76R15699 E
By Armbrister, et al. S.B. No. 1128
Substitute the following for S.B. No. 1128:
By Greenberg C.S.S.B. No. 1128
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to systems and programs administered by the Teacher
1-3 Retirement System of Texas.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 822.201, Government Code, is amended by
1-6 amending Subsection (b), as amended by Chapters 330 and 1035, Acts
1-7 of the 75th Legislature, Regular Session, 1997, and adding
1-8 Subsection (e) to read as follows:
1-9 (b) "Salary and wages" as used in Subsection (a) means:
1-10 (1) normal periodic payments of money for service the
1-11 right to which accrues on a regular basis in proportion to the
1-12 service performed;
1-13 (2) amounts by which the member's salary is reduced
1-14 under a salary reduction agreement authorized by Chapter 610;
1-15 (3) amounts that would otherwise qualify as salary and
1-16 wages under Subdivision (1) but are not received directly by the
1-17 member pursuant to a good faith, voluntary written salary reduction
1-18 agreement in order to finance payments to a deferred compensation
1-19 or tax sheltered annuity program specifically authorized by state
1-20 law or to finance benefit options under a cafeteria plan qualifying
1-21 under Section 125 of the Internal Revenue Code of 1986 (26 U.S.C.
1-22 Section 125), if:
1-23 (A) the program or benefit options are made
1-24 available to all employees of the employer; and
2-1 (B) the benefit options in the cafeteria plan
2-2 are limited to one or more options that provide deferred
2-3 compensation, group health and disability insurance, group term
2-4 life insurance, dependent care assistance programs, or group legal
2-5 services plans; [and]
2-6 (4) performance pay awarded to an employee by a school
2-7 district as part of a total compensation plan approved by the board
2-8 of trustees of the district and meeting the requirements of
2-9 Subsection (e); and[.]
2-10 (5) [(4)] the benefit replacement pay a person earns
2-11 under Subchapter H, Chapter 659, as added by Chapter 417, Acts of
2-12 the 74th Legislature, 1995, except as provided by Subsection (c).
2-13 (e) For purposes of Subsection (b)(4), a total compensation
2-14 plan must:
2-15 (1) describe all elements of compensation received by
2-16 or available to all employees of the employer;
2-17 (2) provide for the availability of at least one type
2-18 of performance pay to classroom teachers employed by the employer;
2-19 (3) identify each type of performance pay, the
2-20 performance criteria for each type of performance pay, and the
2-21 classes of employees eligible for each type of performance pay;
2-22 (4) contain sufficient information concerning the plan
2-23 to ascertain the amount of each qualifying employee's pay under the
2-24 plan;
2-25 (5) contain performance criteria for earning
2-26 performance pay that preclude the exercise of discretion for
2-27 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. (a)
3-7 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
3-27 voluntary additional contribution in an amount determined as
4-1 provided by this subtitle that does not exceed the amount necessary
4-2 to fund the benefit attributable to the service credit.
4-3 (b) The purchase of permissive service credit by a person
4-4 who first becomes a member of the retirement system after August
4-5 31, 2000, is subject to the restrictions and conditions of
4-6 Subsection (d) in addition to all other requirements of this
4-7 subtitle applicable to the purchase.
4-8 (c) The purchase by any person of permissive service credit
4-9 that was first made available under the retirement system after
4-10 December 31, 1997, is subject to the restrictions and conditions of
4-11 Subsection (d) in addition to all other requirements of this
4-12 subtitle applicable to the purchase.
4-13 (d) Under a circumstance described by Subsection (b) or (c),
4-14 a member may not purchase more than five years of permissive
4-15 service credit for nonqualified service, and a member may not
4-16 purchase service credit for nonqualified service before the member
4-17 has at least five years of membership service credit.
4-18 SECTION 3. Subchapter C, Chapter 823, Government Code, is
4-19 amended by adding Section 823.203 to read as follows:
4-20 Sec. 823.203. MEMBERSHIP SERVICE FOR OPTIONAL RETIREMENT
4-21 PROGRAM. A member may not establish service credit in the
4-22 retirement system for any period when the member was participating
4-23 in the optional retirement program under Chapter 830.
