H.B. 601 78(R)    BILL ANALYSIS


H.B. 601
By: Thompson
Pensions & Investments
Committee Report (Unamended)



BACKGROUND

The Houston Municipal Employees Pension System (HMEPS) is a defined
benefit pension plan established by Article 6243h, VTCS, with
approximately 20,000 active and retired participants. HMEPS provides
retirement, disability and survivor benefits for eligible City of Houston
and pension system employees, except police officers and firefighters. 

HMEPS board and staff, as well as active municipal members, retirees, and
the City of Houston, continually review the programs administered by HMEPS
as well as the enabling legislation and make recommendations resulting
from this process 

PURPOSE

As proposed, House Bill 601 revises the composition of the Board of
Trustees , who may serve on the board and how the board member is
selected.  It also revises  the powers and duties of the system and
programs under the Houston Municipal Employees Pension System. 

RULEMAKING AUTHORITY

It is the opinion of this committee that this bill does not grant
additional rulemaking authority  to any state officer, agency, department
or institution. 

SECTION BY SECTION ANALYSIS

 SECTION 1:   Amends Section 2(c) and (j), Chapter 88, Acts of the 77th
Legislature, (Article 6243h, VTCS), to reduce the number of trustees on
the pension board from 11 to 9, by reducing the number of appointed
trustees from three to one.  Deletes the requirement for the appointed
trustee to reside in the city, but allows residency anywhere in the state.
Gives the elected members of the board appointment authority for the
appointed position, including removal. 

 SECTION 2:  Amends Section 3, Chapter 88, Acts of the 77th Legislature,
(Article 6243h, VTCS), by adding Subsection (n).   Subsection (n)
authorizes the pension board to enter into a written agreement with the
city regarding pension issues and benefits, as provided, and sets forth
certain parameters. 

 SECTION 3:   Amends Section 15, Chapter 88, Acts of the 77th Legislature,
(Article 6243h, VTCS), by changing the subchapter heading from "Annuity
Increase" to "Increase in Benefits." 

 SECTION 4 :   Amends Section 15, Chapter 88, Acts of the 77th
Legislature,  (Article 6243h, VTCS), by adding a  Subsection (d).
Subsection (d) provides that a pension benefit may be increased if
approved by a qualified actuary as stipulated, approved by the board and
city as stipulated, and does not deprive a member of benefits as
stipulated. 

 SECTION 5:   Discontinues the terms of the trustees serving under
Section 2(c) (5), Chapter 88, Acts of the 77th Legislature, (Article
6243h, VTCS), on the effective date of this Act, and requires the pension
board to appoint or reappoint one trustee under Section 2, as amended by
this Act, no later than October 1, 2003, for a term expiring in January
2004. 

 SECTION 6.  Effective date.
 


EFFECTIVE DATE

Effectively immediately upon a vote of two-thirds of all members elected
to each house; otherwise, effective September 1, 2003.