1-1 AN ACT
1-2 relating to membership and credit in and benefits and
1-3 administration of retirement systems for officers and employees of
1-4 certain municipalities.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 4, Chapter 358, Acts of the 48th
1-7 Legislature, Regular Session, 1943 (Article 6243g, Vernon's Texas
1-8 Civil Statutes), is amended to read as follows:
1-9 Sec. 4. PERSONS NOT ELIGIBLE UNDER THIS ACT. Employees of
1-10 such city who may not become members of the Pension System shall
1-11 include:
1-12 (a) All quasi-legislative, quasi-judicial and advisory
1-13 boards and commissions;
1-14 (b) All part-time employees, as defined by such city,
1-15 other than any elected officials whose service is made part-time by
1-16 law or charter;
1-17 (c) All seasonal employees and all consultants and
1-18 independent contractors; and
1-19 (d) Employees in positions covered by any other
1-20 pension plan of such city to which the city contributes [or persons
1-21 drawing a pension from any such system], including employees who
1-22 are excluded from membership in another pension plan by action of
1-23 the board of trustees of the pension plan, except to the extent
1-24 that they are covered in another pension plan only as a
2-1 beneficiary.
2-2 SECTION 2. Chapter 358, Acts of the 48th Legislature,
2-3 Regular Session, 1943 (Article 6243g, Vernon's Texas Civil
2-4 Statutes), is amended by adding Section 16B to read as follows:
2-5 Sec. 16B. TRANSFER OF MEMBERSHIP. (a) The Board may
2-6 authorize a person who is a member of the Pension System as
2-7 previously authorized by this Act, who is in a position covered by
2-8 another retirement system to which the city contributes, and who
2-9 has not begun to receive payment of benefits from the Pension
2-10 System to make a one-time irrevocable election, on a date and in a
2-11 manner to be established by the Board, to cease to be a member of
2-12 the Pension System and, for future service only, become a member of
2-13 the retirement system governed by Article 6243e.2(1) or 6243g-3,
2-14 Revised Statutes; Chapter 76, Acts of the 50th Legislature, Regular
2-15 Session, 1947 (Article 6243g-1, Vernon's Texas Civil Statutes); or
2-16 a successor statute to any of those laws.
2-17 (b) A person who does not make an election to cease
2-18 membership in the Pension System under Subsection (a) of this
2-19 section remains a member of the Pension System as authorized under
2-20 this Act.
2-21 (c) For purposes of this Act, a person who makes an election
2-22 to cease membership in the Pension System is considered to have
2-23 separated from service on the date of the election established by
2-24 the Board.
2-25 SECTION 3. Chapter 358, Acts of the 48th Legislature,
2-26 Regular Session, 1943 (Article 6243g, Vernon's Texas Civil
2-27 Statutes), is amended by adding Section 22A to read as follows:
3-1 Sec. 22A. GROUP C MEMBERSHIP, SERVICE REQUIREMENTS, AND
3-2 BENEFITS. (a) A Group C member is subject to the same provisions
3-3 that are applicable to Group A members under this Act except as
3-4 otherwise specifically provided by this section.
3-5 (b) In this section:
3-6 (1) "Credited service" means the number of whole and
3-7 fractional years of a member's eligible service in Group C as an
3-8 executive official after the executive official's effective date of
3-9 participation in Group C for which member and employer
3-10 contributions are on deposit with the fund.
3-11 (2) "Effective date of participation" in Group C means
3-12 September 1, 1999, except for persons who first become executive
3-13 officials and whose contributions to the plan begin after that
3-14 date, in which case the effective date of participation in the plan
3-15 is the first date on which the person qualifies as an executive
3-16 official and for which applicable contributions are made for
3-17 service in the plan as an executive official.
3-18 (3) "Executive official" means a person in one of the
3-19 following categories:
3-20 (A) the chief administrative officer of the
3-21 city;
3-22 (B) the executive director of the Pension
3-23 System; or
3-24 (C) the full-time, appointed director of each
3-25 department of the city as designated by the governing body of the
3-26 city and approved by the Board, other than a director who is
3-27 covered by another pension system to which the city contributes or
4-1 an acting director or the equivalent.
4-2 (4) "Group C" or "plan" means the executive officials'
4-3 plan.
4-4 (c) All executive officials are members of Group C, except
4-5 that an executive official may elect not to participate in Group C
4-6 by making the election in writing on a form provided by and filed
4-7 with the Pension System not later than the 30th day after the date
4-8 the executive official becomes eligible to participate in Group C.
4-9 The election is effective retroactive to the first day of the
4-10 executive official's eligibility. An election not to participate is
4-11 irrevocable and constitutes a waiver of all benefits provided by
4-12 the plan. An executive official who elects not to participate in
4-13 Group C shall participate in Group A or Group B under this Act, as
4-14 applicable.
4-15 (d) A Group C member who separates from service for any
4-16 reason other than death or retirement is eligible to receive a
4-17 refund of the member's Group C contributions from the plan. The
4-18 distribution shall be made in the form and at the time prescribed
4-19 by the Board. A member who receives a refund of the member's
4-20 contributions from the plan under this subsection forfeits the
4-21 member's credited service, and all rights to benefits under the
4-22 plan and membership in the plan terminate.
4-23 (e) If an executive official who has terminated membership
4-24 in Group C under Subsection (d) subsequently becomes eligible for
4-25 membership in the plan under Subsection (c), credited service
4-26 accrues only beginning on the date the member's most recent
4-27 eligibility as an executive official began.
5-1 (f) A person who receives a refund under Subsection (d) and
5-2 is reemployed and resumes membership under this Act may restore the
5-3 credited service forfeited under Subsection (d) by filing a written
5-4 election form with the Board after the reemployment and repaying
5-5 the amount of the member's contributions previously withdrawn under
5-6 Subsection (d) within the earlier of five years after the date of
5-7 the member's election or 60 days after the date of the member's
5-8 separation from service, with interest on that amount at the rate
5-9 of six percent. Credited service may not be restored until
5-10 complete repayment is made to the fund.
5-11 (g) A Group C member shall receive twice the number of
5-12 actual years of credited service in Group C solely for the purpose
5-13 of fulfilling the eligibility requirements for a normal retirement
5-14 pension in Group C as provided by Subsection (h). For all other
5-15 computations under this Act, the actual years of credited service
5-16 in Group C shall be used.
5-17 (h) A Group C member who ceases to be an executive official
5-18 is eligible for a normal retirement pension when the official
5-19 separates from service and:
5-20 (1) fulfills the requirement for age and years of
5-21 credited service applicable to Group A members for a normal
5-22 retirement pension under Section 11 of this Act; or
5-23 (2) attains 65 years of age with any amount of
5-24 credited service.
5-25 (i) The amount of the monthly pension for each Group C
5-26 member equals the member's average monthly salary multiplied by two
5-27 times the percentage accrual rate in effect for Group A members and
6-1 by the member's actual years of credited service in Group C. For
6-2 purposes of this subsection, the member's average monthly salary
6-3 shall be computed by adding together the 78 highest biweekly
6-4 salaries paid to a member during the member's period of credited
6-5 service and dividing the sum by 36, or, if the member has less than
6-6 78 total biweekly salaries, by multiplying 26 times the average of
6-7 all of the member's biweekly salaries and dividing by 12. However,
6-8 a Group C member's pension may not be more than 80 percent of the
6-9 member's average monthly salary and may not be less than the
6-10 greater of $8 a month for each year of credited service or a total
6-11 of $100 a month.
6-12 (j) Any previous service of a Group C member in Group A or
6-13 Group B is governed by the applicable Group A or Group B provisions
6-14 of this Act and may not be credited to Group C. Group C service
6-15 may not be credited to Group A or Group B.
6-16 (k) Except as provided by Subsection (j), this section
6-17 applies to a plan member only while the individual is an eligible
6-18 executive official. An individual who ceases to be an executive
6-19 official and transfers to a municipal position covered by Group A
6-20 shall participate in Group A but does not forfeit Group C service
6-21 and remains eligible for normal retirement for Group C service as
6-22 provided under Subsection (h) of this section.
6-23 SECTION 4. Chapter 358, Acts of the 48th Legislature,
6-24 Regular Session, 1943 (Article 6243g, Vernon's Texas Civil
6-25 Statutes), is amended by adding Section 33A to read as follows:
6-26 Sec. 33A. PROPORTIONATE RETIREMENT PROGRAM WITH
6-27 PARTICIPATING RETIREMENT SYSTEMS. (a) The Board may establish a
7-1 program of proportionate retirement benefits subject to the
7-2 requirements of this section.
7-3 (b) In this section:
7-4 (1) "Combined service credit" means the combined sum
7-5 of an eligible participant's service credit in each participating
7-6 retirement system in which the participant has service credit and
7-7 for which the total satisfies the length-of-service requirements
7-8 for service retirement from that system at the participant's
7-9 attained age.
7-10 (2) "Eligible participant" means a person who is
7-11 employed by the city and covered by a participating retirement
7-12 system at the time of full participation by all participating
7-13 retirement systems under their respective statutory authority and
7-14 who is or has been a member of the Pension System under this Act.
7-15 The term does not include any individual who is in retirement,
7-16 deferred, or DROP status, who is receiving a pension benefit under
7-17 this Act, or who is in a probationary or trainee firefighter or
7-18 police officer position.
7-19 (3) "Maximum benefit" means the maximum amount of
7-20 benefits payable to an eligible participant who has used combined
7-21 service credit to qualify for benefits from a participating
7-22 retirement system, which is 80 percent of the participant's average
7-23 monthly compensation at the time the participant ceases employment
7-24 in a position covered by the Pension System.
7-25 (4) "Participating retirement system" means a
7-26 retirement system established by Article 6243e.2(1) or 6243g-3,
7-27 Revised Statutes; Chapter 76, Acts of the 50th Legislature, Regular
8-1 Session, 1947 (Article 6243g-1, Vernon's Texas Civil Statutes); a
8-2 successor statute to any of those laws; or this Act, to the extent
8-3 that the retirement system recognizes and allows the use of
8-4 combined service credit and disability determinations to provide
8-5 proportionate retirement benefits in its system for an eligible
8-6 participant under circumstances described by this Act.
8-7 (5) "Service credit" means service that is credited by
8-8 the rules of a participating retirement system and that may be used
8-9 to meet length-of-service requirements for service retirement in
8-10 that system, except that service credit that would otherwise be
8-11 allowed by more than one participating retirement system for the
8-12 same service period may be counted only once in determining the
8-13 amount of a person's combined service credit and will apply as
8-14 service credit only in the participating retirement system in which
8-15 the person first established the service credit.
8-16 (c) Participation by the Pension System in the proportionate
8-17 retirement program is voluntary. The Board may elect to
8-18 participate in the proportionate retirement program by adopting a
8-19 resolution to that effect. On adoption, the Board shall notify the
8-20 other participating retirement systems of the election. The
8-21 effective date of participation in the proportionate retirement
8-22 program for which an election is made is the first day of the third
8-23 month after the month in which notice is given. Participation in
8-24 the proportionate retirement program by the Pension System may be
8-25 terminated by Board resolution for any reason, except that the
8-26 proportionate retirement program will be continued by the Pension
8-27 System for eligible participants who are actively employed at the
9-1 time of the termination and remain actively employed without a
9-2 break in service. On adoption of a resolution of termination, the
9-3 Board shall notify the other participating retirement systems of
9-4 the termination. The effective date of termination from the
9-5 proportionate retirement program is the first day of the month
9-6 following the month in which notice is given.
9-7 (d) An eligible participant's combined service credit is
9-8 usable solely for determining eligibility for service retirement
9-9 benefits, including DROP participation if the person is in a
9-10 position covered by this Act, and may not be used in determining
9-11 eligibility for disability retirement benefits, death benefits, or
9-12 any type of benefit other than service retirement benefits or DROP
9-13 participation or determining the amount of any type of benefit.
9-14 The amount of a benefit payable by the Pension System is determined
9-15 according to and in the manner prescribed by the statutes and rules
9-16 governing the Pension System and is based solely on an eligible
9-17 participant's service credit in the Pension System and allowable
9-18 maximum benefit. The Pension System has sole responsibility and
9-19 discretion to determine the eligibility of eligible participants
9-20 for benefits, including whether sufficient combined service credit
9-21 exists to qualify eligible participants for proportionate
9-22 retirement benefits from the Pension System, and the amount and
9-23 duration of proportionate retirement benefits payable by the
9-24 Pension System.
9-25 (e) A person who withdraws pension contributions from a
9-26 participating retirement system ceases to be a member of that
9-27 participating retirement system. Membership and service credit for
10-1 which contributions were withdrawn or otherwise forfeited may be
10-2 reestablished under the statutes and rules governing that system.
10-3 To be counted as combined service credit, all service in a
10-4 participating retirement system for which the person withdrew
10-5 contributions or that was otherwise forfeited must be reinstated in
10-6 accordance with the statutes and rules applicable to that system.
10-7 A lump-sum distribution is governed by the statutes and rules
10-8 applicable to the particular retirement system.
10-9 (f) A person who has service credit in another participating
10-10 retirement system for which the person is receiving or may become
10-11 eligible to receive a benefit from the other system is not eligible
10-12 to vote in a Board election or hold a position on the Board.
10-13 (g) The Board shall make determinations regarding an
10-14 eligible participant's combined service credit based on complete
10-15 and certified records of a participating retirement system,
10-16 including the Pension System, and of the city.
10-17 (h) The provisions of Sections 15 and 16 of this Act
10-18 pertaining to interruption of service and termination of employment
10-19 do not apply to an eligible participant to the extent the
10-20 participant is absent from service covered by the Pension System
10-21 during a period for which the participant earns service credit in
10-22 another participating retirement system for service performed for
10-23 the city in an amount sufficient to meet the length-of-service
10-24 requirement, using combined service credit, for a retirement
10-25 benefit from the participating retirement system.
10-26 (i) A proportionate retirement benefit may be paid by the
10-27 Pension System under the proportionate retirement program to an
11-1 eligible participant who fulfills the requirements for receiving a
11-2 proportionate retirement benefit in the Pension System using
11-3 combined service credit only if the participant is eligible to
11-4 receive and has applied for proportionate retirement benefits from
11-5 the applicable other participating retirement systems. An eligible
11-6 participant may not become eligible to begin receiving a
11-7 proportionate retirement benefit from the Pension System while
11-8 employed in a position covered by the Pension System.
11-9 (j) The Pension System is governed solely by its own
11-10 statutory provisions, policies, and procedures relating to
11-11 disability benefit determinations for members who apply for a
11-12 disability pension from the Pension System, except that if an
11-13 eligible participant has combined service credit from any other
11-14 participating retirement system in addition to this system, files
11-15 for a disability pension for the first time as a member of the
11-16 other participating retirement system, is otherwise eligible for a
11-17 disability retirement benefit in both participating retirement
11-18 systems, and receives a determination from the board of trustees of
11-19 the other participating pension system that the person has a
11-20 disability that is of a type recognized by the Pension System, and
11-21 the other participating retirement system grants the disability
11-22 pension, the Pension System shall pay the proportionate amount of
11-23 benefit attributable to the service credited under the Pension
11-24 System, based on the schedule of benefits in effect for the Pension
11-25 System at the time the eligible participant ceased membership in
11-26 the Pension System. If the disability is determined to be
11-27 service-related, the Pension System shall pay only the ordinary
12-1 disability benefit amount. The Board has the right to require
12-2 examinations, reports, and any other information as provided by
12-3 this Act for the administration and payment of disability benefits
12-4 and the right to reduce, suspend, or terminate a benefit
12-5 accordingly. The benefit allowed under this subsection is payable
12-6 only if the other participating retirement systems authorize and
12-7 pay a disability benefit under the same circumstances as provided
12-8 by this subsection. A person who is receiving a disability benefit
12-9 from a participating retirement system is not eligible for a
12-10 disability pension under this Act except as provided by this
12-11 subsection.
12-12 (k) Creditable military service, if any, will be credited in
12-13 the Pension System only as provided by this Act and only if the
12-14 service is not credited in any other participating retirement
12-15 system.
12-16 (l) The Board may adopt rules and policies for implementing
12-17 and administering the proportionate retirement program.
12-18 (m) A person may not become eligible to receive a benefit
12-19 under this section that is greater than the benefit the person
12-20 would otherwise receive under this Act if this section did not
12-21 apply. A benefit otherwise payable under Section 13(b) of this Act
12-22 on behalf of a person who has used combined service credit to
12-23 qualify for benefits from at least one participating retirement
12-24 system shall instead be computed and payable as provided by Section
12-25 13(a) of this Act.
12-26 SECTION 5. This Act takes effect September 1, 1999.
12-27 SECTION 6. The importance of this legislation and the
13-1 crowded condition of the calendars in both houses create an
13-2 emergency and an imperative public necessity that the
13-3 constitutional rule requiring bills to be read on three several
13-4 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. 3531 was passed by the House on April
30, 1999, by a non-record vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 3531 was passed by the Senate on May
17, 1999, by the following vote: Yeas 30, Nays 0.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor