By Kuempel H.B. No. 1392
76R5449 GCH-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to participation and credit in, contributions to, and
1-3 benefits and administration of the Texas Municipal Retirement
1-4 System.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 851.001, Government Code, is amended by
1-7 adding Subdivision (16) to read as follows:
1-8 (16) "Member" means a person for whom an account has
1-9 been established in the employees saving fund and whose membership
1-10 has not terminated under Section 852.104.
1-11 SECTION 2. Subchapter B, Chapter 852, Government Code, is
1-12 amended by adding Section 852.110 to read as follows:
1-13 Sec. 852.110. CORRECTION OF ERRORS. (a) If, as a result of
1-14 a reporting error on the part of a participating municipality, a
1-15 person has not received credited service or current service credit
1-16 or has received less than the correct amount of current service
1-17 credit for months in which the person performed service as an
1-18 employee of the municipality, the retirement system shall correct
1-19 the error as authorized by this section.
1-20 (b) A correction may not be made as to current service
1-21 performed, or current service credit that should have been
1-22 received, more than four years before the date an application for
1-23 the correction, on a form approved by the board of trustees, is
1-24 received by the retirement system.
2-1 (c) Except as provided by Subsection (g), a correction
2-2 described by Subsection (a) may not be made unless the retirement
2-3 system receives, in addition to the application, each of the items
2-4 required under Subsection (d) and one of the following:
2-5 (1) a written agreement, approved by the
2-6 municipality's governing body, stating that an error has occurred
2-7 and that the municipality has agreed to correct the error;
2-8 (2) a final judgment by a court of competent
2-9 jurisdiction in a proceeding to which the municipality was a party,
2-10 ordering the municipality to correct the error; or
2-11 (3) an order in an administrative proceeding to which
2-12 the municipality was a party, directing the subdivision to correct
2-13 the error, and that is no longer subject to appeal.
2-14 (d) A correction described by Subsection (a) may not be
2-15 made unless the retirement system receives:
2-16 (1) a supplemental report properly signed on behalf of
2-17 the municipality showing the corrections to credited service or
2-18 current service credit of the person;
2-19 (2) payment from the person seeking the correction in
2-20 an amount equal to the contribution or additional contribution the
2-21 person would have made to the retirement system if the service had
2-22 been correctly reported to the system; and
2-23 (3) payment from the municipality in an amount equal
2-24 to the additional contribution that the municipality should have
2-25 paid to the retirement system based on the additional credited
2-26 service or current service credit.
2-27 (e) A municipality that is the subject of an agreement,
3-1 judgment, or order described by Subsection (c) shall file the
3-2 supplemental report and submit the payments described by this
3-3 section not later than the 30th day after the date the municipality
3-4 is notified in writing by the retirement system that those items
3-5 should be sent to the retirement system.
3-6 (f) If, as a result of a reporting error on the part of a
3-7 participating municipality, a person has not received prior service
3-8 credit, on written application to the retirement system,
3-9 accompanied by evidence of the prior service satisfactory to the
3-10 retirement system, the retirement system shall correct the error if
3-11 the retirement system receives the person's written application for
3-12 the correction within four years after the later of the date the
3-13 municipality began participation or the person first became a
3-14 member of the retirement system.
3-15 (g) The correction of an error affecting not more than three
3-16 monthly reports within a period of not more than three consecutive
3-17 months may be made on the basis of the application alone if the
3-18 application, the supplemental report, and the payments required by
3-19 this section are received by the retirement system before the first
3-20 day of the seventh month after the month for which the correction
3-21 is being made.
