SRC-JBJ C.S.S.B. 1226 76(R)BILL ANALYSIS


Senate Research CenterC.S.S.B. 1226
By: Shapiro
State Affairs
4/19/1999
Committee Report (Substituted)


DIGEST 

Currently, the Teacher Retirement System of Texas (TRS) maintains an early
retirement program called the deferred retirement option plan (DROP).  A
person participating in the Employees Retirement System of Texas (ERS) may
transfer credit from ERS toTRS for the purpose of establishing eligibility
in DROP.  However, there exists disagreement in the interpretation of key
statutes regarding DROP, such as whether certain non-retired members may
participate in DROP despite a prohibition against service credit from being
transferred until retirement, and the exact date upon which a member is no
longer entitled to benefits while participating in DROP.  C.S.S.B. 1226
would add language clarifying DROP eligibility, and would amend the
guidelines for calculations and withdrawals. 

PURPOSE

As proposed, C.S.S.B. 1226 amends guidelines regarding the deferred
retirement option plan in the Teacher Retirement System of Texas. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 824.802, Government Code, to authorize a member
to transfer to the Teachers Retirement System of Texas (TRS) service credit
established in the Employees Retirement System of Texas (ERS).  Authorizes
service credit transferred to be used to establish eligibility for
participation in and the amount of benefits under the deferred retirement
option plan (DROP). Authorizes a contributing member to revoke an election
to participate in DROP on a form prescribed by and filed with TRS.
Authorizes the revocation for only one time.  Requires TRS to transfer all
contributions and interest in DROP account as a result of the member's
election to the appropriate system accounts.  Establishes that the
effective date revocation or participation of DROP is the first day of the
month after the month in which a revocation is received.  Requires TRS to
approve the revocation filed by a member who is eligible to make the
revocation.  Deletes a requirement that an election be made only once and
be irrevocable.  Makes conforming changes. 

SECTION 2.  Amends Section 824.803(b), Government Code, to provide that the
amount of service credit used to compute the service retirement annuity is
determined as the effective date of participation in DROP.  

SECTION 3.  Amends Sections 824.804(a) and (c), Government Code, to require
TRS to draw an amount equal to 61 percent, rather than 79 percent, of the
amount the member would receive, rather than have received, that month
under a standard retirement annuity if the member had retired the preceding
month, rather than on the effective date of DROP participation.  Entitles a
person to compensation based on age.  Deletes the entitlement of
compensation based on years of service on the effective date of
participation in DROP and on age. 

SECTION 4. Effective date: September 1, 1999.

SECTION 5.Emergency clause.



 SUMMARY OF COMMITTEE CHANGES

SECTION 2.

Amends Section 824.803(b), Government Code, to delete a proposed provision
making a participating member eligible to receive certain post-retirement
increases. 

SECTION 3.

Amends Section 824.804(a), Government Code, to change the proposed
percentage that TRS must transfer in certain service retirement annuity,
from 85 percent to 61 percent of the amount a member would receive per
month.