4-24 SECTION 4. Section 823.401, Government Code, is amended by
4-25 adding Subsection (j) to read as follows:
4-26 (j) The board of trustees may adopt rules providing for the
4-27 adoption of a reciprocal agreement with a state or territory of a
5-1 member's previous employment for the payment for service credit
5-2 established under this section through the transfer from the state
5-3 or territory to the retirement system of contributions made on
5-4 behalf of the member in the form of an eligible rollover
5-5 distribution as provided by Section 401(a)(31), Internal Revenue
5-6 Code of 1986, and its subsequent amendments.
5-7 SECTION 5. Sections 823.501(b) and (f), Government Code, are
5-8 amended to read as follows:
5-9 (b) A person eligible to reinstate service credit under this
5-10 section is one who is a [contributing] member of the retirement
5-11 system at the time the service is reinstated.
5-12 (f) A [contributing] member may have an account that was
5-13 terminated by absence from service reactivated by requesting the
5-14 reactivation in writing. The beneficiary of a decedent who was a
5-15 [contributing] member at the time of death may have an account that
5-16 was terminated by the decedent's absence from service reactivated
5-17 by requesting the reactivation in writing before the first payment
5-18 of a death benefit.
5-19 SECTION 6. Section 824.101(c), Government Code, is amended
5-20 to read as follows:
5-21 (c) Only one person may be designated as beneficiary of an
5-22 optional retirement annuity under Section 824.204(c)(1), (c)(2), or
5-23 (c)(5), and a designation of beneficiary under any of those options
5-24 may not be made, changed, or revoked, except as provided by
5-25 Sections 824.1011, [and] 824.1012, and 824.1013, after the later of
5-26 the date on which the retirement system makes the first annuity
5-27 payment to the retiree or the date the first payment becomes due.
6-1 For purposes of this section, the term "makes payment" includes the
6-2 depositing in the mail of a payment warrant or the crediting of an
6-3 account with payment through electronic funds transfer.
6-4 SECTION 7. Section 824.1011(a), Government Code, is amended
6-5 to read as follows:
6-6 (a) A retiree who is receiving a standard service or
6-7 disability retirement annuity under Section 824.203 or 824.304(b)
6-8 and who marries after the date of the person's retirement may
6-9 replace the annuity by selecting an optional retirement annuity
6-10 under Section 824.204(c)(1), (c)(2), or (c)(5) or under Section
6-11 824.308(c)(1), (c)(2), or (c)(5), as applicable, and designating
6-12 the person's spouse as beneficiary before the second [first]
6-13 anniversary of the marriage in the same manner as an annuity
6-14 selection and designation of beneficiary may be made before
6-15 retirement.
6-16 SECTION 8. Section 824.1012, Government Code, as added by
6-17 Chapter 1416, Acts of the 75th Legislature, Regular Session, 1997,
6-18 is redesignated as Section 824.1013 to read as follows:
6-19 Sec. 824.1013 [824.1012]. CHANGE OF BENEFICIARY AFTER
6-20 RETIREMENT. (a) A retiree receiving an optional retirement
6-21 annuity under Section 824.204(c)(1), (c)(2), or (c)(5) or Section
6-22 824.308(c)(1), (c)(2), or (c)(5) may change the designated
6-23 beneficiary as provided by this section for the benefits payable
6-24 after the retiree's death under those sections.
6-25 (b) If the beneficiary designated at the time of the
6-26 retiree's retirement is the spouse or former spouse of the retiree:
6-27 (1) the spouse or former spouse must give written,
7-1 notarized consent to the change; or
7-2 (2) a court with jurisdiction over the marriage must
7-3 have ordered the change.
7-4 (c) A beneficiary designated under this section is entitled
7-5 on the retiree's death to receive monthly payments of the
7-6 survivor's portion of the retiree's optional retirement annuity for
7-7 the shorter of:
7-8 (1) the remainder of the life expectancy of the
7-9 beneficiary designated as of the effective date of the retiree's
7-10 retirement; or
7-11 (2) the remainder of the new beneficiary's life.
7-12 (d) A retiree may not change a beneficiary under this
7-13 section after retirement if the retiree has previously changed or
7-14 designated after retirement a beneficiary for optional retirement
7-15 annuity payments under this subtitle.
7-16 SECTION 9. Sections 824.203(a) and (e), Government Code, are
7-17 amended to read as follows:
7-18 (a) Except as provided by Subsections (c), (d), and (e), the
7-19 standard service retirement annuity is an amount computed on the
7-20 basis of the member's average annual compensation for the three
7-21 years of service, whether or not consecutive, in which the member
7-22 received the highest annual compensation, times 2.2 [two] percent
7-23 for each year of service credit in the retirement system.
7-24 (e) The annual standard service retirement annuity for a
7-25 person who immediately before retirement holds a position as a
7-26 classroom teacher or full-time librarian, or the annual death
7-27 benefit annuity based on the service of a member who at the time of
8-1 death held a position as a classroom teacher or full-time
8-2 librarian, may not be less than an amount computed on the basis of
8-3 the minimum annual salary provided by the Education Code for a
8-4 classroom teacher or full-time librarian, multiplied by 2.2 [two]
8-5 percent for each year of service credit in the retirement system.
8-6 SECTION 10. Subchapter C, Chapter 824, Government Code, is
8-7 amended by adding Section 824.2045 to read as follows:
8-8 Sec. 824.2045. PARTIAL LUMP-SUM OPTION. (a) A member who
8-9 is eligible for an unreduced service retirement annuity and is not
8-10 participating in the deferred retirement option plan under
8-11 Subchapter I may select a standard service retirement annuity or an
8-12 optional service retirement annuity described by Section 824.204,
8-13 together with a partial lump-sum distribution.
8-14 (b) The amount of the lump-sum distribution under this
8-15 section may not exceed the sum of 36 months of a standard service
8-16 retirement annuity computed without regard to this section.
8-17 (c) The service retirement annuity selected by the member
8-18 shall be actuarially reduced to reflect the lump-sum option
8-19 selected by the member and shall be actuarially equivalent to a
8-20 standard or optional service retirement annuity, as applicable,
8-21 without the partial lump-sum distribution. The annuity and lump
8-22 sum shall be computed to result in no actuarial loss to the
8-23 retirement system.
8-24 (d) The retiring member may choose a lump sum equal to 12
8-25 months of a standard service retirement annuity and payable at the
8-26 same time that the first monthly payment of the annuity is paid, a
8-27 lump sum equal to 24 months of a standard annuity and payable in
9-1 one or two annual payments, or a lump sum equal to 36 months of a
9-2 standard annuity and payable in one, two, or three annual payments.
9-3 At the option of the member, a payment under this subsection may be
9-4 made as provided by Section 825.509.
9-5 (e) The amount of the lump-sum distribution will be deducted
9-6 from any amounts otherwise payable under Section 824.503.
9-7 (f) The partial lump-sum option under this section may be
9-8 elected only once by a member and may not be elected by a retiree.
9-9 A member retiring under the proportionate retirement program under
9-10 Chapter 803 is not eligible for the partial lump-sum option.
9-11 (g) Before a retiring member selects a partial lump-sum
9-12 distribution under this section, the retirement system shall
9-13 provide a written notice to the member of the amount by which the
9-14 member's annuity will be reduced because of the selection. The
9-15 member shall be asked to sign a copy of or receipt for the notice,
9-16 and the retirement system shall maintain the signed copy or
9-17 receipt.
9-18 (h) The board of trustees may adopt rules for the
9-19 implementation of this section.
9-20 SECTION 11. Section 824.502, Government Code, is amended to
9-21 read as follows:
9-22 Sec. 824.502. BENEFITS ON DEATH OF DISABILITY RETIREE. The
9-23 designated beneficiary of a disability retiree who retires before
9-24 September 1, 1992, who has not selected an optional annuity under
9-25 Section 824.308, and who dies while receiving a retirement benefit
9-26 may elect to receive, instead of survivor benefits provided by
9-27 Section 824.501, a benefit available under Section 824.402,
10-1 computed as if the decedent had been in service at the time of
10-2 death.
10-3 SECTION 12. Sections 824.602(a) and (d), Government Code,
10-4 are amended to read as follows:
10-5 (a) Subject to Section 825.506, the [The] retirement system
10-6 may not, under Section 824.601, withhold a monthly benefit payment
10-7 if the retiree is employed in a Texas public educational
10-8 institution:
10-9 (1) as a substitute only with pay not more than the
10-10 daily rate of substitute pay established by the employer and, if
10-11 the retiree is a disability retiree, the employment has not
10-12 exceeded a total of 90 days in the school year;
10-13 (2) in a position, other than as a substitute, on no
10-14 more than a one-half time basis for the month;
10-15 (3) in one or more positions on as much as a full-time
10-16 basis, if[:]
10-17 [(A)] the work occurs in not more than six
10-18 months of a school year that begins after the retiree's effective
10-19 date of retirement;
10-20 [(B) the work occurs in no more than six months
10-21 of the school year; and]
10-22 [(C) the retiree executes on a form and within
10-23 any deadline prescribed by the retirement system a written election
10-24 to have this exception apply for the school year in determining
10-25 whether benefits are to be suspended for employment after
10-26 retirement; or]
10-27 (4) in a position, other than as a substitute, on no
11-1 more than a one-half time basis for no more than 90 days in the
11-2 school year, if the retiree is a disability retiree; or
11-3 (5) in a position as a classroom teacher on as much as
11-4 a full-time basis, if the retiree has retired under Section
11-5 824.202(a) without reduction for retirement at an early age, is
11-6 certified under Subchapter B, Chapter 21, Education Code, to teach
11-7 the subjects assigned, is teaching in an acute shortage area as
11-8 defined by the commissioner of education, and has been separated
11-9 from service with all public schools for at least 12 months.
11-10 (d) A retiree to whom [who has elected to avoid loss of
11-11 monthly benefits in a school year pursuant to] Subsection (a)(3)
11-12 applies is not eligible during that school year for any other
11-13 exceptions to loss of benefits provided in this section. If a
11-14 retiree is employed under [elects] the exemption provided in
11-15 Subsection (a)(3) for a school year, the retirement system must
11-16 include any previous employment during the school year, including
11-17 any employment that relied upon the exemptions in Subsection (a)(1)
11-18 or (a)(2), in determining whether and when the retiree has exceeded
11-19 six months of employment in the school year.
11-20 SECTION 13. Sections 824.804(a) and (d), Government Code,
11-21 are amended to read as follows:
11-22 (a) On the effective date of a member's participation in the
11-23 plan, the retirement system shall make the transfers required by
11-24 Section 825.309 to the retired reserve account as if the member had
11-25 retired on that date. The retirement system shall transfer
11-26 monthly, during the period of the member's participation in the
11-27 plan, from the retired reserve account to an account for the member
12-1 in the deferred retirement option account an amount equal to:
12-2 (1) 60 percent of the amount the member would have
12-3 received that month under a standard service retirement annuity if
12-4 the member had retired under the multiplier currently in effect; or
12-5 (2) if the member began participation in the plan
12-6 before September 1, 1999, 79 percent of the amount the member would
12-7 have received that month under a standard service retirement
12-8 annuity if the member had retired under the multiplier currently in
12-9 effect [on the effective date of plan participation].
12-10 (d) Payment of the benefit provided under the plan is in
12-11 addition to any annuity otherwise payable under this subtitle. The
12-12 retiring member may choose a DROP payment in accordance with the
12-13 provisions of Section 825.509.
12-14 SECTION 14. Section 824.805, Government Code, is amended to
12-15 read as follows:
12-16 Sec. 824.805. TERMINATION OF PARTICIPATION IN PLAN. (a)
12-17 Except as provided by Subsection (b), a [A] member terminates
12-18 participation in the plan by:
12-19 (1) retirement;
12-20 (2) death; or
12-21 (3) expiration of the period for which participation
12-22 was approved.
12-23 (b) A member participating in the plan on September 1, 1999,
12-24 may, before September 1, 2000, elect to discontinue participation
12-25 in the plan on a form prescribed by and filed with the retirement
12-26 system. The retirement system shall make account transfers and
12-27 change records for a member who elects under this subsection to
13-1 discontinue participation in the plan as if the member had never
13-2 participated in the plan.
13-3 SECTION 15. The heading of Section 825.303, Government Code,
13-4 is amended to read as follows:
13-5 Sec. 825.303. SECURITIES CUSTODY AND SECURITIES LENDING.
13-6 SECTION 16. Section 825.303(a), Government Code, is amended
13-7 to read as follows:
13-8 (a) The retirement system may, in the exercise of its
13-9 constitutional discretion to manage the assets of the retirement
13-10 system, select one or more commercial banks, depository trust
13-11 companies, or other entities to serve as custodian or custodians of
13-12 the system's securities and to lend the securities under rules
13-13 adopted by the board of trustees and as required by this section.
13-14 The retirement system may select one or more commercial banks,
13-15 depository trust companies, or other entities to act independently
13-16 of the custodian and lend the securities under board rules and as
13-17 required by this section.
13-18 SECTION 17. Section 825.405(c), Government Code, is amended
13-19 to read as follows:
13-20 (c) Monthly, employers shall:
13-21 (1) report to the retirement system in a form
13-22 prescribed by the system a certification of the total amount of
13-23 salary paid above the statutory minimum salary and the total amount
13-24 of employer contributions due under this section for the payroll
13-25 period; and
13-26 (2) retain information, as determined by the
13-27 retirement system, sufficient to allow administration of this
14-1 section, [The employer's form showing deductions and certification
14-2 of earnings must provide the retirement system with information
14-3 sufficient to administer this section, as determined by the
14-4 system,] including information for each employee showing the
14-5 applicable minimum salary as well as aggregate annual compensation.
14-6 SECTION 18. Section 825.406(c), Government Code, is amended
14-7 to read as follows:
14-8 (c) Monthly, employers shall:
14-9 (1) report to the retirement system in a form
14-10 prescribed by the system a certification of the total amount of
14-11 salary paid from federal funds and private grants and the total
14-12 amounts provided by the funds and grants for state contributions
14-13 for the employees; and
14-14 (2) retain the following information:
14-15 (A) [(1)] the name of each employee paid in
14-16 whole or part from a grant;
14-17 (B) [(2)] the source of the grant;
14-18 (C) [(3)] the amount of the employee's salary
14-19 paid from the grant;
14-20 (D) [(4)] the amount of the money provided by
14-21 the grant for state contributions for the employee; and
14-22 (E) [(5)] any other information the retirement
14-23 system determines is necessary to enforce this section.
14-24 SECTION 19. Section 825.407(c), Government Code, is amended
14-25 to read as follows:
14-26 (c) The designated disbursing officer of each general
14-27 academic teaching institution and the designated disbursing officer
15-1 of each medical and dental unit shall:
15-2 (1) submit to the retirement system, at a time and in
15-3 the manner prescribed by the retirement system, a monthly report
15-4 containing a certification of the total amount of salary paid from
15-5 noneducational and general funds and the total amount of employer
15-6 contributions due under this section for the payroll period; and
15-7 (2) maintain and retain the following information:
15-8 (A) [(1)] the name of each member employed by
15-9 the institution or unit who, for the most recent payroll period,
15-10 was paid wholly or partly from noneducational and general funds;
15-11 (B) [(2)] the amount of the employee's salary
15-12 for the most recent payroll period that was paid from
15-13 noneducational and general funds;
15-14 [(3) a certification of the total amount of employer
15-15 contributions due under this section for the payroll period;] and
15-16 (C) [(4)] any other information the retirement
15-17 system determines is necessary to administer this section.
15-18 SECTION 20. Section 825.408(a), Government Code, is amended
15-19 to read as follows:
15-20 (a) An employing district that fails to remit, before the
15-21 11th day after the last day of a month, all member and employer
15-22 deposits and documentation of the deposits required by this
15-23 subchapter to be remitted by the district for the month shall pay
15-24 to the retirement system, in addition to the deposits, interest on
15-25 the unpaid or undocumented amounts at an annual rate compounded
15-26 monthly. The rate of interest is the rate established under
15-27 Section 825.313(b)(2), plus two percent. Interest required under
16-1 this section is creditable to the interest account.
16-2 SECTION 21. Section 825.515, Government Code, is amended to
16-3 read as follows:
16-4 Sec. 825.515. INFORMATION ABOUT MEMBER POSITIONS. (a) At
16-5 least annually, the [The] retirement system shall acquire and
16-6 maintain records identifying members and the types of positions
16-7 they hold [have held] as members[, the length of service in each
16-8 type of position, and whether service in each type of position is
16-9 or was as a full-time employee]. The type of position shall be
16-10 identified as Administrative/Professional, Teacher/Full-Time
16-11 Librarian, Support, or Bus Driver. [The retirement system shall
16-12 cooperate with the commissioner of education in maintaining
16-13 information about the employment status of members of the
16-14 retirement system.]
