TO:	Honorable James White, Chair, House Committee on Homeland Security & Public Safety
FROM:	Jerry McGinty, Director, Legislative Budget Board
IN RE:	HB4286 by King, Ken (Relating to procedures for and the consequences of the dishonorable discharge of certain peace officers; creating a criminal offense.), As Introduced

COST ESTIMATE

The bill would amend the Government Code to add Section 810.005 to make dishonorably discharged peace officers ineligible for a service retirement annuity. Under the bill, a dishonorably discharged peace officer would be defined as a peace officer who was reported as dishonorably discharged in an employment termination report required by Section 1701.452, Occupations Code.

If a public retirement system received from an employer a notice of dishonorable discharge of a peace officer, the system would be required to suspend payments of a service retirement annuity and refund the individual's accumulated contributions, including earned interest.  If a peace officer prevails in contesting the dishonorable discharge in an administrative or judicial proceeding, the individual would be entitled to receive the accrued total of payments and earned interest withheld during the suspension period and may resume receipt of annuity payments once the retirement system is reimbursed the contributions that were refunded to the peace officer.

According to the Employees Retirement System of Texas (ERS) and the Teacher Retirement System of Texas (TRS), the bill would not have a significant actuarial impact on either retirement system.  The Pension Review Board (PRB) actuarial review identified thirteen public retirement systems that could potentially be impacted by the bill because they have peace officers as members. The actuarial review states that the occurrence of a dishonorable discharge for a single system would likely be relatively low. To the extent it does occur, the impact of a forfeiture of member benefits, even taking into account refunding their contributions with earned interest, would result in an actuarial gain to the system.

SOURCES

Email Correspondence from ERS Governmental Relations, Ariana Whaley, April 13, 2021.
Email Correspondence from TRS Governmental Relations, Merita Zoga, April 13, 2021.
Email Correspondence from PRB Staff Actuary, Kenneth J. Herbold, ASA, EA, MAAA, April 13, 2021.