H.B. No. 407
AN ACT
relating to participation and credit in, contributions to, benefits
from, and administration of the Texas County and District
Retirement System.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 841.001, Government Code, is amended by
amending Subdivisions (1), (6), and (17) and adding Subdivision
(1-a) to read as follows:
(1) "Actuarial equivalent" means a benefit that, at
the time it is begun, has the same present value as the benefit it
replaces, based on seven percent annual interest and either:
(A) the mortality table published by the
Conference of Actuaries in Public Practice and known as the UP-1984
table with an age setback of five years for retired or disabled
annuitants and an age setback of 10 years for beneficiaries, with a
30-percent reserve refund assumption for the standard benefit; or
(B) a mortality basis adopted under Section
845.110(c).
(1-a) "Accrued benefit" means the sum of a member's
accumulated contributions and service credit calculated as of a
specified date.
(6) "Compensation" means the sum of payments that are
made to an employee for performance of personal services as
certified by a participating subdivision, including nonmonetary
compensation, the value of which is determined by the governing
body of the subdivision, on which contributions by an employee to
the retirement system are based [that do not exceed the amount
established by board rule], which may not exceed either the limit
provided by Section 401(a)(17) of the Internal Revenue Code of 1986
[(26 U.S.C. Section 417)], as indexed in the manner provided by that
section, or a lesser amount established by rule of the board of
trustees. The term includes amounts by which payment for earnings
is reduced because of employer pick-up of employee contributions to
the retirement system under Section 845.403, deferral of
compensation under benefit plans or tax-sheltered annuity programs
adopted by the subdivision under Section 401(k), 403(b), or 457 of
the Internal Revenue Code of 1986, the costs of benefits furnished
under qualified cafeteria plans adopted by the subdivision under
Section 125 of the Internal Revenue Code of 1986, and deductions for
Federal Insurance Contribution Act taxes, federal income taxes, or
other obligations of the employee [and that are made to an employee
of a participating subdivision by the subdivision for service,
including nonmonetary compensation, the value of which is
determined by the governing body of the subdivision]. The term does
not include workers' compensation benefits received by a member
under Section 504.011, Labor Code.
(17) "Subdivision" means a political subdivision of
the state that is not eligible to participate in any other statewide
retirement system or that is not currently participating in a
retirement system established by the legislature. The term
includes the Texas Association of Counties, the retirement system
[Texas County and District Retirement System], and a city-county
hospital jointly managed under Subchapter B, Chapter 265, Health
and Safety Code. The term does not include a branch, division,
department, employee classification group, or other separately
identified component of a political subdivision.
SECTION 2. Section 841.006, Government Code, is amended to
read as follows:
Sec. 841.006. EXEMPTION FROM EXECUTION. (a) All
retirement annuity payments, other benefit payments, and a member's
accumulated contributions are unassignable and are exempt from
execution, garnishment, attachment, and state and local taxation.
(b) Notwithstanding Subsection (a), the board of trustees
by rule may authorize the retirement system, in accordance with a
retiree's voluntary election, to:
(1) deduct qualified health insurance premiums from
the retirement annuity otherwise distributable to a retiree who is
an eligible public safety officer or a retiree who meets any
expanded eligibility provision for a similar tax exemption under
subsequent federal legislation; and
(2) pay the deducted amount directly to the health
plan provider, subject to the requirements of Section 402(l),
Internal Revenue Code of 1986, or other applicable federal law, and
the rules adopted by the board.
SECTION 3. Subchapter A, Chapter 841, Government Code, is
amended by adding Section 841.0091 to read as follows:
Sec. 841.0091. DIVISION OF BENEFITS ON DIVORCE OF MEMBER.
(a) On receipt of a qualified domestic relations order incident to
a divorce that awards a portion of a member's accrued benefit to a
former spouse of the member and that strictly follows the terms and
format of the model qualified domestic relations order, as well as
any other requirements, adopted by the board of trustees for this
purpose, the retirement system shall divide the accrued benefit
into two separate benefits that, in combination at the time of
division, are actuarially equivalent to the undivided accrued
benefit.
(b) Following a division described by Subsection (a), the
portion of the accrued benefit awarded the alternate payee is
considered the alternate payee's sole and separate property in
which the member has no interest. The board of trustees by rule
shall define and specify the rights and responsibilities of the
alternate payee and the terms and features of the benefit awarded
the alternate payee under the order, but in no event may the
alternate payee vest in the accrued benefit before the member vests
or attain greater rights than are attained by the member or the
member's beneficiary.
(c) Notwithstanding Section 804.101, the board of trustees
by rule may prescribe terms on which the interest awarded the
alternate payee under a qualified domestic relations order
described by this section may be transferred at the alternate
payee's death.
(d) The board of trustees has sole authority and discretion
to:
(1) specify the terms and format that are required for
a qualified domestic relations order to be acceptable for purposes
of Subsection (a);
(2) require strict compliance for qualification;
(3) specify the dates on which a distribution to an
alternate payee may or must begin; and
(4) establish rules for the administration of this
section.
(e) This section applies to all domestic relations orders
described by this section that the retirement system first
determines to be qualified on or after September 1, 2009, and to
those domestic relations orders determined to be qualified before
September 1, 2009, that the system further determines can be
construed to allow a division described by this section without
harm or injury to the member's interest awarded under the original
qualified order. The actuarial equivalent value of the accrued
benefit payable to an alternate payee may not be greater than the
actuarial equivalent value of the accrued benefit as if there had
been no division and the accrued benefit had been payable to the
member in the form of an annuity.
SECTION 4. Section 842.108, Government Code, is amended to
read as follows:
Sec. 842.108. WITHDRAWAL OF ACCUMULATED CONTRIBUTIONS.
(a) [(b)] A member who has separated from employment with a
participating subdivision may submit an application to withdraw the
member's accumulated contributions attributable to service with
that subdivision. A withdrawal cancels the person's [credited
service and] service credit attributable to service with that
subdivision on the date the retirement system makes payment of any
portion of the member's accumulated contributions[. Credited
service that has been canceled may not be used to determine
eligibility for a later retirement unless it is reestablished under
Section 803.203, 843.003, or 843.0031].
(b) [(c)] Except for a [terminated] membership terminated
under prior law or in accordance with Section 842.109(b) [described
by Subsection (a)], interest is computed on the balance in the
member's individual account in the employees saving fund on January
1 of the year of withdrawal through the month before the month in
which the withdrawal occurs [for a person described by Subsection
(b)].
(c) [(d)] If a person eligible to receive a withdrawal or
another non-periodic distribution [under this section or Section
844.401] elects to have all or a portion of the distribution
[accumulated contributions] paid directly to an eligible
retirement plan and specifies the plan to which the distribution is
[contributions are] to be paid on forms approved by the board of
trustees, the retirement system shall make the payment in the form
of a direct trustee-to-trustee transfer but is under no obligation
to determine whether the other plan in fact is an eligible
retirement plan for that purpose.
(d) Notwithstanding Subsection (c), the board of trustees
shall adopt rules to administer this section as necessary to
maintain the retirement system as a qualified plan under Section
401(a) of the Internal Revenue Code of 1986. The rules may include
the adoption of definitions and limitations relating to
distributions, eligible recipients, and eligible retirement plans.
SECTION 5. The heading to Section 842.110, Government Code,
is amended to read as follows:
Sec. 842.110. RESUMPTION OF SERVICE AFTER WITHDRAWAL OR
RETIREMENT [BY RETIREE].
SECTION 6. Sections 842.110(a) and (b), Government Code,
are amended to read as follows:
(a) Except as provided by Subsection (b), a person who has
withdrawn the person's accumulated contributions or who has retired
from a participating subdivision with a service retirement annuity
based on a bona fide termination of employment and with a break in
service of not less than one calendar month resumes membership in
the retirement system without repayment of the amount distributed
or cancellation [suspension] of the person's annuity if the person
becomes an employee of any participating subdivision.
(b) A person who resumes employment with the same
subdivision from which the person was previously employed and does
not meet the requirements of Subsection (a) is considered not to
have been eligible for a withdrawal and not to have retired with
respect to that subdivision. The person's membership will be
restored, the person's service retirement annuity will be canceled
[discontinued, the person's membership will be restored], and the
person must return any amounts distributed and payments
received. Appropriate adjustments will be made for any amounts not
returned.
SECTION 7. Section 843.001, Government Code, is amended to
read as follows:
Sec. 843.001. TYPES OF CREDITABLE SERVICE. The types of
service creditable as credited service in the retirement system are
prior service, current service, and optional service. A member may
not be credited in this system with more than one month of credited
service for a specific calendar month, regardless of the number of
employers of the member, the positions held, or the types of
service.
SECTION 8. The heading to Section 843.0031, Government
Code, is amended to read as follows:
Sec. 843.0031. [REESTABLISHMENT OF CREDITED SERVICE;]
OPTION TO PAY LUMP-SUM AMOUNT.
SECTION 9. Section 843.0031(b), Government Code, is amended
to read as follows:
(b) A member who has withdrawn accumulated contributions
from the retirement system and who subsequently resumes employment
with a subdivision may at any time before retirement pay to the
system a lump sum in any amount that does not exceed the actuarial
present value of the additional benefits that would have been
attributable to the withdrawn contributions. Any amount paid
under this subsection and interest accrued on the amount may not be
considered in the computation of service credit [credits].
SECTION 10. Section 843.004, Government Code, is amended to
read as follows:
Sec. 843.004. COMPOSITION OF SERVICE CREDIT. Service
credit consists of allocated prior service credit, current service
credit, and multiple matching credit as authorized by a
participating subdivision [and accumulated interest under this
subtitle].
SECTION 11. Section 843.201, Government Code, is amended to
read as follows:
Sec. 843.201. SERVICE CREDIT FOR CERTAIN PUBLIC
EMPLOYMENT. [(a)] In accordance with rules adopted by the board
of trustees, the governing body of a participating subdivision by
order may authorize the establishment of credited service and prior
service credit in the retirement system for service performed in a
public hospital, utility, or other public facility or governmental
function during a time the facility was operated or function was
performed by a unit of government other than the subdivision and
before the date that the public hospital, utility, or other public
facility or governmental function was taken over by the subdivision
[:
[(1) the effective date of the subdivision's
participation in the retirement system, if the facility was
acquired or the governmental function was taken over by the
subdivision before that date; or
[(2) the date of acquisition of the facility or the
date the governmental function was taken over, if the facility was
acquired or the governmental function was taken over after the
effective date of the subdivision's participation in the retirement
system].
[(b) A member eligible to establish credited service and
prior service credit under this section after an order under
Subsection (a) is one who was employed by a public facility or by an
entity performing the governmental function:
[(1) on the effective date of subdivision
participation, for service under Subsection (a)(1); or
[(2) on the date of acquisition of the facility or the
date the governmental function was taken over, for service under
Subsection (a)(2).
[(c) The allocated prior service credit percentage
allowable under this section may be limited by the order of the
governing body to zero or to any percentage that is a multiple of
five percent.]
SECTION 12. Section 843.401, Government Code, is amended to
read as follows:
Sec. 843.401. CURRENT SERVICE GENERALLY. Current service
is service performed by an employee of a participating subdivision
while a member of the retirement system and credited as provided
under this subtitle and in accordance with rules adopted by the
board of trustees [section]. [The retirement system shall credit a
member with one month of current service for each month for which
the required contributions are made, reported, and certified by the
employing subdivision.]
SECTION 13. Sections 843.502(a), (b), and (c), Government
Code, are amended to read as follows:
(a) In this section:
(1) "Qualified [, "qualified] military service" means
service in the uniformed services, as that term is defined in the
Uniformed Services Employment and Reemployment Rights Act of 1994
(38 U.S.C. Section 4301 et seq.), that meets the requirements of
that Act as it now exists or is amended as to the character of
service performed.
(2) "USERRA" means the Uniformed Services Employment
and Reemployment Rights Act of 1994 (38 U.S.C. Section 4301 et
seq.).
(b) All members of the retirement system are entitled to be
credited with service for qualified military service that is
subject to USERRA [the Uniformed Services Employment and
Reemployment Rights Act of 1994 (38 U.S.C. Section 4301 et seq.)].
Notwithstanding any provision of this subtitle to the contrary,
contributions, benefits, credited service, and service credit for
qualified military service will be provided in accordance with
USERRA and Section 414(u) of the Internal Revenue Code of
1986. The board of trustees may adopt rules for the administration
of this section, including rules that modify the terms of this
subtitle for the purpose of compliance with the provisions of
USERRA [that Act].
(c) An eligible member may establish [The governing body of
a participating subdivision also may, on the terms provided by
Section 844.704, authorize the establishment of] credited service
in the retirement system for qualified active duty military service
not creditable under Subsection (b) [as provided by this
subsection]. Qualified military service includes military service
before becoming an employee of the subdivision. A member eligible
to establish credited service under this subsection is one who is
vested, based on credited service only in this system and without
regard to service that may be established under this subsection, in
a service retirement annuity that may begin at the age of 60 [has
credited service in the retirement system for at least the minimum
period required to receive a service retirement annuity at the age
of 60 from the subdivision from which credit under this subsection
is sought]. An eligible member may establish not more than five
years of credited service under this subsection by filing an
application with the retirement system.
SECTION 14. Section 843.504, Government Code, is amended to
read as follows:
Sec. 843.504. NO DOUBLE CREDITING OF SERVICE. Except as
provided by Chapter 803, only one month of credited service may
[not] be established in the retirement system [under this
subchapter] for any calendar month for all [of] service that is
creditable [credited] under [another section of] this subtitle [or
by another retirement system or program established or governed by
state law].
SECTION 15. Subchapter F, Chapter 843, Government Code, is
amended by adding Section 843.505 to read as follows:
Sec. 843.505. CREDITED SERVICE PREVIOUSLY ELIGIBLE FOR
RECOGNITION UNDER PROPORTIONATE RETIREMENT PROGRAM. The board of
trustees by rule may authorize the retirement system, on
application by a member and for the sole purpose of determining
eligibility for retirement from this system, to recognize service
performed under another system participating under Chapter 803 that
would have been recognized by this system under that chapter if the
service had not been canceled by a withdrawal of contributions.
SECTION 16. Section 844.003, Government Code, is amended by
amending Subsections (c) and (e) and adding Subsection (f) to read
as follows:
(c) The effective date of a member's disability retirement
is the date the member designates at the time the member applies for
retirement under Section 844.301, but the date must be the last day
of a calendar month and may not precede the later of the date the
member became disabled or the date the member terminated
[terminates] employment with all participating subdivisions.
(e) Notwithstanding Subsections (a), (b), (b-1), [and] (c),
and (f), the effective retirement date of a member may not precede
the first anniversary of the effective date of participation of the
subdivision.
(f) The board of trustees by rule may authorize a retiring
member to designate an effective service or disability retirement
date that is not more than six months before the date the retirement
system receives the retirement application. A rule adopted under
this section may not suspend another requirement provided by this
section for retirement.
SECTION 17. Sections 844.006(d) and (f), Government Code,
are amended to read as follows:
(d) The [If a qualified domestic relations order, as that
term is defined by Section 804.001, so provides, the] benefit
payable to a retiree who is receiving payments of a standard or
optional retirement annuity [computed on the joint lives of the
retiree and the person designated as beneficiary by the retiree]
may be divided by the retirement system into two annuities in
accordance with the terms of a model qualified domestic relations
order adopted by the board of trustees by rule [if:
[(1) the person who was designated as beneficiary by
the retiree is the same person as the alternate payee;
[(2) the order specifies that one of the two annuities
is payable over the remaining life of the retiree, with no payments
to be made under that annuity after the death of the retiree; and
[(3) the order specifies that the annuity payable to
the alternate payee is payable over the remaining life of that
person, with no payments to be made under that annuity after the
death of the alternate payee named in the order].
(f) The board of trustees has sole authority and discretion
to specify the terms and format that are required for a domestic
relations order to be acceptable for purposes of this section, to
require strict compliance for qualification, and to define the
terms and features of the benefit awarded an alternate payee under
the order. The board [retirement system] by rule may establish
requirements for forms, documentation, and procedures necessary or
desirable for the administration of this section.
SECTION 18. Section 844.008, Government Code, is amended to
read as follows:
Sec. 844.008. LIMITATION ON PAYMENT OF BENEFITS.
(a) Notwithstanding any other provision of this subtitle, the
benefit payable to a retiree of the retirement system may not exceed
the maximum benefit permitted under Section 415(b) of the Internal
Revenue Code of 1986 [(26 U.S.C. Section 415(b))] as adjusted in
accordance with Section 415(d) of that code. Any adjustments are
applicable to the postretirement benefits of retirees as well as to
the benefits of retiring members. For the purpose of determining
whether the benefit of a retiring member or retiree exceeds the
limitations provided in this section, all defined benefit plans of
the employer and of entities required to be aggregated with the
employer for purposes of Section 415 of the Internal Revenue Code of
1986 are to be treated as one defined benefit plan [and all defined
contribution plans of the employer and of entities required to be
aggregated with the employer] for purposes of Section 415 of that
code [are to be treated as one defined contribution plan]. The
limitation year for determining maximum benefits is the calendar
year.
(b) An employer may not provide employee retirement [or
deferred] benefits under a defined benefit plan other than the
retirement system to the extent that the provision of the benefits,
when considered together with the benefits provided under the
retirement system, would result in the failure of the retirement
system to meet any of the limitation requirements of Section 415 of
the Internal Revenue Code of 1986 [(26 U.S.C. Section 415)], and the
benefits of the other plan will automatically be reduced,
eliminated, or adjusted to the extent necessary to prevent the
failure.
SECTION 19. Section 844.101, Government Code, is amended to
read as follows:
Sec. 844.101. APPLICATION FOR SERVICE RETIREMENT
ANNUITY. To receive a retirement annuity for service, an eligible
member must apply by filing a valid application with the retirement
system [on or before the member's effective retirement date
designated on the application].
SECTION 20. Section 844.301(a), Government Code, is amended
to read as follows:
(a) A member may apply for disability retirement by filing a
valid application for retirement with the retirement system [on or
before the member's effective retirement date designated on the
application].
SECTION 21. Section 844.404, Government Code, is amended to
read as follows:
Sec. 844.404. PERSON CAUSING DEATH OF MEMBER OR ANNUITANT.
(a) A benefit, including any optional group term life benefit,
payable on the death of a member or annuitant may not be paid to a
person convicted of causing that death but instead is payable to a
person who would be entitled under this subtitle to the benefit had
the convicted person predeceased the decedent. If no person would
be entitled to the benefit, the benefit is payable to the decedent's
estate.
(b) The retirement system is not required to change the
recipient of benefits under this section [pay a benefit under
Subsection (a)] unless it receives actual notice of the conviction
of a beneficiary [the person who would have been entitled to the
benefits]. However, the retirement system may delay payment of a
benefit payable on the death of a member or annuitant pending the
results of a criminal investigation and of legal proceedings
relating to the cause of death.
(c) The retirement system is not liable for any benefit paid
to a convicted person before the date the system receives actual
notice of the conviction, and any payment made before that date is a
complete discharge of the system's obligation with regard to that
benefit payment. The convicted person holds all payments received
in constructive trust for the rightful recipient.
(d) If an annuity is in pay status, the [(c) The]
retirement system shall pay in a lump sum the actuarial equivalent
of [convert] the remainder of any annuity or payments that would
otherwise have been payable to [throughout the life of] the
convicted person to the person entitled to the benefit under
Subsection (a) or to the decedent's estate [an actuarially
equivalent annuity payable to the decedent's estate in 60 monthly
annuity payments]. The time of the actuarial equivalence is the
earlier of the time the retirement system receives the notice of the
conviction under Subsection (b) or the time the retirement system
begins the delay in payment of a benefit under Subsection (b).
(e) [(d)] For the purposes of this section, a person has
been convicted of causing the death of a member or annuitant if the
person:
(1) has pleaded guilty or nolo contendere to or has
been found guilty by a court of competent jurisdiction of an offense
at the trial of which it is established that the person's
intentional, knowing, or reckless act or omission resulted in the
death of a person who was a member or annuitant, regardless of
whether sentence is imposed or probated; and
(2) has no appeal of the conviction pending and the
time provided for appeal has expired.
SECTION 22. Subchapter G, Chapter 844, Government Code, is
amended by adding Section 844.601 to read as follows:
Sec. 844.601. PLAN FUNDING BY NON-ADOPTING COUNTY. (a)
This section applies only to a county that began participation in
the retirement system before January 1, 1992, and has not adopted
the provisions of Subchapter H.
(b) Except as provided by Subsections (c) and (d), the
county shall contribute to its account in the subdivision
accumulation fund at the same rate of current service compensation
as the employee contribution rate for the county.
(c) If in any year the retirement system's actuary
determines that the contributions of the county to the subdivision
accumulation fund under Subsection (b) will not finance the
county's obligations to the fund within the closed or open
amortization period recommended by the actuary and adopted by the
board of trustees for all subdivisions, the governing body of the
county shall adopt an order to reduce the amortization period to the
maximum period established by the board. The actuary shall
determine appropriate remedies for review and adoption by the
county. An order adopted under this subsection must first be
approved by the board of trustees and must require:
(1) a reduction in the employee contribution rate to a
rate not less than four percent of current service compensation;
(2) additional employer contributions under a
supplemental contribution rate as provided by Subsection (e);
(3) a reduction in the percentage for determining
multiple matching credits in five percent increments for
contributions made after the effective date of the reduction; or
(4) any combination of these actions.
(d) An order adopted under Subsection (c) takes effect on
the first day of the calendar year that begins after the date the
retirement system's actuary makes a determination described by
Subsection (c).
(e) A supplemental contribution rate under this section is
the rate of contribution by the county to its account in the
subdivision accumulation fund, in addition to the contributions
required under Subsection (b), that the retirement system's actuary
determines and certifies is required to amortize the obligations of
the county to the subdivision accumulation fund within the
established amortization period.
(f) A county that has not adopted the provisions of
Subchapter H may not adopt additional options and may not increase
service credits or benefits otherwise allowable under this subtitle
except for an increase in the rate of employee contributions or an
increase in the percentage of multiple matching credits to a rate or
percentage that does not exceed the rate or percentage in effect on
January 1, 2010.
SECTION 23. Section 844.701, Government Code, is amended to
read as follows:
Sec. 844.701. APPLICABILITY. Except for a county
described by Section 844.601, this [(a) This] subchapter applies
to each subdivision that participates [begins participation] in the
retirement system [after December 31, 1991].
[(b) The governing body of any subdivision participating
before January 1, 1992, by order or resolution may adopt the plan
provisions of this subchapter to be effective on January 1 of the
year following the year in which the order or resolution is received
by the system.
[(c) Other provisions of this subtitle apply to the plan
provisions of this subchapter except as modified by this
subchapter.]
SECTION 24. Section 844.704, Government Code, is amended to
read as follows:
Sec. 844.704. BENEFITS. (a) The [On the adoption of the
plan provisions of this subchapter, the] governing body of a [the]
subdivision shall select a percentage for determining multiple
matching credits [under Section 843.402. The governing body shall
select a percentage] of zero or any percentage that is a multiple of
five percent and that does not exceed 150 percent[, or it may select
the multiple matching percentage that the subdivision has in effect
on the date of its adoption of the plan provisions of this
subchapter]. The governing body may later increase the percentage
used in determining multiple matching credits under Section 843.402
to any percentage that is a multiple of five percent and that does
not exceed 150 percent, to take effect on the next January 1 after
the date the increase is adopted[, except that the sum of the
percentage for current service credits under Section 843.402 and
the percentage for multiple matching credits may not exceed 250
percent]. In its order or resolution, the governing body may
provide that the increased percentage will be used in determining
multiple matching credits [under Section 843.402] only for employee
contributions made after the effective date of the increase or that
the increased percentage will be used both prospectively and
retroactively in determining the multiple matching credits for all
employee contributions not otherwise matched at a higher
percentage. The governing body may thereafter reduce the
percentage used in determining multiple matching credits [under
Section 843.402] for contributions made after the effective date of
the reduction to zero or any percentage that is a multiple of five
percent, to take effect on the next January 1 after the date of the
reduction.
(b) The [On the adoption of the plan provisions of this
subchapter, the] governing body shall select a percentage for
determining allocated prior service credits of zero or any
percentage [under Section 843.105. The governing body shall
select a percentage] that is a multiple of five percent. [For a
subdivision that began participation before January 1, 1992, the
percentage cannot be less than the percentage in effect immediately
before the adoption of the plan.] The governing body may increase
the percentage used in determining allocated prior service credits
[under Section 843.105], to take effect on the next January 1 after
the date of the increase. The percentage may not exceed one-half
of the percentage that results from adding 200 percent to the lowest
percentage for determining multiple matching credit currently
applicable to any employee contribution with respect to the
subdivision.
(c) The subdivision shall provide current service credits
in accordance with Section 843.402.
(d) With the approval of the board of trustees, the [The]
governing body of a subdivision may adopt any benefit increase or
additional benefit, option, right, or feature as authorized under
this subtitle [or authorize:
[(1) an increase in retirement annuities under Section
844.209;
[(2) an increase in retirement annuities under Section
844.208;
[(3) the reestablishment of service credit previously
forfeited under Section 843.003;
[(4) the establishment of credited service for
military service under Section 843.502(c);
[(5) an optional service retirement eligibility
provision described by Section 844.1021; or
[(6) the partial lump-sum distribution on service
retirement under Section 844.009].
(e) The governing body may not adopt an increase or addition
to the subdivision's plan [the benefits of this section] if the
adoption would result in the combined rates of the subdivision's
normal contributions and prior service contributions for the first
calendar year following the adoption exceeding the maximum rate
prescribed by Section 844.703(c), unless a waiver under that
section is in effect.
(f) Other than an order or resolution of initial
participation in the retirement system and except as otherwise
authorized by the board of trustees, an [An] order or resolution
under this section must be filed with the retirement system not
later than December 15 of the year preceding the year in which it
will take effect and may not take effect until the order or
resolution is approved by the board of trustees as meeting the
requirements of this section. An [After approval by the board, an]
order or resolution adopted after participation begins may take
effect only on January 1 of a year[, except that an order or
resolution for a subdivision that begins participation after
January 1, 1992, may take effect on the date the subdivision begins
participation].
SECTION 25. Section 845.107, Government Code, is amended to
read as follows:
Sec. 845.107. AUDITS AND REVIEWS [AUDIT]. (a) In this
section:
(1) "Audit" means an audit authorized or required by a
statute of this state or of the United States or initiated or
commissioned by the board of trustees. The term includes a
financial audit, compliance audit, economy and efficiency audit,
effectiveness audit, performance audit, risk audit, and
investigation.
(2) "Audit working paper" includes all information,
documentary or otherwise, prepared or maintained in conducting an
audit or preparing an audit report, including:
(A) internal or external communications relating
to the audit that are made or received in the course of the audit;
and
(B) drafts of an audit report or portions of
those drafts.
(b) Annually, or more often, the board of trustees shall
have the accounts of the retirement system audited by a certified
public accountant.
(c) In addition to the financial audit required by
Subsection (b), the board of trustees may initiate or commission an
audit or investigation of activities, functions, or operations of
the retirement system as the board determines appropriate.
(d) Audit working papers prepared, maintained, or assembled
by the retirement system or an agent of the system are not a record
of the board of trustees for purposes of Section 845.112, and are
confidential and excepted from the disclosure requirements of
Chapter 552.
(e) Unless made confidential under other law, an audit
report, when accepted by the board of trustees in its final form, is
a record of the board and public information.
SECTION 26. Section 845.110, Government Code, is amended by
adding Subsection (c) to read as follows:
(c) On recommendation of the retirement system's actuary,
the board of trustees by rule may adopt a mortality basis to be used
in determining actuarial equivalents. A mortality basis adopted
under this subsection may not be applied in a manner that would
reduce a participant's monthly benefit that has accrued before the
later of the date the mortality basis is adopted or the date the
mortality basis is implemented.
SECTION 27. Section 845.114(a), Government Code, is amended
to read as follows:
(a) In this chapter [section], "participant" means a
member, former member, retiree, annuitant, beneficiary, or
alternate payee of the retirement system.
SECTION 28. Section 845.1151, Government Code, is amended
to read as follows:
Sec. 845.1151. ELECTRONIC INFORMATION. [(a) In this
section, "participant" has the meaning assigned by Section
845.114(a).
[(b)] The retirement system may provide confidential
information electronically to a participant and to a subdivision
and receive information electronically from those persons,
including by use of an electronic signature or certification in a
form acceptable to the retirement system. An unintentional
disclosure to, or unauthorized access by, a third party related to
the transmission or receipt of information under this section is
not a violation by the retirement system of any law, including a
rule relating to the protection of confidential information.
SECTION 29. Section 845.305(b), Government Code, is amended
to read as follows:
(b) All assets of the pension trust of the retirement system
shall be credited according to the purpose for which they are held
to one of the following funds:
(1) employees saving fund;
(2) subdivision accumulation fund;
(3) current service annuity reserve fund;
(4) income [interest] fund;
(5) endowment fund; or
(6) expense fund.
SECTION 30. The heading to Section 845.309, Government
Code, is amended to read as follows:
Sec. 845.309. INCOME [INTEREST] FUND.
SECTION 31. Section 845.309(a), Government Code, is amended
to read as follows:
(a) The income [interest] fund shall account for the
determination and allocation of net investment income or loss.
SECTION 32. Section 845.315(a), Government Code, is amended
to read as follows:
(a) As of December 31 of each year, the board of trustees
shall make the following allocations that in the aggregate equal
the net investment income or loss for the year:
(1) to the current service annuity reserve fund,
interest as allowed under this subtitle on the mean amount in the
current service annuity reserve fund during that year;
(2) to the optional group term life [supplemental
death benefits] fund, interest as allowed under this subtitle on
the mean amount in the optional group term life [supplemental death
benefits] fund during that year;
(3) to the general reserves account of the endowment
fund, a positive or negative amount determined by the board;
(4) to the employees saving fund, current interest as
allowed under this subtitle on the member account balances on
January 1 of that year of all persons who are members on December 31
of that year;
(5) to the accounts of subdivisions, other than
subdivisions otherwise described by this section, [an amount
derived by applying a] positive or negative amounts [rate,] as
determined under rules adopted by the board prescribing the
allocation methodology for the accounts[, to the January 1 balances
of that year]; and
(6) to the accounts of subdivisions to which Section
842.052 or 842.053 applies, positive or negative amounts as
determined by the board.
SECTION 33. Sections 845.402(b) and (c), Government Code,
are amended to read as follows:
(b) After timely notice to the board of trustees, the [The]
governing body of a participating subdivision may increase the rate
of its member contributions effective with [on] the first pay
period beginning in the following [day of any] calendar year.
(c) After timely notice to the board of trustees, the [The]
governing body of a participating subdivision may reduce the rate
of its member contributions effective with [on] the first pay
period beginning in the following [day of any] calendar year [if, at
least 90 days before the date of the reduction, the subdivision has
given written notice of the reduction to the board of trustees and
if the actuary determines that the reduction would not impair the
ability of the subdivision to fund all obligations against its
account in the subdivision accumulation fund before the 20th
anniversary of the subdivision's most recent actuarial valuation
date].
SECTION 34. Subchapter E, Chapter 845, Government Code, is
amended by adding Section 845.405 to read as follows:
Sec. 845.405. ALTERNATIVE PERIODS FOR ADMINISTRATIVE
COMPLIANCE. (a) Notwithstanding any other provision of this
subtitle, the board of trustees may authorize a subdivision to
remit to the retirement system contributions, deposits, and other
payments on the basis of a period that is less than a month,
including a weekly, biweekly, or other semimonthly period. A
subdivision authorized to remit amounts more frequently than
monthly shall make reports and filings and perform other actions
accordingly, and the retirement system shall credit payments
accordingly.
(b) The board of trustees may make an authorization under
Subsection (a) by rule applicable to all subdivisions similarly
situated or by order applicable to designated subdivisions. A rule
adopted under this subsection is amendable or revocable in the
manner provided for adoption, amendment, or repeal of rules
generally. An order adopted under this subsection is revocable
wholly or partly by subsequent board order.
(c) If the board of trustees adopts a rule or order under
Subsection (b), the board shall also adopt rules, applicable to a
subdivision electing or designated to take actions described by
this section more frequently than monthly, to alter the periods
required for submission of payments and reports, including the
period when a late penalty begins to accrue or is deducted from a
subdivision's account in the subdivision accumulation fund, in a
manner consistent with the periods provided by this subtitle.
(d) A participant may not receive less credited service,
service credit, or benefits due to an authorization under this
section than the participant would have received on a monthly
basis.
SECTION 35. Section 845.407(a), Government Code, is amended
to read as follows:
(a) Except as provided by Subsections (c), (d), and (e), a
participating subdivision that fails to provide the information
required by Section 845.403 or to pay all contributions required by
this subchapter to be made and remitted to the retirement system not
later than the 15th day of the month in which they become due shall
pay a penalty under this section. The penalty for a past-due
monthly remission is equal to interest on the past-due amounts for
each day past due at a nominal interest rate of 12 percent, plus a
$500 administrative fee. If the penalty is not paid within three
months after the date notice of the penalty has been sent to the
subdivision, the retirement system shall deduct the penalty from
the subdivision's account in the subdivision accumulation fund.
The interest portion of the penalty shall be deposited by the
retirement system in the distributable income account of the income
[interest] fund. The administrative fee portion of the penalty
shall be deposited by the retirement system in the expense fund.
SECTION 36. Sections 845.503(a) and (b), Government Code,
are amended to read as follows:
(a) The retirement system may reduce future payments of
benefits based on the account of a member, a retiree, or other
former member to recoup an amount overpaid or otherwise paid in
error to or on the behalf of a participant [the member, former
member, retiree, annuitant, or beneficiary]. If no future
payments are due, the retirement system may recover the overpayment
in any manner that is permitted for the collection of any other
debt.
(b) The retirement system may not recover from a participant
[member, former member, retiree, annuitant, or beneficiary] any
overpayment made more than three years before the date the
overpayment is discovered. This subsection does not apply to an
overpayment a reasonable person should know the person is not
entitled to receive.
SECTION 37. Section 844.601(b), Government Code, as added
by this Act, applies only to employer contributions to the Texas
County and District Retirement System that become due on or after
January 1, 2010. A county subject to Section 844.601(b),
Government Code, is obligated to make employer contributions to the
Texas County and District Retirement System before January 1, 2010,
at the rate in effect on August 31, 2009.
SECTION 38. The following laws are repealed:
(1) Section 843.0031(a), Government Code;
(2) Sections 843.502(d) and (e), Government Code;
(3) Sections 844.605, 844.606, 844.607, 844.608, and
844.609, Government Code;
(4) Section 845.115(f), Government Code; and
(5) Section 95, Chapter 873 (H.B. 1587), Acts of the
80th Legislature, Regular Session, 2007.
SECTION 39. (a) Except as provided by Subsection (b) of
this section, this Act takes effect January 1, 2010.
(b) Sections 841.0091 and 844.601, Government Code, as
added by this Act, Section 845.315, Government Code, as amended by
this Act, and Section 37 of this Act take effect September 1, 2009.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 407 was passed by the House on April
15, 2009, by the following vote: Yeas 147, Nays 0, 1 present, not
voting; and that the House concurred in Senate amendments to H.B.
No. 407 on May 23, 2009, by the following vote: Yeas 142, Nays 0, 2
present, not voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 407 was passed by the Senate, with
amendments, on May 19, 2009, by the following vote: Yeas 30, Nays
0.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor