S.B. No. 1442
AN ACT
relating to participation in, contributions to, and benefits and
administration of retirement systems for police officers in certain
municipalities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 5.02, Chapter 452, Acts of the 72nd
Legislature, Regular Session, 1991 (Article 6243n-1, Vernon's
Texas Civil Statutes), is amended by adding Subsections (d) and (e)
to read as follows:
(d) The police retirement board may by rule establish
additional requirements that a person must meet in order to receive
credit under this section.
(e) The police retirement board may by rule provide that no
person may receive credit under this section after a date set forth
in that rule.
SECTION 2. Chapter 452, Acts of the 72nd Legislature,
Regular Session, 1991 (Article 6243n-1, Vernon's Texas Civil
Statutes), is amended by adding Section 5.05 to read as follows:
Sec. 5.05. PERMISSIVE SERVICE CREDIT. (a) The police
retirement board may by rule provide that a member or eligible
surviving spouse of a member may establish creditable service by
depositing with the retirement system the actuarial present value,
at the time of deposit, of the additional life annuity (modified
cash refund) defined in Section 6.01 of this Act that would be
attributable to the purchase of the service credit under this
section, based on rates and tables recommended by the retirement
system's actuary and adopted by the board of trustees.
(b) Prior to allowing the purchase of service credit under
this section, the police retirement board shall adopt rules
relating to the maximum amount of credit which may be purchased by a
person under this section, the eligibility requirements that a
person must satisfy before purchasing credit under this section,
and such other matters as the board considers necessary for the
administration of this section.
(c) The board may not adopt a rule authorizing the purchase
of credit under this section unless the board has obtained an
actuarial study indicating that adoption of the rule will not make
the retirement system financially unsound and that, after adoption
of the rule, the retirement system's unfunded actuarial liability
can be amortized within the maximum amortization period adopted by
the Governmental Accounting Standards Board.
(d) The board may not adopt a rule authorizing the purchase
of credit under this section if that rule would be inconsistent with
the requirements of the Internal Revenue Code of 1986 (26 U.S.C.
Section 1 et seq.) and its successors.
(e) The board may modify or repeal a rule adopted under this
section. A modification of a rule adopted under this section must
comply with the requirements of this section.
SECTION 3. Subsection (c), Section 6.05, Chapter 452, Acts
of the 72nd Legislature, Regular Session, 1991 (Article 6243n-1,
Vernon's Texas Civil Statutes), is amended to read as follows:
(c) In the event of death of a member receiving a retirement
benefit, the sum of $7,500 shall be payable in a lump sum to the
member's beneficiary or, if no beneficiary, to the member's estate,
unless the member shall have directed otherwise in writing, duly
acknowledged and filed with the board. The payment under this
subsection shall be made from the retiree death benefits fund
described in Section 6.08 of this Act.
SECTION 4. Subsection (j), Section 6.07, Chapter 452, Acts
of the 72nd Legislature, Regular Session, 1991 (Article 6243n-1,
Vernon's Texas Civil Statutes), is amended to read as follows:
(j) The board may modify or eliminate the RETRO DROP
provisions of this section by the adoption of board rules if the
modification or elimination is approved by the board's actuary and
would not cause the amortization period for the retirement system's
unfunded actuarial liability to exceed the maximum amortization
period adopted by the Governmental Accounting Standards Board
[until August 31, 2002. At that time, the board's actuary shall
study the effects of the RETRO DROP provisions of this section and
report the results of the study to the board. Based on the report,
the board may decide to continue with, modify, or eliminate the
RETRO DROP provisions by the adoption of board rules].
SECTION 5. Chapter 452, Acts of the 72nd Legislature,
Regular Session, 1991 (Article 6243n-1, Vernon's Texas Civil
Statutes), is amended by adding Section 6.08 to read as follows:
Sec. 6.08. RETIREE DEATH BENEFIT FUND. (a) The police
retirement board shall establish a retiree death benefit fund and
shall deposit in such fund contributions paid by the city to provide
retiree death benefits in accordance with this section. The board
may, but is not required to, credit interest to the retiree death
benefit fund annually at such rate as the board may determine.
(b) The police retirement system shall pay death benefits
under Section 6.05(c) of this Act only from money in the retiree
death benefit fund, and the benefits are not an obligation of other
funds of the retirement system.
(c) Based upon the recommendation of the system's actuary,
the board shall adopt such rates and tables as are considered
necessary to determine the retiree death benefit fund contribution
rate of the city. At the same time as the actuary makes a valuation
of the assets and liabilities of the system pursuant to Section 3.09
of this Act, the actuary shall also make an actuarial valuation of
the assets and liabilities of the retiree death benefit fund, and
upon recommendation by the actuary, the board shall adjust the
rates and tables for the retiree death benefit fund.
(d) If at any time the amount of payments due from the
retiree death benefit fund exceeds the balance of such fund, the
board may direct that funds be transferred from the general
retirement fund to the retiree death benefit fund in such amounts as
are necessary to cover the deficiency. Any sums transferred to the
retiree death benefit fund under this subsection shall be repaid to
the general retirement fund of the retirement system at such time as
subsequent contributions by the city have resulted in the
accumulation of a sufficient amount in the retiree death benefit
fund for such a repayment to appear prudent.
(e) Contributions by the city to the retiree death benefit
fund shall be made at the same time as the city makes its
contribution to the retirement system under Section 8.01 of this
Act, and the amount of the city's contribution under Section 8.01 of
this Act each pay period shall be reduced by the amount of the
city's contribution to the retiree death benefit fund for that same
pay period.
SECTION 6. This Act takes effect September 1, 2003.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 1442 passed the Senate on
May 6, 2003, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 1442 passed the House on
May 28, 2003, by a non-record vote.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor