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A BILL TO BE ENTITLED
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AN ACT
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relating to contributions to, benefits from, and the administration |
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of systems and programs administered by the Teacher Retirement |
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System of Texas. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 824.202, Government Code, is amended by |
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amending Subsections (a), (b), (d), and (d-1) to read as follows: |
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(a) A [Except as provided by Subsection (a-1), a] member is |
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eligible to retire and receive a standard service retirement |
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annuity if: |
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(1) the member is at least 65 years old and has at |
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least five years of service credit in the retirement system; or |
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(2) the member is at least 62 [60] years old and has at |
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least five [20] years of service credit in the retirement system, |
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and[;
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(3)
the member is at least 50 years old and has at
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least 30 years of service credit in the retirement system; or
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(4)] the sum of the member's age and amount of service |
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credit in the retirement system equals the number 80. |
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(b) This subsection applies only to a person who is not |
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subject to Subsection [(b-1) or] (d) or (d-1). If a member subject |
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to this subsection is at least 55 years old and has at least five |
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years of service credit in the retirement system, the member is |
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eligible to retire and receive a service retirement annuity reduced |
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from the standard service retirement annuity available under |
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Subsection (a)(1), to a percentage derived from the following |
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table: |
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Age at date |
55 |
56 |
57 |
58 |
59 |
60 |
61 |
62 |
63 |
64 |
65 |
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Percentage of |
47% |
51% |
55% |
59% |
63% |
67% |
73% |
80% |
87% |
93% |
100% |
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(d) This subsection applies only to a person who has at |
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least five years of service credit in the retirement system on or |
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before August 31, 2014 and who retires on or after September 1, 2014 |
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[is not subject to Subsection (d-1)]. If the sum of the member's |
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age and amount of service credit in the retirement system equals the |
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number 80, with at least five years of service credit, or if the [a] |
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member [subject to this subsection] has at least 30 [20] years of |
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service credit in the retirement system, the member is eligible to |
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retire regardless of age and receive a service retirement annuity |
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consisting of the standard service retirement annuity available |
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under Subsection (a)(2) [(a)] decreased by two percent for each |
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year of age under 62 years. |
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(d-1) [This subsection applies only to a person who becomes
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a member of the retirement system on or after September 1, 2007.] |
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If the sum of the member's age and amount of service credit in the |
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retirement system equals the number 80, with at least five years of |
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service credit, or if the member has at least 30 years of service |
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credit in the retirement system, the member is eligible to retire |
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regardless of age and receive a service retirement annuity |
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consisting of[, reduced from] the standard service retirement |
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annuity available under Subsection (a)(2) decreased by five percent |
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for each year of age under 62 years[, to a percentage derived from
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the following table:
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Age at date of
|
50
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51
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52
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53
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54
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55
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56
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57
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58
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59
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60
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retirement
|
50
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51
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52
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53
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54
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55
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56
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57
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58
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59
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60
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Minimum years of
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30
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29
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28
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27
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26
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25
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24
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23
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22
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21
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20
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service credit
|
30
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29
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28
|
27
|
26
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25
|
24
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23
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22
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21
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20
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required
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30
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29
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28
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27
|
26
|
25
|
24
|
23
|
22
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21
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20
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Percentage of
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50%
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55%
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60%
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65%
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70%
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75%
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80%
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85%
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90%
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95%
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100%
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standard annuity
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50%
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55%
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60%
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65%
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70%
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75%
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80%
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85%
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90%
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95%
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100%
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receivable
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50%
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55%
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60%
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65%
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70%
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75%
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80%
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85%
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90%
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95%
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100%
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For each year of age under 50 years with 30 years of service
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credit, the standard service retirement annuity shall be five
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percent less than the percentage for age 50 with 30 years of service
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credit]. |
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SECTION 2. Subchapter H, Chapter 824, Government Code, is |
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amended by adding Section 824.702 to read as follows: |
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Sec. 824.702. COST-OF-LIVING ADJUSTMENT. (a) The |
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retirement system shall make a one-time cost-of-living adjustment |
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payable to annuitants receiving a monthly death or retirement |
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benefit annuity, as provided by this section. |
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(b) Subject to Subsections (c) and (d), to be eligible for |
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the adjustment, a person must be, on the effective date of the |
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adjustment and disregarding any forfeiture of benefits under |
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Section 824.601, an annuitant eligible to receive: |
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(1) a standard service or disability retirement |
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annuity payment; |
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(2) an optional service or disability retirement |
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annuity payment as either a retiree or beneficiary; |
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(3) an annuity payment under Section 824.402(a)(3) or |
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(4); |
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(4) an annuity payment under Section 824.502; or |
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(5) an alternate payee annuity payment under Section |
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804.005. |
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(c) If the annuitant: |
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(1) is a retiree, or is a beneficiary under an optional |
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retirement payment plan, to be eligible for the adjustment under |
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this section: |
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(A) the annuitant must be living on the effective |
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date of the adjustment; and |
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(B) the effective date of the retirement of the |
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member of the Teacher Retirement System of Texas must have been on |
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or before August 31, 1994; |
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(2) is a beneficiary under Section 824.402(a)(3) or |
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(4) or 824.502, to be eligible for the adjustment |
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(A) the annuitant must be living on the effective |
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date of the adjustment; and |
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(B) the date of death of the member of the |
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retirement system must have been on or before August 31, 1994; |
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(3) is an alternate payee under Section 804.005, the |
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annuitant is eligible for the adjustment only if the effective date |
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of the election to receive the annuity payment was on or before |
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August 31, 1994. |
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(d) An adjustment made under this section does not apply to |
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payments under: |
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(1) Section 824.203(d), relating to retirees who |
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receive a standard service retirement annuity in an amount fixed by |
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statute; |
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(2) Section 824.304(a), relating to disability |
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retirees with less than 10 years of service credit; |
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(3) Section 824.304(b)(2), relating to disability |
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retirees who receive a disability annuity in an amount fixed by |
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statute; |
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(4) Section 824.404(a), relating to active member |
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survivor beneficiaries who receive a survivor annuity in an amount |
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fixed by statute; |
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(5) Section 824.501(a), relating to retiree survivor |
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beneficiaries who receive a survivor annuity in an amount fixed by |
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statute; or |
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(6) Section 824.804(b), relating to participants in |
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the deferred retirement option plan with regard to payments from |
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their deferred retirement option plan accounts. |
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(e) An adjustment under this section |
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(1) must be made beginning with an annuity payable for |
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the month of September 2013; and |
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(2) is limited to the lesser of: |
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(A) an amount equal to three percent of the |
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monthly benefit subject to the increase; or |
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(B) $100 a month. |
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(f) The board of trustees shall determine the eligibility |
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for and the amount of any adjustment in monthly annuities in |
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accordance with this section. |
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SECTION 3. Section 824.807, Government Code, is amended to |
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read as follows: |
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Sec. 824.807. INTEREST. Interest is creditable to a |
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member's account in the deferred retirement option account at an |
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annual, prorated rate equal to two [five] percent during the period |
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of participation in the plan and until all benefits are |
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distributed. |
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SECTION 4. Section 825.307(b), Government Code, is amended |
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to read as follows: |
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(b) Interest on a member's contribution is earned monthly |
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and computed at the rate of two [five] percent a year. Except as |
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provided by Subsection (c), interest is computed based on the mean |
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balance in the member's account during that fiscal year and shall be |
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credited on August 31 of each year. |
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SECTION 5. Section 825.402, Government Code, is amended to |
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read as follows: |
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Sec. 825.402. RATE OF MEMBER CONTRIBUTIONS. [(a)] The rate |
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of contributions for each member of the retirement system is: |
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(1) five percent of the member's annual compensation |
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or $180, whichever is less, for service rendered after August 31, |
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1937, and before September 1, 1957; |
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(2) six percent of the first $8,400 of the member's |
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annual compensation for service rendered after August 31, 1957, and |
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before September 1, 1969; |
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(3) six percent of the member's annual compensation |
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for service rendered after August 31, 1969, and before the first day |
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of the 1977-78 school year; |
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(4) 6.65 percent of the member's annual compensation |
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for service rendered after the last day of the period described by |
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Subdivision (3) and before September 1, 1985[; and] |
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(5) 6.4 percent of the member's annual compensation |
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for service rendered after August 31, 1985, and before September 1, |
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2014; and |
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(6) for service rendered on or after September 1, |
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2014, the greater of: |
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(A) 6.4 percent of the member's annual |
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compensation; or |
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(B) a percent of the member's annual compensation |
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equal to the state contribution rate, except that the member |
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contribution may not exceed 6.9 percent[, subject to Subsection
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(b)]. |
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[(b)
Subject to Subsection (c), the board of trustees may by
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order require that the rate of contributions for each member of the
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retirement system under Subsection (a) is increased to not more
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than 6.58 percent of the member's annual compensation for service
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rendered after the date of the order if:
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(1)
the legislature by law requires or authorizes the
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board of trustees to pay a supplemental payment to specified
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annuitants; and
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(2)
the board of trustees finds, as of the time the
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payment is to be made, that after the payment is made the
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amortization period for the unfunded actuarial liabilities of the
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retirement system would exceed 30 years by one or more years.
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(c)
Notwithstanding any other law, the board of trustees may
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not make a supplemental payment required or authorized by the
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legislature by law, and may not impose an increase in the rate of
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contributions under Subsection (b), if the board of trustees finds
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that after making the payment and imposing the increase the
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amortization period for the unfunded actuarial liabilities of the
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retirement system would exceed 30 years by one or more years.
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(d)
Notwithstanding any other law, the board of trustees may
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delay making a supplemental payment required or authorized by the
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legislature by law as necessary to make the determinations required
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under Subsections (b) and (c).] |
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SECTION 6. Section 825.403(a), Government Code, is amended |
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to read as follows: |
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(a) Each payroll period, each employer shall deduct from the |
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compensation of each member employed by the employer the [an] |
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amount required by Section 825.402 [equal to 6.4 percent of the
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member's compensation for that period]. |
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SECTION 7. Subchapter E, Chapter 825, Government Code, is |
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amended by adding Section 825.4035 to read as follows: |
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Sec. 825.4035. EMPLOYER CONTRIBUTIONS FOR CERTAIN EMPLOYED |
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MEMBERS FOR WHOM THE EMPLOYER IS NOT MAKING CONTRIBUTIONS TO THE |
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FEDERAL OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE PROGRAM. (a) |
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This section: |
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(1) applies to an employer who reports to the |
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retirement system under Section 825.403 the employment of a member |
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for whom the employer is not making contributions to the federal |
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Old-Age, Survivors, and Disability Insurance (OASDI) program; and |
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(2) does not apply to an employer that is an |
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institution of higher education. |
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(b) Except as provided in Subsection (c), for each member |
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the employer reports to the retirement system and for whom the |
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employer is not making contributions to the OASDI program, the |
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employer shall contribute monthly to the retirement system for each |
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such member an amount equal to one percent of the member's |
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compensation. |
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(c) If a member is entitled to the minimum salary for |
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certain school personnel under Section 21.402, Education Code, or |
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if a member would have been entitled to the minimum salary for |
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certain school personnel under former Section 16.056, Education |
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Code, as that section existed on January 1, 1995, the employer |
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shall, in addition to any contributions required under Section |
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825.405, contribute monthly to the retirement system for each such |
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member an amount equal to one percent of the statutory minimum |
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salary determined under Section 825.405(b). |
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(d) Contributions under this section: |
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(1) are subject to the requirements of Section |
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825.408; and |
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(2) must be used to fund the normal cost of the |
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retirement system. |
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SECTION 8. Section 1575.158(a), Insurance Code, is amended |
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to read as follows: |
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(a) Subject to Section 1575.1581, the [The] trustee may, in |
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addition to providing a basic plan, contract for and make available |
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an optional group health benefit plan for retirees, dependents, |
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surviving spouses, or surviving dependent children. |
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SECTION 9. Chapter 1575, Insurance Code, is amended by |
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adding Section 1575.1581 to read as follows: |
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Sec. 1575.1581. LIMITATION ON ENROLLMENT IN OPTIONAL GROUP |
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HEALTH BENEFIT PLAN. (a) A service retiree and any dependent of a |
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service retiree are not eligible to participate in an optional |
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group health benefit plan made available under Section 1571.158, |
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unless the retiree: |
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(1) is at least 62 years of age or older; and |
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(2) meets the definition of retiree under Section |
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1575.004(a)(1). |
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(b) A retiree subject to Subsection (a) may, on the date the |
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retiree reaches 62 years of age, under rules adopted by the trustee: |
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(1) enroll in any coverage tier under the group |
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program; and |
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(2) enroll, in the same coverage tier, the retiree's |
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dependents who are enrolled in the group program as of the date the |
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retiree reaches 62 years of age. |
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SECTION 10. The following provisions are repealed: |
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(a) Sections 824.202(a-1) and (b-1), Government Code; and |
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(b) Section 1579.103, Insurance Code. |
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SECTION 11. (a) Except as provided in this section, the |
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changes in law made by this Act to Section 824.202, Government Code, |
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do not apply to, and the former law is continued in effect for, a |
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person who retires under the Teacher Retirement System of Texas on |
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or after September 1, 2014, and who meets one or more of the |
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following requirements on or before August 31, 2014: |
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(1) the person has attained age 50; |
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(2) the sum of the person's age and amount of service |
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credit in the retirement system equals 70 or greater; or |
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(3) the person has at least 25 years of service credit |
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in the retirement system. |
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(b) Only service actually credited in the Teacher |
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Retirement System of Texas, the Employees Retirement System of |
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Texas, or a retirement system participating in the proportionate |
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retirement program under Chapter 803, Government Code, on or before |
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August 31, 2014, may be used to determine eligibility under |
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Subsection (a)(2) and (3) of this section. Purchased service |
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credit in the retirement system is: |
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(1) not considered actually credited in the retirement |
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system for purposes of Subsection (a)(2) or (3) of this section, as |
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applicable, if the service credit is established only after |
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completion of an installment payment plan under which any |
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installment payment is required to be made after August 31, 2014; |
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and |
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(2) considered actually credited in the retirement |
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system for purposes of Subsection (a)(2) or (3) of this section, as |
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applicable, if: |
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(A) payment in full for the purchase of service |
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credit is made by a direct rollover or otherwise on or before August |
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31, 2014; or |
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(B) payment in full by direct rollover or |
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otherwise is made after August 31, 2014, if: |
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(i) the member's request to purchase |
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service credit occurred on or before August 31, 2014; and |
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(ii) payment to purchase the service credit |
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is made in accordance with uniform administrative requirements, |
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including payment deadlines, established by the retirement system. |
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(c) For members who meet the eligibility requirements of |
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Subsection (a) of this section and who otherwise would be subject to |
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Section 824.202(d-1) as it formerly existed before being amended by |
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this Act, instead of the five percent reduction for each year the |
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member is less than age 60, the reduction will be two percent for |
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each year the member is less than age 60. |
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SECTION 12. Sections 824.807 and 825.307(b), Government |
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Code, as amended by this Act, apply only to interest accrued on or |
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after the effective date of this Act. Interest accrued before the |
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effective date of this Act is governed by the law in effect on the |
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date the interest accrued, and that law is continued in effect for |
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that purpose. |
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SECTION 13. (a) The change in law made by this Act to |
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Chapter 1575, Insurance Code, does not apply to, and the former law |
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is continued in effect for, a person who takes a service retirement |
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under the Teacher Retirement System of Texas on or after September |
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1, 2014, and who meets one or more of the following requirements on |
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or before August 31, 2014: |
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(1) the sum of the person's age and amount of service |
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credit in the retirement system equals 70 or greater; or |
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(2) the person has at least 25 years of service credit |
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in the retirement system. |
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(b) Only service actually credited in the Teacher |
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Retirement System of Texas or the Employees Retirement System of |
|
Texas, on or before August 31, 2014, may be used to determine |
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eligibility under this section. Purchased service credit in the |
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retirement system is: |
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(1) not considered actually credited in the retirement |
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system for purposes of this section if the service credit is |
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established only after completion of an installment payment plan |
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under which any installment payment is required to be made after |
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August 31, 2014; and |
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(2) considered actually credited in the retirement |
|
system for purposes of this section if: |
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(A) payment in full for the purchase of service |
|
credit is made by a direct rollover or otherwise on or before August |
|
31, 2014; or |
|
(B) payment in full by direct rollover or |
|
otherwise is made after August 31, 2014, if: |
|
(i) the member's request to purchase |
|
service credit occurred on or before August 31, 2014; and |
|
(ii) payment to purchase the service credit |
|
is made in accordance with uniform administrative requirements, |
|
including payment deadlines, established by the retirement system. |
|
SECTION 14. (a) Except as provided by Subsection (b) of |
|
this section, this Act takes effect September 1, 2014. |
|
(b) Section 824.702, Government Code, as added by this Act, |
|
and the repeal by this Act of Section 1579.103, Insurance Code, take |
|
effect September 1, 2013. |