1-1 By: Madla S.B. No. 708
1-2 (In the Senate - Filed February 14, 2001; February 15, 2001,
1-3 read first time and referred to Committee on Intergovernmental
1-4 Relations; March 1, 2001, reported favorably by the following vote:
1-5 Yeas 7, Nays 0; March 1, 2001, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to the retirement system for firefighters and police
1-9 officers in certain municipalities.
1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11 SECTION 1. Subdivision (18), Section 1.02, Chapter 824, Acts
1-12 of the 73rd Legislature, Regular Session, 1993 (Article 6243o,
1-13 Vernon's Texas Civil Statutes), is amended to read as follows:
1-14 (18) "Years of service" means a member's total years
1-15 of service, including fractional years or full months of service,
1-16 computed as provided by Section 5.01 [5.01(e)] of this Act.
1-17 SECTION 2. Article 1, Chapter 824, Acts of the 73rd
1-18 Legislature, Regular Session, 1993 (Article 6243o, Vernon's Texas
1-19 Civil Statutes), is amended by adding Section 1.07 to read as
1-20 follows:
1-21 Sec. 1.07. CONSTRUCTION OF ACT. This Act does not provide
1-22 any benefit that is not specifically provided by this Act.
1-23 SECTION 3. Subsection (e), Section 2.03, Chapter 824, Acts
1-24 of the 73rd Legislature, Regular Session, 1993 (Article 6243o,
1-25 Vernon's Texas Civil Statutes), is amended to read as follows:
1-26 (e) On the date the board enters an order under Subsection
1-27 (d) of this section, the board shall call a special election to be
1-28 held not less than 20 nor more than 30 days after that date to fill
1-29 the vacancy for the unexpired term of the trustee who was removed.
1-30 The trustee who was removed is not eligible to run in the special
1-31 election but is eligible to run in all subsequent board elections
1-32 [for the category in which the trustee was removed].
1-33 SECTION 4. Section 3.02, Chapter 824, Acts of the 73rd
1-34 Legislature, Regular Session, 1993 (Article 6243o, Vernon's Texas
1-35 Civil Statutes), is amended by adding Subsection (e) to read as
1-36 follows:
1-37 (e) A person's failure to give truthful information to the
1-38 board in an application or in testimony at a hearing may result in
1-39 a referral for criminal investigation.
1-40 SECTION 5. Section 4.01, Chapter 824, Acts of the 73rd
1-41 Legislature, Regular Session, 1993 (Article 6243o, Vernon's Texas
1-42 Civil Statutes), is amended to read as follows:
1-43 Sec. 4.01. MEMBERSHIP. (a) A person is eligible to become
1-44 [becomes] a member of the fund as a condition of continued
1-45 employment two months after the person has received state
1-46 certification as a fire fighter or police officer, completed all
1-47 other requirements for membership in the fund, and:
1-48 (1) graduated from [if the person has served eight
1-49 months as a fire fighter or police officer or as a trainee in] a
1-50 fire fighter or police officer training academy of a municipality
1-51 to which this Act applies and passed the municipality's fire
1-52 fighter's or police officer's probationary exam; or
1-53 (2) otherwise satisfied the requirements for
1-54 employment as a fire fighter or police officer in a municipality to
1-55 which this Act applies.
1-56 (b) A person may not become eligible for disability
1-57 retirement benefits unless the person has provided an authorization
1-58 for release of medical information for any medical records dated on
1-59 or after the date of initial application for employment or has
1-60 agreed in writing to provide that authorization when requested by
1-61 the board or, in the alternative if required by the board, has
1-62 submitted to a physical examination by a physician selected by the
1-63 board.
1-64 [(b) Notwithstanding Subsection (a) of this section, a
2-1 person duly appointed and enrolled in a classified position in
2-2 either the fire department or police department who was barred from
2-3 entry in the fund solely because the person had attained the age of
2-4 36 on the date that the person would have otherwise become eligible
2-5 after October 15, 1990, to be a member of the fund and for that
2-6 reason became a member of the Texas Municipal Retirement System and
2-7 who is otherwise eligible for and complies with each requirement
2-8 for membership in the fund shall become a member of the fund as a
2-9 condition of continued employment. The person must make
2-10 application to the fund not later than the 90th day after the date
2-11 on which the person receives notification of this provision.]
2-12 (c) [A person who becomes a member of the fund under
2-13 Subsection (b) of this section shall be given service credit from
2-14 the date the person would have become eligible to be a member of
2-15 the fund if not for the age requirement and must pay into the fund,
2-16 in accordance with procedures established by the board, pension
2-17 contributions for all service credit allowed based on amounts that
2-18 would have been deducted if the person had been allowed to enter
2-19 the fund on that date.]
2-20 [(d) A person who became a member of the Texas Municipal
2-21 Retirement System on or before October 15, 1990, may elect to
2-22 become a member of the fund on or before the 90th day after the
2-23 date the person receives notice of this provision. If the person
2-24 does not elect to become a member during that period, the person
2-25 may not become a member of the fund and waives any claim against
2-26 the fund. If the person elects to become a member of the fund, the
2-27 person must comply with each requirement for membership and must
2-28 pay into the fund, in accordance with procedures established by the
2-29 board, a sum of money equal to the amount of money that would have
2-30 been deducted from that person's salary during the period beginning
2-31 October 16, 1990, and ending on the date the person becomes a
2-32 member of the fund. The person also may purchase service credit
2-33 for the period beginning on the date the person would have
2-34 otherwise become eligible to be a member of the fund if not for the
2-35 age prohibition, through October 15, 1990. Service credit may be
2-36 obtained only in increments of full months, with the minimum being
2-37 one month.]
2-38 [(e) A person who becomes a member of the fund under
2-39 Subsection (b) or (d) of this section must, as a condition of
2-40 employment, provide an authorization for release of medical
2-41 information for any medical records dated on or after the date of
2-42 initial application for employment when requested by the board or
2-43 in the alternative, as required by the board, must submit to a
2-44 physical examination by a physician selected by the board.]
2-45 [(f)] A municipality to which this Act applies shall match
2-46 an amount equal to twice the amount of each payment a member makes
2-47 to the fund under this section.
2-48 (d) [(g)] The drawing of compensation by an officer or
2-49 employee in the fire or police department for service in that
2-50 department does not of itself make that person a member of the
2-51 fund.
2-52 (e) [(h)] The regularity of an appointment as a fire fighter
2-53 or police officer of a municipality to which this Act applies may
2-54 not be presumed from the serving of the full probationary period,
2-55 if any. The service of the probationary period by an officer or
2-56 employee as a fire fighter or police officer of a municipality to
2-57 which this Act applies does not constitute the creation of a
2-58 position or office to which a proper appointment has been made for
2-59 purposes of this Act.
2-60 SECTION 6. Subsection (a), Section 4.04, Chapter 824, Acts
2-61 of the 73rd Legislature, Regular Session, 1993 (Article 6243o,
2-62 Vernon's Texas Civil Statutes), is amended to read as follows:
2-63 (a) There shall be deducted from the total salary of each
2-64 fire fighter and police officer in the employment of a municipality
2-65 to which this Act applies a percentage of the member's total salary
2-66 according to the following schedule:
2-67 (1) 11.16 percent for full pay periods after September
2-68 30, 1993, but before October 1, 1994;
2-69 (2) 11.32 percent for full pay periods after September
3-1 30, 1994, but before October 1, 1995;
3-2 (3) 11.50 percent for full pay periods after September
3-3 30, 1995, but before October 1, 1996;
3-4 (4) 11.66 percent for full pay periods after September
3-5 30, 1996, but before October 1, 1997;
3-6 (5) 11.82 percent for full pay periods after September
3-7 30, 1997, but before October 1, 1998;
3-8 (6) 12 percent for full pay periods after September
3-9 30, 1998, but before October 1, 1999;
3-10 (7) 12.16 percent for full pay periods after September
3-11 30, 1999, but before October 1, 2000; and
3-12 (8) 12.32 percent for full pay periods after September
3-13 30, 2000[, but before October 1, 2001; and]
3-14 [(9) 12.50 percent for full pay periods after
3-15 September 30, 2001].
3-16 SECTION 7. Section 5.01, Chapter 824, Acts of the 73rd
3-17 Legislature, Regular Session, 1993 (Article 6243o, Vernon's Texas
3-18 Civil Statutes), is amended by amending Subsection (e), adding a
3-19 new Subsection (f), amending and relettering existing Subsection
3-20 (f), and relettering the subsequent subsections accordingly to read
3-21 as follows:
3-22 (e) The board shall compute the retirement annuity of a
3-23 member who retires after September 30, 1999, but before October 1,
3-24 2001, at the rate of 2 1/8 percent of the member's average total
3-25 salary for each of the first 20 years of service, plus four percent
3-26 of the member's average total salary for each of the next 10 years
3-27 of service, plus one percent of the member's average total salary
3-28 for each of the next five years of service, with fractional years
3-29 of service prorated based on full months served as a contributing
3-30 member. In making the computation for a year, the year is
3-31 considered to begin on the first day a contribution is made. A
3-32 retirement annuity under this subsection may not exceed, as of the
3-33 date of retirement, 87 1/2 percent of the member's average total
3-34 salary.
3-35 (f) The board shall compute the retirement annuity of a
3-36 member who retires after September 30, 2001, at the rate of 2-1/4
3-37 percent of the member's average total salary for each of the first
3-38 20 years of service, plus 4-1/2 percent of the member's average
3-39 total salary for each of the next seven years of service, plus
3-40 three percent of the member's average total salary for each of the
3-41 next three years of service, plus one-half percent of the member's
3-42 average total salary for each of the next four years of service,
3-43 with fractional years of service prorated based on full months
3-44 served as a contributing member. In making the computation for a
3-45 year, the year is considered to begin on the first day a
3-46 contribution is made. A retirement annuity under this subsection
3-47 may not exceed, as of the date of retirement, 87-1/2 percent of the
3-48 member's average total salary.
3-49 (g) A member may not receive an award from the fund for
3-50 service retirement until the member has at least 20 years of
3-51 service in the fire or police department and has also contributed
3-52 the required amount of money for at least 20 years. In determining
3-53 the number of years of service in a department, the member shall be
3-54 given full credit for the period the member was an active member
3-55 plus the time the member was actively engaged in service with any
3-56 uniformed service in accordance with Section 4.03 of this Act and
3-57 for absences taken under the Family and Medical Leave Act of 1993
3-58 (29 U.S.C. Section 2601 et seq.), in accordance with Section 4.02
3-59 of this Act. Disciplinary suspensions of 15 days or less may not
3-60 be subtracted from a member's service credit under this Act if the
3-61 member has paid into the fund, within 30 days after the later of
3-62 the termination date of each suspension or the exhaustion of any
3-63 appeal with respect to the suspension, a sum of money equal to the
3-64 amount of money that would have been deducted from that person's
3-65 salary during that period of suspension if it had not been for that
3-66 suspension. A municipality to which this Act applies shall
3-67 double-match a payment made under this subsection. Members of the
3-68 fund at the time of their retirement shall also receive service
3-69 credit for all unused sick leave accumulated by them under Chapter
4-1 143, Local Government Code, but only to the extent the unused sick
4-2 leave exceeds 90 days. Service credit for unused sick leave shall
4-3 be prorated based on each full month of sick leave.
4-4 (h) [(g)] All monthly pensions being paid by the fund to
4-5 retirees who retired before October 1, 1989, are increased,
4-6 effective with the first monthly payment due on or after October 1,
4-7 1999. The amount of the increase depends on the fiscal year ending
4-8 September 30 in which the retiree retired and is a percentage of
4-9 the pension payment that would have been payable on October 1,
4-10 1999, except for this increase. The amount of the percentage
4-11 increase is:
4-12 Municipality Fiscal Year Percentage
4-13 of Retirement Increase
4-14 1988 1.0%
4-15 1987 2.0%
4-16 1986 3.0%
4-17 1985 4.0%
4-18 1984 5.0%
4-19 1983 6.0%
4-20 1982 7.0%
4-21 1981 8.0%
4-22 1980 9.0%
4-23 1979 or earlier 10.0%
4-24 SECTION 8. Subsections (d) and (e), Section 5.015, Chapter
4-25 824, Acts of the 73rd Legislature, Regular Session, 1993 (Article
4-26 6243o, Vernon's Texas Civil Statutes), are amended to read as
4-27 follows:
4-28 (d) The amount of a lump-sum payment to which a member
4-29 making a Back DROP election is entitled shall be computed in the
4-30 manner provided by this subsection. The member's retirement
4-31 annuity shall be computed in the manner provided by Section 5.01
4-32 [5.01(c) or (d)] of this Act, [as applicable,] except that the
4-33 retirement date used in making that computation is the retirement
4-34 date computed as provided by this subsection. The member's
4-35 retirement annuity as so computed shall be divided by 12 to compute
4-36 the member's monthly pension. The member's monthly pension
4-37 multiplied by the number of full months elected by the member under
4-38 Subsection (b)(1) of this section is the amount of the lump-sum
4-39 payment to which the member is entitled. Solely for purposes of
4-40 computing the member's monthly pension under this subsection, the
4-41 member's retirement date is the member's Back DROP retirement date,
4-42 which is the member's actual retirement date less the amount of
4-43 time for:
4-44 (1) any service in excess of 34 [35] years of service;
4-45 (2) any service given for sick leave unused on the
4-46 date of actual retirement; and
4-47 (3) any service in excess of 20 years but not in
4-48 excess of the amount permitted under Subsection (b)(1) of this
4-49 section that the member elects for computing the amount of the
4-50 lump-sum payment.
4-51 (e) For purposes of computing the monthly pension of a
4-52 member making a Back DROP election, the member's retirement annuity
4-53 shall be computed in the manner provided by Section 5.01 [5.01(c)
4-54 or (d)] of this Act, [as applicable,] except that the retirement
4-55 date used in making that computation is the member's actual
4-56 retirement date less the amount of time the member elects under
4-57 Subsection (b)(1) of this section. The annuity may not exceed the
4-58 applicable limitations [limitation] provided by Section 5.01
4-59 [5.01(c) or (d)] of this Act[, as applicable]. The member's
4-60 retirement annuity shall be divided by 12 to compute the member's
4-61 monthly pension.
4-62 SECTION 9. Subsection (b), Section 5.07, Chapter 824, Acts
4-63 of the 73rd Legislature, Regular Session, 1993 (Article 6243o,
4-64 Vernon's Texas Civil Statutes), is amended to read as follows:
4-65 (b) If the retiree received income from other employment,
4-66 including self-employment, during the preceding year, the board may
4-67 reduce the retiree's disability retirement annuity by the amount of
4-68 $1 for each month for each $2 of income earned by the retiree from
4-69 the other employment during each month of the previous year, except
5-1 that the disability retirement annuity may not be decreased below
5-2 an amount based on 2-1/4 [two] percent of the retiree's average
5-3 total salary computed at the time of retirement under Section 5.04
5-4 of this Act for each year of service in the department.
5-5 SECTION 10. Subsection (a), Section 5.09, Chapter 824, Acts
5-6 of the 73rd Legislature, Regular Session, 1993 (Article 6243o,
5-7 Vernon's Texas Civil Statutes), is amended to read as follows:
5-8 (a) At or before its regular meeting in the month of March,
5-9 the board annually shall review the Consumer's Price Index for All
5-10 Urban Consumers (CPI-U), U.S. City Average or the nearest
5-11 equivalent published by the United States Bureau of Labor
5-12 Statistics for the preceding calendar year. If that index shows an
5-13 increase during the preceding calendar year in the cost of living
5-14 as compared with that index at the close of the previous year, the
5-15 board shall order an increase of all service, disability, and death
5-16 benefit retirement annuities by a percentage that varies by the
5-17 date of the member's service or disability retirement, or, in the
5-18 case of a member who died before retirement, the date on which the
5-19 member died. If the member's service retirement, disability
5-20 retirement, or death before retirement occurred before August 30,
5-21 1971, the annuity shall be increased by a percentage equal to the
5-22 percentage increase in the cost of living index. If the member's
5-23 service retirement, disability retirement, or death before
5-24 retirement occurred on or after August 30, 1971, but before October
5-25 1, 1991 [1989], the annuity shall be increased as follows: if the
5-26 percentage increase in the cost of living index is eight percent or
5-27 less, the annuity shall be increased by a percentage equal to the
5-28 percentage increase, and if the percentage increase in the cost of
5-29 living index is more than eight percent, the annuity shall be
5-30 increased by eight percent plus a percentage equal to 75 percent of
5-31 the percentage increase that is more than eight percent [by a
5-32 percentage that is 87.5 percent of the percentage increase in the
5-33 cost of living index, for any year in which the cost of living
5-34 index increases by eight percent or less and by 75 percent of the
5-35 percentage increase in the cost of living index if the cost of
5-36 living index increases by more than eight percent]. If the
5-37 member's service retirement, disability retirement, or death before
5-38 retirement occurred on or after October 1, 1991 [1989], the annuity
5-39 shall be increased by a percentage equal to [that is] 75 percent of
5-40 the percentage increase in the cost of living index. A percentage
5-41 increase in annuities shall be rounded to the nearest one-tenth
5-42 percentage point for a cost of living increase.
5-43 SECTION 11. Section 5.11, Chapter 824, Acts of the 73rd
5-44 Legislature, Regular Session, 1993 (Article 6243o, Vernon's Texas
5-45 Civil Statutes), is redesignated as Section 5.10 and amended to
5-46 read as follows:
5-47 Sec. 5.10 [5.11]. COORDINATION WITH FEDERAL LAW. (a) A
5-48 member or beneficiary of a member of the fund may not accrue a
5-49 service retirement annuity, disability retirement annuity, death
5-50 benefit, whether death occurs in the line of duty or otherwise, or
5-51 any other benefit under this Act in excess of the benefit limits
5-52 applicable to the fund under Section 415 of the code. The board
5-53 shall reduce the amount of any benefit that exceeds those limits by
5-54 the amount of the excess. If the total benefits under this fund
5-55 and the benefits and contributions to which any member is entitled
5-56 under any other qualified defined benefit plan [plans] maintained
5-57 by the municipality that employs the member would otherwise exceed
5-58 the applicable limits under Section 415 of the code, the benefits
5-59 the member would otherwise receive from the fund shall be reduced
5-60 to the extent necessary to enable the benefits to comply with
5-61 Section 415 of the code.
5-62 (b) Any member or beneficiary who is entitled to receive any
5-63 distribution that is an eligible rollover distribution as defined
5-64 by Section 402(c)(4) of the code is entitled to have that
5-65 distribution transferred directly to another eligible retirement
5-66 plan of the member's or beneficiary's choice on providing direction
5-67 to the fund regarding that transfer in accordance with procedures
5-68 established by the board.
5-69 (c) The total salary taken into account for any purpose for
6-1 any member of the fund may not exceed $200,000 per year for an
6-2 eligible participant or $150,000 per year for an ineligible
6-3 participant. These dollar limits shall be periodically adjusted in
6-4 accordance with guidelines provided by the United States secretary
6-5 of the treasury. For purposes of this subsection, an eligible
6-6 participant is any person who first became a member before 1996,
6-7 and an ineligible participant is any member who is not an eligible
6-8 participant.
6-9 (d) Accrued benefits under this Act become 100 percent
6-10 vested for a member on:
6-11 (1) the date the member has completed 20 years of
6-12 service;
6-13 (2) the earlier termination or partial termination of
6-14 the pension plan created by this Act, if it affects the member[, of
6-15 the fund]; or
6-16 (3) the complete discontinuance of contributions by
6-17 the municipality to the fund.
6-18 (e) Amounts representing forfeited nonvested benefits of
6-19 terminated members may not be used to increase benefits payable
6-20 from the fund but may be used to reduce contributions for future
6-21 plan years.
6-22 (f) Distribution of benefits must begin not later than April
6-23 1 of the year following the calendar year during which the member
6-24 becomes 70 1/2 years of age and must otherwise conform to Section
6-25 401(a)(9) of the code.
6-26 (g) If the amount of any benefit is to be determined on the
6-27 basis of actuarial assumptions that are not otherwise specifically
6-28 set forth for that purpose in this Act, the actuarial assumptions
6-29 to be used are those earnings and mortality assumptions being used
6-30 on the date of the determination by the fund's actuary and approved
6-31 by the board. The actuarial assumptions being used at any
6-32 particular time shall be attached as an addendum to a copy of this
6-33 Act and treated for all purposes as a part of this Act. The
6-34 actuarial assumptions may be changed by the fund's actuary at any
6-35 time if approved by the board, but a change in actuarial
6-36 assumptions may not result in any decrease in benefits accrued as
6-37 of the effective date of the change.
6-38 (h) This section applies to any benefit regardless of when
6-39 accrued.
6-40 (i) The board may adopt rules to administer this section. A
6-41 rule adopted by the board under this subsection is final and
6-42 binding.
6-43 (j) To the extent permitted by law, the board may adjust the
6-44 benefits of retired members and beneficiaries by increasing any
6-45 retirement benefit that was reduced because of Section 415 of the
6-46 code. If Section 415 of the code is amended to permit the payment
6-47 of amounts previously precluded under Section 415 of the code, the
6-48 board may adjust the benefits of retired members and beneficiaries,
6-49 including the restoration of benefits previously denied. Benefits
6-50 paid under this subsection are not considered as extra compensation
6-51 earned after retirement but as the delayed payment of benefits
6-52 earned before retirement.
6-53 (k) The board by rule shall implement this Act in a manner
6-54 that preserves the tax qualification of the fund under the code and
6-55 may revise any provision or program to the extent necessary to
6-56 retain tax qualification.
6-57 (l) In this section, "qualified plan" has the meaning
6-58 assigned by Section 8.02 of this Act.
6-59 SECTION 12. Section 5.12, Chapter 824, Acts of the 73rd
6-60 Legislature, Regular Session, 1993 (Article 6243o, Vernon's Texas
6-61 Civil Statutes), is redesignated as Section 5.11 and amended to
6-62 read as follows:
6-63 Sec. 5.11 [5.12]. 13TH CHECK FOR RETIREES. (a) In any
6-64 fiscal year ending after 1996 for which the board determines that
6-65 the average annual investment yield on the market value of fund
6-66 investments for the preceding five fiscal years exceeded the annual
6-67 investment yield projected by the actuary for that preceding
6-68 five-fiscal-year period by at least 100 basis points, the board may
6-69 authorize the disbursement of a 13th pension check.
7-1 (b) The 13th pension check is paid to each retiree who is
7-2 entitled to receive an annuity in the last month of the fiscal year
7-3 preceding the fiscal year in which the check is disbursed and is in
7-4 an amount equal to the amount of the annuity payment made in the
7-5 last month of the preceding fiscal year, except the amount of any
7-6 such check shall be prorated for any retiree who has been receiving
7-7 an annuity for less than one year so that the amount of the check
7-8 is one-twelfth of the check that would have been paid to the
7-9 retiree receiving an annuity for a full year times the number of
7-10 full months an annuity has been paid.
7-11 (c) Authorization of a 13th check for any year is subject to
7-12 the discretion of the board. Authorization for one year does not
7-13 obligate the board to authorize a 13th check for any other year.
7-14 The 13th check shall be paid as the board directs.
7-15 (d) In this section, "annual investment yield" means the
7-16 yield on the fund's investment portfolio for a particular year, as
7-17 a percentage of the portfolio, after reduction for costs of
7-18 investing the portfolio, but without reduction for the fund's
7-19 operating expenses.
7-20 SECTION 13. Article 5, Chapter 824, Acts of the 73rd
7-21 Legislature, Regular Session, 1993 (Article 6243o, Vernon's Texas
7-22 Civil Statutes), is amended by adding Section 5.12 to read as
7-23 follows:
7-24 Sec. 5.12. 14TH CHECK FOR RETIREES. (a) In this section,
7-25 "annual investment yield" has the meaning assigned by Section
7-26 5.11(d) of this Act.
7-27 (b) In a fiscal year ending after September 1, 2000, for
7-28 which the board determines that the average annual investment yield
7-29 on the market value of fund investments for the preceding five
7-30 fiscal years exceeded the annual investment yield projected by the
7-31 actuary for that five-fiscal-year period by at least 300 basis
7-32 points, the board may authorize the disbursement of a 14th pension
7-33 check.
7-34 (c) The 14th pension check is paid to each retiree who is
7-35 entitled to receive an annuity in the last month of the fiscal year
7-36 preceding the fiscal year in which the check is disbursed. Except
7-37 as provided by Subsection (d) of this section, the check is in an
7-38 amount equal to the amount of the annuity payment made in the last
7-39 month of the preceding fiscal year.
7-40 (d) For a retiree who has received an annuity for less than
7-41 one year, the amount of the 14th pension check is prorated so that
7-42 the amount of the check is one-twelfth of the check that would have
7-43 been paid to a retiree receiving an annuity for a full year times
7-44 the number of full months an annuity has been paid.
7-45 (e) Authorization of a 14th check for any year is subject to
7-46 the discretion of the board. Authorization for one year does not
7-47 obligate the board to authorize a 14th check for any other year.
7-48 The 14th check shall be paid as the board directs.
7-49 SECTION 14. Section 6.02, Chapter 824, Acts of the 73rd
7-50 Legislature, Regular Session, 1993 (Article 6243o, Vernon's Texas
7-51 Civil Statutes), is amended to read as follows:
7-52 Sec. 6.02. DEATH BENEFIT ANNUITY FOR SURVIVING SPOUSES AND
7-53 CHILDREN. (a) Subject to Section 6.03 of this Act and the
7-54 provisions of this section [Subsections (h), (i), (j), (k), and (l)
7-55 of this section], if a member dies leaving a surviving spouse or at
7-56 least one dependent child, the surviving spouse and the children
7-57 are entitled to receive from the fund an aggregate death benefit
7-58 annuity, computed and payable from the date of the member's death.
7-59 The surviving spouse may elect the annuity[,] in an amount that is
7-60 equal to either [the greater of]:
7-61 (1) 50 percent of the member's average total salary;
7-62 or
7-63 (2) the same percentage of the member's average total
7-64 salary that the member would have been entitled to receive as a
7-65 retirement annuity if the member could have retired on the date of
7-66 death.
7-67 (b) The amount of a death benefit annuity computed under
7-68 Subsection (a) of this section may not exceed the service
7-69 retirement annuity to which a member with the same average total
8-1 salary and with 27 [26] years of service credit would be entitled.
8-2 (c) Subject to Section 6.08 of this Act and the provisions
8-3 of this section [Subsections (h), (i), (j), (k), and (l) of this
8-4 section], if a retiree dies leaving a surviving spouse or at least
8-5 one dependent child, the surviving spouse and dependent children
8-6 are entitled to receive from the fund an aggregate death benefit
8-7 annuity, computed and payable from the date of the member's death,
8-8 in an amount that is equal to the [same percentage of the retiree's
8-9 average total salary that the retiree would have been entitled to
8-10 receive as a retirement annuity if the retiree had retired on the
8-11 date of death less the amount of time, if any, elected by the
8-12 retiree under Section 5.015(b)(1) of this Act.]
8-13 [(d) The amount of a death benefit annuity computed under
8-14 Subsection (c) of this section may not exceed the] lesser of:
8-15 (1) the retirement annuity to which a member with the
8-16 same average total salary as the deceased retiree and 27 [26] years
8-17 of service credit would be entitled if the member retired on the
8-18 date of the deceased retiree's death; or
8-19 (2) the retirement annuity the retiree was receiving
8-20 at the time of the retiree's death.
8-21 (d) [(e)] If, at the time a death benefit annuity becomes
8-22 payable under Subsection (a) or (c) of this section, the deceased
8-23 leaves a surviving spouse and at least one dependent child, the
8-24 board shall award:
8-25 (1) one-half of the annuity to the surviving spouse;
8-26 and
8-27 (2) one-half of the annuity:
8-28 (A) to the dependent child, if there is only
8-29 one; or
8-30 (B) if there is more than one dependent child,
8-31 in equal shares to each child.
8-32 (e) [(f)] If, at the time a death benefit annuity under
8-33 Subsection (a) or (c) of this section becomes payable, the
8-34 deceased leaves a surviving spouse and no dependent child, the
8-35 board shall award the annuity to the surviving spouse.
8-36 (f) [(g)] If, at the time a death benefit annuity under
8-37 Subsection (a) or (c) of this section becomes payable, the
8-38 deceased leaves no surviving spouse and at least one dependent
8-39 child, the board shall award the annuity:
8-40 (1) to the dependent child, if there is only one; or
8-41 (2) if there is more than one child, in equal shares
8-42 to each child.
8-43 (g) [(h)] A child who is born after the date of retirement
8-44 of the member is not entitled to a death benefit annuity under this
8-45 Act unless the retiree was married to the other parent of the child
8-46 on the date of retirement. A surviving spouse of a retiree who was
8-47 not married to the retiree until after the retiree's retirement is
8-48 entitled to receive only the benefit, if any, provided under
8-49 Section 6.08 of this Act.
8-50 (h) [(i)] If a member or retiree dies leaving a surviving
8-51 spouse and at least one dependent child, the death benefit annuity
8-52 payable to the surviving spouse shall be increased as of the day no
8-53 child is entitled to receive benefits to the amount the spouse
8-54 would have received had there been no dependent child.
8-55 (i) [(j)] If a member or retiree dies leaving a surviving
8-56 spouse and at least one dependent child, the death benefit annuity
8-57 payable to the dependent children shall be increased as of the day
8-58 the surviving spouse dies to the amount the children would have
8-59 received had there been no surviving spouse.
8-60 (j) [(k)] A child of the member who is so mentally or
8-61 physically disabled as to be incapable of being self-supporting to
8-62 any extent, if otherwise qualified and regardless of age, has the
8-63 rights of a child under 18 years of age, except that any death
8-64 benefit annuity paid under this subsection to any mentally or
8-65 physically disabled child may, at the discretion of the board,
8-66 [shall] be reduced to the extent of any state pension or aid,
8-67 including Medicaid, or any state-funded assistance received by the
8-68 child, regardless of whether the funds were made available to the
8-69 state by the federal government. In no other instance under this
9-1 Act is a child entitled to any benefit after becoming 18 years of
9-2 age.
9-3 (k) [(l)] The board shall increase a death benefit annuity
9-4 payable on October 1, 1999, to a dependent child or children who do
9-5 not have a living parent on that date to the entire amount of the
9-6 death benefit annuity that would have been awarded had the retiree
9-7 or member died leaving no surviving spouse if a surviving spouse of
9-8 the member or retiree is not entitled to receive benefits from the
9-9 fund on October 1, 1999.
9-10 (l) A former spouse of a deceased member or retiree who is
9-11 not the spouse of the member or retiree on the date of death of the
9-12 member or retiree is not entitled to a benefit under this section.
9-13 SECTION 15. Subsection (c), Section 6.03, Chapter 824, Acts
9-14 of the 73rd Legislature, Regular Session, 1993 (Article 6243o,
9-15 Vernon's Texas Civil Statutes), is amended to read as follows:
9-16 (c) Notwithstanding the formulas for computing the total
9-17 amounts of annuities otherwise provided by this Act, if a member is
9-18 killed in the line of duty, the member's surviving spouse and
9-19 dependent children are entitled to a death benefit annuity equal to
9-20 the total salary of the member at the time of death. Rules
9-21 provided by this section relating to qualification and
9-22 disqualification for and apportionment of benefits apply to a death
9-23 benefit annuity computed under this subsection. A death benefit
9-24 annuity computed under this subsection is divided in the manner
9-25 described by Section 6.02 [6.02(a)] of this Act and is subject to
9-26 the same cost-of-living adjustments that apply to pensions for
9-27 service retirement.
9-28 SECTION 16. Section 6.04, Chapter 824, Acts of the 73rd
9-29 Legislature, Regular Session, 1993 (Article 6243o, Vernon's Texas
9-30 Civil Statutes), is amended to read as follows:
9-31 Sec. 6.04. REMARRIAGE; BENEFITS AFTER TERMINATION OF
9-32 MARRIAGE. (a) [If a surviving spouse remarries or a dependent
9-33 child marries before October 1, 1995, the right of a surviving
9-34 spouse or dependent child to annuity payments under this Act
9-35 terminates on the remarriage of the surviving spouse or on the
9-36 marriage of the child, as applicable, under either statutory law or
9-37 under common law as prescribed by Section 6.06 of this Act.]
9-38 [(b)] The right of a surviving spouse or dependent child to
9-39 annuity payments under this Act is not affected by the surviving
9-40 spouse's remarriage or dependent child's marriage under either
9-41 statutory or common law if the marriage or remarriage takes place
9-42 on or after October 1, 1995.
9-43 (b) [(c)] If after October 1, 1995, there is a termination
9-44 of the remarriage of a surviving spouse or of the marriage of a
9-45 dependent child, that person is entitled, on application, to 100
9-46 percent of the annuity that was in effect on the date of
9-47 termination of benefits.
9-48 (c) [(d)] A surviving spouse or dependent child who is
9-49 unmarried but receiving reduced benefits because of a prior
9-50 marriage that caused the benefits to be terminated is entitled to
9-51 100 percent of the annuity that was in effect on the original date
9-52 of termination of benefits.
9-53 (d) [(e)] The benefit provided under Subsections (b) and (c)
9-54 [and (d)] of this section shall be provided prospectively beginning
9-55 October 1, 1995, and the surviving spouse or dependent child is not
9-56 entitled to receive any benefits or increases in benefits relating
9-57 to any period before October 1, 1995.
9-58 SECTION 17. Subsection (a), Section 6.09, Chapter 824, Acts
9-59 of the 73rd Legislature, Regular Session, 1993 (Article 6243o,
9-60 Vernon's Texas Civil Statutes), is amended to read as follows:
9-61 (a) If a contributing member in good standing of the fire or
9-62 police department or a retiree dies before or after retirement and
9-63 leaves no surviving spouse or child but leaves surviving a father
9-64 and mother wholly dependent on that person for support, the
9-65 dependent father and mother are entitled to receive one-third of
9-66 the average total salary of the deceased member based on the same
9-67 number of years of the member's pay as is currently provided for
9-68 computations of retirement annuities under Section 5.01 [5.01(a)]
9-69 of this Act, the annuity to be equally divided between the father
10-1 and mother as long as they are wholly dependent. If there is only
10-2 one dependent, either father or mother, the board shall grant the
10-3 surviving dependent an annuity not to exceed one-fourth that
10-4 average total salary as computed under this subsection.
10-5 SECTION 18. Section 6.12, Chapter 824, Acts of the 73rd
10-6 Legislature, Regular Session, 1993 (Article 6243o, Vernon's Texas
10-7 Civil Statutes), is amended to read as follows:
10-8 Sec. 6.12. 13TH AND 14TH CHECKS [CHECK] FOR BENEFICIARIES.
10-9 (a) For any year in which the board authorizes disbursement of a
10-10 13th or 14th pension check to retirees under Section 5.11 or 5.12
10-11 of this Act, the board shall also authorize disbursement of a 13th
10-12 or 14th check to each beneficiary entitled to receive an annuity in
10-13 the last month of the fiscal year preceding the fiscal year in
10-14 which the check is disbursed.
10-15 (b) The amount of the 13th or 14th check is equal to the
10-16 amount of the annuity payment made in the last month of the
10-17 preceding fiscal year, except the amount of the check shall be
10-18 prorated for any beneficiary who has been receiving an annuity for
10-19 less than one year so that the amount of the check is one-twelfth
10-20 of the check that would have been paid to the beneficiary receiving
10-21 an annuity for a full year times the number of full months an
10-22 annuity has been paid.
10-23 SECTION 19. Article 6, Chapter 824, Acts of the 73rd
10-24 Legislature, Regular Session, 1993 (Article 6243o, Vernon's Texas
10-25 Civil Statutes), is amended by adding Section 6.14 to read as
10-26 follows:
10-27 Sec. 6.14. LUMP-SUM PAYMENT ELECTION FOR SURVIVING SPOUSES.
10-28 (a) A surviving spouse of a member who is entitled to receive a
10-29 death benefit under Section 6.02 of this Act may elect to receive a
10-30 portion of the benefit in a lump-sum payment under this section.
10-31 (b) The lump-sum payment may be elected only by a surviving
10-32 spouse:
10-33 (1) of a member who, on the date of death, is
10-34 eligible:
10-35 (A) for service retirement; and
10-36 (B) to elect a Backward Deferred Retirement
10-37 Option Plan; and
10-38 (2) who elects to receive a death benefit under
10-39 Section 6.02(a)(2) of this Act.
10-40 (c) If a member is killed in the line of duty and the
10-41 deceased member's surviving spouse is entitled to a death benefit
10-42 annuity under Section 6.03 of this Act, the surviving spouse may
10-43 not elect a lump-sum payment under this section.
10-44 (d) The lump-sum payment is computed by dividing the annuity
10-45 determined under Subsection (e) by 12 and multiplying the result by
10-46 the number of months the surviving spouse elects under Subsection
10-47 (f) of this section.
10-48 (e) The annuity used to compute the lump-sum payment is
10-49 determined in the manner provided by Section 5.01(f) of this Act
10-50 for retired members, using:
10-51 (1) the deceased member's average total salary for all
10-52 months, excluding the number of months immediately preceding the
10-53 member's date of death that equal the number of months elected by
10-54 the surviving spouse under Subsection (f) of this section; and
10-55 (2) the amount of service credit as determined by
10-56 Subsection (g) or (h) of this section.
10-57 (f) The surviving spouse must elect the number of months
10-58 used in computing the lump-sum payment. The number of months may
10-59 not exceed the lesser of:
10-60 (1) the number of months of service credit in excess
10-61 of 20 years that the deceased member has on the date of death; or
10-62 (2) 36 months.
10-63 (g) Except as provided by Subsection (h) of this section, in
10-64 determining the annuity under Subsection (e) of this section, the
10-65 deceased member's service credit is computed as provided by Section
10-66 5.01(g) of this Act, less:
10-67 (1) the number of months elected by the surviving
10-68 spouse under Subsection (f) of this section; and
10-69 (2) any service credit for unused sick leave to which
11-1 the member would have been entitled.
11-2 (h) In determining the annuity under Subsection (e) of this
11-3 section for a surviving spouse whose death benefit annuity is
11-4 limited by Section 6.02(b) of this Act, the deceased member's
11-5 service credit is 27 years, less the number of months elected by
11-6 the surviving spouse under Subsection (f) of this section.
11-7 (i) If a surviving spouse elects to receive a lump-sum
11-8 payment under this section, the total death benefit annuity payable
11-9 to the surviving spouse under Section 6.02 of this Act is reduced
11-10 as provided by Subsection (j) of this section. The lump-sum
11-11 election does not affect the amount of a death benefit annuity
11-12 payable to a dependent child of a deceased member under Section
11-13 6.02 of this Act.
11-14 (j) The reduced annuity is determined in the manner provided
11-15 by Section 5.01(f) of this Act for retired members, using:
11-16 (1) the deceased member's average total salary for all
11-17 months, excluding the number of months immediately preceding the
11-18 member's date of death that equal the number of months elected by
11-19 the surviving spouse under Subsection (f) of this section; and
11-20 (2) the amount of service credit as determined by
11-21 Subsection (k) or (l) of this section.
11-22 (k) Except as provided by Subsection (l) of this section, in
11-23 determining the reduced annuity under Subsection (j) of this
11-24 section, the deceased member's service credit is computed as
11-25 provided by Section 5.01(g) of this Act, less the number of months
11-26 elected by the surviving spouse under Subsection (f) of this
11-27 section.
11-28 (l) In determining the reduced annuity under Subsection (j)
11-29 of this section for a surviving spouse whose death benefit annuity
11-30 is limited by Section 6.02(b) of this Act, the deceased member's
11-31 service credit is 27 years, less the number of months elected by
11-32 the surviving spouse under Subsection (f) of this section.
11-33 SECTION 20. Subdivisions (1), (3), and (5), Section 8.02,
11-34 Chapter 824, Acts of the 73rd Legislature, Regular Session, 1993
11-35 (Article 6243o, Vernon's Texas Civil Statutes), are amended to read
11-36 as follows:
11-37 (1) "Excess benefit participant" means any member
11-38 whose retirement benefits as determined on the basis of all
11-39 qualified plans, without regard to the limitations of Section
11-40 5.10(a) [5.11(a)] of this Act and comparable provisions of other
11-41 qualified plans, would exceed the maximum benefit under Section 415
11-42 of the code.
11-43 (3) "Maximum benefit" means the retirement benefit a
11-44 member or the member's spouse, dependent child, or dependent parent
11-45 is entitled to receive from all qualified plans in any month after
11-46 applying Section 5.10(a) [5.11(a)] of this Act and any similar
11-47 provisions of any other qualified plans designed to conform to
11-48 Section 415 of the code.
11-49 (5) "Unrestricted benefit" means the monthly
11-50 retirement benefit a member or the member's spouse, dependent
11-51 child, or dependent parent would have received under the terms of
11-52 all qualified plans except for the restrictions of Section 5.10(a)
11-53 [5.11(a)] of this Act and any similar provisions of any other
11-54 qualified plans designed to conform to Section 415 of the code.
11-55 SECTION 21. Subsections (b) and (c), Section 8.03, Chapter
11-56 824, Acts of the 73rd Legislature, Regular Session, 1993 (Article
11-57 6243o, Vernon's Texas Civil Statutes), are amended to read as
11-58 follows:
11-59 (b) In the case of the death of an excess benefit
11-60 participant whose spouse, dependent child, or dependent parent is
11-61 entitled to preretirement or postretirement death benefits under a
11-62 qualified plan, the spouse, dependent child, or dependent parent is
11-63 entitled to a monthly benefit under the excess benefit plan equal
11-64 to the benefit determined in accordance with Article 6 of this Act
11-65 without regard to the limitations under Section 5.10(a) [5.11(a)]
11-66 of this Act or Section 415 of the code, less the maximum benefit.
11-67 (c) Any benefit to which any person is entitled under this
11-68 section shall be paid at the same time and in the same manner as
11-69 the benefit would have been paid from the fund if payment of the
12-1 benefit from the fund had not been precluded by Section 5.10(a)
12-2 [5.11(a)] of this Act. An excess benefit participant or any
12-3 beneficiary may not elect to defer the receipt of all or any part
12-4 of a payment due under this article.
12-5 SECTION 22. Section 5.10, Chapter 824, Acts of the 73rd
12-6 Legislature, Regular Session, 1993 (Article 6243o, Vernon's Texas
12-7 Civil Statutes), is repealed.
12-8 SECTION 23. This Act takes effect October 1, 2001.
12-9 * * * * *