Texas 2009 - 81st Regular

Texas House Bill HB2796 Compare Versions

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1	1	H.B. No. 2796
2	2
3	3
4	4	AN ACT
5	5	relating to participation in, contributions to, and the benefits
6	6	and administration of retirement systems for police officers in
7	7	certain municipalities.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Section 6.01(f), Chapter 452 (S.B. 738), Acts of
10	10	the 72nd Legislature, Regular Session, 1991 (Article 6243n-1,
11	11	Vernon's Texas Civil Statutes), is amended to read as follows:
12	12	(f) For purposes of this section, compensation of each
13	13	noneligible member taken into account under this Act may not exceed
14	14	$200,000 [$150,000] per calendar year, indexed pursuant to Section
15	15	401(a)(17) of the Internal Revenue Code of 1986 (26 U.S.C. Section
16	16	401). The $200,000 [$150,000] limit does not apply to an eligible
17	17	member. For purposes of this subsection, an eligible member is any
18	18	individual who first became a member before January 1, 1996. For
19	19	purposes of this subsection, a noneligible member is any other
20	20	member.
21	21	SECTION 2. Section 8.01(a), Chapter 452 (S.B. 738), Acts of
22	22	the 72nd Legislature, Regular Session, 1991 (Article 6243n-1,
23	23	Vernon's Texas Civil Statutes), is amended to read as follows:
24	24	(a)(1) Deposits by the members to the police retirement
25	25	system shall be made at a rate of at least six percent of the basic
26	26	hourly earnings of each member. Deposits required to be made by
27	27	members shall be deducted from payroll. On recommendation of the
28	28	board, the Active--Contributory members may by a majority of those
29	29	voting increase the rate of member deposits above six percent to
30	30	whatever amount the board has recommended. If the deposit rate for
31	31	members has been increased to a rate above six percent, the rate may
32	32	be decreased if the board recommends the decrease, the board's
33	33	actuary approves the decrease, and a majority of the
34	34	Active--Contributory members voting on the matter approve the
35	35	decrease.
36	36	(2) The city shall contribute amounts equal to 18
37	37	percent of the basic hourly earnings of each member employed by the
38	38	city for all periods on or before September 30, 2010, subject to
39	39	additional amounts as provided by Subdivision (3) of this
40	40	subsection. The city shall contribute amounts equal to 19 percent
41	41	of the basic hourly earnings of each member employed by the city for
42	42	all periods after September 30, 2010, subject to additional amounts
43	43	as provided by Subdivision (3) of this subsection. The city council
44	44	may also authorize the city to make additional contributions to the
45	45	police retirement system in whatever amount the city council may
46	46	determine. Contributions by the city shall be made each pay period.
47	47	(3) The city shall contribute amounts in addition to
48	48	the amounts described by Subdivision (2) of this subsection as
49	49	required by Section 803.101(h), Government Code, to fund the
50	50	additional liabilities incurred by the police retirement system as
51	51	a result of participating in the proportionate retirement program.
52	52	The rate at which the city shall contribute additional amounts
53	53	under this subdivision is equal to 0.25 percent of the basic hourly
54	54	earnings of each member employed by the city for all periods from
55	55	January 4, 2009, through September 30, 2009. The rate at which the
56	56	city shall contribute additional amounts under this subdivision is
57	57	equal to 0.63 percent of the basic hourly earnings of each member
58	58	employed by the city for all periods after September 30, 2009,
59	59	subject to adjustment under Subdivision (4) of this subsection.
60	60	(4) The additional contribution rate under
61	61	Subdivision (3) of this subsection shall increase or decrease as
62	62	considered necessary by the actuary for the police retirement
63	63	system after each five-year period of participation by the system
64	64	in the proportionate retirement program in order to update the
65	65	amount necessary to fund the additional liabilities incurred by the
66	66	system as a result of participating in the proportionate retirement
67	67	program and of the consolidation of the city's public safety and
68	68	emergency management department with the police department on
69	69	January 4, 2009. The system's actuary shall perform an experience
70	70	study that shall be the basis for a contribution rate adjustment
71	71	under this subdivision. The effective date of the initial
72	72	contribution rate adjustment under this subdivision is October 1,
73	73	2015. Each later contribution rate adjustment under this
74	74	subdivision takes effect October 1 of every fifth year after the
75	75	effective date of the initial contribution rate adjustment. The
76	76	system's actuary shall present to the police retirement board the
77	77	experience study on which any contribution rate adjustment under
78	78	this subdivision is based not later than 45 days before the
79	79	effective date of the adjustment, and the city's actuary shall have
80	80	the opportunity to review and comment on the study. An adjustment
81	81	in the additional contribution rate under this subdivision may not
82	82	cause the additional contribution rate under Subdivision (3) of
83	83	this subsection to be less than zero.
84	84	SECTION 3. Section 11.01, Chapter 452 (S.B. 738), Acts of
85	85	the 72nd Legislature, Regular Session, 1991 (Article 6243n-1,
86	86	Vernon's Texas Civil Statutes), is amended to read as follows:
87	87	Sec. 11.01. LIMITATION ON PAYMENT OF BENEFITS. (a) If
88	88	the amount of any benefit payment otherwise due under this Act or
89	89	the total payments due under this Act and any other qualified
90	90	defined benefit plan maintained by this city would exceed the
91	91	limitations provided by Section 415(b) [415], Internal Revenue Code
92	92	of 1986, as amended, and the regulations adopted under that
93	93	section, the police retirement system shall reduce the amount of
94	94	the benefit paid under this Act as required to comply with that
95	95	section. If the annual additions that would otherwise be allocated
96	96	under this Act, or the total annual additions under this Act and any
97	97	other qualified plan maintained by the city would exceed the limits
98	98	under Section 415(c), Internal Revenue Code of 1986, the annual
99	99	additions under this Act shall be reduced to the extent required to
100	100	comply with Section 415(c), Internal Revenue Code of 1986.
101	101	(b) For purposes of determining if the benefits or annual
102	102	additions satisfy the limits provided by Subsection (a) of this
103	103	section, the compensation to be used is wages within the meaning of
104	104	Section 3401(a), Internal Revenue Code of 1986, plus amounts
105	105	deferred at the election of the member that would be included in
106	106	wages if not deferred under the rules of Section 402(e)(3), 125(a),
107	107	132(f)(4), 457(b), 402(h)(1)(B), or 402(k), Internal Revenue Code
108	108	of 1986. However, any rules that would limit the remuneration
109	109	included in wages based on the nature or location of the employment
110	110	or the services performed are disregarded for purposes of
111	111	determining compensation. In addition, any wages paid after a
112	112	severance from employment are not included as compensation for
113	113	purposes of this subsection unless the payment is for regular pay
114	114	as described in 26 C.F.R. Section 1.415(c)-2(e)(3)(ii) and is made
115	115	by the later of two and one-half months after the severance from
116	116	employment or the end of the calendar year that includes the date of
117	117	severance from employment. If excess annual additions are made to
118	118	any member's account despite the efforts of the board of trustees,
119	119	the amount shall be treated in accordance with 26 C.F.R. Section
120	120	1.402(g)-1(e)(2) or (3).
121	121	(c) Notwithstanding any other provision of this Act, the
122	122	applicable mortality table for purposes of adjusting a benefit due
123	123	to the limitations provided under Section 415(b)(2)(B) or (D),
124	124	Internal Revenue Code of 1986, is the table prescribed by Revenue
125	125	Ruling 2001-62.
126	126	SECTION 4. Sections 13.01(b)(2) and (3), Chapter 452 (S.B.
127	127	738), Acts of the 72nd Legislature, Regular Session, 1991 (Article
128	128	6243n-1, Vernon's Texas Civil Statutes), are amended to read as
129	129	follows:
130	130	(2) "Eligible retirement plan" means[:
131	131	[(A)] an individual retirement account described
132	132	by Section 408(a) of the Internal Revenue Code of 1986 (26 U.S.C.
133	133	Section 408), an individual retirement annuity described in Section
134	134	408(b) of the Internal Revenue Code of 1986 (26 U.S.C. Section 408),
135	135	an annuity plan described in Section 403(a) of the Internal Revenue
136	136	Code of 1986 (26 U.S.C. Section 403), [or] a qualified trust
137	137	described in Section 401(a) of the Internal Revenue Code of 1986 (26
138	138	U.S.C. Section 401), an annuity contract described by Section
139	139	403(b) of the Internal Revenue Code of 1986 (26 U.S.C. Section 403),
140	140	or an eligible plan under Section 457(b) of the Internal Revenue
141	141	Code of 1986 (26 U.S.C. Section 457), that is maintained by a state,
142	142	a political subdivision of a state, or any agency or
143	143	instrumentality of a state or political subdivision of a state that
144	144	agrees to separately account for amounts transferred from the plan,
145	145	provided that any of the vehicles described above [that] accepts
146	146	the distributee's eligible rollover distribution[; or
147	147	[(B) an individual retirement account or
148	148	individual retirement annuity, in the case of an eligible rollover
149	149	distribution to a surviving spouse]. The term applies to a
150	150	distribution to a surviving spouse or to a spouse or former spouse
151	151	who is the alternate payee under a qualified domestic relations
152	152	order within the meaning of Chapter 804, Government Code. In the
153	153	case of an eligible rollover distribution to a non-spouse
154	154	beneficiary, an eligible retirement plan includes only an
155	155	individual retirement account or individual retirement annuity
156	156	described above.
157	157	(3) "Distributee" means a member or former member, the
158	158	member's or former member's surviving spouse, [or] the member's or
159	159	former member's spouse or former spouse who is the alternate payee
160	160	under a qualified domestic relations order, as prescribed by
161	161	Section 804.003, Government Code, or the member's or former
162	162	member's non-spouse beneficiary.
163	163	SECTION 5. This Act takes effect September 1, 2009.
164	164	______________________________ ______________________________
165	165	President of the Senate Speaker of the House
166	166	I certify that H.B. No. 2796 was passed by the House on April
167	167	22, 2009, by the following vote: Yeas 149, Nays 0, 1 present, not
168	168	voting.
169	169	______________________________
170	170	Chief Clerk of the House
171	171	I certify that H.B. No. 2796 was passed by the Senate on May
172	172	21, 2009, by the following vote: Yeas 31, Nays 0.
173	173	______________________________
174	174	Secretary of the Senate
175	175	APPROVED: _____________________
176	176	Date
177	177	_____________________
178	178	Governor