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A BILL TO BE ENTITLED
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AN ACT
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relating to increasing state employee participation in the |
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TexaSaver program. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 609.006(a), Government Code, is amended |
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to read as follows: |
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(a) A deferred compensation plan must conform to federal law |
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to provide that deferred amounts and investment income are not |
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includable, for federal income tax purposes, in the gross income of |
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a participating employee until distributed to the employee, subject |
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to the employee's option to designate all or a portion of deferred |
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amounts as Roth contributions under Section 609.5021, the federal |
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income tax treatment of which is governed by Section 402A, Internal |
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Revenue Code of 1986. |
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SECTION 2. Subchapter C, Chapter 609, Government Code, is |
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amended by adding Section 609.5021 to read as follows: |
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Sec. 609.5021. ROTH CONTRIBUTION PROGRAMS. The board of |
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trustees may: |
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(1) establish a qualified Roth contribution program in |
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accordance with Section 402A, Internal Revenue Code of 1986, under |
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which an employee may designate all or a portion of the employee's |
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contribution under a 401(k) plan as a Roth contribution at the time |
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the contribution is made; and |
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(2) if authorized by federal law, establish a program |
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in accordance with the applicable federal law under which an |
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employee may designate all or a portion of the employee's |
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contribution under a 457 plan as a Roth contribution at the time the |
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contribution is made. |
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SECTION 3. Section 609.5025(d), Government Code, is amended |
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to read as follows: |
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(d) At any time, an employee participating in a 401(k) plan |
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under this section may, in accordance with rules adopted by the |
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board of trustees, elect to end participation in the 401(k) plan, to |
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contribute to a different investment product, [or] to contribute a |
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different amount to the plan, or to designate all or a portion of |
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the employee's contribution as a Roth contribution subject to the |
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availability of a Roth contribution program under Section 609.5021. |
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SECTION 4. Subchapter C, Chapter 609, Government Code, is |
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amended by adding Section 609.5026 to read as follows: |
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Sec. 609.5026. STATE MATCHING CONTRIBUTIONS. (a) Except |
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as provided by Subsection (b) and subject to a separate legislative |
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appropriation for that purpose, the Employees Retirement System of |
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Texas may make matching contributions to a 401(k) plan on behalf of |
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employees participating in the plan solely from, and in an amount |
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specified by, the appropriation. |
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(b) The Employees Retirement System of Texas may only make a |
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contribution under this section if the retirement system: |
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(1) receives amounts sufficient to cover normal cost; |
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and |
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(2) maintains a funded ratio equal to or greater than |
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90 percent. |
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SECTION 5. Notwithstanding Section 4, Chapter 1409 (H.B. |
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957), Acts of the 80th Legislature, Regular Session, 2007, Section |
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609.5025, Government Code, as amended by this Act, applies to an |
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employee of a state agency regardless of the date on which the |
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employee begins employment. For an employee who began employment |
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before the effective date of this Act, automatic participation in a |
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401(k) plan under Section 609.5025, Government Code, begins as soon |
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as practicable after the effective date of this Act, but not later |
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than August 31, 2010, subject to the employee's option to elect not |
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to participate or to contribute a different amount to the plan. |
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SECTION 6. This Act takes effect September 1, 2009. |