16-15 (b) [Each school year, the retirement system shall provide
16-16 to the commissioner of education information, of a type and in a
16-17 form determined by the commissioner, that allows contributing
16-18 members of the retirement system to be identified in information
16-19 submitted to the commissioner by school districts under the
16-20 Education Code.]
16-21 [(c)] Information contained in records of the retirement
16-22 system maintained under this section is confidential within the
16-23 limits prescribed by Section 825.507.
16-24 SECTION 22. Sections 825.516(a) and (b), Government Code,
16-25 are amended to read as follows:
16-26 (a) A retiree who is receiving an annuity from the
16-27 retirement system may request the system to withhold from the
17-1 retiree's monthly annuity payment membership dues for a nonprofit
17-2 association of retired school employees in this state, if the
17-3 association is statewide and its membership includes at least five
17-4 percent of all retirees of the retirement system. The request for
17-5 withholding must be on a form provided by the retirement system.
17-6 (b) After the retirement system receives a request
17-7 authorized by this section, the system may [shall] make the
17-8 requested deductions until the earlier of:
17-9 (1) the date the annuity is terminated; or
17-10 (2) the first payment of the annuity after the date
17-11 the system receives a written request signed by the retiree
17-12 canceling the request for the withholding.
17-13 SECTION 23. Section 16A(d), Article 3.50-4, Insurance Code,
17-14 is amended to read as follows:
17-15 (d) Monthly, employers shall:
17-16 (1) report to the trustee in a form prescribed by the
17-17 trustee a certification of the total amount of salary paid from
17-18 federal funds and private grants and the total amounts provided by
17-19 the funds and grants for state contributions for the employees; and
17-20 (2) maintain and retain the following information:
17-21 (A) [(1)] the name of each [active] employee
17-22 paid in whole or part from a grant;
17-23 (B) [(2)] the source of the grant;
17-24 (C) [(3)] the amount of the [active] employee's
17-25 salary paid from the grant;
17-26 (D) [(4)] the amount of the money provided by
17-27 the grant for state contributions for the [active] employee; and
18-1 (E) [(5)] any other information the trustee
18-2 determines is necessary to enforce this section.
18-3 SECTION 24. Subchapter E, Chapter 3, Insurance Code, is
18-4 amended by adding Article 3.50-4A to read as follows:
18-5 Art. 3.50-4A. INSURANCE FOR SCHOOL DISTRICT EMPLOYEES AND
18-6 RETIREES
18-7 Sec. 1. DEFINITIONS. In this article:
18-8 (1) "Employee" means a person who is a participating
18-9 member of the Teacher Retirement System of Texas and is not
18-10 participating in a group insurance program under the Texas
18-11 Employees Uniform Group Insurance Benefits Act (Article 3.50-2,
18-12 Vernon's Texas Insurance Code) or the Texas State College and
18-13 University Employees Uniform Insurance Benefits Act (Article
18-14 3.50-3, Vernon's Texas Insurance Code).
18-15 (2) "Retiree" means a person who:
18-16 (A) has retired under the Teacher Retirement
18-17 System of Texas with at least 10 years of credit for service in
18-18 public schools of this state or has retired under that system for
18-19 disability and is entitled to receive an annuity from the system
18-20 based on the person's service; and
18-21 (B) is not eligible to participate in the group
18-22 insurance program provided under the Texas Employees Uniform Group
18-23 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
18-24 Code) or the Texas State College and University Employees Uniform
18-25 Insurance Benefits Act (Article 3.50-3, Vernon's Texas Insurance
18-26 Code).
18-27 (3) "Trustee" means the Teacher Retirement System of
19-1 Texas.
19-2 Sec. 2. INSURANCE COVERAGE. (a) The trustee shall contract
19-3 with one or more carriers authorized to provide life insurance in
19-4 this state to offer employees and retirees optional permanent life
19-5 insurance coverage.
19-6 (b) The trustee shall contract with one or more carriers
19-7 authorized to provide long-term care insurance in this state to
19-8 offer employees and retirees optional long-term care insurance
19-9 coverage. The long-term care insurance coverage shall include
19-10 home, community, and institutional care.
19-11 (c) The trustee shall contract with one or more carriers
19-12 authorized to provide disability insurance in this state to offer
19-13 employees optional insurance against short-term or long-term loss
19-14 of salary because of disability.
19-15 (d) In contracting for any benefits under this article,
19-16 competitive bidding shall be required under rules adopted by the
19-17 trustee. The rules may provide criteria to determine qualified
19-18 carriers. The trustee is not required to select the lowest bid but
19-19 also may consider ability to service contracts, past experiences,
19-20 financial stability, and other relevant criteria. If the trustee
19-21 awards a contract to an entity whose bid deviates from that
19-22 advertised, the deviation shall be recorded and the reasons for the
19-23 deviation shall be fully justified in the minutes of the next
19-24 meeting of the trustee.
19-25 (e) Insurance coverage provided under this section shall be
19-26 made available periodically during open enrollment periods
19-27 determined by the trustee.
20-1 Sec. 3. ADMINISTRATION. (a) The trustee shall adopt rules
20-2 for the selection of contractors under this article. The rules
20-3 must require the contractors to administer enrollment, adjudication
20-4 of claims, and coordination of services under the insurance
20-5 coverages and require the contractors to account for premiums
20-6 collected and disbursed under the coverages.
20-7 (b) The trustee may adopt other rules necessary to
20-8 administer the program provided under this article.
20-9 Sec. 4. PARTICIPATION IN COVERAGE. (a) The trustee shall
20-10 offer the coverages provided under this article to employees
20-11 through their employers and to retirees through the trustee's
20-12 administration of the retirement system.
20-13 (b) The full cost of premiums in a plan of insurance
20-14 coverage provided under this article is the responsibility of the
20-15 enrollees.
20-16 (c) An employee participating in a plan of insurance
20-17 coverage provided under this article shall pay premiums by payroll
20-18 deduction remitted by the employee's employer at the times and in
20-19 the manner provided by the trustee.
20-20 (d) A retiree participating in a plan of insurance coverage
20-21 provided under this article shall pay premiums by deduction from
20-22 the retiree's monthly retirement annuity.
20-23 Sec. 5. SCHOOL DISTRICT EMPLOYEES AND RETIREES OPTIONAL
20-24 INSURANCE TRUST FUND. (a) The school district employees and
20-25 retirees optional insurance trust fund is created as a trust fund
20-26 with the comptroller and shall be administered by the trustee on
20-27 behalf of the participants in the plans of insurance coverage
21-1 provided under this article.
21-2 (b) Premiums paid by enrollees, amounts recovered under
21-3 contracts for the implementation of the program provided by this
21-4 article, and investment and depository income of the fund shall be
21-5 credited to the fund.
21-6 (c) Money in the fund may be used only for the purpose of
21-7 providing the program of insurance coverage provided under this
21-8 article, including the expenses of administering the program.
21-9 (d) The trustee may invest the fund in the manner provided
21-10 by Section 67(a)(3), Article XVI, Texas Constitution.
21-11 SECTION 25. Sections 22.004(c) and (d), Education Code, are
21-12 amended to read as follows:
21-13 (c) Each district shall report the district's compliance
21-14 with this subsection to the executive director of the Teacher
21-15 Retirement System of Texas not later than March [November] 1 of
21-16 each even-numbered year in the manner required by the board of
21-17 trustees of the Teacher Retirement System of Texas. The report
21-18 must be based on the district group health coverage plan in effect
21-19 during the current plan year [on November 1] and must include:
21-20 (1) appropriate documentation of:
21-21 (A) the district's contract for group health
21-22 coverage with a provider licensed to do business in this state by
21-23 the Texas Department of Insurance or a risk pool authorized under
21-24 Chapter 172, Local Government Code; or
21-25 (B) a resolution of the board of trustees of the
21-26 district authorizing a self-insurance plan for district employees
21-27 and of the district's review of district ability to cover the
22-1 liability assumed;
22-2 (2) the schedule of benefits;
22-3 (3) the premium rate sheet, including the amount paid
22-4 by the district and employee;
22-5 (4) the number of employees covered by each health
22-6 coverage plan offered by the district; and
22-7 (5) any other information considered appropriate by
22-8 the executive director of the Teacher Retirement System of Texas.
22-9 (d) Based on the criteria prescribed by Subsection (a), the
22-10 executive director of the Teacher Retirement System of Texas shall
22-11 certify whether a district's coverage is comparable to the basic
22-12 health coverage provided under the Texas Employees Uniform Group
22-13 Insurance Benefits Act (Article 3.50-2, Vernon's Texas Insurance
22-14 Code). If the executive director of the Teacher Retirement System
22-15 of Texas determines that the group health coverage offered by a
22-16 district is not comparable, the executive director shall report
22-17 that information to the district and to the Legislative Budget
22-18 Board. The executive director shall submit a report to the
22-19 legislature not later than September [January] 1 of each
22-20 even-numbered [odd numbered] year describing the status of each
22-21 district's group health coverage program based on the information
22-22 contained in the report required by Subsection (c) and the
22-23 certification required by this subsection.
22-24 SECTION 26. (a) Monthly payments of a death or retirement
22-25 benefit annuity by the Teacher Retirement System of Texas are
22-26 increased beginning with the payment due at the end of September
22-27 1999.
23-1 (b) The increase does not apply to payments under Section
23-2 824.304(a), 824.404, or 824.501, Government Code.
23-3 (c) Except as provided by Subsection (d) of this section,
23-4 the amount of the monthly increase is computed by multiplying the
23-5 previous monthly benefit by a percentage determined in accordance
23-6 with the following table:
23-7 LATEST RETIREMENT DATE OR,
23-8 IF APPLICABLE, DATE OF DEATH INCREASE
23-9 Before September 1, 1973 5%
23-10 On or after September 1, 1973, but before September 1, 1974 6%
23-11 On or after September 1, 1974, but before September 1, 1979 5%
23-12 On or after September 1, 1979, but before September 1, 1981 6%
23-13 On or after September 1, 1981, but before September 1, 1982 7%
23-14 On or after September 1, 1982, but before September 1, 1983 6%
23-15 On or after September 1, 1983, but before September 1, 1990 7%
23-16 On or after September 1, 1990, but before September 1, 1991 6%
23-17 On or after September 1, 1991, but before September 1, 1992 7%
23-18 On or after September 1, 1992, but before September 1, 1995 6%
23-19 On or after September 1, 1995, but before September 1, 1997 5%
23-20 On or after September 1, 1997, but before September 1, 1998 2%
23-21 (d) After making the computations required by Subsection (c)
23-22 of this section, the retirement system shall increase each annuity
23-23 payable by the system on September 1, 1999, other than an annuity
23-24 under Section 824.304(a), 824.404, or 824.501, Government Code, by
23-25 10 percent, which is a benefit equivalent to the benefit provided
23-26 by using a 2.2 percent multiplier for computing annuities.
23-27 SECTION 27. (a) Notwithstanding Section 824.1011,
24-1 Government Code, as amended by this Act, a person who is receiving
24-2 a standard service or disability retirement annuity under Section
24-3 824.203 or 824.304(b), Government Code, on the effective date of
24-4 this Act and who married after retirement but before that date may,
24-5 before September 1, 2000, replace the annuity by selecting an
24-6 optional annuity and designating the person's spouse as beneficiary
24-7 as if the person had married after the effective date of this Act.
24-8 (b) Notwithstanding Section 824.1011, Government Code, as
24-9 amended by this Act, a person who retired before September 1, 1992,
24-10 and is receiving a standard disability retirement annuity under
24-11 Section 824.304(b), Government Code, on the effective date of this
24-12 Act may before September 1, 2001, replace the annuity by selecting
24-13 an optional annuity described by Section 824.308, Government Code.
24-14 An optional annuity selected under this subsection shall be
24-15 actuarially reduced according to the ages of the retiree and the
24-16 designated beneficiary at the time the annuity is selected.
24-17 SECTION 28. This Act takes effect September 1, 1999, except
24-18 Section 12, which takes effect at the beginning of the 1999-2000
24-19 school year.
24-20 SECTION 29. The importance of this legislation and the
24-21 crowded condition of the calendars in both houses create an
24-22 emergency and an imperative public necessity that the
24-23 constitutional rule requiring bills to be read on three several
24-24 days in each house be suspended, and this rule is hereby suspended,
24-25 and that this Act take effect and be in force according to its
24-26 terms, and it is so enacted.