H.B. No. 2829
AN ACT
relating to participation in and benefits and administration of
retirement systems for firefighters in certain municipalities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 1.02, Chapter 183 (S.B. 598), Acts of the
64th Legislature, Regular Session, 1975 (Article 6243e.1, Vernon's
Texas Civil Statutes), is amended by adding Subdivision (13) to
read as follows:
(13) "Spouse" means an individual to whom a member is
legally married under Subtitle A, Title 1, Family Code, or a
comparable law of another jurisdiction, provided that, in the case
of an informal marriage in this state, the marriage must be
evidenced by a declaration of informal marriage recorded in
accordance with Subchapter E, Chapter 2, Family Code.
SECTION 2. Section 2.03(c), Chapter 183 (S.B. 598), Acts of
the 64th Legislature, Regular Session, 1975 (Article 6243e.1,
Vernon's Texas Civil Statutes), is amended to read as follows:
(c) Each election is by secret written ballot on a date the
board of trustees determines. Only persons who have been nominated
may be listed on the written ballot. Nominations may be made in
person, by mail, or by telephone to the office of the fund and must
be received between September [October] 1 and September [October]
15.
SECTION 3. Section 2.11, Chapter 183 (S.B. 598), Acts of the
64th Legislature, Regular Session, 1975 (Article 6243e.1, Vernon's
Texas Civil Statutes), is amended to read as follows:
Sec. 2.11. RULEMAKING. The board of trustees shall adopt
rules and perform reasonable activities it considers necessary or
desirable for the efficient administration of the fund and to
maintain the qualified status of the fund under Section 401(a) of
the Internal Revenue Code.
SECTION 4. Article 2, Chapter 183 (S.B. 598), Acts of the
64th Legislature, Regular Session, 1975 (Article 6243e.1, Vernon's
Texas Civil Statutes), is amended by adding Section 2.13 to read as
follows:
Sec. 2.13. CONFIDENTIALITY OF INFORMATION ABOUT MEMBERS,
RETIREES, ANNUITANTS, OR BENEFICIARIES. (a) Information contained
in records in the custody of the fund concerning an individual
member, retiree, annuitant, or beneficiary is confidential under
Section 552.101, Government Code, and may not be disclosed in a form
identifiable with a specific individual unless:
(1) the information is disclosed to:
(A) the individual or the individual's attorney,
guardian, executor, administrator, conservator, or other person
who the administrator of the fund determines is acting in the
interest of the individual or the individual's estate;
(B) a spouse or former spouse of the individual
after the administrator of the fund determines that the information
is relevant to the spouse's or former spouse's interest in member
accounts, benefits, or other amounts payable by the fund;
(C) a governmental official or employee after the
administrator of the fund determines that disclosure of the
information requested is reasonably necessary to the performance of
the duties of the official or employee; or
(D) a person authorized by the individual in
writing to receive the information; or
(2) the information is disclosed pursuant to a
subpoena and the administrator of the fund determines that the
individual will have a reasonable opportunity to contest the
subpoena.
(b) This section does not prevent the disclosure of the
status or identity of an individual as a member, former member,
retiree, deceased member or retiree, or beneficiary of the fund.
(c) A determination and disclosure under Subsection (a) may
be made without notice to the individual member, retiree,
annuitant, or beneficiary.
SECTION 5. Section 5.04, Chapter 183 (S.B. 598), Acts of the
64th Legislature, Regular Session, 1975 (Article 6243e.1, Vernon's
Texas Civil Statutes), is amended by amending Subsection (b) and
adding Subsection (b-1) to read as follows:
(b) The three percent factor used in this section may be
changed to some other percent if the change:
(1) is first approved by the board's actuary;
(2) is approved by the board of trustees;
(3) applies [only] to one or any combination of the
following groups:
(A) firefighters who are employed on an active,
full-time basis in the fire department at the time of the change;
(B) firefighters who begin service with the fire
department after the change becomes effective; and
(C) members who retire under Section 5.06 of this
Act after the change becomes effective; and
(4) does not reduce a member's benefit for service
credit accumulated before the date of the change.
(b-1) In determining whether to approve an increase in the
factor under Subsection (b) of this section, the board's actuary
shall take into consideration whether the fund has reserves
sufficient to enable the payment of a cost-of-living adjustment
under Section 9.04(a) of this Act to all current members and
survivors at a level that is equal to the average percentage
increase in the Consumer Price Index for All Urban Consumers as
determined by the United States Department of Labor for the 10
annual periods preceding the proposed effective date of the change.
SECTION 6. Section 7.02, Chapter 183 (S.B. 598), Acts of the
64th Legislature, Regular Session, 1975 (Article 6243e.1, Vernon's
Texas Civil Statutes), is amended to read as follows:
Sec. 7.02. SURVIVING SPOUSE OF RETIREE. (a) On the death of
a retiree, the retiree's surviving spouse is entitled to receive an
immediate monthly benefit from the fund of 75 percent of the
retirement benefit that was being paid to the retiree if the spouse:
(1) was married to the retiree at the time of the
retiree's retirement; or
(2) married the retiree after the retiree's retirement
and was married to the retiree for at least 24 consecutive months.
(b) For purposes of Subsection (a)(1) of this section, with
respect to an informal marriage established in this state, a
surviving spouse is considered married to a retiree as of the date a
declaration of informal marriage was recorded in accordance with
Subchapter E, Chapter 2, Family Code.
SECTION 7. Section 9.04, Chapter 183 (S.B. 598), Acts of the
64th Legislature, Regular Session, 1975 (Article 6243e.1, Vernon's
Texas Civil Statutes), is amended by amending Subsections (a) and
(b) and adding Subsections (a-1), (a-2), (a-3), (a-4), and (b-1) to
read as follows:
(a) Subject to this section and except [Except] as provided
by Section 5.05 of this Act, a person receiving a retirement or
survivor's benefit under this Act is entitled each calendar year to
a [an annual] cost-of-living adjustment of that person's benefit
calculated in accordance with this section.
(a-1) The annual cost-of-living adjustment under this
section:
(1) is based on the collective adjustment amount
calculated in accordance with Subsection (a-2) of this section and
allocated among persons eligible for an adjustment under this
section in a manner and in an amount determined by the board of
trustees;
(2) may take effect at any time during a given calendar
year, as determined by the board of trustees; and
(3) may not reduce a person's benefit to an amount less
than the person received when the benefit first was paid to that
person.
(a-2) The collective adjustment amount described by
Subsection (a-1) of this section:
(1) is an amount equal to the actuarial value, as
determined by the board's actuary based on the interest and
mortality assumptions adopted by the board of trustees for the most
recent actuarial valuation of the fund, of the percentage [any]
increase in the Consumer Price Index for All Urban Consumers as
determined by the United States Department of Labor for the
applicable determination period immediately preceding the date the
cost-of-living adjustment is to take effect, multiplied by the
total amount of benefits payable in the month immediately preceding
the date an adjustment is to take effect to persons who are eligible
to receive an adjustment under this section; and
(2) if applicable:
(A) is reduced by an amount that the board's
actuary determines is necessary to maintain the financial stability
of the fund; or
(B) is increased in accordance with Subsection
(b) of this section.
(a-3) For purposes of Subsection (a-2) of this section, the
applicable determination period is the shorter of:
(1) 12 months; or
(2) the period since the last adjustment [increase in
benefits] under this section.
(a-4) In determining whether to reduce the collective
adjustment amount under Subsection (a-2) of this section, the
board's actuary may not take into consideration the cost of future
adjustments under this section.
(b) The board of trustees may increase the collective [If
an] adjustment amount under Subsection (a-2) [(a)] of this section
if:
(1) [would exceed one percent of a person's benefit,
the portion of the adjustment that exceeds one percent of the
benefit may not be made under this section unless] the board's
actuary has advised the board of trustees that the increase
[adjustment] would not impair the financial stability of the fund;
and
(2) the increase [adjustment] has been approved by the
affirmative vote of a majority of the board of trustees. [If an
adjustment under Subsection (a) of this section would be one
percent or less of a person's benefit, the adjustment may not be
made under this section unless the board's actuary has advised the
board of trustees that the adjustment would not impair the
financial stability of the fund.]
(b-1) In determining whether an adjustment would impair the
financial stability of the fund under Subsection (b) of this
section, the board's actuary shall take into consideration the cost
of future adjustments under this section.
SECTION 8. Section 11.01, Chapter 183 (S.B. 598), Acts of
the 64th Legislature, Regular Session, 1975 (Article 6243e.1,
Vernon's Texas Civil Statutes), is amended to read as follows:
Sec. 11.01. INVESTMENTS. The board of trustees in its sole
discretion may invest, reinvest, or change the assets of the fund.
The board of trustees shall invest the funds in whatever
instruments or investments the board considers prudent. In making
investments for the fund, the board of trustees shall discharge its
duties with the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent person acting in a
similar capacity and familiar with such matters would use in the
conduct of an enterprise of a similar character and with similar
aims. [PERMITTED INVESTMENTS. When the board of trustees
determines that there is in the fund a surplus exceeding the
reasonable, safe amount necessary to take care of the current
demands on the fund, the surplus, or so much of it as the board of
trustees considers prudent, may be invested in:
[(1) direct obligations of or obligations the
principal and interest of which are guaranteed by the United States
or its agencies or instrumentalities;
[(2) short-term investment funds, mutual funds, or
their equivalent that are rated as investment quality or higher by a
nationally recognized investment rating firm;
[(3) fully collateralized or direct repurchase
agreements, including direct and reverse security repurchase
agreements and security lending agreements that:
[(A) have a defined termination date;
[(B) are secured by obligations described by this
section or by cash; and
[(C) are pledged with a third party selected or
approved by a majority vote of the board of trustees;
[(4) corporate bonds, including convertible bonds,
collateralized mortgage obligations, and asset-backed securities,
rated as investment quality or higher by a nationally recognized
investment rating firm;
[(5) common stocks, preferred stocks, and convertible
preferred stocks of companies incorporated in the United States and
foreign stocks that are designated in United States dollars and
that are registered with the Securities and Exchange Commission and
listed on a United States exchange or by the National Association of
Securities Dealers Automated Quotations;
[(6) foreign equity and fixed income investments;
[(7) mutual funds, common funds, and their equivalents
that contain only items listed in Subdivisions (1)-(6) of this
section; and
[(8) convertible stocks and bonds recognized as
investment quality or higher by a nationally recognized investment
rating firm or by the investment manager.]
SECTION 9. Section 11.03, Chapter 183 (S.B. 598), Acts of
the 64th Legislature, Regular Session, 1975 (Article 6243e.1,
Vernon's Texas Civil Statutes), is amended to read as follows:
Sec. 11.03. INVESTMENT POLICY. (a) The board of trustees
shall adopt and maintain a written investment policy regarding the
investment of fund assets.
(b) The board of trustees may not adopt an amendment to the
investment policy adopted under this section unless the proposed
amendment is approved by the affirmative vote of a majority of the
members of the board at not fewer than three regular meetings of the
board. [LIMITATIONS ON INVESTMENTS. The fund may not own more than
five percent of the voting stock of any one corporation. Under an
investment measure at market:
[(1) total fixed-income investments should not
represent less than 30 percent of the value of the investment
portfolio;
[(2) total investments in common stocks should not
represent more than 70 percent of the value of the investment
portfolio;
[(3) total investments in common stocks and bonds of
foreign corporations may not represent more than 20 percent of the
value of the investment portfolio; and
[(4) total investments in any one corporation may not
represent more than five percent of the value of the investment
portfolio.]
SECTION 10. Sections 9.04(c) and (d), Chapter 183 (S.B.
598), Acts of the 64th Legislature, Regular Session, 1975 (Article
6243e.1, Vernon's Texas Civil Statutes), are repealed.
SECTION 11. As soon as practicable after the effective date
of this Act, the board of trustees of the firefighters relief and
retirement fund shall adopt the written investment policy required
by Section 11.03, Chapter 183 (S.B. 598), Acts of the 64th
Legislature, Regular Session, 1975 (Article 6243e.1, Vernon's
Texas Civil Statutes), as amended by this Act.
SECTION 12. This Act takes effect September 1, 2009.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 2829 was passed by the House on April
28, 2009, by the following vote: Yeas 149, Nays 0, 1 present, not
voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 2829 was passed by the Senate on May
21, 2009, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor