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A BILL TO BE ENTITLED
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AN ACT
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relating to the contributions to and benefits under the Teacher |
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Retirement System of Texas. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 825.402, Government Code, is amended to |
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read as follows: |
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Sec. 825.402. RATE OF MEMBER CONTRIBUTIONS. The rate of |
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contributions for each member of the retirement system is: |
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(1) five percent of the member's annual compensation |
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or $180, whichever is less, for service rendered after August 31, |
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1937, and before September 1, 1957; |
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(2) six percent of the first $8,400 of the member's |
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annual compensation for service rendered after August 31, 1957, and |
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before September 1, 1969; |
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(3) six percent of the member's annual compensation |
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for service rendered after August 31, 1969, and before the first day |
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of the 1977-78 school year; |
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(4) 6.65 percent of the member's annual compensation |
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for service rendered after the last day of the period described by |
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Subdivision (3) and before September 1, 1985; |
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(5) 6.4 percent of the member's annual compensation |
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for service rendered after August 31, 1985, and before September 1, |
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2014; |
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(6) 6.7 percent of the member's annual compensation |
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for service rendered after August 31, 2014, and before September 1, |
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2015; |
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(7) 7.2 percent of the member's annual compensation |
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for service rendered after August 31, 2015, and before September 1, |
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2016; |
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(8) 7.7 percent of the member's annual compensation |
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for service rendered after August 31, 2016, and before September 1, |
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2017; [and] |
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(9) for compensation paid [service rendered] on or |
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after September 1, 2017, and before September 1, 2019, the lesser |
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of: |
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(A) 7.7 percent of the member's annual |
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compensation; or |
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(B) a percentage of the member's annual |
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compensation equal to 7.7 percent reduced by one-tenth of one |
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percent for each one-tenth of one percent that the state |
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contribution rate for the fiscal year to which the compensation |
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[service] relates is less than the state contribution rate |
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established for the 2015 fiscal year; |
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(10) for compensation paid on or after September 1, |
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2019, and before September 1, 2021, the lesser of: |
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(A) 7.7 percent of the member's annual |
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compensation; or |
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(B) a percentage of the member's annual |
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compensation equal to 7.7 percent reduced by one-tenth of one |
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percent for each one-tenth of one percent that the state |
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contribution rate for the fiscal year to which the compensation |
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relates is less than the state contribution rate established for |
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that fiscal year under Section 825.404(a-2); |
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(11) for compensation paid on or after September 1, |
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2021, but before September 1, 2023, the lesser of: |
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(A) eight percent of the member's annual |
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compensation; or |
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(B) a percentage of the member's annual |
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compensation equal to eight percent reduced by one-tenth of one |
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percent for each one-tenth of one percent that the state |
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contribution rate for the fiscal year to which the compensation |
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relates is less than the state contribution rate established for |
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that fiscal year under Section 825.404(a-2); and |
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(12) for compensation paid on or after September 1, |
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2023, the lesser of: |
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(A) 8.25 percent of the member's annual |
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compensation; or |
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(B) a percentage of the member's annual |
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compensation equal to 8.25 percent reduced by one-tenth of one |
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percent for each one-tenth of one percent that the state |
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contribution rate for the fiscal year to which the service relates |
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is less than the state contribution rate established for that |
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fiscal year under Section 825.404(a-2). |
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SECTION 2. Section 825.4035, Government Code, is amended by |
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amending Subsections (b) and (c) and adding Subsection (e) to read |
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as follows: |
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(b) Except as provided in Subsection (c), for each member |
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the employer reports to the retirement system and for whom the |
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employer is not making contributions to the federal Old-Age, |
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Survivors, and Disability Insurance program, the employer shall |
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contribute monthly to the retirement system for each such member: |
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(1) for the period beginning with the report month of |
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September 2014 and ending with the report month of August 2015, an |
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amount equal to 1.5 percent of the member's compensation; [and] |
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(2) beginning with the report month for September 2015 |
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and ending with the report month of August 2019, an amount equal to |
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the lesser of: |
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(A) 1.5 percent of the member's compensation; or |
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(B) a percentage of the member's compensation |
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equal to 1.5 percent reduced by one-tenth of one percent for each |
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one-tenth of one percent that the state contribution rate for the |
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fiscal year to which the report month relates is less than the state |
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contribution rate established for the 2015 fiscal year; |
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(3) beginning with the report month of September 2019 |
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and ending with the report month of August 2020, an amount equal to |
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the lesser of: |
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(A) 1.5 percent of the member's compensation; or |
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(B) a percentage of the member's compensation |
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equal to 1.5 percent reduced by one-tenth of one percent for each |
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one-tenth of one percent that the state contribution rate for the |
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fiscal year to which the report month relates is less than the state |
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contribution rate established for that fiscal year under Section |
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825.404(a-2); and |
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(4) beginning with the report month of September 2020 |
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and for each subsequent report month, an amount equal to the lesser |
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of: |
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(A) a percentage of the member's compensation |
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equal to the rate of contribution provided for the applicable |
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fiscal year under Subsection (e); or |
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(B) a percentage of the member's compensation |
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equal to the percentage provided by Paragraph (A) reduced by |
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one-tenth of one percent for each one-tenth of one percent that the |
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state contribution rate for the fiscal year to which the report |
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month relates is less than the state contribution rate established |
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for that fiscal year under Section 825.404(a-2). |
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(c) If a member is entitled to the minimum salary for |
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certain school personnel under Section 21.402, Education Code, or |
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if a member would have been entitled to the minimum salary for |
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certain school personnel under former Section 16.056, Education |
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Code, as that section existed on January 1, 1995, the employer |
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shall, in addition to any contributions required under Section |
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825.405, contribute monthly to the retirement system for each such |
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member: |
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(1) for the period beginning with the report month of |
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September 2014 and ending with the report month of August 2015, an |
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amount equal to 1.5 percent of the statutory minimum salary |
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determined under Section 825.405(b); [and] |
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(2) beginning with the report month for September 2015 |
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and ending with the report month of August 2019, an amount equal to |
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the lesser of: |
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(A) 1.5 percent of the statutory minimum salary |
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determined under Section 825.405(b); or |
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(B) a percentage of the statutory minimum salary |
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determined under Section 825.405(b) equal to 1.5 percent reduced by |
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one-tenth of one percent for each one-tenth of one percent that the |
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state contribution rate for the fiscal year to which the report |
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month relates is less than the state contribution rate established |
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for the 2015 fiscal year; |
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(3) beginning with the report month of September 2019 |
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and ending with the report month of August 2020, an amount equal to |
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the lesser of: |
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(A) 1.5 percent of the statutory minimum salary |
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determined under Section 825.405(b); or |
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(B) a percentage of the statutory minimum salary |
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determined under Section 825.405(b) equal to 1.5 percent reduced by |
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one-tenth of one percent for each one-tenth of one percent that the |
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state contribution rate for the fiscal year to which the report |
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month relates is less than the state contribution rate established |
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for that fiscal year under Section 825.404(a-2); and |
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(4) beginning with the report month of September 2020 |
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and for each subsequent report month, an amount equal to the lesser |
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of: |
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(A) a percentage of the statutory minimum salary |
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determined under Section 825.405(b) equal to the rate of |
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contribution provided for the applicable fiscal year under |
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Subsection (e); or |
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(B) a percentage of the statutory minimum salary |
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determined under Section 825.405(b) equal to the percentage |
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provided by Paragraph (A) reduced by one-tenth of one percent for |
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each one-tenth of one percent that the state contribution rate for |
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the fiscal year to which the report month relates is less than the |
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state contribution rate established for that fiscal year under |
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Section 825.404(a-2). |
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(e) For purposes of Subsections (b)(4)(A) and (c)(4)(A), |
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the rate of contribution is: |
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(1) 1.6 percent beginning with the report month of |
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September 2020 and ending with the report month of August 2021; |
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(2) 1.7 percent beginning with the report month of |
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September 2021 and ending with the report month of August 2022; |
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(3) 1.8 percent beginning with the report month of |
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September 2022 and ending with the report month of August 2023; |
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(4) 1.9 percent beginning with the report month of |
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September 2023 and ending with the report month of August 2024; and |
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(5) two percent beginning with the report month of |
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September 2024 and for each subsequent report month. |
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SECTION 3. Section 825.404, Government Code, is amended by |
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amending Subsections (a) and (a-1) and adding Subsection (a-2) to |
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read as follows: |
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(a) Except as provided by Subsection (a-1) and subject to |
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Subsection (a-2), during each fiscal year, the state shall |
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contribute to the retirement system an amount equal to at least six |
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and not more than 10 percent of the aggregate annual compensation of |
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all members of the retirement system during that fiscal year. |
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(a-1) In computing the amount owed by the state under this |
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section [Subsection (a)], the compensation of members who are |
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employed by public junior colleges or public junior college |
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districts shall be included in the aggregate annual compensation as |
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follows: |
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(1) 50 percent of the eligible creditable compensation |
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of employees who: |
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(A) otherwise are eligible for membership in the |
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retirement system; and |
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(B) are instructional or administrative |
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employees whose salaries may be fully paid from funds appropriated |
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under the General Appropriations Act, regardless of whether such |
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salaries are actually paid from appropriated funds; and |
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(2) none of the eligible creditable compensation of |
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all other employees who: |
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(A) do not meet the requirements of Subdivision |
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(1)(B) but are otherwise eligible for membership in the retirement |
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system; or |
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(B) cannot be included as a qualifying employee |
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under Subdivision (1) by application of Subsection (b-1). |
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(a-2) The state contribution required by Subsection (a) is: |
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(1) for the fiscal year beginning on September 1, |
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2019, 7.25 percent of the aggregate annual compensation of all |
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members of the retirement system during that fiscal year; |
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(2) for the fiscal year beginning on September 1, |
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2020, 7.5 percent of the aggregate annual compensation of all |
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members of the retirement system during that fiscal year; |
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(3) for the fiscal year beginning on September 1, |
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2021, 7.75 percent of the aggregate annual compensation of all |
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members of the retirement system during that fiscal year; |
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(4) for the fiscal year beginning on September 1, |
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2022, eight percent of the aggregate annual compensation of all |
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members of the retirement system during that fiscal year; and |
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(5) for the fiscal year beginning on September 1, |
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2023, and each subsequent fiscal year, 8.25 percent of the |
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aggregate annual compensation of all members of the retirement |
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system during that fiscal year. |
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SECTION 4. (a) The Teacher Retirement System of Texas |
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shall make a one-time supplemental payment of a retirement or death |
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benefit, as provided by this section. |
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(b) The supplemental payment is payable not earlier than the |
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first calendar month after the calendar month in which the state |
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transfers to the Teacher Retirement System of Texas the amount |
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described by Subsection (i) of this section. To the extent |
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practicable, the Teacher Retirement System of Texas shall issue the |
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supplemental payment on a date or dates that coincide with the |
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regular annuity payment payable to each eligible annuitant. |
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(c) The amount of the supplemental payment is equal to the |
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lesser of: |
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(1) the gross amount of the regular annuity payment to |
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which the eligible annuitant is otherwise entitled for the calendar |
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month immediately prior to the calendar month in which the Teacher |
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Retirement System of Texas issues the one-time supplemental payment |
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in accordance with Subsection (b) of this section; or |
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(2) $500. |
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(d) The supplemental payment is payable without regard to |
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any forfeiture of benefits under Section 824.601, Government Code. |
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The Teacher Retirement System of Texas shall make applicable tax |
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withholding and other legally required deductions before |
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disbursing the supplemental payment. A supplemental payment under |
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this section is in addition to and not in lieu of the regular |
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monthly annuity payment to which the eligible annuitant is |
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otherwise entitled. |
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(e) Subject to Subsection (f) of this section, to be |
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eligible for the supplemental payment, a person must be, for the |
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calendar month immediately prior to the calendar month in which the |
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Teacher Retirement System of Texas issues the one-time supplemental |
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payment in accordance with Subsection (b) of this section, and |
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disregarding any forfeiture of benefits under Section 824.601, |
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Government Code, an annuitant eligible to receive: |
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(1) a standard retirement annuity payment; |
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(2) an optional retirement annuity payment as either a |
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retiree or beneficiary; |
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(3) a life annuity payment under Section |
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824.402(a)(4), Government Code; |
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(4) an annuity for a guaranteed period of 60 months |
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under Section 824.402(a)(3), Government Code; or |
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(5) an alternate payee annuity payment under Section |
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804.005, Government Code. |
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(f) If the annuitant is a retiree or a beneficiary under an |
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optional retirement payment plan, to be eligible for the |
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supplemental payment, the effective date of the retirement of the |
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member of the Teacher Retirement System of Texas must have been on |
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or before December 31, 2018. If the annuitant is a beneficiary |
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under Section 824.402(a)(3) or (4), Government Code, to be eligible |
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for the supplemental payment, the date of death of the member of the |
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retirement system must have been on or before December 31, 2018. |
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The supplemental payment shall be made to an alternate payee who is |
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an annuitant under Section 804.005, Government Code, only if the |
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annuity payment to the alternate payee commenced on or before |
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December 31, 2018. The supplemental payment is in addition to the |
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guaranteed number of payments under Section 824.204(c)(3) or (4), |
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Section 824.308(c)(3) or (4), or Section 824.402(a)(3), Government |
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Code, and may not be counted as one of the guaranteed monthly |
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payments. |
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(g) The supplemental payment does not apply to payments |
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under: |
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(1) Section 824.304(a), Government Code, relating to |
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disability retirees with less than 10 years of service credit; |
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(2) Section 824.804(b), Government Code, relating to |
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participants in the deferred retirement option plan with regard to |
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payments from their deferred retirement option plan accounts; |
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(3) Section 824.501(a), Government Code, relating to |
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retiree survivor beneficiaries who receive a survivor annuity in an |
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amount fixed by statute; or |
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(4) Section 824.404(a), Government Code, relating to |
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active member survivor beneficiaries who receive a survivor annuity |
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in an amount fixed by statute. |
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(h) Subject to the requirements of this section, the board |
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of trustees of the Teacher Retirement System of Texas shall |
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determine the eligibility for and the amount and timing of a |
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supplemental payment and the manner in which the payment is made. |
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(i) The state shall appropriate to the Teacher Retirement |
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System of Texas an amount equal to the cost of the one-time |
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supplemental payment required by this section. This amount is in |
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addition to the amount the state is required to contribute to the |
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Teacher Retirement System of Texas under Section 825.404, |
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Government Code. If the state does not transfer the appropriated |
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amount described by this subsection, the Teacher Retirement System |
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of Texas shall not issue the one-time supplemental payment required |
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by this section. |
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SECTION 5. This Act takes effect September 1, 2019. |