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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), (a-1), (b), (b-1), (d), and (d-1) and |
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adding Subsections (a-2), (b-2), and (d-2) to read as follows: |
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(a) Except as provided by Subsections [Subsection] (a-1) |
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and (a-2), a member is eligible to retire and receive a standard |
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service retirement 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; |
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(2) the member is at least 60 years old and has at |
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least 20 years of service credit in the retirement system; |
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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 member has at least five years of service |
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credit in the retirement system and the sum of the member's age and |
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amount of service credit in the retirement system equals the number |
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80. |
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(a-1) This subsection applies only to a person who becomes a |
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member of the retirement system on or after September 1, 2007, and |
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who is not subject to Subsection (a-2). A member subject to this |
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subsection is eligible to retire and receive a standard service |
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retirement 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 60 years old and has at |
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least five years of service credit in the retirement system and the |
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sum of the member's age and amount of service credit in the |
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retirement system equals the number 80. |
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(a-2) This subsection applies only to a person who does not |
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have at least five years of service credit in the retirement system |
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on or before August 31, 2014, or who becomes a member of the |
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retirement system on or after September 1, 2014. A member subject |
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to this subsection is eligible to retire and receive a standard |
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service retirement 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 years old and has at |
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least five years of service credit in the retirement system and the |
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sum of the member's age and amount of service credit in the |
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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), (b-2), [or] (d), (d-1), or (d-2). If a |
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member subject to this subsection is at least 55 years old and has |
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at least five years of service credit in the retirement system, the |
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member is eligible to retire and receive a service retirement |
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annuity reduced from the standard service retirement annuity |
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available under Subsection (a)(1), to a percentage derived from the |
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following table: |
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Age at date of retirement |
55 |
56 |
57 |
58 |
59 |
60 |
61 |
62 |
63 |
64 |
65 |
|
|
Age at date of retirement |
55 |
56 |
57 |
58 |
59 |
60 |
61 |
62 |
63 |
64 |
65 |
|
|
Percentage of standard annuity receivable |
47% |
51% |
55% |
59% |
63% |
67% |
73% |
80% |
87% |
93% |
100% |
|
|
Percentage of standard annuity receivable |
47% |
51% |
55% |
59% |
63% |
67% |
73% |
80% |
87% |
93% |
100% |
|
|
Percentage of standard annuity receivable |
47% |
51% |
55% |
59% |
63% |
67% |
73% |
80% |
87% |
93% |
100% |
|
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(b-1) This subsection applies only to a person who becomes a |
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member of the retirement system on or after September 1, 2007, and |
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who is not subject to Subsection (b-2). If a member subject to this |
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subsection is at least 55 years old and has at least five years of |
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service credit in the retirement system, but does not meet the |
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requirements under Subsection (d-1), the member is eligible to |
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retire and receive a service retirement annuity reduced from the |
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standard service retirement annuity available under Subsection |
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(a-1)(1), to a percentage derived from the following table: |
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Age at date of retirement |
55 |
56 |
57 |
58 |
59 |
60 |
61 |
62 |
63 |
64 |
65 |
|
|
Age at date of retirement |
55 |
56 |
57 |
58 |
59 |
60 |
61 |
62 |
63 |
64 |
65 |
|
|
Percentage of standard annuity receivable |
47% |
51% |
55% |
59% |
63% |
67% |
73% |
80% |
87% |
93% |
100% |
|
|
Percentage of standard annuity receivable |
47% |
51% |
55% |
59% |
63% |
67% |
73% |
80% |
87% |
93% |
100% |
|
|
Percentage of standard annuity receivable |
47% |
51% |
55% |
59% |
63% |
67% |
73% |
80% |
87% |
93% |
100% |
|
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(b-2) This subsection applies only to a person who does not |
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have at least five years of service credit in the retirement system |
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on or before August 31, 2014, or who becomes a member of the |
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retirement system on or after September 1, 2014. If a member |
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subject to this subsection is at least 55 years old and has at least |
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five years of service credit in the retirement system, but does not |
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meet the requirements under Subsection (d-2), 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-2)(1), to a percentage derived from the following |
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table: |
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Age at date of |
55 |
56 |
57 |
58 |
59 |
60 |
61 |
62 |
63 |
64 |
65 |
|
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retirement |
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% |
|
|
standard annuity |
47% |
51% |
55% |
59% |
63% |
67% |
73% |
80% |
87% |
93% |
100% |
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receivable |
47% |
51% |
55% |
59% |
63% |
67% |
73% |
80% |
87% |
93% |
100% |
|
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(d) This subsection applies only to a person who is not |
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subject to Subsection (d-1) or (d-2). If a member subject to this |
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subsection has at least 30 years of service credit in the retirement |
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system, the member is eligible to retire regardless of age and |
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receive a service retirement annuity consisting of the standard |
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service retirement annuity available under Subsection (a) |
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decreased by two percent for each year of age under 50 years. |
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(d-1) This subsection applies only to a person who becomes a |
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member of the retirement system on or after September 1, 2007, and |
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who is not subject to Subsection (d-2). 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 |
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member has at least 30 years of service credit in the retirement |
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system, the member is eligible to retire regardless of age and |
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receive a service retirement annuity consisting of[, reduced from] |
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the standard service retirement annuity available under Subsection |
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(a-1)(2) decreased by five percent for each year of age under 60 |
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years [(a)(2), to a percentage derived from the following table:
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Age at date of
|
50
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51
|
52
|
53
|
54
|
55
|
56
|
57
|
58
|
59
|
60
|
|
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retirement
|
50
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51
|
52
|
53
|
54
|
55
|
56
|
57
|
58
|
59
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60
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Minimum years of
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30
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29
|
28
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27
|
26
|
25
|
24
|
23
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22
|
21
|
20
|
|
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service credit
|
30
|
29
|
28
|
27
|
26
|
25
|
24
|
23
|
22
|
21
|
20
|
|
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required
|
30
|
29
|
28
|
27
|
26
|
25
|
24
|
23
|
22
|
21
|
20
|
|
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Percentage of
|
50%
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55%
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60%
|
65%
|
70%
|
75%
|
80%
|
85%
|
90%
|
95%
|
100%
|
|
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standard annuity
|
50%
|
55%
|
60%
|
65%
|
70%
|
75%
|
80%
|
85%
|
90%
|
95%
|
100%
|
|
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receivable
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50%
|
55%
|
60%
|
65%
|
70%
|
75%
|
80%
|
85%
|
90%
|
95%
|
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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(d-2) This subsection applies only to a person who does not |
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have at least five years of service credit in the retirement system |
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on or before August 31, 2014, or who becomes a member of the |
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retirement system on or after September 1, 2014. If the sum of the |
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member's age and amount of service credit in the retirement system |
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equals the number 80, with at least five years of service credit, or |
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if the member has at least 30 years of service credit in the |
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retirement system, the member is eligible to retire regardless of |
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age and receive a service retirement annuity consisting of the |
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standard service retirement annuity available under Subsection |
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(a-2)(2) decreased by five percent for each year of age under 62 |
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years. |
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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, 1999; |
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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, 1999; or |
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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, 1999. |
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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. Subsection (b), Section 825.307, Government |
|
Code, is amended 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 |
|
provided by Subsection (c), interest is computed based on the mean |
|
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 |
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rate 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; |
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(6) 6.7 percent of the member's annual compensation |
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for service rendered after August 31, 2014, and before September 1, |
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2015; |
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(7) 7.2 percent of the member's annual compensation |
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for service rendered after August 31, 2015, and before September 1, |
|
2016; |
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(8) 7.7 percent of the member's annual compensation |
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for service rendered after August 31, 2016, and before September 1, |
|
2017; and |
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(9) for service rendered on or after September 1, |
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2017, the lesser of: |
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(A) 7.7 percent of the member's annual |
|
compensation; or |
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(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 |
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contribution rate for the fiscal year to which the service relates |
|
is less than the state contribution rate established for the 2015 |
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fiscal year [subject to Subsection (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
|
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may 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
|
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may delay making a supplemental payment required or authorized by
|
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the legislature by law as necessary to make the determinations
|
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required under Subsections (b) and (c).] |
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SECTION 6. Subsection (a), Section 825.403, Government |
|
Code, is amended 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]. |
|
SECTION 7. Subchapter E, Chapter 825, Government Code, is |
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amended by adding Section 825.4035 to read as follows: |
|
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. |
|
SECTION 8. 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.] |
|
SECTION 9. Subsection (a), Section 1575.158, Insurance |
|
Code, is amended to read as follows: |
|
(a) Subject to Section 1575.1581, the [The] trustee may, in |
|
addition to providing a basic plan, contract for and make available |
|
an optional group health benefit plan for retirees, dependents, |
|
surviving spouses, or surviving dependent children. |
|
SECTION 10. Subchapter D, Chapter 1575, Insurance Code, is |
|
amended by adding Section 1575.1581 to read as follows: |
|
Sec. 1575.1581. LIMITATION ON ENROLLMENT IN OPTIONAL GROUP |
|
HEALTH BENEFIT PLAN. (a) A service retiree and any dependent of a |
|
service retiree are not eligible to participate in an optional |
|
group health benefit plan made available under Section 1575.158, |
|
unless the retiree: |
|
(1) is at least 62 years of age or older; and |
|
(2) meets the definition of retiree under Section |
|
1575.004(a)(1). |
|
(b) A retiree subject to Subsection (a) may, on the date the |
|
retiree reaches 62 years of age, under rules adopted by the trustee: |
|
(1) enroll in any coverage tier under the group |
|
program; and |
|
(2) enroll, in the same coverage tier, the retiree's |
|
dependents who are enrolled in the group program as of the date the |
|
retiree reaches 62 years of age. |
|
SECTION 11. Section 1579.103, Insurance Code, is repealed. |
|
SECTION 12. For purposes of determining whether a member |
|
has at least five years of service on or before August 31, 2014, |
|
under Subsection (a-2), (b-2), or (d-2), Section 824.202, |
|
Government Code, as added 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: |
|
(1) 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 |
|
(2) considered actually credited in the retirement |
|
system if: |
|
(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 13. Section 824.807 and Subsection (b), Section |
|
825.307, Government Code, as amended by this Act, apply only to |
|
interest accrued on or after the effective date of this Act. |
|
Interest accrued before the effective date of this Act is governed |
|
by the law in effect on the date the interest accrued, and that law |
|
is continued in effect for that purpose. |
|
SECTION 14. (a) The change in law made by this Act to |
|
Chapter 1575, Insurance Code, does not apply to, and the former law |
|
is continued in effect for, a person who takes a service retirement |
|
under the Teacher Retirement System of Texas on or after September |
|
1, 2014, and who meets one or more of the following requirements on |
|
or before August 31, 2014: |
|
(1) the sum of the person's age and amount of service |
|
credit in the retirement system equals 70 or greater; or |
|
(2) the person has at least 25 years of service credit |
|
in the retirement system. |
|
(b) Only service actually credited in the Teacher |
|
Retirement System of Texas or the Employees Retirement System of |
|
Texas on or before August 31, 2014, may be used to determine |
|
eligibility under this section. Purchased service credit in the |
|
retirement system is: |
|
(1) not considered actually credited in the retirement |
|
system for purposes of this section if the service credit is |
|
established only after completion of an installment payment plan |
|
under which any installment payment is required to be made after |
|
August 31, 2014; and |
|
(2) considered actually credited in the retirement |
|
system for purposes of this section if: |
|
(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 15. (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. |