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