By: Armbrister, Barrientos, Bernsen S.B. No. 1128
A BILL TO BE ENTITLED
AN ACT
1-1 relating to systems and programs administered by the Teacher
1-2 Retirement System of Texas.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 822.201, Government Code, is amended by
1-5 amending Subsection (b), as amended by Chapters 330 and 1035, Acts
1-6 of the 75th Legislature, Regular Session, 1997, and adding
1-7 Subsection (e) to read as follows:
1-8 (b) "Salary and wages" as used in Subsection (a) means:
1-9 (1) normal periodic payments of money for service the
1-10 right to which accrues on a regular basis in proportion to the
1-11 service performed;
1-12 (2) amounts by which the member's salary is reduced
1-13 under a salary reduction agreement authorized by Chapter 610;
1-14 (3) amounts that would otherwise qualify as salary and
1-15 wages under Subdivision (1) but are not received directly by the
1-16 member pursuant to a good faith, voluntary written salary reduction
1-17 agreement in order to finance payments to a deferred compensation
1-18 or tax sheltered annuity program specifically authorized by state
1-19 law or to finance benefit options under a cafeteria plan qualifying
1-20 under Section 125 of the Internal Revenue Code of 1986 (26 U.S.C.
1-21 Section 125), if:
1-22 (A) the program or benefit options are made
1-23 available to all employees of the employer; and
1-24 (B) the benefit options in the cafeteria plan
2-1 are limited to one or more options that provide deferred
2-2 compensation, group health and disability insurance, group term
2-3 life insurance, dependent care assistance programs, or group legal
2-4 services plans; [and]
2-5 (4) performance pay awarded to an employee by a school
2-6 district as part of a total compensation plan approved by the board
2-7 of trustees of the district and meeting the requirements of
2-8 Subsection (e); and[.]
2-9 (5) [(4)] the benefit replacement pay a person earns
2-10 under Subchapter H, Chapter 659, as added by Chapter 417, Acts of
2-11 the 74th Legislature, 1995, except as provided by Subsection (c).
2-12 (e) For purposes of Subsection (b)(4), a total compensation
2-13 plan must:
2-14 (1) describe all elements of compensation received by
2-15 all employees of the employer;
2-16 (2) provide at least one type of performance pay to
2-17 classroom teachers employed by the employer;
2-18 (3) identify each type of performance pay, the
2-19 performance criteria for each type of performance pay, and the
2-20 classes of employees eligible for each type of performance pay;
2-21 (4) contain sufficient information concerning the plan
2-22 to ascertain the amount of each qualifying employee's pay under the
2-23 plan;
2-24 (5) contain performance criteria for earning
2-25 performance pay that preclude the exercise of discretion for
2-26 awarding the pay on any basis other than an evaluation of employee
3-1 or group performance or availability of funding; and
3-2 (6) satisfy any other requirements adopted by the
3-3 retirement system.
3-4 SECTION 2. Subchapter A, Chapter 823, Government Code, is
3-5 amended by adding Section 823.006 to read as follows:
3-6 Sec. 823.006. PERMISSIVE SERVICE CREDIT RESTRICTIONS.
3-7 (a) In this section:
3-8 (1) "Nonqualified service" means service for which
3-9 permissive service credit is authorized by this subtitle, other
3-10 than:
3-11 (A) military service; and
3-12 (B) service for any agency or instrumentality of
3-13 this state, including a political subdivision of this state, or for
3-14 any public school supported by the United States or a state or
3-15 territory of the United States, if credit for the service would not
3-16 cause a person to receive a retirement benefit for the same service
3-17 from more than one retirement system or program.
3-18 (2) "Permissive service credit" means service credit:
3-19 (A) that is not membership credit authorized to
3-20 be reinstated;
3-21 (B) that is recognized under this subtitle for
3-22 purposes of computing a member's benefit under the retirement
3-23 system;
3-24 (C) for which the member has not received credit
3-25 with the retirement system; and
3-26 (D) that a member may receive only by making a
4-1 voluntary additional contribution in an amount determined as
4-2 provided by this subtitle that does not exceed the amount necessary
4-3 to fund the benefit attributable to the service credit.
4-4 (b) The purchase of permissive service credit by a person
4-5 who first becomes a member of the retirement system after August
4-6 31, 2000, is subject to the restrictions and conditions of
4-7 Subsection (d) in addition to all other requirements of this
4-8 subtitle applicable to the purchase.
4-9 (c) The purchase by any person of permissive service credit
4-10 that was first made available under the retirement system after
4-11 December 31, 1997, is subject to the restrictions and conditions of
4-12 Subsection (d) in addition to all other requirements of this
4-13 subtitle applicable to the purchase.
4-14 (d) Under a circumstance described by Subsection (b) or (c),
4-15 a member may not purchase more than five years of permissive
4-16 service credit for nonqualified service, and a member may not
4-17 purchase service credit for nonqualified service before the member
4-18 has at least five years of membership service credit.
4-19 SECTION 3. Subchapter C, Chapter 823, Government Code, is
4-20 amended by adding Section 823.203 to read as follows:
4-21 Sec. 823.203. MEMBERSHIP SERVICE FOR OPTIONAL RETIREMENT
4-22 PROGRAM. A member may not establish service credit in the
4-23 retirement system for any period when the member was participating
4-24 in the optional retirement program under Chapter 830.
