76R10713 GCH-F
By Turner of Harris H.B. No. 3377
Substitute the following for H.B. No. 3377:
By Greenberg C.S.H.B. No. 3377
A BILL TO BE ENTITLED
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, 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, officer, or employee of the
9-22 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 a legal holiday, the
12-12 parties must strike names from the list on the next workday. The
12-13 parties or their designees must agree on a date for the hearing
12-14 that is within the period prescribed by Subsection (f) of this
12-15 section.
12-16 (f) The hearing must begin as soon as the hearing examiner
12-17 can be scheduled but not later than the 60th day after the date the
12-18 board votes to remove the board member. In a hearing conducted
12-19 under this subsection, the hearing examiner may issue subpoenas.
12-20 The parties may agree to an expedited hearing procedure. Unless
12-21 otherwise agreed by the parties, in an expedited procedure, the
12-22 hearing examiner must issue a decision not later than the 10th day
12-23 after the date the hearing ends. Unless operating under an
12-24 expedited hearing procedure, the hearing examiner shall make a
12-25 reasonable effort to issue a decision not later than the 30th day
12-26 after the date the hearing ends. The hearing examiner's inability
12-27 to meet the time requirements imposed by this subsection does not
13-1 affect the hearing examiner's jurisdiction or final decision. The
13-2 final decision of the hearing examiner may be either to remove the
13-3 board member or not to remove the board member from the board. A
13-4 decision may be made to remove the board member from the board only
13-5 if the hearing examiner determines that the board member violated
13-6 Subchapter A, Chapter 121, Property Code. The hearing examiner's
13-7 fees and expenses shall be paid by the pension system. The costs
13-8 of a witness shall be paid by the party who calls the witness.
13-9 (g) If the hearing examiner's decision is to remove a board
13-10 member, the person removed is entitled to an opportunity to have
13-11 the hearing examiner's decision reviewed. To have the decision
13-12 reviewed, not later than the 30th day after the date of a decision
13-13 under Subsection (f) of this section, the person removed must
13-14 obtain signatures of at least one-third of the active and retired
13-15 members of the pension system requesting an election to overrule
13-16 the removal decision under Subsection (f). If the 30th day is a
13-17 Saturday, Sunday, or legal holiday, the following workday is
13-18 considered the 30th day. Each signature must indicate the signing
13-19 date beside the signature, be legible, and be accompanied by the
13-20 signer's printed name and employee payroll number, if any. A
13-21 member's payroll number may not be publicly disclosed. The board
13-22 shall verify the list not later than the 10th day after the date
13-23 the board receives it. Not later than the 30th day after the date
13-24 the board has verified the signatures, the board shall hold an
13-25 election among the active and retired members. If a majority of
13-26 the votes cast at an election in which a majority of the active and
13-27 retired members of the pension system participate favor overruling
14-1 the hearing examiner's decision, the board member shall be
14-2 reinstated. If a majority do not vote to overrule the decision to
14-3 remove a board member, a replacement election must be held not
14-4 later than the 30th day after the date of the preceding election.
14-5 (h) During the period beginning on the date of the board
14-6 vote to remove a board member and ending on the date the board
14-7 member is reinstated under this section, the person's privileges as
14-8 a board member, including voting privileges, are suspended.
14-9 Sec. 8. CONTRIBUTIONS BY MEMBERS. (a) Each active member
14-10 of the pension system shall pay into the system each month 8-3/4
14-11 percent of the member's total direct pay. The payments shall be
14-12 deducted by the city from the salary of each active member monthly
14-13 and paid to the pension system. Except for the repayment of
14-14 withdrawn contributions under Section 17(f) or 18(c)(3) of this
14-15 article, a person may not be required or permitted to make any
14-16 payments into the pension system after the person separates from
14-17 service.
14-18 (b) This article does not increase or decrease the
14-19 contribution obligation of any member that arose before September
14-20 1, 1999, or give rise to any claim for refund for any contributions
14-21 made before that date.
14-22 Sec. 9. MONTHLY PAYMENT BY CITY. (a) For fiscal years
14-23 ending before June 30, 2002, the city shall make contributions to
14-24 the fund after each payroll period in an amount previously agreed
14-25 to by the city and the board. For the fiscal year ending June 30,
14-26 2002, the city's contribution rate shall be composed of the normal
14-27 cost plus the level percentage of salary payment required to
15-1 amortize the actuarial liability over a period of 40 years from
15-2 January 1, 1983, computed on the basis of an acceptable actuarial
15-3 reserve funding method approved by the board. For each fiscal year
15-4 ending after June 30, 2002, the city's contribution shall be the
15-5 sum of (1) an amount computed in the manner provided for the
15-6 contribution for the fiscal year ending June 30, 2002, plus (2)
15-7 $2,000,000 multiplied by the number of fiscal years that have ended
15-8 since June 30, 2002, but not more than 16 percent of the aggregate
15-9 total direct pay of all active members for the fiscal year. If the
15-10 amount described by (1) in the preceding sentence is greater than
15-11 16 percent of the aggregate total direct pay of all active members
15-12 for the year, the amount described by (1) shall be contributed.
15-13 (b) In addition to the contributions required by Subsection
15-14 (a) of this section, the city shall contribute to the fund each
15-15 month an amount equal to the aggregate payments the city, in the
15-16 absence of this subsection, would have paid during that month to
15-17 members who have separated from service for unused sick leave,
15-18 vacation pay, and accumulated overtime pay to which the members
15-19 were entitled at the time of separation from service if the members
15-20 had 10 years or more of service or would have had 10 years or more
15-21 of service after application of these amounts to provide additional
15-22 service as provided by Section 17 of this article. Members
15-23 described by this section may no longer receive these payments
15-24 directly.
15-25 (c) The governing body of a city to which this article
15-26 applies by ordinance or resolution may provide that the city pick
15-27 up active member contributions required by Section 8 of this
16-1 article so that the contributions of all active members of the
16-2 pension system qualify as picked up contributions under Section
16-3 414(h)(2) of the code. If the governing body of a city adopts an
16-4 ordinance or resolution under this section, the city, the board,
16-5 and any other necessary party shall implement the action as soon as
16-6 practicable. Contributions picked up as provided by this
16-7 subsection shall be included in the determination of an active
16-8 member's total direct pay, deposited to the individual account of
16-9 the active member on whose behalf they are made, and treated for
16-10 all purposes, other than federal tax purposes, in the same manner
16-11 and with like effect as if they had been deducted from the salary
16-12 of, and made by, the active member.
16-13 Sec. 10. INVESTMENT OF SURPLUS. (a) If the board
16-14 determines that a surplus of funds exists in an amount exceeding
16-15 the current demands upon the pension system, the board shall invest
16-16 the surplus funds in the manner provided for by Chapter 802,
16-17 Government Code.
16-18 (b) The board may select an investment manager or investment
16-19 advisor if the board determines the service is desirable.
16-20 Selection of managers or advisors must be made from firms that have
16-21 made presentations in person or in writing to the board.
16-22 (c) The board may terminate a contract with an investment
16-23 advisor at any time. The board may terminate a contract with an
16-24 investment manager on notice the board considers appropriate. A
16-25 contract may not require the pension system to pay a penalty for
16-26 early termination. The costs of investment management or advisory
16-27 services shall be paid from the fund.
