, is amended
1-23 to read as follows:
1-24 (b) A member may establish credit under this section by
2-1 depositing with the retirement system for each year of service
2-2 claimed an amount equal to:
2-3 (1) the contributions [and membership fees] that the
2-4 person would have paid had the person been a member of the
2-5 retirement system during that year; plus
2-6 (2) interest computed at an annual rate of five
2-7 percent of the amount of each payment that would have been due had
2-8 the person been a member, from the hypothetical payment due date to
2-9 the date of deposit.
2-10 SECTION 4. Section 823.301(b), Government Code, is amended
2-11 to read as follows:
2-12 (b) A member may not establish more than five years of
2-13 service credit in the retirement system under this subchapter for
2-14 military service. Service may be established in one-year
2-15 increments except as otherwise provided by this subchapter.
2-16 SECTION 5. Section 823.3021(d), Government Code, is amended
2-17 to read as follows:
2-18 (d) A member eligible to establish credit under this section
2-19 may not qualify for insurance coverage under the Texas Public
2-20 School [Retired] Employees Group Insurance Act (Article 3.50-4,
2-21 Insurance Code) unless the member retires with 10 or more years of
2-22 membership service credit for actual service in public schools and
2-23 complies with any other requirements for coverage provided by that
2-24 article.
2-25 SECTION 6. Section 823.303, Government Code, is amended to
2-26 read as follows:
2-27 Sec. 823.303. MILITARY LEAVE CREDIT. A member who performs
3-1 military service creditable in the retirement system but who does
3-2 not establish credit for the service by making the deposits
3-3 required by Section 823.302 is entitled to credit of a year for
3-4 each year of military service performed, if the member requests the
3-5 credit in writing before the later of the date of application for
3-6 retirement or the effective date of retirement. The credit is
3-7 usable only in determining eligibility for, but not the amount of,
3-8 benefits under Section 824.406.
3-9 SECTION 7. Sections 823.401(a) and (d), Government Code, are
3-10 amended to read as follows:
3-11 (a) Except as provided by Subsection (b), an eligible member
3-12 may establish equivalent membership service credit for employment
3-13 with a public school system maintained wholly or partly by another
3-14 state or territory of the United States or by the United States for
3-15 children of its citizens. A school receiving funds under 22 U.S.C.
3-16 Section 2701 is considered a public school for the purposes of this
3-17 section.
3-18 (d) A member may establish credit under this section by
3-19 depositing with the retirement system for each year of service
3-20 claimed a contribution computed at the rate of:
3-21 (1) 12 percent of the full-time rate of the member's
3-22 annual compensation, plus any additional eligible compensation
3-23 received, during the first year of service for which the member
3-24 received membership credit in the retirement system that is both
3-25 after the service for which credit is sought and after September 1,
3-26 1956; or
3-27 (2) 12 percent of the full-time rate of the member's
4-1 annual compensation, plus any additional eligible compensation
4-2 received, during the most recent year of service for which the
4-3 member received membership credit that is after the service for
4-4 which credit is sought, if the member has performed no service in
4-5 Texas since September 1, 1956.
4-6 SECTION 8. Section 823.402(e), Government Code, is amended
4-7 to read as follows:
4-8 (e) A member may establish credit under this section by
4-9 depositing with the retirement system for each year of
4-10 developmental leave claimed an amount equal to the sum of:
4-11 (1) the rate of member contributions required during
4-12 the year of leave, times the member's annual rate of compensation
4-13 during the member's most recent year of creditable service that
4-14 preceded the year of leave; plus
4-15 (2) the amount that the state would have contributed
4-16 had the member performed membership service during the year of
4-17 leave at the member's annual rate of compensation during the most
4-18 recent year of service that preceded the leave[; plus]
4-19 [(3) any membership fees in effect during the year of
4-20 leave].