4-25 SECTION 4. Subsections (b) and (f), Section 823.501,
4-26 Government Code, are amended to read as follows:
5-1 (b) A person eligible to reinstate service credit under this
5-2 section is one who is a [contributing] member of the retirement
5-3 system at the time the service is reinstated.
5-4 (f) A [contributing] member may have an account that was
5-5 terminated by absence from service reactivated by requesting the
5-6 reactivation in writing. The beneficiary of a decedent who was a
5-7 [contributing] member at the time of death may have an account that
5-8 was terminated by the decedent's absence from service reactivated
5-9 by requesting the reactivation in writing before the first payment
5-10 of a death benefit.
5-11 SECTION 5. Subsection (c), Section 824.101, Government Code,
5-12 is amended to read as follows:
5-13 (c) Only one person may be designated as beneficiary of an
5-14 optional retirement annuity under Section 824.204(c)(1), (c)(2), or
5-15 (c)(5), and a designation of beneficiary under any of those options
5-16 may not be made, changed, or revoked, except as provided by
5-17 Sections 824.1011, [and] 824.1012, and 824.1013, after the later of
5-18 the date on which the retirement system makes the first annuity
5-19 payment to the retiree or the date the first payment becomes due.
5-20 For purposes of this section, the term "makes payment" includes the
5-21 depositing in the mail of a payment warrant or the crediting of an
5-22 account with payment through electronic funds transfer.
5-23 SECTION 6. Subsection (a), Section 824.1011, Government
5-24 Code, is amended to read as follows:
5-25 (a) A retiree who is receiving a standard service or
5-26 disability retirement annuity under Section 824.203 or 824.304(b)
6-1 and who marries after the date of the person's retirement may
6-2 replace the annuity by selecting an optional retirement annuity
6-3 under Section 824.204(c)(1), (c)(2), or (c)(5) or under Section
6-4 824.308(c)(1), (c)(2), or (c)(5), as applicable, and designating
6-5 the person's spouse as beneficiary before the second [first]
6-6 anniversary of the marriage in the same manner as an annuity
6-7 selection and designation of beneficiary may be made before
6-8 retirement.
6-9 SECTION 7. Section 824.1012, Government Code, as added by
6-10 Chapter 1416, Acts of the 75th Legislature, Regular Session, 1997,
6-11 is redesignated as Section 824.1013 to read as follows:
6-12 Sec. 824.1013 [824.1012]. CHANGE OF BENEFICIARY AFTER
6-13 RETIREMENT. (a) A retiree receiving an optional retirement
6-14 annuity under Section 824.204(c)(1), (c)(2), or (c)(5) or Section
6-15 824.308(c)(1), (c)(2), or (c)(5) may change the designated
6-16 beneficiary as provided by this section for the benefits payable
6-17 after the retiree's death under those sections.
6-18 (b) If the beneficiary designated at the time of the
6-19 retiree's retirement is the spouse or former spouse of the retiree:
6-20 (1) the spouse or former spouse must give written,
6-21 notarized consent to the change; or
6-22 (2) a court with jurisdiction over the marriage must
6-23 have ordered the change.
6-24 (c) A beneficiary designated under this section is entitled
6-25 on the retiree's death to receive monthly payments of the
6-26 survivor's portion of the retiree's optional retirement annuity for
7-1 the shorter of:
7-2 (1) the remainder of the life expectancy of the
7-3 beneficiary designated as of the effective date of the retiree's
7-4 retirement; or
7-5 (2) the remainder of the new beneficiary's life.
7-6 (d) A retiree may not change a beneficiary under this
7-7 section after retirement if the retiree has previously changed or
7-8 designated after retirement a beneficiary for optional retirement
7-9 annuity payments under this subtitle.
7-10 SECTION 8. Subchapter C, Chapter 824, Government Code, is
7-11 amended by adding Section 824.2045 to read as follows:
7-12 Sec. 824.2045. PARTIAL LUMP-SUM OPTION. (a) A member who
7-13 is eligible for an unreduced service retirement annuity and is not
7-14 participating in the deferred retirement option plan under
7-15 Subchapter I may select a standard service retirement annuity or an
7-16 optional service retirement annuity described by Section 824.204,
7-17 together with a partial lump-sum distribution.
7-18 (b) The amount of the lump-sum distribution under this
7-19 section may not exceed the sum of 36 months of a standard service
7-20 retirement annuity computed without regard to this section.
7-21 (c) The service retirement annuity selected by the member
7-22 shall be actuarially reduced to reflect the lump-sum option
7-23 selected by the member and shall be actuarially equivalent to a
7-24 standard or optional service retirement annuity, as applicable,
7-25 without the partial lump-sum distribution. The annuity and lump
7-26 sum shall be computed to result in no actuarial loss to the
8-1 retirement system.
