H.B. No. 3158

	AN ACT
	relating to the retirement systems for and the provision of other
	benefits to police and fire fighters in certain municipalities.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	ARTICLE 1. CONTINGENT PROVISIONS:
	EFFECTIVE SEPTEMBER 1, 2017
	SECTION 1.01.  Section 1.01, Article 6243a-1, Revised
	Statutes, is amended to read as follows:
	Sec. 1.01.  AMENDMENT, RESTATEMENT, AND CONSOLIDATION. (a)
	The purpose of this article is to restate and amend the provisions
	of a former law governing the pension funds for police officers and
	fire fighters in certain municipalities (Chapter 4, Acts of the
	43rd Legislature, 1st Called Session, 1933, also known as Article
	6243a) having previously been amended and restated to permit the
	consolidation of the terms of certain pension plans created under
	Sections 1, 11A, and 11B of that Act for the purpose of simply and
	accurately reflecting the joint administration of the plans.
	(b)  [The provisions of this article are entirely consistent
	with all terms and conditions relating to benefits and benefit
	entitlement previously contained in the plans.] This article does
	not [intend to] take away or reduce any accrued benefit contained in
	the plans created under former Article 6243a or under this article
	as it existed on or before August 31, 2017.
	SECTION 1.02.  Section 2.01, Article 6243a-1, Revised
	Statutes, is amended to read as follows:
	Sec. 2.01.  DEFINITIONS. In this article:
	(1)  "415 compensation" means a member's wages, salary,
	and other amounts received for personal services rendered in the
	course of employment with the city during a limitation year and
	permitted to be treated as compensation for purposes of Section
	415(c) of the code, including differential wage payments described
	in Section 414(u)(12) of the code. The term does not include
	amounts picked up under Section 4.03(i) of this article.
	(2)  "Active service" means any period that a member
	receives compensation as a police officer or fire fighter from
	either department for services rendered.
	(3) [(2)]  "Actuarial equivalent" means a form of
	benefit differing in time, duration, or manner of payment from a
	standard benefit payable under this article but having the same
	value when computed using the assumptions set forth in this
	article.
	[(3)     "Administrator" means the person designated by
	the board to supervise the affairs of the pension system.]
	(4)  "Alternate payee" has the meaning given the term
	by Section 414(p) [414] of the code or any successor provision.
	(5)  "Alternative investment" means an investment in an
	asset other than a traditional asset. The term includes an
	investment in private equity funds, private real estate
	transactions, hedge funds, and infrastructure.
	(6) [(5)]  "Annual additions" means the sum of the
	following amounts credited to a member's account under any defined
	contribution plan maintained by the city for the limitation year:
	(A)  city contributions;
	(B)  member contributions, other than rollover
	contributions from a plan maintained by any employer other than the
	city;
	(C)  forfeitures; and
	(D)  amounts allocated after March 31, 1984, to an
	individual medical benefit account, as defined in Section 415(l)(2)
	[415(1)(2)] of the code, that is part of a pension or annuity plan
	maintained by the city.
	[The term does not include amounts described in Paragraph (D)
	of this subdivision for the purpose of computing the percentage
	limitation described in Section 415(c)(1)(B) of the code.] For any
	limitation year beginning before January 1, 1987, only that portion
	of member contributions equal to the lesser of member contributions
	in excess of six percent of 415 compensation or one-half of member
	contributions to the combined pension plan or any qualified defined
	contribution plan maintained by the city is treated as annual
	additions.
	(7) [(6)]  "Annual benefit" means the aggregate
	benefit attributable to city and member contributions payable
	annually under the combined pension plan, or any plan maintained by
	the city, exclusive of any benefit not required to be considered for
	purposes of applying the limitations of Section 415 of the code to
	the combined pension plan, payable in the form of a straight life
	annuity beginning at age 62 with no ancillary benefits. Solely for
	purposes of computing the limitations under the combined pension
	plan, benefits actually payable to a pensioner are adjusted to the
	actuarial equivalent of a straight life annuity pursuant to Section
	415(b) [8.01] of the code [this article] even though no member may
	actually receive a benefit in the form of a straight life annuity.
	(8) [(7)]  "Article 6243a" means Chapter 4, Acts of the
	43rd Legislature, 1st Called Session, 1933 (former Article 6243a,
	Vernon's Texas Civil Statutes), pertaining to a pension system for
	police officers, fire fighters, and fire alarm operators in certain
	cities.
	(9) [(8)]  "Assignment pay" means monthly pay, in
	addition to salary, granted to a Group B member and authorized by
	the city council for the performance of certain enumerated duty
	assignments.
	(10) [(9)]  "Base pay" means the maximum monthly civil
	service pay from time to time established by the city for a person
	who holds the rank of "police officer" in the city's police
	department or the rank of "fire and rescue officer" in the city's
	fire department [a police officer or fire fighter], exclusive of
	any other form of compensation. The term does not include
	compensation paid by the city to a person for prior periods of
	service or compensation that otherwise constitutes back pay unless
	the compensation is eligible back pay. The board may adopt rules
	and procedures necessary to include eligible back pay as base pay
	for purposes of this definition, including rules regarding how
	increases in benefits will be determined and administered.
	(11) [(10)]  "Base pension" means the amount of
	retirement, death, or disability benefits as determined [computed
	under this article] at the earliest of the time a Group B member
	and, solely for the purposes of Section 6.12 of this article, a
	Group A member:
	(A)  begins participation in DROP;
	(B)  leaves or left active service;
	(C)  [leaves active service,] dies; [,] or
	(D)  becomes entitled to a disability pension
	under the combined pension plan [disabled].
	Solely for purposes of this definition, when a member becomes
	entitled to a disability pension, the base pension shall be
	determined as of the date on which the disability pension begins.
	(12) [(11)]  "Board" means the board of trustees
	created under Section 3.01 of this article for the purpose of
	administering the pension system.
	(13) [(12)]  "Child" means a [an unmarried] person
	[under the age of 19] whose [natural or adoptive] parent, as
	recognized under the laws of this state, is a primary party.
	(14) [(13)]  "City" means each municipality having a
	population of more than 1.18 million and located predominantly in a
	county that has a total area of less than 1,000 square miles.
	(15)  "City attorney" means the chief legal officer of
	a city.
	(16) [(14)]  "City council" means the governing body of
	the city.
	(17)  "City manager" means the city manager of a city or
	the city manager's designee and includes, to the extent of any
	designation, an interim or acting city manager, chief financial
	officer, budget director, or assistant city manager. If a city does
	not have an individual serving in a position otherwise described by
	this subdivision, "city manager" means the mayor of that city.
	(18) [(15)]  "City service incentive pay" means annual
	incentive pay, adjusted by the city from time to time, in addition
	to the salary of a member granted to the member under the authority
	of the city charter and received by the member during active
	service.
	(19) [(16)]  "Code" means the United States Internal
	Revenue Code of 1986, as amended.
	(20) [(17)]  "Combined pension plan" means any pension
	plan created pursuant to this article before September 1, 2017.
	(21) [(18)]  "Computation pay" shall be used in
	determining the amount of the city's contribution under Section
	4.02(d) of this article and a Group B member's contribution under
	Section 4.03(d) of this article and in determining the base pension
	[of any benefits] to be paid to a Group B member or the benefits to
	be paid to the member's qualified survivors and means the sum of the
	following:
	(A)  the biweekly [monthly] rate of pay of a
	[Group B] member for the highest civil service rank the person
	holds, from time to time, as a result of a competitive examination;
	plus
	(B)  the [monthly rate of pay of a Group B member
	as] educational incentive pay of a member, computed on a biweekly
	basis; plus
	(C)  the longevity [monthly rate of] pay of a
	[Group B] member [as longevity pay], as authorized by the
	legislature, computed on a biweekly basis; plus
	(D)  the city service incentive pay, computed on a
	biweekly [monthly] basis, of a [Group B] member.
	The term includes only amounts actually paid in salary or
	payments made instead of salary to the member and member
	contributions picked up by the city, and does not include any
	imputed pay. Furthermore, any [Any] compensation received by a
	[Group B] member, other than that noted in Paragraphs (A)-(D) of
	this subdivision (for example, compensation for overtime work,
	certification pay, and the [monthly rate of] pay a member would
	receive from the city in the form of assignment pay), will not be
	considered in determining the computation pay of a [Group B]
	member. Any lump-sum payments for compensatory time, unused sick
	leave, unused vacation time, or city service incentive pay payable
	after a [Group B] member leaves active service, dies [death],
	becomes disabled [disability], or resigns [resignation], or after
	any other type of termination may not be considered in determining
	the computation pay of any [Group B] member. Computation pay for a
	[Group B] member for any given period [month] is determined on the
	biweekly [monthly] rates of pay due the [Group B] member for the
	entire period [month]. The term does not include compensation paid
	by the city to a person for prior periods of service or compensation
	that otherwise constitutes back pay unless the compensation is
	eligible back pay. The board may adopt rules and procedures
	necessary to include eligible back pay as computation pay for
	purposes of this definition, including rules regarding how
	increases in benefits will be determined and administered. [If a
	Group B member works less than the member's assigned schedule for
	any given month, the computation pay for the Group B member shall be
	prorated for the portion of the month that the Group B member
	worked.
	[(19)     "Educational incentive pay" means incentive pay
	designed to reward completion of certain hours of college credit,
	adjusted by the city from time to time, that is paid to a member in
	addition to the member's salary.]
	(22) [(20)]  "Department" means either the police
	department of the city, the fire department of the city, or both the
	police and fire departments of the city together.
	(23) [(21)]  "Dependent parent" means a natural parent
	or parent who adopted a primary party and who immediately before the
	death of a primary party received over half of the parent's
	financial support from the primary party.
	(24) [(22)]  "Disability retirement" means any period
	that a pensioner receives periodic disability compensation or a
	disability pension.
	(25)  "DROP" means the deferred retirement option plan
	established in accordance with Section 6.14 of this article.
	(26)  "Educational incentive pay" means incentive pay
	designed to reward completion of certain hours of college credit,
	adjusted by the city from time to time, that is paid to a member in
	addition to the member's salary.
	(27)  "Eligible back pay," except as otherwise provided
	by this definition, means additional compensation paid by the city
	to a member or pensioner:
	(A)  that constitutes back pay to the member's or
	pensioner's prior period of service and is otherwise considered
	taxable wages paid by the city to the member or pensioner for
	federal income tax purposes; and
	(B)  for which the pension system receives:
	(i)  an amount equal to the aggregate member
	and city contributions that the pension system would have collected
	with respect to the compensation for all time periods relating to
	the back pay compensation; and
	(ii)  interest, calculated using the pension
	system's actuarial rate of return assumptions in effect for the
	periods relating to the back pay, compounded annually, on the
	contribution amounts for the period from the date that the
	contributions would have been received if the back pay compensation
	had been paid during the relevant periods of prior service through
	the date the amount relating to the contributions for back pay is
	actually received by the pension system.
	The term does not include any additional compensation paid by
	the city to a member or pensioner wholly or partly or directly or
	indirectly as the result of litigation instituted to recover back
	pay.
	The pension system is not obligated to collect the additional
	contributions or interest described in Paragraph (B) of this
	subdivision from the member, pensioner, or city. The pension system
	may not recognize back pay as eligible back pay until the
	contributions and interest described in Paragraph (B) of this
	subdivision have been received.
	(28)  "Executive director" means the person designated
	by the board to supervise the operation of the pension system.
	(29) [(23)     "415 compensation" means a member's wages,
	salary, and other amounts received for personal services rendered
	in the course of employment with the city during a limitation year,
	but does not include:
	[(A)     contributions made by the city to a plan of
	deferred compensation, or a simplified employee pension plan, to
	the extent such contributions are excludable from the member's
	gross income;
	[(B)     any distributions from a plan of deferred
	compensation, or a simplified employee pension plan, to the extent
	the distributions are excludable from the member's gross income;
	[(C)     other amounts that received special tax
	benefits, such as premiums for group term life insurance, to the
	extent that the premiums are not includable in the gross income of
	the member, or contributions made by the city, including
	contributions toward the purchase of an annuity described by
	Section 403(b) of the code, whether or not contributed pursuant to a
	salary reduction agreement and whether or not the amounts are
	actually excludable from the gross income of the member; and
	[(D)     for any limitation year beginning after
	December 31, 1988, compensation in excess of $200,000, adjusted in
	a manner permitted under Section 415(d) of the code.
	[(24)]  "Fund" means all funds and property held to
	provide benefits to [for the benefit of] all persons who are or who
	may become entitled to any benefits under any plan within the
	pension system, together with all income, profits, or other
	increments.
	(30) [(25)]  "Group A member" means any police officer
	or fire fighter included in Group A membership under [described by]
	Section 5.01(a)(1) of this article.
	(31) [(26)]  "Group B member" means any police officer
	or fire fighter included in Group B membership under [described by]
	Section 5.01(a)(2) of this article.
	(32) [(27)]  "Health director" means any qualified
	physician designated from time to time by the board.
	(33) [(28)]  "Limitation year" means the plan year of
	the combined pension plan and any defined benefit plan or defined
	contribution plan of the city in which a member participates.
	(34) [(29)]  "Longevity pay" means pay in addition to
	the salary of a member granted under Section 141.032, Local
	Government Code, for each year of active service completed by a
	member in either department.
	(35) [(30)]  "Member" means both Group A and Group B
	members.
	(36) [(31)]  "Member's account" means an account
	established and maintained for a member with respect to the
	member's total interest in one or more defined contribution plans
	under this article or maintained by the city resulting in annual
	additions.
	(37)  "Nominations committee" means the nominations
	committee established under Section 3.011 of this article.
	(38) [(32)]  "Old plan" means any pension plan created
	pursuant to Section 1 of Article 6243a.
	(39) [(33)]  "Pensioner," "Group A pensioner," or
	"Group B pensioner" means a former member of the pension system who
	is on either a service or disability retirement.
	(40) [(34)]  "Pension service" means the time, in
	years, and prorated for fractional years, that a member has
	contributed to the fund under the terms of the combined pension plan
	or any plan within the pension system, reduced to reflect refunds
	that have been received and not fully repaid.
	(41) [(35)]  "Pension system" means the fund and any
	plans created pursuant to this article or Article 6243a and that are
	intended to be qualified under Section 401(a) of the code.
	(42) [(36)]  "Plan A" means any plan created pursuant
	to Section 11A of Article 6243a.
	(43) [(37)]  "Plan B" means any plan created pursuant
	to Section 11B of Article 6243a.
	(44) [(38)]  "Police officer" or "fire fighter" means,
	as appropriate, a police officer, fire fighter, fire and rescue
	officer, fire alarm operator, fire inspector, apprentice police
	officer, apprentice fire fighter, or similar employee of either
	department as defined in the classifications of the human resources
	[personnel] department of the city.
	(45) [(39)]  "Primary party," "Group B primary party,"
	or "Group A primary party" means a member[, former member,] or
	pensioner.
	(46) [(40)]  "Qualified actuary" means either:
	(A)  an individual who is a Fellow of the Society
	of Actuaries, a Fellow of the Conference of Consulting Actuaries
	[in Public Practice], or a member of the American Academy of
	Actuaries; or
	(B)  a firm that employs one or more persons who
	are Fellows of the Society of Actuaries, Fellows of the Conference
	of Consulting Actuaries [in Public Practice], or members of the
	American Academy of Actuaries and are providing services to the
	pension system.
	(47) [(41)]  "Qualified domestic relations order" has
	the meaning provided by Section 414(p) [414] of the code.
	(48) [(42)]  "Qualified survivor" means a person who is
	eligible to receive death [survivor] benefits after the death of a
	primary party and includes only:
	(A)  a surviving spouse, if the spouse was
	continuously married to the primary party from [both at] the date
	when the primary party either voluntarily or involuntarily left
	active service as a member through [and at] the date of the primary
	party's death;
	(B)  all surviving, unmarried[, legitimate, and
	legally adopted] children who are either under 19 years of age or
	have a disability, as determined by the board under Section
	6.06(o-2) of this article, and who were:
	(i)  born or adopted before the primary
	party [as a member] either voluntarily or involuntarily left active
	service; or
	(ii) [who were] born after the primary party
	[a member] left active service if the mother was pregnant with the
	child before the primary party [member] left active service; and
	(C)  a surviving dependent parent of a primary
	party if the primary party is not survived by a spouse or child
	eligible for benefits.
	(49) [(43)]  "Service retirement" means any period
	that a pensioner receives a retirement pension but does not include
	any period of disability retirement.
	(50) [(44)]  "Spouse" means the person to whom [husband
	or wife of] a primary party is legally married [recognized] under
	the laws of this state or any other state.
	(51)  "Traditional asset" includes stocks, bonds, and
	cash [(45) "Total wages and salaries" means all pay received by a
	member of any plan within the pension system from the city,
	excluding any lump-sum payments for unused sick time or unused
	vacation time accrued by any member and payable as the result of the
	member's death, disability, resignation, or any other reason for
	leaving active service].
	(52) [(46)]  "Trustee" means a member of the board.
	(53)  "Two-thirds vote," in reference to a vote of all
	the trustees, means a vote of 8 of the 11 trustees of the board.
	SECTION 1.03.  Sections 2.02(a) and (b), Article 6243a-1,
	Revised Statutes, are amended to read as follows:
	(a)  If the amount of any benefit or contribution is to be
	determined on the basis of actuarial assumptions that are not
	otherwise specifically set forth for that purpose in this article,
	the actuarial assumptions to be used are those earnings and
	mortality assumptions being used on the date of the determination
	by the pension system's qualified actuary and approved by the
	board.
	(b)  The actuarial assumptions being used at any particular
	time shall be attached by the executive director [administrator] as
	an addendum to this article and treated for all purposes as a part
	of any plan created by this article. The executive director shall
	promptly update any addendum to conform to any changed actuarial
	assumptions approved by the board.
	SECTION 1.04.  Part 2, Article 6243a-1, Revised Statutes, is
	amended by adding Sections 2.025 and 2.03 to read as follows:
	Sec. 2.025.  INDEPENDENT ACTUARIAL ANALYSIS AND LEGISLATIVE
	RECOMMENDATIONS. (a) Before July 1, 2024, the State Pension Review
	Board shall select an independent actuary who the board shall hire
	to perform an actuarial analysis of the most recently completed
	actuarial valuation of the pension system. The independent actuary
	shall submit the analysis to the State Pension Review Board and the
	board not later than October 1, 2024. The analysis must include the
	independent actuary's:
	(1)  conclusion regarding whether the pension system
	meets State Pension Review Board pension funding guidelines; and
	(2)  recommendations regarding changes to benefits or
	to member or city contribution rates.
	(b)  Subject to Subsection (d) of this section, not later
	than November 1, 2024, the board shall by rule adopt a plan that:
	(1)  complies with funding and amortization period
	requirements applicable to the pension system under Subchapter C,
	Chapter 802, Government Code; and
	(2)  takes into consideration the independent actuary's
	recommendations under Subsection (a)(2) of this section.
	(b-1)  The board shall provide a copy of the analysis
	prepared under Subsection (a) of this section and a summary of any
	rules adopted by the board under Subsection (b) of this section to
	the State Pension Review Board.
	(c)  Not later than December 1, 2024, the State Pension
	Review Board shall submit a report to the legislature regarding
	actions taken under this section. The report required under this
	section must include a copy of the analysis prepared under
	Subsection (a) of this section and a summary of rules adopted by the
	board under Subsection (b) of this section.
	(d)  Notwithstanding any other provision of this article, a
	rule adopted by the board under Subsection (b) of this section that
	conflicts with a provision of this article remains in effect until:
	(1)  a law that is enacted by the legislature and
	becomes law preempts the rule; or
	(2)  the board amends the rule and the amendment takes
	effect, provided the board may only amend the rule if the pension
	system complies with the funding and amortization period
	requirements applicable to the pension system under Subchapter C,
	Chapter 802, Government Code.
	(e)  This section expires September 1, 2025.
	Sec. 2.03.  REFERENCES TO CERTAIN LAW. A reference to a
	statute made in this article includes a reference to any
	regulation, rule, order, or notice made by a governmental entity
	with the authority under law to adopt the regulation, rule, order,
	or notice, and on which the governmental entity intends persons to
	rely, as appropriate.
	SECTION 1.05.  Section 3.01, Article 6243a-1, Revised
	Statutes, is amended by amending Subsections (a), (b), (d), (e),
	(f), (h), (i), (j), (n), and (o) and adding Subsections (b-1),
	(b-2), (b-3), (b-4), (j-1), (j-2), (j-3), (j-4), (j-5), (j-6),
	(j-7), (j-8), (j-9), (j-10), (o-1), (p), (q), (r), and (s) to read
	as follows:
	(a)  The pension system shall be administered by the board.
	The board shall execute its fiduciary duty to hold and administer
	the assets of the fund for the exclusive benefit of members and
	their beneficiaries under Section 802.203, Government Code,
	Section 67(f), Article XVI, Texas Constitution, and any other
	applicable law, in a manner that ensures the sustainability of the
	pension system for purposes of providing current and future
	benefits to members and their beneficiaries.
	(b)  Subject to Subsections (b-1) and (b-2) of this section,
	the [The] board consists of 11 [seven] trustees who shall be
	selected and shall serve as follows:
	(1)  six trustees appointed by the mayor, in
	consultation with the city council;
	(2)  three trustees elected under rules adopted by the
	board by the members and pensioners of the pension system from a
	slate of nominees, in a number determined under the rules, selected
	and vetted by the nominations committee;
	(3)  subject to Subsection (b-3) of this section, one
	trustee who is a current or former police officer of the city
	nominated and elected by members of the pension system under rules
	adopted by the board; and
	(4)  subject to Subsection (b-3) of this section, one
	trustee who is a current or former fire fighter of the city
	nominated and elected by members of the pension system under rules
	adopted by the board.
	(b-1)  To be appointed or elected a trustee under this
	section, a person:
	(1)  must have demonstrated financial, accounting,
	business, investment, budgeting, real estate, or actuarial
	expertise; and
	(2)  may not be an elected official of the city.
	(b-2)  To be appointed or elected a trustee under Subsection
	(b)(1) or (2) of this section a person may not be an active member or
	pensioner.
	(b-3)  If the board determines that it is not possible to
	nominate or elect a trustee under Subsection (b)(3) or (4) of this
	section who meets the requirements of Subsection (b-1) of this
	section, the board shall notify the nominations committee and the
	nominations committee shall select, vet, and nominate a slate of
	persons, the number of which is determined by board rule, who meet
	the requirements of Subsection (b-1) of this section, and the
	members of the pension system shall elect a trustee from the slate
	of nominees to represent the interests of police officers or fire
	fighters, as appropriate, of the city on the board.  The nomination
	and election of a trustee under this subsection may be made without
	regard to whether the trustee is qualified under Subsection (b)(3)
	or (4), as applicable, of this section.
	(b-4)  A trustee is not required to reside in a particular
	city or county of this state. [The city council shall name from
	among its members three council members who shall serve as trustees
	of the board. The council member trustees shall be named as soon as
	possible after the first Monday in May of each odd-numbered year and
	shall serve for the term of office to which they were elected as
	council members. If there is a vacancy in any of the council member
	trustees' seats on the board, the city council shall name another
	council member to serve out the remainder of the unexpired term.
	[(2)     The police and fire department members of the
	pension plans within the pension system shall separately, by
	department and not by plan, elect from among their respective
	memberships two active police officer and two active fire fighter
	members. On their election, each of the trustees under this
	subdivision shall execute a written affirmation of the person's
	undertaking to faithfully perform duties to the pension system.
	The police and fire department trustees shall serve terms of four
	years each, the terms being staggered so that one term, but not both
	from the same department, shall expire on June 1 of each
	odd-numbered year. If a vacancy occurs among the police and fire
	department trustees, the vacancy shall be filled in accordance with
	the provisions of Subsection (d) of this section. The police and
	fire department trustees will continue to serve beyond the
	expiration of their terms, if their successors have not been
	elected and affirmed in writing their undertaking to faithfully
	perform their duties to the pension system, until their successors
	are elected and have affirmed in writing their undertaking to
	faithfully perform their duties to the pension system.]
	(d)  A [If a] vacancy on the board in a trustee position under
	Subsection (b)(1) or (2) of this section shall be filled in the same
	manner as the original appointment, or election. The board by rule
	shall determine the manner by which a vacancy in a trustee position
	under Subsection (b)(3) or (4) of this section is filled [occurs
	among the police or fire department alternate trustees, for reasons
	other than the failure to elect a successor alternate trustee or the
	occurrence of a vacancy among the regular trustees of either
	department, the board shall appoint a new alternate trustee
	representing the department from which the vacancy occurs to serve
	as the alternate trustee for the remainder of the alternate
	trustee's term]. [A candidate is not eligible for election to an
	alternate trustee position and to a regular trustee position during
	the same election.]
	(e)  The mayor shall determine whether all trustees
	appointed under Subsection (b)(1) of this section hold office for
	staggered two-year terms or staggered three-year terms. The
	nominations committee shall determine whether all trustees elected
	under Subsection (b)(2), (3), or (4) of this section hold office for
	staggered two-year terms or staggered three-year terms. A trustee
	appointed or elected, as applicable, under Subsection (b)(1) or (2)
	of this section may not serve for more than six consecutive years on
	the board [If a vacancy occurs among the police or fire department
	regular trustees, the alternate trustee representing the
	department from which the vacancy occurs shall serve as the regular
	trustee for the remainder of the unexpired regular trustee's term].
	[Thereafter, the board shall appoint a new alternate trustee from
	the same department to serve for a period ending on the earlier of
	the expiration of the regular trustee's term or the original
	alternate trustee's term. If the original alternate trustee's term
	has not expired after serving in place of the regular trustee, then
	that person shall serve out the remainder of the unexpired term.
	After a new regular trustee has been elected, the original
	alternate trustee shall return to serve as an alternate trustee
	until the regular trustee's term has expired. However, if the
	original alternate trustee, while an alternate trustee, is elected
	to a full term as a regular trustee before the expiration of the
	term as an alternate trustee, the term of the new alternate trustee
	extends until the expiration of the original alternate trustee's
	term.]
	(f)  The election of the trustees under Subsection (b)(2),
	(3), or (4) of this section, including an election under Subsection
	(b-3) of this section to fill a trustee position under Subsection
	(b)(3) or (4) of this section, [representing the police and fire
	departments] shall be held under the supervision of the board, and
	the board shall adopt such rules [and regulations] governing the
	election procedure as it considers appropriate, as long as the
	rules [and regulations] are consistent with generally accepted
	principles of secret ballot and majority rule. The rules [and
	regulations] adopted by the board shall be recorded in the minutes
	of the board and made available to the members of any pension plan
	within the pension system.
	(h)  The executive director [administrator], or in the
	executive director's [administrator's] absence a member of the
	administrative staff designated by the board, shall serve as the
	secretary of the board.
	(i)  The board shall serve without separate compensation
	from the fund, but a trustee is entitled to reimbursement for travel
	expenses and, if applicable, [with entitlement] to any appropriate
	compensation from the city as if the trustee [board members] were
	performing the trustee's [their] regular functions for the police
	or fire department or for the city. The board shall meet not less
	than once each month and may meet at any time on the call of its
	chairman.
	(j)  The board has full power to make rules [and regulations]
	pertaining to the conduct of its meetings and to the operation of
	the pension system as long as its rules are not, subject to
	Subsections (j-1) and (j-2) of this section, inconsistent with the
	terms of this article, any pension plan within the pension system,
	or the laws of this state or the United States to the extent
	applicable. A board meeting may be held by telephone conference
	call or by videoconference call in accordance with Sections 551.125
	and 551.127, Government Code, except that Section 551.125(b),
	Government Code, does not apply.
	(j-1)  Subject to Subsection (o)(2) of this section, the
	board may adopt a rule that conflicts with this article:
	(1)  to ensure compliance with the code, including
	Section 415 of the code, and other applicable federal law;
	(2)  subject to Subsections (j-5) through (j-8) of this
	section, to amortize the unfunded actuarial accrued liability of
	the pension system within a period that does not exceed 35 years, if
	the board determines the rule is appropriate based on the
	evaluations required under Subsection (j-5) of this section; or
	(3)  subject to Subsections (j-6) and (j-7) of this
	section and notwithstanding any other law, to increase the benefits
	provided under this article in any manner the board determines
	appropriate if the increase will not cause the amortization period
	of the unfunded actuarial accrued liability of the pension system
	to exceed 25 years, after taking into account the impact of the
	increase.
	(j-2)  Except as provided by Subsection (j-1) of this section
	or Section 4.02(b) of this article, a provision of any plan provided
	by the pension system may only be amended if approved by the board.
	An amendment described by this subsection:
	(1)  may not cause the amortization period of the
	unfunded actuarial accrued liability of the pension system to
	exceed 35 years, after taking into account the impact of the
	amendment, as determined by the board and reviewed by the State
	Pension Review Board; and
	(2)  is not required to be ratified by the legislature.
	(j-3)  The board may correct any defect, supply any omission,
	and reconcile any inconsistency that may appear in this article in a
	manner and to the extent that the board believes would:
	(1)  be expedient for the administration of the pension
	system;
	(2)  be for the greatest benefit of all members,
	pensioners, and qualified survivors; and
	(3)  not adversely affect the benefits of a member,
	pensioner, or qualified survivor.
	(j-4)  The board has full discretion and authority to
	construe and interpret the combined pension plan and to do all acts
	necessary to carry out the purpose of the combined pension plan. A
	decision of the board is final and binding on all affected parties.
	(j-5)  Not later than January 1, 2018, the board shall
	conduct an evaluation of:
	(1)  how benefits are computed under this article to
	identify potential means of abusing the computation of benefits to
	inflate pension benefits received by pensioners; and
	(2)  the impact, including the impact on the combined
	pension plan, of establishing one or more alternative benefit
	plans, including a defined contribution plan or a hybrid retirement
	plan that combines elements of both a defined benefit plan and a
	defined contribution plan, for newly hired employees of the city
	and for members who voluntarily elect to transfer to an alternative
	benefit plan.
	(j-6)  The board may not adopt a rule under Subsection
	(j-1)(2) or (3) of this section unless the rule has first been
	reviewed by the State Pension Review Board and the State Pension
	Review Board finds that implementation of a rule under:
	(1)  Subsection (j-1)(2) of this section complies with
	the amortization period prescribed by that subdivision and
	Subsection (j-8) of this section; or
	(2)  Subsection (j-1)(3) of this section complies with
	the amortization period prescribed by that subdivision.
	(j-7)  The board shall provide the State Pension Review Board
	with a copy of a proposed rule for purposes of Subsection (j-6) of
	this section at least 90 days before the date the board intends to
	implement the rule.
	(j-8)  The board may not adopt a rule under Subsection
	(j-1)(2) of this section based on an evaluation under Subsection
	(j-5)(2) of this section if the board determines implementation of
	the rule would cause the amortization period of the unfunded
	actuarial accrued liability of the combined pension plan or any
	plan established under this article by the pension system to exceed
	35 years, after taking into account implementation of the rule.
	(j-9)  At least twice each year, the board shall have a
	meeting to receive public input regarding the pension system and to
	inform the public about the health and performance of the pension
	system. The State Pension Review Board is entitled to all documents
	and other information provided to the public or that are the basis
	for information provided to the public, as determined by the State
	Pension Review Board, for purposes of this subsection and shall
	independently review the information to ensure its validity.
	(j-10)  An employee or other agent acting on behalf of the
	pension system or the city must certify to the State Pension Review
	Board that any information provided by the pension system or city,
	as appropriate, under this article or other law is accurate and
	based on realistic assumptions.
	(n)  Six [Four] trustees of the board constitute a quorum at
	any [called] meeting[, except that a trustee from the police
	department and a trustee from the fire department must be present to
	conduct business].
	(o)  No action may be taken by the board except at a meeting.
	Except as otherwise specifically provided by this article or other
	law:
	(1)  [, and] no action shall be taken during a board
	meeting without the approval of a majority of the trustees of the
	board; and
	(2)  no action otherwise authorized by this article or
	other law may be taken that establishes an alternative benefit
	plan, reduces the city contribution rate, increases the member
	contribution rate, or reduces benefits, including accrued
	benefits, without the approval of at least a two-thirds vote of all
	the trustees of the board [present].
	(o-1)  Only actions of the board taken or approved of during
	a meeting are binding on the board, and no other written or oral
	statement or representation made by any person is binding on the
	board or the pension system.
	(p)  The board may file suit on behalf of the pension system
	in a court of competent jurisdiction regardless of the court's
	location. The board has sole authority to litigate matters on
	behalf of the pension system. Notwithstanding Chapter 15, Civil
	Practice and Remedies Code, or any other law, an action against the
	pension system or the board shall be brought in a court of competent
	jurisdiction located in the city or county in which the pension
	system is located.
	(q)  The board may purchase from one or more insurers one or
	more insurance policies that provide for the reimbursement of a
	trustee or employee of the pension system for liability imposed as
	damages caused by, and for costs and expenses incurred by the
	individual in defense of, an alleged act, error, or omission
	committed by the individual in the individual's capacity as a
	fiduciary or employee of the pension system. The board may not
	purchase an insurance policy that provides for the reimbursement of
	a trustee or employee of the pension system due to the trustee's or
	employee's dishonesty, fraudulent breach of trust, lack of good
	faith, intentional fraud or deception, or intentional failure to
	act prudently.
	(r)  The board shall adopt a code or codes of ethics
	consistent with Section 825.212, Government Code. In adopting or
	amending a code or codes of ethics, the board may consider comments
	on the policy from the city attorney of the city. The board shall:
	(1)  review the code or codes of ethics on an annual
	basis and amend the code or codes as the board considers necessary;
	(2)  file a copy of the code or codes of ethics adopted
	or amended in accordance with this subsection with the State
	Pension Review Board; and
	(3)  provide a copy of the code or codes of ethics
	adopted or amended in accordance with this subsection to the city
	attorney.
	(s)  The board shall develop an Internet website designed to
	give active members and pensioners access to the information
	concerning the pension system and the individual's participation in
	the pension system required by Section 802.106, Government Code, as
	well as information concerning the financial health of the pension
	system.
	SECTION 1.06.  Part 3, Article 6243a-1, Revised Statutes, is
	amended by adding Sections 3.011, 3.012, and 3.013 to read as
	follows:
	Sec. 3.011.  NOMINATIONS COMMITTEE. (a) Subject to
	Subsection (b) of this section, the nominations committee consists
	of:
	(1)  the executive director, who is a nonvoting member;
	and
	(2)  the president, chair, or other executive head of
	the following organizations or their successor organizations, or
	that person's designee:
	(A)  the Dallas Black Firefighters Association;
	(B)  the Black Police Association of Greater
	Dallas;
	(C)  the National Latino Law Enforcement
	Organization;
	(D)  the Dallas Fraternal Order Police Lodge 588;
	(E)  the Dallas Police Association;
	(F)  the Dallas Fire Fighters Association,
	International Association of Fire Fighters Local No. 58;
	(G)  the Dallas Hispanic Firefighters
	Association, Inc.;
	(H)  the Dallas Police Retired Officers
	Association;
	(I)  the Dallas Retired Firefighters Association;
	(J)  the Retired Black Firefighters Association
	of Dallas; and
	(K)  the Dallas Hispanic Retired Fire Fighters
	Association.
	(b)  If an organization described by Subsection (a)(2) of
	this section elects not to participate on the nominations
	committee, is prohibited from participating on the nominations
	committee under Subsection (g) of this section, or ceases to exist,
	the nominations committee members appointed under that subsection
	consist only of representatives of the remaining organizations, if
	any.
	(c)  The executive director shall serve as presiding officer
	of the nominations committee.
	(d)  The nominations committee shall meet at the call of the
	presiding officer.
	(e)  The nominations committee shall nominate trustees to
	the board in accordance with Sections 3.01(b)(2) and (b-3) of this
	article.
	(f)  A person serving on the nominations committee under
	Subsection (a)(2) of this section serves without compensation and
	may not be reimbursed for travel or other expenses incurred while
	conducting the business of the nominations committee. The
	executive director may not receive additional compensation for
	service on the nominations committee.
	(g)  An organization described by Subsection (a)(2) of this
	section may not participate on the nominations committee unless the
	organization is in good standing with the secretary of state, if
	applicable.
	(h)  Chapter 2110, Government Code, does not apply to the
	nominations committee.
	(i)  The nominations committee may establish policies and
	procedures governing its operations.
	Sec. 3.012.  REMOVAL OF TRUSTEES. (a) In accordance with
	procedures adopted by board rule, a trustee:
	(1)  appointed under Section 3.01(b)(1) of this article
	may be removed by the mayor for cause; and
	(2)  elected under Section 3.01(b)(2), (3), or (4) of
	this article may be removed by the nominations committee for cause.
	(b)  It is a cause for removal of a trustee from the board
	that the trustee:
	(1)  does not have at the time of taking office the
	qualifications required by Section 3.01(b) or (b-1)(1) of this
	article, subject to Subsection (b-3) of that section;
	(2)  does not maintain during service on the board the
	qualifications required by Section 3.01(b) or (b-1)(1) of this
	article, subject to Subsection (b-3) of that section;
	(3)  is ineligible for membership under Section
	3.01(b-1)(2) or (b-2) of this article; or
	(4)  is absent from more than 40 percent of the meetings
	that the trustee is eligible to attend during a calendar year
	without an excuse approved by a majority vote of the board.
	(c)  The validity of an action of the board is not affected by
	the fact that it is taken when a cause for removal of a trustee
	exists.
	(d)  If the executive director has knowledge that a potential
	cause for removal exists, the executive director shall notify the
	chairman of the board of the potential cause. The chairman shall
	then notify the mayor or nominations committee, as appropriate,
	that a potential cause for removal exists. If the potential cause
	for removal involves the chairman, the executive director shall
	notify the vice chairman or next highest ranking officer of the
	board, who shall then notify the mayor or nominations committee, as
	appropriate, that a potential cause for removal exists.
	Sec. 3.013.  TRUSTEE TRAINING. (a) A person who is
	appointed or elected to the board and qualifies for office as a
	trustee shall complete a training program that complies with this
	section.
	(b)  The training program must provide the person with
	information regarding:
	(1)  the law governing the pension system's operations;
	(2)  the programs, functions, rules, and budget of the
	pension system;
	(3)  the scope of and limitations on the rulemaking
	authority of the board;
	(4)  the results of the most recent formal audit of the
	pension system;
	(5)  the requirements of:
	(A)  laws relating to open meetings, public
	information, administrative procedure, and disclosing conflicts of
	interest; and
	(B)  other laws applicable to a trustee in
	performing the trustee's duties, including the board's fiduciary
	duties described under Section 3.01(a) of this article;
	(6)  the code or codes of ethics adopted under Section
	3.01(r) of this article and any applicable ethics policies adopted
	by the Texas Ethics Commission; and
	(7)  financial training regarding the risks of
	investing in alternative investments.
	(c)  The executive director shall create a training manual
	that includes the information required by Subsection (b) of this
	section. The executive director shall distribute a copy of the
	training manual annually to each trustee. On receipt of the
	training manual, each trustee shall sign and submit to the
	executive director a statement acknowledging receipt of the
	training manual.
	SECTION 1.07.  Section 3.02, Article 6243a-1, Revised
	Statutes, is amended to read as follows:
	Sec. 3.02.  PROFESSIONAL CONSULTANTS. In addition to the
	authority of the board to employ the services of certain
	consultants set forth in this article, the board has the authority
	to employ the services of any professional consultant recommended
	by the executive director, including investment advisors and
	investment managers, whenever the services of the consultants
	[consultant] are considered necessary or desirable and in the best
	interests of the pension system, as determined by the board in
	consultation with the executive director. A professional
	consultant shall receive such compensation as may be determined by
	the board in accordance with Section 4.01 of this article.
	SECTION 1.08.  Part 3, Article 6243a-1, Revised Statutes, is
	amended by adding Section 3.025 to read as follows:
	Sec. 3.025.  CHIEF INVESTMENT OFFICER. The executive
	director may hire a chief investment officer, subject to
	confirmation by the board, to assist the pension system regarding
	the investment of assets of the fund. Compensation for a chief
	investment officer hired under this section shall be made in
	accordance with Section 4.01 of this article.
	SECTION 1.09.  Section 3.03, Article 6243a-1, Revised
	Statutes, is amended by amending Subsections (b) and (c) and adding
	Subsection (b-1) to read as follows:
	(b)  Subject to Subsection (b-1) of this section, the [The]
	city attorney or an assistant city attorney may [shall] attend
	board [all] meetings [of the board] and may advise the board on any
	matter on which the pension system [board] requests a legal opinion
	from the city attorney.
	(b-1)  The city attorney or an assistant city attorney is not
	required to provide an opinion under Subsection (b) of this section
	unless the opinion is requested by the city council on behalf of the
	pension system. The city attorney or assistant city attorney may
	decline to provide the opinion if the subject matter of the request
	is too dependent on disputed facts to permit a generalized opinion,
	as determined by the city attorney or assistant city attorney.
	(c)  The board may retain other attorneys to serve as legal
	advisors to [represent] the board [or to give advice]. The
	executive director may hire a chief legal officer, subject to
	confirmation by the board, or other attorneys if necessary to carry
	out the business of the pension system. Compensation for a chief
	legal officer or other attorneys hired under this subsection shall
	be made in accordance with Section 4.01 of this article.
	SECTION 1.10.  Section 3.04, Article 6243a-1, Revised
	Statutes, is amended to read as follows:
	Sec. 3.04.  APPOINTMENT OF EXECUTIVE DIRECTOR
	[ADMINISTRATOR]. (a) The board has the authority to appoint an
	executive director [administrator] to assist [carry out the
	business of] the board with administering the pension system and
	ensure that records are kept [to keep a record] of the proceedings
	of the board. Subject to Subsection (a-1) of this section, a person
	appointed executive director under this section:
	(1)  must have, to the extent possible, relevant
	experience in managing a similarly situated business entity; and
	(2)  may not be a current or former trustee [The
	administrator, in carrying out the business of the board within the
	scope of the administrator's responsibility, may not be considered
	a fiduciary with respect to the pension system].
	(a-1)  During any period in which the most recent actuarial
	valuation of the pension system indicates that the period needed to
	amortize the unfunded actuarial accrued liability of the pension
	system exceeds 35 years, the board shall, to the extent lapsed
	investments are a significant portion of the pension system's
	assets, ensure that the executive director appointed under
	Subsection (a) of this section has, or hires staff that has,
	appropriate experience in managing a business entity with lapsed
	investments in a manner that resulted in the improved liquidity or
	profitability of the business entity.
	(b)  Subject to Subsections (b-1) and (b-3) of this section
	[the approval of the board], the executive director [administrator]
	may select any number of persons the executive director determines
	appropriate to assist the executive director in carrying out the
	executive director's duties under this section.  Subject to Section
	4.01 of this article, the titles and salaries of persons selected to
	assist the executive director shall be determined by the executive
	director.
	(b-1)  The executive director may not select a person to
	assist the executive director who is an active, former, or retired
	police officer or fire fighter of the city [administrator].
	(b-2)  The executive director shall establish the
	organizational structure of pension system employees to optimize
	administration of the pension system.
	(b-3)  A former or retired employee of the city may not
	before the second anniversary of the first day of the month
	following the date the person terminated employment with the city
	serve the pension system in any capacity other than as a trustee.
	Except as specifically provided by this article, including Section
	3.01(b)(3) or (4) of this article, or other law, an employee of the
	city may not serve the pension system in any capacity.
	(c)  The executive director [Both the administrator] and
	those persons selected to assist the executive director
	[administrator] may be considered employees of the city. Unless
	otherwise delegated to the executive director [administrator], the
	board shall have the ultimate authority to retain, discipline, or
	terminate the engagement of the executive director.
	(d)  If acting in the executive director's own discretion,
	the executive director owes a fiduciary duty to the pension system
	and shall ensure the sustainability of the pension system for the
	purpose of providing current and future benefits to members of the
	pension system and their beneficiaries [any persons selected under
	this subsection].  If the executive director is acting at the
	direction of the board and not exercising the executive director's
	own discretion, the executive director does not owe a fiduciary
	duty under this subsection.
	SECTION 1.11.  Sections 4.01(a), (c), and (d), Article
	6243a-1, Revised Statutes, are amended to read as follows:
	(a)  The board shall pay for all costs of administration out
	of the income from the fund when in the judgment of the board the
	costs are necessary, including the cost of:
	(1)  salaries and benefits for the executive director
	[of the administrator, assistant administrator,] and
	administrative staff;
	(2) [,]  office expenses;
	(3)  expenses associated with securing[,] adequate
	office space and associated utilities;
	(4)  compensation for [, and] professional
	consultants, professional investment managers, or other persons
	providing professional services; and
	(5)  any other expenses approved by the board[, out of
	income from the fund when it is actuarially determined that the
	payments will not have an adverse effect on the payment of benefits
	from any of the plans within the pension system and when in the
	judgment of the board the costs are necessary]. [The city shall
	provide for costs of administration if the board determines that
	payment of the costs by the fund will have an adverse effect on the
	payment of benefits from any plan within the pension system.]
	(c)  No expenditure for the costs of administration,
	including the [or] payment of any fee for professional consultants,
	professional investment management services, or any other person
	providing professional services, may be made from the fund without
	the approval of the board.
	(d)  After the board has developed an annual budget for the
	pension system, the budget shall be presented to the city manager
	[city's budget office] for comment. The city manager [city's budget
	office] may request the board to reconsider the appropriation for
	any expenditure at a board meeting, but the board shall make the
	final determination concerning any appropriation.
	SECTION 1.12.  Sections 4.02(b), (d), and (e), Article
	6243a-1, Revised Statutes, are amended to read as follows:
	(b)  Funds contributed by the city as its share of the amount
	required to finance the payment of benefits under the pension
	system may be used for no other purpose. The city is not
	responsible for the payment of any administrative or professional
	service fees of the pension system.  Any change to the [The]
	contributions required to be made to the pension system by the city
	[shall be annually appropriated by the city council and
	periodically paid on the basis of a percentage of the total wages
	and salaries of the members of the police and fire departments who
	are members of each of the plans within the pension system. The
	amount of this percentage and any change in it] may [be determined]
	only be made:
	(1)  by the legislature; [or]
	(2)  by a majority vote of the voters of the city; or
	(3)  in accordance with a written agreement entered
	into between the pension system, by at least a two-thirds vote of
	all trustees of the board, and the city, provided that a change made
	in accordance with this subdivision may not increase the period
	required to amortize the unfunded actuarial accrued liability of
	the fund.
	(d)  Subject to Section 4.025 of this article, the city shall
	make contributions to the pension system biweekly in an amount
	equal to the sum of:
	(1)  the greater of:
	(A)  34.5 percent of the aggregate computation pay
	paid to members during the period for which the contribution is
	made; or
	(B)  the applicable amount set forth below:
	(i)  $5,173,000 for the biweekly pay periods
	beginning with the first biweekly pay period that begins after
	September 1, 2017, and ends on the last day of the first biweekly
	pay period that ends after December 31, 2017;
	(ii)  $5,344,000 for the 26 biweekly pay
	periods immediately following the last biweekly pay period
	described by Subparagraph (i) of this paragraph;
	(iii)  $5,571,000 for the 26 biweekly pay
	periods immediately following the last biweekly pay period
	described by Subparagraph (ii) of this paragraph;
	(iv)  $5,724,000 for the 26 biweekly pay
	periods immediately following the last biweekly pay period
	described by Subparagraph (iii) of this paragraph;
	(v)  $5,882,000 for the 26 biweekly pay
	periods immediately following the last biweekly pay period
	described by Subparagraph (iv) of this paragraph;
	(vi)  $6,043,000 for the 26 biweekly pay
	periods immediately following the last biweekly pay period
	described by Subparagraph (v) of this paragraph;
	(vii)  $5,812,000 for the 26 biweekly pay
	periods immediately following the last biweekly pay period
	described by Subparagraph (vi) of this paragraph;
	(viii)  $6,024,000 for the 26 biweekly pay
	periods immediately following the last biweekly pay period
	described by Subparagraph (vii) of this paragraph through the
	biweekly pay period that ends after December 31, 2024; and
	(ix)  $0 for each subsequent biweekly pay
	period beginning with the first biweekly pay period following the
	last biweekly pay period described by Subparagraph (viii) of this
	paragraph; and
	(2)  except as provided by Subsection (e) of this
	section, an amount equal to 1/26th of $13 million. [The percentage
	of required contributions from the city shall be in accordance with
	the following schedule and any increase or decrease in city
	contributions shall occur automatically on any increases or
	decreases in the members' contribution percentage:
	[City Contributions Member Contributions
	28-1/2% 9%
	27-1/2% 8-1/2%
	26% 8%
	24-1/2% 7-1/2%
	23% 7%
	21-1/2% 6-1/2%]
	(e)  The city is required to pay the contribution amount
	described by Subsection (d)(2) of this section only through the
	last biweekly pay period that ends after December 31, 2024 [may
	elect to contribute more than that required in the schedule
	provided by Subsection (d) of this section, except that the city's
	contribution percentage may not exceed 28-1/2 percent unless
	approved as provided by Subsection (b) of this section. Further, in
	no event may the city's contribution be less than 21-1/2 percent
	unless approved as provided by Subsection (b)].
	SECTION 1.13.  Part 4, Article 6243a-1, Revised Statutes, is
	amended by adding Section 4.025 to read as follows:
	Sec. 4.025.  CITY OR MEMBER CONTRIBUTIONS IF NO UNFUNDED
	ACTUARIAL LIABILITIES. Notwithstanding Section 4.02 or 4.03 of
	this article, if the pension system has no unfunded actuarial
	liability according to the most recent actuarial valuation, the
	annual normal costs must be equally divided between the city and the
	members unless equally dividing the costs would increase the member
	contribution rates beyond the rates prescribed by Section 4.03 of
	this article. The board shall adjust the city contribution rates
	under Section 4.02 of this article and the member contribution
	rates under Section 4.03 of this article accordingly, and certify
	the adjusted rates.  After the completion of a subsequent actuarial
	valuation showing unfunded actuarial liabilities, the contribution
	rates applicable under Sections 4.02 and 4.03 of this article
	apply.
	SECTION 1.14.  Section 4.03, Article 6243a-1, Revised
	Statutes, is amended by amending Subsections (a), (b), (c), (d),
	and (g) and adding Subsections (a-1), (d-1), (d-2), and (i) to read
	as follows:
	(a)  Subject to Subsection (a-1) of this section and except
	as provided by Section 4.025 of this article, each [Each] Group A
	member of the combined pension plan shall have 13.5 [6.5] percent of
	base pay deducted from the member's wages on a biweekly basis [each
	month], and the contributions shall be promptly remitted to the
	fund by the city.
	(a-1)  If a Group A member is assigned, for any period, to a
	job-sharing program or any similar work schedule that is considered
	by the member's department to be less than a full-time work
	schedule, the member's contributions are determined by multiplying
	the applicable contribution rate by a fraction, the numerator of
	which is the number of hours the member actually worked during the
	period and the denominator of which is the number of hours the
	member would have worked during the period if the member had been
	working a full-time work schedule.
	(b)  Each member shall [continue to] contribute to the fund
	under the applicable terms of this article [section] until the
	member leaves active service with either department. If a member
	leaves active service with a department, [or until the beginning of
	the member's 33rd year of pension service, at which time] the member
	shall cease making contributions.
	(c)  Each Group B member shall authorize the city to deduct
	from the member's salary a percentage of the member's computation
	pay. The authorization shall be in writing and filed with the
	executive director [administrator].
	(d)  Subject to Subsection (d-1) of this section and except
	as provided by Section 4.025 of this article, for pay periods
	starting on or after September 1, 2017, each [Each] Group B member
	shall have 13.5 [8.5] percent of the member's computation pay
	deducted from the member's wages on a biweekly basis [each month,]
	and the contributions shall be promptly remitted to the fund by the
	city.
	(d-1)  If a Group B member is assigned, for any period, to a
	job-sharing program or any similar work schedule that is considered
	by the member's department to be less than a full-time work
	schedule, the member's contributions are determined by multiplying
	the applicable contribution rate by a fraction, the numerator of
	which is the number of hours the member actually worked during the
	period and the denominator of which is the number of hours the
	member would have worked during the period if the member had been
	working a full-time work schedule.
	(d-2)  For purposes of Subsection (d) of this section,
	"computation pay" includes computation pay paid to a Group B member
	during any period the member is receiving workers' compensation.
	(g)  The percentage of base pay contributed by Group A
	members or computation pay contributed by Group B members may not be
	altered except by an adjustment under Section 4.025 [amendment
	pursuant to the terms of Section 4.02] of this article.
	(i)  Member contributions under this article or any payments
	a member is entitled to make under this article to receive
	additional pension service may be picked up by the city under the
	terms of an appropriate resolution of the city council.
	SECTION 1.15.  Section 4.04, Article 6243a-1, Revised
	Statutes, is amended by amending Subsections (a), (c), (d), (e),
	(f), (g), (h), (j), and (k) and adding Subsections (f-1) and (h-1)
	to read as follows:
	(a)  Except as provided by Subsection (d) or (e) of this
	section, a [A] Group B member who, either voluntarily or
	involuntarily, leaves active service is entitled to a refund from
	the fund of the total amount of the member's Plan B and Group B
	contributions, without interest, that were paid beginning with the
	effective date of the member's Group B membership or membership in
	Plan B. A refund under this subsection results in a total
	cancellation of pension service credit and the member and any
	person who would otherwise take by, through, or under the member is
	not entitled to any benefits from the pension system [an
	appropriate reduction of pension service].
	(c)  A [former] Group B member who desires [desiring] a
	refund of the Plan B or Group B contributions under Subsection (a)
	of this section [the person made to the fund] must make written
	application for the refund with the executive director
	[administrator]. In no case may any refund be made to a [any
	former] Group B member before the expiration of 30 days after the
	date the person leaves active service.
	(d)  Subject to Subsection (k) of this section, if a Group B
	member with less than five years of pension service either
	voluntarily or involuntarily leaves active service and fails to
	make written application for a refund of contributions within three
	years after the date of the notice described by Subsection (j) of
	this section [is] made by the board, the person forfeits the right
	to withdraw any portion of the contribution, and the total amount of
	Plan B and Group B contributions the person made will remain in the
	fund. If the Group B member described by this subsection dies after
	leaving active service, the [person's heirs or, if there are no
	heirs, the] deceased member's designee [estate] may apply for the
	refund of the person's contributions, resulting in an appropriate
	loss of pension service if the application is filed with the
	executive director [administrator] within three years after the
	date of the notice described by Subsection (j) of this section [is]
	made by the board. Subject to Subsection (k) of this section, if a
	Group B member's designee [heirs or estate] fails to apply for a
	refund of the Group B member's contributions within the three-year
	period described by this subsection, the designee forfeits [heirs
	and the estate forfeit] any right to the contributions, and the
	total amount of the Plan B and Group B contributions made by the
	Group B member will remain in the fund.
	(e)  Subject to Subsection (k) of this section, if a Group B
	member with five or more years of pension service either
	voluntarily or involuntarily leaves active service and fails to
	make written application for a refund of the person's Plan B and
	Group B contributions within three years after the date of the
	notice described by Subsection (j) of this section [is] made by the
	board, the person forfeits the right to withdraw any portion of the
	contributions, and the total amount of the contributions will
	remain in the fund. A Group B member described by this subsection
	may, however, apply for a Group B retirement pension [benefits]
	under Section 6.02 of this article or, if the Group B member dies
	before the member is eligible to apply for a Group B retirement
	pension, the member's qualified survivors [benefits, the person's
	heirs or, if there are no heirs, the deceased member's estate] may
	apply for Group B death benefits under Sections 6.06, 6.061, 6.062,
	and 6.063 of this article. If the Group B member dies before the
	member is eligible to apply for a Group B retirement pension and the
	member has no qualified survivors, the Group B member's designee
	[in accordance with the provisions of this article, or the heirs or
	the estate] may apply for a refund of the Group B member's Plan B and
	Group B contributions, resulting in a total cancellation [an
	appropriate loss] of pension service. Subject to Subsection (k) of
	this section, if a Group B member's designee [heirs or estate] fails
	to apply for a refund of the Group B and Plan B member's
	contributions within the three-year period described by this
	subsection, the designee forfeits [heirs and the estate forfeit]
	any right to the contributions, and the total amount of the Plan B
	and Group B contributions made by the Group B member will remain in
	the fund.
	(f)  Subject to Subsections (g) and (h) of this section, [If]
	a Group B member, other than a Group B member who elects or has
	elected to receive a Group A benefit or a benefit determined under
	the old plan or Plan A, who [with five or more years of pension
	service] either voluntarily or involuntarily leaves active service
	with five or more years of pension service [, the person] is
	entitled to:
	(1)  subject to Subsection (f-1) of this section, have
	the total amount of the person's Plan B and Group B contributions to
	the fund refunded in accordance with Subsection (a) of this
	section, which results in a loss of all of the person's accrued
	pension service; or
	(2)  if the Group B member first entered active service
	before January 1, 1999, elect to take a refund of less than the
	total amount of the person's Plan B and Group B contributions while
	leaving a sufficient amount to retain pension service amounting to
	five or more years.
	(f-1)  A Group B member who elects to receive a refund under
	Subsection (f)(1) of this section and any person who would
	otherwise take by, through, or under the member is not entitled to
	any benefits from the pension system.
	(g)  If a Group B member elects a refund of a portion of the
	person's contributions under Subsection (f)(2) of this section, the
	amount of the refund shall equal the total amount of the person's
	Plan B and Group B annual contributions, without interest, for each
	full year of pension service canceled [cancelled], computed based
	on the earliest contributions made.
	(h)  A [former] Group B member who first entered active
	service on or after January 1, 1999, is entitled to have the total
	amount of the person's Group B contributions refunded under
	Subsection (a) of this section in accordance with Subsection (f)(1)
	of this section, but may not receive a refund of less than the total
	amount in accordance with Subsection (f)(2) of this section.
	(h-1)  A Group B member who leaves active service and later
	returns to active service is permitted to repay to the fund any
	previously withdrawn employee contributions and receive pension
	service in accordance with Section 5.07(d) of this article as a
	Group B member to the extent that [if,] before again leaving active
	service, the Group B member repays [completely] to the fund the
	previously withdrawn contributions with interest, calculated at
	the interest rate from time to time used in the pension system's
	actuarial rate of return assumptions, compounded annually, on the
	previously withdrawn contributions [for the period from the date
	the contributions were withdrawn until the date the principal and
	accrued interest are repaid in full].
	(j)  On the 58th [50th] anniversary of the birth of a Group B
	member described by Subsection (d) or (e) of this section, or on the
	board's receipt of notice of the death of the Group B member, the
	board shall, by registered or certified mail, return receipt
	requested, attempt to notify the Group B member or designee [the
	member's heirs or estate], as applicable, of the status of the
	person's [their] entitlement to a refund of contributions from the
	fund.
	(k)  A Group B member or designee described by Subsection (d)
	or (e) of this section [or the heirs or estate of the Group B member]
	shall have the person's [their] right, title, interest, or claim to
	a refund of the Group B member's contributions reinstated only on
	the board's grant of their written request for a reinstatement and
	refund. The board's decision shall be based on a uniform and
	nondiscriminatory basis [policy that it shall, from time to time,
	adopt].
	SECTION 1.16.  Section 4.06(c), Article 6243a-1, Revised
	Statutes, is amended to read as follows:
	(c)  The authority of the board to make a custody account or
	master trust agreement is supplementary to its authority to make an
	investment management contract. Allocation of assets to a custody
	account or master trust shall be coordinated by the executive
	director [administrator], as authorized by the board, and the bank
	designated as custodian or master trustee for the assets.
	SECTION 1.17.  Section 4.07, Article 6243a-1, Revised
	Statutes, is amended by amending Subsections (a), (d), and (g) and
	adding Subsection (h) to read as follows:
	(a)  Subject to Section 4.071 of this article, if [If] the
	board determines that there is in the fund a surplus exceeding a
	reasonably safe amount to take care of current demands on the
	pension system, the board may invest or direct the investment of the
	surplus for the sole benefit of the pension system.
	(d)  The board also has the authority to contract for
	professional investment management services. Any contract that the
	board makes with an investment manager shall set forth the board's
	investment policies and guidelines [of the board for the use of
	standard rating services and shall include specific criteria for
	determining the quality of investments]. A professional investment
	management service shall receive such compensation as may be
	determined by the board in accordance with Section 4.01 of this
	article.
	(g)  A [No investment manager, other than a] bank or trust
	company that has custody and trustee powers and a contract with the
	board to provide assistance in making investments[,] shall be the
	custodian or master trustee of any of the securities or other assets
	of the fund. Pursuant to Section 4.06 of this article, the board
	may designate a bank to serve as custodian or master trustee, or
	subcustodian or submaster trustee, to perform the customary duty of
	safekeeping as well as duties incident to the execution of
	transactions. As the demands of the pension system require, the
	board shall withdraw from the custodian or master trustee money
	previously considered surplus in excess of current cash and
	proceeds from the sale of investments. The money may without
	distinction be used for the payment of benefits pursuant to each of
	the plans within the pension system and for other uses authorized by
	this article and approved by the board.
	(h)  The board through policy shall establish an investment
	advisory committee composed of trustees and outside investment
	professionals to review investment related matters as prescribed by
	the board and make recommendations to the board.  A majority of the
	members of the committee established under this subsection must be
	outside investment professionals.
	SECTION 1.18.  Part 4, Article 6243a-1, Revised Statutes, is
	amended by adding Section 4.071 to read as follows:
	Sec. 4.071.  BOARD APPROVAL OF CERTAIN ALTERNATIVE
	INVESTMENTS. (a) The executive director, an investment manager, a
	provider of professional investment management services or
	professional advisory services, or any other person delegated
	authority to invest or reinvest pension system assets under this
	article may not invest pension system assets in a single
	alternative investment unless the board votes to approve the
	investment by at least a two-thirds vote of all the trustees.
	(b)  The board may adopt rules necessary to implement this
	section.
	SECTION 1.19.  Section 4.08, Article 6243a-1, Revised
	Statutes, is amended by adding Subsection (c) to read as follows:
	(c)  On written request by the city, the executive director
	shall make available to the city's actuary or auditor the
	information and documents provided to or used by the pension
	system's actuary or auditor in conducting an actuarial valuation
	under this article or preparing any other document prepared under
	this article.
	SECTION 1.20.  Section 4.09, Article 6243a-1, Revised
	Statutes, is amended to read as follows:
	Sec. 4.09.  REWARDS, DONATIONS, AND CONTRIBUTIONS. Any
	reward, donation, or contribution given to any member as payment or
	gratuity for service performed in the line of duty shall be turned
	over to the chief of the member's department, who shall, in turn,
	forward the reward, donation, or contribution to the executive
	director [administrator] of the pension system for deposit in the
	fund.
	SECTION 1.21.  Section 5.01, Article 6243a-1, Revised
	Statutes, is amended to read as follows:
	Sec. 5.01.  MEMBERSHIP IN COMBINED PENSION PLAN. (a) Except
	as provided by Subsection (a-1) of this section, the [The]
	membership of the combined pension plan is composed of the
	following persons:
	(1)  Group A members:
	(A)  police officers or fire fighters who are on
	active service and who as of February 28, 1973, had filed a written
	statement with the pension system of their desire to participate in
	either the old plan or Plan A;
	(B)  police officers and fire fighters who are on
	active service and [,] who were employed and receiving compensation
	from the city as a police officer or a fire fighter before March 1,
	1973, and who made contributions to either the old plan or Plan A
	attributable to any period of employment before March 1, 1973; and
	(C)  except as provided by Subsection (b) of this
	section, persons who elect to become Group A members under that
	subsection; and
	(2)  Group B members:
	(A)  police officers and fire fighters who are on
	active service and who [,] were formerly members of either the old
	plan or Plan A[,] and who, as of April 30, 1973, had filed a written
	statement with the pension system of their desire to participate in
	Plan B;
	(B)  police officers and fire fighters who are on
	active service and who on or after March 1, 1973, and before January
	1, 1993, became members of Plan B;
	(C)  as a condition of employment, any police
	officer [office] or fire fighter who is initially employed as a
	police officer or a fire fighter by the city on or after January 1,
	1993;
	(D)  as a condition of return to active service
	and except as provided by Subsection (b) of this section, former
	members of the old plan or Plan A who left active service before
	March 1, 1973;
	(E)  as a condition of return to active service
	and except as provided by Subsection (c) of this section, former
	Group B members who are no longer on active service, whether or not
	the persons were ever a member of the old plan, Plan A, or the
	combined pension plan;
	(F)  Group A members who are on active service and
	meet the requirements and make an election under Subsection (d) of
	this section; and
	(G)  persons who are on active service and make an
	election under Subsection (e) of this section.
	(a-1)  Group A or Group B members do not include any employee
	of the city who is:
	(1)  required by ordinance or who elects, in accordance
	with an ordinance, to participate in an alternative benefit plan
	established under Section 3.01(j-1)(2) of this article based on an
	evaluation under Section 3.01(j-5)(2) of this article; or
	(2)  required by ordinance to participate in an
	alternative benefit plan established under Section 810.002,
	Government Code.
	(b)  A person who has received an old plan, Plan A, or
	combined pension plan retirement or disability pension on or after
	March 1, 1973, may, if the person returns to active service, elect
	to participate as a Group A or Group B member by filing a written
	application for membership with the executive director
	[administrator] not later than 60 days after the date of return to
	active service. [As a condition of either Group A or Group B
	membership, the board may require the person to undergo a physical
	examination and be certified by the health director as being
	capable of performing the duties to which the person will be
	assigned.] If the person described by this subsection does not
	elect to become a Group A or Group B member, the person shall on
	leaving active service receive a retirement pension in an amount
	that is unadjusted for the period of return to active service if the
	person meets all of the requirements of Group A membership.
	(c)  A Group B pensioner who was never a member of the old
	plan, Plan A, or the combined pension plan before January 1, 1993,
	may, if the person returns to active service, elect to become a
	Group B member by filing a written application for membership with
	the executive director [administrator] not later than 60 days after
	the date of return to active service. [As a condition of Group B
	membership, the board may require the pensioner to undergo a
	physical examination and be certified by the health director as
	being capable of performing the duties to which the person will be
	assigned.] If the person described by this subsection does not
	elect to again become a Group B member, on leaving active service,
	if the person meets all applicable requirements of this article,
	the person shall receive benefits in an amount equal to the amount
	the person was receiving as of the day before the day the person
	returned to active service, and the person's base pension shall be
	the same as the base pension originally computed before the return
	to active service.
	(d)  A person who is on active service and is a Group A member
	may, before the person participates in DROP, irrevocably elect to
	become a Group B member by filing a written application with the
	executive director [administrator]. On and after the filing of the
	application, the Group A member shall make contributions to the
	fund at the rate applicable to Group B members. However, the
	contributions do not, by themselves, establish [constitute] Group B
	membership. Group B membership is contingent on the satisfaction
	of the following conditions:
	(1)  the [The] person must, before the person elects to
	participate in DROP, pay an amount to the fund equal to the
	difference between the contributions the person would have made to
	the fund had the person been a Group B member for the entire period
	the person could otherwise have been a Group B member before making
	application for membership and the contributions the person
	actually made during that period, plus interest calculated in
	accordance with procedures adopted by the board from time to time;
	and[.]
	(2)  the [The] payments described by this subsection
	must be completed before the earlier of the date on which the person
	begins participation in DROP or leaves active service in accordance
	with procedures adopted by the board from time to time.
	(d-1)  If the fund does not receive payment under Subsection
	(d)(1) of this section by the [that] date prescribed by Subsection
	(d)(2) of this section, all payments made under Subsection (d)(1)
	of this section [of this type], as well as those contribution
	amounts paid by the person after the person's application for Group
	B membership that are in excess of the Group A member contribution
	rate, shall be returned without accrued interest to the person, or
	in the event of the person's death to the person's designee
	[surviving spouse, children, or estate], as applicable.
	(e)  A person who is on active service and has never been a
	member of any plan within the pension system may elect to become a
	Group B member on a prospective basis by filing a written
	application for membership with the executive director
	[administrator].
	SECTION 1.22.  Sections 5.02(a), (d), (e), (h), and (i),
	Article 6243a-1, Revised Statutes, are amended to read as follows:
	(a)  The effective date of Group B membership for a person
	who becomes a Group B member under [persons described by] Section
	5.01(a)(2)(A) or (B) of this article is the date the Group B member
	first became a member of Plan B [January 1, 1993].
	(d)  The effective date of Group B membership for a person
	[former Group B member] who again becomes a Group B member and is
	described by Section 5.01(a)(2)(E) of this article is the person's
	original effective date of Group B membership, adjusted for any
	period for which [that] the person was not on active service or [,
	if the person] has [not] withdrawn some, but not all, contributions
	to the fund pursuant to Section 4.04 of this article. If, however,
	the person withdraws [former Group B member has withdrawn] all
	contributions to the fund in accordance with Section 4.04 of this
	article, and the person does not replace the previously withdrawn
	contributions together with interest as provided by Section
	4.04(h-1) [4.04(h)] of this article, the effective date of the
	person's membership is the date of return to active service.
	(e)  The effective date of membership for a person who
	becomes a Group B member pursuant to Section 5.01(b) of this article
	is the date on which written application for the membership is filed
	with the executive director [administrator]. The effective date of
	membership for a person who becomes a Group A member pursuant to
	Section 5.01(b) of this article is the person's original effective
	date of membership in the old plan, Plan A, or the combined pension
	plan, whichever is applicable.
	(h)  A person described by Subsection (a), (c), (d), (e),
	(f), or (g) of this section shall be given full pension service for
	the time the person was a contributing member of the old plan, Plan
	A, the combined pension plan, and Plan B, and the pension service
	shall be counted as if it had been earned while a Group B member.
	Neither the length of time persons described by Subsection (a),
	(c), (d), (e), (f), or (g) of this section received a retirement or
	disability pension, whether under the old plan, Plan A, the
	combined pension plan or Plan B, nor the amount of any benefits paid
	to the person shall have any effect on the pension service earned by
	the person. No pension service may be earned while on service
	retirement or disability retirement, or when the person was not on
	active service. Except as provided by Sections 5.08 [5.02] and 5.09
	of this article, a person described by Subsection (a), (c), (d),
	(e), (f), or (g) of this section may not be allowed to contribute to
	the fund in order to receive pension service for the time the person
	was not on active service, regardless of whether the person was
	actually receiving a pension.
	(i)  The effective date of Group B membership for a person
	who becomes a Group B member pursuant to Section 5.01(e) of this
	article is the date on which written application for Group B
	membership is filed with the executive director [administrator].
	SECTION 1.23.  Section 5.03, Article 6243a-1, Revised
	Statutes, is amended by amending Subsections (c) and (d) and adding
	Subsection (c-1) to read as follows:
	(c)  A Group B member who is on active service and [or former
	Group B member who also] was a former contributing member of either
	the old plan or Plan A may elect, when applying for either a
	retirement or disability pension if applicable, to terminate
	membership and receive a Group A retirement or disability pension
	under the applicable provisions of this article, if the Group B
	member's application for retirement or disability pension is
	granted by the board.
	(c-1)  A Group B member who is not on active service and was a
	former contributing member of either the old plan or Plan A may
	elect, when applying for a retirement pension, to terminate
	membership and receive a Group A retirement pension under the
	applicable provisions of this article, if the Group B member's
	application for retirement pension is granted by the board.
	(d)  If a Group B member [or former Group B member] described
	by Subsection (c) or (c-1) of this section has elected and been
	granted a Group A retirement or disability pension under the
	applicable provisions of this article, the person is entitled to a
	reimbursement from the fund. The reimbursement shall be equal to
	that portion of the person's contributions to the fund, without
	interest, from the person's effective date of Group B membership
	until the time the person left active service[,] that is in excess
	of the total amount the person would have contributed as a Group A
	member or as a member of the old plan or Plan A for the same period.
	A Group B member [or former Group B member] desiring a refund of
	excess contributions must make written application for the refund
	with the executive director [administrator] within three years
	after the date the person's Group A retirement or disability
	pension, whichever is applicable, begins, otherwise, the person
	will [or] lose all right, title, interest, or claim to the refund
	until such time as the board grants the refund in response to the
	person's written request. The refund shall be made as soon as
	practicable after written application is filed with the executive
	director [administrator].
	SECTION 1.24.  Section 5.04, Article 6243a-1, Revised
	Statutes, is amended to read as follows:
	Sec. 5.04.  GROUP B MEMBERSHIP MAY BE DECLARED INACTIVE. (a)
	Except as provided by Subsection (d)(1) of this section, if [If] a
	Group B member with less than five years of pension service either
	voluntarily or involuntarily leaves active service, the person's
	Group B membership remains active as long as the person has not
	withdrawn the person's contributions pursuant to Section 4.04 of
	this article.
	(b)  Except as provided by Subsection (d)(2) of this section,
	if [If] a Group B member with five or more years of pension service
	either voluntarily or involuntarily leaves active service, the
	person's Group B membership remains active as long as the person has
	not withdrawn the person's entire contributions pursuant to Section
	4.04 of this article.
	(c)  Except as provided by Subsection (d)(3) of this section,
	if [If] the board receives valid information that a Group B primary
	party has died, [leaving one or more heirs,] the board shall, by
	registered or certified mail, return receipt requested, attempt to
	notify:
	(1)  the qualified survivors [heirs] of the primary
	party of the procedures for applying and qualifying for death
	[survivor] benefits under Section 6.06, 6.061, 6.062, or 6.063 of
	this article; or
	(2)  if the primary party does not have any qualified
	survivors, the primary party's designee of the procedures for
	applying for [or] a refund of the [Group B] primary party's
	contributions, if applicable, in accordance with Section 4.04 of
	this article.
	(d)(1)  Subject to the provisions of Subdivision (5)(A) of
	this subsection, the membership of a Group B member described by
	Subsection (a) of this section shall be declared inactive and all of
	the person's accrued pension service voided if the person does not
	return to active service within three years after the date of
	[receiving] the notice described by Subdivision (4) of this
	subsection.
	(2)  Subject to the provisions of Subdivision (5)(B) of
	this subsection, the membership of a Group B member described by
	Subsection (b) of this section shall be declared inactive and all of
	the person's accrued pension service voided if the person does not
	file an application for a Group B retirement pension with the board
	within three years after the date of [receiving] the notice
	described by Subdivision (4) of this subsection.
	(3)  Subject to the provisions of Subdivision (5)(C) of
	this subsection, if a primary party described by Subsection (c) of
	this section:
	(A)  does not have any qualified survivors, the
	designee has [, the heirs or estate of a deceased primary party
	described by Subsection (c) of this section have] no right, title,
	interest, or claim for [benefits or] a refund of the primary party's
	contributions to the fund[,] if the designee does not file an
	application for the primary party's contributions within three
	years after the date of the notice described in Subsection (c) of
	this section; or
	(B)  has qualified survivors, the qualified
	survivors have no right, title, interest, or claim to [heirs or the
	estate, whichever is applicable, fails to file an application for]
	the primary party's death benefits if the qualified survivor does
	not file an application for the benefits [or contributions] within
	three years after the date of [receiving] the notice described in
	Subsection (c) [by Subdivision (4)] of this section [subsection].
	(4)  On the 58th [50th] anniversary of the birth of a
	Group B member described by Subsection (a) or (b) of this section
	[or on the board's receipt of notice of the death of a primary party
	described by Subsection (c) of this section], the board shall, by
	registered or certified mail, return receipt requested, attempt to
	notify:
	(A)  the [Group B] member [or the heirs or estate
	of a primary party, whichever is applicable,] of the status of the
	member's [their] entitlement to benefits or contributions from the
	fund; or
	(B)  if the board receives valid information that
	the member has died, the qualified survivors of the deceased person
	or, if none exists, the designee of the deceased person.
	(5)(A)  A Group B member described by Subdivision (1)
	of this subsection shall have the person's Group B membership and
	pension service reinstated on the person's return to active
	service.
	(B)  A Group B member described by Subdivision (2)
	of this subsection shall have the person's Group B membership and
	pension service reinstated on the person's return to active service
	or on the grant of the person's written request to the board of the
	person's desire to apply for a Group B [service] retirement pension
	under Section 6.02 of this article [benefit].
	(C)  A primary party's qualified survivors or
	designee, as appropriate, [The heirs or estate of a primary party]
	described by Subdivision (3) of this subsection shall have their
	right, title, interest, or claim to the primary party's refund of
	the party's contributions reinstated on the board's grant of their
	written request [for the reinstatement and refund]. [The board's
	decision shall be based on a uniform and nondiscriminatory policy
	that it shall, from time to time, adopt.]
	SECTION 1.25.  Section 5.05, Article 6243a-1, Revised
	Statutes, is amended to read as follows:
	Sec. 5.05.  PENSION SERVICE. (a) Subject to Subsection (d)
	of this section and except as provided by Subsection (e) of this
	section, a [A] member shall receive pension service for the time,
	computed in years and fractional years for months and days,
	completed as a member of the combined pension plan, the old plan,
	Plan A, or Plan B.
	(b)  A member who elects to pay contributions for time spent
	on military leave, authorized non-uniformed leave of absence, or
	for an apprenticeship or probationary period, or for any other
	reason provided for by this article may [not] receive [any] pension
	service for [any part of] the time for which the member is
	contributing only to the extent provided under Section 5.07(d),
	5.08, or 5.09 of this article [until the entire amount due the fund
	for the entire period involved has been paid as if the service were
	performed as a member].
	(c)  If a member, either voluntarily or involuntarily,
	leaves active service and later returns to active service, the
	person shall receive full pension service for the period of the
	person's original membership, if the person did not withdraw the
	person's contributions pursuant to Section 4.04 of this article.
	If, however, the member had withdrawn the person's contributions
	and did [does] not replace the previously withdrawn contributions
	[with interest] as required by Section 4.04 of this article, the
	member [person] forfeits any pension service attributable to any
	period of time for which the respective contributions were not
	repaid [accrued while a member before the date of the person's
	return to active service].
	(d)  If a member is assigned, for any period, to a
	job-sharing program or any similar work schedule that is considered
	by the member's department to be less than a full-time work
	schedule, the member's pension service is determined by multiplying
	the pension service that could have been earned for full-time work
	during the period by a fraction, the numerator of which is the
	number of hours the member actually worked during the period and the
	denominator of which is the number of hours the member would have
	worked during the period if the member had been working a full-time
	work schedule. This proration may not affect the computation of
	pension service for a member during any period the member is on
	leave:
	(1)  because of an illness or injury; or
	(2)  receiving periodic payments of workers'
	compensation.
	(e)  Notwithstanding any other provision in this section, a
	member may not receive pension service attributable to nonqualified
	service to the extent the pension service would result in either
	more than five years of permissive service attributable to
	nonqualified service being taken into account, or any permissive
	service being taken into account before the member has completed at
	least five years of active service. In this subsection,
	"permissive service" and "nonqualified service" have the meanings
	described by Section 415(n)(3) of the code.
	SECTION 1.26.  Sections 5.06, 5.07, 5.08, and 5.09, Article
	6243a-1, Revised Statutes, are amended to read as follows:
	Sec. 5.06.  VESTED RIGHTS OF GROUP B MEMBERS. (a) If a Group
	B member accrues five years of pension service, whether the pension
	service is accrued while a Group B member or while a member of the
	old plan, Plan B, Plan A, the combined pension plan, or a
	combination of the plans, the Group B member has vested rights and
	is eligible to apply for a retirement pension in accordance with
	Section 6.02 of this article.
	(b)  If a Group B member has vested rights as determined
	under Subsection (a) of this section, and the Group B member either
	voluntarily or involuntarily leaves active service before becoming
	eligible to receive any benefits under Section 6.02 of this
	article, the person shall be provided with a letter approved by the
	board and signed by the executive director [administrator] that,
	barring unrepaid refunds, clerical error, miscalculation, or other
	error, is incontestable and shall state:
	(1)  the total amount of pension service the Group B
	member had accrued until the date the person left active service;
	(2)  the total amount of contributions the Group B
	member made under the terms of Plan B and the combined pension plan;
	and
	(3)  the monthly retirement pension due the Group B
	member at age 58 [50].
	Sec. 5.07.  PURCHASE OF PENSION SERVICE BY GROUP B MEMBERS.
	(a) A Group B member who is on active service and has previously
	elected not to become a contributing member of the old plan or [and]
	Plan A may purchase pension service from the fund for that period
	during which the member performed active service with either
	department until the effective date of the member's Group B
	membership. No pension service may be given to the Group B member
	except to the extent that [until] payment is made for the [entire
	period described by this subsection, and no] pension service in
	accordance with Subsection (d) of this section [may be purchased
	for any period that is of greater or lesser length].
	(b)  Payment for the purchase of pension service under
	Subsection (a) of this section shall be equal to the amount of
	contributions the Group B member would have made to the old plan and
	Plan A had the member been a contributing member of either of the
	plans during the period for which the pension service is being
	purchased [described by Subsection (a) of this section], plus
	interest calculated in accordance with procedures adopted by the
	board from time to time.
	(c)  Subject to Subsection (d) of this section, a [A] Group B
	member who is on active service may repay the fund all or a portion
	of the employee contributions withdrawn by an alternate payee
	pursuant to the terms of a qualified domestic relations order [and
	receive pension service as a Group B member attributable to the
	contributions, if the Group B member repays completely to the fund
	the withdrawn contributions] with interest, calculated at the
	interest rate from time to time used in the pension system's
	actuarial rate of return assumptions, compounded annually, on the
	contributions for the period from the date the contributions were
	withdrawn until the date the principal and accrued interest are
	repaid, and receive pension service as a Group B member, in
	accordance with Subsection (d) of this section, for the period for
	which the contributions and interest were paid [in full].
	(d)  [No pension service may be given to a Group B member
	under Subsection (b) or (c) of this section until the entire amount
	described by Subsection (b) or (c) has been paid to the fund.] If
	payment of the entire amount of pension service a member is entitled
	to under Subsection (a) or (c) of this section or under Section
	4.04(h-1) of this article is not completed by the earlier of the
	date the Group B member begins participation in DROP or the date the
	member [is not completed by the date the Group B member] leaves
	active service, pension service will be provided only for the
	number of full years of pension service that the contributions and
	interest paid under those provisions will purchase, computed based
	on the most recent years for which the member was entitled to
	purchase pension service. Except for pension service that is
	picked up by the city under the authority of Section 414(h)(2) of
	the code, a fractional year of pension service may be purchased only
	if less than a full year of pension service is available for
	purchase.
	(e)  The amounts paid but insufficient to purchase one or
	more whole years of pension service that remain available for
	purchase, including any interest paid by the Group B member, must be
	returned to the Group B member or, if the Group B member has died, to
	the Group B member's designee, without any accrued interest on the
	returned money.
	(f)  Notwithstanding any other provision of this section,
	any amounts that have been picked up and paid by the city may not be
	paid to a member or designee, and the member shall be given credit
	for all years, and fractions of years, of pension service that can
	be purchased with the picked-up contributions [all partial payments
	shall be returned to the Group B member or, if the Group B member has
	died, to the member's heirs or estate, whichever is applicable].
	Sec. 5.08.  MEMBERS IN UNIFORMED [ARMED] SERVICES. (a)  In
	this section, "service in the uniformed services" has the meaning
	assigned by the federal Uniformed Services Employment and
	Reemployment Rights Act of 1994 (38 U.S.C. Section 4301 et seq.), as
	amended.
	(a-1)  A member who is reemployed by the city after an
	absence due to service in the uniformed services shall receive
	contributions, benefits, and pension service that are no less
	favorable than those required by Section 414(u) of the code in
	accordance with the procedure described by Subsection (c) of this
	section [may receive pension service for time spent away from
	either department while on active duty in any of the military
	services of the United States, including service in any state or
	National Guard or any reserve component of any military service in
	accordance with the military leave provided by this section].
	(b)  To the extent a provision of this section that was in
	effect before November 25, 1996, would provide a member who was on
	active service with the pension system before November 25, 1996,
	with greater rights, the prior provision of this section applies
	[Any member inducted into the armed forces as a draftee must reapply
	for reinstatement with the member's prior department within 90 days
	after the date of honorable discharge or separation from military
	service. On such reinstatement, the member may elect to repay the
	member's contributions at any time under the procedure described by
	Subsection (h) of this section].
	(c)  Payment for credit for pension service under this
	section [Any member enlisting in the armed forces, other than as a
	reservist, whose military service between June 24, 1948, and August
	1, 1961, did not exceed four years, or whose military service began
	after August 1, 1961, and did not exceed five years if the fifth
	year is at the request and convenience of the federal government,
	and who was honorably discharged or separated from service is
	guaranteed, under the provisions of coverage described by this
	subsection, the right to restore pension service under the
	procedure described by Subsection (h) of this section. The four-
	and five-year leaves permitted by this subsection apply to all of a
	member's employment with the city. An enlistment plus any number of
	reenlistments may not exceed the four- or five-year limitations
	stated above.
	[(d)     Any member ordered to an initial period of active duty
	for training in a reserve component of not less than 12 consecutive
	weeks is entitled to restore pension service for the period absent
	from the member's department, if the member returns to the member's
	department within 31 days after the date of honorable discharge or
	separation from duty in the reserve unit.
	[(e)     Any member serving in a reserve component, voluntarily
	or involuntarily, may remain on military leave for four years,
	which may be extended for periods when the President of the United
	States calls the reserve unit into active duty. The service
	extension for members joining a reserve unit voluntarily is
	available only when the additional service is at the request and for
	the convenience of the federal government. Any member returning to
	the member's department under this provision must report back to
	work within the time specified to the member by the department,
	giving due regard for travel time and hospitalization, if required.
	Any inquiry into the validity of orders extending terms of
	reservist active duty for training will be referred to the
	Department of Labor's Office of Veterans' Employment and Training.
	[(f)     Any member on military leave for short periods of
	authorized training, such as two-week encampments, are treated as
	on leave with pay for up to 15 working days in any one calendar year,
	during which time pension service automatically accrues. Leave in
	excess of 15 days will be treated as described by Subsection (e) of
	this section.
	[(g)     With the exception of those circumstances described by
	Subsection (f) of this section, the city is not required to match
	contributions made by members under the terms of this section.
	[(h)  Repayment] shall be made in accordance with Section
	5.07 of this article and a [the procedure set forth in any] uniform
	and nondiscriminatory [military leave and payment] procedure
	adopted by the board [and in effect from time to time].
	Sec. 5.09.  NON-UNIFORMED [NONMILITARY] LEAVE OF ABSENCE.
	(a) An "authorized non-uniformed leave of absence" means any leave
	of absence that meets one of the following requirements
	[conditions]:
	(1)  the leave of absence was unpaid and granted by the
	member's department in accordance with the federal Family and
	Medical Leave Act of 1993 (29 U.S.C. Section 2601 et seq.); or
	(2)  the leave of absence was unpaid and was [must be]
	an official leave authorized and certified by the chief of the
	member's [either] department as being beneficial to[; and
	[(2) the leave of absence must be for the purpose of
	benefitting] the department.
	(b)  Subject to the requirements of this section and any
	procedures adopted by the board, a [A] member may receive pension
	service for time spent away from the member's [either] department
	on an authorized non-uniformed [nonmilitary] leave of absence. To
	receive pension service under this section [for a nonmilitary leave
	of absence, the following conditions must be met:
	[(1) before the date the member's leave of absence is to
	begin], the member must file with the executive director
	[administrator] a written application to pay to the fund both:
	(1)  the member contributions the member would have
	made to the fund had the member remained on active service and had
	there been no change in the member's position or hours of work
	during the period of the authorized non-uniformed leave of absence;
	and
	(2)  the contributions the city would have made to the
	fund on the member's behalf [any contributions that will accrue
	during the member's leave as set forth in Subdivisions (2) and (3)
	of this subsection;
	[(2) the member must agree to pay into the fund the
	amount the member would have contributed had the member remained on
	active service, the amount to be based on the computation pay the
	member would have normally received had there been no change in the
	member's position during the period of leave;
	[(3) the member must agree to pay into the fund an
	amount equal to the amount the city would have contributed computed
	on the basis of total wages and salary the member would normally
	have received] had the member remained on active service and had
	there been no change in the member's position or hours of work
	during the period of the authorized non-uniformed leave of absence.
	(b-1)  Contributions made under Subsection (b)(2) of this
	section may not be refunded to the member.
	(b-2)  The written application described by Subsection (b)
	of this section must be filed before the member's authorized
	non-uniformed leave of absence begins, unless the pension system
	determines that it would not be reasonable to expect the member to
	file the application before the authorized non-uniformed leave of
	absence begins, in which case the application must be filed as soon
	as circumstances permit, as determined by the pension system.
	[leave, the payment to represent the total amount that would have
	been contributed by the city on the member's behalf had the member
	remained on active service and paid in addition to the amount the
	member must contribute as set forth in Subdivision (2) of this
	subsection;]
	(b-3)  To receive pension service under this section, the
	following additional conditions must also be met:
	(1) [(4)]  if the member's contribution rate, the
	city's contribution rate, or both the member's and city's
	contribution rates change before the end of the member's authorized
	non-uniformed leave of absence [changes as provided by Section 4.02
	of this article], the percentage [of total wages and salary]
	required to be paid by the member also changes, so that the amount
	paid by the member in accordance with this section always equals the
	amount that would have been contributed by the member, and by the
	city on the member's behalf had the member remained on active
	service[, and in no event is the city required to pay into the fund
	any contributions that would have been made on behalf of a member
	had the member remained on active service during the period of an
	authorized leave of absence];
	(2) [(5)]  payment of contributions as set forth in
	Subsection (b) of this section [Subdivisions (3) and (4) of this
	subsection] shall begin coincident with the beginning of the
	applicable authorized non-uniformed leave of absence and shall be
	made monthly to the executive director [administrator] for deposit
	in the fund, unless the board authorizes the deferment of the
	payments, in which case the payments must include interest
	calculated in accordance with Subsection (b-4) of this section
	[until the member has returned to active service];
	(3)  no pension service will be granted to the member
	until the member returns to active service, and if the member does
	not return to active service, the contributions paid, including any
	interest paid, will be returned to the member except as provided by
	Subsection (c) of this section;
	(4)  if the board authorizes the deferment of the
	payments under Subdivision (2) of this subsection, the payment must
	[may] be made either by authorizing the deduction of pro rata
	portions of the total amount due from the member's salary over a
	one-year period, or by cash payment made to the executive director
	[administrator] within one year after the date of the member's
	return to active service, except that the board may approve a longer
	period for making the payment if it finds that the one-year limit
	would work a financial hardship on the member;
	(5) [(6)]  the member must return to active service
	within 90 days after the date the member's authorized non-uniformed
	leave of absence expires, or if the member's authorized
	non-uniformed leave of absence does not have a fixed expiration
	date, within a reasonable time to be determined by the board, or the
	member forfeits the right to pay for the leave time; and
	(6) [(7)]  no member may ever be allowed to pay leave of
	absence contributions under this section for any time in excess of
	the time actually spent on an authorized non-uniformed leave of
	absence.
	(b-4)  For purposes of Subsection (b-3)(2) of this section,
	interest is calculated from the date the member's payment was first
	due, at the interest rate from time to time used in the pension
	system's actuarial rate of return assumptions, compounded annually
	until the date the principal and accrued interest are repaid in
	full.
	(c)(1)  If a member of the combined pension plan is disabled
	or dies while on an authorized non-uniformed leave of absence, the
	member or the member's designee is [heirs are] entitled to [either]
	a refund of contributions pursuant to Section 4.04 of this article
	or the member or the member's qualified survivors are entitled to
	benefits under the provisions of this article, to the extent
	applicable.
	(2)  A member who is disabled or dies while on an
	authorized non-uniformed leave of absence pursuant to this section
	may receive no pension service for any portion of the period of the
	leave,[;] except that if the member had, before the member's
	disability or death, paid for contributions while on an authorized
	non-uniformed leave of absence in accordance with [Subsection (a)
	of] this section, the member shall receive pension service for the
	leave time actually paid for at the time of the member's disability
	or death. The [, but the] member may receive no pension service for
	any portion of the period of leave for which contributions were
	[have] not [been] paid to the executive director [administrator]
	for deposit in the fund.
	SECTION 1.27.  Section 6.01, Article 6243a-1, Revised
	Statutes, is amended by amending Subsections (a), (b), (d), (e),
	(f), (g), and (h) and adding Subsections (a-1) and (a-2) to read as
	follows:
	(a)  A Group A member [or former Group A member] must have 20
	years of pension service to be eligible for a Group A retirement
	pension under this section. A member's benefit election
	[application] under this section, once approved [made], is
	irrevocable.
	(a-1)  If a Group A pensioner returns to active service as a
	police officer or fire fighter with the city, the person's Group A
	retirement pension ceases until [the time] that [the] person again
	leaves active service with the city.
	(a-2)  If a Group A pensioner resumes employment with the
	city in a capacity other than as a police officer or fire fighter,
	the pensioner's Group A retirement pension continues during the
	period of employment, except the pensioner may not accrue
	additional credit for pension service during this period.
	Additional credit for pension service does not accrue during any
	period in which a Group A pensioner becomes employed by the city
	unless the additional credit is attributable to active service as a
	police officer or fire fighter with the city.
	(b)  At age 50 a Group A member [or former Group A member] is
	eligible to begin drawing a monthly Group A retirement pension. A
	monthly Group A retirement pension equals 50 percent of the base pay
	per month, plus 50 percent of any longevity pay the Group A member
	was receiving at the time the member left active service. Although
	the number of years used in the computation of longevity pay remains
	fixed at the earlier of the time a Group A member [or former Group A
	member] leaves active service or begins participation in DROP, the
	monthly rate of longevity pay used in this computation is subject to
	change in the event of an amendment to the state law governing
	longevity pay. The monthly Group A retirement pension benefits of
	Group A pensioners shall be adjusted from time to time in a like
	manner.
	(d)  The element of annual retirement pension computed under
	Subsection (c)(1) of this section is subject to the following
	limitations:
	(1)  it shall be prorated for the year in which the
	pensioner begins receiving a retirement pension;
	(2)  it shall be payable only to those Group A
	pensioners who, as [a] Group A members [member] on active service,
	received city service incentive pay and who receive a monthly Group
	A retirement pension as determined under Subsection (b) of this
	section on the last day of September of each year; and
	(3)  it shall be paid to Group A pensioners as long as
	the city continues to pay city service incentive pay to Group A
	members on active service.
	(4)  Notwithstanding Subsections (b) and (c) of this
	section, a Group A member with a minimum of 20 years of pension
	service may apply for an actuarially reduced retirement pension to
	begin no earlier than when the member attains age 45 but before the
	member attains age 50. The Group A member [or a former Group A
	member] who has made an application may receive a retirement
	pension calculated under Subsections (b) and (c) of this section
	reduced by two-thirds of one percent per month for each whole
	calendar month the benefit is payable before the month in which the
	Group A member [or former Group A member] attains age 50.
	(e)  At age 55 a Group A member [or former Group A member] is
	eligible to begin drawing a monthly retirement pension computed as
	follows:
	(1)(A)  at the rate of three percent of base pay for
	each year, prorated for fractional years, of pension service, with
	a maximum of 32 years of pension service, or 96 percent of base pay;
	or
	(B)  if the Group A member [or former Group A
	member] had 34 or more years of pension service as of April 30,
	1990, then the member's retirement pension is calculated at the
	rate calculated under the terms of the combined pension plan in
	effect on April 30, 1990, if the resulting amount would be greater
	than the amount calculated under Paragraph (A) of this subdivision;
	plus
	(2)  one-half of the longevity pay the Group A member
	[or former Group A member] was receiving at the time the person left
	active service; plus
	(3)  1/24th, without subsequent adjustment, of the
	annualized amount of the city service incentive pay the Group A
	member [or former Group A member] received at the time the person
	left active service.
	(f)  [Notwithstanding Subsection (e) of this section, Group
	A pensioners payments under Subsection (e)(3) of this section are
	contingent on the city's continuing payment of city service
	incentive pay to Group A members on active service.] For purposes
	of Subsection (e) of this section, base pay and longevity pay are
	the amounts in effect on the earlier of the date the member begins
	participation in DROP or the date benefits are to begin, without
	subsequent adjustment.
	(g)  Notwithstanding Subsection (e) of this section, a Group
	A member [or former Group A member] with 20 or more years of pension
	service may apply for an actuarially reduced Group A retirement
	pension beginning on or after the date the Group A member [or former
	Group A member] attains age 50 but before the person attains age 55.
	The Group A member [or former Group A member] may receive a
	retirement pension calculated under Subsection (e) of this section
	reduced by two-thirds of one percent per month for each whole
	calendar month the benefit is payable before the month in which the
	Group A member [or former Group A member] attains age 55.
	(h)  Entitlement to the Group A retirement pension described
	by this section is subject to the following conditions:
	(1)  a written application must be filed with the
	executive director [administrator];
	(2)  the grant of a Group A retirement pension by the
	board must be made at a meeting of the board held during the month
	the [Group A] retirement pension is to become effective, or as soon
	after that as administratively possible; and
	(3)  the Group A member must no longer be on active
	service.
	SECTION 1.28.  Section 6.02, Article 6243a-1, Revised
	Statutes, is amended to read as follows:
	Sec. 6.02.  GROUP B RETIREMENT PENSION.  (a) If a [A] Group B
	member [or former Group B member who] has accrued five or more years
	of pension service, is no longer on active service with the
	department, has not withdrawn the member's contributions, and
	otherwise meets the age and pension service requirements under the
	applicable provision of this section, the member may apply [may
	make application] for a Group B retirement pension under this
	section. A member's benefit election application under a provision
	of this section, once approved, is irrevocable.
	(a-1)  If a Group B pensioner returns to active service as a
	police officer or fire fighter with the city, the person's [on
	reaching 50 years of age, or for an actuarially reduced] Group B
	retirement pension ceases until that person again leaves active
	service with the city.
	(a-2)  If a Group B pensioner resumes employment with the
	city in a capacity other than as a police officer or fire fighter,
	the pensioner's Group B retirement pension continues during the
	period of employment except the pensioner may not accrue additional
	credit for pension service during this period. Additional credit
	for pension service does not accrue during any period in which a
	Group B pensioner becomes employed by the city unless the
	additional credit is attributable to active service as a police
	officer or fire fighter with the city [on reaching 45 years of age].
	(b)  A [former] Group B member who began active service
	before March 1, 2011, and who has attained at least 50 years of age,
	or who began active service on or after March 1, 2011, and has
	attained at least 58 years of age, and who otherwise meets the
	requirements of Subsection (a) of this section may elect to receive
	a Group B retirement pension that shall be calculated as follows:
	(1)  for a member who began active service before March
	1, 2011, the member's retirement pension shall be the sum of:
	(A)  the number of years of pension service before
	September 1, 2017, prorated for fractional years, times three
	percent of the average computation pay determined over the 36
	consecutive months of pension service in which the Group B member
	received the highest computation pay; plus
	(B)  the number of years of pension service on or
	after September 1, 2017, prorated for fractional years, times the
	applicable percentage prescribed by Subsection (b-1) of this
	section of the average computation pay determined over the 60
	consecutive months of pension service in which the Group B member
	received the highest computation pay; or
	(2)  for a member who began active service on or after
	March 1, 2011, the member's retirement pension shall be the number
	of years of pension service, prorated for fractional years, times
	2.5 percent of the average computation pay determined over the 60
	consecutive months of pension service in which the member received
	the highest computation pay.
	(b-1)  For purposes of Subsection (b)(1)(B) of this section,
	the applicable percentage is based on the age of the Group B member
	when the member's retirement pension begins as set forth below:
	Age of Member When Retirement Pension Begins Percent
	58 and older 2.5%
	57 2.4%
	56 2.3%
	55 2.2%
	54 2.1%
	53 and younger 2.0%
	(b-2)  Days during which the member earned no pension service
	due to a termination of active service or otherwise must be
	disregarded in determining the 36 or 60 consecutive months of
	highest computation pay under Subsection (b)(1) or (2) of this
	section, as appropriate. The pension benefit calculated under
	Subsection (b) of this section may not exceed the greater of:
	(1)  90 percent of the member's average computation pay
	determined under the applicable subsection; or
	(2)  the vested and accrued benefit of a member as
	determined on August 31, 2017. [or Group B pensioner who withdrew
	any of the person's Plan B or Group B contributions and who on again
	becoming a Group B member does not replace such previously
	withdrawn contributions with interest thereon as provided by
	Section 4.04 of this article must earn at least five years of
	pension service after the time the person returns to active service
	to be eligible for a Group B retirement pension.]
	(c)  Except as provided by Subsection (c-2) of this section,
	[Entitlement to] a Group B member who has either attained at least
	45 years of age on September 1, 2017, or who attains at least 53
	years of age after September 1, 2017, and who otherwise meets the
	requirements of Subsection (a) of this section may elect to receive
	an actuarially reduced Group B retirement pension calculated in
	accordance with Subsection (c-1) of this section:
	(1)  not earlier than the member's 45th or 53rd
	birthday, as applicable; and
	(2)  not later than the member's 50th or 58th birthday,
	as applicable.
	(c-1)  Except as provided by Subsection (c-2) of this section
	and subject to Section 6.021 of this article, a Group B member who
	applies for an actuarially reduced Group B retirement pension under
	Subsection (c) of this section shall receive a pension calculated
	under Subsection (b) of this section, reduced by two-thirds of one
	percent per month, for each whole calendar month the benefit is
	payable before the month in which the member attains:
	(1)  for members who attained at least 45 years of age
	on September 1, 2017, 50 years of age; or
	(2)  for members not described by Subdivision (1) of
	this subsection who attain at least 53 years of age after September
	1, 2017, 58 years of age.
	(c-2)  Subject to Subsection (d-3) of this section and for
	purposes of Subsection (c-1) of this section, if a Group B member's
	pension benefit calculated under Subsection (b) of this section is
	equal to 90 percent of the member's average computation pay, the
	member is entitled to a Group B retirement pension under Subsection
	(c) of this section at 45 or 53 years of age, as applicable, that is
	not actuarially reduced as provided under Subsection (c-1) of this
	section [retirement pension as described by Subsection (a) or (b)
	of this section is subject to the following conditions:
	[(1)     written application must be filed with the
	administrator;
	[(2)     the grant of the Group B retirement pension by the
	board must be made at a meeting of the board held during the month
	the Group B retirement pension is to become effective, or as soon
	after that as possible; and
	[(3)     the Group B member may no longer be on active
	service].
	(d)  Except as provided by Subsection (d-2) of this section,
	a [A] Group B member who has accrued 20 or more years of pension
	service and has been on active service at any time on or after
	January 1, 1999, may elect to apply for a Group B retirement pension
	beginning at any time after the Group B member leaves active
	service, regardless of age. A Group B member may elect a Group B
	retirement pension under this subsection as follows:
	(1)  if the member accrued 20 or more years of pension
	service on or before September 1, 2017, the member may elect a
	pension under this subsection that is computed in the same manner as
	the Group B retirement pension under Subsection (b)(1) of this
	section except that the percentage set forth below must be used
	instead of the three percent multiplier prescribed by Subsection
	(b)(1)(A) of this section:
	Age of Member When Retirement Pension Begins Percent
	48 and 49 2.75%
	47 2.5%
	46 2.25%
	45 and younger 2%; and
	(2)  except as provided by Subsection (d-2) of this
	section and subject to Section 6.021 of this article, if the member
	accrued 20 or more years of pension service after September 1, 2017,
	the member may elect a pension under this subsection computed in the
	same manner as the Group B retirement pension under Subsection
	(b)(2) of this section except that the percentage set forth below
	must be used instead of the 2.5 percent multiplier prescribed by
	Subsection (b)(2) of this section:
	Age of Member When Retirement Pension Begins Percent
	57 2.4%
	56 2.3%
	55 2.2%
	54 2.1%
	53 and younger 2.0%
	(d-1)  A member who elects a pension under Subsection (d) of
	this section is not entitled to:
	(1)  minimum benefits under either Section 6.10A or
	6.11 of this article; or
	(2)  benefits under Subsection (g) of this section.
	(d-2)  Subject to Subsection (d-3) of this section and for
	purposes of Subsection (d) of this section, if a Group B member's
	pension benefit calculated under Subsection (b) of this section is
	equal to 90 percent of the member's average computation pay, the
	member is entitled to a Group B retirement pension under Subsection
	(d) of this section that is not reduced as provided under Subsection
	(d)(1) or (2) of this section [retirement pension shall be computed
	at the rate of three percent of the average computation pay
	determined over the 60 consecutive months in which the Group B
	member received the highest computation pay, multiplied by the
	number of years, prorated for fractional years, of pension service
	to a maximum of 32 years of pension service or 96 percent of the
	computation pay as determined under this subsection].
	(d-3)  For purposes of Subsections (c-2) and (d-2) of this
	section, a Group B member's pension benefit calculated under
	Subsection (b) of this section shall be calculated without
	application of any reduction under Subsection (b-1) of this
	section.
	(e)  A [However, a] Group B member or former Group B member
	with 34 or more years of pension service as of April 30, 1990, is
	entitled to [shall] receive the greater of a Group B retirement
	pension calculated under the terms of Plan B as in effect on that
	date or a Group B retirement pension calculated pursuant to
	Subsection (b) [(d)] of this section.
	[(f)     A Group B member, or any former Group B member who was a
	Group B member as of any date after April 30, 1990, may apply for an
	actuarially reduced Group B retirement pension beginning no earlier
	than the person's 45th birthday but before the person's 50th
	birthday. A Group B member or former Group B member who applies for
	an actuarially reduced Group B retirement pension beginning on or
	after the person's 45th birthday shall receive a pension calculated
	under Subsection (d) of this section, reduced by two-thirds of one
	percent per month for each whole calendar month the pension would be
	payable before the month in which the Group B member or former Group
	B member attains age 50.]
	(g)  In no event may any Group B member [or former Group B
	member] who was at any time a Group A member or a contributing
	member of the old plan or Plan A, and who satisfied the applicable
	age and length-of-service requirements of the applicable plan at
	the time the person left active service, receive a retirement
	pension in an amount less than the amount the person would be
	entitled to receive as a Group A member.
	(h)  Notwithstanding any other provision of this section, a
	[A former] Group B member who was not a Group B member on or after
	January 1, 1993 [May 1, 1990], shall receive a retirement pension
	calculated under the applicable provisions of Plan B [this plan] as
	that plan existed [in effect] on the date the member terminated
	[person left] active service.
	(i)  Entitlement to a Group B retirement pension under
	Subsection (b), (c), (d), or (e) of this section is subject to the
	following conditions:
	(1)  a written application must be filed with the
	executive director;
	(2)  the grant of the Group B retirement pension by the
	board must be made at a meeting of the board held during the month
	the retirement pension is to become effective, or as soon after as
	administratively possible; and
	(3)  the Group B member may no longer be on active
	service [A former Group B member who was not a Group B member after
	April 30, 1990, may request an actuarially reduced retirement
	pension beginning no earlier than the person's 45th birthday but
	before the person's 50th birthday]. [A former Group B member
	described by this subsection shall receive a retirement pension
	under the applicable provisions of Plan B as in effect on the date
	the person left active service, reduced by two-thirds of one
	percent per month for each whole calendar month the pension would be
	payable before the month in which the former Group B member attains
	age 50.]
	SECTION 1.29.  Part 6, Article 6243a-1, Revised Statutes, is
	amended by adding Sections 6.021 and 6.022 to read as follows:
	Sec. 6.021.  AUTHORITY TO ADOPT ALTERNATIVE MULTIPLIERS FOR
	COMPUTATION OF CERTAIN GROUP B BENEFITS. (a)  For purposes of
	Section 6.02(c-1) or (d)(2) of this article, the board by rule may
	adopt alternative multipliers, including an alternative table
	prescribing actuarially appropriate multipliers. In adopting
	rules under this subsection, the board shall designate the date on
	which the alternative multiplier shall take effect.
	(b)  Copies of any alternative multipliers adopted under
	this section must be maintained at the principal office of the
	pension system and published on the pension system's publicly
	available Internet website.
	Sec. 6.022.  AUTHORITY TO REDUCE RETIREMENT AGE.
	Notwithstanding any other law, the board may reduce the age at which
	a Group B member is eligible to begin receiving a retirement
	pension, including an actuarially reduced retirement pension,
	under Section 6.02 of this article if the board determines that the
	reduction will not cause the amortization period of the unfunded
	actuarial accrued liability of the pension system to exceed 25
	years, after taking into account the impact of the reduction.  A
	board action under this section may not take effect until the State
	Pension Review Board reviews the board's determination described by
	this section.
	SECTION 1.30.  Section 6.03, Article 6243a-1, Revised
	Statutes, is amended by amending Subsections (a), (d), (f), and (g)
	and adding Subsections (k) and (l) to read as follows:
	(a)  If a member who is on active service, other than a member
	participating in DROP, becomes disabled to the extent that the
	member cannot perform the member's duties with the member's
	department, the member may apply for a disability pension, subject
	to [in accordance with] any uniform and nondiscriminatory
	disability application procedure and recall and review procedure
	adopted by the board and in effect from time to time.
	(d)  No disability pension may be paid to a member for any
	disability if the disability was a result of an intentionally
	self-inflicted injury or a chronic illness resulting from an
	addiction by the member through a protracted course of [noncoerced]
	indulgence in alcohol, narcotics, or other substance abuse that was
	not coerced.
	(f)  No disability pension may be paid if the chief of the
	member's department is able to provide the member with duties that
	are within the member's physical or mental capabilities, [as long
	as the board agrees that the duties are within the member's
	capabilities,] even though the duties are different from the duties
	the member performed before the disability.
	(g)  Written application for a disability pension must be
	filed with the executive director not later than the 180th day after
	the date the member leaves active service [administrator]. The
	application must be accompanied by a recommendation from the health
	director. This recommendation shall contain a statement indicating
	whether the member became disabled while the member was on duty or
	off duty and whether the disability was service-connected or was
	not service-connected [nonservice-connected].
	(k)  For purposes of Sections 6.04 and 6.05 of this article
	and this section:
	(1)  longevity pay and incentive pay are the amounts in
	effect on the date the benefits are to begin, without subsequent
	adjustment; and
	(2)  except as provided by Section 6.05(b-1) of this
	article, base pay is the amount in effect on the date benefits are
	to begin, without subsequent adjustment.
	(l)  Notwithstanding any other law, Subchapter B, Chapter
	607, Government Code, applies to all members without regard to the
	employing department or job assignment.
	SECTION 1.31.  Part 6, Article 6243a-1, Revised Statutes, is
	amended by adding Section 6.035 to read as follows:
	Sec. 6.035.  DISABILITY BENEFITS FOR CERTAIN PERSONS IN
	UNIFORMED SERVICES. (a)  In this section, "uniformed services" has
	the meaning assigned by the federal Uniformed Services Employment
	and Reemployment Rights Act of 1994 (38 U.S.C. Section 4301 et
	seq.).
	(b)  This section applies to a person who was released from
	the uniformed services after December 17, 2001, under conditions
	that would have made the person eligible for benefits under Section
	414(u) of the code if the person could have returned to active
	service.
	(c)  If a person subject to this section was unable to return
	to active service by reason of disability incurred while on a leave
	of absence due to service in the uniformed services, that person is
	entitled to a regular disability pension in accordance with Section
	6.03 of this article, calculated in accordance with Section 6.04 of
	this article.
	(d)  Notwithstanding Section 6.03(g) of this article, a
	written application for a disability pension must be filed not
	later than the 180th day after the date of the person's release from
	the uniformed services.
	(e)  A person subject to this section is entitled to receive
	pension service for the period of service with the uniformed
	services only to the extent that contributions are made for that
	period in accordance with this article.
	SECTION 1.32.  Section 6.04, Article 6243a-1, Revised
	Statutes, is amended to read as follows:
	Sec. 6.04.  CALCULATION OF REGULAR [GROUP A] DISABILITY
	BENEFITS [PENSION]. (a) Subject to Subsection (g) of this section,
	if [If] a Group A member's application for a Group A disability
	pension has been approved by the board pursuant to Section 6.03 of
	this article, including any procedures adopted under that section,
	the Group A member may elect to receive a Group A disability pension
	calculated:
	(1)  in the same manner as the benefit under Sections
	6.01(b) and (c) of this article; or
	(2)  under Subsection (c) [(b)] of this section.
	(b)  An election under Subsection (a) of this section, once
	approved by the board [made], is irrevocable.
	[(b)     When a Group A member elects to accept a Group A
	disability pension under this section, it shall be calculated as
	provided by Subsections (c), (d), and (e) of this section.]
	(c)  Subject to Subsection (g) of this section, [If] a Group
	A [member's disability results during the performance of duties
	with either department, the] member who elects to have benefits
	determined under this subsection is entitled to a monthly
	disability pension calculated as follows:
	(1)  at a rate of three percent of base pay for each
	year, prorated for fractional years, of pension service, with a
	[minimum of 20 years of pension service being deemed credited and a]
	maximum of 32 years of pension service being credited, or 96 percent
	of base pay [or], except that if the Group A member had 34 or more
	years of pension service as of April 30, 1990 [May 1, 1990], the
	member is entitled to [shall] receive the greater of a disability
	pension calculated under the terms of the combined pension plan in
	effect on that date or as calculated under this subdivision; plus
	(2)  one-half of the longevity pay the Group A member
	was receiving at the time the member left active service; plus
	(3)  subject to Subsection (d) of this section,
	1/24th[, without subsequent adjustment,] of the annualized amount
	of city service incentive pay the Group A member received at the
	time the member left active service.
	(c-1)  The disability pension calculated under Subsection
	(c) of this section may not exceed the greater of:
	(1)  90 percent of the member's average base pay
	determined under the applicable subsection; or
	(2)  the vested and accrued disability pension of the
	member as determined on August 31, 2017.
	(d)  Payments of the amounts described by [Notwithstanding
	Subsection (c) of this section, the amount of a disability
	retirement benefit of a Group A pensioner who is on disability
	retirement under] Subsection (c)(3) of this section are [is]
	contingent on the city's continuing payment of city service
	incentive pay to Group A members on active service. [For purposes
	of this subsection, base pay and longevity pay are the amounts in
	effect on the date the benefits are to begin, without subsequent
	adjustment.]
	(e)  If a Group B [A] member's application for a Group B
	disability pension has been approved by the board under Section
	6.03 of this article, including any procedures adopted under that
	section, the Group B member may elect to receive a Group B
	disability pension calculated in the manner described by Subsection
	(f) or (f-1) of this section, subject to Subsection (g) of this
	section [disability does not result during the performance of the
	member's duties with either department, the member is entitled to a
	monthly disability pension calculated:
	[(1)     at a rate of three percent of base pay for each
	year, prorated for fractional years, of pension service, with a
	maximum of 32 years of pension service, or 96 percent of base pay,
	except that if the Group A member had 34 or more years of pension
	service as of April 30, 1990, the member shall receive the greater
	of a disability pension calculated under the combined pension plan
	in effect on that date or as calculated under this subdivision; plus
	[(2)     one-half of the longevity pay the Group A member
	was receiving at the time the member left active service; plus
	[(3)     1/24th of the annualized amount of city service
	incentive pay the Group A member received at the time the member
	left active service, without regard to any subsequent adjustment].
	(f)  Subject to Subsections (f-1), (f-3), and (g) of this
	section, the disability pension of a Group B member shall be
	calculated as follows:
	(1)  for a member who began active service before March
	1, 2011, the member's disability pension shall be the sum of:
	(A)  the member's number of years of pension
	service earned before September 1, 2017, prorated for fractional
	years, times three percent of the average computation pay
	determined over the 36 consecutive months of pension service in
	which the member received the highest computation pay; plus
	(B)  the number of years of pension service,
	including pension service credit imputed under Section 6.05(c) of
	this article, earned on or after September 1, 2017, prorated for
	fractional years, times the applicable percentage prescribed by
	Section 6.02(b-1) of this article of the average computation pay
	determined over the 60 consecutive months of pension service in
	which the member received the highest computation pay; or
	(2)  for a member who began active service on or after
	March 1, 2011, the member's disability pension shall be the number
	of years of pension service, including pension service credit
	imputed under Section 6.05(c) of this article, prorated for
	fractional years, times 2.5 percent of the average computation pay
	determined over the 60 consecutive months of pension service in
	which the member received the highest computation pay.
	(f-1)  Notwithstanding Subsection (f) of this section, for a
	Group B member who had 34 or more years of pension service as of
	April 30, 1990, the member is entitled to receive the greater of a
	disability pension calculated under the terms of Plan B in effect on
	April 30, 1990, or calculated under Subsection (f) of this section.
	(f-2)  For purposes of Subsections (f) and (f-1) of this
	section:
	(1)  any partial year of pension service for a Group B
	member's first 20 years of pension service is counted as a full year
	of pension service, if the member was considered by the member's
	department to have worked a normal full-time schedule at the time of
	the disability;
	(2)  if the member has less than 36 or 60 consecutive
	months of pension service, as applicable, the member's average
	computation pay will be computed based on the member's entire
	pension service; and
	(3)  days during which the member earned no pension
	service due to a termination of active service or otherwise must be
	disregarded in determining the 36 or 60 consecutive months of
	highest computation pay.
	(f-3)  The disability pension calculated under Subsection
	(f) or (f-1) of this section may not exceed the greater of:
	(1)  90 percent of the member's average computation pay
	determined under the applicable subsection; or
	(2)  the vested and accrued disability pension of the
	member as determined on August 31, 2017 [Payments of the amounts
	described by Subsection (e)(3) of this section are contingent on
	the city's continuing payment of city service incentive pay to
	Group A members on active service].
	(g)  The disability pension calculated in accordance with
	this section, including both a Group A benefit described by
	Subsection (a) of this section and a Group B benefit described by
	Subsection (f) of this section, shall be reduced dollar-for-dollar
	by any monthly disability compensation benefit received under
	Section 6.05 of this article. If the monthly disability
	compensation benefit provided to a member under Section 6.05 of
	this article equals or exceeds any benefit the member is entitled to
	under this section or Section 6.01(b) or (c) of this article, the
	member may not receive the benefit under this section [For purposes
	of Subsection (e)(3) of this section, base pay and longevity pay are
	the amounts in effect on the date the benefits are to begin, without
	subsequent adjustment].
	SECTION 1.33.  The heading to Section 6.05, Article 6243a-1,
	Revised Statutes, is amended to read as follows:
	Sec. 6.05.  COMPENSATION BENEFITS FOR SERVICE-CONNECTED
	[CALCULATION OF GROUP B] DISABILITY [BENEFITS].
	SECTION 1.34.  Section 6.05, Article 6243a-1, Revised
	Statutes, is amended by amending Subsections (a), (b), and (c) and
	adding Subsection (b-1) to read as follows:
	(a)  If a member leaves active service at any time due to
	disability and the board determines that the member with the
	disability became unable to perform the member's duties with the
	member's department due to an injury or sickness incurred in the
	performance of the member's duties, the member is entitled to
	periodic disability compensation benefits in accordance with this
	section [Group B member's application for a Group B disability
	pension has been approved by the board pursuant to Section 6.03 of
	this article, including any procedures adopted under that section,
	the Group B member may, depending on the circumstances, elect to
	receive a Group B disability pension calculated in the manner
	described by Subsection (b) or (c) of this section].
	(b)  Subject to Subsection (b-1), [If] a Group A [B] member
	whose disability, as determined by the board, was caused by an
	injury or sickness incurred in the performance of the member's duty
	shall receive a monthly benefit equal to 60 percent of the member's
	base pay. For purposes of this subsection, "base pay" is the amount
	in effect on the date compensation benefits under this section are
	to begin, without subsequent adjustment.
	(b-1)  Instead of receiving a periodic disability
	compensation benefit under Subsection (b) of this section, a Group
	A member who is entitled to periodic disability compensation
	benefits under this section may elect, before the benefits begin,
	to receive those benefits as a monthly benefit equal to 50 percent
	of the member's base pay adjusted from time to time to reflect
	changes in base pay that occur after the member began receiving a
	monthly compensation benefit under this section [becomes disabled
	during the performance of the member's duties with either
	department, the member is entitled to a monthly disability pension
	calculated at a rate of three percent of the average computation pay
	determined over the 60 consecutive months in which the Group B
	member received the member's highest computation pay multiplied by
	the number of years, prorated for fractional years, of the member's
	pension service with a minimum of 20 years of pension service being
	deemed credited, or 60 percent of average computation pay
	determined over the 60 consecutive months in which the Group B
	member received the member's highest computation pay, except that
	if the Group B member has less than five years of pension service,
	the Group B member's average computation pay will be computed based
	on the member's entire pension service. If a Group B member had 34
	or more years of pension service as of April 30, 1990, the Group B
	member is entitled to receive the greater of a Group B disability
	pension calculated under the terms of Plan B in effect on that date
	or calculated pursuant to this subsection].
	(c)  A [The Group B disability pension for any] Group B
	member whose disability, as determined by the board, was caused by
	an injury or sickness incurred in the performance of the member's
	duty shall receive a monthly benefit equal to the disability
	pension under Sections 6.04(f), (f-1), (f-2), and (f-3) of this
	article except that if the member:
	(1)  does not have 20 years of pension service, the
	member is considered to have 20 years of pension service for the
	purposes of calculating the disability pension under that section;
	and
	(2)  has less than 36 or 60 consecutive months, as
	applicable, of employment with the department, the member's average
	computation pay will be computed based on all the member's
	computation pay, and days during which the member earned no pension
	service due to a termination of active service or otherwise must be
	disregarded in determining either the 36 or 60 consecutive months
	of highest computation pay [does not result during the performance
	of the member's duties with either department shall be computed at a
	rate of three percent of the average computation pay determined
	over the 60 consecutive months in which the Group B member received
	the member's highest computation pay multiplied by the number of
	years, prorated for fractional years, of the member's pension
	service, except that any partial year of pension service for the
	first 20 years of pension service shall be counted as a full year of
	pension service. If the Group B member has less than five years of
	pension service, the Group B member's average computation pay will
	be computed based on the member's entire pension service, and if a
	Group B member had 34 or more years of pension service as of April
	30, 1990, the Group B member is entitled to receive the greater of a
	disability pension calculated under the terms of Plan B in effect on
	that date or calculated pursuant to this subsection].
	SECTION 1.35.  Section 6.05(d), Article 6243a-1, Revised
	Statutes, is redesignated as Section 6.055, Article 6243a-1,
	Revised Statutes, and amended to read as follows:
	Sec. 6.055.  REDUCTION IN DISABILITY OR COMPENSATION
	BENEFITS FOR CERTAIN PERSONS. (a) In this section, "earned income"
	means income earned by a Group B pensioner in the form of wages,
	salaries, commissions, fees, tips, unemployment benefits, and
	other amounts received by virtue of employment or self-employment
	but paid before any deduction for taxes or insurance. In addition,
	earned income also includes those amounts contributed on a
	before-tax basis to any retirement plan or employee health and
	welfare benefit plan.
	(b) [(d)]  The board shall require any Group B pensioner who
	became a member of Plan B or the combined pension plan on or after
	May 1, 1990, and who is receiving a Group B disability pension under
	Section 6.04 of this article or a periodic disability compensation
	under Section 6.05 of this article [in accordance with Subsection
	(b) or (c) of this section] to provide the board annually, on or
	before July 1 [May 1] of each year, with a true and complete copy of
	those portions of the person's federal and, if applicable, state
	tax return, including appropriate schedules, for the previous
	calendar year that indicate the person's occupations, if any, and
	earned income for the previous calendar year. If the pensioner did
	not file a tax return for the previous calendar year, the board may
	require other documentation reflecting the pensioner's occupation
	or earned income that the board determines appropriate.
	(c)  The pension system [However, the board] may waive the
	July 1 [May 1] date under Subsection (b) of this section in lieu of
	one later in the same calendar year if the Group B pensioner
	provides the board with a true and complete copy of a grant of an
	extension of time for the filing of the person's tax return from the
	appropriate governmental agency or a true and complete copy of an
	extension request that results in any automatic extension.
	(d)  If, after evaluating the information received under
	Subsection (b) of this section, the board finds the Group B
	pensioner is or has been receiving earned income from one or more
	employments, including self-employment, during the preceding year,
	the board shall reduce future disability retirement [pension]
	payments to the Group B pensioner in accordance with the following
	formula: $1 for each $1 that the sum of "a" + "b" is greater than
	"c," where "a" is the earned income of the Group B pensioner
	attributable to the previous calendar year from the person's
	employments, "b" is the total amount of Group B disability
	retirement payments [pension] received by the Group B pensioner the
	previous calendar year, and "c" is the annualized amount of the
	average computation pay the Group B pensioner received as of the
	date the person left active service.
	(e)  For purposes of the [this] computation under Subsection
	(d) of this section, the average computation pay shall be deemed
	increased at a rate of 2.75 percent [of four percent simple
	interest], without compounding during the year, as of each January
	1 that the Group B pensioner receives a Group B disability
	retirement payment [pension].
	SECTION 1.36.  Section 6.06, Article 6243a-1, Revised
	Statutes, is amended by amending Subsections (b), (e), (f), (g),
	(h), (j), (k), (l), (m), (n), (o), (p), (q), (r), and (t) and adding
	Subsections (e-1), (e-2), (j-1), (o-1), (o-2), (u), and (v) to read
	as follows:
	(b)  A written application for benefits must be filed with
	the executive director [administrator].
	(e)  If [the qualified] surviving children of a primary party
	are not qualified survivors entitled to death benefits, the
	[qualified surviving] spouse of the primary party who is a
	qualified survivor is entitled only to receive a share of the death
	benefits in the amount calculated under Section 6.07(a) [or (b)] or
	Section 6.08(b)(1), (c)(1), (d)(1), or (e)(1) of this article,
	whichever is applicable, and is not entitled to what otherwise
	would be the [qualified] surviving children's share.
	(e-1)  If a primary party had [there is] no [qualifying]
	surviving spouse, any [qualified] surviving child who is a
	qualified survivor [children] shall receive only the amount
	calculated under Section 6.07(a) [or (b)] or Section 6.08(b)(2),
	(c)(2), (d)(2), or (e)(2) of this article, whichever is applicable,
	and is [are] not entitled to what otherwise would be the [qualified]
	surviving spouse's share.
	(e-2)  If a primary party does not have a [there is no
	qualified surviving] spouse or [qualified surviving] children who
	are qualified survivors, any [qualified] dependent parent of the
	primary party who is a qualified survivor shall receive only the
	amount calculated under Section 6.07(c) or Section 6.08(b)(3),
	(d)(3), or (e)(3) of this article, whichever is applicable, and is
	not entitled to what otherwise would be the [qualified] surviving
	spouse's or [qualified] surviving children's share.
	(f)  The total monthly death benefits [benefit] received by
	the qualified survivors of a primary party under this article,
	including the primary party's [surviving] spouse, [qualified
	surviving] children, or [qualified] dependent parents, [parent]
	may not exceed the pension to which the deceased primary party was
	entitled per month.
	(g)  If there is no surviving spouse or legal guardian for
	the [qualified] surviving children of a primary party who are
	qualified survivors and if the board determines that the
	[qualified] surviving children lack the discretion to handle money,
	or in other appropriate circumstances, notwithstanding any other
	provision of this section, the board may request a court of
	competent jurisdiction to appoint a suitable person to receive and
	administer the [qualified] surviving children's money or in those
	circumstances described in Subsection (n) of this section, appoint
	a new trustee to administer the [qualified] surviving children's
	[support] trust.
	(h)  With the exception of a [support] trust described in
	Subsection (n) of this section, no death benefits awarded to
	[qualified] surviving children may be used for any purpose other
	than to benefit the [qualified] surviving children. [The board may
	withhold payment of benefits if it has reason to believe the
	benefits are not being properly applied.]
	(j)  With the exception of those circumstances described in
	Subsection (n) of this section, death benefits payable [paid] to
	[qualified] surviving children [living with a person other than the
	surviving spouse] shall be delivered to the legal guardian of the
	estate of the surviving children if one has been appointed and the
	pension system has been provided proof of the appointment. If no
	legal guardian has been appointed, death benefits shall be
	delivered to one of the following persons, provided there is
	evidence that the person is [person with whom the qualified
	surviving children are living, if the board has designated the
	person as being] a suitable person to receive and administer the
	benefits:
	(1)  the surviving spouse with whom the child resides;
	or
	(2)  the adult head of the household with whom the child
	resides, if the child does not reside with the surviving spouse.
	(j-1)  In accordance with Subsection (h) of this section, the
	recipient of a surviving child's death benefits under Subsection
	(j) of this section must use the death benefits to benefit the
	child. The board may[, however,] withhold payment of benefits to
	anyone, if presented with evidence that the death benefits are not
	being used to benefit the surviving child [but the legal guardian of
	the qualified surviving children and may require proof that a
	person has been appointed legal guardian of the qualified surviving
	children before authorizing any benefits to be delivered to that
	person].
	(k)  Dependent [The qualified surviving dependent] parents
	of a primary party [member] who are entitled to receive death [any
	survivor] benefits provided by this article may only receive the
	benefits for the remainder of the dependent parents' [their] lives.
	(l)  The pension system [board] may require all qualified
	survivors [persons] receiving death benefits[, including qualified
	surviving spouses, qualified surviving children or their
	guardians, and qualified surviving dependent parents,] to file
	[with the administrator, at least once every two years,] a sworn
	statement with the executive director concerning the qualified
	survivor's [their] eligibility to continue to receive death
	benefits at least once every two years, or at any other time the
	executive director considers a sworn statement to be appropriate to
	evidence the continued eligibility of the qualified survivor. [The
	board may also require a sworn statement from any person receiving
	death benefits at any time.] The board may withhold death benefits
	from any person who fails or refuses to file a statement when
	requested to do so.
	(m)  When the last qualified survivor of any primary party
	becomes ineligible to continue to receive death benefits, [that
	survivor shall be paid in a lump sum] an amount equal to the excess
	[difference], if any, of [between] the total amount of all
	contributions made to the fund by the primary party while a member
	over [, and] the sum of all benefits paid to the primary party and
	all of the primary party's [his] qualified survivors shall be paid
	in a lump sum to the last person to receive benefits as a qualified
	survivor or, if none exists, to the member's designee.  The total
	amount to be paid in benefits to the primary party and all qualified
	survivors shall never be less than the total amount of
	contributions the primary party made to the fund while a member.
	(n)  Notwithstanding any other provision of this section:
	(1)  [,] death benefits awarded to an unmarried child
	who is a qualified survivor [surviving child of a primary party] who
	is determined by the board to be disabled [handicapped] under the
	terms of Subsection (o-2) [(o)] of this section may be paid to the
	trustee of a management trust, supplemental needs or special needs
	trust, or comparable trust [support trust] established for the
	benefit of the child, if the trust meets the requirements set forth
	in a procedure adopted from time to time by the board [qualified
	surviving child if:
	[(1)     an opinion of counsel of the trustee of the
	support trust is furnished to the board indicating that payments
	made to the support trust will not, under existing law, be
	considered a resource of the qualified surviving child under Title
	42, Section 1396(a)(17), of the United States Code or any successor
	statute, as well as applicable state law or regulations governing
	the situation]; and
	(2)  as soon as practicable after the pension system
	has knowledge of an event listed in this subdivision, the pension
	system shall terminate payment of death benefits to a [coincident
	with the furnishing of the opinion of counsel, the board is provided
	with an executed original of the support trust document for the
	records of the pension system;
	[(3) the terms of the trust provide that the board will
	receive an annual accounting of the support trust from its trustee,
	although the board has no legal responsibility to oversee the
	support trust; and
	[(4) the support] trust described by Subdivision (1) of
	this subsection effective [will terminate as soon as practicable]
	on the earlier occurrence of the following events:
	(A)  the date as of [on] which the [qualified
	surviving] child is determined by the board to no longer be disabled
	[handicapped] under the terms of this section;
	(B)  the date on which the [qualified surviving]
	child is lawfully married;
	(C)  the date on which the [qualified surviving]
	child is deceased;
	(D)  the date on which the pension system becomes
	aware that the assets of the [support] trust are deemed to be the
	resources of the child under applicable federal or state laws or
	regulations; or
	(E)  if [unless otherwise excused by the board,]
	the trustee of the child's [support] trust fails to provide a court
	of competent jurisdiction [the board] with an annual accounting of
	the child's trust, the date occurring [within] six months after the
	date of the close of the [support] trust's fiscal year.
	(o)  When a child who, as a qualified survivor, [surviving
	child who] is entitled to receive death benefits under this article
	reaches the age of 19, the [qualified surviving] child may no longer
	participate in the division of the benefits, but the same
	undiminished [qualified surviving] child's share as determined by
	this section shall be paid to any remaining [qualified surviving]
	children who are qualified survivors who remain eligible to
	continue to receive death benefits.
	(o-1)  If benefits are no longer payable to the trust
	described in Subsection (n)(1) of this section in accordance with
	Subsection (n)(2) of this section, the benefits are divisible and
	payable to any remaining children who are qualified survivors who
	remain eligible to receive death benefits.
	(o-2)  If an unmarried child [under 19 years of age.
	However, a handicapped qualified surviving child may not be removed
	from participation in the division of benefits on reaching the age
	of 19 nor may the child be barred from original participation at any
	time after reaching the age of 19, and the payments shall continue
	for the duration of the handicap. If a qualified surviving child is
	not married and], after cessation of entitlement to death benefits
	[(]because of attainment of age 19[) but before age 23], becomes
	disabled before age 23 [handicapped], the child is entitled to
	participate in the division of death benefits under this article.
	Notwithstanding the preceding, all death benefits granted under
	this subsection are conditioned on the board finding that:
	(1)  the [qualified surviving] child is so physically
	or mentally disabled [handicapped], either congenitally or through
	injury suffered or disease contracted, as to be unable to be
	self-supporting or to secure and hold gainful employment or pursue
	an occupation;
	(2)  the [qualified surviving] child is not married;
	(3)  the disability [handicap] was not the result of an
	occupational injury for which the [qualified surviving] child
	received compensation equal to or greater than that provided under
	this article;
	(4)  the disability [handicap] was not the result of an
	intentional self-inflicted injury or a chronic illness itself
	resulting from an addiction of the [qualified surviving] child
	through a protracted course of [noncoerced] indulgence in alcohol,
	narcotics, or other substance abuse that was not coerced; and
	(5)  the disability [handicap] did not occur as a
	result of the [qualified surviving] child's participation in the
	commission of a felony.
	(p)  If a [handicapped qualified surviving] child with a
	disability received or is receiving workers' compensation
	resulting from an occupational injury equal to an amount less than
	the death benefit to be provided under this section, the difference
	shall be paid out of the assets of the fund in the form otherwise
	payable as monthly benefits. For purposes of Subsections
	[Subsection] (o), (o-1), and (o-2) of this section, if a lump sum is
	awarded for an injury, the fund's actuary may compute a
	corresponding monthly equivalent. A finding relating to a
	[qualified surviving] child's disability [handicap] is subject to
	periodic review and modification by the board.
	(q)  On the death or marriage of a [qualified surviving]
	child granted death benefits under this article, the death benefits
	shall cease being paid to that child; however, the same
	undiminished [qualified surviving] child's share as determined by
	this section shall be uniformly distributed among any remaining
	unmarried [qualified surviving] children who are:
	(1)  under 19 years of age; or
	(2)  disabled [and any unmarried qualified surviving
	children who are handicapped] as described by Subsection (o-2)
	[(o)] of this section and entitled to death benefits as qualified
	survivors.
	(r)  A spouse of a primary party who married the primary
	party [resulting from any marriage to a former member or pensioner]
	after the date the primary party terminated [member or pensioner
	leaves] active service is not a qualified survivor [surviving
	spouse] and is [not] entitled only to those death benefits, if
	applicable, provided under Section 6.063 of this article.
	(t)  A [qualified] surviving spouse who first remarried on or
	after April 21, 1988, is eligible to receive death benefits for the
	remainder of the [qualified surviving] spouse's life provided the
	surviving spouse is a qualified survivor. This subsection may not
	be applied retroactively.
	(u)  The eligibility of a surviving spouse who first
	remarried before April 21, 1988, is governed by Section 6.061 of
	this article.
	(v)  The qualified survivors of a member who dies while
	performing qualified military service are entitled to any
	additional benefits, other than benefits relating to the qualified
	military service, that qualified survivors would have received if
	the member had returned from qualified military service the day
	before death, resumed employment, and then died.
	SECTION 1.37.  Part 6, Article 6243a-1, Revised Statutes, is
	amended by adding Sections 6.061, 6.062, 6.063, and 6.064 to read as
	follows:
	Sec. 6.061.  PROSPECTIVE REINSTATEMENT OF CERTAIN DEATH
	BENEFITS. (a)  Subject to Subsection (c) of this section, the
	surviving spouse of a primary party who was a member of the old
	plan, Plan A, or Plan B whose death benefits, also referred to as
	"survivor benefits" or "widow benefits," terminated because of a
	remarriage of the surviving spouse that occurred before April 21,
	1988, is entitled to receive death benefits, on a prospective basis
	only, as of the first day of the month following the month in which
	the executive director receives the application.
	(b)  The board shall make reasonable efforts to notify all
	known living surviving spouses who may be entitled to a
	reinstatement of benefits under this section.
	(c)  A surviving spouse's properly completed, board-approved
	application for reinstatement of death benefits under this section
	must be received by the executive director not later than the 180th
	day after the date the board completes, as determined by the board,
	the reasonable efforts required by Subsection (b) of this section.
	(d)  A surviving spouse's application for reinstatement of
	death benefits under this section constitutes the spouse's waiver
	of any claims against the pension system, the board, the executive
	director, or any other employee of the board or the pension system
	arising out of any claim for death benefits.
	(e)  This section may not be applied retroactively. A
	surviving spouse may not receive death benefits attributable to
	periods before the executive director's receipt of a properly
	completed and board-approved application, and any benefit provided
	to a surviving spouse described in this section must be calculated
	as if the benefits had not terminated on the surviving spouse's
	remarriage notwithstanding the fact the reinstatement of benefits
	is not retroactive.
	Sec. 6.062.  LUMP-SUM PAYMENT ON DEATH OF CERTAIN MEMBERS.
	(a) If an unmarried member dies while on active service and before
	beginning participation in DROP, the last person to receive
	benefits as the member's qualified survivor or, if the member does
	not have a qualified survivor living, the member's designee, shall
	be paid a lump-sum payment determined in accordance with this
	section if, at the time of the member's death, the member:
	(1)  had no qualified survivors; or
	(2)  only had qualified survivors who are children who
	become ineligible to receive death benefits before the benefits
	were paid for at least 120 consecutive months.
	(b)  The amount of the lump-sum payment under this section is
	the greater of:
	(1)  the payment that could have been provided under
	Section 6.06(m) of this article; or
	(2)  an amount equal to the actuarial equivalent of the
	remainder of the monthly benefits that would have been paid for the
	period from the last monthly benefit payment to the end of the 120
	months, starting with the date of the first monthly benefit
	payment, if any.
	(c)  If no death benefit payments have been made with respect
	to the member, the amount of a monthly death benefit payment shall
	be considered to be the monthly death benefit that would have been
	paid if the member had died leaving only one dependent parent who
	was a qualified survivor.
	(d)  If a qualified survivor or designee is entitled to
	payment under both this section and Section 6.06(m) of this
	article, payments shall be made only under this section.
	(e)  The payment required under this section shall be made as
	soon as practicable after the later of the date:
	(1)  of the death of the member; or
	(2)  the last qualified survivor becomes ineligible to
	receive monthly death benefit payments.
	Sec. 6.063.  AUTHORITY TO ELECT CERTAIN ACTUARIALLY REDUCED
	BENEFITS. (a) The board shall adopt policies under which a member
	who is leaving active service or a pensioner may elect to accept
	actuarially reduced benefits to provide the following optional
	benefits:
	(1)  a 100 percent joint and survivor annuity with the
	member's or pensioner's spouse;
	(2)  a 50 percent joint and survivor annuity with a
	spouse who is not a qualified survivor because the marriage to the
	pensioner occurred after the pensioner terminated active service,
	provided the election is made not later than one year after the date
	of the marriage; or
	(3)  a death benefit for a child who is not a qualified
	survivor because the child was born or adopted after the member left
	active service, but only if the child:
	(A)  is a dependent of the pensioner, within the
	meaning of Section 152(a)(1) of the code; and
	(B)  has not attained 18 years of age at the time
	of the election.
	(b)  An election under this section may not be revoked by the
	member or pensioner after it is filed with the pension system.
	(c)  Notwithstanding any other provision of this article, an
	election under this section shall result in benefits being paid as
	prescribed by this section instead of as prescribed by Section
	6.01, 6.02, 6.04, 6.05, 6.07, or 6.08 of this article, as
	applicable.
	(d)  A pensioner who desires to make an election under
	Subsection (a)(1) of this section after having made an election
	under Subsection (a)(2) of this section shall incur a second
	actuarial reduction in benefits to pay for the increased survivor
	annuity.
	(e)  Except as provided by Subsection (f) of this section, a
	person is not entitled to the payment of benefits under this section
	with respect to a pensioner who makes an election after termination
	of active service and dies within one year after making the
	election, except the amount by which the pensioner's benefits were
	reduced are paid to the person who is entitled to receive payments
	under Section 6.064 of this article.
	(f)  Subsection (e) of this section does not apply to a
	person who makes an election under Subsection (a)(1) of this
	section to receive a 100 percent joint and survivor annuity with a
	spouse who is a qualified survivor at the time:
	(1)  the board grants a retirement pension; or
	(2)  a retirement pension would have been granted but
	for the fact that the person elected to participate in DROP after
	retirement.
	(g)  The actuarially reduced benefits being paid to the
	pensioner under this section will not be increased if the spouse
	dies before the pensioner, or if the child attains 19 years of age
	before the pensioner dies.
	(h)  The joint and survivor annuity or the pensioner's
	pension and child's death benefit payable under this section is the
	actuarial equivalent of the pension and death benefits, if any,
	that would have been payable, at the time of the election, if the
	election had not been made. On the death of the pensioner:
	(1)  the surviving spouse of a pensioner who made an
	election under Subsection (a)(1) of this section receives a pension
	that is equal to the reduced pension being received by the pensioner
	at the time of death; and
	(2)  a surviving spouse who is not a qualified survivor
	of a pensioner who made an election under Subsection (a)(2) of this
	section receives a pension that is 50 percent of the reduced pension
	being received by the pensioner at the time of death.
	(i)  A pensioner and surviving spouse receiving a death
	benefit payable under this section are eligible for adjustments
	under Sections 6.12 and 6.13 of this article, if the pensioner or
	surviving spouse, as applicable, is otherwise entitled to those
	adjustments, except that in each case the adjustment shall be
	calculated so that the total pension or death benefit paid is
	reduced by the same percentage the pensioner's pension is otherwise
	reduced under this section.
	(j)  A pensioner and surviving spouse receiving a death
	benefit payable under this section are not entitled to the minimum
	benefits provided under Section 6.10A, 6.10B, or 6.11 of this
	article.
	(k)  A surviving spouse receiving a death benefit payable
	under this section is not entitled to the special death benefit
	provided under Section 6.09 of this article.
	(l)  During a period in which there are two or more qualified
	survivors of a member who has made a joint and survivor annuity
	election under this section, the spousal benefit will be divided
	among the eligible survivors under Section 6.07 or 6.08 of this
	article, as applicable.
	(m)  A child's death benefit elected under Subsection (a)(3)
	of this section is treated the same way as a death benefit to a child
	who is a qualified survivor, except that it is based on the
	actuarially reduced pension.
	Sec. 6.064.  DESIGNEES. (a) A member, pensioner, or
	qualified survivor may at any time designate, in writing, one or
	more persons as a designee to receive any lump-sum payment due from
	the pension system on the death of the member, pensioner, or
	qualified survivor, as applicable.
	(b)  A designation under this section of a person other than
	the spouse of the member, pensioner, or qualified survivor, as
	appropriate, must be made with the written consent of the spouse, if
	the individual has a spouse.
	(c)  A designation made under this section:
	(1)  may be revoked or changed at any time; and
	(2)  is void if the person designated dies or goes out
	of existence before the payment is made.
	(d)  If a member, pensioner, or qualified survivor
	designates a spouse to receive a payment and the parties are later
	divorced, the designation is void at the time of the divorce unless
	ratified in writing at the time of the divorce or after that time.
	(e)  A designation by a member under this section is void at
	the time the member becomes a pensioner unless ratified in writing
	at the time the member becomes a pensioner or after that time.
	(f)  If a member, pensioner, or qualified survivor does not
	have a valid designee on file with the pension system at the time of
	death, the designee is:
	(1)  the spouse;
	(2)  the qualified survivors, if any, if there is no
	spouse;
	(3)  the estate of the person, if there is no spouse or
	qualified survivors; or
	(4)  the heirs of the person, if there is no spouse,
	qualified survivors, or estate.
	SECTION 1.38.  Sections 6.07, 6.08, 6.09, and 6.10A, Article
	6243a-1, Revised Statutes, are amended to read as follows:
	Sec. 6.07.  GROUP A DEATH BENEFITS. (a)(1) If a Group A
	member dies before leaving active service [retirement] and before
	the Group A member had [has] 20 years of pension service, the Group
	A member's [leaving both a qualified surviving] spouse and
	[qualified surviving] children who are [, the] qualified [surviving
	spouse shall make an election for all] survivors shall, in the
	aggregate, [to] receive a Group A death benefit [consisting in the
	aggregate of an amount] equal to a Group A retirement pension
	computed under the terms of Section 6.01 of this article as if the
	Group A member had completed 20 years of pension service. [An
	election under this subdivision, once made, is irrevocable. This
	Group A death benefit shall be divided one-half to the qualified
	surviving spouse and one-half to the qualified surviving children.]
	(2)  If a Group A [pensioner dies during disability
	retirement and before the Group A pensioner had 20 years of pension
	service, leaving both a qualified surviving spouse and qualified
	children, the survivors in the aggregate shall receive a Group A
	death benefit calculated either under Sections 6.01(b) and (c) of
	this article if the Group A pensioner's Group A disability pension
	was calculated under Section 6.04(a) of this article, or under
	Section 6.01(e) of this article if the Group A pensioner's Group A
	disability pension was calculated under Section 6.04(b) of this
	article. This Group A death benefit shall be divided one-half to
	the qualified surviving spouse and one-half to the qualified
	surviving children.
	[(b)(1)  If a Group A member or former Group A] member dies
	before service retirement and after the Group A member has [or
	former Group A member has] 20 years of pension service, the Group A
	member's [leaving both a qualified surviving] spouse and [qualified
	surviving] children[,] who are [the] qualified [surviving spouse
	shall make an election for all] survivors shall, in the aggregate,
	[to] receive a Group A death benefit calculated under Section 6.01
	of this article as if the Group A member [of an amount equal to a
	Group A retirement pension the Group A member or former Group A
	member would have received] had [the person] left active service on
	the date of the [death, computed under the terms of Section 6.01 of
	this article. An election under this subdivision, once made, is
	irrevocable. This] Group A member's death [benefit shall be
	divided one-half to the qualified surviving spouse and one-half to
	the qualified surviving children].
	(3)  If a Group A pensioner dies during service
	retirement, the Group A pensioner's spouse and children who are
	qualified survivors shall, in the aggregate, receive a Group A
	death benefit in an amount equal to the Group A retirement pension
	being received by the Group A pensioner on the date of the
	pensioner's death.
	(4)  If a Group A pensioner dies after November 25,
	1996, while receiving periodic disability compensation under
	Section 6.05 of this article or a disability pension under Section
	6.04 of this article, and before the Group A pensioner has 20 years
	of pension service, the Group A pensioner's spouse and children who
	are qualified survivors shall, in the aggregate, receive a Group A
	death benefit calculated under Section 6.04 or 6.05 of this
	article, as applicable, in the same manner as the Group A
	pensioner's periodic disability compensation or disability
	pension, but as if the Group A pensioner had completed 20 years of
	pension service.
	(5)  [(2)(A)] If a Group A pensioner who has 20 or more
	years of pension service dies during disability retirement, the
	Group A pensioner's spouse and children who are qualified survivors
	shall, in the aggregate, [dies leaving both a qualified surviving
	spouse and qualified surviving children, the qualified surviving
	spouse shall make an election for all survivors to] receive a Group
	A death benefit in an [the] amount equal to [of] the Group A
	disability [retirement] pension being received by the Group A
	pensioner on the date of the pensioner's death.
	(b)  [before the person's death. This] Group A death
	benefits under Subsection (a) of this section [benefit] shall:
	(1)  be divided one-half to the [qualified surviving]
	spouse and one-half to the [qualified surviving] children who are
	qualified survivors; and [.]
	(2)  subject to [(B) With] the terms of Sections
	[exception of those circumstances described by Section] 6.06(n),
	(o), (o-1), and (o-2) of this article, be distributed in an equal
	and uniform manner to the children described by Subdivision (1) of
	this subsection [the Group A death benefits awarded to the
	qualified survivors under this subsection shall be paid entirely to
	the qualified surviving spouse and the qualified surviving
	children. The qualified surviving children's one-half share shall
	be equally and uniformly distributed by the qualified surviving
	spouse to them].
	(c) [(c)(1)]  If a Group A member or pensioner [former Group
	A member] dies leaving no [qualified surviving] spouse or
	[qualified surviving] children who are qualified survivors, the
	[but leaves surviving one or both qualified surviving dependent
	parents, the qualified surviving] dependent parents who are
	qualified survivors shall [may elect to] receive a Group A death
	benefit equal to the death benefit otherwise payable under
	Subsection (a) of this section. The death benefit payable to the
	dependent parents under this subsection shall be divided equally
	between the parents regardless of whether the parents are married
	or living at the same residence. [Group A retirement pension the
	Group A member or former Group A member would have been entitled to
	under Section 6.01 of this article after leaving active service. If
	there are two qualified dependent parents, the election must be
	mutual. An election under this subdivision, once made, is
	irrevocable. The qualified surviving dependent parents of a Group
	A pensioner shall receive a Group A death benefit equal to the
	amount of the actual Group A retirement pension being received at
	the time of the pensioner's death, divided equally between the
	qualified surviving dependent parents.
	[(2) If a Group A pensioner dies during disability
	retirement and before the Group A pensioner had 20 years of pension
	service, leaving no qualified surviving spouse or qualified
	surviving children, but leaves surviving one or both qualified
	surviving dependent parents, the qualified surviving dependent
	parents may elect to receive a Group A death benefit calculated
	either: under Sections 6.01(b) and (c) of this article if the Group
	A pensioner's Group A disability pension was calculated under
	Section 6.04(a) of this article, or under Section 6.01(e) of this
	article if the Group A pensioner's Group A disability pension was
	calculated under Section 6.04(b) of this article. An election
	under this subdivision, once made, is irrevocable.
	[(d)]  If there is only one [qualified surviving] dependent
	parent, that [the] parent is entitled to one-half of the death
	benefit described in [amount determined under Subsection (c)(1) or
	(c)(2) of] this subsection [section].
	Sec. 6.08.  GROUP B DEATH BENEFITS. (a) If a Group B member
	dies while on active service, a [former] Group B member who left
	active service and is vested under Section 5.06 of this article
	dies, or a Group B pensioner dies while receiving [on] service or
	disability retirement or while receiving periodic disability
	compensation under Section 6.05 of this article, the person's
	qualified survivors, or the person described in Section 6.06(g) or
	(j) of this article as the recipient of the children's benefits
	[guardian of the qualified surviving children if no qualified
	surviving spouse exists], may make application for Group B death
	benefits. If the deceased [The qualified surviving spouse of a
	Group B member or former Group B member described by this
	subsection, the guardian of the qualified surviving children of the
	person if no qualified surviving spouse exists, or the qualified
	dependent parents if no qualified surviving spouse or qualified
	surviving children exist, have the option to select whether Group A
	or Group B death benefits are received, if the Group B member or
	former] Group B member was previously eligible to elect whether to
	receive either a Group A or Group B retirement pension, the option
	to elect whether Group A or Group B death benefits are received
	shall be exercised by one of the following:
	(1)  a qualified survivor who is the spouse of the
	deceased Group B member described by this subsection;
	(2)  the person described in Section 6.06(g) or (j) of
	this article as the recipient of benefits on behalf of the deceased
	member's children who are qualified survivors, if no spouse is a
	qualified survivor; or
	(3)  the qualified survivors who are dependent parents
	of the deceased member, if there is neither a spouse nor children
	who are qualified survivors.
	(a-1)  A qualified survivor who receives Group A death
	benefits under Subsection (a) of this section [subsection] is
	entitled to a ratable portion of a reimbursement from the fund in
	the same amount and manner determined under Section 5.03(d) of this
	article. A qualified survivor or guardian desiring a refund of
	excess contributions must make application for the refund with the
	executive director [administrator] within three years after the
	date the qualified survivor or guardian makes application for Group
	A death benefits. The option contained in this subsection is not
	available to qualified survivors of a Group B member [or former
	Group B member] who had, at the time of death, already applied for a
	retirement pension and selected a Group A retirement pension as
	provided by Section 5.03(c) or (c-1) of this article, but the
	qualified survivors are entitled to receive a Group A death
	benefit.
	(b)  Subject to Subsection (b-2) of this section, death
	[Death] benefits shall be computed as follows for the qualified
	survivors of Group B members who die while on active service:
	(1)  the [A qualified surviving spouse's Group B] death
	benefit of a qualified survivor who is the spouse of a member who
	began active service:
	(A)  before March 1, 2011, shall be the sum of:
	(i)  the number of years of pension service
	earned before September 1, 2017, prorated for fractional years,
	times 1.5 percent of the [computed at the rate of 1.5 percent of the
	Group B member's] average computation pay determined over the 36
	[60] consecutive months of pension service in which the Group B
	member received the highest computation pay; plus
	(ii)  the number of [, for each year, and
	prorated for fractional years, of pension service with a minimum of
	20] years of pension service, including pension service credit
	imputed under Section 6.05(c) of this article, after September 1,
	2017, prorated for fractional years, times the applicable
	percentage rate set forth below [assumed, or 30 percent] of the
	average computation pay determined over the 60 consecutive months
	of pension service in which the Group B member received the highest
	computation pay:
	Age of Member When Retirement Pension Begins Percent
	58 and older 1.25%
	57 1.2%
	56 1.15%
	55 1.10%
	54 1.05%
	53 and younger 1.0%; or
	(B)  on or after March 1, 2011, shall be the number
	of years of pension service, including pension service imputed
	under Section 6.05(c) of this article, prorated for fractional
	years, times 1.25 percent of the average computation pay determined
	over the 60 consecutive months of pension service in which the Group
	B member received the highest computation pay;
	(2)  the death benefit of qualified survivors who are a
	member's children shall be computed in the same manner as a spouse's
	benefit is computed under Subdivision (1)(A) or (B) of this
	subsection, as applicable, and shall be divided equally among all
	of the children who are qualified survivors; and
	(3)  the death benefit of each qualified survivor who
	is a member's dependent parent shall be computed in the same manner
	as a spouse's Group B benefit is computed under Subdivision (1)(A)
	or (B) of this subsection, as applicable.
	(b-1)  Pension service for purposes of the calculation under
	Subsection (b) of this section may not be less than 20 years. Any
	partial year of pension service for the first 20 years of pension
	service is counted as a full year of pension service, if the member
	was considered by the member's department to have worked a normal
	full-time schedule at the time of the member's death.
	(b-2)  The death benefit calculated under Subsection (b) of
	this section may not exceed the greater of:
	(1)  45 [a computation for 32 years of pension service,
	or 48] percent of the member's average computation pay determined
	over the 36 or 60 consecutive months, as applicable, in which the
	Group B member received the highest computation pay; or
	(2)  the vested and accrued death benefit as determined
	on August 31, 2017.
	(b-3)  For purposes of Subsections (b) through (b-2) of this
	section:
	(1)  if [If] the Group B member had less than 36 or 60
	consecutive months, as applicable, [five years] of pension service,
	the average computation pay will be computed based on the person's
	entire pension service; and
	(2)  days during which the member earned no pension
	service due to a termination of active service or otherwise must be
	disregarded in determining the 36 or 60 consecutive months of
	highest computation pay.
	[(2)     A qualified surviving child's Group B death
	benefit shall be computed in the same manner as a qualified
	surviving spouse's benefit is computed under Subdivision (1) of
	this subsection and shall be divided equally among all of the
	qualified surviving children.
	[(3)     Each qualified surviving dependent parent's Group
	B death benefit shall be computed in the same manner as a qualified
	surviving spouse's Group B benefit is computed under Subdivision
	(1) of this subsection.]
	(c)  Group B death benefits shall be computed as follows for
	the qualified survivors of any [former] Group B member who died
	after leaving active service and who had vested rights under
	Section 5.06 of this article but who had not received [Group B]
	retirement benefits [under Section 6.02 of this article] at the
	time of death:
	(1)  the death benefit of a [The] qualified survivor
	who is the member's [surviving] spouse [of the former Group B
	member] is [entitled to a Group B death benefit] equal to 50 percent
	of any [Group B] retirement pension the [former Group B] member
	would have been entitled to [under Section 6.02 of this article] as
	of the date the [former Group B] member left active service;[.]
	(2)  the death benefits of [The] qualified survivors
	who are the member's [surviving] children [of the former Group B
	member] are [entitled to a Group B benefit] calculated in the same
	manner as the spouse's benefit is computed under Subdivision (1) of
	this subsection [Group B death benefit of a qualified surviving
	spouse], to be divided equally between the [qualified surviving]
	children; and[.]
	(3)  the death benefit of each [Each of the] qualified
	survivor who is the member's [surviving] dependent parent [parents
	of the former Group B member] is [entitled to a Group B death
	benefit] equal to 50 percent of any [Group B] retirement pension the
	[former Group B] member would have been entitled to [under the
	provisions of Section 6.02 of this article] as of the date the
	[former Group B] member left active service.
	(d)  Group B death benefits shall be computed as follows for
	the qualified survivors of any Group B pensioner [of this plan] who
	dies while receiving service [a Group B] retirement [pension]:
	(1)  the death benefit of a [The] qualified [surviving]
	survivor who is the pensioner's spouse [of a Group B pensioner] is
	[entitled to Group B death benefits] equal to 50 percent of any
	retirement pension the Group B pensioner was receiving at the time
	of death;[.]
	(2)  the death benefits of qualified survivors who are
	the pensioner's [The qualified surviving] children [of a Group B
	pensioner] are [entitled to a Group B death benefit] calculated in
	the same manner as the spouse's benefit is computed under
	Subdivision (1) of this subsection [Group B death benefit of a
	qualified surviving spouse], to be divided equally between the
	[qualified surviving] children; and[.]
	(3)  the death benefit of each [Each of the] qualified
	survivor who is the pensioner's [surviving] dependent parent
	[parents of a Group B pensioner] is [entitled to a Group B death
	benefit] equal to 50 percent of any retirement pension the Group B
	pensioner was receiving at the time of death.
	(e)  Group B death benefits shall be computed as follows for
	the qualified survivors of any Group B pensioner who dies while
	receiving disability retirement or while receiving periodic [a
	Group B] disability compensation under Section 6.05 of this article
	[pension due to either a service-connected or nonservice-connected
	disability]:
	(1)  the death benefit of a [The] qualified survivor
	who is the pensioner's [surviving] spouse [of the Group B
	pensioner] is [entitled to the greater of a Group B death benefit]
	equal to 50 percent of any Group B periodic disability compensation
	or disability pension the Group B pensioner would have been
	entitled to [under Section 6.05 of this article] as of the date the
	Group B pensioner left active service because of disability, or a
	Group B death benefit equal to 50 percent of any periodic disability
	compensation or [Group B] disability pension the Group B pensioner
	was receiving at the time of death;[.]
	(2)  the death benefits of [The] qualified survivors
	who are the pensioner's [surviving] children [of the Group B
	pensioner] are [entitled to a Group B death benefit] calculated in
	the same manner as the spouse's [Group B death] benefit is computed
	under Subdivision (1) of this subsection [of a qualified surviving
	spouse], to be divided equally between the [qualified surviving]
	children; and[.]
	(3)  the death benefit of each [Each of the] qualified
	survivor who is the pensioner's [surviving] dependent parent
	[parents of the Group B pensioner] is [entitled to the greater of a
	Group B death benefit] equal to 50 percent of any periodic
	disability compensation or disability pension the Group B pensioner
	would have been entitled to [under Section 6.05 of this article] as
	of the date the Group B pensioner left active service because of
	disability, or a Group B death benefit equal to 50 percent of any
	periodic disability compensation or [Group B] disability pension
	the Group B pensioner was receiving at the time of death.
	Sec. 6.09.  QUALIFIED SURVIVING SPOUSE SPECIAL DEATH
	BENEFIT. (a) A person who is the [Notwithstanding Sections 6.06
	and 6.07 of this article, the qualified surviving] spouse of a Group
	A primary party, who is a qualified survivor, and who is entitled to
	death benefits under Sections 6.06, 6.061, 6.062, 6.063, and 6.07
	of this article is also entitled to a special death benefit under
	this section if:
	(1)  the Group A primary party:
	(A)  [elected to receive a Group A retirement
	pension and later died, was receiving a disability or retirement
	pension either under the terms of Plan A before the original
	enactment of this article or elected to receive a Group A retirement
	pension under Sections 6.01(e), (f), and (g) of this article and
	later died, or was receiving a Group A disability pension under
	Section 6.04(c) of this article and later died;
	[(2) the Group A primary party (i)] had at least 20
	years of pension service, [and] left active service after October
	1, 1985, and was at least 55 years of age on the earlier of the date
	the primary party:
	(i)  left active service; or
	(ii)  began participation in DROP [or
	older]; or
	(B)  had [(ii) on or after May 1, 1990, the Group A
	primary party, after accruing] at least 20 years of pension
	service, left active service on or after May 31, 2000, and on the
	earlier of the date the primary party left active service or began
	participation in DROP, [and] had a total of at least 78 [80]
	credits, with each year of pension service, prorated for fractional
	years, equal to one credit and with each year of age, prorated for
	fractional years, equal to one credit; or [and]
	(2)  the [(3) the qualified surviving] spouse has
	attained 55 years of age and there are no [qualified surviving]
	children who are qualified survivors eligible for death benefits.
	(b)  Until the requirements of Subsection (a) of this section
	are satisfied, a qualified survivor who is the spouse of a Group A
	primary party [surviving spouse] shall receive a Group A death
	benefit in accordance with Section 6.07 of this article.
	(c)  The special Group A death benefit under Subsection (a)
	of this section is calculated based on the following formula:
	(P x P x A) + (P x C) + D, where
	A = base pay at the time the Group A primary party began
	participation in DROP, begins service retirement, dies, or becomes
	disabled, plus longevity pay, plus one-twelfth of last-received
	city service incentive pay;
	B = Group A primary party's benefit calculated at the time the
	Group A primary party began participation in DROP, begins service
	retirement, dies, or becomes disabled;
	P = B/A (expressed as a percentage or a decimal);
	C = the number of adjustments made to a Group A primary
	party's [Group A] retirement pension, disability pension, or
	periodic [Group A] disability compensation, [pension under Section
	6.04 of this article] multiplied by the amount of the adjustments;
	and
	D = the number of adjustments made under this article to the
	[a qualified surviving spouse's] Group A death benefit of a spouse
	who is a qualified survivor under Section 6.07 of this article,
	multiplied by the amount of the adjustments.
	(d)  A person who is the [Notwithstanding Sections 6.03 and
	6.05 of this article, a qualified surviving] spouse of a Group B
	primary party, who is a qualified survivor, and who is entitled to
	any death benefits under Sections 6.06, 6.061, 6.062, 6.063, and
	[or] 6.08 of this article is also entitled to a special benefit
	under this section if:
	(1)  the Group B primary party [elected to receive a
	Group B retirement pension and later died, or was receiving a Group
	B disability or retirement pension under this article and died;
	[(2) the Group B primary party]:
	(A)  had at least 20 years of pension service,
	left active service after October 1, 1985, and was at least 55 years
	of age at the earlier of the date the primary party left [time of
	leaving] active service or began participation in DROP; or
	(B)  on or after May 31, 2000 [1, 1990], [the Group
	B primary party] left active service or began participation in
	DROP, whichever was earlier, having a total of at least 78 [80]
	credits, with each year of pension service, prorated for fractional
	years, equal to one credit and with each year of age, determined at
	the time the Group B primary party left active service or began
	participation in DROP, prorated for fractional years, equal to one
	credit; or [and]
	(2) [(3)]  the [qualified surviving] spouse has
	attained 55 years of age, and there are no [qualified surviving]
	children of the primary party who are qualified survivors.
	(d-1)  Until the requirements of Subsection (d) [(c)] of this
	section are satisfied, a spouse who is a qualified survivor
	[surviving spouse] may only receive a Group B death benefit in
	accordance with Sections 6.06, 6.061, 6.062, 6.063, [6.03] and 6.08
	[6.05] of this article.
	(e)  The [This] special Group B death [survivor] benefit
	under Subsection (d) of this section is calculated based on the
	following formula:
	(P x P x A) + (P x C) + D, where
	A = average monthly computation pay at the time the Group B
	primary party begins service retirement, dies, [or] becomes
	disabled, or begins participation in DROP;
	B = the Group B primary party's benefit [Group B retirement or
	Group B disability pension] calculated at the time the Group B
	primary party begins participation in DROP, begins to receive
	service [or disability] retirement, [or] dies, or becomes disabled;
	P = B/A (expressed as a percentage or a decimal);
	C = the number of post-retirement [postretirement]
	adjustments made to a Group B primary party's [Group B] retirement
	pension, disability pension, or periodic [Group B] disability
	compensation [pension under Section 6.05 of this article]
	multiplied by the amount of the adjustments; and
	D = the number of adjustments made to the [a qualified
	surviving spouse's] Group B death benefit of a qualified survivor
	who is the primary party's spouse under Section 6.08 of this article
	multiplied by the amount of the adjustments.
	Sec. 6.10A.  MINIMUM BENEFITS TO CERTAIN GROUP A PRIMARY
	PARTIES WHO WERE GROUP A, OLD PLAN, OR COMBINED PENSION PLAN MEMBERS
	[ELECT TO RECEIVE RETIREMENT PENSION UNDER SECTIONS 6.01(B) AND
	(C)] AND THEIR QUALIFIED SURVIVORS. (a) Except as provided by
	Section 6.063 of this article or Subsections (b) and (h) of this
	section and notwithstanding any benefit computation and
	determination to the contrary contained in this article, the
	minimum Group A benefits provided by this section shall be paid to
	any Group A primary party who elects to receive a Group A retirement
	pension under Sections 6.01(b) and (c) of this article, the old
	plan, or former Section 14(a) of this article, or to the primary
	party's qualified survivors [. The benefits under this section
	shall be distributed in accordance with Sections 6.01(b) and (c),
	6.04(a), or 6.07 of this article, as applicable], except that a
	Group A primary party who elects to receive an actuarially reduced
	[Group A retirement pension because of the primary party's request
	to receive a Group A] retirement pension before 50 years of age and
	the primary party's qualified survivors are not entitled to the
	[Group A] minimum benefits specified under this section. An
	alternate payee is not entitled to the Group A minimum benefits
	specified in this section.
	(b)  A Group A primary party who elects to receive a Group A
	retirement pension under Sections 6.01(b) and (c) of this article,
	the old plan, or former Section 14(a) of this article and who left
	active service with 20 or more years of pension service is entitled
	to receive a minimum Group A retirement pension of $2,200 [$1,500] a
	month. [If the Group A primary party's Group A retirement pension
	is subject to a qualified domestic relations order and the sum of
	the actuarial equivalents of the monthly benefits payable to the
	Group A primary party and the alternate payee is less than the
	actuarial equivalent of the minimum monthly Group A retirement
	pension described by this subsection, the Group A primary party's
	monthly Group A retirement pension will be increased so that the sum
	of the actuarial equivalents of the alternate payee's and the Group
	A primary party's monthly Group A retirement pension equals the
	actuarial equivalent of the minimum monthly Group A retirement
	pension calculated under this subsection.]
	(c)  In the absence of children who are [A] qualified
	survivors, a [surviving] spouse who is a qualified survivor of a
	Group A primary party who elected to receive a Group A retirement
	pension under Sections 6.01(b) and (c) of this article, the old
	plan, or former Section 14(a) of this article will receive a minimum
	monthly Group A death benefit of $1,200 [$750].
	(d)  A spouse who is a qualified survivor [surviving spouse]
	of a Group A primary party who elected to receive a Group A
	retirement pension under Sections 6.01(b) and (c) of this article,
	the old plan, or former Section 14(a) of this article will receive,
	if there are children who are qualified survivors [surviving
	children], a minimum Group A death benefit of $1,100 [$750] a month.
	[The qualified surviving children, as a group, will receive a
	minimum Group A death benefit of $750 a month, to be divided equally
	among them.]
	(e)  In the absence of a spouse who is a qualified survivor
	[surviving spouse] of a Group A primary party who elected to receive
	a Group A retirement pension under Section [Sections] 6.01(b),
	[and] (c), or (e) of this article, the old plan, or former Section
	14(a) of this article, the primary party's children who are
	qualified survivors [surviving children], as a group, will receive
	a minimum Group A death benefit of $1,100 [$750] a month, to be
	divided equally among them.
	(f)  If there is neither a [In the absence of both a qualified
	surviving] spouse nor a child who is a [and] qualified survivor
	[surviving children] of a Group A primary party who elected to
	receive a Group A retirement pension under Sections 6.01(b) and (c)
	of this article, the old plan, or former Section 14(a) of this
	article, each [qualified surviving] dependent parent who is a
	qualified survivor will receive a minimum Group A death benefit of
	$1,100 [$750] a month. If only one of them is surviving, that [the
	qualified surviving] dependent parent will receive a minimum Group
	A death benefit equal to $1,100 [$750] a month.
	(g)  Notwithstanding the minimum monthly benefit described
	in other subsections of this section, a Group A primary party who
	receives periodic disability compensation under Section 6.05(b) of
	this article or a Group A disability pension under Section 6.04(a)
	of this article, the old plan, or former Section 17(a) of this
	article, [calculated in the same manner as a Group A retirement
	pension under Sections 6.01(b) and (c) of this article,] shall
	receive a minimum Group A disability pension equal to $2,200
	[$1,500] a month.
	(h)  If a Group A pensioner who received a monthly benefit
	under Section 6.05(b-1) of this article or a disability pension
	under Section 6.04(a) of this article, calculated in the same
	manner as a Group A retirement pension under Sections 6.01(b) and
	(c) of this article, the old plan, or former Section 17(a) of this
	article [primary party's disability pension is subject to a
	qualified domestic relations order and the sum of the actuarial
	equivalents of the monthly benefits payable to the Group A primary
	party and the alternate payee is less than the actuarial equivalent
	of the minimum monthly Group A disability pension determined under
	Subsection (g) of this section, the Group A primary party's minimum
	monthly Group A disability pension will be increased so that the sum
	of the actuarial equivalents of the alternate payee's and the Group
	A primary party's minimum monthly Group A disability pension equals
	the amount determined under Subsection (g) of this section.
	[(i)     If a Group A pensioner who received a disability under
	Section 6.04(a) of this article, calculated in the same manner as a
	Group A retirement pension under Sections 6.01(b) and (c) of this
	article] before the completion of 20 years of pension service dies,
	the qualified survivors will receive a minimum Group A death
	benefit as provided under Subsection (c), (d), (e), or (f) of this
	section, as applicable, whichever is greatest.
	SECTION 1.39.  The heading to Section 6.10B, Article
	6243a-1, Revised Statutes, is amended to read as follows:
	Sec. 6.10B.  MINIMUM BENEFITS TO CERTAIN GROUP A PRIMARY
	PARTIES WHO WERE GROUP A, PLAN A, OR COMBINED PLAN MEMBERS [ELECT TO
	RECEIVE RETIREMENT PENSION UNDER SECTION 6.01(E)] AND THEIR
	QUALIFIED SURVIVORS.
	SECTION 1.40.  Sections 6.10B(a), (b), (c), (d), (e), (f),
	(g), and (i), Article 6243a-1, Revised Statutes, are amended to
	read as follows:
	(a)  Except as provided by Section 6.063 of this article and
	Subsection [Subsections] (b) [and (h)] of this section and
	notwithstanding any benefit computation and determination to the
	contrary contained in this article, the minimum Group A benefits
	provided by this section shall be paid to any Group A primary party
	who elects to receive a Group A retirement pension under Section
	6.01(e) of this article, Plan A, or former Section 14(b) of this
	article or to the primary party's qualified survivors[. The
	benefits under this section shall be distributed in accordance with
	Section 6.01(e), 6.04(b), or 6.07 of this article, as applicable],
	except that a Group A primary party who elects to receive an
	actuarially reduced Group A retirement pension [because of the
	primary party's request to receive a Group A retirement pension]
	before 55 years of age and the primary party's qualified survivors
	are not entitled to the [Group A] minimum benefits specified in
	[under] this section. An alternate payee is not entitled to the
	Group A minimum benefits specified in this section.
	(b)  A Group A primary party who elects [elected] to receive
	a Group A retirement pension under Section 6.01(e) of this article,
	Plan A, or former Section 14(b) of this article and who left active
	service with 20 or more years of pension service is entitled to
	receive a minimum [Group A] retirement pension equal to the greater
	of $2,200 [(i) $1,500] a month or [(ii)] $1,000 a month adjusted, if
	applicable, in the manner described by Section 6.12 [6.12(a)] of
	this article. [If the Group A primary party's Group A retirement
	pension is subject to a qualified domestic relations order and the
	sum of the actuarial equivalents of the monthly benefits payable to
	the Group A primary party and the alternate payee is less than the
	actuarial equivalent of the minimum monthly Group A retirement
	pension described by this subsection, the Group A primary party's
	monthly Group A retirement pension will be increased so that the sum
	of the actuarial equivalents of the alternate payee's and the Group
	A primary party's monthly Group A retirement pension equals the
	actuarial equivalent of the minimum monthly Group A retirement
	pension calculated under this subsection.]
	(c)  In the absence of children who are [A] qualified
	survivors, a [surviving] spouse who is a qualified survivor of a
	Group A primary party who elects [elected] to receive a Group A
	retirement pension under Section 6.01(e) of this article, Plan A,
	or former Section 14(b) of this article will receive a minimum
	monthly [Group A] death benefit equal to the greater of $1,200
	[(i)  $750] a month or [(ii)] $500 a month adjusted, if applicable,
	in the manner described by Section 6.12 [6.12(a)] of this article.
	(d)  A spouse who is a qualified survivor [surviving spouse]
	of a Group A primary party who elects to receive a Group A
	retirement pension under Section 6.01(e) of this article, Plan A,
	or former Section 14(b) of this article will receive, if there are
	children who are qualified survivors [surviving children], a
	minimum Group A death benefit equal to the greater of $1,100 [(i)
	$750] a month or [(ii)] $500 a month adjusted, if applicable, in the
	manner described by Section 6.12 [6.12(a)] of this article. The
	children who are qualified survivors [surviving children], as a
	group, will receive a minimum [Group A] death benefit equal to the
	greater of $1,100 [(iii) $750] a month or [(iv)] $500 a month
	adjusted, if applicable, in the manner described by Section 6.12
	[6.12(a)] of this article, to be divided equally among them.
	(e)  In the absence of a spouse who is a qualified survivor
	[surviving spouse] of a Group A primary party who elected to receive
	a Group A retirement pension under Section 6.01(e) of this article,
	Plan A, or former Section 14(b) of this article, the [the qualified
	surviving children of a Group A] primary party's children who are
	qualified survivors [party], as a group, will receive a minimum
	Group A death benefit equal to the greater of $1,100 [(i) $750] a
	month or [(ii)] $500 a month adjusted, if applicable, in the manner
	described by Section 6.12 [6.12(a)] of this article, to be divided
	equally among them.
	(f)  If there is neither a [In the absence of both a qualified
	surviving] spouse nor child who is a [and] qualified survivor
	[surviving children] of a Group A primary party who elected to
	receive a Group A retirement pension under Section 6.01(e) of this
	article, Plan A, or the former Section 14(b) of this article, each
	[qualified surviving] dependent parent who is a qualified survivor
	will receive a minimum Group A death benefit equal to the greater of
	$1,100 [(i) $750] a month or [(ii)] $500 a month adjusted, if
	applicable, in the manner described by Section 6.12 [6.12(a)] of
	this article. If only one of them is surviving, that [the qualified
	surviving] dependent parent will receive a minimum Group A death
	benefit equal to the greater of $1,100 [(iii) $750] a month or
	[(iv)] $500 a month adjusted, if applicable, in the manner
	described by Section 6.12 [6.12(a)] of this article.
	(g)  Notwithstanding the minimum monthly benefit as
	described in other subsections of this section, a Group A primary
	party who leaves active service on a non-service-connected
	[nonservice-connected] disability under Section 6.04(a)
	[6.04(b)(2)] of this article, Plan A, or former Section 17(b)(2) of
	this article with less than 20 years of pension service shall
	receive a minimum monthly Group A disability pension equal to the
	greater of $110 [(i) $75] multiplied by the number of years of the
	primary party's pension service or [(ii)] $50 multiplied by the
	number of years of the primary party's pension service, the product
	adjusted, if applicable, in the manner described by Section 6.12
	[6.12(a)] of this article.
	(i)  If a Group A pensioner who received a
	non-service-connected [nonservice-connected] disability pension
	under Section 6.04(a) [6.04(b)(2)] of this article, Plan A, or
	former Section 17(b)(2) of this article before the completion of 20
	years of pension service dies, the qualified survivors will each
	receive the amount specified in Section 6.07 of this article or the
	minimum [monthly] Group A death benefit as provided under
	Subsection (c), (d), (e), or (f) of this section, as applicable,
	whichever is greatest.
	SECTION 1.41.  Sections 6.11, 6.12, and 6.13,
	Article 6243a-1, Revised Statutes, are amended to read as follows:
	Sec. 6.11.  MINIMUM BENEFITS TO GROUP B PRIMARY PARTIES AND
	THEIR QUALIFIED SURVIVORS. (a) Except as provided by Section 6.063
	of this article or Subsections (b), (c), and (h) of this section and
	notwithstanding any benefit computation and determination to the
	contrary contained in this article, the minimum Group B benefits
	provided by this section shall be paid to any Group B primary party
	or the primary party's qualified survivors, except further that a
	Group B primary party who elects to receive an actuarially reduced
	[Group B] retirement pension, including a request for a benefit
	under Sections 6.02(c) and (d) of this article, [because of the
	primary party's request to receive the pension at or after age 45,
	but before age 50] and the primary party's qualified survivors[,]
	or [an] alternate payee [of the primary party], are not entitled to
	the Group B minimum benefits specified by this section.
	(b)  If a Group B primary party leaves active service with 20
	or more years of pension service, the Group B primary party is
	entitled to receive a Group B minimum retirement pension equal to
	the greater of $2,200 [(i) $1,500] a month or [(ii)] $925 a month,
	which sum may (A) increase at the rate of $5 a month for each year of
	pension service beyond 20 years, but the increase may not exceed $75
	and (B) be adjusted, if applicable, in the manner described by
	Section 6.12 [6.12(a)] of this article. [If a Group B primary
	party's Group B retirement pension is or becomes subject to a
	qualified domestic relations order and the sum of the actuarial
	equivalents of the monthly Group B retirement pension payable to
	the Group B primary party and the alternate payee is less than the
	actuarial equivalent of the minimum monthly Group B retirement
	pension as calculated under this subsection, the Group B primary
	party's monthly Group B retirement pension will be increased so
	that the sum of the actuarial equivalents of both the alternate
	payee's and the Group B primary party's Group B retirement pensions
	equals the actuarial equivalent of the minimum monthly Group B
	retirement pension as calculated under this subsection.]
	(c)  If a Group B primary party leaves active service with
	less than 20 years of pension service, the primary party is entitled
	to receive a minimum monthly Group B retirement pension equal to the
	greater of:
	(1)  $2,200 [(i) $1,500] a month divided by 20 and
	multiplied by the Group B primary party's number of years of pension
	service; or
	(2) [(ii)]  $925 a month divided by 20 and multiplied
	by the Group B primary party's number of years of pension service,
	which amount is then adjusted, if applicable, in the manner
	described by Section 6.12 [6.12(a)] of this article. [If a Group B
	primary party's retirement pension is or becomes subject to a
	qualified domestic relations order and the sum of the actuarial
	equivalents of the monthly Group B retirement pension payable to
	the Group B primary party and the alternate payee is less than the
	actuarial equivalent of the monthly retirement pension as
	calculated under this subsection, the Group B primary party's
	monthly Group B retirement pension will be increased so that the sum
	of the actuarial equivalents of the alternate payee's and the Group
	B primary party's monthly Group B retirement pensions equals the
	actuarial equivalent of the minimum monthly Group B retirement
	pension as calculated under this subsection.]
	(d)  In the absence of children who are qualified survivors,
	a spouse who is a [surviving children, the] qualified survivor
	[surviving spouse] of a Group B primary party will receive a minimum
	Group B death benefit equal to the greater of:
	(1)  $1,200 [(i) $750] a month; or
	(2) [(ii)]  $600 a month adjusted, if applicable, in
	the manner described by Section 6.12 [6.12(a)] of this article.
	(e)  A spouse who is a qualified survivor [surviving spouse]
	of a Group B primary party [will receive], if there are children who
	are qualified survivors [surviving children], will receive [the
	greater of a minimum Group B death benefit of 50 percent of the
	primary party's minimum monthly Group B retirement pension
	described by Subsection (b) or (c) of this section, whichever is
	applicable. The qualified surviving children, as a group, will
	receive the greater of] a minimum [monthly] Group B death benefit of
	$1,100 a month [50 percent of the minimum monthly Group B retirement
	pension described by Subsection (b) or (c) of this section,
	whichever is applicable, to be divided equally among them].
	(f)  The [In the absence of a qualified surviving spouse, the
	qualified surviving] children who are qualified survivors of a
	Group B primary party, as a group, will receive a minimum Group B
	death benefit equal to the greater of $1,100 [(i) $750] a month or
	[(ii)] $600 a month adjusted, if applicable, in the manner
	described by Section 6.12 [6.12(a)] of this article, to be divided
	equally between them.
	(g)  If there is neither a [In the absence of either a
	qualified surviving] spouse nor a child who is a [or] qualified
	survivor [surviving children], each [qualified surviving]
	dependent parent who is a qualified survivor of the deceased Group B
	primary party will receive a minimum death benefit of $1,100 a month
	[Group B minimum death benefit equal to the greater of 50 percent of
	the Group B primary party's minimum monthly Group B retirement
	pension described by Subsection (b) or (c) of this section,
	whichever is applicable. If only one qualified surviving dependent
	parent is surviving, the parent will receive a Group B minimum death
	benefit of 50 percent of the minimum monthly Group B retirement
	pension described by Subsection (b) or (c) of this section,
	whichever is applicable].
	(h)  Notwithstanding the minimum monthly [Group B]
	retirement pension otherwise described by this section, a Group B
	primary party who left active service on a non-service-connected
	[nonservice-connected] disability with less than 20 years of
	pension service will receive a minimum monthly [Group B] disability
	pension equal to the greater of $110 [(i) $75] multiplied by the
	number of years of the primary party's pension service or [(ii)]
	$46.25 multiplied by the number of years of the primary party's
	pension service, the product adjusted in the manner, if applicable,
	described by Section 6.12 [6.12(a)] of this article. [If the Group
	B primary party's Group B disability pension is or becomes subject
	to a qualified domestic relations order and the sum of the actuarial
	equivalents of the monthly Group B disability pension payable to
	the Group B primary party and the alternate payee is less than the
	actuarial equivalent of the monthly disability pension as
	calculated under this subsection, the Group B primary party's
	monthly Group B disability pension will be increased so that the sum
	of the actuarial equivalents of the alternate payee's and the Group
	B primary party's monthly Group B disability pensions equals the
	actuarial equivalents of the minimum monthly Group B disability
	pension as calculated under this subsection.] If a Group B primary
	party who was receiving a non-service-connected
	[nonservice-connected Group B] disability pension before the
	completion of 20 years pension service dies, the qualified
	survivors will receive the amount specified in Section 6.08 of this
	article, or the [Group B] minimum monthly death benefits granted to
	qualified survivors as provided by Subsections (d), (e), (f), and
	(g) of this section, as applicable, whichever is greater.
	Sec. 6.12.  ADJUSTMENTS TO RETIREMENT AND DISABILITY PENSION
	BENEFITS. (a) This section applies to the following benefits
	provided under this article:
	(1)  [Annually on the first day of October,] a
	retirement pension calculated under Section 6.01(e) [Section 6.01]
	or 6.02 of this article;
	(2) [,]  a disability pension calculated under Section
	6.04 of this article, other than under Section 6.04(a) of this
	article;
	(3)  periodic disability compensation benefit under
	Section [or] 6.05 of this article, other than Section 6.05(b-1) of
	this article; [,] or
	(4)  a death benefit calculated under:
	(A)  Section 6.07 of this article, if calculated
	in the manner of a retirement pension under Section 6.01(e) of this
	article or in the manner of a disability compensation benefit under
	Section 6.05(b) of this article; or
	(B)  Section 6.08 of this article currently in pay
	status, or pending board approval on the last day of September [,
	will be increased by an amount equal to four percent, not
	compounded, of the original amount of the retirement or disability
	pension or death benefit].
	(b)  Except as provided by Subsection (d) of this section,
	annually on the first day of October, the pension system may
	increase the base pension of a benefit described by Subsection (a)
	of this section by a percentage equal to the average annual rate of
	actual investment return of the pension system for the five-year
	period ending on the December 31 preceding the effective date of the
	adjustment less five percent.
	(c)  An adjustment under this section may not be less than
	zero percent or exceed four percent of the applicable base pension
	benefit.
	(d)  The pension system may only make an adjustment to
	benefits under this section if the ratio of the amount of the
	pension system's market value of assets divided by the amount of the
	pension system's actuarial accrued liabilities, after giving
	effect to the adjustment, is not less than .70.
	(e)  For purposes of Subsection (d) of this section, the
	amount of the pension system's market value of assets and the amount
	of the pension system's actuarial accrued liabilities shall be
	based on and determined as of the date of the most recently
	completed actuarial valuation.
	(f)  The following persons may not receive an adjustment
	under this section:
	(1)  a member on active service, including a DROP
	participant;
	(2)  a pensioner until the first October 1 occurring
	after both the pensioner's retirement and the earlier of:
	(A)  the date the pensioner reaches 62 years of
	age; or
	(B)  the third anniversary of the date the
	pensioner retired; or
	(3)  a qualified survivor until the first October 1
	occurring after the earlier of:
	(A)  the date the qualified survivor reaches 62
	years of age;
	(B)  the third anniversary of the date the primary
	party retired; or
	(C)  the third anniversary of the date of the
	member's or pensioner's death.
	(g) [(b)]  A [Group B] retirement or [Group B] disability
	pension or periodic disability compensation paid to any Group B
	pensioner may not be less than the Group B pensioner's base pension.
	(h)  The death benefit of the qualified survivors who are the
	[a Group B qualified surviving] spouse, [Group B qualified
	surviving] dependent parent, or child of a Group B pensioner
	[parents, as a group, or Group B qualified surviving children], as a
	group, may not be less than 50 percent of the [a Group B]
	pensioner's base pension.
	Sec. 6.13.  SUPPLEMENT TO CERTAIN RECIPIENTS 55 YEARS OF AGE
	OR OLDER.  (a)  Except as provided by Subsection (b) of this
	section, if [If] a pensioner had at least 20 years of pension
	service under any plan adopted pursuant to Article 6243a or this
	article, or if a pensioner is receiving the periodic [a
	service-connected] disability compensation benefit under Section
	6.05 of this article [pension], the pensioner, the pensioner's
	[qualified surviving] spouse who is a qualified survivor eligible
	to receive benefits under this article, or the pensioner's
	[qualified surviving] children who are qualified survivors, as a
	group, under Section 6.06 [6.06(o)] of this article are entitled to
	receive, when the pensioner or spouse who is a qualified survivor
	[surviving spouse] attains 55 years of age, provided the pensioner
	or spouse attains 55 years of age before September 1, 2017, [the
	greater of] a monthly supplement equal to the greater of $50 or
	three percent of their total monthly benefit[,] and for months
	[years] beginning on and after January 1, 1991, a [the] monthly
	supplement [will be] equal to the greater of $75 or three percent of
	their total monthly benefit. For purposes only of calculating this
	supplement, the phrase "their total monthly benefit" means the
	amount payable to a pensioner or qualified survivors under the
	terms of the plans described by this section under which the
	pensioner or qualified survivor elected to receive benefits but
	does not include the supplement authorized by this section or any
	adjustments under Section 6.12 of this article made after September
	1, 2017.
	(b)  A person described by Subsection (a) of this section
	who, on September 1, 2017, is not receiving or has not received a
	supplemental benefit under this section is not entitled to receive
	a supplemental benefit under this section.
	SECTION 1.42.  Section 6.14, Article 6243a-1, Revised
	Statutes, is amended by amending Subsections (a), (b), (c), (d),
	(e), (f), (g), (h), and (j) and adding Subsections (e-1), (e-2),
	(e-3), (e-4), (f-1), (g-1), (l), (m), (n), and (o) to read as
	follows:
	(a)  A [In lieu of either leaving active service and
	commencing a retirement pension as provided for under Section 6.01
	or 6.02 of this article, whichever is applicable, or remaining in
	active service and continuing to accrue additional pension benefits
	as provided under Section 6.01 or 6.02, a] member who remains on
	active service after becoming [is] eligible to receive a [an
	unreduced] retirement pension under either Section 6.01 or 6.02 of
	this article may [remain in active service,] become a participant
	in the deferred retirement option plan [Deferred Retirement Option
	Plan ("DROP")] in accordance with Subsections (b) and (c) of this
	section, and defer the beginning of the person's retirement
	pension. Once an election to participate in the DROP has been made,
	the election continues in effect at least as long as the member
	remains in active service. On leaving active service, the member
	may:
	(1)  apply for a retirement pension under Sections
	6.01(b) and (c), Section 6.01(e), or Section 6.02(b), (c), (d), or
	(e) [Section 6.02] of this article, whichever is applicable,
	together with any DROP benefit provided under this section; or
	(2)  continue to participate in DROP except the member
	is ineligible for disability benefits described by Subsection (g-1)
	of this section.
	(b)  The election to participate in the DROP shall be made in
	accordance with procedures set forth in any uniform and
	nondiscriminatory election form adopted by the board and in effect
	from time to time. To determine the proper amount to be credited to
	a member's DROP account, the election shall indicate whether the
	member desires to receive a retirement pension under Sections
	6.01(b) and (c), Section 6.01(e), or Section 6.02(b), (c), (d), or
	(e) [6.02] of this article, whichever is applicable. The election
	may be made at any time on or after the date the member becomes
	eligible for a [an unreduced] retirement pension as provided by
	this subsection.  The election [under Sections 6.01(b) and (c),
	Section 6.01(e), or Section 6.02 of this article, whichever is
	applicable, and] becomes effective on the first day of the first
	month on or after the date on which the member makes the election,
	except that an election that would otherwise have been effective on
	October 1, 1993, and every October 1 after that date, is considered,
	for purposes of this section and Section 6.12 of this article, to be
	effective on September 30 of the year in which it would otherwise
	have been effective. On and after the effective date of the
	election, the member will no longer be eligible for any refund of
	[make member] contributions [to the fund, notwithstanding Section
	4.03(b) or (f) of this article, whichever is applicable]. The
	election by one or more members to participate in the DROP has no
	effect on the amount of city contributions to the fund under Section
	4.02 of this article.
	(c)  Each month after a member has made an election to
	participate in the DROP and indicated a desire to receive a
	retirement pension under Sections 6.01(b) and (c), Section 6.01(e),
	or Section 6.02(b), (c), (d), or (e) [Section 6.02] of this article,
	whichever is applicable, and through the month before the month in
	which [until] the member leaves active service, an amount equal to
	the retirement pension the member would have received under the
	[Sections 6.01(b) and (c), Section 6.01(e), or Section 6.02,
	whichever is] applicable subsection[,] for that month if the member
	had left active service and been granted a retirement pension by the
	board on the effective date of DROP participation shall be credited
	[transferred] to a separate DROP account maintained within the fund
	for the benefit of the member. Amounts held in the DROP account of a
	member [member's DROP account] shall be credited at the end of each
	calendar month [with interest at a rate that will approximately
	equal one-twelfth of the annual rate assumed by the pension
	system's qualified actuary and approved by the board as the assumed
	actuarial rate of return for the fund]. Notwithstanding this
	section, effective January 1, 2018, a member on active service who
	has 10 years or more of participation in DROP shall no longer have
	the amount of the member's retirement pension credited to the
	member's DROP account while the member is on active service.
	(d)  A [On leaving active service and on the board's grant of
	a retirement pension, a] member may not [who participates in DROP
	shall begin to] receive a [the balance in the person's DROP account
	under one of the following methods of] distribution from the
	member's DROP account while the member is on active service
	[elected by the member:
	[(1)     a single-sum distribution made at a time selected
	by the member but not later than April 1 of the year after the member
	attains 70-1/2 years of age;
	[(2)     an annuity to be paid in equal monthly payments
	for the life of the member, or for the life of the member and a
	designated beneficiary in the same manner as a retirement pension
	computed under Sections 6.01(b) and (c), Section 6.01(e), or
	Section 6.02 of this article, whichever is applicable, determined
	as of the date the member leaves active service based on the
	person's account balance and age and the age of the designated
	beneficiary, if applicable, on that date and using the mortality
	and earnings assumptions being used on that date by the pension
	system's qualified actuary and approved by the board as the assumed
	actuarial rate of return for the fund; or
	[(3)     substantially equal monthly or annual payments of
	the person's account balance beginning at a time selected by the
	member that is on or before April 1st of the year after the member
	attains 70-1/2 years of age and extending over a fixed period that
	does not exceed the life expectancy of the member, or the life
	expectancy of the member and the member's designated beneficiary,
	if applicable].
	(e)  Except as provided by Subsections (e-1) and (l) of this
	section, the balance in the [The] DROP account [balance] of a member
	who terminated from active service on or before September 1, 2017,
	or who terminates from active service shall be distributed to the
	member in the form of an annuity, payable either monthly or annually
	at the election of the member, by annuitizing the amount credited to
	the DROP account over the life expectancy of the member as of the
	date of the annuitization using mortality tables recommended by the
	pension system's qualified actuary. The annuity shall be
	distributed beginning as promptly as administratively feasible
	after the later of, as applicable:
	(1)  the date the member retires and is granted a
	retirement pension; or
	(2)  September 1, 2017 [elects the method of
	distribution described by Subsection (d)(3) of this section shall
	be credited with interest on the unpaid balance at the end of each
	calendar month in the same manner as is prescribed by Subsection (c)
	of this section].
	(e-1)  The board may adopt a shorter period for annuitizing
	DROP account balances under Subsection (e) of this section if the
	pension system's qualified actuary determines that the shorter
	period will not cause the pension system's amortization period to
	exceed 25 years [A member may change a distribution election at any
	time before the member attains 70-1/2 years of age to receive one or
	more additional payments or to accelerate or delay any payment not
	then due, if the change is communicated to the plan administrator,
	in accordance with procedures then in effect, not less than 30 days
	before the day it is to take effect and if the change does not result
	in a failure of the distributions to satisfy the requirements of
	Section 401(a)(9) of the code].
	(e-2)  The annuitization of a DROP account under Subsection
	(e) of this section must reflect the accrual of interest on the
	amount in the DROP account as of September 1, 2017, over the
	annuitization period applied to the account under this section.
	The interest rate applied under this subsection must be a rate as
	reasonably equivalent as practicable to the interest rate on a note
	issued by the United States Department of the Treasury or other
	federal treasury note with a duration that is reasonably comparable
	to the annuitization period applied to the account, as determined
	by the board.  The portion of an annuity attributable to amounts
	credited to a member's DROP account on or after September 1, 2017,
	may not reflect the accrual of this interest on annuitization.
	(e-3)  The board may by rule allow a DROP participant who has
	terminated active service and who is eligible for a retirement
	pension to:
	(1)  assign the distribution from the participant's
	annuitized DROP account to a third party provided the pension
	system receives a favorable private letter ruling from the Internal
	Revenue Service ruling that such an assignment will not negatively
	impact the pension system's qualified plan status; and
	(2)  subject to Subsection (e-4) of this section, in
	the event of a financial hardship that was not reasonably
	foreseeable obtain a lump-sum distribution from the participant's
	DROP account resulting in a corresponding reduction in the total
	number or in the amount of annuity payments.
	(e-4)  The board shall adopt rules necessary to implement
	Subsection (e-3)(2) of this section, including rules regarding what
	constitutes a financial hardship for purposes of that subdivision.
	In adopting the rules, the board shall provide flexibility to
	members.
	(f)  The board may adopt rules and policies relating to the
	administration of Subsections (e), (e-1), and (e-2) of this section
	if the rules and policies are:
	(1)  consistent with the qualification of the plan
	under Section 401 of the code; and
	(2)  in the best interest of the pension system [Any
	election made in accordance with Subsection (d) of this section may
	be changed at any time before leaving active service to any other
	election permitted by that subsection, subject to the requirements
	for spousal consent, in Section 6.14(d)(1), if applicable].
	(f-1)  The DROP account of a member who begins participating
	in DROP on or after September 1, 2017, does not accrue interest.
	(g)  The provisions of Sections 6.06, 6.061, 6.062, 6.063,
	6.07, and 6.08 of this article pertaining to death benefits of a
	qualified survivor do not apply to amounts held in a member's or
	pensioner's DROP account [, and the class of persons eligible to
	become qualified survivors of a member closes on the effective date
	of the member's participation in DROP]. Instead, a member or
	pensioner who participates in DROP may designate a beneficiary to
	receive the annuity payments under this section over the remaining
	annuitization period [balance of the member's DROP account] in the
	event of the member's or pensioner's death subject to any rights
	provided under Subsection (e-3) of this section and in the
	[following] manner allowed by Section 401(a)(9) of the code and any
	policy adopted by the board. A member or pensioner who is or
	becomes married is considered to have designated the member's or
	pensioner's spouse as the member's or pensioner's beneficiary,
	notwithstanding any prior beneficiary designation, unless the
	member or pensioner has made a different designation in accordance
	with a policy adopted by the board. If a member or pensioner does
	not have a spouse or the spouse predeceases the member or pensioner,
	the member's or pensioner's, as applicable, DROP account will be
	distributed to the member's or pensioner's, as applicable,
	designee. Notwithstanding anything in this section to the
	contrary, if a member or pensioner has previously designated the
	member's or pensioner's spouse as the beneficiary or co-beneficiary
	of the DROP account and the member or pensioner and spouse are
	subsequently divorced, the divorce automatically results in the
	invalidation of the designation of the spouse as a beneficiary and,
	if there is no additional beneficiary designated, the member's or
	pensioner's DROP account shall be distributed as provided by
	Subsection (e) of this section. If there are beneficiaries who
	survive the deceased member or pensioner, the surviving
	beneficiaries share equally in that portion that would have
	otherwise been payable to the former spouse. [:
	[(1)     The beneficiary designation must be made on an
	election form adopted by the board and in effect from time to time
	and in accordance with the conditions on the form, except that if
	the member is married, the designation of a beneficiary other than
	the member's spouse is valid only if the spouse consents to the
	designation at the time, in the manner, and on the consent form as
	is adopted by the board and in effect from time to time.
	[(2)     If a member who participates in DROP dies while in
	active service or before the beginning of the member's DROP
	account, distributions will begin no more than one year after the
	date of the member's death under a method described by Subsection
	(d) of this section and shall be completed within the life, or life
	expectancy, of the designated beneficiary.
	[(3)     If a member who participates in DROP dies after
	having begun to receive distributions in accordance with Subsection
	(d) of this section, the balance in the member's DROP account shall
	continue to be distributed to the member's designated beneficiary
	or other person described by Subdivision (4) of this subsection in
	accordance with any elections that had been made under Subsection
	(d) of this section.
	[(4)     If the deceased member has not designated a
	beneficiary or has designated a beneficiary but not a method of
	distribution, the member's DROP account shall be distributed in a
	single-sum payment as soon as administratively feasible after the
	member's death to the beneficiary if one was designated and
	otherwise to the spouse if the member was married at the time of
	death or, if the member was not married, to the member's estate.]
	(g-1) [(5)]  A member who [participates in DROP] becomes a
	DROP participant is ineligible for any disability benefits
	described by Section [Sections] 6.03, 6.04, or [and] 6.05 of this
	article, but is entitled to [instead, on the board's acknowledgment
	of a disability that would otherwise qualify the member for
	disability benefits, the board shall grant] a retirement pension in
	accordance with Sections 6.01(b) and (c), Section 6.01(e), or
	Section 6.02 of this article, whichever is applicable, on
	termination from active service, and [the member] is also entitled
	to receive annuity payments [both a retirement pension and a
	distribution of the DROP account] in accordance with Subsection (e)
	[(d)] of this section.
	(h)  The base pay or computation pay, whichever is
	applicable, in effect as of the effective date of a [Group A]
	member's participation in DROP shall be used in calculating the
	member's [Group A] retirement pension under Section 6.01 or 6.02 of
	this article. A [Group A] member who elects to participate in DROP
	does not accrue additional pension service for purposes of
	computing a [the Group A] retirement pension [provided under
	Section 6.01(e) of this article] for any period after the effective
	date of the election.
	(j)  Except as provided by Subsection (l) of this section, if
	[If] a pensioner who has been a [participated in] DROP participant
	returns to active service, the person must [once again] become a
	participant in DROP under the terms and conditions in effect at the
	time of [the person's] return to active service.
	(l)  Notwithstanding any other provision of this section and
	except as provided by Subsection (o) of this section, a member who
	has entered DROP before June 1, 2017, may revoke the DROP election
	at any time on or after September 1, 2017, and before the earlier
	of:
	(1)  February 28, 2018; or
	(2)  the member's termination of active service.
	(m)  If a member revokes participation in DROP under
	Subsection (l) of this section:
	(1)  the member's DROP account balance is eliminated;
	and
	(2)  the member shall receive pension service credited
	for all or a portion of the period of the revoked DROP participation
	on payment of the required contributions for the period of the
	revoked DROP participation in accordance with a uniform and
	nondiscriminatory procedure adopted by the board that results in
	the payment of the amount of member contributions that would have
	been made if the member had never participated in DROP.
	(n)  A member who revokes the member's DROP election under
	Subsection (l) of this section is entitled to only a monthly pension
	computed on the basis of the member's pension service, including
	pension service purchased under Subsection (m) of this section:
	(1)  that is based on the member's average computation
	pay at the time of leaving active service, if the member is a Group B
	member; or
	(2)  as provided by Section 6.01(b) of this article, if
	the member is a Group A member.
	(o)  A member may not revoke DROP participation under
	Subsection (l) of this section if any money has been transferred out
	of the member's DROP account.
	SECTION 1.43.  Part 6, Article 6243a-1, Revised Statutes, is
	amended by adding Section 6.141 to read as follows:
	Sec. 6.141.  DEFERRED ANNUITIZATION OF CERTAIN DROP
	ACCOUNTS. (a) This section applies only to a pensioner who:
	(1)  before attaining 50 years of age:
	(A)  left active service; and
	(B)  was granted a service retirement pension
	under Section 6.01 or 6.02 of this article;
	(2)  since the pensioner's retirement has continued to
	receive substantially equal periodic payments, as determined under
	Section 72(t) of the code; and
	(3)  on September 1, 2017:
	(A)  is a DROP participant; and
	(B)  has not attained 59-1/2 years of age.
	(b)  Notwithstanding Section 6.14 of this article and solely
	to avoid the possibility of an early distribution tax penalty under
	Section 72(t)(4) of the code:
	(1)  a pensioner subject to this section may until the
	pensioner attains 59-1/2 years of age:
	(A)  subject to Subsection (c) of this section,
	continue to participate in DROP;
	(B)  have the same amount of the pensioner's
	service retirement pension credited to the pensioner's DROP account
	as has been credited since the pensioner's service retirement
	pension was initially granted; and
	(C)  defer annuitization of the pensioner's DROP
	account under Section 6.14(e) of this article; and
	(2)  once a pensioner subject to this section attains
	59-1/2 years of age:
	(A)  the pensioner may not have any portion of the
	pensioner's service retirement pension credited to the pensioner's
	DROP account; and
	(B)  as soon as administratively feasible, the
	balance in the pensioner's DROP account shall be annuitized and
	distributed to the pensioner in accordance with Section 6.14(e) of
	this article.
	(c)  The DROP account of a pensioner who continues
	participation in DROP under Subsection (b)(1)(A) of this section
	does not accrue interest on and after September 1, 2017.
	SECTION 1.44.  Sections 6.15(a), (b), and (e), Article
	6243a-1, Revised Statutes, are amended to read as follows:
	(a)  The board may require the following pensioners
	receiving a disability pension or a periodic disability
	compensation benefit to appear and undergo a medical examination by
	the health director or, if the health director approves, by any
	licensed medical practitioner, to determine if the pensioner's
	disability continues or has been removed to the extent that the
	pensioner is able to resume duties with the department:
	(1)  any Group A pensioner who has served less than 20
	years;
	(2)  any Group A pensioner who elected a Group A [B]
	disability pension under Section 6.04 [6.04(e)] of this article,
	periodic disability compensation under Section 6.05 of this
	article, or a non-service-connected disability pension under Plan A
	or former Section 17(b)(2) of this article, and who had [has served]
	more than 20 years of pension service, but is less than 55 years of
	age; and
	(3)  any Group B pensioner who was granted [elected] a
	Group B disability pension under Section 6.04 of this article or
	periodic disability compensation under Section 6.05 of this article
	or a disability pension under the terms of Plan B and is less than 50
	years of age.
	(b)  Any medical examination under this section is subject to
	the following conditions:
	(1)  Except as otherwise provided by this section, the
	board has complete discretion to require a pensioner to appear and
	undergo a medical examination as well as the time that may pass
	between examinations. When it becomes clear to the board from
	reliable medical evidence that the disability is unequivocally
	permanent and is not expected to diminish, the board may waive [not
	require] subsequent examinations.
	(2)  A pensioner may not be required to undergo a
	medical examination more often than once in a six-month period,
	except that the board may order the pensioner to undergo an
	examination at any time if the board has reason to believe the
	pensioner's disability has been removed and that the pensioner may
	be able to resume duties with the pensioner's former department or
	if the pensioner requests to be allowed to return to duty.
	(3)  If a pensioner fails to undergo an examination
	after being notified by the board that the examination is required,
	the board may discontinue disability benefits until the pensioner
	has undergone the examination and the results of the examination
	have been sent to the board.
	(4)  If the pensioner is examined by an approved
	outside medical practitioner other than the health director, the
	reasonable and customary cost of the examination, if any, is
	payable from the assets of the fund.
	(e)  Pursuant to its authority under Section 6.06(o-2)
	[6.06(o)] of this article to review and modify any funding relating
	to the disability of a child who is a qualified survivor [surviving
	child's handicap], the board may require the [a handicapped]
	qualified survivor with a disability [surviving child] receiving
	death benefits to appear and undergo medical examination by the
	health director or, if the health director approves, by any
	licensed medical practitioner, to determine if the disability
	[handicap] continues or if the disability [handicap] has been
	removed.
	SECTION 1.45.  Sections 6.16, 6.18, and 6.19, Article
	6243a-1, Revised Statutes, are amended to read as follows:
	Sec. 6.16.  WAIVER OF BENEFITS. (a) A primary party
	[pensioner who is on either service or disability retirement], [a]
	qualified survivor [surviving spouse, a handicapped qualified
	surviving child, a member who may be a participant in DROP], or [a]
	beneficiary of a member's [deceased former] DROP account
	[participant, or a qualified surviving dependent parent] may, on a
	form prescribed by the board and filed with the executive director
	[administrator], [irrevocably] waive all or a portion of the
	benefits[,] to which the person [who waives the benefit] is or may
	be entitled. The waiver may state whether it is revocable or
	irrevocable, and is irrevocable unless the waiver clearly states it
	is revocable.
	(b)  The [irrevocable] waiver described by Subsection (a) of
	this section applies only to [retirement, disability, or DROP
	survivor] benefits that become payable on or after the date the
	waiver is filed.
	(b-1)  Benefits waived by a revocable waiver are forfeited
	and the person making the waiver has no right, title, claim, or
	interest in the benefits.
	(c)  If two or more persons are or may be entitled to benefits
	under this article [there are two qualified surviving dependent
	parents receiving death benefits], the waiver described by
	Subsection (a) of this section must be executed by each person to
	become effective. The living parent or parents or legal guardian or
	guardians of a child must sign the waiver described by Subsection
	(a) of this section on behalf of the child [both of the parents].
	Sec. 6.18.  INVESTIGATION. (a) The board shall consider all
	applications for retirement and disability pensions [of members],
	all applications for death benefits [by qualified survivors], and
	all elections to participate [for participation by a member] in
	DROP. The board shall give notice to [those] persons applying for
	benefits, advising them of their right to appear before the board
	and offer such sworn evidence as they may desire. Any [primary
	party, survivor, or other] person claiming retirement, disability,
	or DROP benefits may appear before the board [in person] and offer
	testimony that is relevant to a contested application for a
	retirement pension, a disability pension, death benefits
	[benefit], or DROP benefits [benefit]. The chairman of the board
	may issue process for witnesses, administer oaths to witnesses, and
	examine any witness as to any matter affecting benefits under any
	plan within the pension system. Process for witnesses shall be
	served by any [member of the police or fire department or by any
	other] method of serving process [or person] permitted by the state
	law in any civil judicial proceeding. A witness who fails or
	refuses to attend and testify may be compelled to attend and
	testify, as in any judicial proceeding. The board may seek
	assistance from any court of competent jurisdiction to further
	compel or sanction a witness who fails or refuses to attend and
	testify.
	(b)  Any [primary party, spouse, child, dependent parent, or
	other] person [claiming DROP benefits] who is aggrieved by a
	determination of the board regarding [on the person's application
	for or continuation of] a retirement pension, a disability pension,
	[or] death benefits [benefit], or [an election for] DROP benefits
	may appeal the board determination to a state district court in the
	city [county] where the pension system is located by giving written
	notice of appeal. The notice shall contain a statement of the
	grounds and reasons why the party feels aggrieved. The notice shall
	be served personally on the executive director [secretary of the
	board] within 20 days after the date of the board's determination.
	After service of the notice, the party appealing shall file with the
	state district court a copy of the notice of intention to appeal,
	together with an affidavit of the party making service showing how,
	when, and on whom the notice was served.
	(c)  Within 30 days after the date of service of the notice of
	appeal on the board, the executive director [secretary of the
	board] shall make up and file with the state district court a
	transcript of all nonprivileged papers and proceedings in the case
	before the board. When the copy of the notice of appeal and the
	transcript has been filed with the court, the appeal is perfected,
	and the court shall docket the appeal, assign the appeal a number,
	fix a date for hearing the appeal, and notify both the appellant and
	the board of the date fixed for the hearing.
	(d)  At any time before the rendering of its decision on
	[the] appeal, the court may require further or additional proof or
	information, either documentary or under oath. On rendition of a
	decision on appeal, the court shall give to each party to the appeal
	a copy of the decision of the case. The decision [or order] of the
	court is appealable in the same manner as are civil cases generally.
	(e)  As provided by Section 4.01 of this article, the [The]
	board shall approve all money used for investigations [as provided
	under Section 4.01 of this article]. The board may request the
	investigative services of either the police or fire departments in
	connection with any matter arising under this section.
	Sec. 6.19.  CERTIFICATE OF MEMBER PENSION BENEFIT
	ELIGIBILITY [RETIREMENT].  When a member has earned five [20] years
	of pension service, the member shall be issued an [a certificate of
	retirement that, barring administrative error, miscalculation, or
	other error, after issuance is] incontestable five-year
	certificate indicating that the member is entitled to pension
	benefits subject to the effect of any withdrawals as permitted
	under Article 6243a or this article. The certificate shall state
	that the calculation of the retirement pension to which the member
	is entitled, or any disability benefits to which the member may
	become entitled, shall be determined solely under the actual terms
	of the combined pension plan as in effect at the time the member
	leaves active service. The certificate shall further state that in
	the case of the member's death, the member's qualified survivors, if
	any, may become [shall be] entitled to death [survivor] benefits as
	determined solely under the actual terms of the combined pension
	plan as in effect at the time of the member's death. The
	certificate shall bear a seal and be signed by the executive
	director [mayor, or the mayor pro tem, or the city manager] and [by
	the] chairman of the board [and attested under the seal of the city
	by the city secretary].
	SECTION 1.46.  Part 6, Article 6243a-1, Revised Statutes, is
	amended by adding Section 6.20 to read as follows:
	Sec. 6.20.  ERRONEOUS PAYMENTS OR OVERPAYMENTS. (a) If the
	pension system pays money to any person not entitled to the payment,
	whether by reason of an error of the pension system as to
	entitlement to or the amount of a benefit or otherwise, or an act or
	error of some other person, including the recipient of the payment,
	the recipient of the payment holds the funds to which the recipient
	was not entitled in constructive trust for the pension system and
	those funds are subject to demand by the pension system at any time.
	(b)  The recipient of an erroneous payment from the pension
	system shall repay to the pension system all funds associated with
	the erroneous payment.
	(c)  Subject to Subsection (e) of this section, the board may
	by rule adopt a procedure to enable the pension system to offset the
	future benefit or other payments of a recipient described by this
	section. In addition, the board may take any additional action,
	including the bringing of a lawsuit, the board considers necessary
	to recover an erroneous payment the pension system is entitled to
	under this section.
	(d)  If the pension system determines that a person is
	entitled to additional benefits as a result of an error made by the
	pension system, the pension system shall promptly pay the
	additional benefits owed.
	(e)  The board's correction procedures must comply with the
	Internal Revenue Service's Employee Plans Compliance Resolution
	System and Revenue Procedure 2016-51, including subsequent
	guidance.
	SECTION 1.47.  Article 6243a-1, Revised Statutes, is amended
	by adding Part 6A to read as follows:
	PART 6A. EQUITABLE ADJUSTMENTS
	Sec. 6A.01.  EQUITABLE ADJUSTMENTS TO BENEFITS. (a)
	Subject to this section and notwithstanding any other provision of
	this article, the board by at least a two-thirds vote of all
	trustees may consider and adopt rules requiring the equitable
	return of funds paid to or credited to the benefit of a member or
	pensioner under this article before September 1, 2017, to the
	extent the funds exceeded reasonable amounts that should be paid or
	credited given the circumstances of the pension system at the time
	the payment or credit was made, including the return of excessive
	interest credited to a member's DROP account and excessive
	adjustments made under Section 6.12 of this article.
	(b)  For purposes of Subsection (a) of this section,
	"reasonable amounts" includes the amounts that would have been paid
	or credited:
	(1)  if the interest rate applied in determining a
	benefit, including the interest rate applied to a DROP account,
	equaled the actual, audited rate of return of the plan at the time
	the interest was credited to the account; or
	(2)  if the percentage increase applied under Section
	6.12 of this article equaled the percentage increase, if any, in the
	Consumer Price Index for Urban Wage Earners and Clerical Workers
	(CPI-W) most recently published by the Bureau of Labor Statistics
	of the United States Department of Labor and used by the United
	States Social Security Administration to provide a cost-of-living
	adjustment for social security benefit payments payable beginning
	in January of the next year.
	Sec. 6A.02.  ADJUDICATION OF CERTAIN CHALLENGES.  (a)  The
	Texas Supreme Court has exclusive and original jurisdiction over a
	challenge to the constitutionality under the Texas Constitution of
	Section 6A.01 of this article. An action under this section is
	authorized to the full extent permitted by Section 3, Article V,
	Texas Constitution.  The Texas Supreme Court may issue any
	injunctive, declaratory, or equitable relief the court deems
	appropriate or necessary to effectuate the court's mandamus
	jurisdiction in connection with a challenge under this section.
	(b)  Any action brought under this section must be filed not
	later than the 90th day after the date the board adopts a rule under
	Section 6A.01 of this article.
	(c)  If an action brought under this section is timely filed,
	the board may not enforce or otherwise administer any rules adopted
	pursuant to Section 6A.01 of this article during the pendency of the
	action.
	SECTION 1.48.  Section 8.01, Article 6243a-1, Revised
	Statutes, is amended to read as follows:
	Sec. 8.01.  QUALIFICATION UNDER FEDERAL TAX LAW. (a) The
	plans within the pension system and the assets of the fund are
	intended to qualify as a governmental plan under Sections [Section]
	401 and 414(d) of the code, be exempt from federal income taxes
	under Section 501(a) of the code, and conform at all times to
	applicable requirements of law, regulations, and orders of duly
	constituted federal governmental authorities. Accordingly, if any
	provision of this article is subject to more than one construction,
	one of which will permit the qualification of a plan that is within
	the pension system, that construction that will permit the plan to
	qualify and conform will prevail.
	(b)  The plans within the pension system as well as the
	assets of the fund shall be maintained for the exclusive benefit of
	members and their beneficiaries. At no time before the termination
	of all the plans within the pension system and the satisfaction of
	all liabilities with respect to members and their beneficiaries
	under all plans shall any part of the principal or interest from the
	assets of the fund be used for or diverted to purposes other than
	the exclusive benefit of the members and beneficiaries.
	(c)  Notwithstanding any other provisions of this article,
	the annual benefit [pension] provided with respect to any member
	[may not exceed an annual benefit computed in accordance with the
	limitations prescribed by this subsection.
	[(1)  The maximum annual benefit payable] in any
	limitation year [to a member] may not exceed the amount permitted by
	Section 415(b) of the code for the limitation year, and the sum of
	the member contributions and all other annual additions for any
	limitation year may not exceed the amount permitted under Section
	415(c) of the code for the limitation year. If the aggregated
	annual benefit or aggregated annual additions under [lesser of:
	[(A)  $90,000; or
	[(B)     100 percent of a member's 415 compensation
	averaged over the three consecutive limitation years, or the actual
	number of limitation years for a member whose total pension service
	is less than three consecutive limitation years, during which the
	member had the greatest aggregate 415 compensation from the city.
	[(2)     Benefits provided to a member under this article
	and under any defined benefit plan or plans maintained by the city
	shall be aggregated for purposes of determining whether the
	limitations in Subdivision (1) of this subsection are met. If the
	aggregate benefits otherwise payable from] any qualified plans
	created under this article and any other defined benefit plan or
	plans maintained by the city would otherwise exceed the limitations
	of Section 415 of the code [Subdivision (1) of this subsection], the
	required reductions in benefits or contributions shall first be
	made to the extent possible from the other plan or plans. The
	limitations referenced in this subsection shall be adjusted
	annually in accordance with Section 415(d) of the code and any
	adjustment to benefits applies to the benefits of active and
	terminated members and applies without regard to whether a
	terminated member is a pensioner.
	[(3)  The adjustments on retirement are the following:
	[(A)     If the annual benefit begins before a member
	attains age 62, the $90,000 limitation, as adjusted, shall be
	reduced in a manner prescribed by the secretary of the treasury.
	However, that adjustment may not reduce the member's annual benefit
	below $75,000, if the member's benefit begins after age 55, or the
	actuarial equivalent of $75,000 beginning at age 55 if benefits
	begin before age 55. Furthermore, except as provided by Paragraph
	(C) of this subdivision, an adjustment may not reduce the member's
	annual benefit below $50,000, regardless of the age at which the
	benefit begins.
	[(B)     If the annual benefit begins after a member
	attains age 65, the $90,000 limitation, as adjusted, will be
	increased so that it is the actuarial equivalent of the $90,000
	limitation at age 65.
	[(C)     If a member's benefits begin before the
	member has at least 15 years of pension service as a full-time
	employee of the police or fire department, or both, including
	credit for full-time service in the armed forces of the United
	States, Paragraphs (A) and (B) of this subdivision shall be applied
	by substituting "social security retirement age" for "age 62" and
	for "age 65," and the last two sentences of Paragraph (A) of this
	subdivision do not apply in computing the benefit limitation for
	that member.
	[(D)     The portion of a member's benefit that is
	attributable to the member's own contributions is not part of the
	annual benefit subject to the limitations of Subdivision (1) of
	this subsection. Instead, the amount of those contributions is
	treated as an annual addition to a qualified defined contribution
	plan maintained by the city.
	[(4)(A)     The dollar limitation on annual benefits
	provided by Subdivision (1) of this subsection, and the $50,000
	limitation provided by Subdivision (3) of this subsection, but not
	the $75,000 limitation provided by that subsection, shall be
	adjusted annually as provided by Section 415(d) of the code and the
	regulations prescribed by the secretary of the treasury. The
	adjusted limitation is effective as of January 1 of each calendar
	year and is applicable to limitation years ending with or within
	that calendar year.
	[(B)     The limitation provided by this paragraph
	for a member who has separated from service with a vested right to a
	pension shall be adjusted annually as provided by Section 415(d) of
	the code and the regulations prescribed by the secretary of the
	treasury.
	[(5)     The following interest rate assumptions shall be
	used in computing the limitations under this section:
	[(A)     For the purpose of determining the portion
	of the annual benefit that is purchased with member contributions,
	the interest rate assumption is 8.5 percent, compounded annually,
	for plan years beginning before 1988 and 120 percent of the federal
	mid-term rate, as in effect under Section 1274 of the code,
	compounded annually, for plan years beginning after 1987.
	[(B)     For the purpose of adjusting the annual
	benefit to a straight life annuity, the interest rate assumption is
	five percent, unless a different rate is required by the secretary
	of the treasury.
	[(C)     For the purpose of adjusting the $90,000
	limitation after a member attains age 65, the interest rate
	assumption is five percent, unless a different rate is required by
	the secretary of the treasury, and the mortality decrement shall be
	ignored to the extent that a forfeiture does not occur at death.
	[(6)     For purposes of Subdivisions (1) and (3) of this
	subsection, an adjustment under Section 415(d) of the code may not
	be taken into account before the limitation year for which that
	adjustment first takes effect. For purposes of Subdivisions (1)
	and (5) of this subsection, an adjustment is not required for the
	value of qualified joint and survivor annuity benefits,
	preretirement death benefits, postretirement medical benefits, or
	postretirement cost-of-living increases made in accordance with
	Section 415(d) of the code and Section 1.415-3(c) of the Income Tax
	Regulations.
	[(7)     This plan may pay an annual benefit to any member
	in excess of the member's maximum annual benefit otherwise allowed
	if:
	[(A)     the annual benefit derived from the city's
	contributions under any qualified plans within this article and all
	defined benefit plans maintained by the city does not in the
	aggregate exceed $10,000 for the limitation year or for any prior
	limitation year; and
	[(B)     the member has not at any time participated
	in a defined contribution plan maintained by the city.
	[For purposes of this subdivision, member contributions to
	the plan are not considered a separate defined contribution plan
	maintained by the city.
	[(8)     If a member has less than 10 years of pension
	service in the plan at the time the member begins to receive
	benefits under the plan, the $90,000 limitation, as adjusted, shall
	be reduced by multiplying the limitation by a fraction in which the
	numerator is the number of years of pension service and the
	denominator is 10; provided, however, that the fraction may not be
	less than one-tenth. The 100 percent limitation of Subdivision
	(1)(B) of this subsection, and the $10,000 limitation of
	Subdivision (7) of this subsection shall be reduced in the same
	manner as provided by this subdivision, except the numerator shall
	be the number of years of employment with the city rather than years
	of pension service.
	[(9)     If a member is or has been a participant in one or
	more defined benefit plans and one or more defined contribution
	plans maintained by the city, the following provisions shall apply:
	[(A)     The sum of the defined benefit plan fraction
	and the defined contribution plan fraction for any limitation year
	may not exceed 1.0.
	[(B)     The defined benefit plan fraction for any
	limitation year is a fraction in which:
	[(I)     the numerator is the projected annual
	benefit of a member, determined as of the close of the limitation
	year pursuant to Section 1.415-7(b)(3) of the Income Tax
	Regulations; and
	[(II)  the denominator is the lesser of:
	[(i)     the product of 1.25 and the maximum
	dollar limitation provided by Subdivision (1)(A) of this
	subsection, as adjusted, for the limitation year; or
	[(ii) the product of 1.4 and the amount that
	may be taken into account under Subdivision (1)(B) of this
	subsection for the limitation year.
	[(C)     The defined contribution plan fraction for
	any limitation year is a fraction in which:
	[(I)     the numerator is the sum of the annual
	additions to the member's account as of the close of the limitation
	year; and
	[(II)     the denominator is the sum of the
	lesser of the following amounts determined for the limitation year
	and each prior year of service with the city:
	[(i)     the product of 1.25 and the dollar
	limitation in effect under Section 415(c)(1)(A) of the code for the
	limitation year, determined without regard to Section 415(c)(6) of
	the code; or
	[(ii)     the product of 1.4 and the amount that
	may be taken into account under Section 415(c)(1)(B) of the code for
	the limitation year beginning before January 1, 1987; the annual
	additions may not be recomputed to treat all member contributions
	as an annual addition.
	[(D)     If the sum of the defined benefit plan
	fraction and the defined contribution plan fraction exceeds 1.0 in
	any limitation year for any member of any plan within the pension
	system, the administrator shall limit, to the extent necessary, the
	annual additions to the member's account for that limitation year.
	If after limiting to the extent possible the annual additions to the
	member's account for the limitation year, the sum of the defined
	benefit plan fraction and the defined contribution plan fraction
	still exceeds 1.0, the administrator shall adjust the benefits
	under the defined benefit plan fraction so that the sum of both
	fractions shall not exceed 1.0 in any limitation year for the
	member.
	[(10)     For purposes of determining the limits provided
	by this section, all qualified defined benefit plans, whether
	terminated or not, ever maintained by or contributed to by the city,
	shall be treated as one defined benefit plan, and all qualified
	defined contribution plans, whether terminated or not, ever
	maintained by or contributed to by the city, shall be treated as one
	defined contribution plan.]
	(c-1) [(11)]  Notwithstanding anything contained in this
	section to the contrary, the limitations, adjustments, and other
	requirements prescribed by this section shall at all times be
	computed in the manner most favorable to the affected members, to
	the extent permitted by guidelines issued by the Internal Revenue
	Service [comply with the requirements of Section 415 of the code and
	all regulations promulgated under the code]. If any provision of
	Section 415 of the code is repealed or is not enforced by the
	Internal Revenue Service, that provision may not reduce the
	benefits of any member after the effective date of the repeal of the
	provision or during the period in which the provision is not
	enforced.
	(c-2)  Any benefit reductions that are required to be made
	under this section shall be applied to reduce the monthly benefit
	that would otherwise have been payable to the member, unless the
	value of the member's DROP account accrued under Section 6.14 of
	this article exceeds the amount that may be paid under this section.
	If the value of the DROP account exceeds the value of the payments
	that may be made under this section, the member shall receive a
	lump-sum payment from the account of the maximum amount that may be
	paid under this section and the payment shall permanently reduce
	the benefits the member would otherwise have been entitled to
	receive under the combined pension plan.
	(d)  A member's retirement pension may not begin later than
	April 1 of the year after the later of the year in which the member
	leaves active service or the year in which the member attains age
	70-1/2 and must at all times comply with the requirements of Section
	401(a)(9) of the code. [Benefits to a qualified beneficiary may not
	begin later than one year after the date of the member's death].
	(e)  Any person [member or beneficiary] who receives any
	distribution from any plan within the pension system that is an
	eligible rollover distribution as defined by Section 402(f)(2)(A)
	of the code is entitled to have that distribution transferred
	directly to another eligible retirement plan as defined by Section
	402(c)(8)(B) of the code of the person's [member's or beneficiary's]
	choice on providing direction regarding that transfer to the
	executive director [administrator] in accordance with procedures
	established by the executive director [administrator].
	(e-1)  If an eligible rollover distribution described by
	Subsection (e) of this section is to a designated beneficiary who is
	not the spouse or former spouse of the member, the transfer may only
	be to an individual retirement account or an individual retirement
	annuity.
	(f)  For the 2017 calendar year, the [The] annual
	compensation taken into account for any purpose under the combined
	pension plan [this article] may not exceed $400,000 for an eligible
	participant or $270,000 for an ineligible participant [$200,000 for
	any calendar year]. For a Group A member the term "annual
	compensation" means the aggregate of the member's base pay. For a
	Group B member the term "annual compensation" means the aggregate
	of the member's computation pay for any given plan year. These
	dollar limits [The $200,000 limit] shall be adjusted from [on
	January 1 of each year at the same] time to time [and] in accordance
	with guidelines [the same manner as] provided by the secretary of
	the treasury. For [Section 415(d) of the code. In determining the
	compensation of a member for] purposes of this subsection, an:
	(1)  "eligible participant" means any person who first
	became a member of the pension system before January 1, 1996; and
	(2)  "ineligible participant" means any member who is
	not an eligible participant [limitation, the family aggregation
	rules of Section 414(q)(6) of the code apply, except that the term
	"family member" includes only the spouse of the member and any
	lineal descendants of the member who have not attained age 19 at the
	end of the plan year. If as a result of this family aggregation
	requirement, the $200,000 limit is exceeded, the limitation shall
	be prorated among the affected individuals in proportion to each
	individual's compensation as determined before application of the
	limit].
	(g)  For purposes of Subsection (h) of this section, "normal
	retirement age" means the earlier of:
	(1)  the attainment of 50 years of age on or before
	September 1, 2017, and completion of at least five years of pension
	service;
	(2)  the attainment of 58 years of age after September
	1, 2017, and completion of at least five years of pension service;
	or
	(3)  completion of 20 years of pension service.
	(h)  The retirement benefit earned by a member is
	nonforfeitable:
	(1)  on attainment of normal retirement age, if not
	already nonforfeitable; or
	(2)  to the extent the benefit is funded, if not already
	nonforfeitable, on the termination or partial termination of the
	combined pension plan or the complete discontinuance of city
	contributions to the fund.
	(i)  In accordance with Section 401(a)(8) of the code,
	forfeitures arising under the combined pension plan may not be used
	to increase the benefits any member would otherwise receive under
	the terms of the plan. Forfeitures may be used first to reduce
	administrative expenses, then to reduce required city
	contributions.
	(j)  Subject to procedures adopted by the board, the pension
	system shall accept an eligible rollover distribution from another
	eligible retirement plan as defined by Section 402(f)(2)(B) of the
	code as payment of all or a portion of any payment a member is
	permitted to make to the pension system for past pension service
	credit. The pension system shall separately account for any
	after-tax contributions transferred from any plan under this
	subsection.
	SECTION 1.49.  Section 8.02, Article 6243a-1, Revised
	Statutes, is amended to read as follows:
	Sec. 8.02.  EXCESS BENEFIT PLAN FOR POLICE OFFICERS AND FIRE
	FIGHTERS. The board may by rule establish and administer [On the
	enactment of federal legislation enabling public retirement
	systems to establish excess benefit plans for the benefit of
	employees for whom additional benefits from retirement plans
	qualified under Section 401 of the code would exceed the
	limitations of Section 415 of the code, there is created outside the
	pension system] a separate[,] qualified governmental
	[nonqualified] excess benefit arrangement and associated trust for
	the arrangement in accordance with Section 415(m) of the code.
	[plan containing the following terms and provisions:
	[(a)(1)     All definitions prescribed by Section 2.01 of this
	article are applicable to the plan created pursuant to this section
	except:
	[(A)     if a different definition is set forth in
	this subsection; or
	[(B)     the context in which a term is used in this
	section indicates a different meaning is clearly intended than that
	prescribed by Section 2.01 of this article.
	[(2)     "Excess benefit plan" means this separate,
	nonqualified, unfunded excess benefit plan as created by this
	section for the benefit of eligible members, as amended or restated
	from time to time.
	[(3)     "Qualified plan" means any plan maintained within
	the pension system or maintained by the city outside the pension
	system for the exclusive benefit of some or all of the employees of
	the city if the plan has been found by the Internal Revenue Service
	to be qualified or has been treated by the city as a qualified plan
	under Section 401 of the code.
	[(4)     "Maximum benefit" means the retirement benefit a
	member or, the spouse, any child, or any dependent parent of a
	member if those persons are entitled, is entitled to receive from
	all qualified plans in any month after giving effect to Section 8.01
	of this article and any similar provisions of any other qualified
	plans designed to conform to Section 415 of the code.
	[(5)     "Excess benefit participant" means any member
	whose retirement benefits as determined on the basis of all
	qualified plans without regard to the limitations of Section 8.01
	of this article and comparable provisions of other qualified plans
	would exceed the maximum benefit permitted under Section 415 of the
	code.
	[(6)     "Unrestricted benefit" means the monthly
	retirement benefit a member, or the spouse or any child of a member,
	would have received under the terms of all qualified plans except
	for the restrictions of Section 8.01 of this article and any similar
	provisions of any other qualified plans designed to conform to
	Section 415 of the code.
	[(b)(1)     An excess benefit participant who is receiving
	benefits from an applicable qualified plan is entitled to a monthly
	benefit under this excess benefit plan in an amount equal to the
	lesser of:
	[(A)     the member's unrestricted benefit less the
	maximum benefit; or
	[(B)     the amount by which the member's monthly
	benefit from the qualified plan or plans approved by the members has
	been reduced due to the limitations of Section 415 of the code.
	[(2)     In the case of the death of an excess benefit
	participant whose spouse or child is entitled to preretirement or
	postretirement death benefits under a qualified plan, the excess
	benefit participant's surviving spouse or child is entitled to a
	monthly benefit under the excess benefit plan equal to the benefit
	determined in accordance with the qualified plans without regard to
	the limitations under Section 8.01 of this article or Section 415 of
	the code, less the maximum benefit.
	[(3)     Unless the excess benefit participant makes a
	timely election to the contrary, a retirement benefit payable under
	this excess benefit plan shall be paid in the form and at the time it
	would have been paid under the applicable qualified plan except for
	the limitations under Section 415 of the code. However, retirement
	benefits payable under this excess benefit plan shall be paid at the
	time and in the form, including a single-sum distribution, as the
	excess benefit participant elects from among the benefit payment
	forms made available under the election form as approved by the
	board. An excess benefit participant makes an election under this
	subdivision by sending written notice to the administrator on the
	election form approved by the board. Each optional benefit form
	permitted under this excess benefit plan shall be the actuarial
	equivalent of each other permitted benefit form. On or after an
	excess benefit participant's leaving active service with an
	entitlement to a retirement benefit under any qualified plan
	approved by the members, a benefit under this subdivision may be
	elected to be paid.
	[(c)(1)     This plan shall be administered by the board, and
	the administrator shall also carry out the business of the board
	with respect to this excess benefit plan. Except as provided to the
	contrary by this subsection, the rights, duties, and
	responsibilities of the board and administrator shall be the same
	for this excess benefit plan as for the qualified pension plans
	within the pension system.
	[(2)     The qualified actuary employed pursuant to
	Section 4.08 of this article is responsible for determining the
	amount of benefits that may not be provided under the qualified
	plans solely by reason of the limitations of Section 415 of the code
	and thus the amount of city contributions that will be made to this
	excess benefit plan rather than to a qualified plan.
	[(3)     The legal advisors described by Section 3.03 of
	this article shall also provide advice to the board for this excess
	benefit plan.
	[(d)     Contributions may not be accumulated under this excess
	benefit plan to pay future retirement benefits. Instead, each
	payment of city contributions that would otherwise be made to the
	fund pursuant to Section 4.02 of this article or comparable
	provisions of other qualified plans approved by the members shall
	be reduced by the amount determined by the administrator as
	necessary to meet the requirements for retirement benefits under
	this excess benefit plan until the next payment of city
	contributions is expected to be made to the fund by the city. The
	city shall then pay to this excess benefit plan, out of the withheld
	city contributions no earlier than the 14th day before the date of
	each distribution of monthly retirement benefits is required to be
	made from this excess benefit plan, the amount necessary to satisfy
	the obligation to pay this excess benefit plan monthly retirement
	benefits. The administrator shall satisfy the obligation of this
	excess benefit plan to pay retirement benefits out of the city
	contributions so transferred for that month. The city
	contributions otherwise required to the pension system pursuant to
	Section 4.02 of this article and any other qualified plan approved
	by the members shall be divided into those contributions required
	to pay retirement benefits pursuant to this section and those
	contributions paid into and accumulated to pay the maximum benefits
	required under the qualified plans. City contributions made to
	provide retirement benefits pursuant to this section may not be
	commingled with the monies of the fund or any other qualified plan.
	[(e)     Amendments to this excess benefit plan shall be made in
	the same manner provided by Section 7.01 of this article.]
	SECTION 1.50.  Section 8.03, Article 6243a-1, Revised
	Statutes, is amended to read as follows:
	Sec. 8.03.  EXEMPTION OF BENEFITS FROM JUDICIAL PROCESS OR
	ALIENATION. (a) A portion of the fund or benefit or amount awarded
	to any primary party, qualified survivor, [or] beneficiary of a
	member's DROP account, excess benefit participant, or survivor of
	an excess benefit participant under this article may not be held,
	seized, taken, subjected to, or detained or levied on by virtue of
	any execution, attachment, garnishment, injunction, or other writ,
	order, or decree, or any process or proceedings issued from or by
	any court for the payment or satisfaction, in whole or in part, of
	any debt, damage, claim, demands, or judgment against any person
	entitled to benefits from any plan within the pension system or from
	the excess benefit plan. The fund and the excess benefit plan or
	any claim against the fund or the excess benefit plan may not be
	directly or indirectly assigned or transferred, and any attempt to
	transfer or assign the fund or the excess benefit plan or a claim
	against the fund or the excess benefit plan is void.
	(b)  A benefit under any plan created or existing pursuant to
	this article or Article 6243a is subject to division pursuant to the
	terms of a qualified domestic relations order. The executive
	director [administrator] shall determine the qualifications of a
	domestic relations order according to a uniform, consistent
	procedure approved by the board. The total benefit payable to a
	primary party or to an alternate payee under a qualified domestic
	relations order may not actuarially exceed the benefits to which a
	primary party would be entitled in the absence of the qualified
	domestic relations order. In calculating the alternate payee's
	benefits under a qualified domestic relations order, the interest
	rate is the rate used by the pension system's actuary in the
	actuarial evaluation for that year, except that the minimum
	interest rate for this purpose is the minimum required by Section
	414 of the code.
	(c)  This section does not preclude:
	(1)  the payment of death benefits to a [support] trust
	for certain [surviving] children of a primary party pursuant to
	Section 6.06(n) of this article;
	(2)  the withholding of federal taxes from pension
	benefits;
	(3)  the recovery by the board of overpayments of
	benefits previously made to any person;
	(4)  the direct deposit of benefit payments to an
	account in a bank, savings and loan association, credit union, or
	other financial institution, provided the arrangement is not an
	alienation;
	(5)  under any policy adopted by the board and
	uniformly applied to voluntary arrangements entered into by a
	primary party or qualified survivor, any voluntary and revocable
	arrangement entered into by a pensioner or a qualified survivor
	that permits the withholding and direct payment of health care or
	life insurance premiums or similar payments from the monthly
	benefit payments; or
	(6)  an assignment of the distribution from an
	annuitized DROP account to a third party under Section 6.14(e-3)(1)
	of this article.
	(d)  For purposes of Subsection (c) of this section, an
	attachment, garnishment, levy, execution, or other legal process is
	not considered a voluntary arrangement.
	SECTION 1.51.  Chapter 810, Government Code, is amended by
	adding Section 810.002 to read as follows:
	Sec. 810.002.  ALTERNATIVE BENEFIT PLAN FOR CERTAIN
	MUNICIPALITIES. (a) In this section, "alternative benefit plan"
	means a continuing, organized benefit plan, including a plan
	qualified under Section 401(a) of the Internal Revenue Code of
	1986, of service retirement, disability retirement, or death
	benefits for officers or employees of a municipality.
	(b)  This section applies only to a municipality subject to
	Article 6243a-1, Revised Statutes.
	(c)  Notwithstanding any other law and subject to Subsection
	(f), the governing body of a municipality subject to this section
	may by ordinance:
	(1)  establish an alternative benefit plan and
	determine the benefits, funding source and amount, and
	administration of the alternative benefit plan; and
	(2)  require an employee first hired by the
	municipality on or after the date the alternative benefit plan is
	implemented to participate in the alternative benefit plan instead
	of participating in the pension system provided under Article
	6243a-1, Revised Statutes.
	(d)  Each active participant of an alternative benefit plan
	established under this section shall contribute to the plan an
	amount, if any, determined by the municipa1ity. The municipality
	shall contribute for each active participant in an alternative
	benefit plan established under Subsection (c) an amount determined
	by the municipality.
	(e)  A municipality that establishes an alternative benefit
	plan under this section shall file all reports with the State
	Pension Review Board required by Chapter 802.
	(f)  The governing body of a municipality may only establish
	an alternative benefit plan under this section if:
	(1)  the qualified actuary of the pension system
	established under Article 6243a-1, Revised Statutes, determines
	that after establishment and implementation of the alternative
	benefit plan, the pension system would continue to comply with
	funding and amortization period requirements applicable to the
	pension system under Subchapter C, Chapter 802; and
	(2)  the State Pension Review Board conducts a review
	of and validates the determination made under Subdivision (1).
	SECTION 1.52.  The following provisions of Article 6243a-1,
	Revised Statutes, are repealed:
	(1)  Section 3.01(c);
	(2)  Section 4.01(b);
	(3)  Section 4.02(f);
	(4)  Sections 6.06(i) and (s);
	(5)  Section 6.10B(h);
	(6)  Sections 6.14(i) and (k); and
	(7)  Part 7.
	SECTION 1.53.  (a)  In this section, "board," "city,"
	"nominations committee," "pension system," and "trustee" have the
	meanings assigned by Section 2.01, Article 6243a-1, Revised
	Statutes, as amended by this article.
	(b)  The terms of the current trustees expire on the
	effective date of this article. Subject to Subsection (e) of this
	section, on that date or as soon as possible after that date:
	(1)  the mayor shall appoint new trustees to the board
	in accordance with the requirements of Section 3.01(b)(1), Article
	6243a-1, Revised Statutes, as added by this article; and
	(2)  notwithstanding the requirements of Sections
	3.01(b)(2), (3), and (4) and (f), Article 6243a-1, Revised
	Statutes, as added or amended by this article, that the board in
	consultation with the nominations committee adopt rules governing
	the election of trustees appointed under Sections 3.01(b)(2), (3),
	and (4), Article 6243a-1, Revised Statutes, as added by this
	article, the nominations committee shall adopt procedures for
	electing the initial trustees elected under Sections 3.01(b)(2),
	(3), and (4), Article 6243a-1, Revised Statutes, as added by this
	article.
	(c)  Notwithstanding Section 3.01(o), Article 6243a-1,
	Revised Statutes, as amended by this article, and except as
	provided by Subsections (d) and (g) of this section, the board may
	not take any action authorized by Article 6243a-1, Revised
	Statutes, until at least 10 initial trustees have been appointed or
	elected, except that the board may take such an action, other than
	an action described by Section 3.01(o)(2), Article 6243a-1, Revised
	Statutes, as added by this article, before at least 10 initial
	trustees have been appointed or elected if the action is in the
	ordinary course of business of the board and is required for the
	continued administration of the pension system.
	(d)  Once all trustees have been appointed or elected to the
	board under this section, the board shall by majority vote adopt
	rules establishing a process for electing trustees under Sections
	3.01(b)(2), (3), and (4), Article 6243a-1, Revised Statutes, as
	added by this article.
	(e)  As soon as possible after the effective date of this
	article, the mayor and the nominations committee shall:
	(1)  make a determination under Section 3.01(e),
	Article 6243a-1, Revised Statutes, as amended by this article,
	regarding the term limits of the board established under that
	section; and
	(2)  notwithstanding Section 3.01(e), Article 6243a-1,
	Revised Statutes, as amended by this article, determine the terms
	of initial trustees to ensure the appropriate staggering of trustee
	terms.
	(f)  Notwithstanding Section 3.01(g), Article 6243a-1,
	Revised Statutes, the board shall elect from among its trustees an
	initial chairman, vice chairman, and deputy vice chairman as soon
	as possible after all trustees have been appointed or elected in
	accordance with this article and, if the board elects to do so, an
	initial second deputy vice chairman.
	(g)  Not later than the 90th day after the date all trustees
	under Section 3.01, Article 6243a-1, Revised Statutes, as amended
	by this article, have been appointed or elected, the board shall
	vote on and, if the board determines it is appropriate, amend the
	existing rules relating to the governance and conduct of the board.
	SECTION 1.54.  (a)  Not later than January 1, 2018, the board
	of trustees of the pension system established under Article
	6243a-1, Revised Statutes, shall:
	(1)  establish the ethics policy required by Section
	3.01(r), Article 6243a-1, Revised Statutes, as added by this
	article; and
	(2)  appoint an executive director under Section 3.04,
	Article 6243a-1, Revised Statutes, as amended by this article.
	(b)  As soon as possible after the executive director is
	appointed under Subsection (a) of this section, the executive
	director may hire, subject to confirmation by the board of trustees
	of the pension system established under Article 6243a-1, Revised
	Statutes, a chief investment officer as authorized under Section
	3.025, Article 6243a-1, Revised Statutes, as added by this article,
	and a chief legal officer as authorized under Section 3.03(c),
	Article 6243a-1, Revised Statutes, as amended by this article.
	SECTION 1.55.  (a) In this section, "executive director,"
	"nominations committee," and "pensioner" have the meanings
	assigned by Section 2.01, Article 6243a-1, Revised Statutes, as
	amended by this article.
	(b)  As soon as possible after the effective date of this
	article but not later than the 30th day after the effective date of
	this article, the president, chair, or other executive head of an
	organization described by Section 3.011(a)(2), Article 6243a-1,
	Revised Statutes, as added by this article, that is eligible to and
	intends to participate on the nominations committee shall notify
	the executive director of:
	(1)  the organization's intent to participate on the
	nominations committee; and
	(2)  whether the president, chair, or other executive
	head, as appropriate, or that person's designee will serve on the
	committee.
	SECTION 1.56.  Section 4.025, Article 6243a-1, Revised
	Statutes, as added by this article, applies only to a contribution
	made on or after the date of the most recently completed actuarial
	valuation following the effective date of this article.
	SECTION 1.57.  The board of trustees of the pension system
	established under Article 6243a-1, Revised Statutes, shall review
	all investments held on the effective date of this article under
	Section 4.071, Article 6243a-1, Revised Statutes, as added by this
	article.
	SECTION 1.58.  Changes in law to Part 5, Article 6243a-1,
	Revised Statutes, as amended by this article, apply to membership
	in a pension system established under Article 6243a-1, Revised
	Statutes, on or after the effective date of this article.
	SECTION 1.59.  A rollover distribution to a plan
	administered by the pension system established under Article
	6243a-1, Revised Statutes, that was made on or after January 1,
	2002, is validated as of the date the distribution occurred. A
	distribution described by this section may not be held invalid
	because the distribution was not performed in accordance with
	Section 8.01(j), Article 6243a-1, Revised Statutes, as added by
	this article, or other applicable law.
	SECTION 1.60.  Section 6.14(e), Article 6243a-1, Revised
	Statutes, as amended by this article, applies only to a
	distribution out of a deferred retirement option plan account that
	is made on or after the implementation of that section.  A
	distribution out of a deferred retirement option plan account that
	is made before the implementation of that section is governed by the
	law in effect when the distribution is made.
	ARTICLE 2. IMMEDIATE PROHIBITION ON CERTAIN DISTRIBUTIONS
	SECTION 2.01.  Part 6, Article 6243a-1, Revised Statutes, is
	amended by adding Section 6.142 to read as follows:
	Sec. 6.142.  PROHIBITION ON CERTAIN DISTRIBUTIONS. (a)
	Notwithstanding Section 6.14 of this article, including Section
	6.14(d)(1) of this article, the board may not allow any
	distribution out of a DROP participant's DROP account to a DROP
	participant or a participant's designated beneficiary, except:
	(1)  in the event of an unforeseeable emergency, as
	described in Section 6 of the DROP addendum policy adopted by the
	board that took effect on January 12, 2017;
	(2)  for purposes of making a minimum annual
	distribution, as described in Section 7 of the DROP addendum policy
	adopted by the board that took effect on January 12, 2017;
	(3)  as permitted by the board under Section 8e of the
	DROP addendum policy adopted by the board that took effect on
	January 12, 2017, in order to avoid the possibility of an early
	distribution tax penalty under Section 72(t) of the code; or
	(4)  in compliance with a court order.
	(b)  This section expires September 1, 2017.
	ARTICLE 3. SEVERABILITY AND EFFECTIVE DATE
	SECTION 3.01.  If any provision of this Act or its
	application to any person or circumstance is held invalid, the
	invalidity does not affect other provisions or applications of this
	Act that can be given effect without the invalid provision or
	application, and to this end the provisions of this Act are declared
	to be severable.
	SECTION 3.02.  (a) Except as provided by Subsections (b) and
	(d) of this section, this Act takes effect immediately if it
	receives a vote of two-thirds of all the members elected to each
	house, as provided by Section 39, Article III, Texas Constitution.
	If this Act does not receive the vote necessary for immediate
	effect, this Act takes effect on the 91st day after the last day of
	the legislative session.
	(b)  Article 1 of this Act takes effect on September 1, 2017,
	unless the board of trustees of the pension system established
	under Article 6243a-1, Revised Statutes, violates Section 6.142,
	Article 6243a-1, Revised Statutes, as added by this Act, on or
	before August 31, 2017, as determined by the State Pension Review
	Board. At the request of the State Pension Review Board and within
	the time prescribed by the State Pension Review Board, the board of
	trustees shall provide the data or other information requested by
	the State Pension Review Board for purposes of making a
	determination under this subsection.
	(c)  If the State Pension Review Board determines that the
	pension system violated Section 6.142, Article 6243a-1, Revised
	Statutes, as added by this Act, the State Pension Review Board
	shall:
	(1)  not later than August 31, 2017:
	(A)  notify the board of trustees of the pension
	system and the mayor and city council of a city subject to Article
	6243a-1, Revised Statutes, of its determination under this section;
	and
	(B)  publish notice of its determination under
	this section on the State Pension Review Board's Internet website;
	and
	(2)  as soon as practicable after August 31, 2017,
	publish notice of its determination under this section in the Texas
	Register.
	(c-1)  The State Pension Review Board shall make the
	determination described by Subsection (c) of this section based on
	the data or other information that:
	(1)  is in the State Pension Review Board's possession
	on or before August 31, 2017; and
	(2)  was provided with enough time for the State
	Pension Review Board to reasonably use the information to make a
	determination under this section.
	(d)  If, not later than August 31, 2017, the State Pension
	Review Board makes the determination described by Subsection (c) of
	this section, Article 1 of this Act has no effect.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I certify that H.B. No. 3158 was passed by the House on May 4,
	2017, by the following vote:  Yeas 141, Nays 0, 4 present, not
	voting; and that the House concurred in Senate amendments to H.B.
	No. 3158 on May 25, 2017, by the following vote:  Yeas 142, Nays 0,
	3 present, not voting.
	______________________________
	Chief Clerk of the House
	I certify that H.B. No. 3158 was passed by the Senate, with
	amendments, on May 23, 2017, by the following vote:  Yeas 30, Nays
	0, 1 present, not voting.
	______________________________
	Secretary of the Senate
	APPROVED: __________________
	Date
	__________________
	Governor