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A BILL TO BE ENTITLED
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AN ACT
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relating to contributions to, benefits from, and the administration |
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of the Texas Municipal Retirement System. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 851.006, Government Code, is amended to |
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read as follows: |
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Sec. 851.006. EXEMPTION FROM EXECUTION. (a) Except as |
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provided by Subsection (b), all [All] retirement annuity payments, |
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other benefit payments, and a member's accumulated contributions |
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are unassignable and are exempt from execution, garnishment, |
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attachment, and state and local taxation. |
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(b) The board of trustees by rule may authorize the |
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retirement system to make distributions to pay the qualified health |
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insurance premiums of a public safety officer in accordance with |
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the provisions of Section 845, Pension Protection Act of 2006, Pub. |
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L. No. 109-280. |
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SECTION 2. Subchapter B, Chapter 852, Government Code, is |
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amended by adding Section 852.1081 to read as follows: |
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Sec. 852.1081. RESUMPTION OF SERVICE BY RETIREE. (a) |
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Except as provided by Subsection (b), a person who has retired from |
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a participating municipality with a service retirement annuity |
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based on a bona fide termination of employment resumes membership |
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in the retirement system without suspension of the person's annuity |
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if: |
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(1) the person becomes an employee of the |
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participating municipality by which the person was most recently |
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employed not sooner than one calendar month after the effective |
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date of the person's retirement; or |
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(2) the person becomes an employee of a participating |
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municipality by which the person was not most recently employed |
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after the effective date of the person's retirement. |
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(b) A person who, less than one calendar month after |
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retiring, resumes employment with the participating municipality |
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by which the person was most recently employed is considered to have |
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not retired with respect to that municipality. The person's |
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service retirement annuity will be discontinued, the person's |
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membership will be restored, and the person must return any |
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payments received. Appropriate adjustments will be made for any |
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amounts not returned. |
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(c) A membership established under Subsection (a) is |
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considered to be a new membership for the purposes of beneficiary |
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determinations and benefit selections. |
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(d) After terminating employment with a participating |
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municipality, a member who has previously retired with a service |
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retirement annuity under this subtitle and who meets the |
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requirements of Subsection (a) is eligible to apply for and receive |
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an additional standard or optional service retirement annuity or a |
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refund of the member's accumulated contributions for service with |
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the municipality, without regard to any age or credited service |
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requirement. |
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(e) If a member who meets the requirement of Subsection (d) |
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dies before a payment is made under that subsection, payment shall |
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be made in the manner provided by Section 854.105. |
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SECTION 3. Section 853.402, Government Code, is amended by |
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adding Subsection (a-1) to read as follows: |
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(a-1) The board of trustees by rule may limit the increase |
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in a member's average updated service compensation from year to |
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year. |
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SECTION 4. Effective January 1, 2009, Section 853.402(c), |
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Government Code, is amended to read as follows: |
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(c) The base updated service credit of a member is an amount |
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computed as the number 1.03, times the difference by which the |
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amount computed under Subdivision (1) exceeds the amount computed |
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under Subdivision (2), where: |
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(1) "(1)" is an amount equal to the accumulation at |
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three percent interest of a series of monthly amounts for the number |
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of months of credited service on the date prescribed by Subsection |
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(e), each amount of which equals the member's average updated |
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service compensation, times the sum of: |
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(A) the rate of contributions required of the |
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member for current service; plus |
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(B) the member's contribution rate, times the |
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municipal current service ratio in effect on the effective date of |
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the ordinance adopted under Section 853.401; and where |
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(2) "(2)" is an amount equal to the sum of: |
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(A) the amount credited to the member's |
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individual account in the employees saving fund on the date |
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prescribed by Subsection (e), subject to a 1 to 1 matching ratio, |
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times 2; plus |
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(B) the amount credited to the member's |
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individual account, subject to a 1.25 [1.5] to 1 matching ratio, |
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times 2.25 [2.5]; plus |
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(C) the amount credited to the member's |
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individual account, subject to a 1.5 [2] to 1 matching ratio, times |
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2.5; plus |
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(D) the amount credited to the member's |
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individual account subject to a 1.75 to 1 matching ratio, times |
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2.75; plus |
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(E) the amount credited to the member's |
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individual account subject to a 2 to 1 matching ratio, times 3. |
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SECTION 5. Effective January 1, 2009, Section 853.601(a), |
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Government Code, is amended to read as follows: |
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(a) The governing body of a participating municipality in |
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ordinances authorizing updated service credits under Section |
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853.401 [on or after January 1, 1984,] may provide that those |
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members who are eligible for the [such] credits on the basis of |
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service with the granting municipality, who have unforfeited credit |
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for prior service or current service with another participating |
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municipality or municipalities by reason of previous employment, |
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and who are contributing members on the date prescribed by Section |
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853.402(e), shall be credited in the retirement system with updated |
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service credit calculated in the manner prescribed by Sections |
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853.401 and 853.402, except that in determining the base updated |
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service credit of the member under Section 853.402(c)(1), all |
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unforfeited credited service performed by the member by reason of |
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previous employment in other participating municipalities prior to |
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the date prescribed by Section 853.402(e) shall be treated as if |
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performed in the service of the municipality adopting the |
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ordinance, and that amount shall be reduced by an amount equal to |
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the sum of: |
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(1) 2 times the amount credited to the member's |
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individual accounts in the employees saving fund on the date |
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prescribed in Section 853.402(e), which any participating |
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municipality has undertaken to match on a 1 to 1 ratio; plus |
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(2) 2.25 [2.5] times the amount credited to the |
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member's individual accounts, subject to a 1.25 [1.5] to 1 matching |
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ratio by any participating municipality; plus |
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(3) 2.5 [3] times the amount credited to the member's |
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individual accounts, subject to a 1.5 [2] to 1 matching ratio by any |
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participating municipality; [and] plus |
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(4) 2.75 times the amount credited to the member's |
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individual accounts, subject to a 1.75 to 1 matching ratio by any |
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participating municipality; plus |
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(5) 3 times the amount credited to the member's |
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individual accounts, subject to a 2 to 1 matching ratio by any |
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participating municipality; plus |
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(6) the sum of all updated service credits, prior |
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service credits, special prior service credits, and antecedent |
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service credits allowed to the member by any other participating |
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municipality by which the member was previously employed and to |
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which the member is entitled. |
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SECTION 6. Section 855.110, Government Code, is amended by |
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adding Subsection (c) to read as follows: |
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(c) The board of trustees, after consultation with the |
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actuary, by rule may set open or closed amortization periods not to |
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exceed 25 years. |
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SECTION 7. Subchapter E, Chapter 855, Government Code, is |
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amended by adding Section 855.4065 to read as follows: |
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Sec. 855.4065. ADDITIONAL EMPLOYER CONTRIBUTIONS. (a) In |
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addition to the contributions a participating municipality is |
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required to make under this subtitle, the board of trustees, after |
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consultation with the actuary, by rule may authorize a |
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participating municipality to make lump-sum or periodic employer |
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contributions to the retirement system to be deposited in the |
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municipality's account in the municipality accumulation fund. |
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(b) A contribution made under this section is not subject to |
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the maximum contribution rates under Sections 855.407 and 855.501. |
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SECTION 8. Effective January 1, 2009, Sections 855.501(b), |
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(e), (h), and (i), Government Code, are amended to read as follows: |
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(b) The governing body of a municipality electing to provide |
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for increased reserves by ordinance shall provide that for each |
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month of current service rendered by a participating employee of |
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the municipality after the date of its election the municipality |
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will provide a contribution as provided by Subsection (c) equal to |
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125, 150, 175, or 200 percent of the member's accumulated |
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contribution to the retirement system for that month. |
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(e) Except as provided by Subsection (i), a [A] |
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participating municipality electing to provide an increased |
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current service annuity reserve [and electing a contribution rate
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of 150 percent for a year] is liable for total contributions at a |
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rate that may [does] not exceed [a rate equal to] the applicable |
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maximum rate prescribed [for the municipality] by this subsection. |
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If the contribution rate elected for a municipality's current |
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service annuity reserve is: |
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(1) 125 percent, the total contributions may not |
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exceed the maximum rate prescribed by Section 855.407 by more than |
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one percent a year; |
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(2) 150 percent, the total contributions may not |
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exceed the maximum rate prescribed by Section 855.407 by more than |
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two percent a year; |
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(3) 175 percent, the total contributions may not |
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exceed the maximum rate prescribed by Section 855.407 by more than |
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three percent a year; or |
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(4) 200 percent, the total contributions may not |
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exceed the maximum rate prescribed by Section 855.407 by more than |
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four percent a year [Section 855.407, plus two percent a year. A
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municipality electing a rate of 200 percent a year is liable for
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contributions at a rate that does not exceed a rate equal to the
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maximum rate prescribed for the municipality by Section 855.407,
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plus four percent a year]. |
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(h) A municipality electing to provide for an increased |
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current service annuity reserve may reduce its rate of contribution |
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to 125, 150, or 175 percent of the member contributions or to a rate |
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equal to the member contributions. The reduction becomes effective |
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on January 1 of the calendar year following the date on which the |
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municipality's governing body adopts an ordinance reducing the rate |
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of contribution. |
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(i) If the contribution rate for a participating |
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municipality's employees is six or seven percent, a [A
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participating] municipality electing to provide an increased |
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service annuity reserve [and electing a contribution rate of 150
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percent for a year] may, by ordinance, agree to be liable for total |
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contributions at a rate that may [does] not exceed [a rate equal to] |
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the applicable maximum rate prescribed [for the municipality] by |
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this subsection. If the contribution rate elected for a |
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municipality's current service annuity reserve is: |
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(1) 125 percent, the municipality's total contribution |
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rate may not exceed [Section 855.407 plus two and one-half percent
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if the contribution rate for its employees is six percent, or a rate
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that does not exceed a rate equal to] the maximum rate prescribed |
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[for the municipality] by Section 855.407 by more than: |
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(A) 1.25 percent if the employee contribution |
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rate is six percent; or |
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(B) 1.50 percent if the employee contribution |
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rate is seven percent; |
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(2) 150 percent, the municipality's total contribution |
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rate may not exceed the maximum rate prescribed by Section 855.407 |
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by more than: |
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(A) 2.5 percent if the employee contribution rate |
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is six percent; or |
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(B) three percent if the employee contribution |
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rate is seven percent; |
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(3) 175 percent, the municipality's total contribution |
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rate may not exceed the maximum rate prescribed by Section 855.407 |
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by more than: |
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(A) 3.75 percent if the employee contribution |
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rate is six percent; or |
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(B) 4.5 percent if the employee contribution rate |
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is seven percent; and |
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(4) 200 percent, the municipality's total contribution |
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rate may not exceed the maximum rate prescribed by Section 855.407 |
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by more than: |
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(A) five percent if the employee contribution |
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rate is six percent; or |
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(B) six percent [plus three percent] if the |
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employee contribution rate [for its employees]is seven percent. |
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SECTION 9. (a) Effective September 1, 2007, Section |
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853.402(g), Government Code, is repealed. |
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(b) Effective January 1, 2008, Sections 852.108 and |
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852.109, Government Code, are repealed. |
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(c) Effective January 1, 2009, Section 855.501(j), |
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Government Code, is repealed. |
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SECTION 10. (a) A person who resumed employment after |
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retirement and whose annuity was suspended under former Section |
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852.108, Government Code, repealed by this Act, is entitled to the |
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resumption of monthly annuity payments if the person meets the |
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requirements of Section 852.1081(a)(1), Government Code, as added |
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by this Act. |
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(b) The Texas Municipal Retirement System shall resume |
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making monthly annuity payments to a person described by Subsection |
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(a) of this section on the first payment date occurring on or after |
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January 1, 2008. |
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(c) A person who is entitled to the resumption of monthly |
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annuity payments under this section is not entitled to recover |
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payment for annuity payments not made during the period the |
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person's annuity was suspended under former Section 852.108, |
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Government Code, repealed by this Act. |
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SECTION 11. Sections 853.402(c) and 853.601(a), Government |
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Code, as amended by this Act, apply only to a person whose effective |
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date of retirement under the Texas Municipal Retirement System is |
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on or after January 1, 2009. The computations affecting the |
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retirement benefits of a person whose effective date of retirement |
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is before January 1, 2009, is governed by the law in effect on the |
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date of the person's retirement, and that law is continued in effect |
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for that purpose. |
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SECTION 12. The change in law made by the repeal of Section |
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853.402(g), Government Code, by this Act applies only to the |
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computation of the updated service compensation of a person whose |
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effective date of retirement under the Texas Municipal Retirement |
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System is on or after September 1, 2007. The updated service |
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compensation of a person whose effective date of retirement is |
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before September 1, 2007, is computed according to the law in effect |
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on the effective date of the person's retirement, and that law is |
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continued in effect for that purpose. |
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SECTION 13. Section 855.501, Government Code, as amended by |
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this Act, applies only to a municipality participating in the Texas |
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Municipal Retirement System that elects to provide an increased |
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current service annuity reserve on or after January 1, 2009. A |
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participating municipality that makes that election before January |
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1, 2009, is governed by the law in effect on the date of the |
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election, and that law is continued in effect for that purpose. |
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SECTION 14. (a) Except as provided by Subsection (b) of this |
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section, this Act takes effect September 1, 2007. |
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(b) The following sections take effect January 1, 2008: |
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(1) Section 851.006, Government Code, as amended by |
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this Act; and |
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(2) Sections 852.1081, 853.402(a-1), 855.110(c), and |
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855.4065, Government Code, as added by this Act. |