8-2 (d) The retiring member may choose a lump sum equal to 12
8-3 months of a standard service retirement annuity and payable at the
8-4 same time that the first monthly payment of the annuity is paid, a
8-5 lump sum equal to 24 months of a standard annuity and payable in
8-6 one or two annual payments, or a lump sum equal to 36 months of a
8-7 standard annuity and payable in one, two, or three annual payments.
8-8 (e) The amount of the lump-sum distribution will be deducted
8-9 from any amounts otherwise payable under Section 824.503.
8-10 (f) The partial lump-sum option under this section may be
8-11 elected only once by a member and may not be elected by a retiree.
8-12 A member retiring under the proportionate retirement program under
8-13 Chapter 803 is not eligible for the partial lump-sum option.
8-14 (g) The board of trustees may adopt rules for the
8-15 implementation of this section.
8-16 SECTION 9. Section 824.502, Government Code, is amended to
8-17 read as follows:
8-18 Sec. 824.502. BENEFITS ON DEATH OF DISABILITY RETIREE. The
8-19 designated beneficiary of a disability retiree who retires before
8-20 September 1, 1992, who has not selected an optional annuity under
8-21 Section 824.308, and who dies while receiving a retirement benefit
8-22 may elect to receive, instead of survivor benefits provided by
8-23 Section 824.501, a benefit available under Section 824.402,
8-24 computed as if the decedent had been in service at the time of
8-25 death.
8-26 SECTION 10. Subsections (a) and (d), Section 824.602,
9-1 Government Code, are amended to read as follows:
9-2 (a) The retirement system may not, under Section 824.601,
9-3 withhold a monthly benefit payment if the retiree is employed in a
9-4 Texas public educational institution:
9-5 (1) as a substitute only with pay not more than the
9-6 daily rate of substitute pay established by the employer and, if
9-7 the retiree is a disability retiree, the employment has not
9-8 exceeded a total of 90 days in the school year;
9-9 (2) in a position, other than as a substitute, on no
9-10 more than a one-half time basis for the month;
9-11 (3) in one or more positions on as much as a full-time
9-12 basis, if[:]
9-13 [(A)] the work occurs in not more than six
9-14 months of a school year that begins after the retiree's effective
9-15 date of retirement;
9-16 [(B) the work occurs in no more than six months
9-17 of the school year; and]
9-18 [(C) the retiree executes on a form and within
9-19 any deadline prescribed by the retirement system a written election
9-20 to have this exception apply for the school year in determining
9-21 whether benefits are to be suspended for employment after
9-22 retirement;] or
9-23 (4) in a position, other than as a substitute, on no
9-24 more than a one-half time basis for no more than 90 days in the
9-25 school year, if the retiree is a disability retiree.
9-26 (d) A retiree to whom [who has elected to avoid loss of
10-1 monthly benefits in a school year pursuant to] Subsection (a)(3)
10-2 applies is not eligible during that school year for any other
10-3 exceptions to loss of benefits provided in this section. If a
10-4 retiree is employed under [elects] the exemption provided in
10-5 Subsection (a)(3) for a school year, the retirement system must
10-6 include any previous employment during the school year, including
10-7 any employment that relied upon the exemptions in Subsection (a)(1)
10-8 or (a)(2), in determining whether and when the retiree has exceeded
10-9 six months of employment in the school year.
10-10 SECTION 11. Subsection (a), Section 824.804, Government
10-11 Code, is amended to read as follows:
10-12 (a) On the effective date of a member's participation in the
10-13 plan, the retirement system shall make the transfers required by
10-14 Section 825.309 to the retired reserve account as if the member had
10-15 retired on that date. The retirement system shall transfer
10-16 monthly, during the period of the member's participation in the
10-17 plan, from the retired reserve account to an account for the member
10-18 in the deferred retirement option account an amount equal to 59
10-19 [79] percent of the amount the member would have received that
10-20 month under a standard service retirement annuity if the member had
10-21 retired under the multiplier currently in effect [on the effective
10-22 date of plan participation].
10-23 SECTION 12. Section 824.805, Government Code, is amended to
10-24 read as follows:
10-25 Sec. 824.805. TERMINATION OF PARTICIPATION IN PLAN.
10-26 (a) Except as provided by Subsection (b), a [A] member terminates
11-1 participation in the plan by:
11-2 (1) retirement;
11-3 (2) death; or
11-4 (3) expiration of the period for which participation
11-5 was approved.
11-6 (b) A member participating in the plan on September 1, 1999,
11-7 may, before September 1, 2000, elect to discontinue participation
11-8 in the plan on a form prescribed by and filed with the retirement
11-9 system. The retirement system shall make account transfers and
11-10 change records for a member who elects under this subsection to
11-11 discontinue participation in the plan as if the member had never
11-12 participated in the plan.
11-13 SECTION 13. Subsection (a), Section 825.103, Government
11-14 Code, is amended to read as follows:
11-15 (a) The board of trustees is the trustee of all assets of
11-16 the retirement system. In administering the retirement system
11-17 trust and its investments, the board of trustees may delegate
11-18 responsibility, discretion, and authority to employees, investment
11-19 managers, custodians, and other agencies and entities in the manner
11-20 that a prudent person would delegate under the circumstances. The
11-21 board of trustees shall act with prudence and in the exclusive best
11-22 interests of the members and beneficiaries of the retirement system
11-23 in deciding whether and how to delegate and in the selection and
11-24 supervision of those to whom it has delegated.