3-22 SECTION 3. Section 853.401(c), Government Code, is amended
3-23 to read as follows:
3-24 (c) In adopting an ordinance under this section, a governing
3-25 body shall specify the percentage of base updated service credits
3-26 to be used in computing updated service credits for employees of
3-27 the municipality and shall specify the date the updated service
4-1 credits will take effect. The percentage adopted may be 50
4-2 percent, 75 percent, or [any multiple of 10 percent that does not
4-3 exceed] 100 percent of a base updated service credit. The
4-4 effective date must be January 1 of a year specified by the
4-5 governing body. If the governing body of a municipality has
4-6 specified a different percentage in an ordinance adopted under
4-7 Section 853.404(a) and in effect on December 31, 1999, the
4-8 percentage used in computing updated service credits for employees
4-9 of that municipality remains in effect until changed or
4-10 discontinued under Section 853.404.
4-11 SECTION 4. Subsection 853.402(b), Government Code, is
4-12 amended to read as follows:
4-13 (b) The average updated service compensation of a member is
4-14 computed as the monthly average compensation [for]:
4-15 (1) for the 36 months immediately preceding the date
4-16 prescribed by Subsection (e); or
4-17 (2) if the member did not perform service in each of
4-18 the 36 months described in Subdivision (1) or did not perform any
4-19 service within the 36-month period, for the most recent 36 months
4-20 before the date prescribed by Subsection (e) in which the member
4-21 performed service [, for the number of months of service within the
4-22 36-month period; or]
4-23 [(3) if the member did not perform any service within
4-24 the 36-month period, for the number of months of service within the
4-25 36-month period ending with the last month of the calendar year in
4-26 which the member's most recent service was performed].
4-27 SECTION 5. Section 854.002, Government Code, is amended by
5-1 adding Subsection (d) to read as follows:
5-2 (d) Notwithstanding any other provision of this subtitle,
5-3 instead of an annuity, a person will receive from the retirement
5-4 system a single payment equal to the sum of the following if, on
5-5 the date of that person's retirement, that sum is $5,000 or less:
5-6 (1) any updated service credit or any prior service,
5-7 special prior service, or antecedent service credit for that person
5-8 on the date of retirement, plus accumulated interest;
5-9 (2) the amount credited to the person's individual
5-10 account in the employees saving fund; and
5-11 (3) the amount from the municipality accumulation fund
5-12 equal to the amount in the member's individual account or a greater
5-13 amount authorized by a participating municipality under Section
5-14 855.501.
5-15 SECTION 6. Section 854.004(c), Government Code, is amended
5-16 to read as follows:
5-17 (c) An annuity under this subtitle is payable for a period
5-18 beginning on the last day of the first month following the month in
5-19 which retirement occurs and ending, except as otherwise provided by
5-20 this subtitle, on the last day of the month [immediately preceding
5-21 the month] in which death occurs.
5-22 SECTION 7. Section 854.006, Government Code, is amended by
5-23 adding Subsections (f) and (g) to read as follows:
5-24 (f) If a divorce decree or a qualified domestic relations
5-25 order, as that term is defined by Section 804.001, so provides, the
5-26 benefit payable to a retiree who is receiving payments of an
5-27 annuity for the retiree's life with payments to continue after the
6-1 retiree's death until the death of another person under Section
6-2 854.104(c)(1), (2), or (5), 854.305(c)(1), (2), or (5), or
6-3 854.410(c)(1), (2), or (5) may be increased to the amount that
6-4 would have been payable if the retiree had selected an annuity
6-5 payable only during the retiree's lifetime if:
6-6 (1) the proceeding in which the decree or order is
6-7 entered terminates the marriage between the retiree and the person
6-8 who was designated to receive the continued payment after the
6-9 retiree's death;
6-10 (2) the decree or order awards the retiree all
6-11 benefits resulting from the retiree's participation in the
6-12 retirement system; and
6-13 (3) the decree or order is signed after December 31,
6-14 1999.
6-15 (g) A decree or order under Subsection (f) applies only to
6-16 annuity payments made after the date the retirement system receives
6-17 and approves the decree or order as complying with Subsection (f).
