H.B. No. 1984
AN ACT
relating to participation and credit in, contributions to, and
benefits and administration of the Texas County and District
Retirement System.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 841.001(6), (7), (8), (18), (19), (20),
and (21), Government Code, are amended to read as follows:
(6) "Compensation" means the payments on which
contributions by an employee to the retirement system are based
that do not exceed the amount established by board rule, which may
not exceed the limit [$150,000 in a calendar year, indexed in the
same manner as is] provided by Section 401(a)(17) of the Internal
Revenue Code of 1986 (26 U.S.C. Section 417), as indexed in the
manner provided by that section, and that are made to an employee of
a participating subdivision by the subdivision for service,
including nonmonetary compensation, the value of which is
determined by the governing body of the subdivision. The term does
not include workers' compensation benefits received by a member
under Section 504.011, Labor Code.
(7) "Credited service" means the number of months of
prior and current service ascribed to a member in the retirement
system [or included in a prior service certificate in effect for the
member].
(8) "Employee" means a person, other than a person
determined by a subdivision to be a temporary employee, who is
certified by a subdivision as being employed in, or elected or
appointed to, a position or office in the subdivision that normally
requires services from the person for not less than 900 hours a year
and for which the person is compensated by the subdivision. The
term includes a person employed on a probationary basis, except as
provided by Section 842.107.
(18) "Supplemental death benefit program" means the
voluntary, employer-funded optional death benefit program
established under Subchapter F, Chapter 844.
(19) ["Temporary employee" means a person who is
scheduled to hold a position for less than six months and only:
[(A) until another person can be hired;
[(B) for the duration of a project scheduled to
end less than six months after the date of hiring;
[(C) until a specific date less than six months
after the date of hiring; or
[(D) until a volume of work is completed that is
estimated to be completed in less than six months after the date of
hiring.
[(20) "Supplemental death benefit program" means the
voluntary, employer-funded optional death benefits program under
Subchapter F, Chapter 844. The program constitutes "group-term
life insurance purchased for employees" as described by Section 79
of the Internal Revenue Code of 1986.
[(21)] "Vested member" means a member who may withdraw
from employment with all participating subdivisions, leave the
member's accumulated contributions on deposit with the retirement
system, and, on meeting the age and length-of-service requirements
for service retirement, file an application for retirement and
begin to receive a service retirement annuity.
SECTION 2. Sections 842.008(a), (f), and (i), Government
Code, are amended to read as follows:
(a) A participating subdivision may not terminate
participation in the retirement system as long as it has any
liabilities resulting from the participation of current or former
employees, but it may elect to discontinue enrolling in the
retirement system nonmembers whose employment or reemployment
begins after the effective date of an election to discontinue
enrollment. If the subdivision has an annually determined
contribution rate plan, the subdivision must elect to contribute in
all future years in which the allocation described by Subsection
(b) is necessary at a rate that is either the rate being paid at the
time of the election to discontinue enrollment or a rate that is [an
integer percent] greater than the rate being paid at the time of the
election to discontinue enrollment. The effective date of the
election to discontinue enrollment is January 1 of the year
following the year in which the election by the subdivision is made.
(f) The governing body of a [If the] participating
subdivision that is not enrolling new members in accordance with
Subsection (e)[, the annuities and credits described by Subsections
(c) and (d)] may not authorize a change in a provision of the
subdivision's plan, except that the governing body may authorize
the adoption of an option described by this subtitle:
(1) to the extent otherwise required by this subtitle;
or
(2) if the board of trustees determines that the
adoption of the option is consistent with the subdivision's
decision to discontinue enrolling new members and does not impair
the subdivision's ability to fund its obligations under this
subtitle within the applicable period provided by this subtitle [be
increased to a level that exceeds the greater of the level in effect
immediately before the time Subsection (b) became applicable or the
level in effect on December 31, 1992].
(i) Before or after the initial allocation under Subsection
(b) is determined, the subdivision may elect to contribute a
lump-sum deposit or may elect to contribute in all future years that
the allocation described by Subsection (b) is necessary at a rate
that is [an integer percent] greater than the rate being paid at the
time of the election [of the integer percent], notwithstanding the
provisions of Section 844.605 or 844.703.
SECTION 3. Sections 842.009(b) and (g), Government Code,
are amended to read as follows:
(b) If the subdivision has an annually determined
contribution rate plan, the subdivision must elect to contribute in
all future years in which the allocation described by Subsection
(a) is necessary at a rate that is either the rate being paid at the
time Subsection (a) is applied or a rate that is [an integer
percent] greater than the rate being paid at the time Subsection (a)
is applied.
(g) Before or after the initial allocation under Subsection
(a) is determined, the subdivision may elect to contribute a
lump-sum deposit or may elect to contribute in all future years that
the allocation described by Subsection (a) is necessary at a rate
that is [an integer percent] greater than the rate being paid at the
time of the election [of the integer percent], notwithstanding the
provisions of Section 844.605 and Section 844.703.
SECTION 4. Section 842.010(e), Government Code, is amended
to read as follows:
(e) The governing body of a [If the] participating
subdivision that is not enrolling new members in accordance with
Subsection (d)[, the annuities and credits described by Subsections
(b) and (c)] may not authorize a change in a provision of the
subdivision's plan, except that the governing body may authorize
the adoption of an option described by this subtitle:
(1) to the extent otherwise required by this subtitle;
or
(2) if the board of trustees determines that the
adoption of the option is consistent with the subdivision's
decision to discontinue enrolling new members and does not impair
the subdivision's ability to fund its obligations under this
subtitle within the applicable period provided by this subtitle [be
increased to a level that exceeds the level in effect immediately
before Subsection (a) became applicable].
SECTION 5. Section 842.101(b), Government Code, is amended
to read as follows:
(b) A person to whom Subsection (a)(1) applies becomes a
member of the retirement system on the date the subdivision's
participation becomes effective, and a person to whom Subsection
(a)(2) or (a)(3) applies becomes a member of the retirement system
on the first day of the person's employment. [A person who
heretofore became a member pursuant to Subsection (a)(2) on the
first day of the month subsequent to the month of employment and who
did not receive credit for the initial month of employment may
obtain credit for the month preceding the date of membership by
depositing with the system for credit to the member's individual
account the amount that would have been deducted as the member
contribution had the person become a member on the date of
employment.]
SECTION 6. Section 842.108(b), Government Code, is amended
to read as follows:
(b) A member who has separated from employment with a
participating subdivision may submit an application to withdraw the
member's accumulated contributions attributable to service with
that subdivision. A withdrawal cancels the person's credited
service and service credit attributable to service with that
subdivision on the date the retirement system makes payment of any
portion of the member's accumulated contributions. Credited
service that has been canceled may not be used to determine
eligibility for a later retirement unless it is reestablished under
Section 803.203, 843.003, or 843.0031.
SECTION 7. Section 842.112, Government Code, is amended to
read as follows:
Sec. 842.112. CORRECTION OF ERRORS. (a) The retirement
system may correct any administrative or operational error by any
appropriate means, taking into account any applicable Internal
Revenue Service guidelines [If, as a result of a reporting error on
the part of a participating subdivision, a person has not received
credited service or current service credit or has received less
than the correct amount of current service credit for months in
which the person performed service as an employee of the
subdivision, the retirement system shall correct the error as
authorized by this section].
(b) [Except as provided by Subsection (j) or Section
843.005, a correction may not be made as to current service
performed, or current service credit that should have been
received, more than four years before the date an application, on
forms approved by the retirement system's board of trustees, for
the correction is received by the retirement system.
[(c) Except as provided by Subsection (i), a correction may
not be made unless the retirement system receives, in addition to
the application, each of the items required under Subsections (d),
(e), and (f), and one of the following:
[(1) a written agreement, approved by the
subdivision's governing body, stating that an error has occurred
and that the subdivision has agreed to correct that error;
[(2) a final judgment by a court of competent
jurisdiction in proceedings to which the subdivision was a party,
ordering that the subdivision correct the error; or
[(3) an order in an administrative proceeding to which
the subdivision was a party, directing that the subdivision correct
the error, that is no longer subject to appeal.
[(d) A correction may not be made unless the retirement
system receives a supplemental report properly signed on behalf of
the subdivision showing the corrections to credited service or
current service credit of the person.
[(e) A correction may not be made unless the retirement
system receives payment from the person seeking the correction in
an amount equal to the contributions or additional contributions
the person would have made to the system if the service had been
correctly reported to the retirement system.
[(f) A correction may not be made unless the retirement
system receives payment from the subdivision in an amount equal to
the additional contribution that the subdivision should have paid
to the retirement system based on the additional credited service
or current service credit.
[(g) A subdivision that is the subject of an agreement,
judgment, or order described by Subsection (c) shall file the
supplemental report and submit the payments described by this
section within 30 days after the date the subdivision is notified in
writing by the retirement system that those items should be sent to
the retirement system.
[(h) If, as a result of a reporting error on the part of a
participating subdivision, a person has not received prior service
credit, on written application to the retirement system,
accompanied by evidence of the prior service satisfactory to the
retirement system, the retirement system shall correct the error if
the retirement system receives the person's written application for
the correction within four years after the later of the date the
subdivision began participation or the person first became a member
of the retirement system.
[(i) The correction of an error affecting not more than
three monthly reports within a period of not more than three
consecutive months may be made on the basis of the application alone
if the application, the supplemental report, and the payment
required by this section are received by the retirement system
within six months after the first day of the first month for which
the correction is being made.
[(j)] If, as a result of a suit against a participating
subdivision in a court of competent jurisdiction or as a result of a
complaint or grievance against a participating subdivision filed
with the United States Equal Employment Opportunity Commission, the
Commission on Human Rights, or a county civil service commission, a
judgment or order is issued or a settlement agreement is executed,
the terms of which require that an employee receive back pay or that
a person be employed or reemployed for a specified period and
require that the person receive service credit toward retirement
based on the back pay or both service credit and credited service
for the specified period of employment or reemployment, on written
application to the retirement system, the system shall grant the
service credit and credited service if:
(1) the judgment or order has become final and is no
longer subject to appeal;
(2) a certified copy of the judgment, order, or
settlement agreement accompanies the application;
(3) the retirement system receives payment on behalf
of the person in an amount equal to the contributions the person
would have made to the system if the back pay or additional service
had been reported to the system; and
(4) the retirement system receives payment from the
subdivision in an amount equal to the additional contributions that
the subdivision would have made to the system for the additional
service credit.
[(k) If a person to whom Subsection (j) applies has
forfeited service credit as a result of withdrawal of contributions
during the time between the termination of employment and the date
of reinstatement, the person is eligible to reestablish credit
under Section 843.003. For purposes of this subsection, forfeited
credit based on service performed for more than one participating
subdivision is considered to have been credit for service performed
only for the subdivision that is subject to the judgment, order, or
settlement agreement, except that credit may not be reinstated
under this subsection for service performed after the date of the
termination of employment that resulted in the judgment, order, or
settlement agreement.]
SECTION 8. The heading to Section 843.003, Government Code,
is amended to read as follows:
Sec. 843.003. REESTABLISHING CREDITED SERVICE AND SERVICE
CREDIT PREVIOUSLY FORFEITED.
SECTION 9. Sections 843.003(b) and (d), Government Code,
are amended to read as follows:
(b) A member eligible to reestablish credit under this
section is one who is[:
[(1) was] a member [on the effective date of an order
made under Subsection (a); and
[(2) has, since resuming membership, at least 24
consecutive months of service] as an employee of the subdivision on
the effective date of an order authorized by the subdivision under
Subsection (a) [for which the order was made].
(d) A governing body may not make an order under Subsection
(a) [after 1991] except on the terms provided by Subchapter H, [of]
Chapter 844.
SECTION 10. Subchapter A, Chapter 843, Government Code, is
amended by adding Section 843.0031 to read as follows:
Sec. 843.0031. ALTERNATIVE REESTABLISHMENT OF CREDITED
SERVICE PREVIOUSLY FORFEITED; OPTION TO PAY LUMP-SUM AMOUNT. (a) A
member who has withdrawn contributions from the retirement system
and who subsequently resumes employment with a subdivision may by
application to the system at any time before retirement reestablish
forfeited prior and current credited service.
(b) A member who has withdrawn contributions from the
retirement system and who subsequently resumes employment with a
subdivision may at any time before retirement pay to the system a
lump sum in any amount that does not exceed the actuarial present
value of the additional benefits that would have been attributable
to the withdrawn contributions.
(c) An amount paid under Subsection (b) is not subject to
employer matching contributions, even if the member would otherwise
be eligible under an order adopted under Section 843.003.
SECTION 11. Section 843.102, Government Code, is amended by
adding Subsection (c) to read as follows:
(c) A person who has withdrawn contributions from an account
for service for a subdivision and who subsequently resumes
employment with the subdivision is not eligible to receive service
credit under this section for prior service for the subdivision
that was not established before the person withdrew the
contributions.
SECTION 12. Section 843.103, Government Code, is amended to
read as follows:
Sec. 843.103. STATEMENT OF PRIOR SERVICE. A [Before the
fifth anniversary of the date a] member [becomes] eligible to
receive [claim] prior service credit[, a member claiming credit for
prior service] shall claim the credit by filing [file] a detailed
statement of the service with the treasurer or other disbursing
officer of the subdivision for which the service was performed. The
statement must be filed before the fifth anniversary of the date the
person becomes a member as an employee of the subdivision.
SECTION 13. Section 843.201(d), Government Code, is amended
to read as follows:
(d) Allocated prior service credits are allowable for a
subdivision only if:
(1) the subdivision has adopted the provisions for an
annually determined contribution rate plan under Subchapter H,
Chapter 844; or
(2) the retirement system's actuary determines that
the subdivision's unfunded actuarial accrued liability
amortization period will be less than 20 [25] years, if the
subdivision has not adopted the provisions of Subchapter H, Chapter
844.
SECTION 14. Section 843.203(a), Government Code, is amended
to read as follows:
(a) The governing body of a public employer [subdivision]
that has taken over the functions [facilities of a hospital,
utility, or other public facility] formerly performed [operated] by
a [another] participating subdivision may assume in whole or in
part the obligations that the subdivision [former employer] had
undertaken under this subtitle by reason of service performed by
members of the system [who become employees of the subdivision
seeking to participate in the system]. A public employer
[subdivision participating in the system] that could have assumed
the obligations of another subdivision had this section been in
effect at the time the public employer took over the functions of
the participating subdivision [of participation] may assume in
whole or in part the obligations that the subdivision that was the
first employer had undertaken by reason of service rendered by
members of the system [who became employees of the subdivision that
is the second employer]. The governing body of a public employer
[subdivision] that assumes the obligations of a [another]
subdivision under this section may make a lump-sum deposit to the
appropriate account [of the other subdivision] in the retirement
system, in an amount computed by the retirement system's actuary,
on terms approved by the board of trustees and [that are] agreed to
in writing by the former employer and the assuming employer, if the
former employer exists, or by the assuming employer alone, if the
former employer does not exist [affected subdivisions and approved
by the board of trustees]. Assumptions under this section must
[shall] be by written agreement between the affected existing
employers [subdivisions] and are subject to approval of the board
of trustees. The affected employers may amend an [An] agreement
under this section [may be amended] in writing [by the affected
subdivisions] if the [amendment is approved by the] board of
trustees approves the amendment.
SECTION 15. Section 843.204(b), Government Code, is amended
to read as follows:
(b) The governing body of a subdivision may adopt the
provisions of this section:
(1) on the terms provided by Subchapter H, [of]
Chapter 844; or
(2) if the board of trustees determines that,
according to the computations of the actuary approved by the board
of trustees, the adoption would not impair the ability of the
subdivision to fund all obligations against its account in the
subdivision accumulation fund before the 20th [25th] anniversary of
the subdivision's most recent actuarial valuation date.
SECTION 16. Section 843.401, Government Code, is amended to
read as follows:
Sec. 843.401. CURRENT SERVICE GENERALLY. Current service
[Service that] is service performed by [while a member as] an
employee of a participating subdivision while a member of the
retirement system and [is] credited as provided under this section.
The [in the] retirement system shall grant one month of current
service for each month for which the required contributions are
made, reported, and certified by the [member and the] employing
subdivision.
SECTION 17. Section 843.403(c), Government Code, is amended
to read as follows:
(c) The multiple matching credit of a member is an amount
equal to a percentage of the contributions made by the member to the
retirement system during a calendar year. The percentage is 0
percent until a greater percentage is adopted as provided by
Section 843.703 or, for a subdivision whose participation in the
retirement system began after October 31, 1980, unless a greater
percentage is adopted by its governing body before the first
anniversary of the subdivision's effective date of retirement
system participation, after the actuary has determined and
certified that the greater percentage would not impair the ability
of the subdivision to amortize, before the 20th [25th] anniversary
of the participation date, all obligations that are charges against
its account in the subdivision accumulation fund. A multiple
matching credit includes any portion of a current service credit in
effect on January 1, 1978, that exceeds the member's current
service credit determined under Subsection (b).