11-25 SECTION 14. Section 825.301, Government Code, is amended to
11-26 read as follows:
12-1 Sec. 825.301. INVESTMENT OF ASSETS. (a) The board of
12-2 trustees shall invest and reinvest assets of the retirement system
12-3 without distinction as to their source in accordance with Section
12-4 67, Article XVI, Texas Constitution. For purposes of the board's
12-5 investment authority, the term "securities" shall be construed
12-6 broadly and given its plain meaning to enable the board to fulfill
12-7 its fiduciary duties prudently and consider investment
12-8 opportunities, including collective investments, suitable for a
12-9 large, sophisticated, properly diversified fund and to exercise the
12-10 control or oversight the board considers prudent over those who
12-11 manage investments in which the retirement system has an interest.
12-12 Investment decisions are subject to the standard provided in the
12-13 Texas Trust Code by Section 113.056(a), Property Code.
12-14 (b) The board of trustees may contract with one or more
12-15 [private] professional investment managers to assist the board in
12-16 investing the assets of the retirement system. To be eligible for
12-17 appointment under this subsection, an investment manager must be an
12-18 investment manager registered under the Investment Advisers Act of
12-19 1940 (15 U.S.C. Section 80b-1 et seq.), a bank as defined by that
12-20 Act, or an insurance company qualified to perform investment
12-21 services under the laws of more than one state. An investment
12-22 manager appointed by the board may be authorized to invest or
12-23 reinvest, select, purchase, manage, retain, exchange, sell, or
12-24 otherwise acquire or dispose of investments or interests in
12-25 investments on behalf of the retirement system. The board shall
12-26 exercise reasonable care, skill, and caution in appointing
13-1 investment managers, establishing the scope and terms of the
13-2 delegation with due regard for the purposes of and laws governing
13-3 the retirement system, and periodically reviewing an investment
13-4 manager's compliance with the terms of the delegation. The board
13-5 shall adopt policies and procedures for monitoring the performance
13-6 of the board's investment managers. The board and an individual
13-7 member of the board or an employee of the retirement system are not
13-8 liable, personally or in a person's capacity as trustee or
13-9 employee, for the acts, omissions, or decisions of an investment
13-10 manager to whom fiduciary responsibilities have been properly
13-11 delegated in accordance with this subtitle.
13-12 (c) The board of trustees shall employ one or more
13-13 performance measurement services to evaluate and analyze the
13-14 investment results of those assets of the retirement system for
13-15 which reliable and appropriate measurement methodology and
13-16 procedures exist. Each service shall compare investment results
13-17 with the written investment objectives developed by the board[, and
13-18 shall also compare the investment of the assets being evaluated and
13-19 analyzed with the investment of other public funds].
13-20 (d) The board of trustees may invest assets of the
13-21 retirement system in obligations issued, assumed, or guaranteed by
13-22 the Inter-American Development Bank, the International Bank for
13-23 Reconstruction and Development (the World Bank), the African
13-24 Development Bank, the Asian Development Bank, and the International
13-25 Finance Corporation.
13-26 (e) The board of trustees shall develop written investment
14-1 objectives, strategies, policies, and guidelines concerning the
14-2 investment of the assets of the retirement system. In so doing,
14-3 the board may adopt a statement that provides the expected rate of
14-4 return on system assets generally, the expected rates of return and
14-5 acceptable levels of risk for each investment class in light of
14-6 prevailing circumstances, asset allocation goals, guidelines for
14-7 delegation of authority to retirement system employees and the
14-8 board's professional investment managers, advisors, and
14-9 consultants, information about the types of reports to be used to
14-10 evaluate investment performance [The objectives may address desired
14-11 rates of return, risks involved, investment time frames], and any
14-12 other relevant considerations. At least biennially the board shall
14-13 review any statement adopted under this subsection and modify or
14-14 reaffirm it.
14-15 (f) A professional investment manager appointed under
14-16 Subsection (b) shall acknowledge in writing that the investment
14-17 manager assumes fiduciary responsibilities to the retirement system
14-18 and its members and beneficiaries. An investment manager shall
14-19 perform its responsibilities to the system with the care, skill,
14-20 diligence, and caution under the prevailing circumstances that a
14-21 prudent person acting in the same capacity and familiar with such
14-22 matters would use in the conduct of an activity or enterprise of
14-23 the same character and with the same aims and in accordance with
14-24 the documents governing the delegation of responsibilities by the
14-25 board of trustees.
14-26 (g) A professional investment manager assuming fiduciary
15-1 responsibilities to the retirement system is considered to agree
15-2 that the laws of this state govern the performance of its
15-3 responsibilities to the system and to submit to the jurisdiction of
15-4 the courts of this state. Venue of an action involving a breach of
15-5 duty owed by an investment manager to the retirement system or its
15-6 members and beneficiaries is in Travis County.
15-7 (h) Selection by the retirement system of professionals and
15-8 other agents and consultants, including investment managers,
15-9 investment consultants, actuaries, accountants, and attorneys, to
15-10 provide services necessary for the performance of the fiduciary
15-11 duties of the board of trustees is exempt from all requirements of
15-12 Chapters 2155, 2156, and 2254 that would otherwise be applicable to
15-13 the retirement system.
15-14 SECTION 15. The heading of Section 825.303, Government Code,
15-15 is amended to read as follows:
15-16 Sec. 825.303. SECURITIES CUSTODY AND SECURITIES LENDING.
15-17 SECTION 16. Subsection (a), Section 825.303, Government
15-18 Code, is amended to read as follows:
15-19 (a) The retirement system may, in the exercise of its
15-20 constitutional discretion to manage the assets of the retirement
15-21 system, select one or more commercial banks, depository trust
15-22 companies, or other entities to serve as custodian or custodians of
15-23 the system's securities and to lend the securities under rules
15-24 adopted by the board of trustees and as required by this section.
15-25 The retirement system may select one or more commercial banks,
15-26 depository trust companies, or other entities to act independently
16-1 of the custodian and lend the securities under board rules and as
16-2 required by this section.
16-3 SECTION 17. Subsection (c), Section 825.405, Government
16-4 Code, is amended to read as follows:
16-5 (c) Monthly, employers shall:
16-6 (1) report to the retirement system in a form
16-7 prescribed by the system a certification of the total amount of
16-8 salary paid above the statutory minimum salary and the total amount
16-9 of employer contributions due under this section for the payroll
16-10 period; and
16-11 (2) retain information, as determined by the
16-12 retirement system, sufficient to allow administration of this
16-13 section [The employer's form showing deductions and certification
16-14 of earnings must provide the retirement system with information
16-15 sufficient to administer this section, as determined by the
16-16 system], including information for each employee showing the
16-17 applicable minimum salary as well as aggregate annual compensation.
16-18 SECTION 18. Subsection (c), Section 825.406, Government
16-19 Code, is amended to read as follows:
16-20 (c) Monthly, employers shall:
16-21 (1) report to the retirement system in a form
16-22 prescribed by the system a certification of the total amount of
16-23 salary paid from federal funds and private grants and the total
16-24 amounts provided by the funds and grants for state contributions
16-25 for the employees; and
16-26 (2) retain the following information:
17-1 (A) [(1)] the name of each employee paid in
17-2 whole or part from a grant;
17-3 (B) [(2)] the source of the grant;
17-4 (C) [(3)] the amount of the employee's salary
17-5 paid from the grant;
17-6 (D) [(4)] the amount of the money provided by
17-7 the grant for state contributions for the employee; and
17-8 (E) [(5)] any other information the retirement
17-9 system determines is necessary to enforce this section.
17-10 SECTION 19. Subsection (c), Section 825.407, Government
17-11 Code, is amended to read as follows:
17-12 (c) The designated disbursing officer of each general
17-13 academic teaching institution and the designated disbursing officer
17-14 of each medical and dental unit shall:
17-15 (1) submit to the retirement system, at a time and in
17-16 the manner prescribed by the retirement system, a monthly report
17-17 containing a certification of the total amount of salary paid from
17-18 noneducational and general funds and the total amount of employer
17-19 contributions due under this section for the payroll period; and
17-20 (2) maintain and retain the following information:
17-21 (A) [(1)] the name of each member employed by
17-22 the institution or unit who, for the most recent payroll period,
17-23 was paid wholly or partly from noneducational and general funds;
17-24 (B) [(2)] the amount of the employee's salary
17-25 for the most recent payroll period that was paid from
17-26 noneducational and general funds;
18-1 [(3) a certification of the total amount of employer
18-2 contributions due under this section for the payroll period;] and
18-3 (C) [(4)] any other information the retirement
18-4 system determines is necessary to administer this section.
18-5 SECTION 20. Subsection (a), Section 825.408, Government
18-6 Code, is amended to read as follows:
18-7 (a) An employing district that fails to remit, before the
18-8 11th day after the last day of a month, all member and employer
18-9 deposits and documentation of the deposits required by this
18-10 subchapter to be remitted by the district for the month shall pay
18-11 to the retirement system, in addition to the deposits, interest on
18-12 the unpaid or undocumented amounts at an annual rate compounded
18-13 monthly. The rate of interest is the rate established under
18-14 Section 825.313(b)(2), plus two percent. Interest required under
18-15 this section is creditable to the interest account.
18-16 SECTION 21. Section 825.515, Government Code, is amended to
18-17 read as follows:
18-18 Sec. 825.515. INFORMATION ABOUT MEMBER POSITIONS. (a) At
18-19 least annually, the [The] retirement system shall acquire and
18-20 maintain records identifying members and the types of positions
18-21 they hold [have held] as members[, the length of service in each
18-22 type of position, and whether service in each type of position is
18-23 or was as a full-time employee]. The type of position shall be
18-24 identified as Administrative/Professional, Teacher/Full-Time
18-25 Librarian, Support, or Bus Driver [retirement system shall
18-26 cooperate with the commissioner of education in maintaining
19-1 information about the employment status of members of the
19-2 retirement system].
19-3 (b) [Each school year, the retirement system shall provide
19-4 to the commissioner of education information, of a type and in a
19-5 form determined by the commissioner, that allows contributing
19-6 members of the retirement system to be identified in information
19-7 submitted to the commissioner by school districts under the
19-8 Education Code.]
19-9 [(c)] Information contained in records of the retirement
19-10 system maintained under this section is confidential within the
19-11 limits prescribed by Section 825.507.
19-12 SECTION 22. Subsections (a) and (b), Section 825.516,
19-13 Government Code, are amended to read as follows:
19-14 (a) A retiree who is receiving an annuity from the
19-15 retirement system may request the system to withhold from the
19-16 retiree's monthly annuity payment membership dues for a nonprofit
19-17 association of retired school employees in this state, if the
19-18 association is statewide and its membership includes at least five
19-19 percent of all retirees of the retirement system. The request for
19-20 withholding must be on a form provided by the retirement system.
19-21 (b) After the retirement system receives a request
19-22 authorized by this section, the system may [shall] make the
19-23 requested deductions until the earlier of:
19-24 (1) the date the annuity is terminated; or
19-25 (2) the first payment of the annuity after the date
19-26 the system receives a written request signed by the retiree
20-1 canceling the request for the withholding.
20-2 SECTION 23. Subsection (d), Section 16A, Article 3.50-4,
20-3 Insurance Code, is amended to read as follows:
20-4 (d) Monthly, employers shall:
20-5 (1) report to the trustee in a form prescribed by the
20-6 trustee a certification of the total amount of salary paid from
20-7 federal funds and private grants and the total amounts provided by
20-8 the funds and grants for state contributions for the employees; and
20-9 (2) maintain and retain the following information:
20-10 (A) [(1)] the name of each [active] employee
20-11 paid in whole or part from a grant;
20-12 (B) [(2)] the source of the grant;
20-13 (C) [(3)] the amount of the [active] employee's
20-14 salary paid from the grant;
20-15 (D) [(4)] the amount of the money provided by
20-16 the grant for state contributions for the [active] employee; and
20-17 (E) [(5)] any other information the trustee
20-18 determines is necessary to enforce this section.
20-19 SECTION 24. Subchapter E, Chapter 3, Insurance Code, is
20-20 amended by adding Article 3.50-4A to read as follows:
20-21 Art. 3.50-4A. INSURANCE FOR SCHOOL DISTRICT EMPLOYEES AND
20-22 RETIREES
20-23 Sec. 1. DEFINITIONS. In this article:
20-24 (1) "Employee" means a person who is a participating
20-25 member of the Teacher Retirement System of Texas and is not
20-26 participating in a group insurance program under the Texas
21-1 Employees Uniform Group Insurance Benefits Act (Article 3.50-2,
21-2 Vernon's Texas Insurance Code) or the Texas State College and
21-3 University Employees Uniform Insurance Benefits Act (Article
21-4 3.50-3, Vernon's Texas Insurance Code).
21-5 (2) "Retiree" means a person who:
21-6 (A) has retired under the Teacher Retirement
21-7 System of Texas with at least 10 years of credit for service in
21-8 public schools of this state or has retired under that system for
21-9 disability and is entitled to receive an annuity from the system
21-10 based on the person's service; and
21-11 (B) is not eligible to participate in the group
21-12 insurance program provided under the Texas Employees Uniform Group
21-13 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
21-14 Code) or the Texas State College and University Employees Uniform
21-15 Insurance Benefits Act (Article 3.50-3, Vernon's Texas Insurance
21-16 Code).
21-17 (3) "Trustee" means the Teacher Retirement System of
21-18 Texas.
21-19 Sec. 2. INSURANCE COVERAGE. (a) The trustee shall contract
21-20 with one or more carriers authorized to provide life insurance in
21-21 this state to offer employees and retirees optional permanent life
21-22 insurance coverage.
21-23 (b) The trustee shall contract with one or more carriers
21-24 authorized to provide long-term care insurance in this state to
21-25 offer employees and retirees optional long-term health care
21-26 insurance coverage. The long-term care insurance coverage shall
22-1 include home, community, and institutional care.
22-2 (c) The trustee shall contract with one or more carriers
22-3 authorized to provide disability insurance in this state to offer
22-4 employees optional insurance against short-term or long-term loss
22-5 of salary because of disability.
22-6 (d) In contracting for any benefits under this article,
22-7 competitive bidding shall be required under rules adopted by the
22-8 trustee. The rules may provide criteria to determine qualified
22-9 carriers. The trustee is not required to select the lowest bid but
22-10 also may consider ability to service contracts, past experiences,
22-11 financial stability, and other relevant criteria. If the trustee
22-12 awards a contract to an entity whose bid deviates from that
22-13 advertised, the deviation shall be recorded and the reasons for the
22-14 deviation shall be fully justified in the minutes of the next
22-15 meeting of the trustee.
22-16 (e) Insurance coverage provided under this section shall be
22-17 made available periodically during open enrollment periods
22-18 determined by the trustee.
22-19 Sec. 3. ADMINISTRATION. (a) The trustee shall adopt rules
22-20 for the selection of contractors under this article. The rules
22-21 must require the contractors to administer enrollment, adjudication
22-22 of claims, and coordination of services under the insurance
22-23 coverages and require the contractors to account for premiums
22-24 collected and disbursed under the coverages.
