| |
| |
|
|
A BILL TO BE ENTITLED
|
|
|
AN ACT
|
|
|
relating to requiring the Employees Retirement System of Texas to |
|
|
establish a defined contribution plan to provide retirement |
|
|
benefits to certain employees. |
|
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
|
SECTION 1. Section 802.002, Government Code, is amended by |
|
|
adding Subsection (e) to read as follows: |
|
|
(e) Notwithstanding any other law, including Subsection |
|
|
(a), a defined contribution plan established under Chapter 820 is |
|
|
exempt from Sections 802.101, 802.1012, 802.1014, 802.103, |
|
|
802.104, and 802.202(d). This subsection may not be construed to |
|
|
exempt any plan from Section 802.105 or 802.106(h). |
|
|
SECTION 2. Subtitle B, Title 8, Government Code, is amended |
|
|
by adding Chapter 820 to read as follows: |
|
|
CHAPTER 820. DEFINED CONTRIBUTION PLAN |
|
|
SUBCHAPTER A. GENERAL PROVISIONS |
|
|
Sec. 820.001. DEFINITIONS. In this chapter: |
|
|
(1) "Defined benefit plan" means, as appropriate, the |
|
|
plan that provides benefits to members of the employee class of the |
|
|
retirement system under Chapters 811 through 815. |
|
|
(2) "Defined contribution plan" has the meaning |
|
|
assigned by Section 802.001. |
|
|
(3) "Employee" means an employee or appointed officer |
|
|
described by Section 812.003(a). |
|
|
(4) "Qualified plan" means an employee benefit plan |
|
|
qualified under Section 401(a), Internal Revenue Code of 1986 (26 |
|
|
U.S.C. Section 401). |
|
|
Sec. 820.002. CONFLICT OF LAW. To the extent of a conflict |
|
|
between this chapter, including a rule adopted by the retirement |
|
|
system under authority of this chapter, and any other law, this |
|
|
chapter prevails. |
|
|
Sec. 820.003. CERTAIN REFERENCES IN LAW TO RETIREMENT |
|
|
SYSTEM MEMBERS. A reference in law outside this subtitle to a |
|
|
member of or membership in the retirement system includes a |
|
|
participant of or participation in, as appropriate, a defined |
|
|
contribution plan unless the reference is expressly defined |
|
|
otherwise. |
|
|
SUBCHAPTER B. CREATION OF DEFINED CONTRIBUTION PLAN |
|
|
Sec. 820.051. DUTY TO CREATE PLAN. Notwithstanding any |
|
|
other law and subject to the requirements of Subchapter C, the board |
|
|
of trustees shall by rule establish and administer a defined |
|
|
contribution plan to provide benefits to newly hired employees |
|
|
under that plan instead of under a defined benefit plan. |
|
|
SUBCHAPTER C. PLAN MINIMUM REQUIREMENTS |
|
|
Sec. 820.101. MINIMUM REQUIREMENTS. In establishing a |
|
|
defined contribution plan, the board of trustees of the retirement |
|
|
system shall ensure the plan meets the requirements of this |
|
|
subchapter. |
|
|
Sec. 820.102. QUALIFIED PLAN. A defined contribution plan |
|
|
created under this chapter must be a qualified plan. |
|
|
Sec. 820.103. PARTICIPATION IN PLAN; RESUMPTION OF SERVICE. |
|
|
(a) In adopting rules to establish a defined contribution plan, the |
|
|
board of trustees shall designate the date by which all newly hired |
|
|
employees shall begin participation in the plan, provided that date |
|
|
is not later than January 1, 2023. |
|
|
(b) A person who resumes employment with an employer on or |
|
|
after the date designated by the board of trustees under Subsection |
|
|
(a) and who is already a member of the retirement system eligible to |
|
|
participate in a defined benefit plan remains eligible to |
|
|
participate in the defined benefit plan and is not considered a |
|
|
newly hired employee for purposes of this section. |
|
|
(c) Notwithstanding any other law, including Section |
|
|
812.003, an employee who participates in a defined contribution |
|
|
plan established under this chapter is not eligible for membership |
|
|
in the retirement system and may not participate in the defined |
|
|
benefit plan administered by the retirement system. |
|
|
Sec. 820.104. EFFECT OF EMPLOYMENT CHANGES. A person |
|
|
participating in a defined contribution plan continues to |
|
|
participate in the plan when the person changes employment to |
|
|
another position included in the coverage of the retirement system. |
|
|
Sec. 820.105. VESTING OF BENEFITS; TERMINATION OF |
|
|
PARTICIPATION. (a) Benefits in a defined contribution plan vest in |
|
|
a participant not later than the fifth anniversary of the date the |
|
|
person begins to participate in the plan. |
|
|
(b) A person terminates participation in a defined |
|
|
contribution plan, without losing any vested benefits, by: |
|
|
(1) death; |
|
|
(2) retirement; or |
|
|
(3) termination of employment in all positions |
|
|
included in the coverage of the retirement system. |
|
|
(c) The benefits of a product purchased under a defined |
|
|
contribution plan become available under the terms of the annuity |
|
|
but not before the earlier of the date: |
|
|
(1) the member terminates participation as provided by |
|
|
Subsection (b); or |
|
|
(2) the sum of the member's age and years of service in |
|
|
a position covered by the plan is equal to 80. |
|
|
Sec. 820.106. CREDITABLE SERVICE. A person may not |
|
|
establish in the defined benefit plan administered by the |
|
|
retirement system credit for service performed during a period the |
|
|
person was participating in a defined contribution plan. |
|
|
Sec. 820.107. CONTRIBUTIONS. (a) A participant in a |
|
|
defined contribution plan shall make contributions to the plan at |
|
|
the same rate that a member of the retirement system participating |
|
|
in a defined benefit plan is required to make for current service, |
|
|
and the state and employers otherwise required to make |
|
|
contributions to a defined benefit plan shall make contributions to |
|
|
the defined contribution plan for each participant at the same rate |
|
|
as the state and employers are required to contribute for |
|
|
contributing members of the defined benefit plan. Contributions |
|
|
required under this subsection shall be credited to the benefit of |
|
|
the participant. |
|
|
(b) A participant in a defined contribution plan and the |
|
|
participant's employer shall execute an agreement under which the |
|
|
salary of the participant is reduced by the amount of the |
|
|
contribution required by this section. An agreement under this |
|
|
subsection is irrevocable until the participant terminates |
|
|
participation in the plan under Section 820.105. |
|
|
(c) Participant, state, and employer contributions, as |
|
|
applicable, shall be made in the manner provided by Subchapter E, |
|
|
Chapter 815. |
|
|
SECTION 3. This Act takes effect September 1, 2021. |