AN ACT
1-1 relating to participation and credit in, contributions to, and
1-2 benefits and administration of the Texas Municipal Retirement
1-3 System.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 851.001, Government Code, is amended by
1-6 adding Subdivision (16) to read as follows:
1-7 (16) "Member" means a person for whom an account has
1-8 been established in the employees saving fund and whose membership
1-9 has not terminated under Section 852.104.
1-10 SECTION 2. Subchapter B, Chapter 852, Government Code, is
1-11 amended by adding Section 852.110 to read as follows:
1-12 Sec. 852.110. CORRECTION OF ERRORS. (a) If as a result of
1-13 a reporting error on the part of a participating municipality a
1-14 person has not received credited service or current service credit
1-15 or has received less than the correct amount of current service
1-16 credit for months in which the person performed service as an
1-17 employee of the municipality, the retirement system shall correct
1-18 the error as authorized by this section.
1-19 (b) A correction may not be made as to current service
1-20 performed, or current service credit that should have been
1-21 received, more than four years before the date an application for
1-22 the correction, on a form approved by the board of trustees, is
1-23 received by the retirement system.
1-24 (c) Except as provided by Subsection (g), a correction
2-1 described by Subsection (a) may not be made unless the retirement
2-2 system receives, in addition to the application, each of the items
2-3 required under Subsection (d) and one of the following:
2-4 (1) a written agreement, approved by the
2-5 municipality's governing body, stating that an error has occurred
2-6 and that the municipality has agreed to correct the error;
2-7 (2) a final judgment by a court of competent
2-8 jurisdiction in a proceeding to which the municipality was a party,
2-9 ordering the municipality to correct the error; or
2-10 (3) an order in an administrative proceeding to which
2-11 the municipality was a party, directing the subdivision to correct
2-12 the error, and that is no longer subject to appeal.
2-13 (d) A correction described by Subsection (a) may not be
2-14 made unless the retirement system receives:
2-15 (1) a supplemental report properly signed on behalf of
2-16 the municipality showing the corrections to credited service or
2-17 current service credit of the person;
2-18 (2) payment from the person seeking the correction in
2-19 an amount equal to the contribution or additional contribution the
2-20 person would have made to the retirement system if the service had
2-21 been correctly reported to the system; and
2-22 (3) payment from the municipality in an amount equal
2-23 to the additional contribution that the municipality should have
2-24 paid to the retirement system based on the additional credited
2-25 service or current service credit.
2-26 (e) A municipality that is the subject of an agreement, a
3-1 judgment, or an order described by Subsection (c) shall file the
3-2 supplemental report and submit the payments described by this
3-3 section not later than the 30th day after the date the municipality
3-4 is notified in writing by the retirement system that those items
3-5 should be sent to the retirement system.
3-6 (f) If as a result of a reporting error on the part of a
3-7 participating municipality a person has not received prior service
3-8 credit, on written application to the retirement system accompanied
3-9 by evidence of the prior service satisfactory to the retirement
3-10 system, the retirement system shall correct the error if the
3-11 retirement system receives the person's written application for the
3-12 correction within four years after the later of the date the
3-13 municipality began participation or the person first became a
3-14 member of the retirement system.
3-15 (g) The correction of an error affecting not more than three
3-16 monthly reports within a period of not more than three consecutive
3-17 months may be made on the basis of the application alone if the
3-18 application, the supplemental report, and the payments required by
3-19 this section are received by the retirement system before the first
3-20 day of the seventh month after the month for which the correction
3-21 is being made.
3-22 SECTION 3. Subsection (c), Section 853.401, Government Code,
3-23 is amended to read as follows:
3-24 (c) In adopting an ordinance under this section, a governing
3-25 body shall specify the percentage of base updated service credits
3-26 to be used in computing updated service credits for employees of
4-1 the municipality and shall specify the date the updated service
4-2 credits will take effect. The percentage adopted may be 50
4-3 percent, 75 percent, or [any multiple of 10 percent that does not
4-4 exceed] 100 percent of a base updated service credit. The
4-5 effective date must be January 1 of a year specified by the
4-6 governing body. If the governing body of a municipality has
4-7 specified a different percentage in an ordinance adopted under
4-8 Section 853.404(a) and in effect on December 31, 1999, the
4-9 percentage used in computing updated service credits for employees
4-10 of that municipality remains in effect until changed or
4-11 discontinued under Section 853.404.
