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A BILL TO BE ENTITLED
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AN ACT
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relating to the payment of certain lump-sum benefits by the |
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Employees 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 814.011, Government Code, is amended to |
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read as follows: |
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Sec. 814.011. LUMP-SUM PAYMENTS IN LIEU OF ANNUITIES. (a) |
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The retirement system may elect to make a lump-sum payment to a |
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retiree or beneficiary in lieu of annuity payments if: |
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(1) the actuarial present value of the annuity at the |
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time of retirement or death does not exceed $20,000; or |
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(2) at the time of the election: |
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(A) the retiree or beneficiary, as applicable, |
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agrees to payment in an amount that is less than the actuarial |
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present value of the annuity; and |
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(B) making the payment will result in a reduction |
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in the unfunded actuarial liabilities of the retirement system. |
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(b) Payment of a lump sum under this section does not affect |
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eligibility for any other program administered by the retirement |
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system. |
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SECTION 2. Section 814.1082, Government Code, is amended by |
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amending Subsections (b) and (c) and adding Subsection (c-1) to |
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read as follows: |
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(b) The amount of the lump-sum distribution under this |
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section may not exceed: |
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(1) the sum of 36 months of a standard service |
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retirement annuity computed without regard to this section; or |
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(2) another sum that the board of trustees determines |
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is appropriate and will result in a reduction in the unfunded |
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actuarial liabilities of the retirement system. |
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(c) If a member selects a lump-sum distribution described by |
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Subsection (b)(1), the [The] service retirement annuity selected by |
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the member shall be actuarially reduced to reflect the lump-sum |
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option selected by the member and shall be actuarially equivalent |
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to a standard or optional service retirement annuity, as |
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applicable, without the partial lump-sum distribution. The annuity |
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and lump sum shall be computed to result in no actuarial loss to the |
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retirement system. |
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(c-1) If a member selects a lump-sum distribution described |
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by Subsection (b)(2), the service retirement annuity selected by |
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the member shall be actuarially reduced by an amount that is: |
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(1) greater than the actuarial equivalent of the |
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lump-sum option selected by the member; and |
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(2) agreed to by the member after receiving written |
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notice under Subsection (g). |
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SECTION 3. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2021. |