80R3766 SGA-D

By: West H.B. No. 2289

A BILL TO BE ENTITLED

AN ACT

relating to retirement and health insurance benefits of school district peace officers under the Teacher Retirement System of Texas.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 821.001, Government Code, is amended by adding Subdivision (11-a) to read as follows:

(11-a) "Peace officer" means a member of the retirement system who has been commissioned by a public school district as a law enforcement officer under Section 37.081, Education Code.

SECTION 2. Section 824.202, Government Code, is amended by adding Subsection (d-2) to read as follows:

(d-2) A member who is at least 55 years old and who has at least 10 years of service credit as a commissioned peace officer for a public school district is eligible to retire and receive a service retirement annuity.

SECTION 3. Subchapter C, Chapter 824, Government Code, is amended by adding Section 824.207 to read as follows:

Sec. 824.207. SERVICE RETIREMENT BENEFITS FOR CERTAIN PEACE OFFICERS. (a) A member who has at least 20 years of service credit as a peace officer is eligible to retire regardless of age and receive a standard service retirement annuity in an amount and to be funded as provided by this section.

(b) The standard service retirement annuity payable for at least 20 years of service credit as a peace officer is an amount computed on the basis of the member's average monthly compensation for the 36 highest months of compensation times the sum of the percentage factor used in the computation of a standard service retirement annuity under Section 824.203(a) plus .5 percent.

(c) The standard combined service retirement annuity that is payable under this section is based on retirement on or after the attainment of the normal retirement age, which for purposes of this section is the earlier of either the age of 50 or the age at which the sum of the member's age and amount of service credit equals the number 80. A peace officer who retires before attaining the normal retirement age is entitled to an annuity that is actuarially reduced from the annuity available at the normal retirement age to the peace officer service credit annuity amount available at the sum of the member's age and amount of service credit. The annuity is payable from the peace officer supplemental retirement fund.

(d) Benefits for service as a peace officer become payable from the retired reserve account established by Section 825.309 at the normal retirement age under the computation provided by Section 824.203. Optional retirement annuities provided by Section 824.204 are available to a member eligible to receive a service retirement annuity under this section, but the same optional plan and designee must be selected for the portion of the annuity payable from the peace officer supplemental retirement fund and the portion payable from the retired reserve account established by Section 825.309.

(e) The amount payable from the peace officer supplemental retirement fund is reducible by the amount paid from the retired reserve account established by Section 825.309 for service as a peace officer. The total combined amount of an annuity under this section may not be less than the authorized benefit under Subsection (b) subtracted by any amount necessary because of selection of an optional annuity, because of retirement before the normal retirement age, or as provided by Subsection (f).

(f) The standard combined service retirement annuity payable for at least 20 years of service credit as a peace officer may not exceed 100 percent of the average compensation computed under Subsection (b).

(g) For purposes of this section, service as a peace officer is creditable as provided by rule of the board of trustees or on a month-to-month basis, whichever is greater.

SECTION 4. Subchapter D, Chapter 824, Government Code, is amended by adding Section 824.310 to read as follows:

Sec. 824.310. DISABILITY RETIREMENT BENEFITS FOR CERTAIN PEACE OFFICERS. (a) An annuity payable for an occupational disability resulting from a risk to which peace officers are exposed because of the nature of peace officer duties is payable under the same terms and conditions that apply to other occupational disability retirement annuities under this subtitle, except that the source and amount of the annuity are as provided by this section.

(b) Except as provided by Subsection (c), an occupational disability retirement annuity under this section is an amount, but not more than 100 percent, computed on the basis of the officer's average monthly compensation, times a percentage derived by application of Section 824.207(b).

(c) A disability retirement annuity under this section is not reducible because of age and may not be less than 50 percent of the officer's average monthly compensation regardless of the amount of service credited to the officer.

(d) The portions of the annuity under this section payable from the peace officer supplemental retirement fund are the amount remaining after deduction of any amount payable under Section 824.304, except the portion of an amount that exceeds the minimum payments provided by Section 824.304(b) and that is made for service other than as a peace officer and any amount by which an annuity is increased under Subsection (e).

(e) If a retiring member or retiree under this section presents evidence satisfactory to the retirement system that the person's occupational disability makes the person incapable of substantial gainful activity solely because of the disability and is considered a total disability under federal social security law, the retirement system shall increase the person's occupational disability retirement annuity to 100 percent of the officer's average monthly compensation.

(f) An annuity increase under Subsection (e) is not payable before the first month following the month in which the satisfactory evidence is received by the retirement system under Subsection (e).

SECTION 5. Subchapter E, Chapter 824, Government Code, is amended by adding Section 824.408 to read as follows:

Sec. 824.408. ANNUITY FOR SURVIVOR OF PEACE OFFICER. If a member who has at least 20 years of service credit as a peace officer dies, the amount of the death benefit annuity payable for the member's service as a peace officer is an amount computed and funded as provided by Section 824.207, including any applicable reduction factors.

SECTION 6. Section 825.102, Government Code, is amended to read as follows:

Sec. 825.102. RULEMAKING. Subject to the limitations of this subtitle, the board of trustees may adopt rules for:

(1) eligibility for membership;

(2) the administration of the funds of the retirement system; [and]

(3) the program of supplemental benefits for peace officers; and

(4) the transaction of business of the board.

SECTION 7. Section 825.103, Government Code, is amended by adding Subsection (b-1) to read as follows:

(b-1) The board of trustees may authorize the executive director to acquire, hold, manage, purchase, sell, assign, trade, transfer, and dispose of any security, evidence of debt, or other investment in which assets of the peace officer supplemental retirement fund may be invested.

SECTION 8. Section 825.208, Government Code, is amended by adding Subsection (d) to read as follows:

(d) The board of trustees shall make payments from the peace officer supplemental retirement fund for services rendered by the actuary for that fund and approved by the board.

SECTION 9. Section 825.301, Government Code, is amended by adding Subsection (a-1) to read as follows:

(a-1) The board of trustees shall hold securities purchased with the assets described by Subsection (a) collectively for the proportionate benefit of:

(1) all accounts that are listed in Section 825.306; and

(2) the peace officer supplemental retirement fund.

SECTION 10. Section 825.305, Government Code, is amended to read as follows:

Sec. 825.305. AVAILABLE CASH. The board of trustees may keep on deposit with the comptroller available cash not exceeding 10 percent of the total assets of the retirement system, excluding the assets of the peace officer supplemental retirement fund, to pay annuity and other disbursements.

SECTION 11. Section 825.306, Government Code, is amended to read as follows:

Sec. 825.306. CREDITING SYSTEM ASSETS. The assets of the retirement system, except assets of the peace officer supplemental retirement fund, shall be credited, according to the purpose for which they are held, to one of the following accounts:

(1) member savings account;

(2) state contribution account;

(3) retired reserve account;

(4) interest account;

(5) expense account; or

(6) deferred retirement option account.

SECTION 12. Subchapter D, Chapter 825, Government Code, is amended by adding Section 825.3122 to read as follows:

Sec. 825.3122. PEACE OFFICER SUPPLEMENTAL RETIREMENT FUND. (a) The retirement system shall deposit in the peace officer supplemental retirement fund state contributions and other appropriations made by the legislature to the fund and proceeds from investment of the fund.

(b) The retirement system may use money from the fund only to pay supplemental retirement and death benefits to peace officers as provided by this subtitle and to pay for the administration of the fund.

(c) Money appropriated to pay benefits from the fund as provided by this subtitle may not be diverted or used to pay any other benefits.

SECTION 13. Section 825.402, Government Code, is amended to read as follows:

Sec. 825.402. RATE OF MEMBER CONTRIBUTIONS. The rate of contributions for each member of the retirement system is:

(1) five percent of the member's annual compensation or $180, whichever is less, for service rendered after August 31, 1937, and before September 1, 1957;

(2) six percent of the first $8,400 of the member's annual compensation for service rendered after August 31, 1957, and before September 1, 1969;

(3) six percent of the member's annual compensation for service rendered after August 31, 1969, and before the first day of the 1977-78 school year;

(4) 6.65 percent of the member's annual compensation for service rendered after the last day of the period described by Subdivision (3) and before September 1, 1985; [and]

(5) 6.4 percent of the member's annual compensation for service rendered after August 31, 1985, other than service rendered as a peace officer; and

(6) seven percent of the member's annual compensation for service rendered as a peace officer after August 31, 1985.

SECTION 14. Sections 825.404(a), (b), and (e), Government Code, are amended to read as follows:

(a) During each fiscal year, the state shall contribute to the retirement system:

(1) an amount equal to at least six and not more than 10 percent of the aggregate annual compensation of all members of the retirement system during that fiscal year;

(2) an amount for the peace officer supplemental retirement fund equal to 2.13 percent of the aggregate state compensation of all peace officers for that year; and

(3) money necessary for the administration of the peace officer supplemental retirement fund.

(b) Before November 2 of each even-numbered year, the board of trustees shall certify to the comptroller of public accounts for review and adoption:

(1) an estimate of the amount necessary to pay the state's contributions to the retirement system for the following biennium; and

(2) as a separate item, an estimate of the amount required to administer the peace officer supplemental retirement fund for the following biennium.

(e) All money appropriated by the state to the retirement system shall be paid to the state contribution account in equal monthly installments as provided by Section 403.093(c), Government Code, except:

(1) money appropriated under Subsection (d), which remains in the general revenue fund until expenses are approved under Chapter 2103; and

(2) money for the payment of benefits from the peace officer supplemental retirement fund.

SECTION 15. Subchapter F, Chapter 825, Government Code, is amended by adding Section 825.521 to read as follows:

Sec. 825.521. CERTIFICATION OF NAMES OF PEACE OFFICERS. Not later than the 12th day of the month following the month in which a person begins or ceases employment as a peace officer, the public school district that commissioned the officer shall certify to the retirement system, in the manner prescribed by the system, the name of the employee and such other information as the system determines is necessary for the crediting of service and financing of benefits under this subtitle.

SECTION 16. Subchapter A, Chapter 1575, Insurance Code, is amended by adding Section 1575.009 to read as follows:

Sec. 1575.009. COVERAGE FOR RETIRED PEACE OFFICERS. (a) The trustee shall implement for those retirees who qualify for a benefit under Subtitle C, Title 8, Government Code, as a peace officer, a program under this subtitle that provides health benefits at least as comprehensive as the benefits provided by the Employees Retirement System of Texas for basic coverage provided to an annuitant eligible to participate under Section 1551.102.

(b) The trustee may require that a retiree eligible to participate in the program implemented under Subsection (a) make an additional contribution as determined by the trustee under Section 1575.212.

SECTION 17. (a) The change in law made by this Act applies to a benefit payment made by the Teacher Retirement System of Texas that becomes payable on or after the effective date of this Act.

(b) Not later than the 30th day after the effective date of this Act, a school district shall provide the certified names of all peace officers commissioned and employed by the district on the effective date of this Act to the Teacher Retirement System of Texas as required by Section 825.521, Government Code, as added by this Act.

SECTION 18. (a) Except as provided by Subsection (b) of this section, this Act takes effect September 1, 2007, and applies beginning with the 2007-2008 school year.

(b) Section 1575.009, Insurance Code, as added by this Act, takes effect September 1, 2008, and applies beginning with the 2008-2009 school year.