1-1 AN ACT
1-2 relating to membership and credit in and benefits and
1-3 administration of public retirement systems for police officers in
1-4 certain municipalities.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Title 109, Revised Statutes, is amended by adding
1-7 Article 6243g-4 to read as follows:
1-8 Art. 6243g-4. POLICE OFFICERS PENSION SYSTEM IN CERTAIN
1-9 MUNICIPALITIES
1-10 Sec. 1. PURPOSE. The purpose of this article is to restate
1-11 and amend the provisions of former law governing a police officers
1-12 pension system in each city in this state having a population of
1-13 1.5 million or more, according to the most recent federal decennial
1-14 census, to permit the consolidation of the terms of certain pension
1-15 plans.
1-16 Sec. 2. DEFINITIONS. In this article:
1-17 (1) "Active member" means an employee who holds a
1-18 classified position in a police department of a city subject to
1-19 this article, except an employee who is a part-time, seasonal, or
1-20 temporary employee.
1-21 (2) "Average total direct pay" means a member's total
1-22 direct pay for the 26 pay periods immediately preceding the date of
1-23 separation from service or the date of entry into DROP, if earlier,
1-24 divided by 12.
2-1 (3) "Base salary" means the monthly base pay provided
2-2 for the classified position in the police department held by the
2-3 member.
2-4 (4) "Board" means the board of trustees of the pension
2-5 system.
2-6 (5) "Code" means the federal Internal Revenue Code of
2-7 1986, or any successor, as amended.
2-8 (6) "Dependent" means a dependent child or a dependent
2-9 parent.
2-10 (7) "Dependent child" means a deceased member's
2-11 unmarried natural or adopted child who:
2-12 (A) has not attained age 18;
2-13 (B) has attained age 18 but not age 22 and is
2-14 attending school on a full-time basis; or
2-15 (C) has attained age 18 and is permanently
2-16 disabled as the result of a disability that began before the child
2-17 attained age 18.
2-18 (8) "Dependent parent" means a natural parent of a
2-19 deceased member or an adoptive parent who adopted the member before
2-20 the member attained age 18 and at least 50 percent of whose support
2-21 was received from the member during the one-year period preceding
2-22 the date of death of the member.
2-23 (9) "DROP" means the deferred retirement option plan
2-24 described by Section 14 of this article.
2-25 (10) "Employee" means an individual who holds a
2-26 classified position in the police department of a city subject to
2-27 this article.
3-1 (11) "Former member" means a person who was once an
3-2 active member, vested or not, but has terminated active member
3-3 status and received a refund of member contributions.
3-4 (12) "Fund" means the fund originally established by
3-5 Chapter 76, Acts of the 50th Legislature, Regular Session, 1947
3-6 (Article 6243g-1, Vernon's Texas Civil Statutes).
3-7 (13) "Inactive member" means a person who has
3-8 separated from service and has a vested right to a service pension
3-9 from the pension system but is not eligible for an immediate
3-10 service pension. The term does not include a former member.
3-11 (14) "Member" includes an active member, inactive
3-12 member, or retired member, as the context may require, but does not
3-13 include a former member.
3-14 (15) "Normal retirement date" means the date at which
3-15 a member is eligible for an immediate service pension under Section
3-16 12 of this article.
3-17 (16) "Pension" means a monthly payment for life from
3-18 the fund to a retired member.
3-19 (17) "Pension system" or "system" means the retirement
3-20 and disability plan for employees of any police department subject
3-21 to this article.
3-22 (18) "School" means any public or private school
3-23 through the 12th grade or any trade school, junior college,
3-24 college, or university beyond the 12th grade that is accredited by
3-25 a generally recognized accrediting authority.
3-26 (19) "Retired member" means a member who has separated
3-27 from service and who is eligible to receive an immediate service or
4-1 disability pension under this article.
4-2 (20) "Separation from service" means cessation of work
4-3 for the police department of a city subject to this article,
4-4 whether caused by death, discharge, resignation, or transfer to an
4-5 unclassified position.
4-6 (21) "Service" means the period of time a person is
4-7 employed in the police department of a city subject to this
4-8 article, except for any period of DROP participation, and includes
4-9 any period that the person is receiving a disability pension under
4-10 Section 15 of this article or is on a military leave of absence
4-11 described by Section 23 of this article, but only if the person
4-12 returns to active service after the period of disability or
4-13 military leave. The term does not include periods in which a
4-14 person is suspended from duty without pay, on leave of absence
4-15 without pay, or separated from service.
4-16 (22) "Surviving spouse" means a person who was married
4-17 to an active, inactive, or retired member at the time of the
4-18 member's death and, in the case of an inactive or retired member,
4-19 before the member's separation from service or for a period of at
4-20 least five years before the retired or inactive member's death.
4-21 (23) "Total direct pay" means wages as defined by
4-22 Section 3401(a) of the code, plus any amounts that are not included
4-23 in gross income by reason of Section 125, 402(g)(2), or 457 of the
4-24 code and member contributions picked up pursuant to Section
4-25 414(h)(2) of the code, less any pay received for overtime work.
4-26 The term does not include nontaxable payments not expressly
4-27 described by this subdivision.
5-1 Sec. 3. PENSION BOARD. (a) The board of trustees of the
5-2 pension system that was created under Chapter 76, Acts of the 50th
5-3 Legislature, Regular Session, 1947 (Article 6243g-1, Vernon's Texas
5-4 Civil Statutes), continues to be responsible for the general
5-5 administration, management, and operation of the pension system,
5-6 including the direction of investment and oversight of the fund's
5-7 assets.
5-8 (b) The board is composed of seven members as follows:
5-9 (1) the administrative head of the city or the
5-10 administrative head's authorized representative;
5-11 (2) three employees of the police department having
5-12 membership in the pension system and elected in the manner
5-13 determined at a one-time election held for the pension system
5-14 before October 1, 1999;
5-15 (3) two retired members, elected in the manner
5-16 determined at a one-time election held for the pension system
5-17 before October 1, 1999, who are receiving pensions from the system
5-18 and are not officers or employees of the city; and
5-19 (4) the treasurer of the city or the person
5-20 discharging the duties of the city treasurer.
5-21 (c) The terms of office of the board members elected as
5-22 described by Subsection (b)(2) of this section shall be three
5-23 years, with one board member being elected every year at an
5-24 election called by the board and held in December. If a vacancy
5-25 occurs among the three elected active board members, the board
5-26 shall hold an election within 60 days after the date the vacancy
5-27 occurred. At that election, an active member shall be elected to
6-1 serve for the remainder of the term of the vacant position or for a
6-2 full term if the term of the board member that caused the vacancy
6-3 would have ended in that year.
6-4 (d) The terms of office of the board members elected as
6-5 described by Subsection (b)(3) of this section shall be three
6-6 years. Beginning in 1999, and each third succeeding year, one
6-7 board member shall be elected at an election called by the board
6-8 and held in December. Beginning in 2000, and each third succeeding
6-9 year, a second board member shall be elected at an election called
6-10 by the board and held in December. If a vacancy occurs among the
6-11 two elected retired members of the board, the board shall hold an
6-12 election within 60 days after the date the vacancy occurred. At
6-13 that election, a retired member shall be elected to serve for the
6-14 remainder of the term of the vacant position or for a full term if
6-15 the term of the board member that caused the vacancy would have
6-16 ended in that year. A board member who is a retired member and who
6-17 was appointed to the board before January 1999 shall serve the
6-18 remainder of the board member's term. On expiration of the
6-19 appointed term, the appointed board member is eligible to run for
6-20 the board position described by Subsection (b)(3) of this section
6-21 in the same manner as any other retired member.
6-22 (e) A board member vacates the member's seat on the board if
6-23 the member is removed under Section 7 of this article or ceases to
6-24 meet the qualifications for the seat.
6-25 (f) If it is so determined at a one-time election held for
6-26 the pension system before October 1, 1999, an officer or employee
6-27 of any employee organization or retiree organization or an employee
7-1 of the pension system is prohibited from being elected to,
7-2 appointed to, or in any other way becoming a member of the board.
7-3 (g) Each board member shall, within 30 days after the date
7-4 of appointment or election, take an oath of office to diligently
7-5 and honestly administer the affairs of the pension system and not
7-6 knowingly violate, or willingly permit to be violated, this
7-7 article.
7-8 Sec. 4. BOARD MEMBER LEAVE AND COMPENSATION. (a) Elected
7-9 members of the board who are employees of the city's police
7-10 department are entitled to leave from their employer to attend to
7-11 the official business of the pension system.
7-12 (b) If the city employing an elected board member would
7-13 withhold any portion of the salary of the member who is attending
7-14 to official business of the pension system, the pension system may
7-15 elect to adequately compensate the city for the loss of service of
7-16 the member. If the board, by an affirmative vote of at least four
7-17 board members, makes this election, the amounts shall be remitted
7-18 from the fund to the city, and the city shall pay the board
7-19 member's salary as if no loss of service had occurred.
7-20 (c) The board, by an affirmative vote of at least four board
7-21 members, may elect to reimburse board members who are not employees
7-22 of the city for their time while attending to official business of
7-23 the pension system. The amount of any reimbursement may not exceed
7-24 $350 a month for each affected board member.
7-25 Sec. 5. OFFICERS; MEETINGS; EMPLOYEES. (a) The board
7-26 annually shall elect from its active and retired membership a
7-27 chairman. The board also annually shall elect from its membership
8-1 a vice chairman and a secretary.
8-2 (b) The board may hire one or more employees whose positions
8-3 and salaries shall be set by the board and who, acting under the
8-4 direction of the board, shall keep all of the records of and
8-5 perform all of the clerical services for the pension system.
8-6 (c) The board may employ professional investment managers
8-7 and advisors to manage, or advise the board regarding the
8-8 management and investment of, the fund. These professional
8-9 services may include investment counseling, evaluation of fund
8-10 performance, investment research, and other comparable services.
8-11 (d) The board may employ an actuary, legal counsel, an
8-12 accountant, or another professional and pay the compensation for
8-13 these services from the fund.
8-14 (e) The board shall hold regular monthly meetings at the
8-15 time and place it designates by resolution. The chairman,
8-16 secretary, or any four board members may call a special meeting of
8-17 the board.
8-18 (f) Each board member is entitled to one vote.
8-19 (g) Notice shall be given to all board members, unless
8-20 waived in writing, of any proposed meeting, by any method
8-21 reasonably calculated to provide adequate notice of the meeting.
8-22 The notice may be delivered by mail, in-hand personal delivery, or
8-23 facsimile or other electronically transmitted notice with
8-24 recordation of receipt by the receiving board member. If all board
8-25 members attend a meeting, however, failure to give notice as
8-26 required by this subsection is excused.
8-27 (h) The board shall keep accurate minutes of its meetings
9-1 and records of its proceedings.
9-2 Sec. 6. GENERAL POWERS AND DUTIES. (a) The board shall
9-3 retain control over all money collected or to be collected for the
9-4 pension system, shall keep separate from all other funds all money
9-5 for the use and benefit of the system, and shall keep a record of
9-6 all claims, receipts, and disbursements in one or more books
9-7 maintained for that purpose.
9-8 (b) The board shall establish the policies and procedures
9-9 for disbursements from the fund that it considers appropriate.
9-10 (c) The board may reimburse a board member or an officer or
9-11 employee of the board for liability imposed as damages because of
9-12 an alleged act, error, or omission committed in the individual's
9-13 capacity as a fiduciary or co-fiduciary of assets of the fund or as
9-14 an officer or employee of the board and for costs and expenses
9-15 incurred by a fiduciary or co-fiduciary officer or employee in
9-16 defense of a claim of an alleged act, error, or omission, or may
9-17 purchase from an insurer licensed to do business in this state one
9-18 or more policies of insurance that provide for the reimbursement.
9-19 However, no reimbursement may be provided and no policy of
9-20 insurance may be purchased under this subsection that would provide
9-21 for reimbursement of a board member or an officer or employee of
9-22 the board for liability imposed or expenses incurred because of the
9-23 individual's personal dishonesty, fraudulent breach of trust, lack
9-24 of good faith, intentional fraud or deception, or intentional
9-25 failure to act prudently. The cost of reimbursement or insurance
9-26 coverage purchased under this subsection shall be paid from money
9-27 in the fund.
10-1 (d) The board shall administer the pension system consistent
10-2 with the applicable provisions of the code.
10-3 (e) The board is vested with the power to adopt for the
10-4 administration of the pension system written rules and guidelines
10-5 consistent with this article, including rules or guidelines to
10-6 ensure that the pension system and the fund meet the qualification
10-7 requirements of the code and regulations and rulings issued under
10-8 the code and that are applicable to governmental plans.
10-9 (f) The board has full discretion and authority to
10-10 administer the pension system, to construe and interpret this
10-11 article, and to do all other acts necessary to carry out the
10-12 purpose of this article. All decisions of the board are final and
10-13 binding on all affected parties.
10-14 Sec. 7. REMOVAL OF BOARD MEMBER. (a) An elected board
10-15 member may be removed from the board either by a vote of the
10-16 membership of the pension system at a removal election initiated
10-17 and held as provided by this section or by a vote of five board
10-18 members together with a decision to remove the board member made by
10-19 a hearing examiner as provided by this section.
10-20 (b) An appointed member of the board may be removed from the
10-21 board by the administrative head of the city.
10-22 (c) To initiate an election for removal of an elected board
10-23 member, a petition for removal signed by at least one-third of the
10-24 members and retired members of the pension system must be filed
10-25 with the board not later than the 45th day after the date the first
10-26 signature on the petition is obtained. Each signature must be
10-27 legible and accompanied by the signer's printed name and employee
11-1 payroll number, if any. A member's payroll number may not be
11-2 publicly disclosed. A removal election must be held not later than
11-3 the 30th day after the date the board certifies that a petition for
11-4 removal satisfies the requirements for a petition under this
11-5 subsection. The results of a removal election are binding only if
11-6 a majority of the active and retired members participate in the
11-7 election. A board member's service on the board ends on the
11-8 declaration by the board that a majority of those voting in the
11-9 removal election voted in favor of removal.
11-10 (d) On the date the board makes a declaration under
11-11 Subsection (c) of this section, the board shall call a special
11-12 election to be held not earlier than the 20th or later than the
11-13 30th day after that date to fill the vacancy for the unexpired term
11-14 of the person who was removed. The person who was removed is not
11-15 eligible to run in the special election but is eligible to run in
11-16 all subsequent board elections.
11-17 (e) Except as otherwise provided by Subsections (a) and (b)
11-18 of this section, a board member may be removed only as provided by
11-19 this subsection and Subsections (f) and (g) of this section. After
11-20 an affirmative vote of the board to remove a board member under
11-21 Subsection (a) of this section, the board or its designee and the
11-22 board member whose removal is proposed shall attempt to agree on
11-23 the selection of an impartial hearing examiner. If the parties do
11-24 not agree on the selection of a hearing examiner not later than the
11-25 10th day after the date the board votes to remove the board member,
11-26 on the next workday the parties involved shall request a list of
11-27 seven qualified neutral arbitrators from the American Arbitration
12-1 Association of the Federal Mediation and Conciliation Service or
12-2 another arbitration organization with similarly stringent
12-3 standards. The board member whose removal is proposed and the
12-4 board or their designees may agree on one of the seven neutral
12-5 arbitrators on the list. If the parties fail to agree before the
12-6 26th day after the date the board first votes to remove the board
12-7 member, each party or the party's designee shall alternate striking
12-8 a name from the list, and the name remaining is the hearing
12-9 examiner. The board member whose removal is proposed or the board
12-10 member's designee is entitled to strike the first name. If the
12-11 25th day falls on a Saturday, Sunday, or legal holiday, the parties
12-12 must strike names from the list on the next workday. The parties
12-13 or their designees must agree on a date for the hearing that is
12-14 within the period prescribed by Subsection (f) of this section.
12-15 (f) The hearing must begin as soon as the hearing examiner
12-16 can be scheduled but not later than the 60th day after the date the
12-17 board votes to remove the board member. In a hearing conducted
12-18 under this subsection, the hearing examiner may issue subpoenas.
12-19 The parties may agree to an expedited hearing procedure. Unless
12-20 otherwise agreed by the parties, in an expedited procedure, the
12-21 hearing examiner must issue a decision not later than the 10th day
12-22 after the date the hearing ends. Unless operating under an
12-23 expedited hearing procedure, the hearing examiner shall make a
12-24 reasonable effort to issue a decision not later than the 30th day
12-25 after the date the hearing ends. The hearing examiner's inability
12-26 to meet the time requirements imposed by this subsection does not
12-27 affect the hearing examiner's jurisdiction or final decision. The
13-1 final decision of the hearing examiner may be either to remove the
13-2 board member or not to remove the board member from the board. A
13-3 decision may be made to remove the board member from the board only
13-4 if the hearing examiner determines that the board member violated
13-5 Subchapter A, Chapter 121, Property Code. The hearing examiner's
13-6 fees and expenses shall be paid by the pension system. The costs
13-7 of a witness shall be paid by the party who calls the witness.
13-8 (g) If the hearing examiner's decision is to remove a board
13-9 member, the person removed is entitled to an opportunity to have
13-10 the hearing examiner's decision reviewed. To have the decision
13-11 reviewed, not later than the 30th day after the date of a decision
13-12 under Subsection (f) of this section, the person removed must
13-13 obtain signatures of at least one-third of the active and retired
13-14 members of the pension system requesting an election to overrule
13-15 the removal decision under Subsection (f). If the 30th day is a
13-16 Saturday, Sunday, or legal holiday, the following workday is
13-17 considered the 30th day. Each signature must indicate the signing
13-18 date beside the signature, be legible, and be accompanied by the
13-19 signer's printed name and employee payroll number, if any. A
13-20 member's payroll number may not be publicly disclosed. The board
13-21 shall verify the list not later than the 10th day after the date
13-22 the board receives it. Not later than the 30th day after the date
13-23 the board has verified the signatures, the board shall hold an
13-24 election among the active and retired members. If a majority of
13-25 the votes cast at an election in which a majority of the active and
13-26 retired members of the pension system participate favor overruling
13-27 the hearing examiner's decision, the board member shall be
14-1 reinstated. If a majority do not vote to overrule the decision to
14-2 remove a board member, a replacement election must be held not
14-3 later than the 30th day after the date of the preceding election.
14-4 (h) During the period beginning on the date of the board
14-5 vote to remove a board member and ending on the date the board
14-6 member is reinstated under this section, the person's privileges as
14-7 a board member, including voting privileges, are suspended.
14-8 Sec. 8. CONTRIBUTIONS BY MEMBERS. (a) Each active member
14-9 of the pension system shall pay into the system each month 8-3/4
14-10 percent of the member's total direct pay. The payments shall be
14-11 deducted by the city from the salary of each active member monthly
14-12 and paid to the pension system. Except for the repayment of
14-13 withdrawn contributions under Section 17(f) or 18(c)(3) of this
14-14 article, a person may not be required or permitted to make any
14-15 payments into the pension system after the person separates from
14-16 service.
14-17 (b) This article does not increase or decrease the
14-18 contribution obligation of any member that arose before September
14-19 1, 1999, or give rise to any claim for refund for any contributions
14-20 made before that date.
14-21 Sec. 9. MONTHLY PAYMENT BY CITY. (a) For fiscal years
14-22 ending before June 30, 2002, the city shall make contributions to
14-23 the fund after each payroll period in an amount previously agreed
14-24 to by the city and the board. For the fiscal year ending June 30,
14-25 2002, the city's contribution rate shall be composed of the normal
14-26 cost plus the level percentage of salary payment required to
14-27 amortize the actuarial liability over a period of 40 years from
15-1 January 1, 1983, computed on the basis of an acceptable actuarial
15-2 reserve funding method approved by the board. For each fiscal year
15-3 ending after June 30, 2002, the city's contribution shall be the
15-4 sum of (1) an amount computed in the manner provided for the
15-5 contribution for the fiscal year ending June 30, 2002, plus (2) $2
15-6 million multiplied by the number of fiscal years that have ended
15-7 since June 30, 2002, but not more than 16 percent of the aggregate
15-8 total direct pay of all active members for the fiscal year. If the
15-9 amount described by (1) in the preceding sentence is greater than
15-10 16 percent of the aggregate total direct pay of all active members
15-11 for the year, the amount described by (1) shall be contributed.
15-12 (b) In addition to the contributions required by Subsection
15-13 (a) of this section, the city, if requested to do so by the board,
15-14 shall contribute to the fund each month an amount equal to the
15-15 aggregate payments the city, in the absence of this subsection,
15-16 would have paid during that month to members who have separated
15-17 from service for unused sick leave, vacation pay, and accumulated
15-18 overtime pay to which the members were entitled at the time of
15-19 separation from service if the members had 10 years or more of
15-20 service or would have had 10 years or more of service after
15-21 application of these amounts to provide additional service as
15-22 provided by Section 17 of this article. Members described by this
15-23 section may no longer receive these payments directly.
15-24 (c) The governing body of a city to which this article
15-25 applies by ordinance or resolution may provide that the city pick
15-26 up active member contributions required by Section 8 of this
15-27 article so that the contributions of all active members of the
16-1 pension system qualify as picked-up contributions under Section
16-2 414(h)(2) of the code. If the governing body of a city adopts an
16-3 ordinance or resolution under this section, the city, the board,
16-4 and any other necessary party shall implement the action as soon as
16-5 practicable. Contributions picked up as provided by this
16-6 subsection shall be included in the determination of an active
16-7 member's total direct pay, deposited to the individual account of
16-8 the active member on whose behalf they are made, and treated for
16-9 all purposes, other than federal tax purposes, in the same manner
16-10 and with like effect as if they had been deducted from the salary
16-11 of, and made by, the active member.
16-12 Sec. 10. INVESTMENT OF SURPLUS. (a) If the board
16-13 determines that a surplus of funds exists in an amount exceeding
16-14 the current demands upon the pension system, the board shall invest
16-15 the surplus funds in the manner provided for by Chapter 802,
16-16 Government Code.
16-17 (b) The board may select an investment manager or investment
16-18 advisor if the board determines the service is desirable.
16-19 Selection of managers or advisors must be made from firms that have
16-20 made presentations in person or in writing to the board.
16-21 (c) The board may terminate a contract with an investment
16-22 advisor at any time. The board may terminate a contract with an
16-23 investment manager on notice the board considers appropriate. A
16-24 contract may not require the pension system to pay a penalty for
16-25 early termination. The costs of investment management or advisory
16-26 services shall be paid from the fund.
16-27 Sec. 11. SERVICE CREDIT. (a) A member who returns to
17-1 service after an interruption in service is entitled to credit for
17-2 the previous service to the extent provided by Section 19 of this
17-3 article. In addition, a member who is retiring shall receive
17-4 one-half day of service for each day for which the city is required
17-5 to make contributions with respect to the member's unused sick
17-6 leave, vacation pay, or accumulated overtime under Section 9(b) of
17-7 this article, except to the extent that the member elects to have
17-8 the amounts credited to the member's DROP account. Under no
17-9 circumstances may payments for the same days of unused sick leave,
17-10 vacation pay, or accumulated overtime be used to both increase a
17-11 member's service and credit the member's DROP account.
17-12 (b) Notwithstanding Subsection (a) of this section, if a
17-13 member has withdrawn the contributions made during any previous
17-14 period of service, the previous period of service may not be
17-15 counted in determining years of service unless the contributions
17-16 are repaid to the pension system in accordance with Section 17 of
17-17 this article.
17-18 (c) A member may not have any service credited for unused
17-19 sick leave, vacation pay, or accumulated overtime until the date
17-20 the member retires, at which time the member may apply some or all
17-21 of the service to satisfy the requirements for retirement, although
17-22 the member otherwise could not meet the service requirement without
17-23 the credit.
17-24 (d) The board shall determine the prior service to be
17-25 credited to each employee of the police department who becomes an
17-26 active member of the pension system. The board shall rely on the
17-27 personnel records of the city or the police department in
18-1 determining prior service credits.
18-2 Sec. 12. RETIREMENT; AMOUNT OF PENSION; ANNUAL ADJUSTMENTS.
18-3 (a) A member who separates from service after earning 20 or more
18-4 years of service is eligible to receive a monthly service pension,
18-5 beginning in the month of separation from service. A member who
18-6 separates from service with the city after November 23, 1998,
18-7 after earning 10 or more but less than 20 years of service in any
18-8 of the city's pension systems and who complies with all applicable
18-9 requirements of Section 19 of this article is eligible to receive a
18-10 monthly service pension, beginning in the month the individual
18-11 attains 60 years of age. An individual may not receive a pension
18-12 under this article while still an active member, except as provided
18-13 by Subsection (f) of this section. All service pensions end with
18-14 the month in which the retired member dies.
18-15 (b) Except as otherwise provided by this section, the
18-16 monthly service pension of a member who separates from service
18-17 after November 23, 1998, is equal to 2.5 percent of the member's
18-18 average total direct pay for each of the member's first 20 years of
18-19 service, plus an additional two percent of the member's average
18-20 total direct pay for each of the member's subsequent years of
18-21 service, computed to the nearest one-twelfth of a year. A member
18-22 who separates from service after November 23, 1998, including a
18-23 member who was a DROP participant, and begins to receive a monthly
18-24 service pension shall also receive a one-time lump-sum payment of
18-25 $5,000 at the same time the first monthly pension payment is made.
18-26 The lump-sum payment under this subsection is not available to a
18-27 member who has previously received a $5,000 payment under this
19-1 section or Section 16 of this article.
19-2 (c) The pension payable to each retired member of the
19-3 pension system shall be adjusted annually, effective April 1 of
19-4 each year, upward at a rate equal to two-thirds of any percentage
19-5 increase in the Consumer Price Index for All Urban Consumers for
19-6 the preceding year. The amount of the annual adjustment may not be
19-7 less than three percent or more than eight percent of the pension
19-8 being paid immediately before the adjustment, notwithstanding a
19-9 greater or lesser increase in the consumer price index.
19-10 (d) A retired member who receives a service pension under
19-11 this article is entitled to receive an additional amount each month
19-12 equal to $88.05, beginning on the date the retired member's pension
19-13 begins and continuing until the end of the month in which the
19-14 retired member dies. This amount is intended to defray the retired
19-15 member's group medical insurance costs and will be paid directly by
19-16 the fund to the retired member for the retired member's lifetime.
19-17 (e) At the end of each calendar year beginning after 1998,
19-18 and subject to the conditions provided by this subsection, the
19-19 pension system shall make a 13th benefit payment to each person who
19-20 is receiving a service pension. The amount of the 13th payment
19-21 shall be the same as the last monthly payment received by the
19-22 retiree or survivor before issuance of the payment, except the
19-23 payment received by any person who has been in pay status for less
19-24 than 12 months shall be for a prorated amount determined by
19-25 dividing the amount of the last payment received by 12 and
19-26 multiplying this amount by the number of months the person has been
19-27 in pay status. The 13th payment may be made only for those
20-1 calendar years in which:
20-2 (1) the assets held by the fund will equal or exceed
20-3 its liabilities after the 13th payment is made;
20-4 (2) the rate of return on the fund's assets exceeded
20-5 9.25 percent for the last fiscal year ending before the payment;
20-6 and
20-7 (3) the payment will not cause an increase in the
20-8 contribution the city would have been required to make if the 13th
20-9 payment had not been made.
20-10 (f) Notwithstanding anything to the contrary in this
20-11 article, an active or inactive member who is eligible to
20-12 participate in the executive official pension plan established by
20-13 Chapter 358, Acts of the 48th Legislature, Regular Session, 1943
20-14 (Article 6243g, Vernon's Texas Civil Statutes), or a successor
20-15 statute, may, while continuing employment with the police
20-16 department, participate in the executive official pension plan and
20-17 elect:
20-18 (1) if an active member:
20-19 (A) to begin receiving an immediate pension
20-20 benefit and be considered a retired member eligible for all rights
20-21 and privileges afforded any other retired member under this
20-22 article, if the member has 20 years or more of service and is
20-23 eligible for retirement under this section except for the
20-24 continuing employment; or
20-25 (B) to enter DROP if the member satisfies all
20-26 requirements of this article for DROP membership; or
20-27 (2) if an inactive member, to begin receiving an
21-1 immediate pension benefit equal to 2.5 percent of the member's
21-2 average total direct pay at the time the member became inactive for
21-3 the member's first 20 years of service and be entitled to all
21-4 rights and privileges afforded a retired member under this article.
21-5 (g) Notwithstanding anything to the contrary in this
21-6 article, service pensions that began before September 1, 1999,
21-7 shall continue to be paid in accordance with applicable prior law,
21-8 subject only to the adjustments that are specifically provided by
21-9 this section.
21-10 Sec. 13. RESUMPTION OF SERVICE AS DEPARTMENT HEAD AFTER
21-11 RETIREMENT. (a) The pension system shall suspend all pension
21-12 payments to a retired member who has separated from service and is
21-13 subsequently appointed as the department head of the police
21-14 department. The suspension of payments begins on the effective
21-15 date of the person's appointment.
21-16 (b) Pension benefits based on the person's previous period
21-17 of service do not accrue during the period of pension payment
21-18 suspension described by Subsection (a) of this section, but the
21-19 person again becomes an active member during this period, and
21-20 contributions of the city and the department head for the
21-21 subsequent service are payable during the period. The department
21-22 head retains credit for all previous service and acquires credit
21-23 for the subsequent service unless the department head is or becomes
21-24 a DROP participant.
21-25 (c) Once the department head again separates from service,
21-26 pension benefits under this article shall resume based on both
21-27 periods of service.
22-1 Sec. 14. DEFERRED RETIREMENT OPTION PLAN. (a) In this
22-2 section "DROP benefit" means the total amount credited to a
22-3 member's notional DROP account, payable as described by this
22-4 section, plus a monthly retirement pension.
22-5 (b) An active member who has at least 20 years of service
22-6 with the police department may file with the pension system an
22-7 irrevocable election to participate in DROP and receive a DROP
22-8 benefit instead of the standard form of pension provided by this
22-9 article. The election may be made, under procedures established by
22-10 the board, by an active member who has attained the required years
22-11 of service.
22-12 (c) The monthly service pension and death benefits of an
22-13 active member who becomes a DROP participant will be determined as
22-14 if the active member had separated from service and begun receiving
22-15 a pension on the effective date of the DROP election. The active
22-16 member does not retire but does not accrue additional service
22-17 credit beginning on the effective date of the election, and
22-18 increases in pay that occur on or after that date may not be used
22-19 in computing the active member's monthly service pension, but
22-20 cost-of-living adjustments that occur on or after that date and
22-21 that otherwise would be applicable to the pension will be made.
22-22 (d) The member's DROP benefit is determined as provided by
22-23 this subsection and Subsection (e) of this section. Each month an
22-24 amount equal to the monthly service pension the active member would
22-25 have been entitled to receive if the active member had separated
22-26 from service on the effective date of entry into DROP, less any
22-27 amount that is intended to help defray the active member's group
23-1 medical insurance costs as described by Section 12(d) of this
23-2 article, shall be credited to a notional DROP account for the
23-3 active member, and each month an amount equal to the monthly
23-4 contributions the active member makes to the fund on and after the
23-5 effective date of entry into DROP also shall be credited to the
23-6 same notional DROP account. In any year in which a 13th payment is
23-7 made to retired members under Section 12(e) of this article, an
23-8 amount equal to the amount of the 13th payment that would have been
23-9 made to the DROP participant if the DROP participant had retired on
23-10 the date of DROP entry will be credited to the DROP account. In
23-11 addition, any amount that is contributed by the city under Section
23-12 9(b) of this article with respect to the active member's unused
23-13 sick leave, vacation pay, or accumulated overtime, and that is not
23-14 required to be used to provide 10 or 20 years of service to the
23-15 member under Section 11 of this article or used to repay withdrawn
23-16 contributions under Section 18(c) of this article shall be credited
23-17 to the DROP account as of the end of the month in which it is
23-18 contributed.
23-19 (e) As of the end of each month an amount is credited to
23-20 each active member's notional DROP account at the rate of
23-21 one-twelfth of a hypothetical earnings rate on amounts in the
23-22 account. The hypothetical earnings rate is determined for each
23-23 calendar year based on the average of the aggregate annual rate of
23-24 return on investments of the pension system for the five
23-25 consecutive fiscal years ending June 30 preceding the calendar year
23-26 to which the earnings rate applies. The board may lower any future
23-27 rate below the rate otherwise prescribed by this subsection to the
24-1 extent necessary to ensure that the DROP does not adversely affect
24-2 the financial condition of the fund.
24-3 (f) If a DROP participant separates from service because of
24-4 disability or death, the member or the member's spouse or, if there
24-5 is no eligible spouse, any other person eligible to receive
24-6 benefits under Section 16 of this article, as applicable, may
24-7 either receive an amount equal to the member's DROP account or
24-8 revoke the member's DROP election and elect to receive benefits as
24-9 provided by this article without regard to this section. A
24-10 revocation and election under this subsection must be made at the
24-11 time and in the manner provided in a procedure that the board may
24-12 adopt from time to time. Alternatively, the retired member, a
24-13 deceased member's spouse, or, if there is no spouse, the person
24-14 entitled to receive benefits under Section 16 of this article may
24-15 elect to receive a distribution that is equal to the member's DROP
24-16 account and benefits as described by Subsection (c) of this
24-17 section.
24-18 (g) In lieu of receiving a lump-sum DROP benefit on
24-19 separation from service, a retired member who has been a DROP
24-20 participant may leave the retired member's DROP account with the
24-21 pension system, in which case interest will be credited to the DROP
24-22 account in the manner described by this subsection. The interest
24-23 credited for any month shall be at the applicable annual interest
24-24 rate as defined by Section 417(e)(3)(A)(ii)(II) of the code and
24-25 published by the Internal Revenue Service for June of the year
24-26 preceding the calendar year in which the interest is credited.
24-27 (h) Instead of beginning to receive a service pension on
25-1 separation from service in accordance with Section 12 of this
25-2 article, a retired member who is a DROP participant may elect to
25-3 have part or all of the amount that would otherwise be paid as a
25-4 monthly service pension, less any amount required to pay the
25-5 retired member's share of group medical insurance costs, credited
25-6 to a DROP account, in which case the additional amounts will become
25-7 eligible to be credited with hypothetical earnings in the same
25-8 manner as the amounts described by Subsection (g) of this section.
25-9 (i) A retired member who has not attained age 70-1/2,
25-10 whether or not a DROP participant before retirement, may elect to
25-11 have part or all of an amount equal to the monthly service pension
25-12 the retired member would otherwise be entitled to receive, less any
25-13 amount required to pay the retired member's share of group medical
25-14 insurance costs, credited to a DROP account, in which case the
25-15 amounts will become eligible to be credited with hypothetical
25-16 earnings in the same manner as the amounts described by Subsection
25-17 (g) of this section. A retired member who has elected to have
25-18 monthly service pension benefits credited to a DROP account under
25-19 this subsection or Subsection (h) of this section may direct that
25-20 the credits stop and the monthly service pension resume at any
25-21 time. However, a retired member who stops the credits at any time
25-22 after September 1, 1999, may not later resume the credits.
25-23 (j) A retired member who is a DROP participant may elect to
25-24 receive distribution of the DROP account in a one-time lump-sum
25-25 payment or in any other form of distribution that is approved by
25-26 the board and satisfies the requirements of Section 401(a)(9) of
25-27 the code. Distributions to a deceased member's survivors, as
26-1 described by Subsection (f) of this section, shall be made in a
26-2 lump sum as soon as administratively feasible after the deceased
26-3 member's death.
26-4 (k) If a retired member who is or was a DROP participant is
26-5 rehired as an employee of the police department, any pension or
26-6 DROP distribution that was being paid shall be suspended and the
26-7 monthly amount described by Subsection (d) of this section will
26-8 again begin to be credited to the DROP account while the member
26-9 continues to be an employee. If the member's DROP account has been
26-10 completely distributed, a new notional account will be created to
26-11 receive the member's monthly credits. If a retired member who was
26-12 never a DROP participant is rehired as an employee of the police
26-13 department, that member shall be eligible to elect participation in
26-14 DROP on the same basis as any other member.
26-15 (l) If DROP causes any unanticipated actuarial costs, the
26-16 board may take action as necessary to mitigate the unanticipated
26-17 actuarial cost, including discontinuing acceptance of additional
26-18 elections to participate in the DROP, but the pension system shall
26-19 continue to administer DROP for the members participating before
26-20 the date of discontinuance of enrollment.
