By Armbrister S.B. No. 1188
75R5543 ESH-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the purchase of service credit in the Employees
1-3 Retirement System of Texas and the Teacher Retirement System of
1-4 Texas.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 813.102(b), Government Code, is amended
1-7 to read as follows:
1-8 (b) A member may reestablish credit by depositing with the
1-9 retirement system in a lump sum the amount withdrawn from a
1-10 membership class, plus all membership fees due, plus interest
1-11 computed on the basis of the state fiscal year at an annual rate
1-12 based on actuarial recommendations [of five percent] from the date
1-13 of withdrawal to the date of redeposit.
1-14 SECTION 2. Sections 813.105(a) and (f), Government Code, are
1-15 amended to read as follows:
1-16 (a) A contributing member who is otherwise eligible may
1-17 establish or reestablish service creditable in the retirement
1-18 system by making payments as provided by this section in lieu of
1-19 lump-sum payments otherwise authorized or required by this
1-20 subtitle. Except as provided by Subsection (c), the retirement
1-21 system shall permit a member to purchase service credit over a
1-22 period of up to five years under an agreement under this section.
1-23 (f) A member who, while making payments under this section,
1-24 ceases to hold a position or withdraws the authority for payroll
2-1 deductions may:
2-2 (1) contract with the retirement system for an
2-3 alternative method of continuing the payments;
2-4 (2) receive a prorated amount of service based on the
2-5 payments made; or
2-6 (3) receive a [. The retirement system may] refund of
2-7 payments credited to the suspense account and not transferred to a
2-8 trust fund account [accounts if a remaining payment becomes
2-9 delinquent by more than 60 days].
2-10 SECTION 3. Subchapter B, Chapter 813, Government Code, is
2-11 amended by adding Section 813.107 to read as follows:
2-12 Sec. 813.107. INFORMATION REGARDING ESTABLISHMENT OF
2-13 SERVICE. (a) The retirement system shall:
2-14 (1) permit members to inquire by telephone about the
2-15 cost of establishing or reestablishing service;
2-16 (2) promptly provide written information about the
2-17 cost of establishing or reestablishing service to members who
2-18 inquire about the cost; and
2-19 (3) provide each member who is establishing or
2-20 reestablishing service through a payment plan under Section 813.104
2-21 or through payroll deductions under Section 813.105 an annual
2-22 statement showing:
2-23 (A) the amount paid by the member for
2-24 establishment or reestablishment of service;
2-25 (B) the number of months purchased;
2-26 (C) the number of months remaining to be
2-27 purchased under the agreement; and
3-1 (D) the cost of the months remaining to be
3-2 purchased.
3-3 (b) Before the end of a fiscal year that is the last fiscal
3-4 year of a period in which a member is establishing or
3-5 reestablishing service through a payment plan under Section 813.104
3-6 or through payroll deductions under Section 813.105, the retirement
3-7 system shall:
3-8 (1) inform the member that a new cost estimate must be
3-9 made to renew the installment plan;
3-10 (2) perform the cost estimate; and
3-11 (3) report the cost estimate to the member.
3-12 (c) A member who receives a cost estimate under Subsection
3-13 (b) is entitled to renew the installment plan in the following
3-14 fiscal year without a lapse in payment or deduction if the member
3-15 timely notifies the retirement system of the member's desire to
3-16 renew the plan.
3-17 (d) The retirement system may adopt rules to administer this
3-18 section.
3-19 SECTION 4. Section 813.202(c), Government Code, is amended
3-20 to read as follows:
3-21 (c) Except as provided by Subsection (d), a member may
3-22 establish credit under this section by depositing with the
3-23 retirement system in a lump sum a contribution computed as provided
3-24 by Section 813.404 or 813.505, plus all membership fees due, plus
3-25 interest computed on the basis of the state fiscal year at an
3-26 annual rate based on actuarial recommendations [of 10 percent] from
3-27 the date the service was performed to the date of deposit.
4-1 SECTION 5. Section 813.302(c), Government Code, is amended
4-2 to read as follows:
4-3 (c) A member may establish credit under this section by
4-4 depositing with the retirement system in a lump sum a contribution
4-5 computed as provided by Section 813.404 or 813.505, plus, if the
4-6 member does not establish the credit before the first anniversary
4-7 of the date of first eligibility, interest computed on the basis of
4-8 the state fiscal year at an annual rate based on actuarial
4-9 recommendations [of 10 percent] from the date of first eligibility
4-10 to the date of deposit.
4-11 SECTION 6. Section 813.405(b), Government Code, is amended
4-12 to read as follows:
4-13 (b) A member may establish credit under this section by
4-14 depositing with the retirement system in a lump sum:
4-15 (1) a contribution based on the monthly salary being
4-16 paid to, and the rate of contributions required of, a person who
4-17 holds, at the time the credit is sought, the office in the elected
4-18 class the member most recently held;
4-19 (2) all membership fees due; and
4-20 (3) interest computed at the rate based on actuarial
4-21 recommendations [of 10 percent] from the fiscal year in which the
4-22 service was performed to the date of deposit.
4-23 SECTION 7. Subchapter E, Chapter 825, Government Code, is
4-24 amended by adding Section 825.411 to read as follows:
4-25 Sec. 825.411. PAYROLL DEDUCTIONS FOR SERVICE CREDIT. (a) A
4-26 contributing member who is otherwise eligible may establish or
4-27 reestablish service creditable in the retirement system by making
5-1 payments as provided by this section in lieu of lump-sum payments
5-2 otherwise authorized or required by this subtitle or payments under
5-3 Section 825.410. Except as provided by Subsection (c), the
5-4 retirement system shall permit a member to purchase service credit
5-5 over a period of up to five years under an agreement under this
5-6 section.
5-7 (b) A payment authorized by this section consists of a
5-8 monthly payroll deduction in an amount not less than one-twelfth of
5-9 the contribution required to establish at least one year of service
5-10 credit, including any required interest and membership fee, except
5-11 as provided by Subsection (c).
5-12 (c) Payments to establish service credit by a member who
5-13 plans to retire in less than a year may be made by payroll
5-14 deduction for a period determined by the retirement system.
5-15 (d) Payroll deductions for payments under this section shall
5-16 be made and submitted to the retirement system at the times and in
5-17 the manner provided for member contributions under Section 825.403.
5-18 (e) The retirement system shall credit a member's payments
5-19 made under this section to a suspense account in the trust fund
5-20 until the sum of the payments equals the amount required for one
5-21 year of service credit, at which time the retirement system shall
5-22 deposit the payments in the appropriate accounts in the trust fund
5-23 and grant the applicable amount of service credit.
5-24 (f) A member who, while making payments under this section,
5-25 ceases to hold a position covered by the retirement system or
5-26 withdraws the authority for payroll deductions may:
5-27 (1) contract with the retirement system for an
6-1 alternative method of continuing the payments;
6-2 (2) receive a prorated amount of service based on the
6-3 payments made; or
6-4 (3) receive a refund of payments credited to the
6-5 suspense account and not transferred to a trust fund account.
6-6 (g) Payments may not be made under this section to establish
6-7 service credit of a person who has retired or died, except that a
6-8 beneficiary may make payment in a lump sum for the remainder of
6-9 service credit for which payments were begun before the member's
6-10 death.
6-11 (h) The retirement system may adopt rules to administer this
6-12 section.
6-13 SECTION 8. This Act takes effect September 1, 1997.
6-14 SECTION 9. The importance of this legislation and the
6-15 crowded condition of the calendars in both houses create an
6-16 emergency and an imperative public necessity that the
6-17 constitutional rule requiring bills to be read on three several
6-18 days in each house be suspended, and this rule is hereby suspended.