80R3365 SGA-D

By: McClendon H.B. No. 2753

A BILL TO BE ENTITLED

AN ACT

relating to public financing of the Employees Retirement System of Texas, including a cost-of-living adjustment.

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

SECTION 1. Subchapter A, Chapter 814, Government Code, is amended by adding Section 814.012 to read as follows:

Sec. 814.012. ADJUSTMENT FOR COST OF LIVING. (a) The amount of a monthly service retirement benefit, disability retirement benefit, or death benefit paid under this chapter to a retiree or beneficiary for service credited in the employee class is adjusted in accordance with this section as necessary to reflect inflation.

(b) In each odd-numbered year, the board of trustees shall determine the amount of the adjustment that takes effect on September 1 of that year and ends August 31 of the next odd-numbered year. The adjustment is computed using the greater of two percent or the percent increase, if any, in the Texas Consumer Price Index most recently published by the comptroller for the two most recent Decembers.

(c) The board of trustees shall recompute the amount of a benefit paid under this chapter by applying the adjustment computed under Subsection (b) to the amount otherwise required to be paid as determined in accordance with the other applicable provisions of this chapter.

SECTION 2. Section 814.105(a), Government Code, is amended to read as follows:

(a) Except as otherwise provided by this section, the standard service retirement annuity for service credited in the employee class of membership is an amount computed as the product of 1.05 and the member's average monthly compensation for service in that class for the 36 highest months of compensation multiplied by 2.3 percent for each year of service credit in that class.

SECTION 3. Section 814.107(b), Government Code, is amended to read as follows:

(b) The standard service retirement annuity payable for at least 20 years of service credit as a law enforcement or custodial officer is an amount computed as the product of 1.05 and [on the basis of] the member's average monthly compensation for the 36 highest months of compensation in the employee class, times the sum of the percentage factor used in the computation of a standard service retirement annuity under Section 814.105 plus .5 percent.

SECTION 4. Section 814.206(a), Government Code, is amended to read as follows:

(a) Except as provided by Subsection (b) and Section 814.207, a standard disability retirement annuity for service credited in the employee class of membership is an amount computed as the product of 1.05 and [at the rate of] 2.3 percent for each year of service credit in that class[,] times the member's average monthly compensation.

SECTION 5. Sections 815.403(a), (b), and (d), 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 7.4 percent of the total compensation of all members of the retirement system for that year;

(2) money to pay lump-sum death benefits for retirees under Section 814.501;

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

(4) money necessary for the administration of the law enforcement and custodial officer supplemental retirement fund; [and]

(5) money for service credit not previously established, as provided by Section 813.202(c) or 813.302(d); and

(6) an amount sufficient to amortize, within a 30-year funding period, the actuarial liability of the retirement system for service retirement benefits, disability retirement benefits, death benefits, and cost-of-living adjustments provided under this subtitle for members, retirees, and beneficiaries.

(b) Before November 2 of each even-numbered year, the retirement system shall certify to the Legislative Budget Board and to the budget division of the governor's office for review:

(1) an estimate of the amount necessary to pay the state's contribution under Subsections (a)(1), (a)(2), (a)(3), [and] (a)(5), and (a)(6) for the following biennium; and

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

(d) Before September 1 of each year, the retirement system shall certify to the state comptroller of public accounts:

(1) an estimate of the amount necessary to pay the state's contribution under Subsections [Subsection] (a)(1) and (a)(6) for the following fiscal year;

(2) an estimate of the amount necessary to pay membership fees for the following fiscal year, if the legislature has appropriated money for that purpose; and

(3) an estimate of the amount required to pay lump-sum death benefits for retirees under Section 814.501 for the following fiscal year.

SECTION 6. (a) Section 814.012, Government Code, as added by this Act, applies only to a monthly benefit payment made by the Employees Retirement System of Texas on or after September 1, 2009.

(b) Sections 814.105(a), 814.107(b), and 814.206(a), Government Code, as amended by this Act, apply only to a monthly benefit payment made by the Employees Retirement System of Texas on or after September 1, 2007.

SECTION 7. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2007.