88R20776 KFF-F
 
  By: Metcalf, Perez, Harless, Oliverson, H.B. No. 3340
      J. Johnson of Harris, et al.
 
  Substitute the following for H.B. No. 3340:
 
  By:  Capriglione C.S.H.B. No. 3340
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the public retirement systems of certain
  municipalities.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
  ARTICLE 1.  FIREFIGHTERS' RELIEF AND RETIREMENT FUND
         SECTION 1.01.  The heading to Article 6243e.2(1), Revised
  Statutes, is amended to read as follows:
         Art. 6243e.2(1). FIREFIGHTERS' RELIEF AND RETIREMENT FUND IN
  MUNICIPALITIES OF AT LEAST 2,000,000 [1,600,000] POPULATION.
         SECTION 1.02.  Section 1(13-e), Article 6243e.2(1), Revised
  Statutes, is amended to read as follows:
               (13-e)  "Normal retirement age" means:
                     (A)  [for a member, including a member who was
  hired before the year 2017 effective date and who involuntarily
  separated from service but has been retroactively reinstated in
  accordance with an arbitration, civil service, or court ruling,
  hired before the year 2017 effective date,] the age at which a [the]
  member attains 20 years of service; or
                     (B)  [except as provided by Paragraph (A) of this
  subdivision, for a member hired or rehired on or after the year 2017
  effective date,] the age at which the member first attains both the
  age of at least 50 and at least 10 years of service [sum of the
  member's age, in years, and the member's years of participation in
  the fund equals at least 70].
         SECTION 1.03.  Section 2(a), Article 6243e.2(1), Revised
  Statutes, is amended to read as follows:
         (a)  A firefighters' relief and retirement fund is
  established in each incorporated municipality that has a population
  of at least 2,000,000 [1,600,000] and a fully paid fire department.
         SECTION 1.04.  Section 4(a), Article 6243e.2(1), Revised
  Statutes, is amended to read as follows:
         (a)  A member who terminates active service for any reason
  other than death is entitled to receive a service pension provided
  by this section if the member was:
               (1)  hired as a firefighter before the year 2017
  effective date, including a member who was hired before the year
  2017 effective date and who involuntarily separated from service
  but has been retroactively reinstated in accordance with an
  arbitration, civil service, or court ruling, at the age at which the
  member attains 20 years of service; and
               (2)  except as provided by Subdivision (1) of this
  subsection and subject to Subsection (b-2) of this section, hired
  or rehired as a firefighter on or after the year 2017 effective
  date, at the age at which the member attains 20 years of service
  [when the sum of the member's age in years and the member's years of
  participation in the fund equals at least 70].
         SECTION 1.05.  Sections 5(a), (b), (b-1), (c), (d), (l), and
  (m), Article 6243e.2(1), Revised Statutes, are amended to read as
  follows:
         (a)  A member who is eligible to receive a service pension
  under Section 4 [4(a)(1)] of this article and who remains in active
  service may elect to participate in the deferred retirement option
  plan provided by this section. [A member who is eligible to receive
  a service pension under Section 4(a)(2) of this article may not
  elect to participate in the deferred retirement option plan
  provided by this section.]  On subsequently terminating active
  service, a member who elected the DROP may apply for a monthly
  service pension under Section 4 of this article, except that the
  effective date of the member's election to participate in the DROP
  will be considered the member's retirement date for determining the
  amount of the member's monthly service pension.  The member may also
  apply for any DROP benefit provided under this section on
  terminating active service.  An election to participate in the
  DROP, once approved by the board, is irrevocable.
         (b)  A member may elect to participate in the DROP by
  complying with the election process established by the board.  The
  member's election may be made at any time beginning on the date the
  member has completed 20 years of participation in the fund and is
  otherwise eligible for a service pension under Section 4 [4(a)(1)]
  of this article.  Beginning on the first day of the month following
  the month in which the member makes an election to participate in
  the DROP, subject to board approval, and ending on the year 2017
  effective date, amounts equal to the deductions made from the
  member's salary under Section 13(c) of this article shall be
  credited to the member's DROP account.  Beginning after the year
  2017 effective date, amounts equal to the deductions made from the
  member's salary under Section 13(c) of this article may not be
  credited to the member's DROP account.
         (b-1)  On or after the year 2017 effective date, an active
  member may not participate in the DROP for more than 20 [13] years.  
  If a DROP participant remains in active service after the 20th
  [13th] anniversary of the effective date of the member's DROP
  election:
               (1)  subsequent deductions from the member's salary
  under Section 13(c) of this article, except for unused leave pay,
  may not be credited to the member's DROP account; and
               (2)  the account shall continue to be credited with
  earnings in accordance with Subsection (d) of this section.
         (c)  After a member's DROP election becomes effective, an
  amount equal to the monthly service pension the member would have
  received under Section 4 of this article, if applicable, had the
  member terminated active service on the effective date of the
  member's DROP election shall be credited to a DROP account
  maintained for the member.  That monthly credit to the member's DROP
  account shall continue until the earlier of the date the member
  terminates active service or the 20th [13th] anniversary of the
  date of the first credit to the member's DROP account.
         (d)  A member's DROP account shall be credited with earnings
  at an annual rate equal to 70 [65] percent of the [compounded]
  average annual return earned by the fund over the five years
  preceding, but not including, the year during which the credit is
  given.  Notwithstanding the preceding, however, the credit to the
  member's DROP account shall be at an annual rate of not less than
  2.5 percent, irrespective of actual earnings.
         (l)  A member who participates in the DROP is ineligible for
  disability benefits described by Section 6 of this article, except
  that a member with less than 13 years of DROP participation is
  eligible for the benefits described by Section 6(c).  If a member
  who has a disability described by Section 6(c) of this article is a
  DROP participant with less than 13 years of DROP participation, the
  disability benefit provided by Section 6(c)(1) shall be paid to the
  member, as a monthly pension benefit, in addition to payments from
  the DROP account balance.  If a member who dies under the conditions
  described by Section 7(c) of this article is a DROP participant at
  the time of death or disability resulting in death, the benefit
  provided by Section 7(c) shall be paid to the member's eligible
  survivors, as a monthly pension benefit, in addition to payments
  from the DROP account balance.
         (m)  A DROP participant with a break in service may receive
  service credit within DROP for days worked after the regular
  expiration of the maximum DROP participation period prescribed by
  this section.  The service credit shall be limited to the number of
  days in which the participant experienced a break in service or the
  number of days required to constitute 20 [13] years of DROP
  participation, whichever is smaller.  A retired member who
  previously participated in the DROP and who returns to active
  service is subject to the terms of this section in effect at the
  time of the member's return to active service.
         SECTION 1.06.  Sections 8(a) and (c), Article 6243e.2(1),
  Revised Statutes, are amended to read as follows:
         (a)  A [On or after the year 2017 effective date, a] member
  who [is hired as a firefighter before the year 2017 effective date,
  including a member who was hired before the year 2017 effective date
  and who involuntarily separated from service but has been
  retroactively reinstated in accordance with an arbitration, civil
  service, or court ruling,] terminates active service for any reason
  other than death with at least 10 years of participation, but less
  than 20 years of participation, is entitled to a monthly deferred
  pension benefit, beginning at age 50, in an amount equal to 1.7
  percent of the member's average monthly salary multiplied by the
  amount of the member's years of participation.
         (c)  A [Except as provided by Subsection (a) of this section,
  a member who is hired or rehired as a firefighter on or after the
  year 2017 effective date or a] member who terminates active service
  [employment] for any reason other than death before the member has
  completed 10 years of participation is entitled only to a refund of
  the member's contributions without interest and is not entitled to
  a deferred pension benefit under this section or to any other
  benefit under this article.  The member's refund shall be paid as
  soon as administratively practicable after the effective date of
  the member's termination of active service.
         SECTION 1.07.  Sections 1(13-e) and 4(a), Article
  6243e.2(1), Revised Statutes, as amended by this Act, apply to a
  member who retires on or after the effective date of this Act.
         SECTION 1.08.  Section 5, Article 6243e.2(1), Revised
  Statutes, as amended by this Act, applies to a member who
  participates in the deferred retirement option plan on or after the
  effective date of this Act regardless of whether the member began
  participation in the plan before, on, or after the effective date of
  this Act.
         SECTION 1.09.  Section 8, Article 6243e.2(1), Revised
  Statutes, as amended by this Act, applies to a member who terminates
  active service on or after the effective date of this Act.
  ARTICLE 2.  POLICE OFFICERS' PENSION SYSTEM
         SECTION 2.01.  Section 2(14-c), Article 6243g-4, Revised
  Statutes, is amended to read as follows:
               (14-c)  "Normal retirement age" means:
                     (A)  [for a member hired before October 9, 2004,
  including a member hired before October 9, 2004, who involuntarily
  separated from service but was retroactively reinstated under an
  arbitration, civil service, or court ruling after October 9, 2004,
  the earlier of:
                           [(i)]  the age at which a [the] member
  attains 20 years of service; or
                     (B) [(ii)]  the age at which the member first
  attains both the age of at least 60 and at least 10 years of service
  [; or
                     [(B) except as provided by Paragraph (A) of this
  subdivision, for a member hired or rehired on or after October 9,
  2004, the age at which the sum of the member's age in years and years
  of service equals at least 70].
         SECTION 2.02.  Section 12(a), Article 6243g-4, Revised
  Statutes, is amended to read as follows:
         (a)  A member who separates from service after at least 20
  years of participation in the system [attaining normal retirement
  age] is eligible to receive a monthly service pension, beginning in
  the month of separation from service.  [A member who separates from
  service as a classified police officer with the city after November
  23, 1998, after earning 10 or more but less than 20 years of service
  in the pension system and who complies with all applicable
  requirements of Section 19 of this article is eligible to receive a
  monthly service pension, beginning in the month the individual
  attains normal retirement age.]  An individual may not receive a
  pension under this article while still an active member.  All
  service pensions end with the month in which the retired member
  dies.  The city shall supply all personnel, financial, and payroll
  records necessary to establish the member's eligibility for a
  benefit, the member's credited service, and the amount of the
  benefit.  The city must provide those records in the format
  specified by the pension system.
         SECTION 2.03.  Sections 14(b) and (e), Article 6243g-4,
  Revised Statutes, are amended to read as follows:
         (b)  An active member who [was hired before October 9, 2004,
  including a member hired before October 9, 2004, who has been
  reinstated under arbitration, civil service, or a court ruling
  after that date, and] has at least 20 years of service with the
  police department may file with the pension system an election to
  participate in DROP and receive a DROP benefit instead of the
  standard form of pension provided by this article as of the date the
  active member attained 20 years of service.  The election may be
  made, under procedures established by the board, by an eligible
  active member who has attained the required years of service.  A
  DROP election that is made and accepted by the board may not be
  revoked.
         (e)  As of the end of each month an amount is credited to each
  active member's notional DROP account at the rate of one-twelfth of
  a hypothetical earnings rate on amounts in the account.  The
  hypothetical earnings rate is determined for each calendar year
  based on the [compounded] average of the aggregate annual rate of
  return on investments of the pension system for the five
  consecutive fiscal years ending June 30 preceding the calendar year
  to which the earnings rate applies, multiplied by 70 [65] percent.  
  The hypothetical earnings rate may not be less than 2.5 percent.
         SECTION 2.04.  Sections 2(14-c) and 12(a), Article 6243g-4,
  Revised Statutes, as amended by this Act, apply to a member who
  retires on or after the effective date of this Act.
         SECTION 2.05.  Section 14(e), Article 6243g-4, Revised
  Statutes, as amended by this Act, applies to a member who
  participates in the deferred retirement option plan on or after the
  effective date of this Act regardless of whether the member began
  participation in the plan before, on, or after the effective date of
  this Act.
  ARTICLE 3.  EFFECTIVE DATE
         SECTION 3.01.  This Act takes effect January 1, 2024.