SB 1458, Sen 2nd Rdg, Amnd #F1

(1) Strike SECTION 1 of the bill, amending Section 824.202, Government Code (page 1 line 25, through page 2, line 26), and substitute the following appropriately numbered SECTION:

SECTION 1. Section 824.202, Government Code, is amended by amending Subsections (a), (b), (b-1), (d), and (d-1) and adding Subsections (a-2), (b-2), and (d-2) to read as follows:

(a) Except as provided by Subsections [~~Subsection~~] (a-1) and (a-2), a member is eligible to retire and receive a standard service retirement annuity if:

(1) the member is at least 65 years old and has at least five years of service credit in the retirement system;

(2) the member is at least 60 years old and has at least 20 years of service credit in the retirement system;

(3) the member is at least 50 years old and has at least 30 years of service credit in the retirement system; or

(4) the member has at least five years of service credit in the retirement system and the sum of the member's age and amount of service credit in the retirement system equals the number 80.

(a-1) This subsection applies only to a person who becomes a member of the retirement system on or after September 1, 2007 and who is not subject to Subsection (a-2). A member subject to this subsection is eligible to retire and receive a standard service retirement annuity if:

(1) the member is at least 65 years old and has at least five years of service credit in the retirement system; or

(2) the member is at least 60 years old and has at least five years of service credit in the retirement system and the sum of the member's age and amount of service credit in the retirement system equals the number 80.

(a-2) This subsection applies only to a person who does not have at least five years of service credit in the retirement system on or before August 31, 2014, or who becomes a member of the retirement system on or after September 1, 2014. A member subject to this subsection is eligible to retire and receive a standard service retirement annuity if:

(1) the member is at least 65 years old and has at least five years of service credit in the retirement system; or

(2) the member is at least 62 years old and has at least five years of service credit in the retirement system and the sum of the member's age and amount of service credit in the retirement system equals the number 80.

(b) This subsection applies only to a person who is not subject to Subsection (b-1), (b-2), [or] (d), (d-1), or (d-2). If a member subject to this subsection is at least 55 years old and has at least five years of service credit in the retirement system, the member is eligible to retire and receive a service retirement annuity reduced from the standard service retirement annuity available under Subsection (a)(1), to a percentage derived from the following table:

Age at date 55 56 57 58 59 60 61 62 63 64 65

Percentage of 47% 51% 55% 59% 63% 67% 73% 80% 87% 93% 100%

(b-1) This subsection applies only to a person who becomes a member of the retirement system on or after September 1, 2007 and who is not subject to Subsection (b-2). If a member subject to this subsection is at least 55 years old and has at least five years of service credit in the retirement system, but does not meet the requirements under Subsection (d-1), the member is eligible to retire and receive a service retirement annuity reduced from the standard service retirement annuity available under Subsection (a-1)(1), to a percentage derived from the following table:

Age at date 55 56 57 58 59 60 61 62 63 64 65

Percentage of 47% 51% 55% 59% 63% 67% 73% 80% 87% 93% 100%

(b-2) This subsection applies only to a person who does not have at least five years of service credit in the retirement system on or before August 31, 2014, or who becomes a member of the retirement system on or after September 1, 2014. If a member subject to this subsection is at least 55 years old and has at least five years of service credit in the retirement system, but does not meet the requirements under Subsection (d-2), the member is eligible to retire and receive a service retirement annuity reduced from the standard service retirement annuity available under Subsection (a-2)(1), to a percentage derived from the following table:

Age at date 55 56 57 58 59 60 61 62 63 64 65

Percentage of 47% 51% 55% 59% 63% 67% 73% 80% 87% 93% 100%

(d) This subsection applies only to a person who is not subject to Subsection (d-1) or (d-2). If a member subject to this subsection has at least 30 years of service credit in the retirement system, the member is eligible to retire regardless of age and receive a service retirement annuity consisting of the standard service retirement annuity available under Subsection (a) decreased by two percent for each year of age under 50 years.

(d-1) This subsection applies only to a person who becomes a member of the retirement system on or after September 1, 2007 and who is not subject to Subsection (d-2). If the sum of the member's age and amount of service credit in the retirement system equals the number 80, with at least five years of service credit, or if the member has at least 30 years of service credit in the retirement system, the member is eligible to retire regardless of age and receive a service retirement annuity consisting of[~~, reduced from~~] the standard service retirement annuity available under Subsection (a-1)(2) decreased by five percent for each year of age under 60 years [~~(a)(2), to a percentage derived from the following table:~~

~~Age at date of retirement~~ 50 51 52 53 54 55 56 57 58 59 60

~~Minimum years of service~~ 30 29 28 27 26 25 24 23 22 21 20

~~Percentage of standard~~ ~~50%~~ ~~55%~~ ~~60%~~ ~~65%~~ ~~70%~~ ~~75%~~ ~~80%~~ ~~85%~~ ~~90%~~ ~~95%~~ ~~100%~~

~~annuity receivable~~

~~For each year of age under 50 years with 30 years of service credit, the standard service retirement annuity shall be five percent less than the percentage for age 50 with 30 years of service credit~~].

(d-2) This subsection applies only to a person who does not have at least five years of service credit in the retirement system on or before August 31, 2014, or who becomes a member of the retirement system on or after September 1, 2014. If the sum of the member's age and amount of service credit in the retirement system equals the number 80, with at least five years of service credit, or if the member has at least 30 years of service credit in the retirement system, the member is eligible to retire regardless of age and receive a service retirement annuity consisting of the standard service retirement annuity available under Subsection (a-2)(2) decreased by five percent for each year of age under 62 years.

(2) In SECTION 2 of the bill, adding Section 824.702, Government Code (page 2, line 27 through page 3, line 24), strike "August 31, 1994" and substitute "August 31, 1999" in each of the following places it appears:

(A) page 2, line 54;

(B) page 2, line 60; and

(3) Strike SECTION 5 of the bill, amending Section 825.402, Government Code (page 3, line 39 through page 4, line 19), and substitute the following appropriately numbered SECTION:

SECTION 5. Section 825.402, Government Code, is amended to read as follows:

Sec. 825.402. RATE OF MEMBER CONTRIBUTIONS. [~~(a)~~] The rate of contributions for each member of the retirement system is:

(1) five percent of the member's annual compensation or $180, whichever is less, for service rendered after August 31, 1937, and before September 1, 1957;

(2) six percent of the first $8,400 of the member's annual compensation for service rendered after August 31, 1957, and before September 1, 1969;

(3) six percent of the member's annual compensation for service rendered after August 31, 1969, and before the first day of the 1977-78 school year;

(4) 6.65 percent of the member's annual compensation for service rendered after the last day of the period described by Subdivision (3) and before September 1, 1985[~~; and~~]

(5) 6.4 percent of the member's annual compensation for service rendered after August 31, 1985, and before September 1, 2014;

(6) 7.7 percent of the member's annual compensation for service rendered after August 31, 2014, and before September 1, 2015; and

(7) for service rendered on or after September 1, 2015, the lesser of:

(A) 7.7 percent of the member's annual compensation; or

(B) a percentage of the member's annual compensation equal to 7.7 percent reduced by one-tenth of one percent for each one-tenth of one percent that the state contribution rate for the fiscal year to which the service relates, is less than the state contribution rate established for the 2015 fiscal year [~~, subject to Subsection (b)~~].

[~~(b)~~ Subject to Subsection (c), the board of trustees may by order require that the rate of contributions for each member of the retirement system under Subsection (a) is increased to not more than 6.58 percent of the member's annual compensation for service rendered after the date of the order if:

~~(1)~~ ~~the legislature by law requires or authorizes the board of trustees to pay a supplemental payment to specified annuitants; and~~

~~(2)~~ the board of trustees finds, as of the time the payment is to be made, that after the payment is made the amortization period for the unfunded actuarial liabilities of the retirement system would exceed 30 years by one or more years.

~~(c)~~ Notwithstanding any other law, the board of trustees may not make a supplemental payment required or authorized by the legislature by law, and may not impose an increase in the rate of contributions under Subsection (b), if the board of trustees finds that after making the payment and imposing the increase the amortization period for the unfunded actuarial liabilities of the retirement system would exceed 30 years by one or more years.

~~(d)~~ Notwithstanding any other law, the board of trustees may delay making a supplemental payment required or authorized by the legislature by law as necessary to make the determinations required under Subsections (b) and (c).]

(4) Strike SECTION 7 of the bill, adding Section 825.4035, Government Code (page 4, lines 26 through 57), and substitute the following appropriately numbered SECTION:

Sec. 825.4035. EMPLOYER CONTRIBUTIONS FOR CERTAIN EMPLOYED MEMBERS FOR WHOM THE EMPLOYER IS NOT MAKING CONTRIBUTIONS TO THE FEDERAL OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE PROGRAM. (a) This section:

(1) applies to an employer who reports to the retirement system under Section 825.403 the employment of a member for whom the employer is not making contributions to the federal Old-Age, Survivors, and Disability Insurance program; and

(2) does not apply to an employer that is an institution of higher education.

(b) Except as provided in Subsection (c), for each member the employer reports to the retirement system and for whom the employer is not making contributions to the federal Old-Age, Survivors and Disability Insurance program, the employer shall contribute monthly to the retirement system for each such member:

(1) for the period beginning with the report month of September 2014 and ending with the report month of August 2015, an amount equal to 1.5 percent of the member's compensation; and

(2) beginning with the report month for September 2015, an amount equal to the lesser of:

(A) 1.5 percent of the member's compensation; or

(B) a percentage of the member's compensation equal to 1.5 percent reduced by one-tenth of one percent for each one-tenth of one percent that the state contribution rate for the fiscal year to which the report month relates, is less than the state contribution rate established for the 2015 fiscal year.

(c) If a member is entitled to the minimum salary for certain school personnel under Section 21.402, Education Code, or if a member would have been entitled to the minimum salary for certain school personnel under former Section 16.056, Education Code, as that section existed on January 1, 1995, the employer shall, in addition to any contributions required under Section 825.405, contribute monthly to the retirement system for each such member:

(1) for the period beginning with the report month of September 2014 and ending with the report month of August 2015, an amount equal to 1.5 percent of the statutory minimum salary determined under Section 825.405(b); and

(2) beginning with the report month for September 2015, an amount equal to the lesser of:

(A) 1.5 percent of the statutory minimum salary determined under Section 825.405(b); or

(B) a percentage of the statutory minimum salary determined under Section 825.405(b) equal to 1.5 percent reduced by one-tenth of one percent for each one-tenth of one percent that the state contribution rate for the fiscal year to which the report month relates, is less than the state contribution rate established for the 2015 fiscal year.

(d) Contributions under this section:

(1) are subject to the requirements of Section 825.408; and

(2) must be used to fund the normal cost of the retirement system.

(5) On page 4, between lines 57 and 58, insert the following appropriately numbered SECTION:

SECTION ____. Subsection (a), Section 825.404, Government Code, is amended to read as follows:

(a) During each fiscal year, the state shall contribute to the retirement system an amount equal to at least six and not more than 10 percent of the aggregate annual compensation of all members of the retirement system during that fiscal year. [~~The amount of the state contribution made under this section may not be less than the amount contributed by members during that fiscal year in accordance with Section 825.402.~~]

(6) Strike SECTION 10 of the bill, repealing certain provisions of the Government Code and Insurance Code (page 5, lines 12 through 15), and substitute the following appropriately numbered SECTION:

SECTION ____. Section 1579.103, Insurance Code, is repealed.

(7) Strike SECTION 11 of the bill, adding a transition provision for the changes in law made by the bill to Section 824.202, Government Code (page 5, lines 16 through 58), and substitute the following appropriately numbered SECTION:

SECTION ____. For purposes of determining whether a member has at least five years of service on or before August 31, 2014 under Section 824.202(a-2), (b-2), or (d-2), Government Code, as amended by this Act, only service actually credited in the Teacher Retirement System of Texas, the Employees Retirement System of Texas, or a retirement system participating in the proportionate retirement program under Chapter 803, Government Code, on or before August 31, 2014, may be counted. Purchased service credit in the retirement system is:

(a) not considered actually credited in the retirement system if the service credit is established only after completion of an installment payment plan under which any installment payment is made after August 31, 2014; and

(b) considered actually credited in the retirement system if:

(1) payment in full for the purchase of service credit is made by a direct rollover or otherwise on or before August 31, 2014; or

(2) payment in full by direct rollover or otherwise is made after August 31, 2014, if:

(A) the member's request to purchase service credit occurred on or before August 31, 2014; and

(B) payment to purchase the service credit is made in accordance with uniform administrative requirements, including payment deadlines, established by the retirement system.

(8) Strike SECTION 14 of the bill, providing effective dates for the Act and certain provisions of the Act (page 6, lines 28 through 32), and substitute the following appropriately numbered SECTION:

SECTION ____. (a) Except as provided by Subsection (b) of this section, this Act takes effect September 1, 2014.

(b) Section 825.402, Government Code, as amended by this Act, and the repeal by this Act of Section 1579.103, Insurance Code, take effect September 1, 2013.