26-21 Sec. 15. DISABILITY BENEFITS. (a) An active member who
26-22 becomes totally and permanently incapacitated for the performance
26-23 of the member's duties as a result of a bodily injury received in,
26-24 or illness caused by, the performance of those duties shall, on
26-25 presentation to the board of proof of total and permanent
26-26 incapacity, be retired and shall receive an immediate
26-27 duty-connected disability pension equal to the greater of 50
27-1 percent of the member's average total direct pay at the time of
27-2 retirement or the member's accrued service pension. If the injury
27-3 or illness involves a traumatic event that directly causes an
27-4 immediate cardiovascular condition resulting in a total disability,
27-5 the member is eligible for a duty-connected disability pension. A
27-6 disability pension granted by the board shall be paid to the member
27-7 for the remainder of the member's life or for as long as the
27-8 incapacity remains.
27-9 (b) A member with 10 years or more of credited service who
27-10 becomes totally and permanently incapacitated for the performance
27-11 of the member's duties and is not eligible for either an immediate
27-12 service pension or a duty-connected disability pension is eligible
27-13 for an immediate monthly pension computed in the same manner as a
27-14 service retirement pension but based on average total direct pay
27-15 and service accrued to the date of the disability.
27-16 (c) A member who becomes entitled to receive a disability
27-17 pension after November 23, 1998, is entitled to receive a one-time
27-18 lump-sum payment of $5,000 at the same time the first monthly
27-19 disability pension payment is made, but only if the member has not
27-20 previously received a $5,000 payment under this section or Section
27-21 12 of this article. The person shall also receive an additional
27-22 amount each month equal to $88.05, beginning on the date the
27-23 pension begins and continuing as long as the disability pension
27-24 continues, to help defray the cost of group medical insurance. A
27-25 retired member whose disability pension continues and was in pay
27-26 status on November 23, 1998, is entitled to receive a one-time
27-27 lump-sum payment of $5,000 as soon as administratively feasible
28-1 after November 23, 1998. This payment has no effect on the amount
28-2 of the retired member's monthly pension. For any year in which a
28-3 13th payment is made to retired members under Section 12(e) of this
28-4 article, a 13th payment, computed in the same manner, shall also be
28-5 paid to members who have retired under this section.
28-6 (d) A person may not receive a disability pension unless the
28-7 person files with the board an application for a disability pension
28-8 not later than 180 days after the date of separation from service,
28-9 at which time the board shall have the person examined by a
28-10 physician chosen and compensated by the board. The physician shall
28-11 make a report and recommendations to the board regarding the extent
28-12 of any disability and whether any disability that is diagnosed is a
28-13 duty-connected disability. A person may not receive a disability
28-14 pension for an injury received or illness incurred after separation
28-15 from service.
28-16 (e) A retired member who has been retired for disability is
28-17 subject at all times to reexamination by a physician chosen and
28-18 compensated by the board and shall submit to further examination as
28-19 the board may require. If a retired member refuses to submit to an
28-20 examination, the board may order the payments stopped. If a
28-21 retired member who has been receiving a disability pension under
28-22 this section recovers so that in the opinion of the board the
28-23 retired member is able to perform the usual and customary duties
28-24 formerly performed for the police department, and the retired
28-25 member is reinstated or offered reinstatement to the position, or
28-26 to a position reasonably comparable in rank and responsibility to
28-27 the position, held at the time of separation from service, the
29-1 board shall order the member's disability pension stopped.
29-2 (f) The board may require any person who first becomes an
29-3 active member of the pension system on or after September 1, 1999,
29-4 and subsequently begins to receive a non-duty-connected disability
29-5 pension to provide the board annually, on or before May 1 of the
29-6 second year after the year the disability pension begins, a true
29-7 and complete copy of those portions of the retired member's federal
29-8 or, if applicable, state tax return, including appropriate
29-9 schedules, for the previous calendar year that indicate the retired
29-10 member's occupations and earned income for the previous calendar
29-11 year. The pension system may waive the requirement for filing a
29-12 copy of the tax return or delay the due date until later in the
29-13 same calendar year if the retired member provides the board with a
29-14 true and complete copy of a grant of an extension of time for
29-15 filing the tax return from the appropriate governmental agency or a
29-16 true and complete copy of an extension request that results in any
29-17 automatic extension. If the retired member is or has been
29-18 receiving earned income from one or more employments, including
29-19 self-employment, during the preceding year, the board may reduce
29-20 future disability pension payments in accordance with the following
29-21 formula: $1 for each $1 that the sum of "a" + "b" is greater than
29-22 "c," where "a" is the earned income of the retired member
29-23 attributable to the previous calendar year from the retired
29-24 member's employments, "b" is the amount of disability pension
29-25 received in the previous calendar year, and "c" is the total direct
29-26 pay received as of the date the member separated from service. For
29-27 purposes of this computation, the total direct pay in "c" is
30-1 considered increased at the rate prescribed by Section 12(c) of
30-2 this article, as of each April 1 that the retired member receives
30-3 the disability pension.
30-4 (g) For purposes of this section, a member is totally and
30-5 permanently incapacitated from performing duties if the member is
30-6 prevented by a physical or mental injury or illness from performing
30-7 duties in the police department after any reasonable accommodation
30-8 offered by the police department and this condition is expected to
30-9 be permanent.
30-10 Sec. 16. RIGHTS OF SURVIVORS. (a) For purposes of this
30-11 article, a marriage is considered to exist only if the marriage is
30-12 recorded in the records of the recorder's office in the county in
30-13 which the marriage ceremony was performed or, in the case of a
30-14 declaration of common-law marriage, if the declaration is signed by
30-15 the member and the member's common-law spouse before a notary
30-16 public and filed with the board. In addition, a marriage that is
30-17 evidenced by a declaration of common-law marriage signed before a
30-18 notary public after December 31, 1999, may not be treated as
30-19 effective earlier than the date on which it was signed before the
30-20 notary public.
30-21 (b) If a retired member dies after becoming entitled to a
30-22 service or disability pension, the board shall pay an immediate
30-23 monthly benefit as follows:
30-24 (1) to the surviving spouse, if there is a surviving
30-25 spouse, a sum equal to the pension that was being received by the
30-26 retired member at the time of death;
30-27 (2) to the guardian of any dependent children, on
31-1 behalf of the dependent children, if there is no spouse entitled to
31-2 an allowance, the sum a surviving spouse would have received, to be
31-3 divided equally among the dependent children if there is more than
31-4 one dependent child; or
31-5 (3) to any dependent parents if no spouse or dependent
31-6 child is entitled to an allowance, the sum the spouse would have
31-7 received, to be divided equally between the two parents if there
31-8 are two dependent parents.
31-9 (c) If a member of the pension system who has not completed
31-10 10 years of service in the police department is killed or dies from
31-11 any cause growing out of or in consequence of any act clearly not
31-12 in the actual performance of the member's official duty, the
31-13 member's surviving spouse, dependent child or children, or
31-14 dependent parent or parents are entitled only to a refund of the
31-15 member's contributions to the pension system.
31-16 (d) If any active member who has completed 10 or more years
31-17 of service in the police department is killed or dies from any
31-18 cause growing out of or in consequence of any act clearly not in
31-19 the actual performance of the member's official duty, the member's
31-20 surviving spouse, dependent child or children, or dependent parent
31-21 or parents are entitled to receive an immediate benefit, computed
31-22 in accordance with Subsection (b) of this section but based on the
31-23 deceased member's service and average total direct pay at the time
31-24 of death. If any inactive member dies from any cause after
31-25 completing 10 or more years of service in the police department,
31-26 the member's surviving spouse, dependent child or children, or
31-27 dependent parent or parents are entitled to receive benefits
32-1 computed as provided in the preceding sentence and beginning at the
32-2 time the member would have attained age 60 if the member had lived.
32-3 (e) If any active member is killed or dies from any cause
32-4 growing out of or in consequence of the performance of the member's
32-5 duty, the member's surviving spouse, dependent child or children,
32-6 or dependent parent or parents are entitled to receive immediate
32-7 benefits computed in accordance with Subsection (b) of this
32-8 section, except that the benefit payable to the spouse, or to the
32-9 guardian of the dependent child or children if there is no
32-10 surviving spouse, or the dependent parent or parents if there is no
32-11 surviving spouse or dependent child, is equal to 100 percent of the
32-12 member's average total direct pay, computed as of the date of
32-13 death.
32-14 (f) A surviving spouse who receives a survivor's benefit
32-15 under this article is entitled to receive an additional amount each
32-16 month equal to $88.05, beginning with the first payment of the
32-17 survivor's benefit and continuing until the end of the month in
32-18 which the surviving spouse dies.
32-19 (g) A surviving spouse or dependent who was in pay status on
32-20 November 23, 1998, is entitled to receive a one-time lump-sum
32-21 payment of $5,000 as soon as administratively feasible after
32-22 November 23, 1998. The surviving spouse or dependent who becomes
32-23 eligible to receive benefits with respect to an active member who
32-24 dies in active service after November 23, 1998, is entitled to
32-25 receive a one-time lump-sum payment of $5,000 at the time the first
32-26 monthly pension benefit is paid, if the member has not already
32-27 received a $5,000 lump-sum payment under Section 12 or 15(c) of
33-1 this article. If more than one dependent is eligible to receive a
33-2 payment under this subsection, the $5,000 shall be divided equally
33-3 among the eligible dependents. This payment has no effect on the
33-4 amount of the surviving spouse's or dependents' monthly pension and
33-5 may not be paid more than once.
33-6 (h) The monthly benefits of surviving spouses or dependents
33-7 provided under this section, except the $88.05 monthly payments
33-8 described by Subsection (f) of this section, shall be increased
33-9 annually at the same time and by the same percentage as the
33-10 pensions of retired members are increased in accordance with
33-11 Section 12(c) of this article. Also, for any year in which a 13th
33-12 payment is made pursuant to Section 12(e) of this article, a 13th
33-13 payment, computed in the same manner, shall also be made to
33-14 survivors who are entitled to receive death benefits at that time.
33-15 (i) If a member or individual receiving a survivor's pension
33-16 dies before monthly payments have been made for at least five
33-17 years, leaving no person otherwise entitled to receive further
33-18 monthly payments with respect to the member, the monthly payments
33-19 shall continue to be made to the designated beneficiary of the
33-20 member or survivor, or to the estate of the member or survivor if a
33-21 beneficiary was not designated, in the same amount as the last
33-22 monthly payment made to the member, survivor, or estate, until
33-23 payments have been made for five years with respect to the member.
33-24 If the member dies after becoming vested but before payments begin,
33-25 leaving no survivors eligible for benefits, the amount of each
33-26 monthly payment over the five-year period shall be the same as the
33-27 monthly payment the member would have received if the member had
34-1 taken disability retirement on the date of death. A member may
34-2 designate a beneficiary in lieu of the member's estate to receive
34-3 the remaining payments in the event the member and all survivors
34-4 die before payments have been received for five years. The
34-5 member's estate or a beneficiary who is not a survivor or dependent
34-6 is not entitled to receive the payment described by Subsection (g)
34-7 of this section.
34-8 Sec. 17. TERMINATION OF EMPLOYMENT; REFUNDS; REEMPLOYMENT.
34-9 (a) When any active member of the pension system separates from
34-10 service, either voluntarily or involuntarily, before becoming
34-11 eligible for an immediate service retirement or disability pension,
34-12 the member ceases to be an active member of the pension system.
34-13 (b) A member of the pension system who has not completed 20
34-14 years of service at the time of separation from service with the
34-15 police department is entitled to a refund of the total of the
34-16 contributions the member made to the pension system, plus any
34-17 amount that was contributed for the member by the city and not
34-18 applied in accordance with this section to provide the member with
34-19 10 years of service. The refund does not include interest, and
34-20 neither the city nor the member is entitled to a refund of the
34-21 contributions the city made on the member's behalf, except as
34-22 expressly provided by this subsection. By receiving the refund,
34-23 the member forfeits any service earned before separation from
34-24 service, even if it is otherwise nonforfeitable.
34-25 (c) The board shall notify each member of the pension system
34-26 of the right to a refund as authorized by this section.
34-27 (d) A member must apply to the board for a refund within one
35-1 year after the date of separation from service. Failure to apply
35-2 for the refund within the one-year period results in a forfeiture
35-3 of the right to the refund except for an inactive member whose
35-4 right to a pension is nonforfeitable. However, the board may
35-5 reinstate any amount forfeited and allow the refund on application
35-6 by the former member.
35-7 (e) Heirs, executors, administrators, personal
35-8 representatives, or assignees are not entitled to apply for and
35-9 receive the refund authorized by this section except as provided by
35-10 Section 16(c) of this article.
35-11 (f) If a person who separates from service and receives a
35-12 refund is subsequently reemployed as an employee of the police
35-13 department, the person shall be reinstated as an active member of
35-14 the pension system. Prior service of the active member with the
35-15 police department may not be counted toward a retirement pension
35-16 unless the member pays to the pension system, not later than the
35-17 90th day after the date of a subsequent separation from service, an
35-18 amount equal to any contributions previously refunded to the member
35-19 under this section. Except as provided by Section 18 of this
35-20 article, a person is not eligible to repay any withdrawn
35-21 contributions unless the person is reemployed by the police
35-22 department of the city for which the prior service was performed.
35-23 (g) A member who is contesting an indefinite suspension
35-24 action may, on application to the board, receive a return of the
35-25 member's contributions and be separated from service on receipt of
35-26 the contributions; otherwise, a suspended member is considered to
35-27 have a separation from service when a final decision of the
36-1 arbitrator adverse to the member is rendered.
36-2 (h) City contributions made under Section 9(b) of this
36-3 article based on the unused sick leave, vacation pay, and
36-4 accumulated overtime pay of a member who has separated from service
36-5 may be applied, at the election of the member seeking a refund, to
36-6 pay a refund of member contributions if the contributions are not
36-7 used under Section 11(c) of this article to satisfy a service
36-8 requirement for retirement.
36-9 Sec. 18. EMPLOYMENT BY ANOTHER DEPARTMENT. (a) Except as
36-10 provided by this section, credit may not be allowed to any person
36-11 for service with any department in the city other than the police
36-12 department. Except as provided by this section, if a person is
36-13 transferred to or from some other department of the city to or from
36-14 the police department, the person's service will be computed from
36-15 the date of entry into the service of the police department until
36-16 the date of separation from service with the police department.
36-17 (b) Solely for purposes of determining whether a person has
36-18 a sufficient number of years of service to receive a retirement
36-19 pension, and not for purposes of determining the amount of the
36-20 pension or DROP credit, a person who is employed in any full-time
36-21 position with the city after November 23, 1998, and has or obtains
36-22 any credited service with the pension system after that date, shall
36-23 receive service credit for any period of full-time employment with
36-24 the same city. However, a person may not receive credit for
36-25 service with both the police department and any other department of
36-26 the city for the same period.
36-27 (c) Notwithstanding Section 17 of this article and
37-1 Subsection (b) of this section, a former member of the pension
37-2 system shall be permitted to repay withdrawn contributions and
37-3 restore service credit previously earned with the pension system,
37-4 even if the former member is not reemployed by the police
37-5 department, if the former member:
37-6 (1) is employed by the same city in which the service
37-7 credit for employment with the police department was earned;
37-8 (2) is a participant in another pension plan
37-9 maintained by the city; and
37-10 (3) repays to the pension system the withdrawn
37-11 contributions not later than the 90th day after the date of
37-12 separation from active employment with the city.
37-13 Sec. 19. PERSONS REJOINING OR TRANSFERRED BY CITY; SERVICE
37-14 CREDIT; DOUBLE BENEFITS; RETURN TO SERVICE. (a) An employee of
37-15 the city who has retired under this article or under former law
37-16 governing the pension system and is or has been transferred by
37-17 action of the city to a classified position in a police department
37-18 included in the pension system again becomes an active member of
37-19 the pension system as of the effective date of the transfer.
37-20 (b) A person who rejoins the pension system under this
37-21 section is entitled to receive service credit for each day of
37-22 service and work performed by the person in a classified position
37-23 in the police department, except for any period during which the
37-24 person is a DROP participant. The board shall add service earned
37-25 after the transfer to the prior service the active member accrued
37-26 in a classified position in the police department. However, the
37-27 active member may not receive service credit under this article,
38-1 except to the extent provided by Section 18, for service performed
38-2 for the city other than in a classified position in the police
38-3 department.
38-4 (c) After a transfer described by this section,
38-5 contributions of the city and the active member become payable as
38-6 for other active members of the pension system.
38-7 (d) When a member who has transferred as described by this
38-8 section subsequently retires, the retired member is entitled to a
38-9 pension computed on the basis of the combined service described by
38-10 Subsection (b) of this section, after deducting any period in which
38-11 the member was suspended from duty without pay, on leave of absence
38-12 without pay, separated from service, or employed by the city in a
38-13 capacity other than in a classified position in the police
38-14 department.
38-15 (e) If a retired member receives both pension benefits from
38-16 the pension system and a salary from a classified position in the
38-17 police department that cover the same period, the retired member
38-18 shall repay to the pension system the pension benefits received
38-19 during that period. The board shall withhold payment of pension
38-20 benefits under this article if it is determined that a retired
38-21 member is receiving both pension benefits from the fund and a
38-22 salary from the police department that cover the same period. On
38-23 request of the board, the city attorney or a private attorney
38-24 chosen by the board shall file suit in a court of competent
38-25 jurisdiction to recover pension benefits owed to the pension system
38-26 under this subsection.
38-27 (f) This article does not authorize the return to service
39-1 with a police department or the resumption of active membership in
39-2 the pension system by a retired member except as specifically
39-3 provided by Section 13 or 14 of this article or this section.
39-4 Sec. 20. DONATIONS. The pension system may accept gifts and
39-5 donations, and the gifts and donations shall be added to the fund
39-6 for the use of the pension system.
39-7 Sec. 21. DETERMINATION OF BENEFITS; PROVISION OF
39-8 INFORMATION. The board may require any member, survivor, or other
39-9 person or entity to furnish information the board requires for the
39-10 determination of benefits under this article. If a person or
39-11 entity does not cooperate in the furnishing or obtaining of
39-12 information required as provided by this section, the board may
39-13 withhold payment of the pension or other benefits dependent on the
39-14 information.
39-15 Sec. 22. LEGAL ADVICE. The city attorney of the city shall
39-16 handle all legal matters for the pension system that are referred
39-17 by the board without additional compensation for the service. The
39-18 board may, however, as it considers necessary, employ outside legal
39-19 counsel to the exclusion of, or to assist, the city attorney and
39-20 pay reasonable compensation for the service from the fund.
39-21 Sec. 23. MEMBERS IN MILITARY SERVICE. (a) A member of the
39-22 pension system engaged in active service in a uniformed service may
39-23 not be required to make the monthly payments into the fund and may
39-24 not lose any previous years' service with the city because of the
39-25 uniformed service. The uniformed service shall count as continuous
39-26 service in the police department if the member returns to the city
39-27 police department after discharge from the uniformed service as an
40-1 employee within the period required by the Uniformed Services
40-2 Employment and Reemployment Rights Act of 1994 (38 U.S.C. Section
40-3 4301 et seq.), as amended, and the uniformed service does not
40-4 exceed the period for which a person is entitled to have service
40-5 counted pursuant to that Act.
40-6 (b) The city is required to make its regular monthly
40-7 payments into the fund on behalf of each member while the member is
40-8 engaged in a uniformed service. If a member who has less than 10
40-9 years of service in the pension system dies directly or indirectly
40-10 as a result of the uniformed service, the spouse, dependent
40-11 children, dependent parent, or estate of the member is entitled to
40-12 receive a refund in the same manner as described by Section 16(c)
40-13 of this article.
40-14 Sec. 24. ACTIONS FOR FUNDS MISAPPLIED. (a) The board may
40-15 recover by civil action from any offending party or from the
40-16 party's bondsman, if any, any money paid out or obtained from the
40-17 fund through fraud, misrepresentation, theft, embezzlement, or
40-18 misapplication and may institute, conduct, and maintain the action
40-19 in the name of the board for the use and benefit of the fund.
40-20 (b) Payments due on behalf of a dependent child shall be
40-21 paid to the dependent child's guardian, if any, or if none to the
40-22 person with whom the dependent child is living, except that the
40-23 board may make payments directly to a dependent child in an
40-24 appropriate case and withhold payments otherwise due on behalf of
40-25 any person if the board has reason to believe the payments are not
40-26 being applied on behalf of the person entitled to receive them.
40-27 The board may request a court of competent jurisdiction to appoint
41-1 a person to receive and administer the payments due to any
41-2 dependent child or person under a disability.
41-3 Sec. 25. FEDERAL TAX QUALIFICATION OF FUND. (a) The fund
41-4 described by this article is intended to qualify under Section
41-5 401(a) of the code and is for the exclusive benefit of the members
41-6 and their survivors. No part of the corpus or income of the fund
41-7 may ever be used for, or diverted to, any purpose other than the
41-8 benefit of members and their survivors as provided by this article.
41-9 (b) A member or survivor of a member of the pension system
41-10 may not accrue a retirement pension, disability retirement
41-11 allowance, death benefit allowance, DROP benefit, or any other
41-12 benefit under this article in excess of the benefit limits
41-13 applicable to the fund under Section 415 of the code. The board
41-14 shall reduce the amount of any benefit that exceeds those limits by
41-15 the amount of the excess. If total benefits under this fund and
41-16 the benefits and contributions to which any member is entitled
41-17 under any other qualified plans maintained by the city that employs
41-18 the member would otherwise exceed the applicable limits under
41-19 Section 415 of the code, the benefits the member would otherwise
41-20 receive from the fund shall be reduced to the extent necessary to
41-21 enable the benefits to comply with Section 415.
41-22 (c) Any member or survivor who receives any distribution
41-23 that is an eligible rollover distribution as defined by Section
41-24 402(c)(4) of the code is entitled to have that distribution
41-25 transferred directly to another eligible retirement plan of the
41-26 member's or survivor's choice on providing direction to the pension
41-27 system regarding that transfer in accordance with procedures
42-1 established by the board.
42-2 (d) The total salary taken into account for any purpose for
42-3 any member of the pension system may not exceed $200,000 for any
42-4 year for an eligible participant, or $150,000 a year for an
42-5 ineligible participant. These dollar limits shall be adjusted from
42-6 time to time in accordance with guidelines provided by the United
42-7 States secretary of the treasury. For purposes of this subsection,
42-8 an eligible participant is a person who first became an active
42-9 member before 1996, and an ineligible participant is a member who
42-10 is not an eligible participant.
42-11 (e) Accrued benefits under this article become 100 percent
42-12 nonforfeitable for a member on the date the member has completed 10
42-13 years of service. If the pension system or the fund is terminated
42-14 or partially terminated, or city contributions to the fund are
42-15 discontinued completely, there may not be a reversion of funds to
42-16 the employer. On complete or partial termination or discontinuance
42-17 of city contributions, the fund held by the pension system shall be
42-18 used exclusively for benefits for members and their surviving
42-19 spouses and dependents, and the affected employees' rights to the
42-20 benefits, to the extent funded, shall be nonforfeitable if not
42-21 already nonforfeitable under this subsection.
42-22 (f) Amounts representing forfeited nonvested benefits of
42-23 terminated members may not be used to increase benefits payable
42-24 from the fund.
42-25 (g) Distribution of benefits must begin not later than April
42-26 1 of the year following the calendar year during which the member
42-27 entitled to the benefits becomes 70-1/2 years of age or terminates
43-1 employment with the employer, whichever is later, and must
43-2 otherwise conform to Section 401(a)(9) of the code.
43-3 (h) If the amount of any benefit is to be determined on the
43-4 basis of actuarial assumptions that are not otherwise specifically
43-5 set forth for that purpose in this article, the actuarial
43-6 assumptions to be used are those earnings and mortality assumptions
43-7 being used on the date of the determination by the pension system's
43-8 actuary and approved by the board. The actuarial assumptions being
43-9 used at any particular time shall be attached as an addendum to a
43-10 copy of this article and treated for all purposes as a part of this
43-11 article. The actuarial assumptions may be changed by the pension
43-12 system's actuary at any time if approved by the board, but a change
43-13 in actuarial assumptions may not result in any decrease in benefits
43-14 accrued as of the effective date of the change.
43-15 (i) To the extent permitted by law, the board may adjust the
43-16 benefits of retired members and survivors by increasing any benefit
43-17 that was reduced because of Section 415 of the code. If Section
43-18 415 of the code is amended to permit the payment of amounts
43-19 previously precluded under that section, the board may adjust the
43-20 benefits of retired members or their surviving spouses or
43-21 dependents, including the restoration of benefits previously
43-22 denied. Benefits paid under this subsection are not considered as
43-23 extra base salary earned after retirement but as the delayed
43-24 payment of benefits earned before retirement.
43-25 (j) The board may make any change in this article to the
43-26 extent that the change is necessary to assure compliance with the
43-27 qualification requirements of Section 401 of the code or any other
44-1 federal law.
44-2 Sec. 26. EXCESS BENEFIT PLAN. (a) A separate,
44-3 nonqualified, unfunded excess benefit plan is created outside the
44-4 fund.
44-5 (b) In this section:
44-6 (1) "Excess benefit plan" or "plan" means the
44-7 separate, nonqualified, unfunded excess benefit plan created by
44-8 this section for the benefit of eligible members, as amended or
44-9 restated from time to time, that is intended to be a "qualified
44-10 governmental excess benefit arrangement" within the meaning of
44-11 Section 415(m) of the code.
44-12 (2) "Qualified plan" means the pension system and any
44-13 other plan maintained by the city for the exclusive benefit of some
44-14 or all of the members of the pension system that has been found by
44-15 the Internal Revenue Service to be qualified or has been treated by
44-16 the city as a qualified plan under Section 401 of the code.
44-17 (3) "Maximum benefit" means the retirement benefit a
44-18 retired member and the spouse, dependent child, or dependent parent
44-19 of a retired member or deceased member or retiree are entitled to
44-20 receive from all qualified plans in any month after giving effect
44-21 to Section 25(b) of this article and any similar provisions of any
44-22 other qualified plans designed to conform to Section 415 of the
44-23 code.
44-24 (4) "Excess benefit participant" means any retired
44-25 member whose retirement benefits as determined on the basis of all
44-26 qualified plans without regard to the limitations of Section 25(b)
44-27 of this article and comparable provisions of other qualified plans
45-1 would exceed the maximum benefit permitted under Section 415 of the
45-2 code.
45-3 (5) "Unrestricted benefit" means the monthly
45-4 retirement benefit a retired member and the spouse, dependent
45-5 child, or dependent parent of a retired member or deceased member
45-6 would have received under the terms of all qualified plans except
45-7 for the restrictions of Section 25(b) of this article and any
45-8 similar provisions of any other qualified plans designed to conform
45-9 to Section 415 of the code.
45-10 (c) An excess benefit participant who is receiving benefits
45-11 from the pension system is entitled to a monthly benefit under this
45-12 excess benefit plan in an amount equal to the lesser of:
45-13 (1) the member's unrestricted benefit less the maximum
45-14 benefit; or
45-15 (2) the amount by which the member's monthly benefit
45-16 from the fund has been reduced because of the limitations of
45-17 Section 415 of the code.
45-18 (d) If a spouse, dependent child, or dependent parent is
45-19 entitled to preretirement or postretirement death benefits under a
45-20 qualified plan after the death of an excess benefit participant,
45-21 the surviving spouse, dependent child, or dependent parent is
45-22 entitled to a monthly benefit under the excess benefit plan equal
45-23 to the benefit determined in accordance with this article without
45-24 regard to the limitations under Section 25(b) of this article or
45-25 Section 415 of the code, less the maximum benefit.
45-26 (e) Any benefit to which a person is entitled under this
45-27 section shall be paid at the same time and in the same manner as
46-1 the benefit would have been paid from the pension system if payment
46-2 of the benefit from the pension system had not been precluded by
46-3 Section 25(b) of this article. An excess benefit participant or
46-4 any beneficiary may not, under any circumstances, elect to defer
46-5 the receipt of all or any part of a payment due under this section.
46-6 (f) The board shall administer the plan, and the board's
46-7 designee shall also carry out the business of the board with
46-8 respect to the plan. Except as otherwise provided by this section,
46-9 the rights, duties, and responsibilities of the board and the
46-10 board's designee are the same for the plan as for the funds of the
46-11 pension system.
46-12 (g) The consultants, independent auditors, attorneys, and
46-13 actuaries selected to perform services for the fund also shall
46-14 perform services for the plan, but the fees for their services may
46-15 not be paid by the fund. The actuary engaged to perform services
46-16 for the fund shall advise the board of the amount of benefits that
46-17 may not be provided from the fund solely by reason of the
46-18 limitations of Section 415 of the code and the amount of employer
46-19 contributions that will be made to the plan rather than to the
46-20 fund.
46-21 (h) Contributions may not be accumulated under the plan to
46-22 pay future retirement benefits. Instead, each payment of city
46-23 contributions that would otherwise be made to the fund under
46-24 Section 9 of this article shall be reduced by the amount determined
46-25 by the board or its designee as necessary to meet the requirements
46-26 for retirement benefits under the plan, including reasonable
46-27 administrative expenses, until the next payment of city
47-1 contributions is expected to be made to the pension system. The
47-2 city shall then pay to the plan, from the withheld contributions,
47-3 not earlier than the 30th day before the date each distribution of
47-4 monthly retirement benefits is required to be made from the plan,
47-5 the amount necessary to satisfy the obligation to pay monthly
47-6 retirement benefits from the plan. The board or its designee shall
47-7 satisfy the obligation of the plan to pay retirement benefits from
47-8 the employer contributions so transferred for that month.
47-9 (i) Employer contributions otherwise required to be made to
47-10 the pension system under Section 9 of this article and any other
47-11 qualified plan shall be divided into those contributions required
47-12 to pay retirement benefits under this section and those
47-13 contributions paid into and accumulated to pay the maximum benefits
47-14 permitted under the qualified plan. Employer contributions made to
47-15 provide retirement benefits under this section may not be
47-16 commingled with the money of the fund forming part of the pension
47-17 system or any other qualified plan.
47-18 Sec. 27. AGREEMENT TO CHANGE BENEFITS. (a) Notwithstanding
47-19 any law to the contrary, the board or a designee of the board is
47-20 responsible for representing the interests of the pension system
47-21 and all pension issues and benefits affecting the pension system or
47-22 its members and beneficiaries under this article. The board may
47-23 enter into a written agreement with the city on behalf of the
47-24 pension system and members and beneficiaries of the pension system
47-25 if the agreement is approved by the board and signed by the mayor
47-26 and the board or the board's designee.
47-27 (b) A pension benefit or allowance provided by this article
48-1 may be increased if the increase:
48-2 (1) is first approved by a qualified actuary selected
48-3 by the board;
48-4 (2) is approved by the board and the city in a written
48-5 agreement as authorized by this section; and
48-6 (3) does not deprive a member, without the member's
48-7 written consent, of a right to receive benefits that have become
48-8 fully vested and matured in the member.
48-9 Sec. 28. NONREDUCTION, NONALIENATION, AND NONASSIGNMENT OF
48-10 BENEFITS. (a) No portion of the funds held by the pension system,
48-11 either before or after an order for its disbursement by the board,
48-12 and no amounts due or to become due to any member or survivor under
48-13 this article may be held, seized, taken, subject to, detained, or
48-14 levied on by virtue of any execution, attachment, garnishment,
48-15 injunction, or other writ, and no order or decree, and no process
48-16 may issue out of or by any court of this state for the payment or
48-17 satisfaction, in whole or in part, out of the funds held by or due
48-18 from the pension system, of any debt, damage, claim, demand, or
48-19 judgment against any member, survivor, dependent, or any other
48-20 person.
48-21 (b) No part of the funds or any claim to the funds may be
48-22 directly or indirectly assigned or transferred. Any attempt to
48-23 transfer or assign any part of the funds or a claim to the funds is
48-24 void.
48-25 (c) The funds shall be held, kept, and disbursed for the
48-26 purposes provided by this article, and for no other purpose, except
48-27 that a retired member, survivor, or dependent, at the person's
49-1 discretion, may have deducted from the person's pension the monthly
49-2 premium cost of any group insurance program in which the retired
49-3 member is participating.
49-4 (d) A benefit payable under this article may not be reduced
49-5 or discontinued for any person except under the terms applicable to
49-6 the benefit at the time the person becomes eligible to receive the
49-7 benefit.
49-8 (e) This section does not prevent the division of the
49-9 benefits accrued by a member under any court order determined by
49-10 the board or its designee to be a qualified domestic relations
49-11 order and the payment of a share of a retired member's benefits or
49-12 contributions to an alternate payee in accordance with the order.
49-13 SECTION 2. Chapter 76, Acts of the 50th Legislature, Regular
49-14 Session, 1947 (Article 6243g-1, Vernon's Texas Civil Statutes), and
49-15 Article 6243g-3, Revised Statutes, are repealed.
49-16 SECTION 3. (a) Not later than September 30, 1999, the board
49-17 of trustees of each pension system to which Article 6243g-4,
49-18 Revised Statutes, as added by this Act, applies shall hold an
49-19 election among all of its members. The board shall select an
49-20 independent party not affiliated with the board, the pension
49-21 system, or any employee or retiree organization to conduct and
49-22 tabulate the results of the election. Each active, inactive, or
49-23 retired member of the pension system is eligible to vote in the
49-24 election and has one vote.
49-25 (b) The ballot shall be printed to permit voting:
49-26 (1) alternatively either for:
49-27 "PROPOSITION A (Direct Voting)--To provide that the board of
50-1 trustees of the pension system consist in part of (1) three
50-2 employees of the police department who are members of the pension
50-3 system and who are elected by the active members of the police
50-4 department and (2) two retired members who are receiving pensions
50-5 from the pension system, who are not officers or employees of the
50-6 city, and who are elected by the inactive and retired members of
50-7 the system"; or
50-8 "PROPOSITION B (Universal Voting)--To provide that the board
50-9 of trustees of the pension system consist in part of (1) three
50-10 employees of the police department who are members of the pension
50-11 system and who are elected by the active, inactive, and retired
50-12 members of the system and (2) two retired members who are receiving
50-13 pensions from the pension system, who are not officers or employees
50-14 of the city, and who are elected by the active, inactive, and
50-15 retired members of the system"; and
50-16 (2) for or against the proposition:
50-17 "PROPOSITION ONE--To provide that officers and employees of
50-18 any employee organization or retiree organization and employees of
50-19 the pension system are prohibited from being elected to, appointed
50-20 to, or in any other way becoming a member of the board of trustees
50-21 of the pension system."
50-22 (c) The proposition described by Subsection (b)(1) of this
50-23 section receiving a majority of the votes at the election has
50-24 immediate effect as law and applies to each vacancy on the board of
50-25 trustees that occurs on or after its effective date. If a majority
50-26 of the votes at the election favor the proposition described by
50-27 Subsection (b)(2) of this section, it has immediate effect as law
51-1 and applies to each vacancy on the board of trustees that occurs on
51-2 or after its effective date. If a majority of the votes at the
51-3 election do not favor the proposition described by Subsection
51-4 (b)(2) of this section, it has no effect.
51-5 SECTION 4. Notwithstanding Section 12(b), Article 6243g-4,
51-6 Revised Statutes, as added by this Act, the monthly benefits of a
51-7 person who retires or retired after November 23, 1998, and before
51-8 January 1, 2000, is determined by the benefit formula in effect
51-9 immediately before the effective date of this Act.
51-10 SECTION 5. Each pension system to which Article 6243g-4,
51-11 Revised Statutes, as added by this Act, applies shall reimburse
51-12 each member of the system who has repaid to the system previously
51-13 refunded contributions for any interest paid on the amounts repaid.
51-14 SECTION 6. This Act takes effect September 1, 1999.
51-15 SECTION 7. The importance of this legislation and the
51-16 crowded condition of the calendars in both houses create an
51-17 emergency and an imperative public necessity that the
51-18 constitutional rule requiring bills to be read on three several
51-19 days in each house be suspended, and this rule is hereby suspended.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 3377 was passed by the House on April
20, 1999, by a non-record vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 3377 was passed by the Senate on May
17, 1999, by the following vote: Yeas 30, Nays 0.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor