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BILL ANALYSIS

 

 

 

S.B. 1738

By: Huffman

Pensions, Investments & Financial Services

Committee Report (Unamended)

 

 

 

BACKGROUND AND PURPOSE

 

During the 88th Legislature, Regular Session, the legislature passed S.B. 1245 to reform the Judicial Retirement System of Texas Plan Two (JRS-2). The bill sponsor has informed the committee that further clarification relating to the resumption of service by certain judicial officers under JRS-2 is necessary to carry out the original intent of S.B. 1245 with respect to credit for additional salary increases and the contribution rate for judges who resume service. S.B. 1738 seeks to address this issue by clarifying current law relating to resumption of service in and contributions to JRS-2.

 

CRIMINAL JUSTICE IMPACT

 

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

 

RULEMAKING AUTHORITY

 

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

 

ANALYSIS

 

S.B. 1738 amends the Government Code to change the provisions applicable to the manner by which a Judicial Retirement System of Texas Plan Two (JRS-2) retiree who resumes service as a judicial officer, other than by assignment as a visiting judge in an administrative judicial region and inapplicable to a retiree receiving a cash balance annuity, receives service credit in JRS-2 for the resumed service and by which such a retiree's annuity is recomputed on the person's subsequent retirement from the resumed service. Accordingly, the bill provides the following:

·       JRS-2 must recompute the annuity the retiree selected at the time of the person's original retirement for a person who rejoins JRS-2 and completes at least 24 months of resumed judicial service, on the person's subsequent retirement from that resumed service, to reflect, as follows:

o   the highest annual state salary earned by the person while holding a judicial office included within the membership of JRS-2; and

o   the additional service credit established during the person's period of resumed service; and

·       for a person who rejoins JRS-2 but who does not complete at least 24 months of resumed service, on the person's subsequent retirement from resumed service, JRS-2 must, as follows:

o   resume annuity payments suspended on the resumption of full-time judicial service; and

o   issue the person a refund of the person's accumulated member contributions made during the person's period of resumed service.

 

S.B. 1738 changes the notice requirement applicable to the retiree's election to rejoin JRS-2 as follows:

·       by requiring the retiree to provide the notice not later than the 60th day after the date the retiree takes the oath of office; and

·       by adding the specification that the notice be in the form prescribed by JRS-2, in addition to the manner prescribed by JRS-2 as required under current law.

 

S.B. 1738 requires a JRS-2 retiree who rejoins the system as an applicable judicial officer to resume making member contributions of 9.5 percent of the person's state compensation.

 

S.B. 1738 increases from six percent to 9.5 percent the required contribution of the following members' state compensation for each payroll period:

·       a judicial officer who accrues 20 years of service credit in JRS-2 and elects to make contributions for each subsequent year of service credit that the member accrues by filing an application with JRS-2; and

·       a judicial officer who has served at least 12 years on an appellate court and the sum of whose age and amount of service credited in JRS-2 equals or exceeds the number 70 and elects to make contributions for each subsequent year of service credit that the member accrues by filing an application with JRS-2.

 

The provisions of S.B. 1738 relating to the resumption of full-time judicial service by certain retirees and optional elections to rejoin JRS-2 apply only to a former retiree of JRS-2 who, on the bill's effective date, holds a judicial office and has resumed membership in JRS-2 or a retiree who, on or after the bill's effective date, resumes service as a judicial officer holding a judicial office included in the membership of JRS-2. The bill authorizes such a former retiree to purchase service credit for resumed judicial service performed before the bill's effective date, including service performed before June 18, 2023, by depositing with JRS-2, for each month of service credit, member contributions calculated by multiplying 9.5 percent by the person's monthly judicial state salary on the bill's effective date. The bill requires a former retiree who purchases service credit to do so and make the required deposits not later than September 1, 2027.

 

S.B. 1738 establishes that the notice requirement for an election to rejoin JRS-2 not later than the 60th day after the date the retiree takes the oath of office applies only to such an election made on or after the bill's effective date.

 

S.B. 1738 repeals Section 837.103(e), Government Code, which provides for a conditional implementation of provisions governing a JRS-2 retiree's election to rejoin JRS-2 and which expires on September 1, 2025, on its own terms. The bill establishes that the repeal of this provision takes effect on passage unless the bill does not receive the necessary vote, in which case the repeal of the provision does not take effect.

 

EFFECTIVE DATE

 

Except as otherwise provided, September 1, 2025.