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A BILL TO BE ENTITLED
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AN ACT
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relating to optional annuity increases for certain retirees and |
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beneficiaries 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 853.404, Government Code, is amended by |
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amending Subsection (c) and adding Subsection (f) to read as |
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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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(f) If an ordinance described by Subsection (c) will cease |
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to be in effect for a future year, or if an increase in annuities |
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specified in an ordinance described by Subsection (c) will be |
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changed or discontinued as provided by this section, the governing |
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body of the participating municipality shall provide notice to |
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members and annuitants by regular mail not later than the 60th day |
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before the date on which the ordinance will cease to be in effect or |
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the increase will be changed or discontinued. For an annuitant who |
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receives a periodic check or advice of deposit from the retirement |
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system by regular mail, the notice required by this subsection must |
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be included with the annuitant's check or advice of deposit. |
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SECTION 2. Section 854.203, Government Code, is amended by |
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amending Subsections (b) and (f) and adding Subsection (b-1) to |
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read as follows: |
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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 increase; 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 the maximum amount of the annuity |
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increase allowed under Subdivision (1) been applied to the |
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annuitant's annuity. |
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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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(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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SECTION 3. 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. |
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* * * * * |