79R1472 DLF-D

By:  Van Arsdale                                                  H.B. No. 235


A BILL TO BE ENTITLED
AN ACT
relating to the computation of certain benefits under the Teacher Retirement System of Texas. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Section 824.203, Government Code, is amended by amending Subsection (a) and adding Subsections (a-1) and (c-1) to read as follows: (a) Except as provided by Subsections (a-1), (c), and (d), [and (e),] the standard service retirement annuity is an amount computed on the basis of the member's average annual compensation for the three years of service, whether or not consecutive, in which the member received the highest annual compensation, times 2.3 percent for each year of service credit in the retirement system. (a-1) This subsection applies only to a member who, during any month of the member's service, received compensation of $5,000 or more. Except as provided by Subsections (c-1) and (d), the standard service retirement annuity for a member subject to this subsection is an amount computed as the member's median monthly compensation for the 60 months of service, whether or not consecutive, in which the member received the highest monthly compensation, times 2.3 percent for each year of service credit in the retirement system. (c-1) Notwithstanding Subsection (a-1), and except as provided by Subsection (d), for benefits payable because of the death or retirement of a member otherwise subject to Subsection (a-1) that occurred before September 1, 2005, the standard service retirement annuity is computed in accordance with the law applicable to the computation of those benefits immediately before that date. SECTION 2. Section 824.806, Government Code, is amended by amending Subsection (b) and adding Subsection (c) to read as follows: (b) Except as provided by Subsection (c), at [At] the time a member retires or dies, the retirement system shall compute the value of the additional service credit at the rate provided under Section 824.203, based on the lesser of the three years of service after the member's termination of plan participation, or the member's actual years of service after the termination, in which the member received the highest annual compensation. The retirement system shall add the amount computed under this subsection to the amount determined on the effective date of plan participation, and the sum is payable, subject to actuarial reduction if applicable, as the monthly annuity payment. (c) This subsection applies only to a member who is subject to Section 824.203(a-1). At the time the member retires or dies, the retirement system shall compute the value of the additional service credit at the rate provided under Section 824.203(a-1), based on the lesser of the 60 months of service after the member's termination of plan participation, or the member's actual months of service after the termination, in which the member received the highest monthly compensation. The retirement system shall add the amount computed under this subsection to the amount determined on the effective date of plan participation, and the sum is payable, subject to actuarial reduction if applicable, as the monthly annuity payment. SECTION 3. The change in law made by this Act applies only to benefits payable because of the death or retirement of a member of the Teacher Retirement System of Texas that occurs on or after September 1, 2005. Benefits payable because of a death or retirement that occurs before September 1, 2005, are governed by the law as it existed immediately before that date, and that law is continued in effect for that purpose. SECTION 4. This Act takes effect September 1, 2005.