By Gallegos S.B. No. 1542
76R5287 GCH-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to membership and credit in and benefits and
1-3 administration of public retirement systems for police officers in
1-4 certain municipalities.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Title 109, Revised Statutes, is amended by adding
1-7 Article 6243g-4 to read as follows:
1-8 Art. 6243g-4. POLICE OFFICERS PENSION SYSTEM IN CERTAIN
1-9 MUNICIPALITIES
1-10 Sec. 1. PURPOSE. The purpose of this article is to restate
1-11 and amend the provisions of former law governing a police officers
1-12 pension system in each city in this state having a population of
1-13 1.5 million or more, according to the most recent federal decennial
1-14 census, to permit the consolidation of the terms of certain pension
1-15 plans.
1-16 Sec. 2. DEFINITIONS. In this article:
1-17 (1) "Active member" means an employee who holds a
1-18 classified position in a police department of a city subject to
1-19 this article, except an employee who is a part-time, seasonal, or
1-20 temporary employee.
1-21 (2) "Average total direct pay" means a member's total
1-22 direct pay for the 26 weekly pay periods immediately preceding the
1-23 date of separation from service or the date of entry into DROP, if
1-24 earlier, divided by 12.
2-1 (3) "Base salary" means the monthly base pay provided
2-2 for the classified position in the police department held by the
2-3 member.
2-4 (4) "Board" means the board of trustees of the pension
2-5 system.
2-6 (5) "Code" means the federal Internal Revenue Code of
2-7 1986, or any successor, as amended.
2-8 (6) "Dependent" means a dependent child or a dependent
2-9 parent.
2-10 (7) "Dependent child" means a deceased member's
2-11 unmarried natural or adopted child who:
2-12 (A) has not attained age 18;
2-13 (B) has attained age 18 but not age 22 and is
2-14 attending school on a full-time basis; or
2-15 (C) has attained age 18 and is permanently
2-16 disabled as the result of a disability that began before the child
2-17 attained age 18.
2-18 (8) "Dependent parent" means a natural parent of a
2-19 deceased member or an adoptive parent who adopted the member before
2-20 the member attained age 18 and at least 50 percent of whose support
2-21 was received from the member during the one-year period preceding
2-22 the date of death of the member.
2-23 (9) "DROP" means the deferred retirement option plan
2-24 described by Section 14 of this article.
2-25 (10) "Employee" means an individual who holds a
2-26 classified position in the police department of a city subject to
2-27 this article.
3-1 (11) "Former member" means a person who was once an
3-2 active member, vested or not, but has terminated active member
3-3 status and received a refund of member contributions.
3-4 (12) "Fund" means the fund originally established by
3-5 Chapter 76, Acts of the 50th Legislature, Regular Session, 1947
3-6 (Article 6243g-1, Vernon's Texas Civil Statutes).
3-7 (13) "Inactive member" means a person who has
3-8 separated from service and has a vested right to a service pension
3-9 from the pension system but is not eligible for an immediate
3-10 service pension. The term does not include a former member.
3-11 (14) "Member" includes an active member, inactive
3-12 member, or retired member, as the context may require, but does not
3-13 include a former member.
3-14 (15) "Normal retirement date" means the date at which
3-15 a member is eligible for an immediate service pension under Section
3-16 12 of this article.
3-17 (16) "Pension" means a monthly payment for life from
3-18 the fund to a retired member.
3-19 (17) "Pension system" or "system" means the retirement
3-20 and disability plan for employees of any police department subject
3-21 to this article.
3-22 (18) "School" means any public or private school
3-23 through the 12th grade or any trade school, junior college,
3-24 college, or university beyond the 12th grade that is accredited by
3-25 a generally recognized accrediting authority.
3-26 (19) "Retired member" means a member who has separated
3-27 from service and who is eligible to receive an immediate service or
4-1 disability pension under this article.
4-2 (20) "Separation from service" means cessation of work
4-3 for the police department of a city subject to this article,
4-4 whether caused by death, discharge, resignation, or transfer to an
4-5 unclassified position.
4-6 (21) "Service" means the period of time a person is
4-7 employed in the police department of a city subject to this
4-8 article, except for any period of DROP participation, and includes
4-9 any period that the person is receiving a disability pension under
4-10 Section 15 of this article or is on a military leave of absence
4-11 described by Section 23 of this article, but only if the person
4-12 returns to active service after the period of disability or
4-13 military leave. The term does not include periods in which a
4-14 person is suspended from duty without pay, on leave of absence
4-15 without pay, or separated from service.
4-16 (22) "Surviving spouse" means a person who was married
4-17 to an active, inactive, or retired member at the time of the
4-18 member's death, and in the case of an inactive or retired member,
4-19 before the member's separation from service or for a period of at
4-20 least five years before the retired or inactive member's death.
4-21 (23) "Total direct pay" means wages as defined by
4-22 Section 3401(a) of the code, plus any amounts that are not included
4-23 in gross income by reason of Section 125, 402(g)(2), or 457 of the
4-24 code and member contributions picked up pursuant to Section
4-25 414(h)(2) of the code, less any pay received for overtime work.
4-26 The term does not include nontaxable payments not expressly
4-27 described by this subdivision.
5-1 Sec. 3. PENSION BOARD. (a) The board of trustees of the
5-2 pension system that was created under Chapter 76, Acts of the 50th
5-3 Legislature, Regular Session, 1947 (Article 6243g-1, Vernon's Texas
5-4 Civil Statutes), continues to be responsible for the general
5-5 administration, management, and operation of the pension system,
5-6 including the direction of investment and oversight of the fund's
5-7 assets.
5-8 (b) The board is composed of seven members as follows:
5-9 (1) the administrative head of the city or the
5-10 administrative head's authorized representative;
5-11 (2) three employees of the police department having
5-12 membership in the pension system and elected by the active members
5-13 of the police department;
5-14 (3) two retired members, elected by the inactive and
5-15 retired members of the pension system, who are receiving pensions
5-16 from the system and are not officers or employees of the city; and
5-17 (4) the treasurer of the city or the person
5-18 discharging the duties of the city treasurer.
5-19 (c) The terms of office of the board members elected as
5-20 described by Subsection (b)(2) of this section shall be three
5-21 years, with one board member being elected every year at an
5-22 election called by the board and held in December. If a vacancy
5-23 occurs among the three elected active board members, the board
5-24 shall hold an election within 60 days after the date the vacancy
5-25 occurred. At that election, the active members shall elect an
5-26 active member to serve for the remainder of the term of the vacant
5-27 position or for a full term if the term of the board member that
6-1 caused the vacancy would have ended in that year.
6-2 (d) The terms of office of the board members elected as
6-3 described by Subsection (b)(3) of this section shall be three
6-4 years. Beginning in 1999, and each third succeeding year, one
6-5 board member shall be elected at an election called by the board
6-6 and held in December. Beginning in 2000, and each third succeeding
6-7 year, a second board member shall be elected at an election called
6-8 by the board and held in December. If a vacancy occurs among the
6-9 two elected retired members of the board, the board shall hold an
6-10 election within 60 days after the date the vacancy occurred. At
6-11 that election, the inactive and retired members shall elect a
6-12 retired member to serve for the remainder of the term of the vacant
6-13 position or for a full term if the term of the board member that
6-14 caused the vacancy would have ended in that year. A board member
6-15 who is a retired member and who was appointed to the board before
6-16 January 1999 shall serve the remainder of the board member's term.
6-17 On expiration of the appointed term, the appointed board member is
6-18 eligible to run for the board position being elected by the retired
6-19 members as described in Subsection (b)(3) of this section in the
6-20 same manner as any other retired member.
6-21 (e) A board member vacates the member's seat on the board if
6-22 the member is removed under Section 7 of this article or ceases to
6-23 meet the qualifications for the seat.
6-24 (f) An officer or employee of any employee or retiree
6-25 organization or of the pension system is ineligible to become a
6-26 member of the board.
6-27 (g) Each board member shall, within 30 days after the date
7-1 of appointment or election, take an oath of office to diligently
7-2 and honestly administer the affairs of the pension system and not
7-3 knowingly violate, or willingly permit to be violated, this
7-4 article.
7-5 Sec. 4. BOARD MEMBER LEAVE AND COMPENSATION. (a) Elected
7-6 members of the board who are employees of the city's police
7-7 department are entitled to leave from their employer to attend to
7-8 the official business of the pension system.
7-9 (b) If the city employing an elected board member would
7-10 withhold any portion of the salary of the member who is attending
7-11 to official business of the pension system, the pension system may
7-12 elect to adequately compensate the city for the loss of service of
7-13 the member. If the board, by an affirmative vote of at least four
7-14 board members, makes this election, the amounts shall be remitted
7-15 from the fund to the city, and the city shall pay the board
7-16 member's salary as if no loss of service had occurred.
7-17 (c) The board, by an affirmative vote of at least four board
7-18 members, may elect to reimburse board members who are not employees
7-19 of the city for their time while attending to official business of
7-20 the pension system. The amount of any reimbursement may not exceed
7-21 $350 a month for each affected board member.
7-22 Sec. 5. OFFICERS; MEETINGS; EMPLOYEES. (a) The board
7-23 annually shall elect from its active and retired membership a
7-24 chairman. The board also annually shall elect from its membership
7-25 a vice chairman and a secretary.
7-26 (b) The board may hire one or more employees whose positions
7-27 and salaries shall be set by the board and who, acting under the
8-1 direction of the board, shall keep all of the records of and
8-2 perform all of the clerical services for the pension system.
8-3 (c) The board may employ professional investment managers
8-4 and advisors to manage, or advise the board regarding the
8-5 management and investment of, the fund. These professional
8-6 services may include investment counseling, evaluation of fund
8-7 performance, investment research, and other comparable services.
8-8 (d) The board may employ an actuary, legal counsel, an
8-9 accountant, or another professional and pay the compensation for
8-10 these services from the fund.
8-11 (e) The board shall hold regular monthly meetings at the
8-12 time and place it designates by resolution. The chairman,
8-13 secretary, or any four board members may call a special meeting of
8-14 the board.
8-15 (f) Each board member is entitled to one vote.
8-16 (g) Notice shall be given to all board members, unless
8-17 waived in writing, of any proposed meeting, by any method
8-18 reasonably calculated to provide adequate notice of the meeting.
8-19 The notice may be delivered by mail, in-hand personal delivery, or
8-20 facsimile or other electronically transmitted notice with
8-21 recordation of receipt by the receiving board member. If all board
8-22 members attend a meeting, however, failure to give notice as
8-23 required by this subsection is excused.
8-24 (h) The board shall keep accurate minutes of its meetings
8-25 and records of its proceedings.
8-26 Sec. 6. GENERAL POWERS AND DUTIES. (a) The board shall
8-27 retain control over all money collected or to be collected for the
9-1 pension system, shall keep separate from all other funds all money
9-2 for the use and benefit of the system, and shall keep a record of
9-3 all claims, receipts, and disbursements in one or more books
9-4 maintained for that purpose.
9-5 (b) The board shall establish the policies and procedures
9-6 for disbursements from the fund that it considers appropriate.
9-7 (c) The board may reimburse a board member, officer, or
9-8 employee of the board for liability imposed as damages because of
9-9 an alleged act, error, or omission committed in the individual's
9-10 capacity as a fiduciary or co-fiduciary of assets of the fund or as
9-11 an officer or employee of the board and for costs and expenses
9-12 incurred by a fiduciary or co-fiduciary officer or employee in
9-13 defense of a claim of an alleged act, error, or omission, or may
9-14 purchase from an insurer licensed to do business in this state one
9-15 or more policies of insurance that provide for the reimbursement.
9-16 However, no reimbursement may be provided and no policy of
9-17 insurance may be purchased under this subsection that would provide
9-18 for reimbursement of a board member, officer, or employee of the
9-19 board for liability imposed or expenses incurred because of the
9-20 individual's personal dishonesty, fraudulent breach of trust, lack
9-21 of good faith, intentional fraud or deception, or intentional
9-22 failure to act prudently. The cost of reimbursement or insurance
9-23 coverage purchased under this subsection shall be paid from money
9-24 in the fund.
9-25 (d) The board shall administer the pension system consistent
9-26 with the applicable provisions of the code.
9-27 (e) The board is vested with the power to adopt for the
10-1 administration of the pension system written rules and guidelines
10-2 consistent with this article, including rules or guidelines to
10-3 ensure that the pension system and the fund meet the qualification
10-4 requirements of the code and regulations and rulings issued under
10-5 the code and that are applicable to governmental plans.
10-6 (f) The board has full discretion and authority to
10-7 administer the pension system, to construe and interpret this
10-8 article, and to do all other acts necessary to carry out the
10-9 purpose of this article. All decisions of the board are final and
10-10 binding on all affected parties.
10-11 Sec. 7. REMOVAL OF BOARD MEMBER. (a) An elected board
10-12 member may be removed from the board either by a vote of the
10-13 membership of the pension system at a removal election initiated
10-14 and held as provided by this section or by a vote of five board
10-15 members together with a decision to remove the board member made by
10-16 a hearing examiner as provided by this section.
10-17 (b) An appointed member of the board may be removed from the
10-18 board by the administrative head of the city.
10-19 (c) To initiate an election for removal of an elected board
10-20 member, a petition for removal signed by at least one-third of the
10-21 members and retired members of the pension system must be filed
10-22 with the board not later than the 45th day after the date the first
10-23 signature on the petition is obtained. Each signature must be
10-24 legible and accompanied by the signer's home address and telephone
10-25 number, which address and telephone number may not be publicly
10-26 disclosed. A removal election must be held not later than the 30th
10-27 day after the date the board certifies that a petition for removal
11-1 satisfies the requirements for a petition under this subsection.
11-2 The results of a removal election are binding only if a majority of
11-3 the active and retired members participate in the election. A
11-4 board member's service on the board ends on the declaration by the
11-5 board that a majority of those voting in the removal election voted
11-6 in favor of removal.
11-7 (d) On the date the board makes a declaration under
11-8 Subsection (c) of this section, the board shall call a special
11-9 election to be held not earlier than the 20th or later than the
11-10 30th day after that date to fill the vacancy for the unexpired term
11-11 of the person who was removed. The person who was removed is not
11-12 eligible to run in the special election but is eligible to run in
11-13 all subsequent board elections.
11-14 (e) Except as otherwise provided by Subsections (a) and (b)
11-15 of this section, a board member may be removed only as provided by
11-16 this subsection and Subsections (f) and (g) of this section. After
11-17 an affirmative vote of the board to remove a board member under
11-18 Subsection (a) of this section, the board or its designee and the
11-19 board member whose removal is proposed shall attempt to agree on
11-20 the selection of an impartial hearing examiner. If the parties do
11-21 not agree on the selection of a hearing examiner not later than the
11-22 10th day after the date the board votes to remove the board member,
11-23 on the next workday the parties involved shall request a list of
11-24 seven qualified neutral arbitrators from the American Arbitration
11-25 Association of the Federal Mediation and Conciliation Service or
11-26 another arbitration organization with similarly stringent
11-27 standards. The board member whose removal is proposed and the
12-1 board or their designees may agree on one of the seven neutral
12-2 arbitrators on the list. If the parties fail to agree before the
12-3 26th day after the date the board first votes to remove the board
12-4 member, each party or the party's designee shall alternate striking
12-5 a name from the list, and the name remaining is the hearing
12-6 examiner. The board member whose removal is proposed or the board
12-7 member's designee is entitled to strike the first name. If the
12-8 25th day falls on a Saturday, Sunday, or a legal holiday, the
12-9 parties must strike names from the list on the next workday. The
12-10 parties or their designees must agree on a date for the hearing
12-11 that is within the period prescribed by Subsection (f) of this
12-12 section.
12-13 (f) The hearing must begin as soon as the hearing examiner
12-14 can be scheduled but not later than the 60th day after the date the
12-15 board votes to remove the board member. In a hearing conducted
12-16 under this subsection, the hearing examiner may issue subpoenas.
12-17 The parties may agree to an expedited hearing procedure. Unless
12-18 otherwise agreed by the parties, in an expedited procedure, the
12-19 hearing examiner must issue a decision not later than the 10th day
12-20 after the date the hearing ends. Unless operating under an
12-21 expedited hearing procedure, the hearing examiner shall make a
12-22 reasonable effort to issue a decision not later than the 30th day
12-23 after the date the hearing ends. The hearing examiner's inability
12-24 to meet the time requirements imposed by this subsection does not
12-25 affect the hearing examiner's jurisdiction or final decision. The
12-26 final decision of the hearing examiner may be either to remove the
12-27 board member or not to remove the board member from the board. A
13-1 decision may be made to remove the board member from the board only
13-2 if the hearing examiner determines that the board member violated
13-3 Subchapter A, Chapter 121, Property Code. The hearing examiner's
13-4 fees and expenses shall be paid by the pension system. The costs
13-5 of a witness shall be paid by the party who calls the witness.
13-6 (g) If the hearing examiner's decision is to remove a board
13-7 member, the person removed is entitled to an opportunity to have
13-8 the hearing examiner's decision reviewed. To have the decision
13-9 reviewed, not later than the 30th day after the date of a decision
13-10 under Subsection (f) of this section, the person removed must
13-11 obtain signatures of at least one-third of the active and retired
13-12 members of the pension system requesting an election to overrule
13-13 the removal decision under Subsection (f). If the 30th day is a
13-14 Saturday, Sunday, or legal holiday, the following workday is
13-15 considered the 30th day. Each signature must indicate the signing
13-16 date beside the signature, be legible, and be accompanied by the
13-17 signer's home address and telephone number, which address and
13-18 telephone number may not be publicly disclosed. The board shall
13-19 verify the list not later than the 10th day after the date the
13-20 board receives it. Not later than the 30th day after the date the
13-21 board has verified the signatures, the board shall hold an election
13-22 among the active and retired members. If a majority of the votes
13-23 cast at an election in which a majority of the active and retired
13-24 members of the pension system participate favor overruling the
13-25 hearing examiner's decision, the board member shall be reinstated.
13-26 If a majority do not vote to overrule the decision to remove a
13-27 board member, a replacement election must be held not later than
14-1 the 30th day after the date of the preceding election.
14-2 (h) During the period beginning on the date of the board
14-3 vote to remove a board member and ending on the date the board
14-4 member is reinstated under this section, the person's privileges as
14-5 a board member, including voting privileges, are suspended.
14-6 Sec. 8. CONTRIBUTIONS BY MEMBERS. (a) Each active member
14-7 of the pension system shall pay into the system each month 8-3/4
14-8 percent of the member's total direct pay. The payments shall be
14-9 deducted by the city from the salary of each active member monthly
14-10 and paid to the pension system. Except for the repayment of
14-11 withdrawn contributions under Section 17(f) or 18(c)(3) of this
14-12 article, a person may not be required or permitted to make any
14-13 payments into the pension system after the person separates from
14-14 service.
14-15 (b) This article does not increase or decrease the
14-16 contribution obligation of any member that arose before September
14-17 1, 1999, or give rise to any claim for refund for any contributions
14-18 made before that date.
14-19 Sec. 9. MONTHLY PAYMENT BY CITY. (a) For fiscal years
14-20 ending before June 30, 2002, the city shall make contributions to
14-21 the fund after each payroll period in an amount previously agreed
14-22 to by the city and the board. For the fiscal year ending June 30,
14-23 2002, the city's contribution rate shall be composed of the normal
14-24 cost plus the level percentage of salary payment required to
14-25 amortize the actuarial liability over a period of 40 years from
14-26 January 1, 1983, computed on the basis of an acceptable actuarial
14-27 reserve funding method approved by the board. For each fiscal year
15-1 ending after June 30, 2002, the city's contribution shall be the
15-2 sum of (1) an amount computed in the manner provided for the
15-3 contribution for the fiscal year ending June 30, 2002, plus (2)
15-4 $2,000,000 multiplied by the number of fiscal years that have ended
15-5 since June 30, 2002, but not more than 16 percent of the aggregate
15-6 total direct pay of all active members for the fiscal year. If the
15-7 amount described by (1) in the preceding sentence is greater than
15-8 16 percent of the aggregate total direct pay of all active members
15-9 for the year, the amount described by (1) shall be contributed.
15-10 (b) In addition to the contributions required by Subsection
15-11 (a) of this section, the city shall contribute to the fund each
15-12 month an amount equal to the aggregate payments the city, in the
15-13 absence of this subsection, would have paid during that month to
15-14 members who have separated from service for unused sick leave,
15-15 vacation pay, and accumulated overtime pay to which the members
15-16 were entitled at the time of separation from service if the members
15-17 had 10 years or more of service or would have had 10 years or more
15-18 of service after application of these amounts to provide additional
15-19 service as provided by Section 17 of this article. Members
15-20 described by this section may no longer receive these payments
15-21 directly.
15-22 (c) The governing body of a city to which this article
15-23 applies by ordinance or resolution may provide that the city pick
15-24 up active member contributions required by Section 8 of this
15-25 article so that the contributions of all active members of the
15-26 pension system qualify as picked up contributions under Section
15-27 414(h)(2) of the code. If the governing body of a city adopts an
16-1 ordinance or resolution under this section, the city, the board,
16-2 and any other necessary party shall implement the action as soon as
16-3 practicable. Contributions picked up as provided by this
16-4 subsection shall be included in the determination of an active
16-5 member's total direct pay, deposited to the individual account of
16-6 the active member on whose behalf they are made, and treated for
16-7 all purposes, other than federal tax purposes, in the same manner
16-8 and with like effect as if they had been deducted from the salary
16-9 of, and made by, the active member.
16-10 Sec. 10. INVESTMENT OF SURPLUS. (a) If the board
16-11 determines that a surplus of funds exists in an amount exceeding
16-12 the current demands upon the pension system, the board shall invest
16-13 the surplus funds in the manner provided for by Chapter 802,
16-14 Government Code.
16-15 (b) The board may select an investment manager or investment
16-16 advisor if the board determines the service is desirable.
16-17 Selection of managers or advisors must be made from firms that have
16-18 made presentations in person or in writing to the board.
16-19 (c) The board may terminate a contract with an investment
16-20 advisor at any time. The board may terminate a contract with an
16-21 investment manager on notice the board considers appropriate. A
16-22 contract may not require the pension system to pay a penalty for
16-23 early termination. The costs of investment management or advisory
16-24 services shall be paid from the fund.
16-25 Sec. 11. SERVICE CREDIT. (a) A member who returns to
16-26 service after an interruption in service is entitled to credit for
16-27 the previous service to the extent provided by Section 19 of this
17-1 article. In addition, a member who is retiring or entering DROP
17-2 shall receive one day of service for each day for which the city is
17-3 required to make contributions with respect to the member's unused
17-4 sick leave, vacation pay, or accumulated overtime under Section
17-5 9(b) of this article, except to the extent that the member elects
17-6 to have the amounts credited to the member's DROP account. Under
17-7 no circumstances may payments for the same days of unused sick
17-8 leave, vacation pay, or accumulated overtime be used to both
17-9 increase a member's service and credit the member's DROP account.
17-10 (b) Notwithstanding Subsection (a) of this section, if a
17-11 member has withdrawn the contributions made during any previous
17-12 period of service, the previous period of service may not be
17-13 counted in determining years of service unless the contributions
17-14 are repaid to the pension system in accordance with Section 17 of
17-15 this article.
17-16 (c) A member may not have any service credited for unused
17-17 sick leave, vacation pay, or accumulated overtime until the date
17-18 the member retires or enters DROP, at which time the member may
17-19 apply some or all of the service to satisfy the requirements for
17-20 retirement or DROP entry, although the member otherwise could not
17-21 meet the service requirement without the credit.
17-22 (d) The board shall determine the prior service to be
17-23 credited to each employee of the police department who becomes an
17-24 active member of the pension system. The board shall rely on the
17-25 personnel records of the city or the police department in
17-26 determining prior service credits.
17-27 Sec. 12. RETIREMENT; AMOUNT OF PENSION; ANNUAL ADJUSTMENTS.
18-1 (a) A member who separates from service after earning 20 or more
18-2 years of service is eligible to receive a monthly service pension,
18-3 beginning in the month of separation from service. A member who
18-4 separates from service with the city after November 23, 1998,
18-5 after earning 10 or more but less than 20 years of service in any
18-6 of the city's pension systems and who complies with all applicable
18-7 requirements of Section 19 of this article is eligible to receive a
18-8 monthly service pension, beginning in the month the individual
18-9 attains 60 years of age. An individual may not receive a pension
18-10 under this article while still an active member, except as provided
18-11 by Subsection (f) of this section. All service pensions end with
18-12 the month in which the retired member dies.
18-13 (b) Except as otherwise provided by this section, the
18-14 monthly service pension of a member who separates from service
18-15 after November 23, 1998, is equal to 2.5 percent of the member's
18-16 average total direct pay for each of the member's first 20 years of
18-17 service, plus an additional two percent of the member's average
18-18 total direct pay for each of the member's subsequent years of
18-19 service, computed to the nearest one-twelfth of a year. A member
18-20 who separates from service after November 23, 1998, including a
18-21 member who was a DROP participant, and begins to receive a monthly
18-22 service pension shall also receive a one-time lump-sum payment of
18-23 $5,000 at the same time the first monthly pension payment is made.
18-24 The lump-sum payment under this subsection is not available to a
18-25 member who has previously received a $5,000 payment under this
18-26 section or Section 16 of this article.
18-27 (c) The pension payable to each retired member of the
19-1 pension system shall be adjusted annually, effective April 1 of
19-2 each year, upward at a rate equal to two-thirds of any percentage
19-3 increase in the Consumer Price Index for All Urban Consumers for
19-4 the preceding year. The amount of the annual adjustment may not be
19-5 less than three percent or more than eight percent of the pension
19-6 being paid immediately before the adjustment, notwithstanding a
19-7 greater or lesser increase in the consumer price index.
19-8 (d) A retired member who receives a service pension under
19-9 this article is entitled to receive an additional amount each month
19-10 equal to $88.05, beginning on the date the retired member's pension
19-11 begins and continuing until the end of the month in which the
19-12 retired member dies. This amount is intended to defray the retired
19-13 member's group medical insurance costs and will be paid directly by
19-14 the fund to the retired member for the retired member's lifetime.
19-15 (e) At the end of each calendar year beginning after 1998,
19-16 and subject to the conditions provided by this subsection, the
19-17 pension system shall make a 13th benefit payment to each person who
19-18 is receiving a service pension. The amount of the 13th payment
19-19 shall be the same as the last monthly payment received by the
19-20 retiree or survivor before issuance of the payment, except the
19-21 payment received by any person who has been in pay status for less
19-22 than 12 months shall be for a prorated amount determined by
19-23 dividing the amount of the last payment received by 12 and
19-24 multiplying this amount by the number of months the person has been
19-25 in pay status. The 13th payment may be made only for those
19-26 calendar years in which:
19-27 (1) the assets held by the fund will equal or exceed
20-1 its liabilities after the 13th payment is made;
20-2 (2) the rate of return on the fund's assets exceeded
20-3 9.25 percent for the last fiscal year ending before the payment;
20-4 and
20-5 (3) the payment will not cause an increase in the
20-6 contribution the city would have been required to make if the 13th
20-7 payment had not been made.
20-8 (f) Notwithstanding anything to the contrary in this
20-9 article, an active or inactive member who is eligible to
20-10 participate in the executive official pension plan established by
20-11 Chapter 358, Acts of the 48th Legislature, Regular Session, 1943
20-12 (Article 6243g, Vernon's Texas Civil Statutes), or a successor
20-13 statute, may, while continuing employment with the police
20-14 department, participate in the executive official pension plan and
20-15 elect:
20-16 (1) if an active member:
20-17 (A) to begin receiving an immediate pension
20-18 benefit and be considered a retired member eligible for all rights
20-19 and privileges afforded any other retired member under this
20-20 article, if the member has 20 years or more of service and is
20-21 eligible for retirement under this section except for the
20-22 continuing employment; or
20-23 (B) to enter DROP if the member satisfies all
20-24 requirements of this article for DROP membership; or
20-25 (2) if an inactive member, to begin receiving an
20-26 immediate pension benefit equal to 2.5 percent of the member's
20-27 average total direct pay at the time the member became inactive for
21-1 the member's first 20 years of service and be entitled to all
21-2 rights and privileges afforded a retired member under this article.
21-3 (g) Notwithstanding anything to the contrary in this
21-4 article, service pensions that began before September 1, 1999,
21-5 shall continue to be paid in accordance with applicable prior law,
21-6 subject only to the adjustments that are specifically provided by
21-7 this section.
21-8 Sec. 13. RESUMPTION OF SERVICE AS DEPARTMENT HEAD AFTER
21-9 RETIREMENT. (a) The pension system shall suspend all pension
21-10 payments to a retired member who has separated from service and is
21-11 subsequently appointed as the department head of the police
21-12 department. The suspension of payments begins on the effective
21-13 date of the person's appointment.
21-14 (b) Pension benefits based on the person's previous period
21-15 of service do not accrue during the period of pension payment
21-16 suspension described by Subsection (a) of this section, but the
21-17 person again becomes an active member during this period, and
21-18 contributions of the city and the department head for the
21-19 subsequent service are payable during the period. The department
21-20 head retains credit for all previous service and acquires credit
21-21 for the subsequent service unless the department head is or becomes
21-22 a DROP participant.
21-23 (c) Once the department head again separates from service,
21-24 pension benefits under this article shall resume based on both
21-25 periods of service.
21-26 Sec. 14. DEFERRED RETIREMENT OPTION PLAN. (a) In this
21-27 section "DROP benefit" means the total amount credited to a
22-1 member's notional DROP account, payable as described by this
22-2 section, plus a monthly retirement pension.
22-3 (b) An active member who has at least 20 years of service
22-4 with the police department may file with the pension system an
22-5 irrevocable election to participate in DROP and receive a DROP
22-6 benefit instead of the standard form of pension provided by this
22-7 article. The election may be made, under procedures established by
22-8 the board, by an active member who has attained the required years
22-9 of service.
22-10 (c) The monthly service pension and death benefits of an
22-11 active member who becomes a DROP participant will be determined as
22-12 if the active member had separated from service and begun receiving
22-13 a pension on the effective date of the DROP election. The active
22-14 member does not retire but does not accrue additional service
22-15 credit beginning on the effective date of the election, and
22-16 increases in pay that occur on or after that date may not be used
22-17 in computing the active member's monthly service pension, but
22-18 cost-of-living adjustments that occur on or after that date and
22-19 that otherwise would be applicable to the pension will be made.
22-20 (d) The member's DROP benefit is determined as provided by
22-21 this subsection and Subsection (e) of this section. Each month an
22-22 amount equal to the monthly service pension the active member would
22-23 have been entitled to receive if the active member had separated
22-24 from service on the effective date of entry into DROP, less any
22-25 amount that is intended to help defray the active member's group
22-26 medical insurance costs as described by Section 12(d) of this
22-27 article, shall be credited to a notional DROP account for the
23-1 active member, and each month an amount equal to the monthly
23-2 contributions the active member makes to the fund on and after the
23-3 effective date of entry into DROP also shall be credited to the
23-4 same notional DROP account. In any year in which a 13th payment is
23-5 made to retired members under Section 12(e) of this article, an
23-6 amount equal to the amount of the 13th payment that would have been
23-7 made to the DROP participant if the DROP participant had retired on
23-8 the date of DROP entry will be credited to the DROP account. In
23-9 addition, any amount that is contributed by the city under Section
23-10 9(b) of this article with respect to the active member's unused
23-11 sick leave, vacation pay, or accumulated overtime, and that is not
23-12 required to be used to provide 10 or 20 years of service to the
23-13 member under Section 11 of this article or used to repay withdrawn
23-14 contributions under Section 18(c) of this article shall be credited
23-15 to the DROP account as of the end of the month in which it is
23-16 contributed.
23-17 (e) As of the end of each month an amount is credited to
23-18 each active member's notional DROP account at the rate of
23-19 one-twelfth of a hypothetical earnings rate on amounts in the
23-20 account. The hypothetical earnings rate is determined for each
23-21 calendar year based on the average of the aggregate annual rate of
23-22 return on investments of the pension system for the five
23-23 consecutive fiscal years ending June 30 preceding the calendar year
23-24 to which the earnings rate applies. The board may lower any future
23-25 rate below the rate otherwise prescribed by this subsection to the
23-26 extent necessary to ensure that the DROP does not adversely affect
23-27 the actuarial condition of the fund.
24-1 (f) If a DROP participant separates from service because of
24-2 disability or death, the member or the member's spouse or, if there
24-3 is no eligible spouse, any other person eligible to receive
24-4 benefits under Section 16 of this article, as applicable, may
24-5 either receive an amount equal to the member's DROP account or
24-6 revoke the member's DROP election and elect to receive benefits as
24-7 provided by this article without regard to this section. A
24-8 revocation and election under this subsection must be made at the
24-9 time and in the manner provided in a procedure that the board may
24-10 adopt from time to time. Alternatively, the retired member, a
24-11 deceased member's spouse, or, if there is no spouse, the person
24-12 entitled to receive benefits under Section 16 of this article may
24-13 elect to receive a distribution that is equal to the member's DROP
24-14 account and benefits as described by Subsection (c) of this
24-15 section.
24-16 (g) In lieu of receiving a lump sum DROP benefit on
24-17 separation from service, a retired member who has been a DROP
24-18 participant may leave the retired member's DROP account with the
24-19 pension system, in which case hypothetical earnings will continue
24-20 to be credited to the DROP account. The interest credited for any
24-21 month shall be at the applicable annual interest rate as defined by
24-22 Section 417(e)(3)(A)(ii)(II) of the code and published by the
24-23 Internal Revenue Service for June of the year preceding the
24-24 calendar year in which the interest is credited.
24-25 (h) Instead of beginning to receive a service pension on
24-26 separation from service in accordance with Section 12 of this
24-27 article, a retired member who is a DROP participant may elect to
25-1 have part or all of the amount that would otherwise be paid as a
25-2 monthly service pension, less any amount required to pay the
25-3 retired member's share of group medical insurance costs, credited
25-4 to a DROP account, in which case the additional amounts will become
25-5 eligible to be credited with hypothetical earnings in the same
25-6 manner as the amounts described by Subsection (g) of this section.
25-7 (i) A retired member who has not attained age 70-1/2,
25-8 whether or not a DROP participant before retirement, may elect to
25-9 have part or all of an amount equal to the monthly service pension
25-10 the retired member would otherwise be entitled to receive, less any
25-11 amount required to pay the retired member's share of group medical
25-12 insurance costs, credited to a DROP account, in which case the
25-13 amounts will become eligible to be credited with hypothetical
25-14 earnings in the same manner as the amounts described by Subsection
25-15 (g) of this section. A retired member who has elected to have
25-16 monthly service pension benefits credited to a DROP account under
25-17 this subsection or Subsection (h) of this section may direct that
25-18 the credits stop and the monthly service pension resume at any
25-19 time. However, a retired member who stops the credits at any time
25-20 after September 1, 1999, may not later resume the credits.
25-21 (j) A retired member who is a DROP participant may elect to
25-22 receive distribution of the DROP account in a one-time lump-sum
25-23 payment or in any other form of distribution that is approved by
25-24 the board and satisfies the requirements of Section 401(a)(9) of
25-25 the code. Distributions to a deceased member's survivors, as
25-26 described by Subsection (f) of this section, shall be made in a
25-27 lump sum as soon as administratively feasible after the deceased
26-1 member's death.
26-2 (k) If a retired member who is or was a DROP participant is
26-3 rehired as an employee of the police department, any pension or
26-4 DROP distribution that was being paid shall be suspended and the
26-5 monthly amount described by Subsection (d) of this section will
26-6 again begin to be credited to the DROP account while the member
26-7 continues to be an employee. If the member's DROP account has been
26-8 completely distributed, a new notional account will be created to
26-9 receive the member's monthly credits. If a retired member who was
26-10 never a DROP participant is rehired as an employee of the police
26-11 department, that member shall be eligible to elect participation in
26-12 DROP on the same basis as any other member.
26-13 (l) If DROP causes any unanticipated costs, the board may
26-14 take action as necessary to mitigate the unanticipated cost,
26-15 including discontinuing acceptance of additional elections to
26-16 participate in the DROP, but the pension system shall continue to
26-17 administer DROP for the members participating before the date of
26-18 discontinuance of enrollment.
26-19 Sec. 15. DISABILITY BENEFITS. (a) An active member who
26-20 becomes totally and permanently incapacitated for the performance
26-21 of the member's duties as a result of a bodily injury received in,
26-22 or illness caused by, the performance of those duties shall, on
26-23 presentation to the board of proof of total and permanent
26-24 incapacity, be retired and shall receive an immediate
26-25 duty-connected disability pension equal to the greater of 50
26-26 percent of the member's average total direct pay at the time of
26-27 retirement or the member's accrued service pension. If the injury
27-1 or illness involves a traumatic event that directly causes an
27-2 immediate cardiovascular condition resulting in partial or total
27-3 disability, the member is eligible for a partial or total
27-4 duty-connected disability pension. A disability pension granted by
27-5 the board shall be paid to the member for the remainder of the
27-6 member's life or for as long as the incapacity remains.
27-7 (b) A member with 10 years or more of credited service who
27-8 becomes totally and permanently incapacitated for the performance
27-9 of the member's duties and is not eligible for either an immediate
27-10 service pension or a duty-connected disability pension is eligible
27-11 for an immediate monthly pension computed in the same manner as a
27-12 service retirement pension but based on average total direct pay
27-13 and service accrued to the date of the disability.
27-14 (c) A member who becomes entitled to receive a disability
27-15 pension after November 23, 1998, is entitled to receive a one-time
27-16 lump sum payment of $5,000 at the same time the first monthly
27-17 disability pension payment is made, but only if the member has not
27-18 previously received a $5,000 payment under this section or Section
27-19 12 of this article. The person shall also receive an additional
27-20 amount each month equal to $88.05, beginning on the date the
27-21 pension begins and continuing as long as the disability pension
27-22 continues, to help defray the cost of group medical insurance. A
27-23 retired member whose disability pension continues and was in pay
27-24 status on November 23, 1998, is entitled to receive a one-time
27-25 lump-sum payment of $5,000 as soon as administratively feasible
27-26 after November 23, 1998. This payment has no effect on the amount
27-27 of the retired member's monthly pension. For any year in which a
28-1 13th payment is made to retired members under Section 12(e) of this
28-2 article, a 13th payment, computed in the same manner, shall also be
28-3 paid to members who have retired under this section.
28-4 (d) A person may not receive a disability pension unless the
28-5 person files with the board an application for a disability pension
28-6 not later than 180 days after the date of separation from service,
28-7 at which time the board shall have the person examined by a
28-8 physician chosen and compensated by the board. The physician shall
28-9 make a report and recommendations to the board regarding the extent
28-10 of any disability and whether any disability that is diagnosed is a
28-11 duty-connected disability. A person may not receive a disability
28-12 pension for an injury received or illness incurred after separation
28-13 from service.
28-14 (e) A retired member who has been retired for disability is
28-15 subject at all times to reexamination by a physician chosen and
28-16 compensated by the board and shall submit to further examination as
28-17 the board may require. If a retired member refuses to submit to an
28-18 examination, the board may order the payments stopped. If a
28-19 retired member who has been receiving a disability pension under
28-20 this section recovers so that in the opinion of the board the
28-21 retired member is able to perform the usual and customary duties
28-22 formerly performed for the police department, and the retired
28-23 member is reinstated or offered reinstatement to the position, or
28-24 to a position reasonably comparable in rank and responsibility to
28-25 the position, held at the time of separation from service, the
28-26 board shall order the member's disability pension stopped.
28-27 (f) The board shall require any person who first becomes an
29-1 active member of the pension system on or after September 1, 1999,
29-2 and subsequently begins to receive a disability pension to provide
29-3 the board annually, on or before May 1 of the second year after the
29-4 year the disability pension begins, a true and complete copy of
29-5 those portions of the retired member's federal or, if applicable,
29-6 state tax return, including appropriate schedules, for the previous
29-7 calendar year that indicate the retired member's occupations and
29-8 earned income for the previous calendar year. The pension system
29-9 may waive the requirement for filing a copy of the tax return or
29-10 delay the due date until later in the same calendar year if the
29-11 retired member provides the board with a true and complete copy of
29-12 a grant of an extension of time for filing the tax return from the
29-13 appropriate governmental agency or a true and complete copy of an
29-14 extension request that results in any automatic extension. If the
29-15 retired member is or has been receiving earned income from one or
29-16 more employments, including self-employment, during the preceding
29-17 year, the board shall reduce future disability pension payments in
29-18 accordance with the following formula: $1 for each $1 that the sum
29-19 of "a" + "b" is greater than "c," where "a" is the earned income of
29-20 the retired member attributable to the previous calendar year from
29-21 the retired member's employments, "b" is the amount of disability
29-22 pension received in the previous calendar year, and "c" is the
29-23 total direct pay received as of the date the member separated from
29-24 service. For purposes of this computation, the total direct pay in
29-25 "c" is considered increased at the rate prescribed by Section 12(c)
29-26 of this article, as of each April 1 that the retired member
29-27 receives the disability pension.
30-1 (g) For purposes of this section, a member is totally and
30-2 permanently incapacitated from performing duties if the member is
30-3 prevented by a physical or mental injury or illness from performing
30-4 duties in the police department after any reasonable accommodation
30-5 offered by the police department and this condition is expected to
30-6 be permanent.
30-7 Sec. 16. RIGHTS OF SURVIVORS. (a) For purposes of this
30-8 article a marriage is considered to exist only if the marriage is
30-9 recorded in the records of the recorder's office in the county in
30-10 which the marriage ceremony was performed or, in the case of a
30-11 declaration of common-law marriage, if the declaration is signed by
30-12 the member and the member's common-law spouse before a notary
30-13 public and filed with the board. In addition, a marriage that is
30-14 evidenced by a declaration of common-law marriage signed before a
30-15 notary public after December 31, 1999, may not be treated as
30-16 effective earlier than the date on which it was signed before the
30-17 notary public.
30-18 (b) If a retired member dies after becoming entitled to a
30-19 service or disability pension, the board shall pay an immediate
30-20 monthly benefit as follows:
30-21 (1) to the surviving spouse, if there is a surviving
30-22 spouse, a sum equal to the pension that was being received by the
30-23 retired member at the time of death;
30-24 (2) to the guardian of any dependent children, on
30-25 behalf of the dependent children, if there is no spouse entitled to
30-26 an allowance, the sum a surviving spouse would have received, to be
30-27 divided equally among the dependent children if there is more than
31-1 one dependent child; or
31-2 (3) to any dependent parents if no spouse or dependent
31-3 child is entitled to an allowance, the sum the spouse would have
31-4 received, to be divided equally between the two parents if there
31-5 are two dependent parents.
31-6 (c) If a member of the pension system who has not completed
31-7 10 years of service in the police department is killed or dies from
31-8 any cause growing out of or in consequence of any act clearly not
31-9 in the actual performance of the member's official duty, the
31-10 member's surviving spouse, dependent child or children, or
31-11 dependent parent or parents are entitled only to a refund of the
31-12 member's contributions to the pension system.
31-13 (d) If any active member who has completed 10 or more years
31-14 of service in the police department is killed or dies from any
31-15 cause growing out of or in consequence of any act clearly not in
31-16 the actual performance of the member's official duty, the member's
31-17 surviving spouse, dependent child or children, or dependent parent
31-18 or parents are entitled to receive an immediate benefit, computed
31-19 in accordance with Subsection (b) of this section but based on the
31-20 deceased member's service and average total direct pay at the time
31-21 of death. If any inactive member dies from any cause after
31-22 completing 10 or more years of service in the police department,
31-23 the member's surviving spouse, dependent child or children, or
31-24 dependent parent or parents are entitled to receive benefits
31-25 computed as provided in the preceding sentence and beginning at the
31-26 time the member would have attained age 60 if the member had lived.
31-27 (e) If any active member is killed or dies from any cause
32-1 growing out of or in consequence of the performance of the member's
32-2 duty, the member's surviving spouse, dependent child or children,
32-3 or dependent parent or parents are entitled to receive immediate
32-4 benefits computed in accordance with Subsection (b) of this
32-5 section, except that the benefit payable to the spouse, or to the
32-6 guardian of the dependent child or children if there is no
32-7 surviving spouse, or the dependent parent or parents if there is no
32-8 surviving spouse or dependent child, is equal to 100 percent of the
32-9 member's average total direct pay, computed as of the date of
32-10 death.
32-11 (f) A surviving spouse who receives a survivor's benefit
32-12 under this article is entitled to receive an additional amount each
32-13 month equal to $88.05, beginning with the first payment of the
32-14 survivor's benefit and continuing until the end of the month in
32-15 which the surviving spouse dies.
32-16 (g) A surviving spouse or dependent who was in pay status on
32-17 November 23, 1998, is entitled to receive a one-time lump-sum
32-18 payment of $5,000 as soon as administratively feasible after
32-19 November 23, 1998. The surviving spouse or dependent who becomes
32-20 eligible to receive benefits with respect to an active member who
32-21 dies in active service after November 23, 1998, is entitled to
32-22 receive a one-time lump-sum payment of $5,000 at the time the first
32-23 monthly pension benefit is paid, if the member has not already
32-24 received a $5,000 lump-sum payment under Section 12 or 15(c) of
32-25 this article. If more than one dependent is eligible to receive a
32-26 payment under this subsection, the $5,000 shall be divided equally
32-27 among the eligible dependents. This payment has no effect on the
33-1 amount of the surviving spouse's or dependents' monthly pension,
33-2 and may not be paid more than once.
33-3 (h) The monthly benefits of surviving spouses or dependents
33-4 provided under this section, except the $88.05 monthly payments
33-5 described by Subsection (f) of this section, shall be increased
33-6 annually at the same time and by the same percentage as the
33-7 pensions of retired members are increased in accordance with
33-8 Section 12(c) of this article. Also, for any year in which a 13th
33-9 payment is made pursuant to Section 12(e) of this article, a 13th
33-10 payment, computed in the same manner, shall also be made to
33-11 survivors who are entitled to receive death benefits at that time.
33-12 (i) If a member or individual receiving a survivor's pension
33-13 dies before monthly payments have been made for at least five
33-14 years, leaving no person otherwise entitled to receive further
33-15 monthly payments with respect to the member, the monthly payments
33-16 shall continue to be made to the designated beneficiary of the
33-17 member or survivor, or to the estate of the member or survivor if a
33-18 beneficiary was not designated, in the same amount as the last
33-19 monthly payment made to the member, survivor, or estate, until
33-20 payments have been made for five years with respect to the member.
33-21 If the member dies after becoming vested but before payments begin,
33-22 leaving no survivors eligible for benefits, the amount of each
33-23 monthly payment over the five-year period shall be the same as the
33-24 monthly payment the member would have received if the member had
33-25 taken disability retirement on the date of death. A member may
33-26 designate a beneficiary in lieu of the member's estate to receive
33-27 the remaining payments in the event the member and all survivors
34-1 die before payments have been received for five years. The
34-2 member's estate or a beneficiary who is not a survivor or dependent
34-3 is not entitled to receive the payment described by Subsection (g)
34-4 of this section.
34-5 Sec. 17. TERMINATION OF EMPLOYMENT; REFUNDS; REEMPLOYMENT.
34-6 (a) When any active member of the pension system separates from
34-7 service, either voluntarily or involuntarily, before becoming
34-8 eligible for an immediate service retirement or disability pension,
34-9 the member ceases to be an active member of the pension system.
34-10 (b) A member of the pension system who has not completed 20
34-11 years of service at the time of separation from service with the
34-12 police department is entitled to a refund of the total of the
34-13 contributions the member made to the pension system, plus any
34-14 amount that was contributed for the member by the city and not
34-15 applied in accordance with this section to provide the member with
34-16 10 years of service. The refund does not include interest, and
34-17 neither the city nor the member is entitled to a refund of the
34-18 contributions the city made on the member's behalf, except as
34-19 expressly provided by this subsection. By receiving the refund,
34-20 the member forfeits any service earned before separation from
34-21 service, even if it is otherwise nonforfeitable.
34-22 (c) The board shall notify each member of the pension system
34-23 of the right to a refund as authorized by this section.
34-24 (d) A member must apply to the board for a refund within one
34-25 year after the date of separation from service. Failure to apply
34-26 for the refund within the one-year period results in a forfeiture
34-27 of the right to the refund except for an inactive member whose
35-1 right to a pension is nonforfeitable. However, the board may
35-2 reinstate any amount forfeited and allow the refund on application
35-3 by the former member.
35-4 (e) Heirs, executors, administrators, personal
35-5 representatives, or assignees are not entitled to apply for and
35-6 receive the refund authorized by this section except as provided by
35-7 Section 16(c) of this article.
35-8 (f) If a person who separates from service and receives a
35-9 refund is subsequently reemployed as an employee of the police
35-10 department, the person shall be reinstated as an active member of
35-11 the pension system. Prior service of the active member with the
35-12 police department may not be counted toward a retirement pension
35-13 unless the member pays to the pension system, not later than the
35-14 90th day after the date of a subsequent separation from service, an
35-15 amount equal to any contributions previously refunded to the member
35-16 under this section. Except as provided by Section 18 of this
35-17 article, a person is not eligible to repay any withdrawn
35-18 contributions unless the person is reemployed by the police
35-19 department of the city for which the prior service was performed.
35-20 (g) A member who is contesting an indefinite suspension
35-21 action may, on application to the board, receive a return of the
35-22 member's contributions and be separated from service on receipt of
35-23 the contributions; otherwise, a suspended member is considered to
35-24 have a separation from service when a final decision of the
35-25 arbitrator adverse to the member is rendered.
35-26 Sec. 18. EMPLOYMENT BY ANOTHER DEPARTMENT. (a) Except as
35-27 provided by this section, credit may not be allowed to any person
36-1 for service with any department in the city other than the police
36-2 department. Except as provided by this section, if a person is
36-3 transferred to or from some other department of the city to or from
36-4 the police department, the person's service will be computed from
36-5 the date of entry into the service of the police department until
36-6 the date of separation from service with the police department.
36-7 (b) Solely for purposes of determining whether a person has
36-8 a sufficient number of years of service to receive a retirement
36-9 pension, and not for purposes of determining the amount of the
36-10 pension or DROP credit, a person who is employed in any full-time
36-11 position with the city after November 23, 1998, and has or obtains
36-12 any credited service with the pension system after that date, shall
36-13 receive service credit for any period of full-time employment with
36-14 the same city. However, a person may not receive credit for
36-15 service with both the police department and any other department of
36-16 the city for the same period.
36-17 (c) Notwithstanding Section 17 of this article and
36-18 Subsection (b) of this section, a former member of the pension
36-19 system shall be permitted to repay withdrawn contributions and
36-20 restore service credit previously earned with the pension system,
36-21 even if the former member is not reemployed by the police
36-22 department, if the former member:
36-23 (1) is employed by the same city in which the service
36-24 credit for employment with the police department was earned;
36-25 (2) is a participant in another pension plan
36-26 maintained by the city; and
36-27 (3) repays to the pension system the withdrawn
37-1 contributions not later than the 90th day after the date of
37-2 separation from active employment with the city.
37-3 Sec. 19. PERSONS REJOINING OR TRANSFERRED BY CITY; SERVICE
37-4 CREDIT; DOUBLE BENEFITS; RETURN TO SERVICE. (a) An employee of
37-5 the city who has retired under this article or under former law
37-6 governing the pension system and is or has been transferred by
37-7 action of the city to a classified position in a police department
37-8 included in the pension system again becomes an active member of
37-9 the pension system as of the effective date of the transfer.
37-10 (b) A person who rejoins the pension system under this
37-11 section is entitled to receive service credit for each day of
37-12 service and work performed by the person in a classified position
37-13 in the police department, except for any period during which the
37-14 person is a DROP participant. The board shall add service earned
37-15 after the transfer to the prior service the active member accrued
37-16 in a classified position in the police department. However, the
37-17 active member may not receive service credit under this article,
37-18 except to the extent provided by Section 18, for service performed
37-19 for the city other than in a classified position in the police
37-20 department.
37-21 (c) After a transfer described by this section,
37-22 contributions of the city and the active member become payable as
37-23 for other active members of the pension system.
37-24 (d) When a member who has transferred as described by this
37-25 section subsequently retires, the retired member is entitled to a
37-26 pension computed on the basis of the combined service described by
37-27 Subsection (b) of this section, after deducting any period in which
38-1 the member was suspended from duty without pay, on leave of absence
38-2 without pay, separated from service, or employed by the city in a
38-3 capacity other than in a classified position in the police
38-4 department.
38-5 (e) If a retired member receives both pension benefits from
38-6 the pension system and a salary from a classified position in the
38-7 police department that cover the same period, the retired member
38-8 shall repay to the pension system the pension benefits received
38-9 during that period. The board shall withhold payment of pension
38-10 benefits under this article if it is determined that a retired
38-11 member is receiving both pension benefits from the fund and a
38-12 salary from the police department that cover the same period. On
38-13 request of the board, the city attorney or a private attorney
38-14 chosen by the board shall file suit in a court of competent
38-15 jurisdiction to recover pension benefits owed to the pension system
38-16 under this subsection.
38-17 (f) This article does not authorize the return to service
38-18 with a police department or the resumption of active membership in
38-19 the pension system by a retired member except as specifically
38-20 provided by Section 13 or 14 of this article or this section.
38-21 Sec. 20. DONATIONS. The pension system may accept gifts and
38-22 donations, and the gifts and donations shall be added to the fund
38-23 for the use of the pension system.
38-24 Sec. 21. DETERMINATION OF BENEFITS; PROVISION OF
38-25 INFORMATION. The board may require any member, survivor, or other
38-26 person or entity to furnish information the board requires for the
38-27 determination of benefits under this article. If a person or
39-1 entity does not cooperate in the furnishing or obtaining of
39-2 information required as provided by this section, the board may
39-3 withhold payment of the pension or other benefits dependent on the
39-4 information.
39-5 Sec. 22. LEGAL ADVICE. The city attorney of the city shall
39-6 handle all legal matters for the pension system that are referred
39-7 by the board without additional compensation for the service. The
39-8 board may, however, as it considers necessary, employ outside legal
39-9 counsel to the exclusion of, or to assist, the city attorney and
39-10 pay reasonable compensation for the service from the fund.
39-11 Sec. 23. MEMBERS IN MILITARY SERVICE. (a) A member of the
39-12 pension system engaged in active service in a uniformed service may
39-13 not be required to make the monthly payments into the fund and may
39-14 not lose any previous years' service with the city because of the
39-15 uniformed service. The uniformed service shall count as continuous
39-16 service in the police department if the member returns to the city
39-17 police department after discharge from the uniformed service as an
39-18 employee within the period required by the Uniformed Services
39-19 Employment and Reemployment Rights Act of 1994 (38 U.S.C. Section
39-20 4301 et seq.), as amended, and the uniformed service does not
39-21 exceed the period for which a person is entitled to have service
39-22 counted pursuant to that Act.
39-23 (b) The city is required to make its regular monthly
39-24 payments into the fund on behalf of each member while the member is
39-25 engaged in a uniformed service. If a member who has less than 10
39-26 years of service in the pension system dies directly or indirectly
39-27 as a result of the uniformed service, the spouse, dependent
40-1 children, dependent parent, or estate of the member is entitled to
40-2 receive a refund in the same manner as described by Section 16(c)
40-3 of this article.
40-4 Sec. 24. ACTIONS FOR FUNDS MISAPPLIED. (a) The board may
40-5 recover by civil action from any offending party or from the
40-6 party's bondsman, if any, any money paid out or obtained from the
40-7 fund through fraud, misrepresentation, theft, embezzlement, or
40-8 misapplication and may institute, conduct, and maintain the action
40-9 in the name of the board for the use and benefit of the fund.
40-10 (b) Payments due on behalf of a dependent child shall be
40-11 paid to the dependent child's guardian, if any, or if none to the
40-12 person with whom the dependent child is living, except that the
40-13 board may make payments directly to a dependent child in an
40-14 appropriate case and withhold payments otherwise due on behalf of
40-15 any person if the board has reason to believe the payments are not
40-16 being applied on behalf of the person entitled to receive them.
40-17 The board may request a court of competent jurisdiction to appoint
40-18 a person to receive and administer the payments due to any
40-19 dependent child or person under a disability.
40-20 Sec. 25. FEDERAL TAX QUALIFICATION OF FUND. (a) The fund
40-21 described by this article is intended to qualify under Section
40-22 401(a) of the code and is for the exclusive benefit of the members
40-23 and their survivors. No part of the corpus or income of the fund
40-24 may ever be used for, or diverted to, any purpose other than the
40-25 benefit of members and their survivors as provided by this article.
40-26 (b) A member or survivor of a member of the pension system
40-27 may not accrue a retirement pension, disability retirement
41-1 allowance, death benefit allowance, DROP benefit, or any other
41-2 benefit under this article in excess of the benefit limits
41-3 applicable to the fund under Section 415 of the code. The board
41-4 shall reduce the amount of any benefit that exceeds those limits by
41-5 the amount of the excess. If total benefits under this fund and
41-6 the benefits and contributions to which any member is entitled
41-7 under any other qualified plans maintained by the city that employs
41-8 the member would otherwise exceed the applicable limits under
41-9 Section 415 of the code, the benefits the member would otherwise
41-10 receive from the fund shall be reduced to the extent necessary to
41-11 enable the benefits to comply with Section 415.
41-12 (c) Any member or survivor who receives any distribution
41-13 that is an eligible rollover distribution as defined by Section
41-14 402(c)(4) of the code is entitled to have that distribution
41-15 transferred directly to another eligible retirement plan of the
41-16 member's or survivor's choice on providing direction to the pension
41-17 system regarding that transfer in accordance with procedures
41-18 established by the board.
41-19 (d) The total salary taken into account for any purpose for
41-20 any member of the pension system may not exceed $200,000 for any
41-21 year for an eligible participant, or $150,000 a year for an
41-22 ineligible participant. These dollar limits shall be adjusted from
41-23 time to time in accordance with guidelines provided by the United
41-24 States Secretary of the Treasury. For purposes of this subsection,
41-25 an eligible participant is a person who first became an active
41-26 member before 1996, and an ineligible participant is a member who
41-27 is not an eligible participant.
42-1 (e) Accrued benefits under this article become 100 percent
42-2 nonforfeitable for a member on the date the member has completed 10
42-3 years of service. If the pension system or the fund is terminated
42-4 or partially terminated, or city contributions to the fund are
42-5 discontinued completely, there may not be a reversion of funds to
42-6 the employer. On complete or partial termination or discontinuance
42-7 of city contributions, the fund held by the pension system shall be
42-8 used exclusively for benefits for members and their surviving
42-9 spouses and dependents, and the affected employees' rights to the
42-10 benefits, to the extent funded, shall be nonforfeitable if not
42-11 already nonforfeitable under this subsection.
42-12 (f) Amounts representing forfeited nonvested benefits of
42-13 terminated members may not be used to increase benefits payable
42-14 from the fund.
42-15 (g) Distribution of benefits must begin not later than April
42-16 1 of the year following the calendar year during which the member
42-17 entitled to the benefits becomes 70-1/2 years of age or terminates
42-18 employment with the employer, whichever is later, and must
42-19 otherwise conform to Section 401(a)(9) of the code.
42-20 (h) If the amount of any benefit is to be determined on the
42-21 basis of actuarial assumptions that are not otherwise specifically
42-22 set forth for that purpose in this article, the actuarial
42-23 assumptions to be used are those earnings and mortality assumptions
42-24 being used on the date of the determination by the pension system's
42-25 actuary and approved by the board. The actuarial assumptions being
42-26 used at any particular time shall be attached as an addendum to a
42-27 copy of this article and treated for all purposes as a part of this
43-1 article. The actuarial assumptions may be changed by the pension
43-2 system's actuary at any time if approved by the board, but a change
43-3 in actuarial assumptions may not result in any decrease in benefits
43-4 accrued as of the effective date of the change.
43-5 (i) To the extent permitted by law, the board may adjust the
43-6 benefits of retired members and survivors by increasing any benefit
43-7 that was reduced because of Section 415 of the code. If Section
43-8 415 of the code is amended to permit the payment of amounts
43-9 previously precluded under that section, the board may adjust the
43-10 benefits of retired members or their surviving spouses or
43-11 dependents, including the restoration of benefits previously
43-12 denied. Benefits paid under this subsection are not considered as
43-13 extra base salary earned after retirement but as the delayed
43-14 payment of benefits earned before retirement.
43-15 (j) The board may make any change in this article to the
43-16 extent that the change is necessary to assure compliance with the
43-17 qualification requirements of Section 401 of the code or any other
43-18 federal law.
43-19 Sec. 26. EXCESS BENEFIT PLAN. (a) A separate,
43-20 nonqualified, unfunded excess benefit plan is created outside the
43-21 fund.
43-22 (b) In this section:
43-23 (1) "Excess benefit plan" or "plan" means the
43-24 separate, nonqualified, unfunded excess benefit plan created by
43-25 this section for the benefit of eligible members, as amended or
43-26 restated from time to time, that is intended to be a "qualified
43-27 governmental excess benefit arrangement" within the meaning of
44-1 Section 415(m) of the code.
44-2 (2) "Qualified plan" means the pension system and any
44-3 other plan maintained by the city for the exclusive benefit of some
44-4 or all of the members of the pension system that has been found by
44-5 the Internal Revenue Service to be qualified or has been treated by
44-6 the city as a qualified plan under Section 401 of the code.
44-7 (3) "Maximum benefit" means the retirement benefit a
44-8 retired member and the spouse, dependent child, or dependent parent
44-9 of a retired member or deceased member or retiree are entitled to
44-10 receive from all qualified plans in any month after giving effect
44-11 to Section 25(b) of this article and any similar provisions of any
44-12 other qualified plans designed to conform to Section 415 of the
44-13 code.
44-14 (4) "Excess benefit participant" means any retired
44-15 member whose retirement benefits as determined on the basis of all
44-16 qualified plans without regard to the limitations of Section 25(b)
44-17 of this article and comparable provisions of other qualified plans
44-18 would exceed the maximum benefit permitted under Section 415 of the
44-19 code.
44-20 (5) "Unrestricted benefit" means the monthly
44-21 retirement benefit a retired member and the spouse, dependent
44-22 child, or dependent parent of a retired member or deceased member
44-23 would have received under the terms of all qualified plans except
44-24 for the restrictions of Section 25(b) of this article and any
44-25 similar provisions of any other qualified plans designed to conform
44-26 to Section 415 of the code.
44-27 (c) An excess benefit participant who is receiving benefits
45-1 from the pension system is entitled to a monthly benefit under this
45-2 excess benefit plan in an amount equal to the lesser of:
45-3 (1) the member's unrestricted benefit less the maximum
45-4 benefit; or
45-5 (2) the amount by which the member's monthly benefit
45-6 from the fund has been reduced because of the limitations of
45-7 Section 415 of the code.
45-8 (d) If a spouse, dependent child, or dependent parent is
45-9 entitled to preretirement or postretirement death benefits under a
45-10 qualified plan after the death of an excess benefit participant,
45-11 the surviving spouse, dependent child, or dependent parent is
45-12 entitled to a monthly benefit under the excess benefit plan equal
45-13 to the benefit determined in accordance with this article without
45-14 regard to the limitations under Section 25(b) of this article or
45-15 Section 415 of the code, less the maximum benefit.
45-16 (e) Any benefit to which a person is entitled under this
45-17 section shall be paid at the same time and in the same manner as
45-18 the benefit would have been paid from the pension system if payment
45-19 of the benefit from the pension system had not been precluded by
45-20 Section 25(b) of this article. An excess benefit participant or
45-21 any beneficiary may not, under any circumstances, elect to defer
45-22 the receipt of all or any part of a payment due under this section.
45-23 (f) The board shall administer the plan, and the board's
45-24 designee shall also carry out the business of the board with
45-25 respect to the plan. Except as otherwise provided by this section,
45-26 the rights, duties, and responsibilities of the board and the
45-27 board's designee are the same for the plan as for the funds of the
46-1 pension system.
46-2 (g) The consultants, independent auditors, attorneys, and
46-3 actuaries selected to perform services for the fund also shall
46-4 perform services for the plan, but the fees for their services may
46-5 not be paid by the fund. The actuary engaged to perform services
46-6 for the fund shall advise the board of the amount of benefits that
46-7 may not be provided from the fund solely by reason of the
46-8 limitations of Section 415 of the code and the amount of employer
46-9 contributions that will be made to the plan rather than to the
46-10 fund.
46-11 (h) Contributions may not be accumulated under the plan to
46-12 pay future retirement benefits. Instead, each payment of city
46-13 contributions that would otherwise be made to the fund under
46-14 Section 9 of this article shall be reduced by the amount determined
46-15 by the board or its designee as necessary to meet the requirements
46-16 for retirement benefits under the plan, including reasonable
46-17 administrative expenses, until the next payment of city
46-18 contributions is expected to be made to the pension system. The
46-19 city shall then pay to the plan, from the withheld contributions,
46-20 not earlier than the 30th day before the date each distribution of
46-21 monthly retirement benefits is required to be made from the plan,
46-22 the amount necessary to satisfy the obligation to pay monthly
46-23 retirement benefits from the plan. The board or its designee shall
46-24 satisfy the obligation of the plan to pay retirement benefits from
46-25 the employer contributions so transferred for that month.
46-26 (i) Employer contributions otherwise required to be made to
46-27 the pension system under Section 9 of this article and any other
47-1 qualified plan shall be divided into those contributions required
47-2 to pay retirement benefits under this section and those
47-3 contributions paid into and accumulated to pay the maximum benefits
47-4 permitted under the qualified plan. Employer contributions made to
47-5 provide retirement benefits under this section may not be
47-6 commingled with the money of the fund forming part of the pension
47-7 system or any other qualified plan.
47-8 Sec. 27. AGREEMENT TO CHANGE BENEFITS. (a) Notwithstanding
47-9 any law to the contrary, the board or a designee of the board is
47-10 responsible for representing the interests of the pension system
47-11 and all pension issues and benefits affecting the pension system or
47-12 its members and beneficiaries under this article. The board may
47-13 enter into a written agreement with the city on behalf of the
47-14 pension system and members and beneficiaries of the pension system
47-15 if the agreement is approved by the board and signed by the mayor
47-16 and the board or the board's designee.
47-17 (b) A pension benefit or allowance provided by this article
47-18 may be increased if the increase:
47-19 (1) is first approved by a qualified actuary selected
47-20 by the board;
47-21 (2) is approved by the board and the city in a written
47-22 agreement as authorized by this section; and
47-23 (3) does not deprive a member, without the member's
47-24 written consent, of a right to receive benefits that have become
47-25 fully vested and matured in the member.
47-26 Sec. 28. NONALIENATION AND NONASSIGNMENT OF BENEFITS. (a)
47-27 No portion of the funds held by the pension system, either before
48-1 or after an order for its disbursement by the board, and no amounts
48-2 due or to become due to any member or survivor under this article
48-3 may be held, seized, taken, subject to, detained, or levied on by
48-4 virtue of any execution, attachment, garnishment, injunction, or
48-5 other writ, and no order or decree, and no process may issue out of
48-6 or by any court of this state for the payment or satisfaction, in
48-7 whole or in part, out of the funds held by or due from the pension
48-8 system, of any debt, damage, claim, demand, or judgment against any
48-9 member, survivor, dependent, or any other person.
48-10 (b) No part of the funds or any claim to the funds may be
48-11 directly or indirectly assigned or transferred. Any attempt to
48-12 transfer or assign any part of the funds or a claim to the funds is
48-13 void.
48-14 (c) The funds shall be sacredly held, kept, and disbursed
48-15 for the purposes provided by this article, and for no other
48-16 purpose, except that a retired member, survivor, or dependent, at
48-17 the person's discretion, may have deducted from the person's
48-18 pension the monthly premium cost of any group insurance program in
48-19 which the retired member is participating.
48-20 (d) This section does not prevent the division of the
48-21 benefits accrued by a member under any court order determined by
48-22 the board or its designee to be a qualified domestic relations
48-23 order and the payment of a share of a retired member's benefits or
48-24 contributions to an alternate payee in accordance with the order.
48-25 SECTION 2. Chapter 76, Acts of the 50th Legislature, Regular
48-26 Session, 1947 (Article 6243g-1, Vernon's Texas Civil Statutes), and
48-27 Article 6243g-3, Revised Statutes, are repealed.
49-1 SECTION 3. This Act takes effect September 1, 1999.
49-2 SECTION 4. The importance of this legislation and the
49-3 crowded condition of the calendars in both houses create an
49-4 emergency and an imperative public necessity that the
49-5 constitutional rule requiring bills to be read on three several
49-6 days in each house be suspended, and this rule is hereby suspended.