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A BILL TO BE ENTITLED
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AN ACT
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relating to optional annuity increases and annual supplemental |
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payments for certain retirees and beneficiaries of the Texas |
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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 853.404(c), Government Code, is amended |
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to read as follows: |
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(c) The governing body of a participating municipality that |
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adopts an ordinance under Section 854.203 providing for increased |
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annuities effective January 1 of a designated year may further |
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provide in the ordinance that increases in annuities will be |
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credited effective January 1 of each year following the designated |
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year based on recomputations made as provided by Section 854.203(b) |
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[854.203(b)(1)] for each year following the initial computation, |
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and using the fraction specified in the ordinance as required under |
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Section 854.203(b) [854.203(b)(2)] in the recomputations. |
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SECTION 2. The heading to Section 854.203, Government Code, |
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is amended to read as follows: |
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Sec. 854.203. OPTIONAL ANNUITY INCREASE OR ANNUAL |
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SUPPLEMENTAL PAYMENTS [IN RETIREMENT ANNUITIES]. |
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SECTION 3. Section 854.203, Government Code, is amended by |
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amending Subsections (a), (b), (f), and (g) and adding Subsections |
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(b-1), (b-2), (b-3), and (b-4) to read as follows: |
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(a) The governing body of a participating municipality by |
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ordinance, from time to time but not more frequently than once in |
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each 12-month period, may authorize and provide for an increased |
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annuity, a supplemental payment, or both [annuities] to be paid to |
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retirees and beneficiaries of deceased retirees of the |
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municipality. An annuity increased under this section replaces any |
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annuity or increased annuity previously granted to the same person. |
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(b) The amount of annuity increase under this section is |
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computed by one of the following methods: |
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(1) as the sum of the prior and current service |
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annuities on the effective date of retirement of the person on whose |
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service the annuities are based, multiplied by: |
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(A) [(1)] the percentage change in the Consumer |
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Price Index for All Urban Consumers, published by the Bureau of |
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Labor Statistics of the United States Department of Labor, from |
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December of the year immediately preceding the effective date of |
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the person's retirement to the December that is 13 months before the |
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effective date of the ordinance providing the annuity increase; |
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and |
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(B) [(2)] 30 percent, 50 percent, or 70 percent, |
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as specified by the governing body in the ordinance, except that if |
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the governing body has specified a different percentage in an |
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ordinance adopted under Section 853.404(c) and in effect on |
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December 31, 1999, the percentage used in computing annuity |
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increases for retirees of that municipality remains in effect until |
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changed or discontinued under Section 853.404; or |
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(2) as the sum of the prior and current service |
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annuities of the person on whose service the annuities are based on |
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the effective date of the annuity increase multiplied by the |
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percentage increase specified in the ordinance adopted by the |
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governing body, except that an adjustment to an annuity after the |
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annuity starting date for annuity increases under this subdivision |
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may not cause an annuitant's annuity to exceed the amount that the |
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annuitant would be entitled to had 100 percent of the amount |
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described by Subsection (b)(1)(A) been applied to the annuitant's |
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annuity on the effective date of retirement. |
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(b-1) An increase under Subsection (b)(2) applies to all |
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annuities for which the effective date of retirement of the person |
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on whose service the annuity is based is at least 12 months before |
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the effective date of the increase. Notwithstanding any other |
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provision of this subtitle, each distribution of a benefit under |
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this subtitle must be determined and made in accordance with |
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Section 401(a)(9), Internal Revenue Code of 1986. The board of |
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trustees may adopt rules it considers necessary to comply with the |
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distribution requirements. |
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(b-2) The amount of a supplemental payment under this |
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section is an amount equal to the sum of the prior and current |
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service annuities of the person on whose service the annuities are |
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based on the date that is the 30th day after the effective date of |
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the ordinance as described by Subsection (c) multiplied by the |
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percentage specified in the ordinance adopted by the governing |
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body. A supplemental payment under this section must be issued on: |
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(1) March 31, if the effective date of the ordinance |
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described by Subsection (c) is January 1; or |
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(2) the 60th day after the date on which the amount of |
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the payment is calculated under this subsection, if the effective |
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date of the ordinance is not January 1. |
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(b-3) If the effective date of retirement of the person on |
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whose service the annuity is based is less than 12 months before the |
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date on which the amount of the payment is calculated under |
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Subsection (b-2), the supplemental payment shall be prorated based |
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on the number of months the person is retired. |
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(b-4) A supplemental payment under this section is an |
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obligation of the municipality's account in the municipality |
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accumulation fund. |
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(f) An increase granted to an annuitant under Subsection |
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(b)(2), or the [The] amount by which an increase under Subsection |
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(b)(1) [this section] exceeds all previously granted increases to |
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an annuitant is: |
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(1) payable as a prior service annuity; |
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(2) [, is] an obligation of the municipality's account |
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in the municipality accumulation fund;[,] and |
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(3) [is] subject to reduction under Section |
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855.308(f). |
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(g) An ordinance under this section may not take effect |
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until it is approved by the board of trustees as meeting the |
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requirements of this section. The board may not approve an |
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ordinance unless the actuary first determines that all obligations |
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charged against the municipality's account in the municipality |
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accumulation fund, including the obligations proposed in the |
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ordinance, can be funded by the municipality within its maximum |
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contribution rate and within its amortization period as in effect |
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on the effective date of the annuity increases or supplemental |
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payments. |
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SECTION 4. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2011. |