22-25 (b) The trustee may adopt other rules necessary to
22-26 administer the program provided under this article.
23-1 Sec. 4. PARTICIPATION IN COVERAGE. (a) The trustee shall
23-2 offer the coverages provided under this article to employees
23-3 through their employers and to retirees through the trustee's
23-4 administration of the retirement system.
23-5 (b) The full cost of premiums in a plan of insurance
23-6 coverage provided under this article is the responsibility of the
23-7 enrollees.
23-8 (c) An employee participating in a plan of insurance
23-9 coverage provided under this article shall pay premiums by payroll
23-10 deduction remitted by the employee's employer at the times and in
23-11 the manner provided by the trustee.
23-12 (d) A retiree participating in a plan of insurance coverage
23-13 provided under this article shall pay premiums by deduction from
23-14 the retiree's monthly retirement annuity.
23-15 Sec. 5. SCHOOL DISTRICT EMPLOYEES AND RETIREES OPTIONAL
23-16 INSURANCE TRUST FUND. (a) The school district employees and
23-17 retirees optional insurance trust fund is created as a trust fund
23-18 with the comptroller and shall be administered by the trustee on
23-19 behalf of the participants in the plans of insurance coverage
23-20 provided under this article.
23-21 (b) Premiums paid by enrollees, amounts recovered under
23-22 contracts for the implementation of the program provided by this
23-23 article, and investment and depository income of the fund shall be
23-24 credited to the fund.
23-25 (c) Money in the fund may be used only for the purpose of
23-26 providing the program of insurance coverage provided under this
24-1 article, including the expenses of administering the program.
24-2 (d) The trustee may invest the fund in the manner provided
24-3 by Section 67(a)(3), Article XVI, Texas Constitution.
24-4 SECTION 25. Subtitle A, Title 6, Government Code, is amended
24-5 by adding Chapter 618 to read as follows:
24-6 CHAPTER 618. ANNUITIES OR INVESTMENTS FOR
24-7 EDUCATIONAL EMPLOYEES
24-8 Sec. 618.001. DEFINITION. In this chapter "retirement
24-9 system" means the Teacher Retirement System of Texas.
24-10 Sec. 618.002. ESTABLISHMENT OF PLAN. The board of trustees
24-11 of the retirement system is the trustee of a plan it shall
24-12 establish under this chapter to offer contributing members of the
24-13 retirement system the opportunity to purchase annuities or other
24-14 investments authorized by Section 403(b) of the Internal Revenue
24-15 Code of 1986.
24-16 Sec. 618.003. ADMINISTRATION OF PLAN. The board of trustees
24-17 of the retirement system shall contract with one or more persons to
24-18 administer the plan.
24-19 Sec. 618.004. SELECTION OF VENDORS AND PRODUCTS. (a) The
24-20 board of trustees of the retirement system shall adopt rules for
24-21 the selection of companies to provide annuities or other investment
24-22 products under the plan. The rules must provide for the selection
24-23 of vendors of a wide variety of annuities or other investment
24-24 products authorized under Section 403(b) of the Internal Revenue
24-25 Code of 1986. The board shall select vendors for the plan under
24-26 the process it adopts by rule.
25-1 (b) A vendor or investment product having an ownership or
25-2 other financial interest in a contractor selected by the retirement
25-3 system to administer the plan established under this chapter is not
25-4 qualified to be selected as a vendor or investment product under
25-5 the plan.
25-6 (c) The board of trustees shall select vendors or investment
25-7 products based on the quality of investment performance, proven
25-8 ability to manage institutional assets, minimum net worth
25-9 requirements, fee structure, compliance with applicable federal and
25-10 state laws, and other criteria established by the board. The board
25-11 of trustees shall determine the minimum and maximum number of
25-12 vendors and investment products that may be offered under the plan
25-13 at any particular time.
25-14 Sec. 618.005. ELIGIBILITY AND ELECTION TO PARTICIPATE.
25-15 (a) A contributing member of the retirement system is eligible to
25-16 participate in the plan established under this chapter.
25-17 Participation is in addition to participation as a contributing
25-18 member of the retirement system.
25-19 (b) A person eligible to participate in the plan may elect
25-20 to participate on a form prescribed by and filed with the
25-21 retirement system. A participant must execute a salary reduction
25-22 agreement under which contributions for the purchase of annuities
25-23 or other investment products under the plan are deducted from the
25-24 participant's salary.
25-25 (c) Persons employed by an institution of higher education
25-26 offering annuities or other investments authorized by Section
26-1 403(b) of the Internal Revenue Code of 1986 are not eligible to
26-2 participate in this plan.
26-3 Sec. 618.006. RULES. The retirement system may adopt other
26-4 rules for the administration of the plan and this chapter.
26-5 SECTION 26. Subsections (c) and (d), Section 22.004,
26-6 Education Code, are amended to read as follows:
26-7 (c) Each district shall report the district's compliance
26-8 with this subsection to the executive director of the Teacher
26-9 Retirement System of Texas not later than March [November] 1 of
26-10 each even-numbered year in the manner required by the board of
26-11 trustees of the Teacher Retirement System of Texas. The report
26-12 must be based on the district group health coverage plan in effect
26-13 during the current plan year [on November 1] and must include:
26-14 (1) appropriate documentation of:
26-15 (A) the district's contract for group health
26-16 coverage with a provider licensed to do business in this state by
26-17 the Texas Department of Insurance or a risk pool authorized under
26-18 Chapter 172, Local Government Code; or
26-19 (B) a resolution of the board of trustees of the
26-20 district authorizing a self-insurance plan for district employees
26-21 and of the district's review of district ability to cover the
26-22 liability assumed;
26-23 (2) the schedule of benefits;
26-24 (3) the premium rate sheet, including the amount paid
26-25 by the district and employee;
26-26 (4) the number of employees covered by each health
27-1 coverage plan offered by the district; and
27-2 (5) any other information considered appropriate by
27-3 the executive director of the Teacher Retirement System of Texas.
27-4 (d) Based on the criteria prescribed by Subsection (a), the
27-5 executive director of the Teacher Retirement System of Texas shall
27-6 certify whether a district's coverage is comparable to the basic
27-7 health coverage provided under the Texas Employees Uniform Group
27-8 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
27-9 Code). If the executive director of the Teacher Retirement System
27-10 of Texas determines that the group health coverage offered by a
27-11 district is not comparable, the executive director shall report
27-12 that information to the district and to the Legislative Budget
27-13 Board. The executive director shall submit a report to the
27-14 legislature not later than September [January] 1 of each
27-15 even-numbered [odd-numbered] year describing the status of each
27-16 district's group health coverage program based on the information
27-17 contained in the report required by Subsection (c) and the
27-18 certification required by this subsection.
27-19 SECTION 27. (a) Monthly payments of a death or retirement
27-20 benefit annuity by the Teacher Retirement System of Texas are
27-21 increased beginning with the payment due at the end of September
27-22 1999.
27-23 (b) The increase does not apply to payments under Subsection
27-24 (a), Section 824.304, Section 824.404, or Section 824.501,
27-25 Government Code.
27-26 (c) Except as provided by Subsection (d) of this section,
28-1 the amount of the monthly increase is computed by multiplying the
28-2 previous monthly benefit by a percentage determined in accordance
28-3 with the following table:
28-4 LATEST RETIREMENT DATE OR,
28-5 IF APPLICABLE, DATE OF DEATH INCREASE
28-6 Before September 1, 1973 5%
28-7 On or after September 1, 1973, but before September 1, 1974 6%
28-8 On or after September 1, 1974, but before September 1, 1979 5%
28-9 On or after September 1, 1979, but before September 1, 1981 6%
28-10 On or after September 1, 1981, but before September 1, 1982 7%
28-11 On or after September 1, 1982, but before September 1, 1983 6%
28-12 On or after September 1, 1983, but before September 1, 1990 7%
28-13 On or after September 1, 1990, but before September 1, 1991 6%
28-14 On or after September 1, 1991, but before September 1, 1992 7%
28-15 On or after September 1, 1992, but before September 1, 1995 6%
28-16 On or after September 1, 1995, but before September 1, 1997 5%
28-17 On or after September 1, 1997, but before September 1, 1998 2%
28-18 (d) After making the computations required by Subsection (c)
28-19 of this section, the Teacher Retirement System of Texas shall
28-20 increase each annuity payable by the system on September 1, 1999,
28-21 other than an annuity under Subsection (a), Section 824.304,
28-22 Section 824.404, or Section 824.501, Government Code, by 10
28-23 percent, which is a benefit equivalent to the benefit provided by
28-24 using a 2.2 percent multiplier for computing annuities.
28-25 SECTION 28. (a) Notwithstanding Section 824.1011,
28-26 Government Code, as amended by this Act, a person who is receiving
29-1 a standard service or disability retirement annuity under Section
29-2 824.203 or Subsection (b), Section 824.304, Government Code, on the
29-3 effective date of this Act and who married after retirement but
29-4 before that date may, before September 1, 2000, replace the annuity
29-5 by selecting an optional annuity and designating the person's
29-6 spouse as beneficiary as if the person had married after the
29-7 effective date of this Act.
29-8 (b) Notwithstanding Section 824.1011, Government Code, as
29-9 amended by this Act, a person who retired before September 1, 1992,
29-10 and is receiving a standard disability retirement annuity under
29-11 Subsection (b), Section 824.304, Government Code, on the effective
29-12 date of this Act may before September 1, 2001, replace the annuity
29-13 by selecting an optional annuity described by Section 824.308,
29-14 Government Code. An optional annuity selected under this
29-15 subsection shall be actuarially reduced according to the ages of
29-16 the retiree and the designated beneficiary at the time the annuity
29-17 is selected.
29-18 SECTION 29. This Act takes effect September 1, 1999.
29-19 SECTION 30. The importance of this legislation and the
29-20 crowded condition of the calendars in both houses create an
29-21 emergency and an imperative public necessity that the
29-22 constitutional rule requiring bills to be read on three several
29-23 days in each house be suspended, and this rule is hereby suspended.