4-12 SECTION 4. Subsection (b), Subsection 853.402, Government
4-13 Code, is amended to read as follows:
4-14 (b) The average updated service compensation of a member is
4-15 computed as the monthly average compensation [for]:
4-16 (1) for the 36 months immediately preceding the date
4-17 prescribed by Subsection (e); or
4-18 (2) if the member did not perform service in each of
4-19 the 36 months described in Subdivision (1) or did not perform any
4-20 service within the 36-month period, for the most recent 36 months
4-21 before the date prescribed by Subsection (e) in which the member
4-22 performed service[, for the number of months of service within the
4-23 36-month period; or]
4-24 [(3) if the member did not perform any service within
4-25 the 36-month period, for the number of months of service within the
4-26 36-month period ending with the last month of the calendar year in
5-1 which the member's most recent service was performed].
5-2 SECTION 5. Section 854.002, Government Code, is amended by
5-3 adding Subsection (d) to read as follows:
5-4 (d) Notwithstanding any other provision of this subtitle,
5-5 instead of an annuity, a person will receive from the retirement
5-6 system a single payment equal to the sum of the following if on the
5-7 date of that person's retirement that sum is $5,000 or less:
5-8 (1) any updated service credit or any prior service,
5-9 special prior service, or antecedent service credit for that person
5-10 on the date of retirement, plus accumulated interest;
5-11 (2) the amount credited to the person's individual
5-12 account in the employees saving fund; and
5-13 (3) the amount from the municipality accumulation fund
5-14 equal to the amount in the member's individual account or a greater
5-15 amount authorized by a participating municipality under Section
5-16 855.501.
5-17 SECTION 6. Subsection (c), Section 854.004, Government Code,
5-18 is amended to read as follows:
5-19 (c) An annuity under this subtitle is payable for a period
5-20 beginning on the last day of the first month following the month in
5-21 which retirement occurs and ending, except as otherwise provided by
5-22 this subtitle, on the last day of the month [immediately preceding
5-23 the month] in which death occurs.
5-24 SECTION 7. Section 854.006, Government Code, is amended by
5-25 adding Subsections (f) and (g) to read as follows:
5-26 (f) If a divorce decree or a qualified domestic relations
6-1 order, as that term is defined by Section 804.001, so provides, the
6-2 benefit payable to a retiree who is receiving payments of an
6-3 annuity for the retiree's life with payments to continue after the
6-4 retiree's death until the death of another person under Section
6-5 854.104(c)(1), (2), or (5), 854.305(c)(1), (2), or (5), or
6-6 854.410(c)(1), (2), or (5) may be increased to the amount that
6-7 would have been payable if the retiree had selected an annuity
6-8 payable only during the retiree's lifetime if:
6-9 (1) the proceeding in which the decree or order is
6-10 entered terminates the marriage between the retiree and the person
6-11 who was designated to receive the continued payment after the
6-12 retiree's death;
6-13 (2) the decree or order awards the retiree all
6-14 benefits resulting from the retiree's participation in the
6-15 retirement system; and
6-16 (3) the decree or order is signed after December 31,
6-17 1999.
6-18 (g) A decree or order under Subsection (f) applies only to
6-19 annuity payments made after the date the retirement system receives
6-20 and approves the decree or order as complying with Subsection (f).
6-21 SECTION 8. Subsection (b), Section 854.008, Government Code,
6-22 is amended to read as follows:
6-23 (b) The amount of a lump-sum distribution under this section
6-24 may not exceed three-fourths [one-half] of the total contributions
6-25 and accumulated interest in the member's individual account in the
6-26 employees saving fund at the time of the member's retirement.
7-1 SECTION 9. Subsection (b), Section 854.203, Government Code,
7-2 is amended to read as follows:
7-3 (b) The amount of annuity increase under this section is
7-4 computed as the sum of the prior and current service annuities on
7-5 the effective date of retirement of the person on whose service the
7-6 annuities are based, multiplied by:
7-7 (1) the percentage change in the Consumer Price Index
7-8 for All Urban Consumers, published by the Bureau of Labor
7-9 Statistics of the United States Department of Labor, from December
7-10 of the year immediately preceding the effective date of the
7-11 person's retirement to the December that is 13 months before the
7-12 effective date of the ordinance providing the increase; and
7-13 (2) 30 percent, 50 percent, or 70 percent, as [a
7-14 fraction,] specified by the governing body in the ordinance, except
7-15 that if the governing body has specified a different percentage in
7-16 an ordinance adopted under Section 853.404(c) and in effect on
7-17 December 31, 1999, the percentage used in computing annuity
7-18 increases for retirees of that municipality remains in effect until
7-19 changed or discontinued under Section 853.404 [that is not less
7-20 than 10 percent nor more than 70 percent and is a multiple of 5
7-21 percent].
7-22 SECTION 10. Section 854.204, Government Code, is amended to
7-23 read as follows:
7-24 Sec. 854.204. OPTIONAL BENEFIT FOR DESIGNATED BENEFICIARY
7-25 [SURVIVING SPOUSE] OF VESTED EMPLOYEE. (a) This section applies
7-26 to all municipalities having a participation date in the retirement
8-1 system after August 31, 1987. The governing body of any
8-2 municipality having an earlier effective date of participation may
8-3 by ordinance adopt the provisions of this section if the actuary
8-4 first determines, on the basis of mortality and other tables
8-5 adopted by the board of trustees, that all obligations of the
8-6 municipality to the municipality accumulation fund, including
8-7 obligations proposed under the ordinance, can be funded by the
8-8 municipality within its maximum contribution rate and within its
8-9 amortization period.
8-10 (b) If a member who has sufficient credited service
8-11 performed for municipalities that have adopted or are subject to
8-12 this section to entitle the member to withdraw from service, to
8-13 leave on deposit with the retirement system the member's
8-14 accumulated contributions and, on attainment of an age prescribed
8-15 by this subtitle, to retire with a service retirement benefit dies
8-16 before becoming eligible for service retirement and leaves
8-17 surviving a person [lawful spouse] whom the member has designated
8-18 as beneficiary entitled to payment of the member's accumulated
8-19 contributions in the event of the member's death before retirement,
8-20 the person [surviving spouse] may by written notice filed with the
8-21 board elect to leave the accumulated deposits with the retirement
8-22 system subject to the terms of this section. If the accumulated
8-23 deposits have not been withdrawn before such time as the member, if
8-24 living, would have become entitled to service retirement, the
8-25 person designated as beneficiary [surviving spouse] may elect to
8-26 receive, in lieu of the accumulated deposits, an annuity payable
9-1 monthly during the lifetime of the person [surviving spouse] in the
9-2 amount that would have been payable to the person [surviving
9-3 spouse] had the member lived and retired at that date under an
9-4 optional annuity described by Section 854.104(c)(1).
9-5 (c) At any time before payment of the first monthly benefit
9-6 of an annuity, a designated beneficiary [surviving spouse] to whom
9-7 this section applies may, after filing a written application with
9-8 the board of trustees, receive payment of the accumulated
9-9 contributions credited to the account of the member in lieu of any
9-10 benefits otherwise payable under this section. If the designated
9-11 beneficiary [surviving spouse] dies before payment of the first
9-12 monthly benefit of an annuity allowed under this section, the
9-13 accumulated contributions credited to the account of the member
9-14 shall be paid to the estate of the designated beneficiary [spouse].
9-15 (d) A person eligible to file an election under Subsection
9-16 (b) may, by written notice filed with the board of trustees not
9-17 later than 180 days after the date of the member's death, elect to
9-18 receive a reduced annuity under this subsection instead of the
9-19 accumulated deposits or the annuity under Subsection (b). An
9-20 annuity under this subsection is payable monthly during the
9-21 person's lifetime in the amount that would have been payable to the
9-22 person if the member had been eligible to retire and had retired,
9-23 on the last day of the month immediately preceding the month in
9-24 which death occurred, under an optional annuity described by
9-25 Section 854.104(c)(1).
9-26 (e) If a member to whom this section applies has designated
10-1 as beneficiary a person to whom a retirement plan that is qualified
10-2 under Section 401, Internal Revenue Code of 1986, cannot make
10-3 payments for a period greater than five years after the date of the
10-4 member's death without losing its qualified status and the
10-5 beneficiary elects to receive an annuity under Subsection (b) or
10-6 (d), the annuity payable by the retirement system is the actuarial
10-7 equivalent of the monthly payments that the beneficiary would have
10-8 received if the member had retired on the date the annuity begins
10-9 under the optional annuity described by Section 854.104(c)(4), to
10-10 be paid over 60 months.
10-11 (f) If a member to whom this section applies has designated
10-12 more than one person as beneficiaries and those persons elect to
10-13 receive an annuity under Subsection (b) or (d), the annuity payable
10-14 by the retirement system is the actuarial equivalent of the monthly
10-15 payments that the beneficiaries would have received if the member
10-16 had retired on the date the annuity begins under the optional
10-17 annuity described by Section 854.104(c)(4), to be paid over 180
10-18 months.
10-19 SECTION 11. Subsection (c), Section 854.304, Government
10-20 Code, is amended to read as follows:
10-21 (c) A standard disability retirement annuity is payable
10-22 throughout the life of a retiree. If a retiree dies before 60
10-23 monthly payments of a standard disability retirement annuity have
10-24 been made, the remainder of the 60 monthly payments is payable to
10-25 the retiree's designated beneficiary. When a retiree who receives
10-26 an annuity under this section dies, an additional benefit may be
11-1 payable under Section 854.502.
11-2 SECTION 12. Subsection (c), Section 854.305, Government
11-3 Code, is amended to read as follows:
11-4 (c) An eligible person may select an optional annuity that
11-5 provides that:
11-6 (1) after the retiree's death, the reduced annuity is
11-7 payable throughout the life of a person designated by the retiree;
11-8 (2) after the retiree's death, one-half of the reduced
11-9 annuity is payable throughout the life of a person designated by
11-10 the retiree;
11-11 (3) if the retiree dies before 120 monthly annuity
11-12 payments have been made, the remainder of the 120 payments are
11-13 payable to the retiree's beneficiary or, if one does not exist, to
11-14 the retiree's estate;
11-15 (4) if the retiree dies before 180 monthly annuity
11-16 payments have been made, the remainder of the 180 payments are
11-17 payable to the retiree's beneficiary or, if one does not exist, to
11-18 the retiree's estate; [or]
11-19 (5) after the retiree's death, two-thirds of the
11-20 reduced annuity is payable throughout the life of a person
11-21 designated by the retiree; or
11-22 (6) the annuity is payable only during the retiree's
11-23 lifetime.
11-24 SECTION 13. Subsections (a) and (b), Section 854.408,
11-25 Government Code, are amended to read as follows:
11-26 (a) The standard occupational disability retirement annuity
12-1 payable under this subchapter is the sum of the member's prior
12-2 service annuity and current service annuity[, payable monthly
12-3 during the lifetime of the retiree, but reduced as to any month or
12-4 series of months as provided in this section]. A prior service
12-5 annuity is subject to reduction under Section 855.308(f). A
12-6 standard occupational disability retirement annuity:
12-7 (1) is payable throughout the life of the retiree, but
12-8 if the retiree dies before 60 monthly payments have been made, the
12-9 remainder of the 60 monthly payments is payable to the retiree's
12-10 designated beneficiary; and
12-11 (2) is reducible as to any month or series of months
12-12 as provided by this section.
12-13 (b) During any month in which a retiree who is less than 60
12-14 years old receives earned income subject to taxation under the
12-15 Federal Insurance Contributions Act or that would be subject to
12-16 those taxes if the employer were not an exempt organization, the
12-17 standard occupational disability retirement annuity may not exceed
12-18 the greater of the following amounts:
12-19 (1) the amount that is required to be added to the
12-20 retiree's earned income for the month to equal the highest average
12-21 compensation on which the retiree made membership contributions to
12-22 the retirement system during any 12 consecutive months during the
12-23 three calendar years immediately preceding the year in which the
12-24 retiree retired for disability, when the highest average
12-25 compensation is multiplied by the percentage increase, if any, in
12-26 the Consumer Price Index for All Urban Consumers published by the
13-1 Bureau of Labor Statistics of the United States Department of Labor
13-2 from December of the year immediately preceding the effective date
13-3 of the person's retirement to the December that is 13 months before
13-4 a computation is made under this subsection; or
13-5 (2) the monthly annuity attributable to the retiree's
13-6 accumulated contributions at the time of the person's retirement.
13-7 SECTION 14. Subsection (c), Section 854.410, Government
13-8 Code, is amended to read as follows:
13-9 (c) An eligible person may select an optional annuity that
13-10 provides that:
13-11 (1) after the retiree's death, the reduced annuity is
13-12 payable throughout the life of a person designated by the retiree;
13-13 (2) after the retiree's death, one-half of the reduced
13-14 annuity is payable throughout the life of a person designated by
13-15 the retiree;
13-16 (3) if the retiree dies before 120 monthly annuity
13-17 payments have been made, the remainder of the 120 payments is
13-18 payable to the retiree's beneficiary or, if one does not exist, to
13-19 the retiree's estate;
13-20 (4) if the retiree dies before 180 monthly annuity
13-21 payments have been made, the remainder of the 180 payments is
13-22 payable to the retiree's beneficiary or, if one does not exist, to
13-23 the retiree's estate; [or]
13-24 (5) after the retiree's death, two-thirds of the
13-25 reduced annuity is payable throughout the life of a person
13-26 designated by the retiree; or
14-1 (6) the annuity is payable only during the retiree's
14-2 lifetime.
14-3 SECTION 15. Subchapter B, Chapter 855, Government Code, is
14-4 amended by adding Section 855.116 to read as follows:
14-5 Sec. 855.116. ELECTRONIC FILING OF CERTAIN DOCUMENTS.
14-6 (a) In this section, "electronic filing" means the filing of data
14-7 by the communication of information by facsimile or in the form of
14-8 digital electronic signals transformed by computer and stored on
14-9 microfilm, magnetic tape, optical disk, or any other medium.
14-10 (b) The board of trustees may adopt rules and procedures
14-11 relating to the electronic filing of documents with the retirement
14-12 system. A document that is electronically filed in accordance with
14-13 those rules and procedures is considered to have been properly
14-14 filed with the retirement system.
14-15 SECTION 16. Subsection (d), Section 855.205, Government
14-16 Code, is amended to read as follows:
14-17 (d) On the basis of rates and tables adopted by the board,
14-18 the actuary shall:
14-19 (1) annually compute the normal contribution rate for
14-20 each participating municipality;
14-21 (2) annually compute the prior service contribution
14-22 rate for each participating municipality;
14-23 (3) compute the current interest rate in accordance
14-24 with Section 855.316(b) [855.316(c)];
14-25 (4) compute the supplemental death benefits rate and
14-26 the supplemental disability benefits rate for each participating
15-1 municipality; and
15-2 (5) [certify the amount of each annuity and benefit
15-3 granted by the board; and]
15-4 [(6)] make an annual valuation of the assets and
15-5 liabilities of the funds of the retirement system.
15-6 SECTION 17. Subsections (b) and (c), Section 855.306,
15-7 Government Code, are amended to read as follows:
15-8 (b) On December 31 of each year the retirement system shall
15-9 credit to each member's individual account interest as allowed by
15-10 this subtitle on the amount of accumulated contributions credited
15-11 to the member's account on January 1 of that year. On a person's
15-12 retirement under this subtitle on a date other than December 31,
15-13 the retirement system shall credit to that person's individual
15-14 account interest and supplemental interest, if any, at the rate
15-15 credited on members' accounts for the preceding year. The interest
15-16 must be:
15-17 (1) on the amount of accumulated contributions
15-18 credited to the member's account on January 1 of the year in which
15-19 retirement occurs; and
15-20 (2) prorated from January 1 of the year in which
15-21 retirement occurs to the effective date of retirement.
15-22 (c) The retirement system may not pay interest on money in a
15-23 person's individual account:
15-24 (1) for a part of a year except as provided by
15-25 Subsection (b); or
15-26 (2) after the person's membership has been terminated
16-1 in accordance with Section 852.104 because of absence from service.
16-2 SECTION 18. Section 855.311, Government Code, is amended by
16-3 adding Subsection (g) to read as follows:
16-4 (g) Distribution and payment to an annuitant under
16-5 Subsection (e) must be based on the ratio that the number of months
16-6 elapsing since the effective date of the person's retirement bears
16-7 to the number 12 if that person retired under this subtitle during
16-8 the year for which the distribution and payment is made.
16-9 SECTION 19. Section 855.315, Government Code, is amended by
16-10 adding Subsections (d) and (e) to read as follows:
16-11 (d) The retirement system shall make payments by electronic
16-12 funds transfer to annuitants whose first annuity payment under this
16-13 subtitle occurs after January 1, 2000. The retirement system may
16-14 use electronic funds transfers to make other payments.
16-15 (e) Notwithstanding any requirement to make a payment by
16-16 electronic funds transfer, the retirement system may make payment
16-17 by vouchers, checks, or warrants to an annuitant if making the
16-18 payment by electronic funds transfer would be impractical for the
16-19 retirement system or if the annuitant properly notifies the
16-20 retirement system that:
16-21 (1) receiving the payment by electronic funds transfer
16-22 would be impractical to the person;
16-23 (2) receiving the payment by electronic funds transfer
16-24 would be more costly to the person than receiving the payment by
16-25 check or warrant; or
16-26 (3) the person is unable to establish a qualifying
17-1 account at a financial institution to receive electronic funds
17-2 transfers.
17-3 SECTION 20. Subsection (g), Section 855.407, Government
17-4 Code, is amended to read as follows:
17-5 (g) A municipality that begins participation in the
17-6 retirement system on or after December 31, 1999, and any
17-7 municipality already participating in the retirement system on that
17-8 date whose [The] governing body elects [of a municipality may
17-9 elect] to have the municipality do so shall contribute to its
17-10 account in the municipality accumulation fund at the combined rate
17-11 of total compensation paid to its employees as the actuary
17-12 determines is necessary to fund all obligations chargeable to its
17-13 account in the fund within the municipality's amortization period,
17-14 regardless of other provisions of this subtitle.
17-15 SECTION 21. This Act takes effect December 31, 1999.
17-16 SECTION 22. The importance of this legislation and the
17-17 crowded condition of the calendars in both houses create an
17-18 emergency and an imperative public necessity that the
17-19 constitutional rule requiring bills to be read on three several
17-20 days in each house be suspended, and this rule is hereby suspended.
_______________________________ _______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 574 passed the Senate on
March 30, 1999, by the following vote: Yeas 30, Nays 0.
_______________________________
Secretary of the Senate
I hereby certify that S.B. No. 574 passed the House on
April 29, 1999, by a non-record vote.
_______________________________
Chief Clerk of the House
Approved:
_______________________________
Date
_______________________________
Governor