17-1 Sec. 11. SERVICE CREDIT. (a) A member who returns to
17-2 service after an interruption in service is entitled to credit for
17-3 the previous service to the extent provided by Section 19 of this
17-4 article. In addition, a member who is retiring shall receive
17-5 one-half day of service for each day for which the city is required
17-6 to make contributions with respect to the member's unused sick
17-7 leave, vacation pay, or accumulated overtime under Section 9(b) of
17-8 this article, except to the extent that the member elects to have
17-9 the amounts credited to the member's DROP account. Under no
17-10 circumstances may payments for the same days of unused sick leave,
17-11 vacation pay, or accumulated overtime be used to both increase a
17-12 member's service and credit the member's DROP account.
17-13 (b) Notwithstanding Subsection (a) of this section, if a
17-14 member has withdrawn the contributions made during any previous
17-15 period of service, the previous period of service may not be
17-16 counted in determining years of service unless the contributions
17-17 are repaid to the pension system in accordance with Section 17 of
17-18 this article.
17-19 (c) A member may not have any service credited for unused
17-20 sick leave, vacation pay, or accumulated overtime until the date
17-21 the member retires, at which time the member may apply some or all
17-22 of the service to satisfy the requirements for retirement, although
17-23 the member otherwise could not meet the service requirement without
17-24 the credit.
17-25 (d) The board shall determine the prior service to be
17-26 credited to each employee of the police department who becomes an
17-27 active member of the pension system. The board shall rely on the
18-1 personnel records of the city or the police department in
18-2 determining prior service credits.
18-3 Sec. 12. RETIREMENT; AMOUNT OF PENSION; ANNUAL ADJUSTMENTS.
18-4 (a) A member who separates from service after earning 20 or more
18-5 years of service is eligible to receive a monthly service pension,
18-6 beginning in the month of separation from service. A member who
18-7 separates from service with the city after November 23, 1998,
18-8 after earning 10 or more but less than 20 years of service in any
18-9 of the city's pension systems and who complies with all applicable
18-10 requirements of Section 19 of this article is eligible to receive a
18-11 monthly service pension, beginning in the month the individual
18-12 attains 60 years of age. An individual may not receive a pension
18-13 under this article while still an active member, except as provided
18-14 by Subsection (f) of this section. All service pensions end with
18-15 the month in which the retired member dies.
18-16 (b) Except as otherwise provided by this section, the
18-17 monthly service pension of a member who separates from service
18-18 after November 23, 1998, is equal to 2.5 percent of the member's
18-19 average total direct pay for each of the member's first 20 years of
18-20 service, plus an additional two percent of the member's average
18-21 total direct pay for each of the member's subsequent years of
18-22 service, computed to the nearest one-twelfth of a year. A member
18-23 who separates from service after November 23, 1998, including a
18-24 member who was a DROP participant, and begins to receive a monthly
18-25 service pension shall also receive a one-time lump-sum payment of
18-26 $5,000 at the same time the first monthly pension payment is made.
18-27 The lump-sum payment under this subsection is not available to a
19-1 member who has previously received a $5,000 payment under this
19-2 section or Section 16 of this article.
19-3 (c) The pension payable to each retired member of the
19-4 pension system shall be adjusted annually, effective April 1 of
19-5 each year, upward at a rate equal to two-thirds of any percentage
19-6 increase in the Consumer Price Index for All Urban Consumers for
19-7 the preceding year. The amount of the annual adjustment may not be
19-8 less than three percent or more than eight percent of the pension
19-9 being paid immediately before the adjustment, notwithstanding a
19-10 greater or lesser increase in the consumer price index.
19-11 (d) A retired member who receives a service pension under
19-12 this article is entitled to receive an additional amount each month
19-13 equal to $88.05, beginning on the date the retired member's pension
19-14 begins and continuing until the end of the month in which the
19-15 retired member dies. This amount is intended to defray the retired
19-16 member's group medical insurance costs and will be paid directly by
19-17 the fund to the retired member for the retired member's lifetime.
19-18 (e) At the end of each calendar year beginning after 1998,
19-19 and subject to the conditions provided by this subsection, the
19-20 pension system shall make a 13th benefit payment to each person who
19-21 is receiving a service pension. The amount of the 13th payment
19-22 shall be the same as the last monthly payment received by the
19-23 retiree or survivor before issuance of the payment, except the
19-24 payment received by any person who has been in pay status for less
19-25 than 12 months shall be for a prorated amount determined by
19-26 dividing the amount of the last payment received by 12 and
19-27 multiplying this amount by the number of months the person has been
20-1 in pay status. The 13th payment may be made only for those
20-2 calendar years in which:
20-3 (1) the assets held by the fund will equal or exceed
20-4 its liabilities after the 13th payment is made;
20-5 (2) the rate of return on the fund's assets exceeded
20-6 9.25 percent for the last fiscal year ending before the payment;
20-7 and
20-8 (3) the payment will not cause an increase in the
20-9 contribution the city would have been required to make if the 13th
20-10 payment had not been made.
20-11 (f) Notwithstanding anything to the contrary in this
20-12 article, an active or inactive member who is eligible to
20-13 participate in the executive official pension plan established by
20-14 Chapter 358, Acts of the 48th Legislature, Regular Session, 1943
20-15 (Article 6243g, Vernon's Texas Civil Statutes), or a successor
20-16 statute, may, while continuing employment with the police
20-17 department, participate in the executive official pension plan and
20-18 elect:
20-19 (1) if an active member:
20-20 (A) to begin receiving an immediate pension
20-21 benefit and be considered a retired member eligible for all rights
20-22 and privileges afforded any other retired member under this
20-23 article, if the member has 20 years or more of service and is
20-24 eligible for retirement under this section except for the
20-25 continuing employment; or
20-26 (B) to enter DROP if the member satisfies all
20-27 requirements of this article for DROP membership; or
21-1 (2) if an inactive member, to begin receiving an
21-2 immediate pension benefit equal to 2.5 percent of the member's
21-3 average total direct pay at the time the member became inactive for
21-4 the member's first 20 years of service and be entitled to all
21-5 rights and privileges afforded a retired member under this article.
21-6 (g) Notwithstanding anything to the contrary in this
21-7 article, service pensions that began before September 1, 1999,
21-8 shall continue to be paid in accordance with applicable prior law,
21-9 subject only to the adjustments that are specifically provided by
21-10 this section.
21-11 Sec. 13. RESUMPTION OF SERVICE AS DEPARTMENT HEAD AFTER
21-12 RETIREMENT. (a) The pension system shall suspend all pension
21-13 payments to a retired member who has separated from service and is
21-14 subsequently appointed as the department head of the police
21-15 department. The suspension of payments begins on the effective
21-16 date of the person's appointment.
21-17 (b) Pension benefits based on the person's previous period
21-18 of service do not accrue during the period of pension payment
21-19 suspension described by Subsection (a) of this section, but the
21-20 person again becomes an active member during this period, and
21-21 contributions of the city and the department head for the
21-22 subsequent service are payable during the period. The department
21-23 head retains credit for all previous service and acquires credit
21-24 for the subsequent service unless the department head is or becomes
21-25 a DROP participant.
21-26 (c) Once the department head again separates from service,
21-27 pension benefits under this article shall resume based on both
22-1 periods of service.
22-2 Sec. 14. DEFERRED RETIREMENT OPTION PLAN. (a) In this
22-3 section "DROP benefit" means the total amount credited to a
22-4 member's notional DROP account, payable as described by this
22-5 section, plus a monthly retirement pension.
22-6 (b) An active member who has at least 20 years of service
22-7 with the police department may file with the pension system an
22-8 irrevocable election to participate in DROP and receive a DROP
22-9 benefit instead of the standard form of pension provided by this
22-10 article. The election may be made, under procedures established by
22-11 the board, by an active member who has attained the required years
22-12 of service.
22-13 (c) The monthly service pension and death benefits of an
22-14 active member who becomes a DROP participant will be determined as
22-15 if the active member had separated from service and begun receiving
22-16 a pension on the effective date of the DROP election. The active
22-17 member does not retire but does not accrue additional service
22-18 credit beginning on the effective date of the election, and
22-19 increases in pay that occur on or after that date may not be used
22-20 in computing the active member's monthly service pension, but
22-21 cost-of-living adjustments that occur on or after that date and
22-22 that otherwise would be applicable to the pension will be made.
22-23 (d) The member's DROP benefit is determined as provided by
22-24 this subsection and Subsection (e) of this section. Each month an
22-25 amount equal to the monthly service pension the active member would
22-26 have been entitled to receive if the active member had separated
22-27 from service on the effective date of entry into DROP, less any
23-1 amount that is intended to help defray the active member's group
23-2 medical insurance costs as described by Section 12(d) of this
23-3 article, shall be credited to a notional DROP account for the
23-4 active member, and each month an amount equal to the monthly
23-5 contributions the active member makes to the fund on and after the
23-6 effective date of entry into DROP also shall be credited to the
23-7 same notional DROP account. In any year in which a 13th payment is
23-8 made to retired members under Section 12(e) of this article, an
23-9 amount equal to the amount of the 13th payment that would have been
23-10 made to the DROP participant if the DROP participant had retired on
23-11 the date of DROP entry will be credited to the DROP account. In
23-12 addition, any amount that is contributed by the city under Section
23-13 9(b) of this article with respect to the active member's unused
23-14 sick leave, vacation pay, or accumulated overtime, and that is not
23-15 required to be used to provide 10 or 20 years of service to the
23-16 member under Section 11 of this article or used to repay withdrawn
23-17 contributions under Section 18(c) of this article shall be credited
23-18 to the DROP account as of the end of the month in which it is
23-19 contributed.
23-20 (e) As of the end of each month an amount is credited to
23-21 each active member's notional DROP account at the rate of
23-22 one-twelfth of a hypothetical earnings rate on amounts in the
23-23 account. The hypothetical earnings rate is determined for each
23-24 calendar year based on the average of the aggregate annual rate of
23-25 return on investments of the pension system for the five
23-26 consecutive fiscal years ending June 30 preceding the calendar year
23-27 to which the earnings rate applies. The board may lower any future
24-1 rate below the rate otherwise prescribed by this subsection to the
24-2 extent necessary to ensure that the DROP does not adversely affect
24-3 the financial condition of the fund.
24-4 (f) If a DROP participant separates from service because of
24-5 disability or death, the member or the member's spouse or, if there
24-6 is no eligible spouse, any other person eligible to receive
24-7 benefits under Section 16 of this article, as applicable, may
24-8 either receive an amount equal to the member's DROP account or
24-9 revoke the member's DROP election and elect to receive benefits as
24-10 provided by this article without regard to this section. A
24-11 revocation and election under this subsection must be made at the
24-12 time and in the manner provided in a procedure that the board may
24-13 adopt from time to time. Alternatively, the retired member, a
24-14 deceased member's spouse, or, if there is no spouse, the person
24-15 entitled to receive benefits under Section 16 of this article may
24-16 elect to receive a distribution that is equal to the member's DROP
24-17 account and benefits as described by Subsection (c) of this
24-18 section.
24-19 (g) In lieu of receiving a lump sum DROP benefit on
24-20 separation from service, a retired member who has been a DROP
24-21 participant may leave the retired member's DROP account with the
24-22 pension system, in which case interest will be credited to the DROP
24-23 account in the manner described by this subsection. The interest
24-24 credited for any month shall be at the applicable annual interest
24-25 rate as defined by Section 417(e)(3)(A)(ii)(II) of the code and
24-26 published by the Internal Revenue Service for June of the year
24-27 preceding the calendar year in which the interest is credited.
25-1 (h) Instead of beginning to receive a service pension on
25-2 separation from service in accordance with Section 12 of this
25-3 article, a retired member who is a DROP participant may elect to
25-4 have part or all of the amount that would otherwise be paid as a
25-5 monthly service pension, less any amount required to pay the
25-6 retired member's share of group medical insurance costs, credited
25-7 to a DROP account, in which case the additional amounts will become
25-8 eligible to be credited with hypothetical earnings in the same
25-9 manner as the amounts described by Subsection (g) of this section.
25-10 (i) A retired member who has not attained age 70-1/2,
25-11 whether or not a DROP participant before retirement, may elect to
25-12 have part or all of an amount equal to the monthly service pension
25-13 the retired member would otherwise be entitled to receive, less any
25-14 amount required to pay the retired member's share of group medical
25-15 insurance costs, credited to a DROP account, in which case the
25-16 amounts will become eligible to be credited with hypothetical
25-17 earnings in the same manner as the amounts described by Subsection
25-18 (g) of this section. A retired member who has elected to have
25-19 monthly service pension benefits credited to a DROP account under
25-20 this subsection or Subsection (h) of this section may direct that
25-21 the credits stop and the monthly service pension resume at any
25-22 time. However, a retired member who stops the credits at any time
25-23 after September 1, 1999, may not later resume the credits.
25-24 (j) A retired member who is a DROP participant may elect to
25-25 receive distribution of the DROP account in a one-time lump-sum
25-26 payment or in any other form of distribution that is approved by
25-27 the board and satisfies the requirements of Section 401(a)(9) of
26-1 the code. Distributions to a deceased member's survivors, as
26-2 described by Subsection (f) of this section, shall be made in a
26-3 lump sum as soon as administratively feasible after the deceased
26-4 member's death.
26-5 (k) If a retired member who is or was a DROP participant is
26-6 rehired as an employee of the police department, any pension or
26-7 DROP distribution that was being paid shall be suspended and the
26-8 monthly amount described by Subsection (d) of this section will
26-9 again begin to be credited to the DROP account while the member
26-10 continues to be an employee. If the member's DROP account has been
26-11 completely distributed, a new notional account will be created to
26-12 receive the member's monthly credits. If a retired member who was
26-13 never a DROP participant is rehired as an employee of the police
26-14 department, that member shall be eligible to elect participation in
26-15 DROP on the same basis as any other member.
26-16 (l) If DROP causes any unanticipated actuarial costs, the
26-17 board may take action as necessary to mitigate the unanticipated
26-18 actuarial cost, including discontinuing acceptance of additional
26-19 elections to participate in the DROP, but the pension system shall
26-20 continue to administer DROP for the members participating before
26-21 the date of discontinuance of enrollment.
26-22 Sec. 15. DISABILITY BENEFITS. (a) An active member who
26-23 becomes totally and permanently incapacitated for the performance
26-24 of the member's duties as a result of a bodily injury received in,
26-25 or illness caused by, the performance of those duties shall, on
26-26 presentation to the board of proof of total and permanent
26-27 incapacity, be retired and shall receive an immediate
27-1 duty-connected disability pension equal to the greater of 50
27-2 percent of the member's average total direct pay at the time of
27-3 retirement or the member's accrued service pension. If the injury
27-4 or illness involves a traumatic event that directly causes an
27-5 immediate cardiovascular condition resulting in a total disability,
27-6 the member is eligible for a duty-connected disability pension. A
27-7 disability pension granted by the board shall be paid to the member
27-8 for the remainder of the member's life or for as long as the
27-9 incapacity remains.
27-10 (b) A member with 10 years or more of credited service who
27-11 becomes totally and permanently incapacitated for the performance
27-12 of the member's duties and is not eligible for either an immediate
27-13 service pension or a duty-connected disability pension is eligible
27-14 for an immediate monthly pension computed in the same manner as a
27-15 service retirement pension but based on average total direct pay
27-16 and service accrued to the date of the disability.
27-17 (c) A member who becomes entitled to receive a disability
27-18 pension after November 23, 1998, is entitled to receive a one-time
27-19 lump-sum payment of $5,000 at the same time the first monthly
27-20 disability pension payment is made, but only if the member has not
27-21 previously received a $5,000 payment under this section or Section
27-22 12 of this article. The person shall also receive an additional
27-23 amount each month equal to $88.05, beginning on the date the
27-24 pension begins and continuing as long as the disability pension
27-25 continues, to help defray the cost of group medical insurance. A
27-26 retired member whose disability pension continues and was in pay
27-27 status on November 23, 1998, is entitled to receive a one-time
28-1 lump-sum payment of $5,000 as soon as administratively feasible
28-2 after November 23, 1998. This payment has no effect on the amount
28-3 of the retired member's monthly pension. For any year in which a
28-4 13th payment is made to retired members under Section 12(e) of this
28-5 article, a 13th payment, computed in the same manner, shall also be
28-6 paid to members who have retired under this section.
28-7 (d) A person may not receive a disability pension unless the
28-8 person files with the board an application for a disability pension
28-9 not later than 180 days after the date of separation from service,
28-10 at which time the board shall have the person examined by a
28-11 physician chosen and compensated by the board. The physician shall
28-12 make a report and recommendations to the board regarding the extent
28-13 of any disability and whether any disability that is diagnosed is a
28-14 duty-connected disability. A person may not receive a disability
28-15 pension for an injury received or illness incurred after separation
28-16 from service.
28-17 (e) A retired member who has been retired for disability is
28-18 subject at all times to reexamination by a physician chosen and
28-19 compensated by the board and shall submit to further examination as
28-20 the board may require. If a retired member refuses to submit to an
28-21 examination, the board may order the payments stopped. If a
28-22 retired member who has been receiving a disability pension under
28-23 this section recovers so that in the opinion of the board the
28-24 retired member is able to perform the usual and customary duties
28-25 formerly performed for the police department, and the retired
28-26 member is reinstated or offered reinstatement to the position, or
28-27 to a position reasonably comparable in rank and responsibility to
29-1 the position, held at the time of separation from service, the
29-2 board shall order the member's disability pension stopped.
29-3 (f) The board shall require any person who first becomes an
29-4 active member of the pension system on or after September 1, 1999,
29-5 and subsequently begins to receive a non-duty-connected disability
29-6 pension to provide the board annually, on or before May 1 of the
29-7 second year after the year the disability pension begins, a true
29-8 and complete copy of those portions of the retired member's federal
29-9 or, if applicable, state tax return, including appropriate
29-10 schedules, for the previous calendar year that indicate the retired
29-11 member's occupations and earned income for the previous calendar
29-12 year. The pension system may waive the requirement for filing a
29-13 copy of the tax return or delay the due date until later in the
29-14 same calendar year if the retired member provides the board with a
29-15 true and complete copy of a grant of an extension of time for
29-16 filing the tax return from the appropriate governmental agency or a
29-17 true and complete copy of an extension request that results in any
29-18 automatic extension. If the retired member is or has been
29-19 receiving earned income from one or more employments, including
29-20 self-employment, during the preceding year, the board shall reduce
29-21 future disability pension payments in accordance with the following
29-22 formula: $1 for each $1 that the sum of "a" + "b" is greater than
29-23 "c," where "a" is the earned income of the retired member
29-24 attributable to the previous calendar year from the retired
29-25 member's employments, "b" is the amount of disability pension
29-26 received in the previous calendar year, and "c" is the total direct
29-27 pay received as of the date the member separated from service. For
30-1 purposes of this computation, the total direct pay in "c" is
30-2 considered increased at the rate prescribed by Section 12(c) of
30-3 this article, as of each April 1 that the retired member receives
30-4 the disability pension.
30-5 (g) For purposes of this section, a member is totally and
30-6 permanently incapacitated from performing duties if the member is
30-7 prevented by a physical or mental injury or illness from performing
30-8 duties in the police department after any reasonable accommodation
30-9 offered by the police department and this condition is expected to
30-10 be permanent.
30-11 Sec. 16. RIGHTS OF SURVIVORS. (a) For purposes of this
30-12 article a marriage is considered to exist only if the marriage is
30-13 recorded in the records of the recorder's office in the county in
30-14 which the marriage ceremony was performed or, in the case of a
30-15 declaration of common-law marriage, if the declaration is signed by
30-16 the member and the member's common-law spouse before a notary
30-17 public and filed with the board. In addition, a marriage that is
30-18 evidenced by a declaration of common-law marriage signed before a
30-19 notary public after December 31, 1999, may not be treated as
30-20 effective earlier than the date on which it was signed before the
30-21 notary public.
30-22 (b) If a retired member dies after becoming entitled to a
30-23 service or disability pension, the board shall pay an immediate
30-24 monthly benefit as follows:
30-25 (1) to the surviving spouse, if there is a surviving
30-26 spouse, a sum equal to the pension that was being received by the
30-27 retired member at the time of death;
31-1 (2) to the guardian of any dependent children, on
31-2 behalf of the dependent children, if there is no spouse entitled to
31-3 an allowance, the sum a surviving spouse would have received, to be
31-4 divided equally among the dependent children if there is more than
31-5 one dependent child; or
31-6 (3) to any dependent parents if no spouse or dependent
31-7 child is entitled to an allowance, the sum the spouse would have
31-8 received, to be divided equally between the two parents if there
31-9 are two dependent parents.
31-10 (c) If a member of the pension system who has not completed
31-11 10 years of service in the police department is killed or dies from
31-12 any cause growing out of or in consequence of any act clearly not
31-13 in the actual performance of the member's official duty, the
31-14 member's surviving spouse, dependent child or children, or
31-15 dependent parent or parents are entitled only to a refund of the
31-16 member's contributions to the pension system.
31-17 (d) If any active member who has completed 10 or more years
31-18 of service in the police department is killed or dies from any
31-19 cause growing out of or in consequence of any act clearly not in
31-20 the actual performance of the member's official duty, the member's
31-21 surviving spouse, dependent child or children, or dependent parent
31-22 or parents are entitled to receive an immediate benefit, computed
31-23 in accordance with Subsection (b) of this section but based on the
31-24 deceased member's service and average total direct pay at the time
31-25 of death. If any inactive member dies from any cause after
31-26 completing 10 or more years of service in the police department,
31-27 the member's surviving spouse, dependent child or children, or
32-1 dependent parent or parents are entitled to receive benefits
32-2 computed as provided in the preceding sentence and beginning at the
32-3 time the member would have attained age 60 if the member had lived.
32-4 (e) If any active member is killed or dies from any cause
32-5 growing out of or in consequence of the performance of the member's
32-6 duty, the member's surviving spouse, dependent child or children,
32-7 or dependent parent or parents are entitled to receive immediate
32-8 benefits computed in accordance with Subsection (b) of this
32-9 section, except that the benefit payable to the spouse, or to the
32-10 guardian of the dependent child or children if there is no
32-11 surviving spouse, or the dependent parent or parents if there is no
32-12 surviving spouse or dependent child, is equal to 100 percent of the
32-13 member's average total direct pay, computed as of the date of
32-14 death.
32-15 (f) A surviving spouse who receives a survivor's benefit
32-16 under this article is entitled to receive an additional amount each
32-17 month equal to $88.05, beginning with the first payment of the
32-18 survivor's benefit and continuing until the end of the month in
32-19 which the surviving spouse dies.
32-20 (g) A surviving spouse or dependent who was in pay status on
32-21 November 23, 1998, is entitled to receive a one-time lump-sum
32-22 payment of $5,000 as soon as administratively feasible after
32-23 November 23, 1998. The surviving spouse or dependent who becomes
32-24 eligible to receive benefits with respect to an active member who
32-25 dies in active service after November 23, 1998, is entitled to
32-26 receive a one-time lump-sum payment of $5,000 at the time the first
32-27 monthly pension benefit is paid, if the member has not already
33-1 received a $5,000 lump-sum payment under Section 12 or 15(c) of
33-2 this article. If more than one dependent is eligible to receive a
33-3 payment under this subsection, the $5,000 shall be divided equally
33-4 among the eligible dependents. This payment has no effect on the
33-5 amount of the surviving spouse's or dependents' monthly pension,
33-6 and may not be paid more than once.
33-7 (h) The monthly benefits of surviving spouses or dependents
33-8 provided under this section, except the $88.05 monthly payments
33-9 described by Subsection (f) of this section, shall be increased
33-10 annually at the same time and by the same percentage as the
33-11 pensions of retired members are increased in accordance with
33-12 Section 12(c) of this article. Also, for any year in which a 13th
33-13 payment is made pursuant to Section 12(e) of this article, a 13th
33-14 payment, computed in the same manner, shall also be made to
33-15 survivors who are entitled to receive death benefits at that time.
33-16 (i) If a member or individual receiving a survivor's pension
33-17 dies before monthly payments have been made for at least five
33-18 years, leaving no person otherwise entitled to receive further
33-19 monthly payments with respect to the member, the monthly payments
33-20 shall continue to be made to the designated beneficiary of the
33-21 member or survivor, or to the estate of the member or survivor if a
33-22 beneficiary was not designated, in the same amount as the last
33-23 monthly payment made to the member, survivor, or estate, until
33-24 payments have been made for five years with respect to the member.
33-25 If the member dies after becoming vested but before payments begin,
33-26 leaving no survivors eligible for benefits, the amount of each
33-27 monthly payment over the five-year period shall be the same as the
34-1 monthly payment the member would have received if the member had
34-2 taken disability retirement on the date of death. A member may
34-3 designate a beneficiary in lieu of the member's estate to receive
34-4 the remaining payments in the event the member and all survivors
34-5 die before payments have been received for five years. The
34-6 member's estate or a beneficiary who is not a survivor or dependent
34-7 is not entitled to receive the payment described by Subsection (g)
34-8 of this section.
34-9 Sec. 17. TERMINATION OF EMPLOYMENT; REFUNDS; REEMPLOYMENT.
34-10 (a) When any active member of the pension system separates from
34-11 service, either voluntarily or involuntarily, before becoming
34-12 eligible for an immediate service retirement or disability pension,
34-13 the member ceases to be an active member of the pension system.
34-14 (b) A member of the pension system who has not completed 20
34-15 years of service at the time of separation from service with the
34-16 police department is entitled to a refund of the total of the
34-17 contributions the member made to the pension system, plus any
34-18 amount that was contributed for the member by the city and not
34-19 applied in accordance with this section to provide the member with
34-20 10 years of service. The refund does not include interest, and
34-21 neither the city nor the member is entitled to a refund of the
34-22 contributions the city made on the member's behalf, except as
34-23 expressly provided by this subsection. By receiving the refund,
34-24 the member forfeits any service earned before separation from
34-25 service, even if it is otherwise nonforfeitable.
34-26 (c) The board shall notify each member of the pension system
34-27 of the right to a refund as authorized by this section.
35-1 (d) A member must apply to the board for a refund within one
35-2 year after the date of separation from service. Failure to apply
35-3 for the refund within the one-year period results in a forfeiture
35-4 of the right to the refund except for an inactive member whose
35-5 right to a pension is nonforfeitable. However, the board may
35-6 reinstate any amount forfeited and allow the refund on application
35-7 by the former member.
35-8 (e) Heirs, executors, administrators, personal
35-9 representatives, or assignees are not entitled to apply for and
35-10 receive the refund authorized by this section except as provided by
35-11 Section 16(c) of this article.
35-12 (f) If a person who separates from service and receives a
35-13 refund is subsequently reemployed as an employee of the police
35-14 department, the person shall be reinstated as an active member of
35-15 the pension system. Prior service of the active member with the
35-16 police department may not be counted toward a retirement pension
35-17 unless the member pays to the pension system, not later than the
35-18 90th day after the date of a subsequent separation from service, an
35-19 amount equal to any contributions previously refunded to the member
35-20 under this section. Except as provided by Section 18 of this
35-21 article, a person is not eligible to repay any withdrawn
35-22 contributions unless the person is reemployed by the police
35-23 department of the city for which the prior service was performed.
35-24 (g) A member who is contesting an indefinite suspension
35-25 action may, on application to the board, receive a return of the
35-26 member's contributions and be separated from service on receipt of
35-27 the contributions; otherwise, a suspended member is considered to
36-1 have a separation from service when a final decision of the
36-2 arbitrator adverse to the member is rendered.
36-3 (h) City contributions made under Section 9(b) of this
36-4 article based on the unused sick leave, vacation pay, and
36-5 accumulated overtime pay of a member who has separated from service
36-6 may be applied, at the election of the member seeking a refund, to
36-7 pay a refund of member contributions if the contributions are not
36-8 used under Section 11(c) of this article to satisfy a service
36-9 requirement for retirement.
36-10 Sec. 18. EMPLOYMENT BY ANOTHER DEPARTMENT. (a) Except as
36-11 provided by this section, credit may not be allowed to any person
36-12 for service with any department in the city other than the police
36-13 department. Except as provided by this section, if a person is
36-14 transferred to or from some other department of the city to or from
36-15 the police department, the person's service will be computed from
36-16 the date of entry into the service of the police department until
36-17 the date of separation from service with the police department.
36-18 (b) Solely for purposes of determining whether a person has
36-19 a sufficient number of years of service to receive a retirement
36-20 pension, and not for purposes of determining the amount of the
36-21 pension or DROP credit, a person who is employed in any full-time
36-22 position with the city after November 23, 1998, and has or obtains
36-23 any credited service with the pension system after that date, shall
36-24 receive service credit for any period of full-time employment with
36-25 the same city. However, a person may not receive credit for
36-26 service with both the police department and any other department of
36-27 the city for the same period.
37-1 (c) Notwithstanding Section 17 of this article and
37-2 Subsection (b) of this section, a former member of the pension
37-3 system shall be permitted to repay withdrawn contributions and
37-4 restore service credit previously earned with the pension system,
37-5 even if the former member is not reemployed by the police
37-6 department, if the former member:
37-7 (1) is employed by the same city in which the service
37-8 credit for employment with the police department was earned;
37-9 (2) is a participant in another pension plan
37-10 maintained by the city; and
37-11 (3) repays to the pension system the withdrawn
37-12 contributions not later than the 90th day after the date of
37-13 separation from active employment with the city.
37-14 Sec. 19. PERSONS REJOINING OR TRANSFERRED BY CITY; SERVICE
37-15 CREDIT; DOUBLE BENEFITS; RETURN TO SERVICE. (a) An employee of
37-16 the city who has retired under this article or under former law
37-17 governing the pension system and is or has been transferred by
37-18 action of the city to a classified position in a police department
37-19 included in the pension system again becomes an active member of
37-20 the pension system as of the effective date of the transfer.
37-21 (b) A person who rejoins the pension system under this
37-22 section is entitled to receive service credit for each day of
37-23 service and work performed by the person in a classified position
37-24 in the police department, except for any period during which the
37-25 person is a DROP participant. The board shall add service earned
37-26 after the transfer to the prior service the active member accrued
37-27 in a classified position in the police department. However, the
38-1 active member may not receive service credit under this article,
38-2 except to the extent provided by Section 18, for service performed
38-3 for the city other than in a classified position in the police
38-4 department.
38-5 (c) After a transfer described by this section,
38-6 contributions of the city and the active member become payable as
38-7 for other active members of the pension system.
38-8 (d) When a member who has transferred as described by this
38-9 section subsequently retires, the retired member is entitled to a
38-10 pension computed on the basis of the combined service described by
38-11 Subsection (b) of this section, after deducting any period in which
38-12 the member was suspended from duty without pay, on leave of absence
38-13 without pay, separated from service, or employed by the city in a
38-14 capacity other than in a classified position in the police
38-15 department.
38-16 (e) If a retired member receives both pension benefits from
38-17 the pension system and a salary from a classified position in the
38-18 police department that cover the same period, the retired member
38-19 shall repay to the pension system the pension benefits received
38-20 during that period. The board shall withhold payment of pension
38-21 benefits under this article if it is determined that a retired
38-22 member is receiving both pension benefits from the fund and a
38-23 salary from the police department that cover the same period. On
38-24 request of the board, the city attorney or a private attorney
38-25 chosen by the board shall file suit in a court of competent
38-26 jurisdiction to recover pension benefits owed to the pension system
38-27 under this subsection.
39-1 (f) This article does not authorize the return to service
39-2 with a police department or the resumption of active membership in
39-3 the pension system by a retired member except as specifically
39-4 provided by Section 13 or 14 of this article or this section.
39-5 Sec. 20. DONATIONS. The pension system may accept gifts and
39-6 donations, and the gifts and donations shall be added to the fund
39-7 for the use of the pension system.
39-8 Sec. 21. DETERMINATION OF BENEFITS; PROVISION OF
39-9 INFORMATION. The board may require any member, survivor, or other
39-10 person or entity to furnish information the board requires for the
39-11 determination of benefits under this article. If a person or
39-12 entity does not cooperate in the furnishing or obtaining of
39-13 information required as provided by this section, the board may
39-14 withhold payment of the pension or other benefits dependent on the
39-15 information.
39-16 Sec. 22. LEGAL ADVICE. The city attorney of the city shall
39-17 handle all legal matters for the pension system that are referred
39-18 by the board without additional compensation for the service. The
39-19 board may, however, as it considers necessary, employ outside legal
39-20 counsel to the exclusion of, or to assist, the city attorney and
39-21 pay reasonable compensation for the service from the fund.
39-22 Sec. 23. MEMBERS IN MILITARY SERVICE. (a) A member of the
39-23 pension system engaged in active service in a uniformed service may
39-24 not be required to make the monthly payments into the fund and may
39-25 not lose any previous years' service with the city because of the
39-26 uniformed service. The uniformed service shall count as continuous
39-27 service in the police department if the member returns to the city
40-1 police department after discharge from the uniformed service as an
40-2 employee within the period required by the Uniformed Services
40-3 Employment and Reemployment Rights Act of 1994 (38 U.S.C. Section
40-4 4301 et seq.), as amended, and the uniformed service does not
40-5 exceed the period for which a person is entitled to have service
40-6 counted pursuant to that Act.
40-7 (b) The city is required to make its regular monthly
40-8 payments into the fund on behalf of each member while the member is
40-9 engaged in a uniformed service. If a member who has less than 10
40-10 years of service in the pension system dies directly or indirectly
40-11 as a result of the uniformed service, the spouse, dependent
40-12 children, dependent parent, or estate of the member is entitled to
40-13 receive a refund in the same manner as described by Section 16(c)
40-14 of this article.
40-15 Sec. 24. ACTIONS FOR FUNDS MISAPPLIED. (a) The board may
40-16 recover by civil action from any offending party or from the
40-17 party's bondsman, if any, any money paid out or obtained from the
40-18 fund through fraud, misrepresentation, theft, embezzlement, or
40-19 misapplication and may institute, conduct, and maintain the action
40-20 in the name of the board for the use and benefit of the fund.
40-21 (b) Payments due on behalf of a dependent child shall be
40-22 paid to the dependent child's guardian, if any, or if none to the
40-23 person with whom the dependent child is living, except that the
40-24 board may make payments directly to a dependent child in an
40-25 appropriate case and withhold payments otherwise due on behalf of
40-26 any person if the board has reason to believe the payments are not
40-27 being applied on behalf of the person entitled to receive them.
41-1 The board may request a court of competent jurisdiction to appoint
41-2 a person to receive and administer the payments due to any
41-3 dependent child or person under a disability.
41-4 Sec. 25. FEDERAL TAX QUALIFICATION OF FUND. (a) The fund
41-5 described by this article is intended to qualify under Section
41-6 401(a) of the code and is for the exclusive benefit of the members
41-7 and their survivors. No part of the corpus or income of the fund
41-8 may ever be used for, or diverted to, any purpose other than the
41-9 benefit of members and their survivors as provided by this article.
41-10 (b) A member or survivor of a member of the pension system
41-11 may not accrue a retirement pension, disability retirement
41-12 allowance, death benefit allowance, DROP benefit, or any other
41-13 benefit under this article in excess of the benefit limits
41-14 applicable to the fund under Section 415 of the code. The board
41-15 shall reduce the amount of any benefit that exceeds those limits by
41-16 the amount of the excess. If total benefits under this fund and
41-17 the benefits and contributions to which any member is entitled
41-18 under any other qualified plans maintained by the city that employs
41-19 the member would otherwise exceed the applicable limits under
41-20 Section 415 of the code, the benefits the member would otherwise
41-21 receive from the fund shall be reduced to the extent necessary to
41-22 enable the benefits to comply with Section 415.
41-23 (c) Any member or survivor who receives any distribution
41-24 that is an eligible rollover distribution as defined by Section
41-25 402(c)(4) of the code is entitled to have that distribution
41-26 transferred directly to another eligible retirement plan of the
41-27 member's or survivor's choice on providing direction to the pension
42-1 system regarding that transfer in accordance with procedures
42-2 established by the board.
42-3 (d) The total salary taken into account for any purpose for
42-4 any member of the pension system may not exceed $200,000 for any
42-5 year for an eligible participant, or $150,000 a year for an
42-6 ineligible participant. These dollar limits shall be adjusted from
42-7 time to time in accordance with guidelines provided by the United
42-8 States Secretary of the Treasury. For purposes of this subsection,
42-9 an eligible participant is a person who first became an active
42-10 member before 1996, and an ineligible participant is a member who
42-11 is not an eligible participant.
42-12 (e) Accrued benefits under this article become 100 percent
42-13 nonforfeitable for a member on the date the member has completed 10
42-14 years of service. If the pension system or the fund is terminated
42-15 or partially terminated, or city contributions to the fund are
42-16 discontinued completely, there may not be a reversion of funds to
42-17 the employer. On complete or partial termination or discontinuance
42-18 of city contributions, the fund held by the pension system shall be
42-19 used exclusively for benefits for members and their surviving
42-20 spouses and dependents, and the affected employees' rights to the
42-21 benefits, to the extent funded, shall be nonforfeitable if not
42-22 already nonforfeitable under this subsection.
42-23 (f) Amounts representing forfeited nonvested benefits of
42-24 terminated members may not be used to increase benefits payable
42-25 from the fund.
42-26 (g) Distribution of benefits must begin not later than April
42-27 1 of the year following the calendar year during which the member
43-1 entitled to the benefits becomes 70-1/2 years of age or terminates
43-2 employment with the employer, whichever is later, and must
43-3 otherwise conform to Section 401(a)(9) of the code.
43-4 (h) If the amount of any benefit is to be determined on the
43-5 basis of actuarial assumptions that are not otherwise specifically
43-6 set forth for that purpose in this article, the actuarial
43-7 assumptions to be used are those earnings and mortality assumptions
43-8 being used on the date of the determination by the pension system's
43-9 actuary and approved by the board. The actuarial assumptions being
43-10 used at any particular time shall be attached as an addendum to a
43-11 copy of this article and treated for all purposes as a part of this
43-12 article. The actuarial assumptions may be changed by the pension
43-13 system's actuary at any time if approved by the board, but a change
43-14 in actuarial assumptions may not result in any decrease in benefits
43-15 accrued as of the effective date of the change.
43-16 (i) To the extent permitted by law, the board may adjust the
43-17 benefits of retired members and survivors by increasing any benefit
43-18 that was reduced because of Section 415 of the code. If Section
43-19 415 of the code is amended to permit the payment of amounts
43-20 previously precluded under that section, the board may adjust the
43-21 benefits of retired members or their surviving spouses or
43-22 dependents, including the restoration of benefits previously
43-23 denied. Benefits paid under this subsection are not considered as
43-24 extra base salary earned after retirement but as the delayed
43-25 payment of benefits earned before retirement.
43-26 (j) The board may make any change in this article to the
43-27 extent that the change is necessary to assure compliance with the
44-1 qualification requirements of Section 401 of the code or any other
44-2 federal law.
44-3 Sec. 26. EXCESS BENEFIT PLAN. (a) A separate,
44-4 nonqualified, unfunded excess benefit plan is created outside the
44-5 fund.
44-6 (b) In this section:
44-7 (1) "Excess benefit plan" or "plan" means the
44-8 separate, nonqualified, unfunded excess benefit plan created by
44-9 this section for the benefit of eligible members, as amended or
44-10 restated from time to time, that is intended to be a "qualified
44-11 governmental excess benefit arrangement" within the meaning of
44-12 Section 415(m) of the code.
44-13 (2) "Qualified plan" means the pension system and any
44-14 other plan maintained by the city for the exclusive benefit of some
44-15 or all of the members of the pension system that has been found by
44-16 the Internal Revenue Service to be qualified or has been treated by
44-17 the city as a qualified plan under Section 401 of the code.
44-18 (3) "Maximum benefit" means the retirement benefit a
44-19 retired member and the spouse, dependent child, or dependent parent
44-20 of a retired member or deceased member or retiree are entitled to
44-21 receive from all qualified plans in any month after giving effect
44-22 to Section 25(b) of this article and any similar provisions of any
44-23 other qualified plans designed to conform to Section 415 of the
44-24 code.
44-25 (4) "Excess benefit participant" means any retired
44-26 member whose retirement benefits as determined on the basis of all
44-27 qualified plans without regard to the limitations of Section 25(b)
45-1 of this article and comparable provisions of other qualified plans
45-2 would exceed the maximum benefit permitted under Section 415 of the
45-3 code.
45-4 (5) "Unrestricted benefit" means the monthly
45-5 retirement benefit a retired member and the spouse, dependent
45-6 child, or dependent parent of a retired member or deceased member
45-7 would have received under the terms of all qualified plans except
45-8 for the restrictions of Section 25(b) of this article and any
45-9 similar provisions of any other qualified plans designed to conform
45-10 to Section 415 of the code.
45-11 (c) An excess benefit participant who is receiving benefits
45-12 from the pension system is entitled to a monthly benefit under this
45-13 excess benefit plan in an amount equal to the lesser of:
45-14 (1) the member's unrestricted benefit less the maximum
45-15 benefit; or
45-16 (2) the amount by which the member's monthly benefit
45-17 from the fund has been reduced because of the limitations of
45-18 Section 415 of the code.
45-19 (d) If a spouse, dependent child, or dependent parent is
45-20 entitled to preretirement or postretirement death benefits under a
45-21 qualified plan after the death of an excess benefit participant,
45-22 the surviving spouse, dependent child, or dependent parent is
45-23 entitled to a monthly benefit under the excess benefit plan equal
45-24 to the benefit determined in accordance with this article without
45-25 regard to the limitations under Section 25(b) of this article or
45-26 Section 415 of the code, less the maximum benefit.
45-27 (e) Any benefit to which a person is entitled under this
46-1 section shall be paid at the same time and in the same manner as
46-2 the benefit would have been paid from the pension system if payment
46-3 of the benefit from the pension system had not been precluded by
46-4 Section 25(b) of this article. An excess benefit participant or
46-5 any beneficiary may not, under any circumstances, elect to defer
46-6 the receipt of all or any part of a payment due under this section.
46-7 (f) The board shall administer the plan, and the board's
46-8 designee shall also carry out the business of the board with
46-9 respect to the plan. Except as otherwise provided by this section,
46-10 the rights, duties, and responsibilities of the board and the
46-11 board's designee are the same for the plan as for the funds of the
46-12 pension system.
46-13 (g) The consultants, independent auditors, attorneys, and
46-14 actuaries selected to perform services for the fund also shall
46-15 perform services for the plan, but the fees for their services may
46-16 not be paid by the fund. The actuary engaged to perform services
46-17 for the fund shall advise the board of the amount of benefits that
46-18 may not be provided from the fund solely by reason of the
46-19 limitations of Section 415 of the code and the amount of employer
46-20 contributions that will be made to the plan rather than to the
46-21 fund.
46-22 (h) Contributions may not be accumulated under the plan to
46-23 pay future retirement benefits. Instead, each payment of city
46-24 contributions that would otherwise be made to the fund under
46-25 Section 9 of this article shall be reduced by the amount determined
46-26 by the board or its designee as necessary to meet the requirements
46-27 for retirement benefits under the plan, including reasonable
47-1 administrative expenses, until the next payment of city
47-2 contributions is expected to be made to the pension system. The
47-3 city shall then pay to the plan, from the withheld contributions,
47-4 not earlier than the 30th day before the date each distribution of
47-5 monthly retirement benefits is required to be made from the plan,
47-6 the amount necessary to satisfy the obligation to pay monthly
47-7 retirement benefits from the plan. The board or its designee shall
47-8 satisfy the obligation of the plan to pay retirement benefits from
47-9 the employer contributions so transferred for that month.
47-10 (i) Employer contributions otherwise required to be made to
47-11 the pension system under Section 9 of this article and any other
47-12 qualified plan shall be divided into those contributions required
47-13 to pay retirement benefits under this section and those
47-14 contributions paid into and accumulated to pay the maximum benefits
47-15 permitted under the qualified plan. Employer contributions made to
47-16 provide retirement benefits under this section may not be
47-17 commingled with the money of the fund forming part of the pension
47-18 system or any other qualified plan.
47-19 Sec. 27. AGREEMENT TO CHANGE BENEFITS. (a) Notwithstanding
47-20 any law to the contrary, the board or a designee of the board is
47-21 responsible for representing the interests of the pension system
47-22 and all pension issues and benefits affecting the pension system or
47-23 its members and beneficiaries under this article. The board may
47-24 enter into a written agreement with the city on behalf of the
47-25 pension system and members and beneficiaries of the pension system
47-26 if the agreement is approved by the board and signed by the mayor
47-27 and the board or the board's designee.
48-1 (b) A pension benefit or allowance provided by this article
48-2 may be increased if the increase:
48-3 (1) is first approved by a qualified actuary selected
48-4 by the board;
48-5 (2) is approved by the board and the city in a written
48-6 agreement as authorized by this section; and
48-7 (3) does not deprive a member, without the member's
48-8 written consent, of a right to receive benefits that have become
48-9 fully vested and matured in the member.
48-10 Sec. 28. NONREDUCTION, NONALIENATION, AND NONASSIGNMENT OF
48-11 BENEFITS. (a) No portion of the funds held by the pension system,
48-12 either before or after an order for its disbursement by the board,
48-13 and no amounts due or to become due to any member or survivor under
48-14 this article may be held, seized, taken, subject to, detained, or
48-15 levied on by virtue of any execution, attachment, garnishment,
48-16 injunction, or other writ, and no order or decree, and no process
48-17 may issue out of or by any court of this state for the payment or
48-18 satisfaction, in whole or in part, out of the funds held by or due
48-19 from the pension system, of any debt, damage, claim, demand, or
48-20 judgment against any member, survivor, dependent, or any other
48-21 person.
48-22 (b) No part of the funds or any claim to the funds may be
48-23 directly or indirectly assigned or transferred. Any attempt to
48-24 transfer or assign any part of the funds or a claim to the funds is
48-25 void.
48-26 (c) The funds shall be held, kept, and disbursed for the
48-27 purposes provided by this article, and for no other purpose, except
49-1 that a retired member, survivor, or dependent, at the person's
49-2 discretion, may have deducted from the person's pension the monthly
49-3 premium cost of any group insurance program in which the retired
49-4 member is participating.
49-5 (d) A benefit payable under this article may not be reduced
49-6 or discontinued for any person except under the terms applicable to
49-7 the benefit at the time the person becomes eligible to receive the
49-8 benefit.
49-9 (e) This section does not prevent the division of the
49-10 benefits accrued by a member under any court order determined by
49-11 the board or its designee to be a qualified domestic relations
49-12 order and the payment of a share of a retired member's benefits or
49-13 contributions to an alternate payee in accordance with the order.
49-14 SECTION 2. Chapter 76, Acts of the 50th Legislature, Regular
49-15 Session, 1947 (Article 6243g-1, Vernon's Texas Civil Statutes), and
49-16 Article 6243g-3, Revised Statutes, are repealed.
49-17 SECTION 3. (a) Not later than September 30, 1999, the board
49-18 of trustees of each pension system to which Article 6243g-4,
49-19 Revised Statutes, as added by this Act, applies shall hold an
49-20 election among all of its members. The board shall select an
49-21 independent party not affiliated with the board, the pension
49-22 system, or any employee or retiree organization to conduct and
49-23 tabulate the results of the election. Each active, inactive, or
49-24 retired member of the pension system is eligible to vote in the
49-25 election and has one vote.
49-26 (b) The ballot shall be printed to permit voting:
49-27 (1) alternatively either for:
50-1 "PROPOSITION A (Direct Voting)--To provide that the board of
50-2 trustees of the pension system consist in part of (1) three
50-3 employees of the police department who are members of the pension
50-4 system and who are elected by the active members of the police
50-5 department and (2) two retired members who are receiving pensions
50-6 from the pension system, who are not officers or employees of the
50-7 city, and who are elected by the inactive and retired members of
50-8 the system"; or
50-9 "PROPOSITION B (Universal Voting)--To provide that the board
50-10 of trustees of the pension system consist in part of (1) three
50-11 employees of the police department who are members of the pension
50-12 system and who are elected by the active, inactive, and retired
50-13 members of the system and (2) two retired members who are receiving
50-14 pensions from the pension system, who are not officers or employees
50-15 of the city, and who are elected by the active, inactive, and
50-16 retired members of the system"; and
50-17 (2) for or against the proposition:
50-18 "PROPOSITION ONE--To provide that officers and employees of
50-19 any employee organization or retiree organization and employees of
50-20 the pension system are prohibited from being elected to, appointed
50-21 to, or in any other way becoming a member of the board of trustees
50-22 of the pension system."
50-23 (c) The proposition described by Subsection (b)(1) of this
50-24 section receiving a majority of the votes at the election has
50-25 immediate effect as law and applies to each vacancy on the board of
50-26 trustees that occurs on or after its effective date. If a majority
50-27 of the votes at the election favor the proposition described by
51-1 Subsection (b)(2) of this section, it has immediate effect as law
51-2 and applies to each vacancy on the board of trustees that occurs on
51-3 or after its effective date. If a majority of the votes at the
51-4 election does not favor the proposition described by Subsection
51-5 (b)(2) of this section, it has no effect.
51-6 SECTION 4. Notwithstanding Section 12(b), Article 6243g-4,
51-7 Revised Statutes, as added by this Act, the monthly benefits of a
51-8 person who retires or retired after November 23, 1998, and before
51-9 January 1, 2000, is determined by the benefit formula in effect
51-10 immediately before the effective date of this Act.
51-11 SECTION 5. This Act takes effect September 1, 1999.
51-12 SECTION 6. The importance of this legislation and the
51-13 crowded condition of the calendars in both houses create an
51-14 emergency and an imperative public necessity that the
51-15 constitutional rule requiring bills to be read on three several
51-16 days in each house be suspended, and this rule is hereby suspended.