SECTION 18. Section 843.601(c), Government Code, is amended
to read as follows:
(c) The governing body of a participating subdivision also
may, on the terms provided by Section 844.704, authorize the
establishment of credited service [credit] for current service in
the retirement system for qualified military service as provided by
this subsection. Qualified military service includes military
service before becoming an employee of the subdivision. A member
eligible to establish credited service for current service [credit]
under this subsection is one who has credited service in the
retirement system for at least the minimum period required to
receive a service retirement annuity at the age of 60 from the
subdivision from which credit under this subsection is sought
[performed as an employee at least 10 years of service that is
credited in the retirement system] and who does not receive and is
not eligible to receive federal retirement payments based on 20
years or more of active federal military duty or its equivalent. An
eligible member may establish credited service for current service
[credit] under this subsection by filing an application with the
retirement system [an application for the credit].
SECTION 19. Section 844.009(a), Government Code, is amended
to read as follows:
(a) The governing body of a contributing subdivision with a
member contribution rate of at least four percent that has not
elected to discontinue enrolling employees may adopt the provisions
of this section:
(1) on the terms provided by Subchapter H; or
(2) if the board of trustees determines that, based on
computations by the retirement system's actuary, the adoption would
not impair the ability of the subdivision to fund all obligations
against its account in the subdivision accumulation fund before the
20th [25th] anniversary of the subdivision's most recent actuarial
valuation date.
SECTION 20. Subchapter A, Chapter 844, Government Code, is
amended by adding Section 844.010 to read as follows:
Sec. 844.010. CERTAIN BENEFICIARY DESIGNATIONS. (a) A
beneficiary designation that names a former spouse as beneficiary
is invalid for purposes of this subtitle unless the designation:
(1) is made or confirmed in writing after the date of
divorce; or
(2) was made by a retiree who, at the time of divorce,
is receiving payments under an optional service or disability
retirement with payments to continue to the beneficiary for the
beneficiary's life.
(b) In addition to the authority provided by Section
804.051, the board of trustees may adopt rules to require consent of
a member's spouse to:
(1) the member's designation of a beneficiary who is
not the member's spouse;
(2) the member's selection of an optional form of
retirement benefit; or
(3) the member's election of a withdrawal of
contributions.
(c) A benefit payable under this subtitle is not subject to
a will, other testamentary document, or the law of intestacy to the
extent that the member, retiree, or other former member has a
different beneficiary under the retirement system than under the
testamentary document or law of intestacy.
SECTION 21. Section 844.104(c), Government Code, is amended
to read as follows:
(c) An eligible person may select any of the following
optional annuities that are the actuarial equivalent of the annuity
to which the person is entitled and that provide that:
(1) after the retiree's death, the reduced annuity is
payable throughout the life of a person designated by the retiree;
(2) after the retiree's death, one-half of the reduced
annuity is payable throughout the life of a person designated by the
retiree;
(3) if the retiree dies before 60 monthly annuity
payments have been made, the remainder of the 60 payments are
payable to the retiree's beneficiary or, if one does not exist, to
the retiree's spouse or, if no surviving spouse exists, to the
retiree's estate;
(4) if the retiree dies before 120 monthly annuity
payments have been made, the remainder of the 120 payments are
payable to the retiree's beneficiary or, if one does not exist, to
the retiree's spouse or, if no surviving spouse exists, to the
retiree's estate;
(5) after the retiree's death, the reduced annuity is
payable throughout the life of a person designated by the retiree,
except that if the beneficiary predeceases the retiree, the annuity
payable throughout the remaining life of the retiree is the annuity
that would be payable if the retiree had chosen a standard service
retirement annuity;
(6) after the retiree's death, three-fourths of the
reduced annuity is payable throughout the life of a person
designated by the retiree; or
(7) if the retiree dies before 180 monthly annuity
payments have been made, the remainder of the 180 payments are
payable to the retiree's beneficiary or, if one does not exist, to
the retiree's spouse or, if no surviving spouse exists, to the
retiree's estate.
SECTION 22. Section 844.208(b), Government Code, is amended
to read as follows:
(b) The amount of annuity increase under this section is
computed as the sum of the basic and supplemental annuities on the
effective date of retirement of the person on whose service the
annuities are based or, if the person's current annuity has been
increased under Section 844.006(c) or (d), 844.104(c)(5), or
844.305(c)(5), the sum of the basic and supplemental annuities is
computed as if the person had selected a standard service or
disability retirement annuity on the person's effective date of
retirement, multiplied by:
(1) the percentage change in the Consumer Price Index
for All Urban Consumers, published by the Bureau of Labor
Statistics of the United States Department of Labor, from December
of the year immediately preceding the effective date of the
person's retirement to the December that is 13 months before the
month in which the effective date of the order or resolution
providing the increase occurs; and
(2) a fraction, specified by the governing body in the
order or resolution, that is not less than 30 percent nor more than
80 percent and is a multiple of 10 percent.
SECTION 23. Section 844.305(c), Government Code, is amended
to read as follows:
(c) An eligible person may select any of the following
optional annuities that are the actuarial equivalent of the annuity
to which the person is entitled and that provide that:
(1) after the retiree's death, the reduced annuity is
payable throughout the life of a person designated by the retiree;
(2) after the retiree's death, one-half of the reduced
annuity is payable throughout the life of a person designated by the
retiree;
(3) if the retiree dies before 60 monthly annuity
payments have been made, the remainder of the 60 payments are
payable to the retiree's beneficiary or, if one does not exist, to
the retiree's spouse or, if no surviving spouse exists, to the
retiree's estate;
(4) if the retiree dies before 120 monthly annuity
payments have been made, the remainder of the 120 payments are
payable to the retiree's beneficiary or, if one does not exist, to
the retiree's spouse or, if no surviving spouse exists, to the
retiree's estate;
(5) after the retiree's death, the reduced annuity is
payable throughout the life of a person designated by the retiree,
except that if the beneficiary predeceases the retiree, the annuity
payable throughout the remaining life of the retiree is the annuity
that would be payable if the retiree had chosen a standard service
retirement annuity;
(6) after the retiree's death, three-fourths of the
reduced annuity is payable throughout the life of a person
designated by the retiree; or
(7) if the retiree dies before 180 monthly annuity
payments have been made, the remainder of the 180 payments are
payable to the retiree's beneficiary or, if one does not exist, to
the retiree's spouse or, if no surviving spouse exists, to the
retiree's estate.
SECTION 24. Section 844.504, Government Code, is amended to
read as follows:
Sec. 844.504. RETIREE SUPPLEMENTAL DEATH BENEFIT. If a
retiree dies who was receiving a retirement annuity based on
service for a subdivision that has elected to provide, and
continues to provide, postretirement supplemental death benefits,
a lump-sum supplemental death benefit is payable from the fund in
the amount of $5,000. [If a retiree dies who was receiving
retirement annuities based on service for more than one subdivision
that has elected to provide, and continues to provide,
postretirement supplemental death benefits, the financing of the
lump-sum benefit will be prorated among those subdivisions. If a
person dies while payment of a retirement annuity to that person is
suspended as a result of Section 842.110, the supplemental death
benefit under this section will be paid if it would have been
payable except for the suspension, unless a supplemental death
benefit is payable under Section 844.503 as a result of the member's
death.]
SECTION 25. Sections 844.605(a), (b), and (d), Government
Code, are amended to read as follows:
(a) If the actuary determines that the obligations of a
participating subdivision to the subdivision accumulation fund
cannot be amortized within a period of 30 [40] years or determines
that subdivision contributions at the rate in accordance with
Section 845.404(a)(2) and any supplemental contribution rate
adopted by the subdivision under this section are inadequate to
fund all obligations charged against the subdivision's account in
the subdivision accumulation fund, the governing body of the
subdivision may by order or resolution provide additional
contributions by adopting a supplemental contribution rate under
this section to reduce the funding period.
(b) A supplemental contribution rate is the rate of
contribution by a subdivision to its account in the subdivision
accumulation fund, in addition to the contributions provided under
Section 845.404(a)(2), that the actuary determines and certifies is
required, together with the contributions provided under Section
845.404(a)(2), to amortize the obligations of the subdivision to
the subdivision accumulation fund within a period of 20 [25] years.
A supplemental contribution rate may exceed the rate determined by
the actuary.
(d) A supplemental contribution rate adopted by the
governing body of a subdivision expires at the end of the 20th
[25th] calendar year after its effective date, or at the end of any
earlier calendar year in which the actuary determines and
certifies, after the annual actuarial valuation under Section
845.206, that all obligations of the subdivision to the subdivision
accumulation fund can be amortized within a period of 20 [25] years
on the basis of contributions provided by the subdivision under
Section 845.404(a)(2).
SECTION 26. Sections 844.606(b), (d), and (e), Government
Code, are amended to read as follows:
(b) The actuary shall determine what lower percentage to be
used in determining multiple matching credits under Section
843.403(c) for contributions made after the effective date of the
reduction is required to amortize the obligations of the
subdivision to the subdivision accumulation fund within a period of
20 [25] years.
(d) The governing body of a participating subdivision may
reduce the percentage used in determining multiple matching credits
under Section 843.403(c) to zero percent for contributions made
after the effective date of the reduction, even if the resulting
amortization period exceeds 20 [25] years.
(e) The governing body of a participating subdivision may
reduce the percentage used in determining multiple matching credits
in conjunction with the adoption of a supplemental contribution
rate under Section 844.605 in order to amortize the obligations of
the subdivision to the subdivision accumulation fund within a
period of 20 [25] years.
SECTION 27. Section 844.608(b), Government Code, is amended
to read as follows:
(b) If the actuary determines that, despite all required
decreases described by Section 844.607, the obligations of a
participating subdivision to the subdivision accumulation fund
cannot be amortized within a period of 20 [25] years, the retirement
system shall reduce the rate of member contributions to such lower
rate authorized by this section as, in the opinion of the actuary,
is required for the obligations of the subdivision to the
subdivision accumulation fund to be able to be amortized within a
period of 20 [25] years. At the time the actuary determines that
the rate of employee contributions no longer must be reduced for the
obligations to be able to be amortized within 20 [25] years, the
retirement system shall reinstate the employee contribution rate to
the rate that was in effect at the time of the reduction, unless the
governing body of the subdivision has elected to change to some
other rate authorized by Section 845.402. Any change under this
section shall be made on January 1 of the year following the
applicable determination by the actuary.
SECTION 28. Sections 844.704(d) and (f), Government Code,
are amended to read as follows:
(d) The governing body of a subdivision that has adopted or
is adopting the plan provisions of this subchapter may adopt or
authorize:
(1) an increase in retirement annuities under Section
844.209;
(2) an increase in retirement annuities under Section
844.208;
(3) the reestablishment of credited service
previously forfeited under Section 843.003;
(4) the establishment of credited service for military
service under Section 843.601(c);
(5) [the reduction in the credited service requirement
for military service under Section 843.601(g);
[(6)] the establishment of premembership credited
service for overage employees under Section 843.204;
(6) [(7)] the benefit eligibility plan described by
Section 844.210, 844.211, or 844.212; or
(7) [(8)] the partial lump-sum distribution on
service retirement under Section 844.009.
(f) An order or resolution under this section must be filed
with the retirement system not later than December 15 of the year
preceding the year in which it will take effect and may not take
effect until the order or resolution is approved by the board of
trustees as meeting the requirements of this section. After
approval by the board, an order or resolution may take effect only
on January 1 of a year, except that an order or resolution for a
subdivision that begins participation after January 1, 1992, may
take effect on the date the subdivision begins participation.
SECTION 29. Section 845.003, Government Code, is amended to
read as follows:
Sec. 845.003. ELIGIBILITY. (a) To be eligible to serve as
a trustee a person must be:
(1) a member of the retirement system[;] and
[(2)] an employee of a participating subdivision; or
(2) a retiree of the retirement system.
(b) If a person serving as a trustee ceases to meet an
eligibility requirement under Subsection (a) [be an employee of a
participating subdivision or fails to attend four consecutive
regular meetings of the board of trustees], the person may not act
as a trustee and shall vacate the office of trustee.
(c) A person serving as trustee who fails to attend four
consecutive regular meetings of the board of trustees may not act as
a trustee and is considered to have vacated the office of trustee.
SECTION 30. Section 845.007(a), Government Code, is amended
to read as follows:
(a) The board of trustees shall hold four regular meetings
[in March, June, September, and December of] each year and special
meetings when called by the director.
SECTION 31. Sections 845.309(b) and (e), Government Code,
are amended to read as follows:
(b) As of [On] December 31 of each year, the
nondistributable income account will be adjusted by the net change
in carrying value necessary to value at market all domestic,
fixed-income securities owned by the retirement system as part of a
passively managed, long-term portfolio.
(e) As of [On] December 31 of each year, the amount
remaining in the distributable income account and the investment
expenses account shall be distributed in the manner prescribed by
this subtitle.
