82R5407 SGA-D

By: Zaffirini S.B. No. 812

A BILL TO BE ENTITLED

AN ACT

relating to the service retirement benefits of certain retirees who resume employment within the Texas Municipal Retirement System.

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

SECTION 1. Section 852.108, Government Code, is amended by amending Subsections (b), (d), (e), (f), (h), and (i) and adding Subsections (a-1), (b-1), (b-2), and (f-1) to read as follows:

(a-1) Except as provided by Subsection (a), this section applies only to a person who:

(1) has retired with a service retirement benefit under this subtitle;

(2) has been separated from service with the person's reemploying municipality for at least 12 months; and

(3) returns to service with the reemploying municipality after the separation described by Subdivision (2).

(b) Except as provided by Section 852.1085, a person to whom this section applies [who has retired with a service retirement benefit under this subtitle and later becomes an employee of the person's reemploying municipality] also resumes the person's most recent membership in [becomes a member of] the system on the date of employment, but credits and benefits allowable to the person under this subtitle are limited as provided by this section.

(b-1) The retirement system shall reactivate the same individual member account in the employees saving fund that the person contributed to before the person retired.

(b-2) On the date of a person's reemployment, the person must choose whether to resume making member contributions to the person's individual member account. A person who resumes making contributions shall earn additional service credit.

(d) Member contributions under Section 855.402 shall be made on all compensation paid to the employee by the reemploying municipality at the same rate as is required of other employees of the department. The retirement system shall deposit the contributions on receipt in the member's reactivated [an] individual account [for the member] in the employees saving fund and shall credit the account with interest annually at the same rate and manner as the accounts of other members are credited. The compensation paid to the employee by the reemploying municipality shall be included in computing the monthly contributions the municipality makes to the municipality accumulation fund.

(e) After termination of employment with the reemploying municipality and after filing of an application for resumption of retirement with the board of trustees, a person described by Subsection (a-1) [(b)] is entitled to receive future payments of the suspended annuity, as provided by Subsections (f) and (f-1) or Subsection (h) [(f)], and to the additional benefits as provided by Subsections (g)[, (h),] and (i).

(f) Monthly payments of a suspended annuity shall be recomputed to reflect:

(1) the amount of the original service retirement annuity;

(2) any additional service credit earned by the person during the period of reemployment;

(3) the sum of any contributions made by the person during the period of reemployment to the person's individual account in the employees saving fund and interest accrued on the accumulated contributions allowed by the retirement system;

(4) one of the following amounts from the municipality accumulation fund, as applicable:

(A) an amount equal to the amount under Subdivision (3) if the person elected to resume making contributions under Subsection (b-2);

(B) an amount equal to the amount under Subdivision (3) based on the contributions that would have been made by the person if the person had elected to resume making contributions under Subsection (b-2); or

(C) a greater amount than the amount under Paragraph (A) or (B) if authorized by the reemploying municipality under Section 855.501; and

(5) a reduction for any service retirement annuity payments received by the person before the person's reemployment.

(f-1) The payments as recomputed shall be resumed in the month following the month in which employment is terminated with the reemploying municipality, without any other change in the amount except for any increase allowed under Section 854.203 or the duration of or another condition pertaining to the suspended benefit. Payment of the resumed benefit may not be made for any month during which the payment was suspended under this section.

(h) Instead of a resumption of recomputed benefits under Subsection (f), [The additional service retirement benefit allowable to] a person to whom this section applies may elect to resume the suspended annuity payments in the month following the month in which employment is terminated with the reemploying municipality in the amount provided before the reemployment without any change in the amount except for any increase allowed under Section 854.203 and [is], at the option of that person, receive either:

(1) a refund of accumulated contributions made since reemployment plus any accrued interest on the accumulated contributions allowed by the retirement system; or

(2) a benefit consisting of:

(A) a basic annuity actuarially determined from the sum of the member's deposits made and accumulated since the date the person last became a member, together with interest accumulated on that amount since the person last became a member; or

(B) a greater amount authorized by the municipality under Section 855.501.

(i) The additional benefit described by Subsection (h)(1) or (2) [(h)] is payable as a standard service retirement benefit or, at the election of the member, any optional benefit authorized under this subtitle that is the actuarial equivalent of the standard retirement benefit. The first benefit payment date under this subsection is the later of the end of the month following the last month of employment or the end of the month following the month in which the person files an application for payment. The first payment may not be made if the person has resumed employment with the reemploying municipality in a position that would make the person an employee.

SECTION 2. (a) The changes in law made by this Act to Section 852.108, Government Code, apply only to the following:

(1) a person who resumes employment on or after the effective date of this Act with the same municipality the person was employed by before retiring from service; and

(2) a person who resumed employment before the effective date of this Act with the same municipality the person was employed by before retiring from service and who is in that employment on the effective date of this Act.

(b) A person described by Subsection (a)(2) of this section may elect under Section 852.108(b-2), Government Code, as added by this Act, whether to resume making contributions and earn additional service credit for the months of reemployment that occur on and after the effective date of this Act.

(c) The changes in law made by this Act to Section 852.108, Government Code, do not apply to a person to whom Section 852.1085, Government Code, applies.

SECTION 3. 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, 2011.