By Coleman H.B. No. 3531
76R5882 GCH-F
A BILL TO BE ENTITLED
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. Section 5(b), Chapter 358, Acts of the 48th
2-3 Legislature, Regular Session, 1943 (Article 6243g, Vernon's Texas
2-4 Civil Statutes), is amended to read as follows:
2-5 (b) The Pension Board shall be composed of eleven (11)
2-6 members as follows:
2-7 (1) The Mayor of the City, or the Director of the
2-8 Civil Service Commission as his representative.
2-9 (2) The Treasurer of the City or person performing the
2-10 duties of Treasurer.
2-11 (3) Four (4) employees of the city having membership
2-12 in the Pension System and elected by the active members of such
2-13 System. No city department shall have more than two (2)
2-14 representatives. Persons elected as employee members of the Board
2-15 shall continue in office until the expiration of their terms if
2-16 they retire during their terms. Persons elected as employee
2-17 members of the Board serve staggered terms of four (4) years, with
2-18 the terms of two (2) of the members expiring in each even-numbered
2-19 year. Each employee member shall continue to serve until his
2-20 successor is duly elected and qualified. Vacancies occurring by
2-21 death, resignation or removal of such representative shall be
2-22 filled by appointments made by any three (3) of the Board members
2-23 elected by the members of the Pension System. Such appointees
2-24 shall serve for the remainder of the unexpired term of the member
2-25 they replace. The first election of employee members in cities
2-26 hereafter coming under this Act shall be held in such city at such
2-27 time and place as shall be fixed by the governing body of the city,
3-1 and to be not more than seventy-five (75) days from the date such
3-2 city comes under the terms of this Act.
3-3 (4) Three (3) legally qualified taxpayers of such
3-4 city, who have been residents of the county in which such city is
3-5 located for the preceding five (5) years, to be appointed [chosen]
3-6 by the elected members of the Board [governing body of the city],
3-7 being neither retirees, employees, nor officers of such city. The
3-8 three (3) members so appointed [chosen] by the elected members of
3-9 the Board [governing body of the city] shall serve for a term of
3-10 two (2) years [and until their successors are duly appointed and
3-11 qualified]. Vacancies occurring by death, resignation, or removal
3-12 of such representative shall be filled by vote of the elected
3-13 members of the Board [governing body of the city]. A person who is
3-14 appointed to fill a vacancy holds office for the unexpired term of
3-15 the Board member who vacated that position. [Public members now on
3-16 the Boards of cities having established Systems shall continue in
3-17 office until the expiration of their terms.]
3-18 (5) Two (2) retirees of the Pension System elected by
3-19 the retirees of the System. Persons elected as retiree members of
3-20 the Board serve staggered terms of four (4) years, with the term of
3-21 one (1) member expiring in each even-numbered year. Each retiree
3-22 member serves until the retiree's successor is elected and has
3-23 qualified. A vacancy occurring by death, resignation, or removal
3-24 of a board member normally chosen by retiree election shall be
3-25 filled by appointment made by the other member normally chosen by
3-26 retiree election.
3-27 SECTION 3. Chapter 358, Acts of the 48th Legislature,
4-1 Regular Session, 1943 (Article 6243g, Vernon's Texas Civil
4-2 Statutes), is amended by adding Section 22A to read as follows:
4-3 Sec. 22A. (a) A Group C member is subject to the same
4-4 provisions that are applicable to Group A members under this Act
4-5 except as otherwise specifically provided by this section.
4-6 (b) In this section:
4-7 (1) "Credited service" means the number of whole and
4-8 fractional years of a member's eligible service in Group C as an
4-9 executive official after the executive official's effective date of
4-10 participation in Group C for which member and employer
4-11 contributions are on deposit with the fund.
4-12 (2) "Effective date of participation" in Group C means
4-13 September 1, 1999, except for executive officials whose
4-14 contributions to the plan begin after that date, in which case the
4-15 effective date of participation in the plan is the first date on
4-16 which the person qualifies as an executive official and for which
4-17 applicable contributions are made for service as an executive
4-18 official.
4-19 (3) "Executive official" means a person in one of the
4-20 following categories:
4-21 (A) the mayor, the city controller, and the
4-22 elected city council members of a city covered by this Act;
4-23 (B) the chief administrative officer of the
4-24 city;
4-25 (C) the executive director of the Pension
4-26 System; or
4-27 (D) the full-time, appointed director of each
5-1 department of the city as designated by the governing body of the
5-2 city and approved by the Board, other than a director who is
5-3 covered by another pension system to which the city contributes or
5-4 an acting director or the equivalent.
5-5 (4) "Group C" or "plan" means the executive officials'
5-6 plan.
5-7 (c) All executive officials are members of Group C, except
5-8 that an executive official may elect not to participate in Group C
5-9 by making the election in writing on a form provided by and filed
5-10 with the Pension System not later than the 30th day after the date
5-11 the executive official becomes eligible to participate in Group C.
5-12 The election is effective retroactive to the first day of the
5-13 executive official's eligibility. An election not to participate is
5-14 irrevocable and constitutes a waiver of all benefits provided by
5-15 the plan. An executive official who elects not to participate in
5-16 Group C shall participate in Group A or Group B under this Act, as
5-17 applicable.
5-18 (d) A Group C member who separates from service for any
5-19 reason other than death or retirement is eligible to receive a
5-20 refund of the member's Group C contributions from the plan. The
5-21 distribution shall be made in the form and at the time prescribed
5-22 by the Board. A member who receives a refund of the member's
5-23 contributions from the plan under this subsection forfeits the
5-24 member's credited service, and all rights to benefits under the
5-25 plan and membership in the plan terminate.
5-26 (e) If an executive official who has terminated membership
5-27 in Group C under Subsection (d) is subsequently elected or
6-1 otherwise becomes eligible for membership in the plan under
6-2 Subsection (c), credited service accrues only beginning on the date
6-3 the member's most recent eligibility as an executive official
6-4 began.
6-5 (f) A person who receives a refund under Subsection (d) and
6-6 is reemployed and resumes membership under this Act may restore the
6-7 credited service forfeited under Subsection (d) by filing a written
6-8 election form with the Board after the reemployment and repaying
6-9 the amount of the member's contributions previously withdrawn under
6-10 Subsection (d) within five years after the date of the member's
6-11 reemployment, with interest on that amount at the rate of six
6-12 percent. Credited service may not be restored until complete
6-13 repayment is made to the fund.
6-14 (g) A Group C member shall receive twice the number of
6-15 actual years of credited service in Group C solely for the purpose
6-16 of fulfilling the eligibility requirements for a normal retirement
6-17 pension in Group C as provided by Subsection (h). For all other
6-18 computations under this Act, the actual years of credited service
6-19 in Group C shall be used.
6-20 (h) A Group C member who ceases to be an executive official
6-21 is eligible for a normal retirement pension when the official:
6-22 (1) fulfills the requirement for age and years of
6-23 credited service applicable to Group A members for a normal
6-24 retirement pension under Section 11 of this Act; or
6-25 (2) completes less than five years of credited service
6-26 and attains 65 years of age.
6-27 (i) The amount of the monthly pension for each Group C
7-1 member equals the member's average monthly salary multiplied by two
7-2 times the percentage accrual rate in effect for Group A members and
7-3 by the member's actual years of credited service in Group C. For
7-4 purposes of this subsection, the member's average monthly salary
7-5 shall be computed by adding together the 78 highest biweekly
7-6 salaries paid to a member during the member's period of credited
7-7 service and dividing the sum by 36, or, if the member has less than
7-8 78 total biweekly salaries, by multiplying 26 times the average of
7-9 all of the member's biweekly salaries and dividing by 12. However,
7-10 a Group C member's pension may not be more than 80 percent of the
7-11 member's average monthly salary and may not be less than the
7-12 greater of $8 a month for each year of credited service or a total
7-13 of $100 a month.
7-14 (j) Any previous service of a Group C member in Group A or
7-15 Group B is governed by the applicable Group A or Group B provisions
7-16 of this Act and may not be credited to Group C. Group C service
7-17 may not be credited to Group A or Group B.
7-18 (k) Except as provided by Subsection (j), this section
7-19 applies to a plan member only while the individual is an eligible
7-20 executive official. An individual who ceases to be an executive
7-21 official and transfers to a municipal position covered by Group A
7-22 shall participate in Group A but does not forfeit Group C service
7-23 and remains eligible for normal retirement for Group C service as
7-24 provided under Subsection (h) of this section.
7-25 SECTION 4. Chapter 358, Acts of the 48th Legislature,
7-26 Regular Session, 1943 (Article 6243g, Vernon's Texas Civil
7-27 Statutes), is amended by adding Section 33A to read as follows:
8-1 Sec. 33A. (a) The Board may establish a program of
8-2 proportionate retirement benefits subject to the requirements of
8-3 this section.
8-4 (b) In this section:
8-5 (1) "Combined service credit" means the combined sum
8-6 of an eligible participant's service credit in each participating
8-7 retirement system in which the participant has service credit and
8-8 for which the total satisfies the length-of-service requirements
8-9 for service retirement from that system at the participant's
8-10 attained age.
8-11 (2) "Eligible participant" means a person who is
8-12 employed by the city and covered by a participating retirement
8-13 system at the time of full participation by all participating
8-14 retirement systems under their respective statutory authority and
8-15 who is or has been a member of the Pension System under this Act.
8-16 The term does not include any individual who is in retirement,
8-17 deferred, or DROP status, who is receiving a pension benefit under
8-18 this Act, or who is in a probationary or trainee firefighter or
8-19 police officer position.
8-20 (3) "Maximum benefit" means the maximum amount of
8-21 benefits payable to an eligible participant who has used combined
8-22 service credit to qualify for benefits from a participating
8-23 retirement system, which is 80 percent of the participant's average
8-24 monthly compensation at the time the participant ceases employment
8-25 in a position covered by the Pension System.
8-26 (4) "Participating retirement system" means a
8-27 retirement system established by Article 6243e.2(1) or 6243g-3,
9-1 Revised Statutes; Chapter 76, Acts of the 50th Legislature, Regular
9-2 Session, 1947 (Article 6243g-1, Vernon's Texas Civil Statutes); a
9-3 successor statute to any of those laws; or this Act, to the extent
9-4 that the retirement system recognizes and allows the use of
9-5 combined service credit and disability determinations to provide
9-6 proportionate retirement benefits in its system for an eligible
9-7 participant under circumstances described by this Act.
9-8 (5) "Service credit" means service that is credited by
9-9 the rules of a participating retirement system and that may be used
9-10 to meet length-of-service requirements for service retirement in
9-11 that system, except that service credit that would otherwise be
9-12 allowed by more than one participating retirement system for the
9-13 same service period may be counted only once in determining the
9-14 amount of a person's combined service credit and will apply as
9-15 service credit only in the participating retirement system in which
9-16 the person first established the service credit.
9-17 (c) Participation by the Pension System in the proportionate
9-18 retirement program is voluntary. The Board may elect to
9-19 participate in the proportionate retirement program by adopting a
9-20 resolution to that effect. On adoption, the Board shall notify the
9-21 other participating retirement systems of the election. The
9-22 effective date of participation in the proportionate retirement
9-23 program for which an election is made is the first day of the third
9-24 month after the month in which notice is given. Participation in
9-25 the proportionate retirement program by the Pension System may be
9-26 terminated by Board resolution for any reason, except that the
9-27 proportionate retirement program will be continued by the Pension
10-1 System for eligible participants who are actively employed at the
10-2 time of the termination and remain actively employed without a
10-3 break in service. On adoption of a resolution of termination, the
10-4 Board shall notify the other participating retirement systems of
10-5 the termination. The effective date of termination from the
10-6 proportionate retirement program is the first day of the month
10-7 following the month in which notice is given.
10-8 (d) An eligible participant's combined service credit is
10-9 usable solely for determining eligibility for service retirement
10-10 benefits and DROP participation and may not be used in determining
10-11 eligibility for disability retirement benefits, death benefits, or
10-12 any type of benefit other than service retirement benefits or DROP
10-13 participation or determining the amount of any type of benefit.
10-14 The amount of a benefit payable by the Pension System is determined
10-15 according to and in the manner prescribed by the statutes and rules
10-16 governing the Pension System and is based solely on an eligible
10-17 participant's service credit in the Pension System and allowable
10-18 maximum benefit. The Pension System has sole responsibility and
10-19 discretion to determine the eligibility of eligible participants
10-20 for benefits, including whether sufficient combined service credit
10-21 exists to qualify eligible participants for proportionate
10-22 retirement benefits from the Pension System, and the amount and
10-23 duration of proportionate retirement benefits payable by the
10-24 Pension System.
10-25 (e) A person who withdraws pension contributions from a
10-26 participating retirement system ceases to be a member of that
10-27 participating retirement system. Membership and service credit for
11-1 which contributions were withdrawn or otherwise forfeited may be
11-2 reestablished under the statutes and rules governing that system.
11-3 To be counted as combined service credit, all service in a
11-4 participating retirement system for which the person withdrew
11-5 contributions or that was otherwise forfeited must be reinstated in
11-6 accordance with the statutes and rules applicable to that system.
11-7 A lump-sum distribution is governed by the statutes and rules
11-8 applicable to the particular retirement system.
11-9 (f) A person who has service credit in another participating
11-10 retirement system for which the person is receiving or may become
11-11 eligible to receive a benefit from the other system is not eligible
11-12 to vote in a Board election or hold a position on the Board.
11-13 (g) The Board shall make determinations regarding an
11-14 eligible participant's combined service credit based on complete
11-15 and certified records of a participating retirement system,
11-16 including the Pension System, and of the city.
11-17 (h) The provisions of Sections 15 and 16 of this Act
11-18 pertaining to interruption of service and termination of employment
11-19 do not apply to an eligible participant to the extent the
11-20 participant is absent from service covered by the Pension System
11-21 during a period for which the participant earns service credit in
11-22 another participating retirement system for service performed for
11-23 the city in an amount sufficient to meet the length-of-service
11-24 requirement, using combined service credit, for a retirement
11-25 benefit from the participating retirement system.
11-26 (i) A proportionate retirement benefit may be paid by the
11-27 Pension System under the proportionate retirement program to an
12-1 eligible participant who fulfills the requirements for receiving a
12-2 proportionate retirement benefit in the Pension System using
12-3 combined service credit only if the participant is eligible to
12-4 receive and has applied for proportionate retirement benefits from
12-5 the applicable other participating retirement systems. An eligible
12-6 participant may not become eligible to begin receiving a
12-7 proportionate retirement benefit from the Pension System while
12-8 employed in a position covered by the Pension System.
12-9 (j) The Pension System is governed solely by its own
12-10 statutory provisions, policies, and procedures relating to
12-11 disability benefit determinations for members who apply for a
12-12 disability pension from the Pension System, except that if an
12-13 eligible participant has combined service credit from any other
12-14 participating retirement system in addition to this system, files
12-15 for a disability pension for the first time as a member of the
12-16 other participating retirement system, is otherwise eligible for a
12-17 disability retirement benefit in both participating retirement
12-18 systems, and receives a determination from the board of trustees of
12-19 the other participating pension system that the person has a
12-20 disability that is of a type recognized by the Pension System, and
12-21 the other participating retirement system grants the disability
12-22 pension, the Pension System shall pay the proportionate amount of
12-23 benefit attributable to the service credited under the Pension
12-24 System, based on the schedule of benefits in effect for the Pension
12-25 System at the time the eligible participant ceased membership in
12-26 the Pension System. If the disability is determined to be
12-27 service-related, the Pension System shall pay only the ordinary
13-1 disability benefit amount. The Board has the right to require
13-2 examinations, reports, and any other information as provided by
13-3 this Act for the administration and payment of disability benefits
13-4 and the right to reduce, suspend, or terminate a benefit
13-5 accordingly. The benefit allowed under this subsection is payable
13-6 only if the other participating retirement systems authorize and
13-7 pay a disability benefit under the same circumstances as provided
13-8 by this subsection. A person who is receiving a disability benefit
13-9 from a participating retirement system is not eligible for a
13-10 disability pension under this Act except as provided by this
13-11 subsection.
13-12 (k) Creditable military service, if any, will be credited in
13-13 the Pension System only as provided by this Act and only if the
13-14 service is not credited in any other participating retirement
13-15 system.
13-16 (l) The Board may adopt rules and policies for implementing
13-17 and administering the proportionate retirement program.
13-18 (m) A person may not become eligible to receive a benefit
13-19 under this section that is greater than the benefit the person
13-20 would otherwise receive under this Act if this section did not
13-21 apply. A benefit otherwise payable under Section 13(b) of this Act
13-22 on behalf of a person who has used combined service credit to
13-23 qualify for benefits from at least one participating retirement
13-24 system shall instead be computed and payable as provided by Section
13-25 13(a) of this Act.
13-26 SECTION 5. This Act takes effect September 1, 1999.
13-27 SECTION 6. The importance of this legislation and the
14-1 crowded condition of the calendars in both houses create an
14-2 emergency and an imperative public necessity that the
14-3 constitutional rule requiring bills to be read on three several
14-4 days in each house be suspended, and this rule is hereby suspended.