SECTION 32. Section 845.315(a), Government Code, is amended
to read as follows:
(a) As of [On] December 31 of each year and after the balance
of the investment expenses account has been transferred to the
distributable income account, the board of trustees shall transfer
from the distributable income account of the interest fund the
following amounts:
(1) to the current service annuity reserve fund,
interest on the mean amount in the current service annuity reserve
fund during that year;
(2) to the supplemental death benefits fund, interest
on the mean amount in the supplemental death benefits fund during
that year;
(3) to the general reserves account of the endowment
fund, a dollar amount determined by the board of trustees as
necessary to provide adequate funding of the endowment fund,
including provisions for all special needs, all contingencies,
replenishment of the amount transferred during the current year to
the employees saving fund for interest to retiring or deceased
members plus the matching amount transferred to the subdivision
accumulation fund, and funding of investment expenses and
administrative costs for the following year;
(4) to the employees saving fund, current interest on
the sum of the accumulated contributions in the employees saving
fund credited on January 1 of that year to all persons who are
members on December 31 of that year before any transfers for
retirement effective December 31 of that year are made; and
(5) to the subdivision accumulation fund, the
remaining balance of the distributable income account in the
interest fund after transfers provided for by Subdivisions (1),
(2), (3), and (4) have been made.
SECTION 33. Section 845.402(c), Government Code, is amended
to read as follows:
(c) The governing body of a participating subdivision may
reduce the rate of its member contributions effective on the first
day of any calendar year if, at least 90 days before the date of the
reduction, the subdivision has given written notice of the
reduction to the board of trustees and if the actuary determines
that the reduction would not impair the ability of the subdivision
to fund all obligations against its account in the subdivision
accumulation fund before the 20th [25th] anniversary of the
subdivision's most recent actuarial valuation date.
SECTION 34. Section 845.407, Government Code, is amended by
amending Subsection (a) and adding Subsection (e) to read as
follows:
(a) Except as provided by Subsections (c), [and] (d), and
(e), a participating subdivision that fails to provide the
information required by Section 845.403 or to pay all contributions
required by this subchapter to be made and remitted to the
retirement system not later than the 15th day of the month in which
they become due shall pay a penalty under this section. The penalty
for a past-due monthly remission is equal to interest on the
past-due amounts for each day past due at a nominal interest rate of
12 percent, plus a $500 administrative fee. If the penalty is not
paid within three months after the date notice of the penalty has
been sent to the subdivision, the retirement system shall deduct
the penalty from the subdivision's account in the subdivision
accumulation fund. The interest portion of the penalty shall be
deposited by the retirement system in the distributable income
account of the interest fund. The administrative fee portion of the
penalty shall be deposited by the retirement system in the expense
fund.
(e) The retirement system may extend the due date provided
by this section if a subdivision applies for an extension before the
due date and the director determines that good cause exists for the
extension and that the need for the extension is not caused by
neglect, indifference, or lack of diligence.
SECTION 35. Subchapter F, Chapter 845, Government Code, is
amended by adding Sections 845.503 and 845.504 to read as follows:
Sec. 845.503. AUTHORITY TO RECOUP OR MAKE ADJUSTMENTS FOR
PAYMENTS MADE IN ERROR. (a) The retirement system may reduce
future payments of benefits based on the account of a member, a
retiree, or other former member to recoup an amount overpaid or
otherwise paid in error to or on the behalf of the member, retiree,
or other former member. If no future payments are due, the
retirement system may recover the overpayment in any manner that is
permitted for the collection of any other debt.
(b) The retirement system may not recover from a member,
retiree, or other former member any overpayment made more than
three years before the date the overpayment is discovered. This
subsection does not apply to an overpayment a reasonable person
should know the person is not entitled to receive.
(c) The retirement system may adjust amounts in a
subdivision's account in the subdivision accumulation fund to
correct an error related to the account.
Sec. 845.504. EXCESS BENEFIT PROGRAM. (a) If the board of
trustees determines that it is in the interest of the retirement
system and will benefit members and annuitants, the board by rule
may establish an excess benefits program for the payment of
benefits under Section 415(m) of the Internal Revenue Code of 1986,
and its subsequent amendments, that would otherwise be barred by
the limitation on benefits imposed by Section 415 of that code.
(b) Notwithstanding any other provision of this subtitle,
the board of trustees by rule may provide for the transfer of
contributions as part of the excess benefits program in a manner
consistent with a governmental excess benefit arrangement.
SECTION 36. Section 844.605(d), Government Code, as amended
by this Act, applies only to a supplemental contribution rate
adopted by a governing body of a subdivision on or after the
effective date of this Act.
SECTION 37. The following provisions of the Government Code
are repealed:
(1) Section 843.005;
(2) Section 843.106;
(3) Section 843.107; and
(4) Section 843.601(g).
SECTION 38. This Act takes effect January 1, 2004.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 1984 was passed by the House on April
10, 2003, by a non-record vote.
______________________________
Chief Clerk of the House
I certify that H.B. No. 1984 was passed by the Senate on May
27, 2003, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor