1-1 By: Armbrister S.B. No. 1129
1-2 (In the Senate - Filed March 10, 1999; March 11, 1999, read
1-3 first time and referred to Committee on State Affairs;
1-4 April 8, 1999, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 8, Nays 0; April 8, 1999,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 1129 By: Shapleigh
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to participation and credit in, contributions to, and
1-11 benefits and administration of the Texas County and District
1-12 Retirement System.
1-13 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-14 SECTION 1. Section 841.001, Government Code, is amended by
1-15 amending Subdivision (5) and adding Subdivisions (16) and (17) to
1-16 read as follows:
1-17 (5) "Compensation" means the payments that do not
1-18 exceed $150,000 in a calendar year, indexed in the same manner as
1-19 is provided by Section 401(a)(17) of the Internal Revenue Code of
1-20 1986 (26 U.S.C. Section 417) and that are made to an employee of a
1-21 participating subdivision by the subdivision for service, including
1-22 nonmonetary compensation, the value of which is determined by the
1-23 governing body of the subdivision. The term does not include
1-24 workers' compensation benefits received by a member under Section
1-25 504.011, Labor Code.
1-26 (16) "Supplemental death benefit program" means the
1-27 voluntary, employer-funded optional death benefits program under
1-28 Subchapter F, Chapter 844. The program constitutes "group-term
1-29 life insurance purchased for employees" as described by Section 79
1-30 of the Internal Revenue Code of 1986.
1-31 (17) "Vested member" means a member who may withdraw
1-32 from employment with all participating subdivisions, leave the
1-33 member's accumulated contributions on deposit with the retirement
1-34 system, and, on meeting the age and length-of-service requirements
1-35 for service retirement, file an application for retirement and
1-36 begin to receive a service retirement benefit.
1-37 SECTION 2. Section 842.004, Government Code, is amended by
1-38 adding a new Subsection (e) and redesignating former Subsection (e)
1-39 as Subsection (f) to read as follows:
1-40 (e) If before November 1 of any year a subdivision gives
1-41 written notice of its intention to the retirement system, the
1-42 subdivision may terminate coverage under and discontinue
1-43 participation in the supplemental death benefits fund. A
1-44 termination under this subsection is effective on January 1 of the
1-45 year following the year in which notice is given.
1-46 (f) If a subdivision has previously discontinued
1-47 participation in the fund, the board of trustees in its discretion
1-48 may restrict the right of the subdivision to participate again.
1-49 SECTION 3. Subchapter A, Chapter 842, Government Code, is
1-50 amended by adding Section 842.008 to read as follows:
1-51 Sec. 842.008. NO PARTICIPATION FOR EMPLOYEES HIRED AFTER
1-52 ELECTION. (a) A participating subdivision may not terminate
1-53 participation in the retirement system as long as it has any
1-54 liabilities resulting from the participation of current or former
1-55 employees, but it may elect to discontinue enrolling in the
1-56 retirement system nonmembers whose employment or reemployment
1-57 begins after the effective date of an election to discontinue
1-58 enrollment. If the subdivision has an annually determined
1-59 contribution rate plan, the subdivision must elect to contribute in
1-60 all future years in which the allocation described by Subsection
1-61 (b) is necessary at a rate that is either the rate being paid at
1-62 the time of the election to discontinue enrollment or an integer
1-63 percent greater than the rate being paid at the time of the
1-64 election to discontinue enrollment. The effective date of the
2-1 election to discontinue enrollment is January 1 of the year
2-2 following the year in which the election by the subdivision is
2-3 made.
2-4 (b) If a participating subdivision makes the election
2-5 described by Subsection (a), the assets in that subdivision's
2-6 account in the subdivision accumulation fund shall be allocated
2-7 under the priorities provided by this section, with the details of
2-8 the allocation to be determined by the actuary and approved by the
2-9 board of trustees.
2-10 (c) First priority shall be given to current service credit
2-11 of all members who leave their contributions in the retirement
2-12 system. If the ratio of the sum of the assets and the actuarial
2-13 present value of future subdivision contributions in excess of
2-14 normal costs, if any, to the actuarial present value of current
2-15 service credits is less than one-to-one, the credits shall be
2-16 proportionally reduced. The ratio shall be redetermined annually
2-17 and adjustments made as needed.
2-18 (d) Second priority shall be given to prior service credit,
2-19 multiple matching credit, and supplemental annuities, without
2-20 differentiation. If the ratio of the sum of the assets and the
2-21 actuarial present value of future subdivision contributions in
2-22 excess of normal costs, if any, for this priority group remaining
2-23 after the allocation described by Subsection (c) to the actuarial
2-24 present value of second priority benefits is less than one-to-one,
2-25 the annuities and credits may all have to be proportionally
2-26 reduced. If the ratio is greater than one-to-one, the annuities
2-27 and credits may all have to be proportionally increased, except as
2-28 limited by Subsection (f). The ratio shall be redetermined
2-29 annually, and reductions or increases in the annuities and credits
2-30 shall be made when considered appropriate to bring the ratio closer
2-31 to one-to-one.
2-32 (e) A subdivision whose assets in the retirement system have
2-33 been allocated under Subsection (b) may not enroll new members
2-34 unless the subdivision applies to the board of trustees for
2-35 approval and receives it. The board of trustees may not grant
2-36 approval unless the subdivision adopts an order or resolution on
2-37 the terms provided by Subchapter H, Chapter 844.
2-38 (f) If the participating subdivision is not enrolling new
2-39 members in accordance with Subsection (e), the annuities and
2-40 credits described by Subsections (c) and (d) may not be increased
2-41 to a level that exceeds the greater of the level in effect
2-42 immediately before the time Subsection (b) became applicable or the
2-43 level in effect on December 31, 1992.
2-44 (g) When the participating subdivision or its successor has
2-45 no employees who are members of the retirement system and has no
2-46 present or potential liabilities resulting from the participation
2-47 of former employees, the subdivision's participation in the
2-48 retirement system ceases, and the system shall repay to the
2-49 subdivision or its successor the amount in the subdivision
2-50 accumulation fund that is credited to the subdivision. If the
2-51 participating subdivision is no longer in existence and has no
2-52 successor when its participation ceases, the amount in the
2-53 subdivision accumulation fund that is credited to the subdivision
2-54 shall be transferred to the general reserves account of the
2-55 endowment fund.
2-56 (h) If a subdivision whose assets in the retirement system
2-57 have been allocated under Subsection (b) is allowed to begin
2-58 enrolling new members in accordance with Subsection (e), the
2-59 annuities and credits described by Subsections (c) and (d)
2-60 attributable to contributions made by members before the date the
2-61 subdivision begins enrolling new members:
2-62 (1) must be restored to the level in effect
2-63 immediately before Subsection (b) became applicable unless they
2-64 already equal or exceed that level; and
2-65 (2) may not be increased above the greater of the
2-66 level in effect immediately before Subsection (b) became applicable
2-67 or the level in effect immediately before the subdivision began
2-68 enrolling new members until the expiration of four calendar years
2-69 after the date the subdivision begins enrolling new members.
3-1 (i) Before or after the initial allocation under Subsection
3-2 (b) is determined, the subdivision may elect to contribute a
3-3 lump-sum deposit or may elect to contribute in all future years
3-4 that the allocation described by Subsection (b) is necessary at an
3-5 integer percent greater than the rate being paid at the time of the
3-6 election of the integer percent, notwithstanding the provisions of
3-7 Section 844.605 or 844.703.
3-8 SECTION 4. Subchapter A, Chapter 842, Government Code, is
3-9 amended by adding Section 842.009 to read as follows:
3-10 Sec. 842.009. SIGNIFICANT REDUCTION IN NUMBER OF
3-11 CONTRIBUTING MEMBERS. (a) If a participating subdivision reduces
3-12 the number of members in its employment by at least 26 percent but
3-13 less than 100 percent, or by 100 percent if the reduction is
3-14 expected to last less than 12 months, over the 12-month period
3-15 ending with the preceding December, no other participating
3-16 subdivision has assumed funding of the obligations, and the actuary
3-17 recommends to the board of trustees and the board agrees that this
3-18 subsection shall be applied, the assets in that subdivision's
3-19 account in the subdivision accumulation fund shall be allocated
3-20 under the priorities provided by this section, with the details of
3-21 the allocation to be determined by the actuary and approved by the
3-22 board of trustees.
3-23 (b) If the subdivision has an annually determined
3-24 contribution rate plan, the subdivision must elect to contribute in
3-25 all future years in which the allocation described by Subsection
3-26 (a) is necessary at a rate that is either the rate being paid at
3-27 the time Subsection (a) is applied or an integer percent greater
3-28 than the rate being paid at the time Subsection (a) is applied.
3-29 (c) First priority shall be given to current service credit
3-30 of all members who leave their contributions in the retirement
3-31 system. If the ratio of the sum of the assets and the actuarial
3-32 present value of future subdivision contributions in excess of
3-33 normal costs, if any, to the actuarial present value of current
3-34 service credits is less than one-to-one, the credits shall be
3-35 proportionally reduced. The ratio shall be redetermined annually
3-36 and adjustments made as needed.
3-37 (d) Second priority shall be given to prior service credit,
3-38 multiple matching credit, and supplemental annuities, without
3-39 differentiation. If the ratio of the sum of the assets and the
3-40 actuarial present value of future subdivision contributions in
3-41 excess of normal costs, if any, for this priority group remaining
3-42 after the allocation described by Subsection (c) to the actuarial
3-43 present value of second priority benefits is less than one-to-one,
3-44 the annuities and credits may all have to be proportionally
3-45 reduced. If the ratio is greater than one-to-one, the annuities
3-46 and credits may all have to be proportionally increased, except as
3-47 limited by Subsection (e). The ratio shall be redetermined
3-48 annually, and reductions or increases in the annuities and credits
3-49 shall be made when considered appropriate to bring the ratio closer
3-50 to one-to-one.
3-51 (e) If the actuary has not recommended and the board of
3-52 trustees has not approved ending the allocation described by
3-53 Subsection (a), the annuities and credits described by Subsections
3-54 (c) and (d) may not be increased to a level that exceeds the level
3-55 in effect immediately before Subsection (a) became applicable.
3-56 (f) If the allocation described by Subsection (a) has been
3-57 ended by action of the board of trustees on the recommendation of
3-58 the actuary, the annuities and credits described by Subsections (c)
3-59 and (d) attributable to contributions made by members before the
3-60 date the allocation was ended:
3-61 (1) must be restored to the level in effect
3-62 immediately before Subsection (a) became applicable unless they
3-63 already equal that level; and
3-64 (2) may not be increased above the level in effect
3-65 immediately before Subsection (a) became applicable until the
3-66 expiration of four calendar years after the allocation ended.
3-67 (g) Before or after the initial allocation under Subsection
3-68 (a) is determined, the subdivision may elect to contribute a
3-69 lump-sum deposit or may elect to contribute in all future years
4-1 that the allocation described by Subsection (a) is necessary at an
4-2 integer percent greater than the rate being paid at the time of the
4-3 election of the integer percent, notwithstanding the provisions of
4-4 Section 844.605 and Section 844.703.
4-5 SECTION 5. Subchapter A, Chapter 842, Government Code, is
4-6 amended by adding Section 842.010 to read as follows:
4-7 Sec. 842.010. REDUCTION TO NO CONTRIBUTING MEMBERS. (a) If
4-8 a participating subdivision is abolished or reduces the number of
4-9 members in its employment to zero, with the reduction expected to
4-10 last at least 12 months, so that it no longer contributes to the
4-11 retirement system and no other participating subdivision has
4-12 assumed funding of the obligations, the assets in that
4-13 subdivision's account in the subdivision accumulation fund shall be
4-14 allocated under the priorities provided by this section, with the
4-15 details of the allocation to be determined by the actuary and
4-16 approved by the board of trustees. Service retirement will be
4-17 allowed at age 60 with at least four years of credited service.
4-18 (b) First priority shall be given to current service credit
4-19 of all members who leave their contributions in the retirement
4-20 system. If the ratio of the assets to the actuarial present value
4-21 of current service credits is less than one-to-one, the credits
4-22 shall be proportionally reduced. The ratio shall be redetermined
4-23 annually and adjustments made as needed.
4-24 (c) Second priority shall be given to prior service credit,
4-25 multiple matching credit, and supplemental annuities, without
4-26 differentiation. If the ratio of the assets for this priority
4-27 group remaining after the allocation described by Subsection (b) to
4-28 the actuarial present value of second priority benefits is less
4-29 than one-to-one, the annuities and credits may all have to be
4-30 proportionally reduced. If the ratio is greater than one-to-one,
4-31 the annuities and credits may all have to be proportionally
4-32 increased, except as limited by Subsection (e). The ratio shall be
4-33 redetermined annually, and reductions or increases in the annuities
4-34 and credits shall be made when considered appropriate to bring the
4-35 ratio closer to one-to-one.
4-36 (d) A subdivision whose assets in the retirement system have
4-37 been allocated under Subsection (a) may not enroll new members
4-38 unless the subdivision applies to the board of trustees for
4-39 approval and receives it. The board of trustees may not grant
4-40 approval unless the subdivision adopts an order or resolution on
4-41 the terms provided by Subchapter H, Chapter 844.
4-42 (e) If the participating subdivision is not enrolling new
4-43 members in accordance with Subsection (d), the annuities and
4-44 credits described by Subsections (b) and (c) may not be increased
4-45 to a level that exceeds the level in effect immediately before
4-46 Subsection (a) became applicable.
4-47 (f) When the participating subdivision or its successor has
4-48 no employees who are members of the retirement system and has no
4-49 present or potential liabilities resulting from the participation
4-50 of former employees, the subdivision's participation in the
4-51 retirement system ceases, and the system shall repay to the
4-52 subdivision or its successor the amount in the subdivision
4-53 accumulation fund that is credited to the subdivision. If the
4-54 participating subdivision is no longer in existence and has no
4-55 successor when its participation ceases, the amount in the
4-56 subdivision accumulation fund that is credited to the subdivision
4-57 shall be transferred to the general reserves account of the
4-58 endowment fund.
4-59 (g) If a subdivision whose assets in the retirement system
4-60 have been allocated under Subsection (a) is allowed to begin
4-61 enrolling new members in accordance with Subsection (d), the
4-62 annuities and credits described by Subsections (b) and (c)
4-63 attributable to contributions made by members before the date the
4-64 subdivision begins enrolling new members:
4-65 (1) must be restored to the level in effect
4-66 immediately before Subsection (a) became applicable unless they
4-67 already equal that level; and
4-68 (2) may not be increased above the level in effect
4-69 immediately before Subsection (a) became applicable until the
5-1 expiration of four calendar years after the date the subdivision
5-2 begins enrolling new members.
5-3 (h) Before the initial allocation under Subsection (a) is
5-4 determined, the subdivision may elect to contribute a lump-sum
5-5 deposit.
5-6 SECTION 6. Section 842.105, Government Code, is amended to
5-7 read as follows:
5-8 Sec. 842.105. STATUS AS AN EMPLOYEE. For the purposes of
5-9 this subtitle, a person has the standing of an employee in a
5-10 participating subdivision if the person:
5-11 (1) is employed in a position that normally requires
5-12 services from the person for not less than 900 hours a year by a
5-13 community supervision and corrections [judicial district probation]
5-14 department that has executed a contract with the participating
5-15 subdivision under Section 76.006, Government Code [Article 42.12,
5-16 Code of Criminal Procedure]; or
5-17 (2) is eligible for optional membership in the
5-18 retirement system under Subchapter C.
5-19 SECTION 7. Subsection (a), Section 842.106, Government Code,
5-20 is amended to read as follows:
5-21 (a) Except as provided by this section, a person who is
5-22 [not] an employee eligible for membership and is [not] eligible to
5-23 receive credit in this retirement system for service performed for
5-24 a subdivision is not [that makes a person] eligible for credit for
5-25 that service [membership or is creditable] in another pension fund
5-26 or retirement system that is at least partly supported at public
5-27 expense. It is the responsibility of the subdivision to enforce
5-28 this provision.
5-29 SECTION 8. Subsection (a), Section 842.108, Government Code,
5-30 is amended to read as follows:
5-31 (a) A person who is not an employee of any participating
5-32 subdivision and who has not retired may, by written [after]
5-33 application, withdraw from membership in the retirement system, and
5-34 the person's account will be closed and the person will be paid:
5-35 (1) the accumulated contributions in the member's
5-36 individual account in the employees saving fund; plus
5-37 (2) interest computed from the beginning of the
5-38 calendar year of withdrawal through the end of the month before the
5-39 month in which withdrawal occurs on the balance in the member's
5-40 individual account in the employees saving fund on January 1 of the
5-41 year of withdrawal [all of the accumulated contributions credited
5-42 to the person's individual account in the employees saving fund,
5-43 and the retirement system shall close the account].
5-44 SECTION 9. Section 842.109, Government Code, is amended to
5-45 read as follows:
5-46 Sec. 842.109. TERMINATION OF MEMBERSHIP. (a) A person
5-47 terminates membership in the retirement system by:
5-48 (1) death;
5-49 (2) retirement;
5-50 (3) withdrawal of all of the person's contributions
5-51 while absent from service; or
5-52 (4) absence from service for five consecutive years
5-53 [or more either before accumulating enough credited service to
5-54 enable the person to retire without additional service or] before
5-55 accumulating four or more years of credited service [with one or
5-56 more subdivisions that have adopted a program allowing retirement
5-57 without additional service after accumulation of 12 years of
5-58 credited service].
5-59 (b) A member of the retirement system is not absent from
5-60 service and continues to accumulate membership credited service if
5-61 the person[:]
5-62 [(1)] leaves employment with a participating
5-63 subdivision to perform and does perform qualified military service
5-64 in the uniformed services, as that term is defined in the Uniformed
5-65 Services Employment and Reemployment Rights Act of 1994 (38 U.S.C.
5-66 Section 4301 et seq.), that meets the requirements of that Act
5-67 [active duty service in the armed forces or the armed forces
5-68 reserves of the United States or an auxiliary of the armed forces
5-69 or reserves,] and if:
6-1 (1) [(A)] the person applies for reemployment with the
6-2 same subdivision not later than the 90th day after the date the
6-3 person is [released from active duty or] discharged from military
6-4 service under honorable conditions or released from hospitalization
6-5 continuing after being discharged under honorable conditions
6-6 [release or discharge] for a period of not more than two years [one
6-7 year]; and
6-8 (2) [(B)] the person is reemployed by the same
6-9 participating subdivision[; or]
6-10 [(2) is conscripted and leaves employment with a
6-11 participating subdivision to perform and does perform war-related
6-12 service during a state of war or conflict between the armed forces
6-13 of the United States and a foreign country, and if the person
6-14 applies for and is reemployed by the same subdivision not later
6-15 than the 90th day after the date the person is released from active
6-16 duty or discharged from military service].
6-17 (c) On any termination of membership in the retirement
6-18 system, a person forfeits all credited service established in the
6-19 retirement system.
6-20 SECTION 10. Subsection (f), Section 842.110, Government
6-21 Code, is amended to read as follows:
6-22 (f) If a person with credited service under this section
6-23 dies before a payment under Subsection (g) is made, the person's
6-24 beneficiary, or if there is no beneficiary surviving, the person's
6-25 spouse, or if there is no surviving spouse, the executor or
6-26 administrator of the person's estate, may elect payment as provided
6-27 by Section 844.407 [844.105(c)].
6-28 SECTION 11. Subsection (c), Section 842.111, Government
6-29 Code, is amended to read as follows:
6-30 (c) If a person with credited service under this section
6-31 dies before a payment under Subsection (d) is made, the person's
6-32 beneficiary or, if no beneficiary survives, the person's spouse, or
6-33 if there is no surviving spouse, the executor or administrator of
6-34 the person's estate, may elect payment as provided by Section
6-35 844.407 [844.105(c)].
6-36 SECTION 12. Section 842.112, Government Code, is amended by
6-37 amending Subsection (c) and adding Subsection (i) to read as
6-38 follows:
6-39 (c) Except as provided by Subsection (i), a [A] correction
6-40 may not be made unless the retirement system receives, in addition
6-41 to the application, each of the items required under Subsections
6-42 (d), (e), and (f), and one of the following:
6-43 (1) a written agreement, approved by the subdivision's
6-44 governing body, stating that an error has occurred and that the
6-45 subdivision has agreed to correct that [the] error;
6-46 (2) a final judgment by a court of competent
6-47 jurisdiction in proceedings to which the subdivision was a party,
6-48 ordering that the subdivision correct the error; or
6-49 (3) an order in an administrative proceeding to which
6-50 the subdivision was a party, directing that the subdivision correct
6-51 the error, that is no longer subject to appeal.
6-52 (i) The correction of an error affecting not more than three
6-53 monthly reports within a period of not more than three consecutive
6-54 months may be made on the basis of the application alone if the
6-55 application, the supplemental report, and the payment required by
6-56 this section are received by the retirement system within six
6-57 months after the first day of the first month for which the
6-58 correction is being made.
6-59 SECTION 13. Section 842.112, Government Code, is amended by
6-60 adding Subsections (j) and (k) to read as follows:
6-61 (j) If, as a result of a suit against a participating
6-62 subdivision in a court of competent jurisdiction, a person receives
6-63 a judgment against a subdivision ordering that the person be
6-64 reinstated as an employee of the subdivision retroactively to the
6-65 date the person's employment was terminated and ordering that the
6-66 person receive credit toward retirement for the reinstated service,
6-67 on written application to the retirement system, the system shall
6-68 grant the service credit if:
6-69 (1) the judgment has become final and is no longer
7-1 subject to appeal;
7-2 (2) a certified copy of the judgment accompanies the
7-3 application;
7-4 (3) the retirement system receives payment from the
7-5 person in an amount equal to the contributions the person would
7-6 have made to the system if the employment had not been terminated
7-7 and the service reported to the system; and
7-8 (4) the retirement system receives payment from the
7-9 subdivision in an amount equal to the additional contributions that
7-10 the subdivision would have made to the system for the additional
7-11 credited service.
7-12 (k) If a person to whom Subsection (j) applies has forfeited
7-13 service credit as a result of withdrawal of contributions during
7-14 the time between the termination of employment and the date of
7-15 reinstatement, the person is eligible to reestablish credit under
7-16 Section 843.003. For purposes of this subsection, forfeited credit
7-17 based on service performed for more than one participating
7-18 subdivision is considered to have been credit for service performed
7-19 only for the subdivision that is subject to the judgment, except
7-20 that credit may not be reinstated under this subsection for service
7-21 performed after the date of the termination of employment that
7-22 resulted in the judgment.
7-23 SECTION 14. Subsection (d), Section 843.105, Government
7-24 Code, is amended to read as follows:
7-25 (d) Interest is earned [for each whole year] on an allocated
7-26 prior service credit from the effective date of membership to the
7-27 effective date of retirement at the applicable rate for the period
7-28 as provided by Section 845.314.
7-29 SECTION 15. Subsection (d), Section 843.201, Government
7-30 Code, is amended to read as follows:
7-31 (d) Allocated prior service credits are allowable for a
7-32 subdivision only if [the retirement system's actuary certifies
7-33 that]:
7-34 (1) [the subdivision contribution rate will not exceed
7-35 the employee contribution rate plus three percent, if] the
7-36 subdivision has adopted the provisions for an annually determined
7-37 contribution rate plan under Subchapter H, Chapter 844; or
7-38 (2) the retirement system's actuary determines that
7-39 the subdivision's unfunded actuarial accrued liability amortization
7-40 period will be less than 25 years, if the subdivision has not
7-41 adopted the provisions of Subchapter H, Chapter 844.
7-42 SECTION 16. Subsection (a), Section 843.203, Government
7-43 Code, is amended to read as follows:
7-44 (a) The governing body of a subdivision that has taken over
7-45 the facilities of a hospital, utility, or other public facility
7-46 formerly operated by another participating subdivision may assume
7-47 in whole or in part the obligations that the former employer had
7-48 undertaken under this subtitle by reason of service performed by
7-49 members of the system who become employees of the subdivision
7-50 seeking to participate in the system. A subdivision participating
7-51 in the system that could have assumed the obligations of another
7-52 subdivision had this section been in effect at time of
7-53 participation may assume in whole or in part the obligations that
7-54 the subdivision that was the first employer had undertaken by
7-55 reason of service rendered by members who became employees of the
7-56 subdivision that is the second employer. The governing body of a
7-57 subdivision that assumes the obligations of another subdivision
7-58 under this section may make a lump-sum deposit to the account of
7-59 the other subdivision in the retirement system, in an amount
7-60 computed by the retirement system's actuary, on terms that are
7-61 agreed to in writing by the affected subdivisions and approved by
7-62 the board of trustees. Assumptions under this section shall be by
7-63 written agreement between the affected subdivisions and are subject
7-64 to approval of the board of trustees. An agreement under this
7-65 section may be amended in writing by the affected subdivisions if
7-66 the amendment is approved by the board of trustees.
7-67 SECTION 17. Subsection (d), Section 843.403, Government
7-68 Code, is amended to read as follows:
7-69 (d) Interest is earned [for each whole calendar year] on a
8-1 current service credit or multiple matching credit from the end of
8-2 each calendar year to the effective date of the member's retirement
8-3 at the rate credited annually to a member's individual account in
8-4 the employees saving fund.
8-5 SECTION 18. Section 843.501, Government Code, is amended to
8-6 read as follows:
8-7 Sec. 843.501. LEGISLATIVE SERVICE. (a) A member may
8-8 establish credit for current service in the retirement system for
8-9 service performed as a member of the legislature[, if the member
8-10 deposits with the system a contribution in an amount computed for
8-11 each month of service claimed at the contribution rate currently
8-12 required of an employee of the subdivision that employs the member,
8-13 multiplied by $400. On the member's making a deposit, the
8-14 employing subdivision shall deposit with the retirement system a
8-15 contribution in an amount equal to the amount deposited by the
8-16 member].
8-17 [(b)] A member claiming credit for previous legislative
8-18 service shall file a detailed statement of the service with the
8-19 treasurer or other disbursing officer of the subdivision by which
8-20 the member is currently employed. As soon as practicable after the
8-21 filing of a statement, the employing subdivision shall verify the
8-22 service claimed and certify to the board of trustees the amount of
8-23 service approved.
8-24 (b) Credit may not be established under this section for
8-25 service that is credited by another retirement system or program
8-26 established or governed by state law.
8-27 SECTION 19. Section 843.601, Government Code, is amended to
8-28 read as follows:
8-29 Sec. 843.601. CURRENT SERVICE FOR QUALIFIED MILITARY SERVICE
8-30 [MILITARY DUTY]. (a) In this section, "qualified military
8-31 service" means service in the uniformed services, as that term is
8-32 defined in the Uniformed Services Employment and Reemployment
8-33 Rights Act of 1994 (38 U.S.C. Section 4301 et seq.), that meets the
8-34 requirements of that Act as it now exists or is amended as to the
8-35 character of service performed.
8-36 (b) All members of the retirement system are entitled to
8-37 receive credit for qualified military service that is subject to
8-38 the Uniformed Services Employment and Reemployment Rights Act of
8-39 1994 (38 U.S.C. Section 4301 et seq.). Notwithstanding any
8-40 provision of this subtitle to the contrary, contributions,
8-41 benefits, and service credit for qualified military service will be
8-42 provided in accordance with Section 414(u) of the Internal Revenue
8-43 Code of 1986. The board of trustees may adopt rules that modify
8-44 the terms of this subtitle for the purpose of compliance with the
8-45 provisions of that Act.
8-46 (c) The governing body of a participating subdivision also
8-47 may, on the terms provided by Section 844.704, authorize the
8-48 establishment of credit for current service in the retirement
8-49 system for qualified military service as provided by this
8-50 subsection. Qualified military service includes military service
8-51 before becoming an employee of the subdivision. A member eligible
8-52 to establish credit under this subsection is one who has performed
8-53 as an employee at least 10 years of service that is credited in the
8-54 retirement system and who does not receive and is not eligible to
8-55 receive federal retirement payments based on 20 years or more of
8-56 active federal military duty or its equivalent. An eligible member
8-57 may establish credit under this subsection by filing with the
8-58 retirement system an application for the credit.
8-59 (d) A subdivision whose governing body authorized "current
8-60 service for military duty" before December 31, 1999, has authorized
8-61 credit for current service under Subsection (c).
8-62 (e) Except for service credit established with the
8-63 retirement system before December 31, 1999, the maximum amount of
8-64 credited service that a person may receive under this section is
8-65 five years. If a person would receive more than five years of
8-66 service credit as a result of having received credit under
8-67 Subsection (c) before receiving credit under Subsection (b),
8-68 service credit under Subsection (c) shall be canceled to the extent
8-69 necessary to reduce the total to five years of credit [The
9-1 governing body of a participating subdivision may, on the terms
9-2 provided by Section 844.201, authorize the establishment of credit
9-3 for current service in the retirement system for military service
9-4 creditable as provided by this section.]
9-5 [(b) Military service creditable in the retirement system
9-6 under this section is service as a member of the armed forces of
9-7 the United States during a time, or before the first anniversary of
9-8 the last day of a time, that the United States is or was engaged
9-9 in:]
9-10 [(1) organized conflict with foreign forces, whether a
9-11 state of war or a police action; or]
9-12 [(2) a crisis in this country.]
9-13 [(c) The board of trustees by rule shall determine the
9-14 periods recognized for purposes of this subtitle as times of
9-15 organized conflict or crisis.]
9-16 [(d) A member eligible to establish credit under this
9-17 section is one who:]
9-18 [(1) does not receive and is not eligible to receive
9-19 federal retirement payments based on 20 years or more of active
9-20 federal military duty or its equivalent;]
9-21 [(2) has been released from military duty under
9-22 conditions not dishonorable;]
9-23 [(3) became a member of the retirement system after
9-24 release from military duty; and]
9-25 [(4) has performed as an employee at least 10 years of
9-26 service that is credited in the retirement system.]
9-27 [(e) An eligible member may establish credit under this
9-28 section by filing with the retirement system an application for the
9-29 credit. An application must be accompanied by a contribution in an
9-30 amount computed as the number of months of service claimed under
9-31 this section, times the lesser of:]
9-32 [(1) the member's average monthly contribution for the
9-33 first 12 months as an employee after becoming a member of the
9-34 retirement system; or]
9-35 [(2) $15.]
9-36 [(f) If a member makes a deposit under Subsection (e), the
9-37 subdivision shall deposit with the retirement system a contribution
9-38 in an amount equal to the amount deposited under Subsection (e).]
9-39 [(g) The maximum amount of current credited service that may
9-40 be established under this section is:]
9-41 [(1) 3 years, if the member has performed as an
9-42 employee at least 10 but less than 15 years of service that is
9-43 credited in the retirement system; or]
9-44 [(2) 5 years, if the member has performed as an
9-45 employee at least 15 years of service that is credited in the
9-46 system].
9-47 (f) [(h)] Credit may not be established under this section
9-48 for service that is [simultaneously] credited by another retirement
9-49 system or program established or governed by state law.
9-50 SECTION 20. Section 843.701, Government Code, is amended to
9-51 read as follows:
9-52 Sec. 843.701. INCREASE IN PRIOR SERVICE CREDITS. The
9-53 governing body of a participating subdivision may not[, on the
9-54 terms provided by Section 844.201,] increase the percentage of
9-55 maximum prior service credits used in determining the allocated
9-56 prior service credits under Section 843.105 except on the terms
9-57 provided by Subchapter H, Chapter 844 [previously granted and in
9-58 effect concerning prior service with the subdivision].
9-59 SECTION 21. Section 843.703, Government Code, is amended to
9-60 read as follows:
9-61 Sec. 843.703. INCREASE IN MULTIPLE MATCHING CREDITS.
9-62 [(a)] The governing body of a participating subdivision may not[,
9-63 on the terms provided by Section 844.201,] increase the percentage
9-64 used in determining multiple matching credits under Section 843.403
9-65 except on the terms provided by Subchapter H, Chapter 844
9-66 [843.403(c)].
9-67 [(b) A percentage increase in multiple matching credits must
9-68 be in a multiple of 10 percent of the amount of member
9-69 contributions and must be applied to all members and annuitants who
10-1 have performed or subsequently perform current service that is
10-2 credited with the subdivision in the retirement system.]
10-3 SECTION 22. Subsection (c), Section 844.002, Government
10-4 Code, is amended to read as follows:
10-5 (c) A supplemental annuity is an amount payable from the
10-6 subdivision accumulation fund, subject to reduction under Section
10-7 842.008(d), 842.009(d), 842.010(c), [842.004(c)] or 845.307(c), and
10-8 is actuarially determined from the sum of:
10-9 (1) a member's allocated prior service credit,
10-10 accumulated at interest as provided by Section 843.105(d); and
10-11 (2) a member's multiple matching credit, accumulated
10-12 at interest as provided by Section 843.403(d).
10-13 SECTION 23. Section 844.003, Government Code, is amended by
10-14 amending Subsections (b) and (c) and adding Subsection (e) to read
10-15 as follows:
10-16 (b) If a member who is eligible under Section 844.407
10-17 [844.105, 844.106, 844.203, 844.204, 844.207(e), or 844.210(e)] to
10-18 select an optional retirement annuity dies before retirement, the
10-19 member is considered to have retired on the last day of the month
10-20 before the month in which death occurred [or on the day before the
10-21 first anniversary of the effective date of the person's membership,
10-22 whichever is later].
10-23 (c) Except as provided by Subsection (b), the effective date
10-24 of a member's disability retirement is the date designated on the
10-25 application for retirement filed by or for the member as provided
10-26 by Section 844.301, but the date must be the last day of a calendar
10-27 month and may not precede the date the member terminates employment
10-28 with all participating subdivisions.
10-29 (e) Notwithstanding Subsections (a), (b), and (c), the
10-30 effective retirement date of a member may not precede the first
10-31 anniversary of the earlier of the effective date of the person's
10-32 membership in the retirement system or the effective date of
10-33 participation of the subdivision from which the member had most
10-34 recently earned credited service.
10-35 SECTION 24. Section 844.006, Government Code, is amended by
10-36 amending Subsection (c) and adding Subsection (f) to read as
10-37 follows:
10-38 (c) A retiree who selected an optional annuity under Section
10-39 844.104(c)(1), (c)(2), (c)(5), or (c)(6) or Section 844.305(c)(1),
10-40 (c)(2), (c)(5), or (c)(6) may revoke the designation of the
10-41 beneficiary to receive the annuity on the death of the retiree, if
10-42 a court of competent jurisdiction in a divorce proceeding involving
10-43 the retiree and beneficiary awards to the retiree the entire
10-44 retirement benefit earned by the retiree. The order awarding the
10-45 retirement benefit may be set forth in the divorce decree or in an
10-46 order approving the terms of a property settlement agreement
10-47 incident to the divorce of the retiree and beneficiary but must be
10-48 dated on or after December 31, 1999. The revocation takes effect
10-49 when the retirement system receives it and cancels the optional
10-50 annuity selection made by the retiree. Beginning with the month
10-51 following the month in which the retirement system receives the
10-52 notice of revocation, the retiree is entitled to receive a standard
10-53 service or disability retirement annuity, as applicable, in the
10-54 same amount that the retiree would receive for the same month if
10-55 the retiree had originally retired with a standard service or
10-56 disability retirement annuity [Any selection and designation of
10-57 beneficiary under Subsection (a) or (b) must be in writing on forms
10-58 prescribed by the board of trustees and becomes effective on filing
10-59 with the director].
10-60 (f) The retirement system by rule may establish requirements
10-61 for forms, documentation, and procedures necessary or desirable for
10-62 the administration of this section.
10-63 SECTION 25. Subsections (a) and (b), Section 844.007,
10-64 Government Code, are amended to read as follows:
10-65 (a) The [Except as provided by Subsection (g), the]
10-66 adjustments prescribed in this section shall be made in computing
10-67 the benefits of and to the accounts of any member who retires
10-68 effective at the end of any month other than December.
10-69 (b) Interest [Through December 31, 1995, current and
11-1 supplemental interest will be credited on the balance in the
11-2 member's individual account in the employees saving fund on January
11-3 1 of the year of retirement from that date to the effective date of
11-4 retirement at the rates allowed on individual accounts of members
11-5 as of December 31 of the preceding year. For periods that begin
11-6 after December 31, 1995, interest] will be credited on the balance
11-7 in the member's individual account in the employees saving fund on
11-8 January 1 of the year of retirement from that date to the effective
11-9 date of retirement.
11-10 SECTION 26. Section 844.101, Government Code, is amended to
11-11 read as follows:
11-12 Sec. 844.101. APPLICATION FOR SERVICE RETIREMENT ANNUITY. A
11-13 member may apply for a service retirement annuity by filing an
11-14 application for retirement with the board of trustees on or [not
11-15 less than 15 days] before the member's effective retirement date
11-16 designated on the application.
11-17 SECTION 27. Section 844.102, Government Code, is amended to
11-18 read as follows:
11-19 Sec. 844.102. ELIGIBILITY FOR SERVICE RETIREMENT ANNUITY.
11-20 [(a)] A member is eligible[, beginning on the first anniversary of
11-21 the effective date of the person's membership,] to apply for
11-22 [retire] and receive a service retirement annuity, if the member:
11-23 (1) is at least 60 years old and has at least 12 years
11-24 of credited service in the retirement system; [or]
11-25 (2) has at least 30 years of credited service in the
11-26 retirement system; or
11-27 (3) has met the eligibility requirements for service
11-28 retirement under Section 844.207, 844.210, or 844.211.
11-29 [(b) A member may terminate employment with all
11-30 participating subdivisions and, beginning on the first anniversary
11-31 of the effective date of the person's membership, remain eligible
11-32 to retire and receive a service retirement annuity at any time
11-33 after the member attains the age of 60, if the member has at least
11-34 20 years of credited service in the retirement system.]
11-35 [(c) A member whose most recent service was performed for a
11-36 subdivision having an effective date of participation in the
11-37 retirement system after August 31, 1979, may terminate employment
11-38 with all participating subdivisions and remain eligible to retire
11-39 and receive a service retirement annuity at any time after the
11-40 member attains the age of 60, if the member has at least 12 years
11-41 of credited service performed for one or more subdivisions that are
11-42 either subject to this subsection or have adopted a like provision
11-43 under Section 844.202.]
11-44 SECTION 28. Subsection (j), Section 844.104, Government
11-45 Code, is amended to read as follows:
11-46 (j) A retiree who dies before the 31st day after the
11-47 effective date of service retirement and who did not select an
11-48 optional service retirement annuity before death is considered to
11-49 have selected an optional annuity under Subsection (c)(7) [(c)(4)].
11-50 Alternatively, the decedent's beneficiary may elect to receive a
11-51 refund of the decedent's accumulated contributions under Section
11-52 844.401, in which case the decedent will be considered to have been
11-53 a contributing member at the time of death.
11-54 SECTION 29. Section 844.202, Government Code, is amended to
11-55 read as follows:
11-56 Sec. 844.202. VESTED ELIGIBILITY TO FUTURE RETIREMENT
11-57 [OPTIONAL SERVICE RETIREMENT ELIGIBILITY]. A [(a) The governing
11-58 body of a participating subdivision may authorize an employee of
11-59 the subdivision who is a] member of the retirement system is a
11-60 vested member and may [to] terminate employment with all
11-61 participating subdivisions [the subdivision] and remain eligible to
11-62 retire and receive a service retirement annuity at any time after
11-63 the member attains the age of 60, if the member leaves the member's
11-64 accumulated contributions on deposit with the retirement system
11-65 and:
11-66 (1) has at least 12 years of credited service;
11-67 (2) has at least 10 years of Section 844.207 credited
11-68 service; or
11-69 (3) has at least 8 years of Section 844.210 credited
12-1 service [performed for one or more subdivisions that either have
12-2 authorized the eligibility under this section or are subject to
12-3 Section 844.102(c)].
12-4 [(b) The governing body of a subdivision may not authorize
12-5 eligibility for service retirement under this section except on the
12-6 terms provided by Section 844.201.]
12-7 SECTION 30. Section 844.207, Government Code, is amended to
12-8 read as follows:
12-9 Sec. 844.207. OPTIONAL BENEFIT ELIGIBILITY PLAN. (a) The
12-10 provisions of this section shall apply to all subdivisions that
12-11 [which] elect after September 1, 1985, to begin participation in
12-12 the retirement system. Subject to the conditions in this section
12-13 [below], the governing body of any subdivision participating as of
12-14 September 1, 1985, may adopt the plan provisions of this section.
12-15 (b) The term "Section 844.207 credited service" as used in
12-16 this section means credited service performed for one or more
12-17 participating subdivisions that have adopted the plan provisions of
12-18 this section or the plan provisions of Section 844.210.
12-19 (c) A member is [shall be] eligible[, beginning on the first
12-20 anniversary date of the person's membership,] to apply for [retire]
12-21 and receive a service retirement annuity, if the member:
12-22 (1) is at least 60 years old and has at least 10 years
12-23 of Section 844.207 credited service in the retirement system; or
12-24 (2) is less than 60 years old and has sufficient years
12-25 of Section 844.207 credited service in the retirement system that,
12-26 when that [such] number is added to the years of attained age of
12-27 the member, produces a sum equal to or in excess of the number 80;
12-28 or
12-29 (3) if the member is eligible for service retirement
12-30 under any other provision of this subtitle.
12-31 (d) A member who has 10 years or more of Section 844.207
12-32 credited service is a vested member for purposes of Sections
12-33 844.202, 844.302, and 844.303 [If a member has 10 years or more of
12-34 Section 844.207 credited service in the retirement system,
12-35 subsequent absence from service shall not terminate membership, and
12-36 unless membership is otherwise terminated, the member shall be
12-37 eligible to retire and receive a service retirement annuity at any
12-38 time after the member attains the age of 60 years].
12-39 (e) A member who on December 31, 1999, has any Section
12-40 844.207 credited service, whose membership in the retirement system
12-41 continues after that date without interruption, and who accumulates
12-42 four years or more of Section 844.207 credited service is eligible
12-43 to receive a service retirement benefit when the number of years of
12-44 Section 844.207 credited service added to the years of the member's
12-45 attained age equals or exceeds the number 80 [An employee of a
12-46 participating subdivision which has adopted the plan provisions of
12-47 this section may select an optional service retirement annuity in
12-48 the manner and under the conditions provided in Section 844.105, if
12-49 the member:]
12-50 [(1) has 10 or more years of Section 844.207 credited
12-51 service in the retirement system and has attained the age of 60
12-52 years; or]
12-53 [(2) has at least 20 years of Section 844.207 credited
12-54 service or is otherwise eligible to make such selection of an
12-55 optional service retirement annuity under the provisions of Section
12-56 844.105, 844.106, 844.203, or 844.204.]
12-57 [If a member who is authorized under this subsection to
12-58 select an optional service retirement annuity dies before
12-59 retirement without having made a selection, the member's surviving
12-60 spouse or the executor or administrator of the member's estate may
12-61 make the selection provided by Section 844.105 under the terms of
12-62 that subsection.]
12-63 [(f) A member who has 10 years or more of Section 844.207
12-64 credited service in the retirement system is eligible to retire and
12-65 receive a disability retirement annuity if the member is the
12-66 subject of a certification issued as provided in Section
12-67 844.303(b)(2); but a member is not entitled to retire for
12-68 disability before the first anniversary of the effective date of
12-69 the person's membership. A member eligible to receive a disability
13-1 retirement annuity under this subsection may, if the member is
13-2 eligible for service retirement, elect to receive a service
13-3 retirement annuity but may not receive both annuities.]
13-4 [(g) For the purposes of Subsections (c), (d), (e), and (f),
13-5 each month of credited service under Section 844.210 is considered
13-6 a month of Section 844.207 credited service].
13-7 (f) [(h)] After 1991, the governing body of a subdivision
13-8 may not adopt the plan provisions of this section except on the
13-9 terms provided by Subchapter H [of this chapter].
13-10 SECTION 31. Section 844.209, Government Code, is amended to
13-11 read as follows:
13-12 Sec. 844.209. ALTERNATIVE OPTIONAL INCREASE IN RETIREMENT
13-13 ANNUITIES [OPTIONAL BENEFIT FOR SURVIVING BENEFICIARY OF VESTED
13-14 MEMBER]. (a) The governing body of a participating subdivision,
13-15 from time to time but not more frequently than once in each
13-16 12-month period, may provide for increased annuities to be paid to
13-17 retirees and beneficiaries of deceased retirees of the subdivision.
13-18 The governing body of the subdivision may not elect an increase in
13-19 retirement annuities under Section 844.208 and under this section
13-20 in the same 12-month period.
13-21 (b) An increase under this section applies to all annuities
13-22 for which the effective retirement date is at least twelve months
13-23 before the effective date of the increase.
13-24 (c) The amount of annuity increase under this section is
13-25 computed as the sum of the person's basic and supplemental
13-26 annuities on the effective date of the increase multiplied by the
13-27 integer percentage increase specified by the governing body for all
13-28 annuitants in the order or resolution adopting the increase.
13-29 (d) Except as provided by Subsection (g), the effective date
13-30 of an order or resolution under this section is January 1 of the
13-31 year that begins after the year in which the governing body adopts
13-32 and notifies the retirement system of the order or resolution.
13-33 (e) An increase in an annuity that was reduced because of an
13-34 option selection is reducible in the same proportion and in the
13-35 same manner that the original annuity was reduced.
13-36 (f) The amount of an increase under this section is payable
13-37 as a supplemental annuity, is an obligation of the subdivision's
13-38 account in the subdivision accumulation fund, and is subject to
13-39 reduction under Section 845.307(c).
13-40 (g) The governing body of a subdivision may not adopt an
13-41 order or resolution under this section except on the terms provided
13-42 by Subchapter H. [This section applies to all subdivisions that
13-43 elect after December 31, 1991, to begin participation in the
13-44 retirement system. Subject to the conditions provided by this
13-45 section, the governing body of any subdivision participating before
13-46 January 1, 1992, may adopt the plan provisions of this section.]
13-47 [(b) If a member who has sufficient credited service
13-48 performed for subdivisions that have adopted or are subject to this
13-49 section to entitle the member to withdraw from service, to leave on
13-50 deposit with the retirement system the member's accumulated
13-51 contributions, and, on attainment of an age prescribed by this
13-52 subtitle, to retire with a service retirement benefit dies before
13-53 becoming eligible for deferred service retirement and leaves
13-54 surviving a person whom the member has designated as beneficiary
13-55 entitled to payment of the member's accumulated contributions if
13-56 the member dies before retirement, the surviving beneficiary may by
13-57 written notice filed with the board elect to receive, in lieu of
13-58 the accumulated deposits, an annuity payable during the lifetime of
13-59 the surviving beneficiary in the amount that would have been
13-60 payable to the surviving beneficiary had the member retired on the
13-61 last day of the month preceding the month in which death occurred
13-62 under an optional annuity described by Section 844.104(c)(1).]
13-63 [(c) At any time before the first annuity payment, a
13-64 surviving beneficiary to whom this section applies may, after
13-65 filing a written application with the board of trustees, receive
13-66 payment of the accumulated contributions credited to the account of
13-67 the member in lieu of any benefits otherwise payable under this
13-68 section. If the surviving beneficiary dies before the first
13-69 payment of an annuity allowed under this section, the accumulated
14-1 contributions credited to the account of the member will be paid to
14-2 the estate of the beneficiary.]
14-3 [(d) The governing body of a subdivision may not adopt the
14-4 plan provisions of this section except on the terms provided by
14-5 Subchapter H of this chapter.]
14-6 [(e) The benefit payable under Subsection (b) is payable as
14-7 if the member had retired on the later of December 31, 1993, or the
14-8 last day of the month preceding the month in which death occurred.
14-9 Any benefit payments under this section must begin within one year
14-10 after the later of December 31, 1993, or the last day of the month
14-11 preceding the month in which death occurred. A benefit payable
14-12 under Subsection (b) because of the death of a person who died
14-13 before January 1, 1994, is computed based on the benefit that would
14-14 have been payable if the death had occurred on January 1, 1994.]
14-15 [(f) If a member to whom Subsection (b) would be applicable
14-16 designates the member's estate or more than one but not more than
14-17 three persons to receive payment of the member's accumulated
14-18 contributions if the member dies before becoming eligible to make a
14-19 selection under Section 844.105, 844.106, 844.207, or 844.210, the
14-20 executor or administrator of the estate or, if there is no executor
14-21 or administrator, the surviving beneficiaries may by written notice
14-22 filed with the board elect to receive, in lieu of the accumulated
14-23 deposits, the optional benefit described by Section 844.104(c)(4).
14-24 If the estate is not the beneficiary, the election may only be made
14-25 if all of the beneficiaries agree in writing on the selection of
14-26 the option. If any surviving beneficiary dies before the first
14-27 payment of an annuity allowed under this section, the annuity will
14-28 be paid to those beneficiaries who are still surviving on the date
14-29 of the first payment.]
14-30 [(g) If a member to whom Subsection (b) otherwise would be
14-31 applicable dies without having a valid beneficiary designation on
14-32 file with the retirement system, the member's estate will be
14-33 considered to be the designated beneficiary if the member died
14-34 before becoming eligible to make a selection under Section 844.105,
14-35 844.106, 844.207, or 844.210. The executor or administrator of the
14-36 estate or, if there is no executor or administrator, the persons
14-37 entitled to receive the member's estate may elect to receive, in
14-38 lieu of the accumulated deposits, the optional benefit described by
14-39 Section 844.104(c)(4). The election may be made only by filing
14-40 written notice with the board of trustees together with either a
14-41 certified copy of the court order or an affidavit meeting the
14-42 requirements of Section 137, Texas Probate Code. An election by
14-43 those persons may be made only if all of the persons entitled to
14-44 the member's accumulated contributions agree in writing on the
14-45 selection of the option.]
14-46 SECTION 32. Section 844.210, Government Code, is amended to
14-47 read as follows:
14-48 Sec. 844.210. OPTIONAL BENEFIT ELIGIBILITY PLAN TWO.
14-49 (a) Subject to Subsection (f) [(h)], the governing body of a
14-50 participating subdivision may adopt the plan provisions of this
14-51 section.
14-52 (b) In this section "Section 844.210 credited service" means
14-53 credited service performed for one or more participating
14-54 subdivisions that have adopted the plan provisions of this section.
14-55 (c) A member is eligible[, beginning on the first
14-56 anniversary of the person's membership,] to apply for [retire] and
14-57 receive a service retirement annuity if the member:
14-58 (1) is at least 60 years old and has at least eight
14-59 years of Section 844.210 credited service in the retirement system;
14-60 (2) is less than 60 years old and has sufficient years
14-61 of Section 844.210 credited service in the retirement system that,
14-62 when added to the years of the member's attained age, produces a
14-63 sum equal to or in excess of the number 80; or
14-64 (3) is eligible for service retirement under any other
14-65 provision of this subtitle.
14-66 (d) A member who [If a member] has eight years or more of
14-67 Section 844.210 credited service in the retirement system is a
14-68 vested member for purposes of Sections 844.202, 844.302, and
14-69 844.303[, subsequent absence from service does not terminate
15-1 membership, and unless membership is otherwise terminated, the
15-2 member is eligible to retire and receive a service retirement
15-3 annuity at any time after the member attains the age of 60 years].
15-4 (e) A member who on December 31, 1999, has any Section
15-5 844.210 credited service, whose membership in the retirement system
15-6 continues after that date without interruption, and who accumulates
15-7 four years or more of Section 844.210 credited service is eligible
15-8 to receive a service retirement benefit when the number of years of
15-9 Section 844.210 credited service added to the years of the member's
15-10 attained age equals or exceeds the number 80. For purposes of this
15-11 subsection, Section 844.210 credited service also includes credited
15-12 service performed for one or more subdivisions that have adopted
15-13 the plan provisions of Section 844.207 [An employee of a
15-14 participating subdivision that has adopted the plan provisions of
15-15 this section may select an optional service retirement annuity in
15-16 the manner and under the conditions provided by Section 844.105 if
15-17 the member:]
15-18 [(1) has at least eight years of Section 844.210
15-19 credited service in the retirement system and has attained the age
15-20 of 60 years; or]
15-21 [(2) has at least 20 years of Section 844.210 credited
15-22 service or is otherwise eligible to make a selection of an optional
15-23 service retirement annuity under Section 844.105, 844.106, 844.203,
15-24 844.204, or 844.207.]
15-25 [(f) If a member who is authorized under Subsection (e) to
15-26 select an optional service retirement annuity dies before
15-27 retirement without having made a selection, the member's surviving
15-28 spouse or the executor or administrator of the member's estate may
15-29 make the selection provided by Section 844.105 under the terms of
15-30 that section.]
15-31 [(g) A member who has at least eight years of Section
15-32 844.210 credited service in the retirement system is eligible to
15-33 retire and receive a disability retirement annuity if the member is
15-34 the subject of a certification issued as provided by Section
15-35 844.303(b)(2), except that a member is not eligible to retire for
15-36 disability before the first anniversary of the effective date of
15-37 the person's membership. A member eligible to receive a disability
15-38 retirement annuity under this subsection may, if the member is
15-39 eligible for service retirement, elect to receive a service
15-40 retirement annuity but may not receive both annuities].
15-41 (f) [(h)] The governing body of a subdivision may not adopt
15-42 the plan provisions of this section except on the terms provided by
15-43 Subchapter H [of this chapter].
15-44 SECTION 33. Section 844.211, Government Code, is amended to
15-45 read as follows:
15-46 Sec. 844.211. OPTIONAL BENEFIT ELIGIBILITY PLAN THREE.
15-47 (a) Subject to Subsection (e) [(d)], the governing body of a
15-48 participating subdivision may adopt the plan provisions of this
15-49 section.
15-50 (b) In this section "Section 844.211 credited service" means
15-51 credited service performed for one or more participating
15-52 subdivisions that have adopted the plan provisions of this section.
15-53 (c) A member is eligible[, beginning on the first
15-54 anniversary of the person's membership,] to apply for [retire] and
15-55 receive a service retirement annuity if the member:
15-56 (1) is less than 60 years old and has sufficient years
15-57 of Section 844.211 credited service in the retirement system that,
15-58 when added to the years of the member's attained age, produces a
15-59 sum equal to or in excess of the number 75; or
15-60 (2) is eligible for service retirement under any other
15-61 provision of this subtitle.
15-62 (d) A member who on December 31, 1999, has any Section
15-63 844.211 credited service, whose membership in the retirement system
15-64 continues after that date without interruption, and who accumulates
15-65 four years or more of Section 844.211 credited service is eligible
15-66 to receive a service retirement benefit when the number of years of
15-67 that credited service added to the years of the member's attained
15-68 age equals or exceeds the number 75.
15-69 (e) The governing body of a subdivision may not adopt the
16-1 plan provisions of this section except on the terms provided by
16-2 Subchapter H [of this chapter].
16-3 SECTION 34. Subsection (b), Section 844.301, Government
16-4 Code, is amended to read as follows:
16-5 (b) An application for a disability retirement annuity must
16-6 be filed on or [not less than 15 days] before the member's
16-7 effective retirement date designated on the application.
16-8 SECTION 35. Section 844.302, Government Code, is amended to
16-9 read as follows:
16-10 Sec. 844.302. ELIGIBILITY FOR DISABILITY RETIREMENT ANNUITY.
16-11 (a) Except as provided by Subsection (c), a member who is not a
16-12 vested member under Section 844.202 [has less than 12 years of
16-13 credited service in the retirement system] is eligible to apply for
16-14 [retire] and receive a disability retirement annuity if the member
16-15 is the subject of a certification issued as provided by Section
16-16 844.303(b)(1).
16-17 (b) Except as provided by Subsection (c), a member who is a
16-18 vested member under Section 844.202 [has at least 12 years of
16-19 credited service in the retirement system] is eligible to apply for
16-20 [retire] and receive a disability retirement annuity if the member
16-21 is the subject of a certification issued as provided by Section
16-22 844.303(b)(2). A member eligible to receive a disability
16-23 retirement annuity under this subsection may, if the member is
16-24 eligible for service retirement, elect to receive a service
16-25 retirement annuity but may not receive both annuities.
16-26 (c) A member is not eligible to retire for disability before
16-27 the first anniversary of the earlier of the effective date of the
16-28 person's membership or the effective date of participation of the
16-29 subdivision from which the member had most recently earned credited
16-30 service.
16-31 SECTION 36. Subsection (b), Section 844.303, Government
16-32 Code, is amended to read as follows:
16-33 (b) The medical board shall issue a certification of
16-34 disability and submit it to the board of trustees, if the medical
16-35 board finds:
16-36 (1) in the case of a member who is not a vested member
16-37 under Section 844.202 [has less than 12 years of credited service
16-38 in the retirement system], that:
16-39 (A) the member is mentally or physically
16-40 incapacitated for any gainful occupation;
16-41 (B) the incapacity is the direct result of
16-42 injuries sustained during membership by external and violent means
16-43 as a direct and proximate result of the performance of duty;
16-44 (C) the incapacity is likely to be permanent;
16-45 and
16-46 (D) the member should be retired; or
16-47 (2) in the case of a member who is a vested member
16-48 under Section 844.202 [has at least 12 years of credited service in
16-49 the retirement system], that:
16-50 (A) the member is mentally or physically
16-51 incapacitated for any gainful occupation;
16-52 (B) the incapacity is likely to be permanent;
16-53 and
16-54 (C) the member should be retired.
16-55 SECTION 37. Subsection (h), Section 844.305, Government
16-56 Code, is amended to read as follows:
16-57 (h) A retiree who dies before the 31st day after the
16-58 effective date of disability retirement and who did not select an
16-59 optional disability retirement annuity before death is considered
16-60 to have selected an optional annuity under Subsection (c)(7)
16-61 [(c)(4)]. Alternatively, the decedent's beneficiary may elect to
16-62 receive a refund of the decedent's accumulated contributions under
16-63 Section 844.401, in which case the decedent will be considered to
16-64 have been a contributing member at the time of death.
16-65 SECTION 38. Subchapter E, Chapter 844, Government Code, is
16-66 amended by adding Section 844.407 to read as follows:
16-67 Sec. 844.407. SURVIVOR ANNUITY DEATH BENEFIT. (a) In this
16-68 section "eligible member" means:
16-69 (1) a member who has four or more years of credited
17-1 service with one or more subdivisions that on September 1, 1999,
17-2 are participating in the retirement system or that begin
17-3 participation in the system after that date;
17-4 (2) a member who has 20 or more years of credited
17-5 service with one or more subdivisions participating in the system;
17-6 (3) a member who is at least 60 years of age and has
17-7 12 or more years of credited service with one or more subdivisions
17-8 participating in the system;
17-9 (4) a member who is at least 60 years of age and has
17-10 10 or more years of Section 844.207 credited service; or
17-11 (5) a member who is at least 60 years of age and has
17-12 eight or more years of Section 844.210 credited service.
17-13 (b) An annuity described by this section may be selected and
17-14 paid on the death of an eligible member before the effective date
17-15 of the member's retirement instead of any other benefit allowed
17-16 under this subtitle, except that a supplemental death benefit under
17-17 Subchapter F may also be paid.
17-18 (c) An eligible member may, before the effective date of the
17-19 member's retirement, file with the board of trustees on a form
17-20 prescribed by the board a selection of an optional service
17-21 retirement annuity available under Section 844.104 and a
17-22 designation of beneficiary.
17-23 (d) A member who is entitled under this section to select
17-24 one of the optional service retirement annuities authorized by
17-25 Section 844.104 may elect instead to name a beneficiary who, on the
17-26 death of the member before retirement, will be allowed to choose
17-27 any benefit that the member could have chosen to be paid to the
17-28 beneficiary, with like effect as if the selection had been made by
17-29 the member.
17-30 (e) An unrevoked application for deferred service retirement
17-31 executed and filed by the member with the retirement system before
17-32 December 31, 1999, shall be considered a selection of benefit and a
17-33 designation of beneficiary under Subsection (c). If no application
17-34 is on file on that date, an unrevoked form executed by the member
17-35 and filed with the system naming a beneficiary to whom the member's
17-36 accumulated deposits are to be paid in the event of death before
17-37 retirement shall be considered a selection of a beneficiary under
17-38 Subsection (d).
17-39 (f) A member may change a selection of an optional annuity
17-40 or a designation of beneficiary at any time before the member's
17-41 retirement or death in the same manner that the original selection
17-42 or designation was made.
17-43 (g) If an eligible member dies before retirement without
17-44 having made a selection under Subsection (c), (d), or (e), the
17-45 member's surviving spouse is considered to be the beneficiary and
17-46 may select an optional annuity in the same manner as if the member
17-47 had made the selection.
17-48 (h) If no surviving spouse exists, the executor or
17-49 administrator of the member's estate may elect:
17-50 (1) for an estate beneficiary to receive the optional
17-51 annuity under Section 844.104(c)(7); or
17-52 (2) for the estate to receive a refund of the member's
17-53 accumulated contributions under Section 844.401.
17-54 (i) Any annuity payable under this section shall be computed
17-55 on the assumption that the member had actually retired under the
17-56 annuity selected and with the same beneficiary determined under the
17-57 applicable provision of this section, effective on the last day of
17-58 the calendar month before the month in which death of the member
17-59 occurred.
17-60 (j) A survivor annuity under this section shall be paid from
17-61 the same accounts and is subject to the same conditions as are
17-62 applicable to a service retirement benefit for the same member.
17-63 SECTION 39. Subchapter E, Chapter 844, Government Code, is
17-64 amended by adding Section 844.408 to read as follows:
17-65 Sec. 844.408. NO SURVIVING SPOUSE, EXECUTOR, OR
17-66 ADMINISTRATOR. (a) In this section "heirs" has the meaning
17-67 assigned by Section 3, Texas Probate Code, except that the term
17-68 excludes any person who has filed a proper disclaimer or
17-69 renunciation with the retirement system.
18-1 (b) If a surviving spouse or the executor or administrator
18-2 of a deceased member's estate would be entitled to make an election
18-3 under Section 842.110(f) or 842.111(c), or if a beneficiary or the
18-4 executor or administrator of a deceased member's estate would be
18-5 entitled to make an election under Section 844.407 because of the
18-6 death of the member, the heirs of the deceased member may make that
18-7 election if:
18-8 (1) no surviving spouse exists, or, if Section 844.407
18-9 is applicable, no surviving beneficiary exists;
18-10 (2) no petition for the appointment of a personal
18-11 representative of the member is pending or has been granted;
18-12 (3) 30 days have elapsed since the date of death of
18-13 the member;
18-14 (4) the value of the entire assets of the member's
18-15 estate, excluding homestead and exempt property, does not exceed
18-16 $50,000; and
18-17 (5) on file with the retirement system is a certified
18-18 copy of a small estates affidavit that has been approved and filed
18-19 in accordance with Section 137, Texas Probate Code, or an original
18-20 affidavit described by Subsection (c).
18-21 (c) If no affidavit has been filed with the clerk of the
18-22 court having jurisdiction and venue as provided by Section 137,
18-23 Texas Probate Code, the retirement system may accept instead an
18-24 affidavit sworn to by two disinterested witnesses and by those
18-25 heirs who have legal capacity and, if the facts warrant, by the
18-26 natural guardian or next of kin of any minor or incompetent who is
18-27 also an heir. The affidavit must include the names and addresses
18-28 of the heirs and witnesses, establish the facts listed in
18-29 Subsection (b), include a list of the assets and liabilities of the
18-30 estate, show the facts that constitute the basis for the right of
18-31 the heirs to receive the estate, and show the fractional interests
18-32 of the heirs in the estate as a result of those facts.
18-33 (d) If the retirement system, acting through the director or
18-34 a person designated by the director, approves the affidavit, the
18-35 heirs may make the election if each heir agrees to it.
18-36 SECTION 40. Subsections (a), (b), (c), and (d), Section
18-37 844.502, Government Code, are amended to read as follows:
18-38 (a) A member included in the coverage of the supplemental
18-39 death benefit program who fails to earn compensation in a month for
18-40 service to a subdivision participating in the supplemental death
18-41 benefits fund may be [is] eligible to receive extended coverage in
18-42 the program under [on complying with the terms of] this section.
18-43 (b) A member who dies within 24 months after the date the
18-44 member last made a required contribution to the retirement system
18-45 is considered to have received [is entitled to receive] extended
18-46 program coverage if the retirement system receives at its office
18-47 after the member's death:
18-48 (1) evidence that the retirement system considers
18-49 satisfactory to establish [notification] that, as a result of
18-50 illness or injury, the member was [is] unable to engage in gainful
18-51 employment throughout the period beginning with the date of the
18-52 last required contribution and ending on the date of death; [or is
18-53 on leave of absence under the Family and Medical Leave Act of 1993
18-54 (Pub. L. 103-3); and]
18-55 (2) a statement from the subdivision, on a form
18-56 approved by the board of trustees, that the member was on leave of
18-57 absence under the Family and Medical Leave Act of 1993 (Pub. L.
18-58 103-3) throughout the period beginning with the date of the last
18-59 required contribution and ending on the date of death; or
18-60 (3) a statement from the subdivision, on a form
18-61 approved by the board of trustees, that the member was on leave of
18-62 absence under the Family and Medical Leave Act of 1993 (Pub. L.
18-63 103-3) during part of the period beginning with the date of the
18-64 last required contribution and ending on the date of death, with
18-65 evidence that the retirement system considers satisfactory to
18-66 establish that, throughout the rest of the period, the member was
18-67 unable to engage in gainful employment as a result of illness or
18-68 injury [evidence that the member made a required contribution to
18-69 the retirement system as an employee of a subdivision participating
19-1 in the supplemental death benefits fund for the month immediately
19-2 preceding the first full month in which the member was unable to
19-3 engage in gainful employment].
19-4 (c) A member who had applied for and received extended
19-5 program coverage before September 1, 1999, remains covered by [The
19-6 retirement system may request additional evidence as to illness or
19-7 injury or of the required contribution as a condition to granting
19-8 the coverage.]
19-9 [(d) Once established, extended coverage of a person in] the
19-10 supplemental death benefit program [continues] until the last day
19-11 of the month in which:
19-12 (1) the member returns to work as an employee of a
19-13 participating subdivision;
19-14 (2) the member becomes able to engage in gainful
19-15 employment;
19-16 (3) the person's membership in the retirement system
19-17 is terminated;
19-18 (4) the member retires under this subtitle; or
19-19 (5) the member's leave of absence under the Family and
19-20 Medical Leave Act of 1993 (Pub. L. 103-3) terminates.
19-21 SECTION 41. Section 844.505, Government Code, is amended to
19-22 read as follows:
19-23 Sec. 844.505. BENEFICIARY OF SUPPLEMENTAL DEATH BENEFIT.
19-24 (a) Unless a member has directed otherwise on a form prescribed by
19-25 the board of trustees and filed with the retirement system:
19-26 (1) a supplemental death benefit under Section 844.503
19-27 is payable to the person entitled to receive the decedent's
19-28 accumulated contributions, unless the decedent was eligible under
19-29 Section 844.407 [844.105] to select an optional service retirement
19-30 annuity, in which case the benefit is payable to the beneficiary
19-31 designated by the decedent or, if no designation was made, to the
19-32 person entitled under that section to receive an optional annuity;
19-33 and
19-34 (2) a supplemental death benefit under Section 844.504
19-35 is payable to a person entitled to receive any remaining payments
19-36 of the decedent's annuity.
19-37 (b) If a person entitled under this section to receive a
19-38 supplemental death benefit does not survive the member or retiree
19-39 covered by the supplemental death benefit program, the benefit is
19-40 payable to the person to whom a benefit under Subchapter B or D is
19-41 payable, or if no benefit is payable under those subchapters, to
19-42 the person to whom a benefit under Subchapter E is or would be
19-43 payable [estate of the covered member or retiree].
19-44 SECTION 42. Subsections (b) and (c), Section 844.605,
19-45 Government Code, are amended to read as follows:
19-46 (b) A supplemental contribution rate is the rate of
19-47 contribution by a subdivision to its account in the subdivision
19-48 accumulation fund, in addition to the contributions provided under
19-49 Section 845.404(a)(2), that the actuary determines and certifies is
19-50 required, together with the contributions provided under Section
19-51 845.404(a)(2), to amortize the obligations of the subdivision to
19-52 the subdivision accumulation fund within a period of 25 years. A
19-53 supplemental contribution rate may [not] exceed the rate determined
19-54 by the actuary [four percent of covered payroll].
19-55 (c) A supplemental contribution rate adopted by a
19-56 participating subdivision may not be increased unless the actuary
19-57 subsequently makes the determination described by Subsection (a).
19-58 If the actuary subsequently makes the determination specified by
19-59 this subsection, the governing body of the subdivision may adopt
19-60 another supplemental contribution rate under this section.
19-61 SECTION 43. Section 844.606, Government Code, is amended by
19-62 adding Subsection (f) to read as follows:
19-63 (f) The lower percentage to be used in determining multiple
19-64 matching credits provided for by Subsection (b) must be a multiple
19-65 of 10 percent of the amount of member contributions.
19-66 SECTION 44. Subsection (a), Section 844.608, Government
19-67 Code, is amended to read as follows:
19-68 (a) Notwithstanding Section 845.402(c) [Sections 845.402(c)
19-69 and (d)], a subdivision's member contribution rate may be reduced
20-1 to one, two, three, four, five, or six percent of the current
20-2 service compensation of its employees, except that the rate of
20-3 member contributions may be reduced to less than four percent only
20-4 if the reduction is necessary under this section.
20-5 SECTION 45. Section 844.702, Government Code, is amended to
20-6 read as follows:
20-7 Sec. 844.702. MEMBER CONTRIBUTIONS. (a) The governing body
20-8 of the subdivision may designate the rate of member contributions
20-9 for employees of the subdivision to take effect beginning on the
20-10 effective date of adoption of the plan provisions of this
20-11 subchapter. The subdivision may elect a rate of four, five, six,
20-12 or seven percent of the current service compensation of its
20-13 employees. The governing body of the subdivision may thereafter
20-14 increase or decrease the contribution rate to take effect on the
20-15 next January 1 after the date of adoption of the increase or
20-16 decrease, in accordance with [notwithstanding] the provisions of
20-17 Sections 845.402(b) and (c) [845.402(c) and (d)].
20-18 (b) If necessary under Section [844.608(b) or] 844.703(h), a
20-19 subdivision's member contribution rate may be reduced to one, two,
20-20 three, four, five, or six percent of the current service
20-21 compensation of its employees.
20-22 SECTION 46. Subsections (c), (d), (g), and (h), Section
20-23 844.703, Government Code, are amended to read as follows:
20-24 (c) The combined rates of a subdivision's normal
20-25 contributions and prior service contributions under this subchapter
20-26 may not exceed 11 percent unless the governing body of the
20-27 subdivision elects to waive this limitation. A waiver under this
20-28 subsection becomes effective on January 1 of the year after the
20-29 year in which it is adopted and remains effective until January 1
20-30 of the year following a repeal of the waiver by the subdivision's
20-31 governing body.
20-32 (d) The actuary annually shall determine the subdivision
20-33 normal contribution rate and the prior service contribution rate
20-34 for subdivisions adopting the plan provisions of this subchapter
20-35 from the most recent data available at the time of determination.
20-36 Before January 1 of each year, the board of trustees shall certify
20-37 the rates of each subdivision that has adopted the plan provisions
20-38 of this subchapter. If the combined rates of the subdivision's
20-39 normal contributions and prior service contributions under this
20-40 subchapter exceed the rate prescribed by Subsection (c), and if the
20-41 governing body of the subdivision has not waived that maximum rate,
20-42 the rate for prior service contributions must be reduced to the
20-43 rate that equals the difference between the maximum rate prescribed
20-44 by Subsection (c) and the normal contribution rate. The governing
20-45 body may elect to contribute at a rate that is an integer percent
20-46 but not more than the maximum rate prescribed by Subsection (c),
20-47 unless the governing body has elected to waive that maximum rate,
20-48 if that elected rate exceeds the sum of the subdivision's normal
20-49 contribution rate and its prior service contribution rate as
20-50 determined under Subsections (a) and (b). This elected rate
20-51 remains in effect for each subsequent calendar year until it is
20-52 rescinded by the governing body or until the sum of the rates
20-53 determined under Subsections (a) and (b) exceeds the elected rate,
20-54 at which time the governing body must contribute the sum of the
20-55 rates determined under Subsections (a) and (b). For years in which
20-56 the elected rate exceeds the sum of the rates determined under
20-57 Subsections (a) and (b), the prior service contribution rate is
20-58 increased to the rate that equals the difference between the
20-59 elected rate and the normal contribution rate prescribed by
20-60 Subsection (a).
20-61 (g) If the combined rates of the subdivision's normal
20-62 contributions and prior service contributions under this subchapter
20-63 exceed the maximum rate prescribed by Subsection (c) before the
20-64 adjustment prescribed by Subsection (d), and if the governing body
20-65 of the subdivision has not waived that maximum rate, the actuary
20-66 shall determine what lower percentage for determining multiple
20-67 matching credits of future member contributions is necessary to
20-68 make the combined rates of the subdivision not exceed the maximum
20-69 rate prescribed by Subsection (c). The actuary shall give written
21-1 notice of the determination to the director, who shall give written
21-2 notice to the governing body of the subdivision. The lower
21-3 percentage determined by the actuary and specified in the notice to
21-4 the governing body becomes effective as to all members who perform
21-5 current service for the affected subdivision on or after the first
21-6 day of the first calendar year that begins after the date of the
21-7 notice, unless before the effective date, the governing body of the
21-8 subdivision adopts an order or resolution, approved by the board of
21-9 trustees, authorizing a reduction in the percentage used in
21-10 determining multiple matching credits in accordance with Section
21-11 844.704(a) or authorizing a reduction in the rate of member
21-12 contributions in accordance with Section 844.702, or authorizing
21-13 both a reduction in the percentage used in determining multiple
21-14 matching credits and a reduction in the rate of member
21-15 contributions.
21-16 (h) If the combined rates of the subdivision's normal
21-17 contributions and prior service contributions under this subchapter
21-18 exceed the maximum rate prescribed by Subsection (c), and if the
21-19 governing body of the subdivision has not waived that maximum rate,
21-20 and if all reductions under Subsection (g), in the opinion of the
21-21 actuary, result in the combined rates of the subdivision remaining
21-22 in excess of the maximum rate prescribed by Subsection (c), the
21-23 retirement system shall reduce the rate of member contributions to
21-24 a lower rate authorized by Section 844.702 that, in the opinion of
21-25 the actuary, is required to produce a combined rate that does not
21-26 exceed the rate prescribed by Subsection (c). At the time the
21-27 actuary determines that the rate of employee contributions that was
21-28 in existence before a reduction under this subsection no longer
21-29 would result in a combined rate in excess of the maximum rate
21-30 prescribed by Subsection (c), the retirement system shall reinstate
21-31 the employee contribution to the rate that was in effect at the
21-32 time of the reduction, unless the governing body of the subdivision
21-33 has elected to change to some other rate authorized by Section
21-34 844.702(a). Any change under this section shall be made on January
21-35 1 of the year following the applicable determination by the
21-36 actuary. During the time that the member contribution rate is
21-37 reduced, the combined rates of the subdivision's normal
21-38 contributions and prior service contributions shall be equal to the
21-39 maximum rate prescribed by Subsection 844.703(c).
21-40 SECTION 47. Subsections (c), (d), and (e), Section 844.704,
21-41 Government Code, are amended to read as follows:
21-42 (c) By adopting the plan provisions of this subchapter, the
21-43 governing body also adopts the optional benefit eligibility plan
21-44 described by Section 844.207 unless by its order it adopts the
21-45 optional benefit eligibility plan described by Section 844.210 and
21-46 the survivor annuity death benefit described by Section 844.407.
21-47 (d) The governing body of a subdivision that has adopted or
21-48 is adopting the plan provisions of this subchapter may adopt:
21-49 (1) the alternative optional increase in retirement
21-50 annuities [benefit for a surviving beneficiary of a vested member]
21-51 under Section 844.209;
21-52 (2) the optional increase in retirement annuities
21-53 under Section 844.208;
21-54 (3) the optional authorization of the reestablishment
21-55 of credited service previously forfeited under Section 843.003;
21-56 (4) the optional authorization of the establishment of
21-57 credited service for military service under Section 843.601(c)
21-58 [843.202 or 843.601, notwithstanding the limitation related to
21-59 Section 844.201 in Section 843.202(d) and 843.601(a)];
21-60 (5) the optional authorization of the establishment of
21-61 premembership credited service for overage employees under Section
21-62 843.204 [election to have credits recomputed on the basis of total
21-63 compensation under Section 843.702];
21-64 (6) the optional benefit eligibility plan described by
21-65 Section 844.210; or
21-66 (7) the optional benefit eligibility plan described by
21-67 Section 844.211.
21-68 (e) The governing body may not adopt the benefits of this
21-69 section if the adoption would result in the combined rates of the
22-1 subdivision's normal contributions and prior service contributions
22-2 for the first calendar year following the adoption exceeding the
22-3 maximum rate prescribed by Section 844.703(c) unless a waiver under
22-4 that section is in effect.
22-5 SECTION 48. Section 845.105, Government Code, is amended to
22-6 read as follows:
22-7 Sec. 845.105. INDEBTEDNESS; PAYMENT. (a) The board of
22-8 trustees may:
22-9 (1) incur indebtedness;
22-10 (2) on the credit of the retirement system, borrow
22-11 money to pay expenses incident to the system's operation;
22-12 (3) renew, extend, or refund its indebtedness; or
22-13 (4) issue and sell negotiable promissory notes or
22-14 negotiable bonds of the system.
22-15 (b) A note or bond issued under this section must [mature
22-16 before the 20th anniversary of the issuance of the note or bond.
22-17 The rate of interest on the note or bond may not exceed six percent
22-18 a year.]
22-19 [(c) The board shall charge a note or bond issued under this
22-20 section against the system's expense fund and shall pay the note or
22-21 bond from that fund. The total indebtedness against the expense
22-22 fund may not exceed $100,000 at any time.]
22-23 [(d) A note or bond issued under this section must]
22-24 expressly state that the note or bond is not an obligation of this
22-25 state.
22-26 SECTION 49. Subchapter B, Chapter 845, Government Code, is
22-27 amended by adding Section 845.116 to read as follows:
22-28 Sec. 845.116. ELECTRONIC TRANSFER OF FUNDS AND ELECTRONIC
22-29 FILING OF DOCUMENTS. (a) In this section:
22-30 (1) "Electronic filing" means the filing of data
22-31 transmitted to the retirement system by the communication of
22-32 information by facsimile or in the form of digital electronic
22-33 signals transformed by computer and stored on microfilm, magnetic
22-34 tape, optical disks, or any other medium.
22-35 (2) "Electronic transfer" means any transfer of funds,
22-36 other than a transaction originated by check, draft, or similar
22-37 paper instrument, that is initiated through an electronic terminal,
22-38 telephone instrument, computer, or magnetic media to order,
22-39 instruct, or authorize a financial institution to debit or credit
22-40 an account.
22-41 (b) The board of trustees may adopt rules and procedures
22-42 relating to the electronic transfer of funds and the electronic
22-43 filing of documents and required reports.
22-44 (c) Funds that are electronically transferred in accordance
22-45 with those rules and procedures are considered to have been timely
22-46 received by the retirement system. Documents and required reports
22-47 that are electronically filed in accordance with those rules and
22-48 procedures are considered to have been properly filed with the
22-49 retirement system.
22-50 SECTION 50. Section 845.306, Government Code, is amended to
22-51 read as follows:
22-52 Sec. 845.306. EMPLOYEES SAVING FUND. (a) The retirement
22-53 system shall deposit in a member's individual account in the
22-54 employees saving fund:
22-55 (1) the amount of contributions to the retirement
22-56 system deducted from the member's compensation;
22-57 (2) interest allowed on money in the account in
22-58 accordance with this subtitle;
22-59 (3) [an amount deposited by a member in accordance
22-60 with Section 845.405 to establish credited service during a time of
22-61 war;]
22-62 [(4)] the portion of a deposit required by Section
22-63 843.003 [or 843.404] to reinstate credited service previously
22-64 terminated that represents the amount withdrawn;
22-65 (4) [(5)] the amount deposited in accordance with
22-66 Section 843.301(b) or 843.402(b) to establish credit for prior or
22-67 current service for a person who became a member in accordance with
22-68 Subchapter C, [of] Chapter 842;
22-69 (5) [(6)] the amount, if any, deposited by a member in
23-1 accordance with Section 843.601(b) [843.601(e)] to establish
23-2 current service credit for military service;
23-3 [(7) the amount deposited by a member in accordance
23-4 with Section 843.501 to establish credit for legislative service;]
23-5 and
23-6 (6) [(8)] the amount deposited by a person to become a
23-7 member in accordance with Section 842.103.
23-8 (b) On December 31 of each year, the retirement system shall
23-9 credit to each member's individual account interest as allowed by
23-10 this subtitle on the amount of accumulated deposits credited to the
23-11 member's account on January 1 of that year.
23-12 [(c) The retirement system may not pay interest on money in
23-13 a person's individual account:]
23-14 [(1) for a part of a year; or]
23-15 [(2) after the person's membership has been terminated
23-16 in accordance with Section 842.109 because of absence from
23-17 service.]
23-18 SECTION 51. Subsection (a), Section 845.307, Government
23-19 Code, is amended to read as follows:
23-20 (a) The retirement system shall deposit in the account of a
23-21 participating subdivision in the subdivision accumulation fund:
23-22 (1) all benefit contributions made by the subdivision
23-23 to the system pursuant to Section 845.404(a)(2);
23-24 (2) income [and interest] allocated to the fund as
23-25 provided by this subtitle;
23-26 (3) amounts deposited by the subdivision under Section
23-27 845.408 [in accordance with former Section 845.405 to establish
23-28 credited service during a time of war];
23-29 (4) the withdrawal charge for reinstatement of
23-30 credited service as provided by Section 843.003 [or 843.404];
23-31 (5) the amount of matching contributions made by a
23-32 subdivision in accordance with Section 843.301(c) or 843.402(c) to
23-33 establish credit for prior or current service for a person who
23-34 became a member in accordance with Subchapter C, [of] Chapter 842;
23-35 [(6) the amount of matching contributions made by a
23-36 subdivision in accordance with Section 843.601(f) to establish
23-37 current service credit for military service;]
23-38 [(7) the amount of matching contributions made by a
23-39 subdivision in accordance with Section 843.501 to establish credit
23-40 for legislative service;] and
23-41 (6) [(8)] the amount deposited by a subdivision for a
23-42 person to become a member in accordance with Section 842.103.
23-43 SECTION 52. Subsection (f), Section 845.310, Government
23-44 Code, is amended to read as follows:
23-45 (f) The retirement system shall deposit and hold in the
23-46 perpetual endowment account funds, gifts, and awards that the
23-47 grantors designate as perpetual endowment for the retirement system
23-48 and money forfeited to the retirement system as provided by Section
23-49 845.505 [845.503].
23-50 SECTION 53. Section 845.312, Government Code, is amended to
23-51 read as follows:
23-52 Sec. 845.312. SUPPLEMENTAL DEATH BENEFITS FUND. (a) The
23-53 retirement system shall deposit in the supplemental death benefits
23-54 fund contributions paid by subdivisions to the retirement system to
23-55 provide supplemental death benefits in accordance with Section
23-56 845.406. The retirement system may not establish separate accounts
23-57 in the fund for subdivisions participating in the fund but shall
23-58 credit contributions to a single account.
23-59 (b) The retirement system shall pay supplemental death
23-60 benefits only from money in the supplemental death benefits fund,
23-61 and the benefits are not an obligation of other funds of the
23-62 system.
23-63 (c) [The supplemental death benefits fund may become
23-64 operative only after a sufficient number of subdivisions elect to
23-65 participate in the fund so that 4,000 members or more are covered
23-66 by the fund.]
23-67 [(d) The board of trustees shall determine the operative
23-68 date of the fund.]
23-69 [(e)] The effective participation date of a subdivision is[:]
24-1 [(1) the operative date of the fund if the subdivision
24-2 elected to participate in the fund on or before the fund's
24-3 operative date; or]
24-4 [(2)] the first day of any calendar month after the
24-5 month in which the subdivision notifies the board of its election
24-6 to enter the fund.
24-7 [(f) The board of trustees shall notify each subdivision of
24-8 its effective participation date.]
24-9 SECTION 54. Subsection (b), Section 845.315, Government
24-10 Code, is amended to read as follows:
24-11 (b) The account of each subdivision, other than a
24-12 subdivision that has ceased participation according to Section
24-13 845.317(a), will receive a share of the amount transferred under
24-14 Subsection (a)(5) that is in proportion to the amount that the
24-15 balance credited to its account on January 1 bears to the total
24-16 credited to the subdivision accumulation fund on that date.
24-17 SECTION 55. The heading of Subchapter E, Chapter 845,
24-18 Government Code, is amended to read as follows:
24-19 SUBCHAPTER E. COLLECTION OF [MEMBERSHIP FEES AND]
24-20 CONTRIBUTIONS
24-21 SECTION 56. Subsection (j), Section 845.403, Government
24-22 Code, is amended to read as follows:
24-23 (j) Contributions picked up as provided by Subsection (i)
24-24 shall be treated as employer contributions in determining tax
24-25 treatment of the amounts under Section 414(h) of the United States
24-26 Internal Revenue Code of 1986[; however, each participating
24-27 subdivision shall continue to withhold federal income taxes based
24-28 upon these contributions until the Internal Revenue Service
24-29 determines or the federal courts rule that pursuant to Section
24-30 414(h) of the Internal Revenue Code of 1986 (26 U.S.C. Section
24-31 414), these picked-up contributions are not included as gross
24-32 income of the employee until such time as they are distributed or
24-33 made available]. Each employee contribution that is picked up as
24-34 above provided shall be deposited as provided in Section 845.306 to
24-35 the individual account of the member, on whose behalf they are
24-36 made, and shall be treated for all other purposes of this subtitle
24-37 in the same manner and with like effect as if the amount had been
24-38 deducted from the compensation of and made by the employee pursuant
24-39 to Sections 845.402 and 845.403(a) through (h).
24-40 SECTION 57. Subsection (a), Section 845.404, Government
24-41 Code, is amended to read as follows:
24-42 (a) Before the 16th day of each month, each participating
24-43 subdivision shall pay or cause to be paid to the retirement system
24-44 at the system's office:
24-45 (1) the member contributions, or "picked-up" member
24-46 contributions, provided for by Sections 845.402 and 845.403, which
24-47 shall be deposited to the individual accounts of the members; and
24-48 (2) the contributions that a subdivision is required
24-49 to make under this subtitle, which [an additional amount equal to
24-50 the total of contributions made by or on behalf of employees of the
24-51 subdivision under the provisions of Sections 845.402 and 845.403
24-52 for the preceding month, which additional amount] shall be
24-53 deposited to the account of the subdivision in the subdivision
24-54 accumulation fund.
24-55 SECTION 58. Section 845.406, Government Code, is amended to
24-56 read as follows:
24-57 Sec. 845.406. SUPPLEMENTAL DEATH BENEFITS PROGRAM. (a) In
24-58 addition to other contributions to the retirement system required
24-59 by this subtitle, each subdivision participating in the
24-60 supplemental death benefits fund monthly shall pay to the fund an
24-61 amount equal to the rate of contribution computed in accordance
24-62 with this section, multiplied by the total compensation for the
24-63 month of the members employed by the subdivision.
24-64 (b) A limitation on subdivision contribution rates provided
24-65 by this subtitle does not apply to the rate of the contribution to
24-66 the supplemental death benefits fund.
24-67 (c) At [As soon as practical after the supplemental death
24-68 benefits program is established and at] the time of each
24-69 investigation of members' mortality and service experience required
25-1 by Section 845.110, the actuary shall investigate the mortality
25-2 experience of the members and eligible annuitants participating in
25-3 the supplemental death benefits program. On the basis of the
25-4 result of that investigation, the actuary shall recommend to the
25-5 board of trustees rates and tables necessary to determine
25-6 supplemental death benefits contribution rates. The rates and
25-7 tables may provide for the anticipated mortality experience of the
25-8 persons covered under the supplemental death benefits fund and for
25-9 a contingency reserve.
25-10 (d) Before a subdivision's participation date in the
25-11 supplemental death benefits fund and before January 1 of each
25-12 subsequent year, the actuary shall compute, on the basis of rates
25-13 and tables adopted by the board of trustees, the supplemental death
25-14 benefits contribution rate of a subdivision participating in the
25-15 supplemental death benefits contribution fund. The rate must be
25-16 expressed as a percentage of the compensation of members employed
25-17 by the subdivision. When the rate is approved by the board of
25-18 trustees, the rate is effective for the calendar year for which it
25-19 was approved.
25-20 (e) The board of trustees, in the exercise of its discretion
25-21 to manage the assets of the retirement system, may lend money to
25-22 the supplemental death benefits fund if the amount in the fund is
25-23 insufficient to pay the supplemental death benefits due. Any loan
25-24 is an investment of the retirement system and must be repaid solely
25-25 from future contributions to the supplemental death benefits fund
25-26 and its share of trust earnings. The terms of the loan shall be
25-27 set by the board of trustees, but the loan must bear a commercially
25-28 reasonable interest rate. The board may adjust future
25-29 contributions to the supplemental death benefits fund for purposes
25-30 of repayment of the loan [If the balance in the supplemental death
25-31 benefits fund is insufficient to pay the supplemental death
25-32 benefits due, the board of trustees may direct that, to the extent
25-33 available, an amount equal to the amount of the deficiency be
25-34 transferred from the general reserves account of the endowment fund
25-35 to the supplemental death benefits fund. The board may adjust
25-36 future contributions to the supplemental death benefits fund to
25-37 repay to the general reserves account the transferred amount].
25-38 (f) [If the total number of members covered by the
25-39 supplemental death benefits fund becomes fewer than 4,000, the
25-40 board of trustees may order that the fund be discontinued and all
25-41 coverage terminated. The termination date must be December 31 of a
25-42 year designated by the board and may not be before the expiration
25-43 of six months after the date on which the order of termination was
25-44 adopted.]
25-45 [(g)] To protect against adverse claim experience, the board
25-46 of trustees may secure reinsurance from one or more stock insurance
25-47 companies doing business in this state if the board determines that
25-48 reinsurance is necessary. The retirement system shall pay the
25-49 premiums for reinsurance from the supplemental death benefits fund.
25-50 SECTION 59. Subchapter E, Chapter 845, Government Code, is
25-51 amended by adding Section 845.407 to read as follows:
25-52 Sec. 845.407. PENALTY FOR LATE CONTRIBUTIONS. (a) A
25-53 participating subdivision that fails to provide the information
25-54 required by Section 845.403 or to pay all contributions required by
25-55 this subchapter to be made and remitted to the retirement system
25-56 before the 16th day of the month in which they are due shall pay a
25-57 penalty under this section. The penalty for a past-due monthly
25-58 remission is equal to interest on the past-due amounts for each day
25-59 past due at a nominal interest rate of 12 percent, plus a $500
25-60 administrative fee. If the penalty is not paid within three months
25-61 after the date notice of the penalty has been sent to the
25-62 subdivision, the retirement system shall deduct the penalty from
25-63 the subdivision's account in the subdivision accumulation fund.
25-64 The interest portion of the penalty shall be deposited by the
25-65 retirement system in the distributable income account of the
25-66 interest fund. The administrative fee portion of the penalty shall
25-67 be deposited by the retirement system in the expense fund.
25-68 (b) Payment and required reports are considered to be made
25-69 when received by the retirement system.
26-1 SECTION 60. Subchapter E, Chapter 845, Government Code, is
26-2 amended by adding Section 845.408 to read as follows:
26-3 Sec. 845.408. ADDITIONAL OPTIONAL DEPOSITS BY SUBDIVISIONS.
26-4 In addition to the deposits that a subdivision is required to make
26-5 under this subtitle, the governing body of a participating
26-6 subdivision may elect to deposit to the subdivision's account in
26-7 the subdivision accumulation fund one or more lump-sum payments.
26-8 Once a payment is deposited, it cannot be withdrawn from that fund
26-9 by the subdivision.
26-10 SECTION 61. Subsection (e), Section 845.505, Government
26-11 Code, is amended to read as follows:
26-12 (e) If a person files with the retirement system a valid
26-13 application for retirement based on an account that has been closed
26-14 under Subsection (a)[, (b),] or (c), the retirement system shall
26-15 restore the member's individual account in the employees saving
26-16 fund and pay a retirement annuity computed as of the date on which
26-17 the annuity would have been required to begin under this subtitle.
26-18 All annuity payments that previously would have been paid if the
26-19 annuity had begun on the date required under this subtitle will be
26-20 paid to the person as a single sum.
26-21 SECTION 62. Notwithstanding Section 844.407, Government
26-22 Code, as added by this Act, a subdivision participating in the
26-23 Texas County and District Retirement System that is not subject to
26-24 Subchapter H, Chapter 844, Government Code, may before December 31,
26-25 1999, elect not to have Subdivision (1), Subsection (a), Section
26-26 844.407, apply to the subdivision by filing a notice of that
26-27 election with the retirement system before that date. A
26-28 subdivision that makes an election under this section may
26-29 subsequently elect to have Subdivision (1), Subsection (a), Section
26-30 844.407, Government Code, as added by this Act, apply to the
26-31 subdivision.
26-32 SECTION 63. The following provisions of the Government Code
26-33 are repealed:
26-34 (1) Section 842.005;
26-35 (2) Section 843.202;
26-36 (3) Section 843.404;
26-37 (4) Section 843.603;
26-38 (5) Section 843.702;
26-39 (6) Sections 844.007(d), (e), (f), and (g);
26-40 (7) Section 844.105;
26-41 (8) Section 844.106;
26-42 (9) Section 844.107;
26-43 (10) Section 844.108;
26-44 (11) Section 844.201;
26-45 (12) Section 844.203;
26-46 (13) Section 844.204;
26-47 (14) Section 844.205;
26-48 (15) Section 844.206; and
26-49 (16) Sections 844.502(e) and (f).
26-50 SECTION 64. This Act takes effect December 31, 1999, except
26-51 Sections 13, 16, 62, and this section, which take effect September
26-52 1, 1999.
26-53 SECTION 65. The importance of this legislation and the
26-54 crowded condition of the calendars in both houses create an
26-55 emergency and an imperative public necessity that the
26-56 constitutional rule requiring bills to be read on three several
26-57 days in each house be suspended, and this rule is hereby suspended.
26-58 * * * * *