81R3251 TJS-D
By: Truitt H.B. No. 2283
A BILL TO BE ENTITLED
AN ACT
relating to increasing state employee participation in the
TexaSaver program.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 609.006(a), Government Code, is amended
to read as follows:
(a) A deferred compensation plan must conform to federal law
to provide that deferred amounts and investment income are not
includable, for federal income tax purposes, in the gross income of
a participating employee until distributed to the employee, subject
to the employee's option to designate all or a portion of deferred
amounts as Roth contributions under Section 609.5021, the federal
income tax treatment of which is governed by Section 402A, Internal
Revenue Code of 1986.
SECTION 2. Subchapter C, Chapter 609, Government Code, is
amended by adding Section 609.5021 to read as follows:
Sec. 609.5021. ROTH CONTRIBUTION PROGRAMS. The board of
trustees shall:
(1) establish a qualified Roth contribution program in
accordance with Section 402A, Internal Revenue Code of 1986, under
which an employee may designate all or a portion of the employee's
contribution under a 401(k) plan as a Roth contribution at the time
the contribution is made; and
(2) if authorized by federal law, establish a program
in accordance with the applicable federal law under which an
employee may designate all or a portion of the employee's
contribution under a 457 plan as a Roth contribution at the time the
contribution is made.
SECTION 3. Sections 609.5025(c) and (d), Government Code,
are amended to read as follows:
(c) An employee participating in a 401(k) plan under this
section makes a contribution [of one percent of the compensation
earned by the employee] to a default investment product selected by
the board of trustees based on the criteria established under
Section 609.505(d) and the rules adopted under Subsection (f).
Subject to Subsection (d), the employee contributes one percent of
the employee's compensation in the employee's first year of
participation, and that contribution amount increases by an
additional one percent in each succeeding year of participation
until the employee's total annual contribution equals five percent
of the employee's compensation. The contribution is made by
automatic payroll deduction.
(d) At any time, an employee participating in a 401(k) plan
under this section may, in accordance with rules adopted by the
board of trustees, elect to end participation in the 401(k) plan, to
contribute to a different investment product, [or] to contribute a
different amount to the plan, or to designate all or a portion of
the employee's contribution as a Roth contribution under Section
609.5021.
SECTION 4. Subchapter C, Chapter 609, Government Code, is
amended by adding Section 609.5026 to read as follows:
Sec. 609.5026. STATE MATCHING CONTRIBUTIONS. (a) Except
as provided by Subsection (b) and subject to legislative
appropriation, the Employees Retirement System of Texas may make
matching contributions to a 401(k) plan on behalf of employees
participating in the plan in an amount specified in the
appropriation.
(b) The Employees Retirement System of Texas may only make a
contribution under this section if the retirement system:
(1) receives amounts sufficient to cover normal cost;
and
(2) maintains a funded ratio equal to or greater than
90 percent.
SECTION 5. Section 4, Chapter 1409 (H.B. 957), Acts of the
80th Legislature, Regular Session, 2007, is repealed.
SECTION 6. The Employees Retirement System of Texas shall
adopt rules to implement Section 609.5025(c), Government Code, as
amended by this Act, as soon as practicable after the effective date
of this Act, but not later than August 31, 2010.
SECTION 7. Section 609.5025(c), Government Code, as amended
by this Act, applies to an employee of a state agency regardless of
the date on which the employee begins employment. For an employee
who began employment before the effective date of this Act,
automatic participation in or increased contributions to a 401(k)
plan under Section 609.5025(c), Government Code, begins as soon as
practicable after the effective date of this Act, but not later than
August 31, 2010, subject to the employee's option to elect not to
participate or to contribute a different amount to the plan.
SECTION 8. This Act takes effect September 1, 2009.