4-21 SECTION 9. Section 823.501, Government Code, is amended by
4-22 amending Subsections (b) and (c) and adding Subsections (e) and (f)
4-23 to read as follows:
4-24 (b) A person eligible to reinstate service credit under this
4-25 section is one who is a contributing member of the retirement
4-26 system at the time the service is reinstated [resumes membership
4-27 service in the retirement system].
5-1 (c) A member may reinstate canceled credit under this
5-2 section by depositing with the retirement system:
5-3 (1) the amount withdrawn or refunded; plus
5-4 (2) [membership fees for the period that membership
5-5 was terminated; plus]
5-6 [(3)] a reinstatement fee of six percent, compounded
5-7 annually, of the amount withdrawn or refunded from the date of
5-8 withdrawal or refund to the date of redeposit.
5-9 (e) Service credit canceled by a withdrawal of contributions
5-10 not authorized by Section 822.005 is required to be reinstated
5-11 under this section.
5-12 (f) A contributing member may have an account that was
5-13 terminated by absence from service reactivated by requesting the
5-14 reactivation in writing. The beneficiary of a decedent who was a
5-15 contributing member at the time of death may have an account that
5-16 was terminated by the decedent's absence from service reactivated
5-17 by requesting the reactivation in writing before the first
5-18 anniversary of the decedent's death.
5-19 SECTION 10. Section 823.502(c), Government Code, is amended
5-20 to read as follows:
5-21 (c) A person may resume membership and claim credit under
5-22 this section by depositing with the retirement system:
5-23 (1) an amount equal to service retirement benefits
5-24 received; plus
5-25 (2) a reinstatement fee of six percent, compounded
5-26 annually, of the amount determined under Subdivision (1) from the
5-27 date of the person's return to service to the date of redeposit;
6-1 plus
6-2 (3) an amount equal to the total contributions that
6-3 would have been deducted from the person's annual compensation each
6-4 year after the return to service had the person been a member of
6-5 the retirement system; plus
6-6 (4) a reinstatement fee of six percent, compounded
6-7 annually, of the amount determined under Subdivision (3) from the
6-8 end of each year of service after the return to service to the date
6-9 of deposit[; plus]
6-10 [(5) membership fees for the years after the return to
6-11 service].
6-12 SECTION 11. Section 824.1011(a), Government Code, is amended
6-13 to read as follows:
6-14 (a) A retiree who is receiving a standard service or
6-15 disability retirement annuity under Section 824.203 or 824.304 and
6-16 who marries after the date of the person's retirement may replace
6-17 the annuity by selecting an optional retirement annuity under
6-18 Section 824.204(c)(1), (c)(2), or (c)(5) or under Section
6-19 824.308(c)(1), (c)(2), or (c)(5), as applicable, and designating
6-20 the person's spouse as beneficiary before the first anniversary of
6-21 the marriage in the same manner as an annuity selection and
6-22 designation of beneficiary may be made before retirement.
6-23 SECTION 12. Section 824.203, Government Code, is amended by
6-24 amending Subsection (d) and adding Subsection (f) to read as
6-25 follows:
6-26 (d) In no case may the standard service retirement annuity
6-27 be less than [$6.50 a month for each year of service credit or, for
7-1 a member who is at least 65 years old at the time of retirement,
7-2 less than the greater of $6.50 a month for each year of service
7-3 credit, or] $150 a month. The minimum benefits provided by this
7-4 section are subject to reduction in the same manner as other
7-5 benefits because of early retirement or selection of an optional
7-6 retirement annuity.
7-7 (f) The legislature determines that the percentage used to
7-8 compute benefits under this section should be increased permanently
7-9 when it is actuarially sound to do so. The board of trustees may
7-10 increase the percentage to a rate that does not exceed 2.25 percent
7-11 for each year of service credit in the retirement system if the
7-12 actuary certifies that the action complies with Section 821.006.
7-13 The board shall notify the governor, lieutenant governor, and
7-14 speaker of the house of representatives before adopting a rate
7-15 under this subsection.
7-16 SECTION 13. Section 824.204(d), Government Code, is amended
7-17 to read as follows:
7-18 (d) If a person who is nominated by a retiree in the written
7-19 designation under Section 824.101 predeceases the retiree, the
7-20 reduced annuity of a retiree who has elected an optional service
7-21 retirement annuity under Subsection (c)(1), (c)(2), or (c)(5) [or
7-22 (2)] shall be increased to the standard service retirement annuity
7-23 that the retiree would otherwise be entitled to receive if the
7-24 retiree had not selected that annuity option. The standard service
7-25 retirement annuity shall be adjusted as appropriate for:
7-26 (1) early retirement as provided by Section 824.202;
7-27 and
8-1 (2) postretirement increases in retirement benefits
8-2 authorized by law after the date of retirement.
8-3 SECTION 14. Section 824.304, Government Code, is amended by
8-4 amending Subsection (b) and adding Subsection (d) to read as
8-5 follows:
8-6 (b) If a member has a total of at least 10 years of service
8-7 credit in the retirement system on the date of disability
8-8 retirement, the retirement system shall pay the person for the
8-9 duration of the disability a disability retirement annuity in an
8-10 amount equal to the greater of:
8-11 (1) a standard service retirement annuity computed
8-12 under Section 824.203; or
8-13 (2) [$6.50 a month for each year of service credit on
8-14 the date of retirement; or]
8-15 [(3)] $150 a month.
8-16 (d) The minimum benefits provided by this section are
8-17 subject to reduction in the same manner as other benefits because
8-18 of the selection of an optional retirement annuity.
8-19 SECTION 15. Section 824.602, Government Code, is amended by
8-20 adding Subsection (l) to read as follows:
8-21 (l) This subchapter does not apply to payments under Section
8-22 824.804(b).
8-23 SECTION 16. Chapter 824, Government Code, is amended by
8-24 adding Subchapter I to read as follows:
8-25 SUBCHAPTER I. DEFERRED RETIREMENT OPTION PLAN
8-26 Sec. 824.801. DEFINITION. In this subchapter, "plan" means
8-27 the deferred retirement option plan provided by this subchapter.
9-1 Sec. 824.802. PARTICIPATION IN PLAN. (a) A contributing
9-2 member who is eligible under Section 824.202 to retire and receive
9-3 a service retirement annuity that is not actuarially reduced may,
9-4 if the member remains an employee, elect to participate in the
9-5 deferred retirement option plan.
9-6 (b) An election to participate in the plan must be on a form
9-7 prescribed by and filed with the retirement system. An election
9-8 must state the period that the member wishes to participate in the
9-9 plan and must select a standard service retirement annuity or an
9-10 available optional service retirement annuity. The maximum period
9-11 a member may participate in the plan is five years. An election
9-12 under this section is irrevocable after filing. The filing of an
9-13 election under this section is not considered for any purpose an
9-14 application for retirement, and a person is not considered a
9-15 retiree for any purpose because of the filing.
9-16 (c) The effective date of a member's participation in the
9-17 plan is the first day of the month after the month in which an
9-18 election is filed and approved by the retirement system. The
9-19 retirement system shall approve each election filed by a member who
9-20 is eligible to make the election.
9-21 Sec. 824.803. COMPUTATION OF PARTICIPANT'S SERVICE AND
9-22 ANNUITY. (a) A person participating in the plan remains a member
9-23 of the retirement system during the period of participation, unless
9-24 the member terminates membership under Section 822.003, but the
9-25 member may not, during participation, accrue additional service
9-26 credit or make additional employee contributions to the retirement
9-27 system, and the state and the member's employing district, if
10-1 applicable, also cease contributions for the member's service
10-2 performed during the member's participation in the plan. The
10-3 member and the state retain the obligation to contribute under
10-4 Section 16, Texas Public School Employees Group Insurance Act
10-5 (Article 3.50-4, Insurance Code), during the member's participation
10-6 in this plan.
10-7 (b) For purposes of the plan, the computation of the service
10-8 retirement annuity of a member participating in the plan is
10-9 determined as of the effective date of participation. A
10-10 participating member is not eligible to receive a postretirement
10-11 increase made applicable to annuitants during the member's
10-12 participation in the plan.
10-13 Sec. 824.804. BENEFITS UNDER PLAN. (a) On the effective
10-14 date of a member's participation in the plan, the retirement system
10-15 shall make the transfers required by Section 825.309 to the retired
10-16 reserve account as if the member had retired on that date. The
10-17 retirement system shall transfer monthly, during the period of the
10-18 member's participation in the plan, from the retired reserve
10-19 account to an account for the member in the deferred retirement
10-20 option account the amount the member would have received that month
10-21 if the member had retired on the effective date of plan
10-22 participation.
10-23 (b) When a member who has participated in the plan retires,
10-24 the person is entitled to the accumulated amount in the member's
10-25 account in the deferred retirement option account. The amount is
10-26 payable in a lump sum or in periodic installments at the option of
10-27 the member. The board of trustees by rule shall determine the
11-1 number and frequency of installment payments.
11-2 (c) If a member dies during participation in the plan or
11-3 after participation but before retirement, the decedent's
11-4 designated beneficiary is entitled to the accumulated amount in the
11-5 decedent's account in the deferred retirement option account as if
11-6 the decedent had retired immediately before dying.
11-7 (d) Payment of the benefit provided under the plan is in
11-8 addition to any annuity otherwise payable under this subtitle.
11-9 Sec. 824.805. TERMINATION OF PARTICIPATION IN PLAN. A
11-10 member terminates participation in the plan by:
11-11 (1) retirement;
11-12 (2) death; or
11-13 (3) expiration of the period for which participation
11-14 was approved.
11-15 Sec. 824.806. BENEFITS FOR SERVICE AFTER PLAN PARTICIPATION.
11-16 (a) A member whose participation in the plan terminates while the
11-17 member remains an employee resumes accruing service credit at that
11-18 time, and the member, the state and, if applicable, the employing
11-19 district resume the obligations of contributions for the service
11-20 performed after the termination of plan participation.
11-21 (b) At the time a member retires or dies, the retirement
11-22 system shall compute the value of the additional service credit at
11-23 the rate provided under Section 824.203, based on the lesser of the
11-24 three years of service after the member's termination of plan
11-25 participation, or the member's actual years of service after the
11-26 termination, in which the member received the highest annual
11-27 compensation. The retirement system shall add the amount computed
12-1 under this subsection to the amount determined on the effective
12-2 date of plan participation, and the sum is payable, subject to
12-3 actuarial reduction if applicable, as the monthly annuity payment.
12-4 Sec. 824.807. INTEREST. Interest is creditable to a
12-5 member's account in the deferred retirement option account at an
12-6 annual, prorated rate equal to the realized return on the
12-7 retirement system's investments for the preceding year.
12-8 SECTION 17. Section 825.206, Government Code, is amended by
12-9 adding Subsection (f) to read as follows:
12-10 (f) An actuarial audit shall be performed in conjunction
12-11 with an actuarial experience study or at least once every five
12-12 years. The audit must include:
12-13 (1) an analysis of the appropriateness of the
12-14 actuarial assumptions;
12-15 (2) a review of the assumptions and methodology for
12-16 compliance with the funding standards;
12-17 (3) verification of demographic data; and
12-18 (4) confirmation of the valuation results, including a
12-19 determination of actuarial accrued liability, normal cost, expected
12-20 employee contributions, and the effects of any recent legislation.
12-21 SECTION 18. Section 825.207, Government Code, is amended to
12-22 read as follows:
12-23 Sec. 825.207. COMPTROLLER [STATE TREASURER]. (a) Except as
12-24 provided by Section 825.302 or 825.303 or by Subsection (e) of this
12-25 section, the comptroller [state treasurer] is the custodian of all
12-26 securities and cash of the retirement system, including securities
12-27 held in the name of a nominee of the retirement system.
13-1 (b) The comptroller [state treasurer] shall pay money from
13-2 the accounts of the retirement system on warrants drawn by the
13-3 comptroller [of public accounts] and authorized by vouchers signed
13-4 by the executive director or other persons designated by the board
13-5 of trustees.
13-6 (c) The comptroller [state treasurer] annually shall furnish
13-7 to the board of trustees a sworn statement of the amount of the
13-8 retirement system's assets in the comptroller's [treasurer's]
13-9 custody.
13-10 (d) The comptroller [state treasurer] is not responsible,
13-11 under either civil or criminal law, for any action or losses with
13-12 respect to assets of the retirement system while the assets are in
13-13 the custody of a commercial bank as provided by Section 825.302 or
13-14 825.303 or by Subsection (e) of this section.
13-15 (e) The board of trustees may, in the exercise of its
13-16 constitutional discretion to manage the assets of the retirement
13-17 system, select one or more commercial banks, depository trust
13-18 companies, or other entities to serve as custodian or custodians of
13-19 all or part of the retirement system's assets.
13-20 SECTION 19. Section 825.209, Government Code, is amended to
13-21 read as follows:
13-22 Sec. 825.209. SURETY BONDS. (a) [The state treasurer shall
13-23 give a surety bond in the amount of $50,000.]
13-24 [(b) The executive director shall give a surety bond in the
13-25 amount of $25,000.]
13-26 [(c)] The board of trustees may require any trustee or
13-27 employee of the board[, other than the executive director,] to give
14-1 a surety bond in an amount determined by the board.
14-2 (b) [(d)] All surety bonds must be:
14-3 (1) made with a solvent surety company that is
14-4 authorized to do business in the state;
14-5 (2) made payable to the board of trustees;
14-6 (3) approved by the board of trustees and the attorney
14-7 general; and
14-8 (4) conditioned on the bonded person's faithful
14-9 performance of all of the person's duties.
14-10 (c) [(e)] The board of trustees shall pay from the expense
14-11 account all expenses for the execution of a bond under this
14-12 section, including premiums.
14-13 SECTION 20. Section 825.306, Government Code, is amended to
14-14 read as follows:
14-15 Sec. 825.306. CREDITING SYSTEM ASSETS. The assets of the
14-16 retirement system shall be credited, according to the purpose for
14-17 which they are held, to one of the following accounts:
14-18 (1) member savings account;
14-19 (2) state contribution account;
14-20 (3) retired reserve account;
14-21 (4) interest account; [or]
14-22 (5) expense account; or
14-23 (6) deferred retirement option account.
14-24 SECTION 21. Subchapter D, Chapter 825, Government Code, is
14-25 amended by adding Section 825.3121 to read as follows:
14-26 Sec. 825.3121. DEFERRED RETIREMENT OPTION ACCOUNT. (a) The
14-27 retirement system shall deposit in the deferred retirement option
15-1 account the amounts required to be deposited in the account by
15-2 Section 824.804(a) and interest as required by Section 824.807.
15-3 (b) The retirement system shall pay from the account all
15-4 benefits accrued during participation in the deferred retirement
15-5 option plan.
15-6 SECTION 22. Sections 825.410(a) and (c), Government Code,
15-7 are amended to read as follows:
15-8 (a) Payments to establish special service credit as
15-9 authorized in Sections 805.002, [823.202,] 823.302, 823.304,
15-10 823.401, [823.402,] 823.501, and 825.403 may be made in a lump sum
15-11 or in equal monthly installments over a period not to exceed the
15-12 lesser of the number of years of credit to be purchased or 60
15-13 months. Installment payments are due on the first day of each
15-14 calendar month in the payment period. If an installment payment is
15-15 not made in full within 60 days after the due date, the retirement
15-16 system may refund all installment payments less fees paid on the
15-17 lump sum due when installment payments began. Partial payment of
15-18 an installment payment may be treated as nonpayment. A check
15-19 returned for insufficient funds or a closed account shall be
15-20 treated as nonpayment. When two or more consecutive monthly
15-21 payments have a returned check, a refund may be made. If the
15-22 retirement system refunds payments pursuant to this subsection, the
15-23 member is not permitted to use the installment method of payment
15-24 for the same service for [a period of] three years after [from] the
15-25 date of the refund. A member who requests and receives a refund
15-26 of installment payments also is not permitted to use the
15-27 installment method of payment for the same service for three years
16-1 after the date of the refund.
16-2 (c) All installment payments must be made on or before the
16-3 service retirement date or the last day of the month in which the
16-4 member's application for service retirement is submitted, whichever
16-5 is later, or before the 31st day following the date on which the
16-6 medical board certifies a member's disability. The installment
16-7 payment method may not be used to establish service credit after
16-8 retirement.
16-9 SECTION 23. Section 825.512(e), Government Code, is amended
16-10 to read as follows:
16-11 (e) The retirement system shall submit an annual investment
16-12 performance report not later than the 45th day after the end of
16-13 [25th day of the month following] each fiscal year to the governor,
16-14 the lieutenant governor, the speaker of the house of
16-15 representatives, the executive director of the State Pension Review
16-16 Board, the legislative audit committee, the committees of the
16-17 senate and the house of representatives having jurisdiction over
16-18 appropriations, the committees of the senate and the house of
16-19 representatives having principal jurisdiction over legislation
16-20 governing the retirement system, and the Legislative Budget Board.
16-21 The report shall include a listing of all commissions and fees paid
16-22 by the system during the reporting period for the sale, purchase,
16-23 or management of system assets. The report shall be in a form
16-24 recommended by the evaluating firm.
16-25 SECTION 24. The heading of Article 3.50-4, Insurance Code,
16-26 is amended to read as follows:
17-1 ARTICLE 3.50-4. TEXAS PUBLIC SCHOOL [RETIRED] EMPLOYEES
17-2 GROUP INSURANCE PROGRAM
17-3 SECTION 25. Sections 7A(a) and (e), Article 3.50-4,
17-4 Insurance Code, are amended to read as follows:
17-5 (a) A public school district may elect to participate in the
17-6 program provided under this article. A district that elects to
17-7 participate must accept the schedule of costs adopted by the
17-8 trustee. A district [and] may [not] offer an alternative health
17-9 benefit plan to its active employees during the period of its
17-10 participation in the program if the trustee approves the plan as
17-11 providing contributions, participation, and a design that are in
17-12 accordance with sound group benefit underwriting principles.
17-13 (e) Each participating school district shall contribute for
17-14 each district employee covered by the program an amount equal to
17-15 not less than 75 percent of the cost for the employee only of the
17-16 plans of group coverages authorized by the trustee for active
17-17 employees. The district shall certify to the trustee the amount
17-18 the district will contribute monthly toward the cost of coverage.
17-19 The trustee shall determine if the amount is sufficient to
17-20 underwrite the plan for the district based on sound group benefit
17-21 underwriting principles. A determination by the trustee under this
17-22 subsection is final[, except that the school district's
17-23 contribution may not exceed the amount contributed for each state
17-24 employee by the state under the Texas Employees Uniform Group
17-25 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
17-26 Code)].
17-27 SECTION 26. Section 8, Article 3.50-4, Insurance Code, is
18-1 amended to read as follows:
18-2 Sec. 8. PURCHASE OF GROUP HEALTH CARE BENEFITS [INSURANCE].
18-3 (a) The trustee shall be designated as the group policyholder for
18-4 any plan or plans established in this article. The trustee has
18-5 authority to establish one or more plans that are self-insured.
18-6 (b) The [group insurance] coverages provided under the plan
18-7 or plans may include but are not limited to life insurance,
18-8 accidental death and dismemberment, hospital care and benefits,
18-9 surgical care and treatment, medical care and treatment, dental
18-10 care, eye care, obstetrical benefits, long-term care, prescribed
18-11 drugs, medicines, and prosthetic devices, and other supplemental
18-12 benefits, supplies, and services as provided by this article,
18-13 protection against loss of salary, and other coverages considered
18-14 advisable.
18-15 (c) The trustee may provide different plans for retirees and
18-16 surviving spouses covered by Medicare than the plans provided for
18-17 retirees and surviving spouses who are not covered by Medicare.
18-18 (d) Each basic plan must cover preexisting conditions.
18-19 (e) The trustee may contract for and make available to all
18-20 retirees, dependents, surviving spouses, and surviving dependent
18-21 children optional group health [insurance] benefit plans in
18-22 addition to the basic plans. The optional coverage may include a
18-23 smaller deductible, lower coinsurance, or additional categories of
18-24 benefits permitted under Subsection (b) of this section to provide
18-25 additional levels of coverages and benefits. The trustee may
18-26 utilize a portion of the funds received for the Texas Public School
18-27 Employees Group Insurance Program to offset some portion of costs
19-1 paid by the retiree for optional coverage if such utilization does
19-2 not reduce the period the program is projected to remain
19-3 financially solvent by more than one year in a biennium. Any
19-4 additional contributions for these optional plans shall be paid for
19-5 by the retiree, surviving spouse, or surviving dependent children.
19-6 (f) [The trustee shall enter into a contract or contracts
19-7 with a carrier or carriers for the plan or plans that will provide
19-8 that the method of paying expenses, paying claims, and establishing
19-9 reserves shall be under the minimum premium approach to financing;
19-10 and the contract shall be referred to as a minimum premium
19-11 contract.]
19-12 [(g)] New contracts for coverages under this program shall
19-13 be submitted for competitive bidding at least every six years.
19-14 [Contracts between the trustee and carriers for the group insurance
19-15 pool may provide for renegotiation.]
19-16 (g) [(h)] Each contract shall be based on the terms and
19-17 conditions agreed on between the trustee and the entity [carrier or
19-18 carriers] selected to provide the [insurance] coverage and
19-19 benefits. Any contract for group benefits [insurance] awarded by
19-20 the trustee must meet the minimum benefit and financial standards
19-21 adopted by the trustee.
19-22 (h) [(i)] The coverage provided by the plan or plans may be
19-23 secondary to all other benefit coverage to which the retiree,
19-24 surviving spouse, dependent, or surviving dependent child is
19-25 entitled. In the event the retiree, surviving spouse, dependent,
19-26 or surviving dependent child is entitled to receive medicare
19-27 hospital insurance benefits at no charge, then the coverage
20-1 provided by the plan or plans shall be secondary to medicare
20-2 hospital and medical insurance to the extent permitted by federal
20-3 law.
20-4 (i) [(j)] In contracting for any benefits [insurance] under
20-5 this article, competitive bidding shall be required under rules
20-6 adopted by the trustee. The trustee is not required to select the
20-7 lowest bid but may consider also ability to service contracts, past
20-8 experiences, financial stability, and other relevant criteria. If
20-9 the trustee awards a contract to an entity [a carrier] whose bid
20-10 deviates from that advertised, the deviation shall be recorded and
20-11 the reasons for the deviation shall be fully justified in the
20-12 minutes of the next meeting of the trustee.
20-13 (j) [(k)] Notwithstanding any other provisions of this
20-14 article, the trustee providing programs of benefits under this
20-15 article is authorized to self-insure any and all programs available
20-16 under this article and may, at its discretion, engage private
20-17 entities to collect contributions from or to settle claims in
20-18 connection with plans established by the trustee under Section 8 of
20-19 this article.
20-20 (k) [(l)] The trustee may contract directly with health care
20-21 providers, including health maintenance organizations, preferred
20-22 provider organizations, carriers, administrators, and other
20-23 qualified vendors, to provide benefits to participants in the
20-24 program. [Those benefits may include dental care, eye care,
20-25 hospital care, surgical care and treatment, medical care and
20-26 treatment, obstetrical care, and prescription drugs, medicines, and
20-27 prosthetic devices.]
21-1 SECTION 27. Section 15(c), Article 3.50-4, Insurance Code,
21-2 is amended to read as follows:
21-3 (c) Expenses for the development and administration of the
21-4 program shall be spent as provided by a budget adopted by the
21-5 trustee. [Expenses in any fiscal year may not exceed one percent
21-6 of the contributions to the program for that year by the state, the
21-7 active employees, and the covered participants in the program.]
21-8 SECTION 28. Section 16(b), Article 3.50-4, Insurance Code,
21-9 is amended to read as follows:
21-10 (b) The state shall contribute as the state's contribution
21-11 to the fund each fiscal year [the following amounts:]
21-12 [(1) for the state fiscal year beginning September 1,
21-13 1986, an amount equal to .35 percent of the salary of each active
21-14 employee;]
21-15 [(2) for the state fiscal year beginning September 1,
21-16 1987, an amount equal to .40 percent of the salary of each active
21-17 employee;]
21-18 [(3) for the state fiscal year beginning September 1,
21-19 1988, an amount equal to .45 percent of the salary of each active
21-20 employee;]
21-21 [(4) for the state fiscal year beginning September 1,
21-22 1989, an amount equal to .50 percent of the salary of each active
21-23 employee; and]
21-24 [(5) for the state fiscal year beginning September 1,
21-25 1990, and each subsequent fiscal year,] an amount equal to .50
21-26 percent of the salary of each active employee. The state may
21-27 contribute amounts in addition to the contribution required by this
22-1 subsection.
22-2 SECTION 29. (a) Monthly payments of a death or retirement
22-3 benefit annuity by the Teacher Retirement System of Texas are
22-4 increased beginning with the payment due at the end of September
22-5 1997.
22-6 (b) The increase does not apply to payments under Section
22-7 824.304(a), 824.404, or 824.501, Government Code.
22-8 (c) The amount of the monthly increase is computed by
22-9 multiplying the previous monthly benefit by a percentage determined
22-10 in accordance with the following table:
22-11 LATEST RETIREMENT DATE OR, IF APPLICABLE, DATE OF DEATH INCREASE
22-12 Before September 1, 1971........................................ 5%
22-13 On or after September 1, 1971, but before September 1, 1972..... 6%
22-14 On or after September 1, 1972, but before September 1, 1973..... 5%
22-15 On or after September 1, 1973, but before September 1, 1974..... 8%
22-16 On or after September 1, 1974, but before September 1, 1975..... 5%
22-17 On or after September 1, 1975, but before September 1, 1976..... 2%
22-18 On or after September 1, 1976, but before September 1, 1977.... 14%
22-19 On or after September 1, 1977, but before September 1, 1978.... 13%
22-20 On or after September 1, 1978, but before September 1, 1979.... 12%
22-21 On or after September 1, 1979, but before September 1, 1981.... 10%
22-22 On or after September 1, 1981, but before September 1, 1984..... 9%
22-23 On or after September 1, 1984, but before September 1, 1985.... 10%
22-24 On or after September 1, 1985, but before September 1, 1986..... 9%
22-25 On or after September 1, 1986, but before September 1, 1987.... 10%
22-26 On or after September 1, 1987, but before September 1, 1988..... 8%
22-27 On or after September 1, 1988, but before September 1, 1989.... 10%
23-1 On or after September 1, 1989, but before September 1, 1990..... 9%
23-2 On or after September 1, 1990, but before September 1, 1992..... 6%
23-3 On or after September 1, 1992, but before September 1, 1993..... 5%
23-4 On or after September 1, 1993, but before September 1, 1994..... 7%
23-5 On or after September 1, 1994, but before September 1, 1995..... 5%
23-6 On or after September 1, 1995, but before September 1, 1996..... 3%
23-7 SECTION 30. This Act takes effect September 1, 1997.
23-8 SECTION 31. The importance of this legislation and the
23-9 crowded condition of the calendars in both houses create an
23-10 emergency and an imperative public necessity that the
23-11 constitutional rule requiring bills to be read on three several
23-12 days in each house be suspended, and this rule is hereby suspended.