6-18 SECTION 8. Section 854.008(b), Government Code, is amended
6-19 to read as follows:
6-20 (b) The amount of a lump-sum distribution under this section
6-21 may not exceed three-fourths [one-half] of the total contributions
6-22 and accumulated interest in the member's individual account in the
6-23 employees saving fund at the time of the member's retirement.
6-24 SECTION 9. Section 854.203(b), Government Code, is amended
6-25 to read as follows:
6-26 (b) The amount of annuity increase under this section is
6-27 computed as the sum of the prior and current service annuities on
7-1 the effective date of retirement of the person on whose service the
7-2 annuities are based, multiplied by:
7-3 (1) the percentage change in the Consumer Price Index
7-4 for All Urban Consumers, published by the Bureau of Labor
7-5 Statistics of the United States Department of Labor, from December
7-6 of the year immediately preceding the effective date of the
7-7 person's retirement to the December that is 13 months before the
7-8 effective date of the ordinance providing the increase; and
7-9 (2) 30 percent, 50 percent, or 70 percent, as [a
7-10 fraction,] specified by the governing body in the ordinance, except
7-11 that if the governing body has specified a different percentage in
7-12 an ordinance adopted under Section 853.404(c) and in effect on
7-13 December 31, 1999, the percentage used in computing annuity
7-14 increases for retirees of that municipality remains in effect until
7-15 changed or discontinued under Section 853.404 [that is not less
7-16 than 10 percent nor more than 70 percent and is a multiple of 5
7-17 percent].
7-18 SECTION 10. Section 854.204, Government Code, is amended to
7-19 read as follows:
7-20 Sec. 854.204. OPTIONAL BENEFIT FOR DESIGNATED BENEFICIARY
7-21 [SURVIVING SPOUSE] OF VESTED EMPLOYEE. (a) This section applies
7-22 to all municipalities having a participation date in the retirement
7-23 system after August 31, 1987. The governing body of any
7-24 municipality having an earlier effective date of participation may
7-25 by ordinance adopt the provisions of this section if the actuary
7-26 first determines, on the basis of mortality and other tables
7-27 adopted by the board of trustees, that all obligations of the
8-1 municipality to the municipality accumulation fund, including
8-2 obligations proposed under the ordinance, can be funded by the
8-3 municipality within its maximum contribution rate and within its
8-4 amortization period.
8-5 (b) If a member who has sufficient credited service
8-6 performed for municipalities that have adopted or are subject to
8-7 this section to entitle the member to withdraw from service, to
8-8 leave on deposit with the retirement system the member's
8-9 accumulated contributions and, on attainment of an age prescribed
8-10 by this subtitle, to retire with a service retirement benefit dies
8-11 before becoming eligible for service retirement and leaves
8-12 surviving a person [lawful spouse] whom the member has designated
8-13 as beneficiary entitled to payment of the member's accumulated
8-14 contributions in the event of the member's death before retirement,
8-15 the person [surviving spouse] may by written notice filed with the
8-16 board elect to leave the accumulated deposits with the retirement
8-17 system subject to the terms of this section. If the accumulated
8-18 deposits have not been withdrawn before such time as the member, if
8-19 living, would have become entitled to service retirement, the
8-20 person designated as beneficiary [surviving spouse] may elect to
8-21 receive, in lieu of the accumulated deposits, an annuity payable
8-22 monthly during the lifetime of the person [surviving spouse] in the
8-23 amount that would have been payable to the person [surviving
8-24 spouse] had the member lived and retired at that date under an
8-25 optional annuity described by Section 854.104(c)(1).
8-26 (c) At any time before payment of the first monthly benefit
8-27 of an annuity, a designated beneficiary [surviving spouse] to whom
9-1 this section applies may, after filing a written application with
9-2 the board of trustees, receive payment of the accumulated
9-3 contributions credited to the account of the member in lieu of any
9-4 benefits otherwise payable under this section. If the designated
9-5 beneficiary [surviving spouse] dies before payment of the first
9-6 monthly benefit of an annuity allowed under this section, the
9-7 accumulated contributions credited to the account of the member
9-8 shall be paid to the estate of the designated beneficiary [spouse].
9-9 (d) A person eligible to file an election under Subsection
9-10 (b) may, by written notice filed with the board of trustees not
9-11 later than 180 days after the date of the member's death, elect to
9-12 receive a reduced annuity under this subsection instead of the
9-13 accumulated deposits or the annuity under Subsection (b). An
9-14 annuity under this subsection is payable monthly during the
9-15 person's lifetime in the amount that would have been payable to the
9-16 person if the member had been eligible to retire and had retired,
9-17 on the last day of the month immediately preceding the month in
9-18 which death occurred, under an optional annuity described by
9-19 Section 854.104(c)(1).
9-20 (e) If a member to whom this section applies has designated
9-21 as beneficiary a person to whom a retirement plan that is qualified
9-22 under Section 401, Internal Revenue Code of 1986, cannot make
9-23 payments for a period greater than five years after the date of the
9-24 member's death without losing its qualified status, and the
9-25 beneficiary elects to receive an annuity under Subsection (b) or
9-26 (d), the annuity payable by the retirement system is the actuarial
9-27 equivalent of the monthly payments that the beneficiary would have
10-1 received if the member had retired on the date the annuity begins
10-2 under the optional annuity described by Section 854.104(c)(4), to
10-3 be paid over 60 months.
10-4 (f) If a member to whom this section applies has designated
10-5 more than one person as beneficiaries, and those persons elect to
10-6 receive an annuity under Subsection (b) or (d), the annuity payable
10-7 by the retirement system is the actuarial equivalent of the monthly
10-8 payments that the beneficiaries would have received if the member
10-9 had retired on the date the annuity begins under the optional
10-10 annuity described by Section 854.104(c)(4), to be paid over 180
10-11 months.
10-12 SECTION 11. Section 854.304(c), Government Code, is amended
10-13 to read as follows:
10-14 (c) A standard disability retirement annuity is payable
10-15 throughout the life of a retiree. If a retiree dies before 60
10-16 monthly payments of a standard disability retirement annuity have
10-17 been made, the remainder of the 60 monthly payments is payable to
10-18 the retiree's designated beneficiary. When a retiree who receives
10-19 an annuity under this section dies, an additional benefit may be
10-20 payable under Section 854.502.
10-21 SECTION 12. Section 854.305(c), Government Code, is amended
10-22 to read as follows:
10-23 (c) An eligible person may select an optional annuity that
10-24 provides that:
10-25 (1) after the retiree's death, the reduced annuity is
10-26 payable throughout the life of a person designated by the retiree;
10-27 (2) after the retiree's death, one-half of the reduced
11-1 annuity is payable throughout the life of a person designated by
11-2 the retiree;
11-3 (3) if the retiree dies before 120 monthly annuity
11-4 payments have been made, the remainder of the 120 payments are
11-5 payable to the retiree's beneficiary or, if one does not exist, to
11-6 the retiree's estate;
11-7 (4) if the retiree dies before 180 monthly annuity
11-8 payments have been made, the remainder of the 180 payments are
11-9 payable to the retiree's beneficiary or, if one does not exist, to
11-10 the retiree's estate; [or]
11-11 (5) after the retiree's death, two-thirds of the
11-12 reduced annuity is payable throughout the life of a person
11-13 designated by the retiree; or
11-14 (6) the annuity is payable only during the retiree's
11-15 lifetime.
11-16 SECTION 13. Sections 854.408(a) and (b), Government Code,
11-17 are amended to read as follows:
11-18 (a) The standard occupational disability retirement annuity
11-19 payable under this subchapter is the sum of the member's prior
11-20 service annuity and current service annuity[, payable monthly
11-21 during the lifetime of the retiree, but reduced as to any month or
11-22 series of months as provided in this section]. A prior service
11-23 annuity is subject to reduction under Section 855.308(f). A
11-24 standard occupational disability retirement annuity:
11-25 (1) is payable throughout the life of the retiree, but
11-26 if the retiree dies before 60 monthly payments have been made, the
11-27 remainder of the 60 monthly payments is payable to the retiree's
12-1 designated beneficiary; and
12-2 (2) is reducible as to any month or series of months
12-3 as provided by this section.
12-4 (b) During any month in which a retiree who is less than 60
12-5 years old receives earned income subject to taxation under the
12-6 Federal Insurance Contributions Act or that would be subject to
12-7 those taxes if the employer were not an exempt organization, the
12-8 standard occupational disability retirement annuity may not exceed
12-9 the greater of the following amounts:
12-10 (1) the amount that is required to be added to the
12-11 retiree's earned income for the month to equal the highest average
12-12 compensation on which the retiree made membership contributions to
12-13 the retirement system during any 12 consecutive months during the
12-14 three calendar years immediately preceding the year in which the
12-15 retiree retired for disability, when the highest average
12-16 compensation is multiplied by the percentage increase, if any, in
12-17 the Consumer Price Index for All Urban Consumers published by the
12-18 Bureau of Labor Statistics of the United States Department of Labor
12-19 from December of the year immediately preceding the effective date
12-20 of the person's retirement to the December that is 13 months before
12-21 a computation is made under this subsection; or
12-22 (2) the monthly annuity attributable to the retiree's
12-23 accumulated contributions at the time of the person's retirement.
12-24 SECTION 14. Section 854.410(c), Government Code, is amended
12-25 to read as follows:
12-26 (c) An eligible person may select an optional annuity that
12-27 provides that:
13-1 (1) after the retiree's death, the reduced annuity is
13-2 payable throughout the life of a person designated by the retiree;
13-3 (2) after the retiree's death, one-half of the reduced
13-4 annuity is payable throughout the life of a person designated by
13-5 the retiree;
13-6 (3) if the retiree dies before 120 monthly annuity
13-7 payments have been made, the remainder of the 120 payments is
13-8 payable to the retiree's beneficiary or, if one does not exist, to
13-9 the retiree's estate;
13-10 (4) if the retiree dies before 180 monthly annuity
13-11 payments have been made, the remainder of the 180 payments is
13-12 payable to the retiree's beneficiary or, if one does not exist, to
13-13 the retiree's estate; [or]
13-14 (5) after the retiree's death, two-thirds of the
13-15 reduced annuity is payable throughout the life of a person
13-16 designated by the retiree; or
13-17 (6) the annuity is payable only during the retiree's
13-18 lifetime.
13-19 SECTION 15. Subchapter B, Chapter 855, Government Code, is
13-20 amended by adding Section 855.116 to read as follows:
13-21 Sec. 855.116. ELECTRONIC FILING OF CERTAIN DOCUMENTS.
13-22 (a) In this section, "electronic filing" means the filing of data
13-23 by the communication of information by facsimile or in the form of
13-24 digital electronic signals transformed by computer and stored on
13-25 microfilm, magnetic tape, optical disk, or any other medium.
13-26 (b) The board of trustees may adopt rules and procedures
13-27 relating to the electronic filing of documents with the retirement
14-1 system. A document that is electronically filed in accordance with
14-2 those rules and procedures is considered to have been properly
14-3 filed with the retirement system.
14-4 SECTION 16. Section 855.205(d), Government Code, is amended
14-5 to read as follows:
14-6 (d) On the basis of rates and tables adopted by the board,
14-7 the actuary shall:
14-8 (1) annually compute the normal contribution rate for
14-9 each participating municipality;
14-10 (2) annually compute the prior service contribution
14-11 rate for each participating municipality;
14-12 (3) compute the current interest rate in accordance
14-13 with Section 855.316(b) [855.316(c)];
14-14 (4) compute the supplemental death benefits rate and
14-15 the supplemental disability benefits rate for each participating
14-16 municipality; and
14-17 (5) [certify the amount of each annuity and benefit
14-18 granted by the board; and]
14-19 [(6)] make an annual valuation of the assets and
14-20 liabilities of the funds of the retirement system.
14-21 SECTION 17. Sections 855.306(b) and (c), Government Code,
14-22 are amended to read as follows:
14-23 (b) On December 31 of each year the retirement system shall
14-24 credit to each member's individual account interest as allowed by
14-25 this subtitle on the amount of accumulated contributions credited
14-26 to the member's account on January 1 of that year. On a person's
14-27 retirement under this subtitle on a date other than December 31,
15-1 the retirement system shall credit to that person's individual
15-2 account interest and supplemental interest, if any, at the rate
15-3 credited on members' accounts for the preceding year. The interest
15-4 must be:
15-5 (1) on the amount of accumulated contributions
15-6 credited to the member's account on January 1 of the year in which
15-7 retirement occurs; and
15-8 (2) prorated from January 1 of the year in which
15-9 retirement occurs to the effective date of retirement.
15-10 (c) The retirement system may not pay interest on money in a
15-11 person's individual account:
15-12 (1) for a part of a year except as provided by
15-13 Subsection (b); or
15-14 (2) after the person's membership has been terminated
15-15 in accordance with Section 852.104 because of absence from service.
15-16 SECTION 18. Section 855.311, Government Code, is amended by
15-17 adding Subsection (g) to read as follows:
15-18 (g) Distribution and payment to an annuitant under
15-19 Subsection (e) must be based on the ratio that the number of months
15-20 elapsing since the effective date of the person's retirement bears
15-21 to the number 12 if that person retired under this subtitle during
15-22 the year for which the distribution and payment is made.
15-23 SECTION 19. Section 855.315, Government Code, is amended by
15-24 adding Subsections (d) and (e) to read as follows:
15-25 (d) The retirement system shall make payments by electronic
15-26 funds transfer to annuitants whose first annuity payment under this
15-27 subtitle occurs after January 1, 2000. The retirement system may
16-1 use electronic funds transfers to make other payments.
16-2 (e) Notwithstanding any requirement to make a payment by
16-3 electronic funds transfer, the retirement system may make payment
16-4 by vouchers, checks, or warrants to an annuitant if making the
16-5 payment by electronic funds transfer would be impractical for the
16-6 retirement system or if the annuitant properly notifies the
16-7 retirement system that:
16-8 (1) receiving the payment by electronic funds transfer
16-9 would be impractical to the person;
16-10 (2) receiving the payment by electronic funds transfer
16-11 would be more costly to the person than receiving the payment by
16-12 check or warrant; or
16-13 (3) the person is unable to establish a qualifying
16-14 account at a financial institution to receive electronic funds
16-15 transfers.
16-16 SECTION 20. Section 855.407(g), Government Code, is amended
16-17 to read as follows:
16-18 (g) A municipality that begins participation in the
16-19 retirement system on or after December 31, 1999, and any
16-20 municipality already participating in the retirement system on that
16-21 date whose [The] governing body elects [of a municipality may
16-22 elect] to have the municipality do so shall contribute to its
16-23 account in the municipality accumulation fund at the combined rate
16-24 of total compensation paid to its employees as the actuary
16-25 determines is necessary to fund all obligations chargeable to its
16-26 account in the fund within the municipality's amortization period,
16-27 regardless of other provisions of this subtitle.
17-1 SECTION 21. This Act takes effect December 31, 1999.
17-2 SECTION 22. The importance of this legislation and the
17-3 crowded condition of the calendars in both houses create an
17-4 emergency and an imperative public necessity that the
17-5 constitutional rule requiring bills to be read on three several
17-6 days in each house be suspended, and this rule is hereby suspended.