Texas 2009 - 81st Regular

Texas Senate Bill SB1511 Compare Versions

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1	1	81R9835 TJS-F
2	2	By: Watson S.B. No. 1511
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to participation in, contributions to, and the benefits
8	8	and administration of retirement systems for police officers in
9	9	certain municipalities.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Section 6.01(f), Chapter 452 (S.B. 738), Acts of
12	12	the 72nd Legislature, Regular Session, 1991 (Article 6243n-1,
13	13	Vernon's Texas Civil Statutes), is amended to read as follows:
14	14	(f) For purposes of this section, compensation of each
15	15	noneligible member taken into account under this Act may not exceed
16	16	$200,000 [$150,000] per calendar year, indexed pursuant to Section
17	17	401(a)(17) of the Internal Revenue Code of 1986 (26 U.S.C. Section
18	18	401). The $200,000 [$150,000] limit does not apply to an eligible
19	19	member. For purposes of this subsection, an eligible member is any
20	20	individual who first became a member before January 1, 1996. For
21	21	purposes of this subsection, a noneligible member is any other
22	22	member.
23	23	SECTION 2. Section 8.01(a), Chapter 452 (S.B. 738), Acts of
24	24	the 72nd Legislature, Regular Session, 1991 (Article 6243n-1,
25	25	Vernon's Texas Civil Statutes), is amended to read as follows:
26	26	(a)(1) Deposits by the members to the police retirement
27	27	system shall be made at a rate of at least six percent of the basic
28	28	hourly earnings of each member. Deposits required to be made by
29	29	members shall be deducted from payroll. On recommendation of the
30	30	board, the Active--Contributory members may by a majority of those
31	31	voting increase the rate of member deposits above six percent to
32	32	whatever amount the board has recommended. If the deposit rate for
33	33	members has been increased to a rate above six percent, the rate may
34	34	be decreased if the board recommends the decrease, the board's
35	35	actuary approves the decrease, and a majority of the
36	36	Active--Contributory members voting on the matter approve the
37	37	decrease.
38	38	(2) The city shall contribute amounts equal to 18
39	39	percent of the basic hourly earnings of each member employed by the
40	40	city for all periods on or before September 30, 2010, subject to
41	41	additional amounts as provided by Subdivision (3) of this
42	42	subsection. The city shall contribute amounts equal to 19 percent
43	43	of the basic hourly earnings of each member employed by the city for
44	44	all periods after September 30, 2010, subject to additional amounts
45	45	as provided by Subdivision (3) of this subsection. The city council
46	46	may also authorize the city to make additional contributions to the
47	47	police retirement system in whatever amount the city council may
48	48	determine. Contributions by the city shall be made each pay period.
49	49	(3) The city shall contribute amounts in addition to
50	50	the amounts described by Subdivision (2) of this subsection as
51	51	required by Section 803.101(h), Government Code, to fund the
52	52	additional liabilities incurred by the police retirement system as
53	53	a result of participating in the proportionate retirement program.
54	54	The rate at which the city shall contribute additional amounts
55	55	under this subdivision is equal to 0.25 percent of the basic hourly
56	56	earnings of each member employed by the city for all periods from
57	57	January 4, 2009, through September 30, 2009. The rate at which the
58	58	city shall contribute additional amounts under this subdivision is
59	59	equal to 0.63 percent of the basic hourly earnings of each member
60	60	employed by the city for all periods after September 30, 2009,
61	61	subject to adjustment under Subdivision (4) of this subsection.
62	62	(4) The additional contribution rate under
63	63	Subdivision (3) of this subsection shall increase or decrease as
64	64	considered necessary by the actuary for the police retirement
65	65	system after each five-year period of participation by the system
66	66	in the proportionate retirement program in order to update the
67	67	amount necessary to fund the additional liabilities incurred by the
68	68	system as a result of participating in the proportionate retirement
69	69	program and of the consolidation of the city's public safety and
70	70	emergency management department with the police department on
71	71	January 4, 2009. The system's actuary shall perform an experience
72	72	study that shall be the basis for a contribution rate adjustment
73	73	under this subdivision. The effective date of the initial
74	74	contribution rate adjustment under this subdivision is October 1,
75	75	2015. Each later contribution rate adjustment under this
76	76	subdivision takes effect October 1 of every fifth year after the
77	77	effective date of the initial contribution rate adjustment. The
78	78	system's actuary shall present to the police retirement board the
79	79	experience study on which any contribution rate adjustment under
80	80	this subdivision is based not later than 45 days before the
81	81	effective date of the adjustment, and the city's actuary shall have
82	82	the opportunity to review and comment on the study. An adjustment
83	83	in the additional contribution rate under this subdivision may not
84	84	cause the percentage rate of the additional contribution rate under
85	85	Subdivision (3) of this subsection to be less than zero.
86	86	SECTION 3. Section 11.01, Chapter 452 (S.B. 738), Acts of
87	87	the 72nd Legislature, Regular Session, 1991 (Article 6243n-1,
88	88	Vernon's Texas Civil Statutes), is amended to read as follows:
89	89	Sec. 11.01. LIMITATION ON PAYMENT OF BENEFITS. (a) If
90	90	the amount of any benefit payment otherwise due under this Act or
91	91	the total payments due under this Act and any other qualified
92	92	defined benefit plan maintained by this city would exceed the
93	93	limitations provided by Section 415(b) [415], Internal Revenue Code
94	94	of 1986, as amended, and the regulations adopted under that
95	95	section, the police retirement system shall reduce the amount of
96	96	the benefit paid under this Act as required to comply with that
97	97	section. If the annual additions that would otherwise be allocated
98	98	under this Act, or the total annual additions under this Act and any
99	99	other qualified plan maintained by the city would exceed the limits
100	100	under Section 415(c), Internal Revenue Code of 1986, the annual
101	101	additions under this Act shall be reduced to the extent required to
102	102	comply with Section 415(c), Internal Revenue Code of 1986.
103	103	(b) For purposes of determining if the benefits or annual
104	104	additions satisfy the limits provided by Subsection (a) of this
105	105	section, the compensation to be used is wages within the meaning of
106	106	Section 3401(a), Internal Revenue Code of 1986, plus amounts
107	107	deferred at the election of the member that would be included in
108	108	wages if not deferred under the rules of Section 402(e)(3), 125(a),
109	109	132(f)(4), 457(b), 402(h)(1)(B), or 402(k), Internal Revenue Code
110	110	of 1986. However, any rules that would limit the remuneration
111	111	included in wages based on the nature or location of the employment
112	112	or the services performed are disregarded for purposes of
113	113	determining compensation. In addition, any wages paid after a
114	114	severance from employment are not included as compensation for
115	115	purposes of this subsection unless the payment is for regular pay
116	116	as described in 26 C.F.R. Section 1.415(c)-2(e)(3)(ii) and is made
117	117	by the later of two and one-half months after the severance from
118	118	employment or the end of the calendar year that includes the date of
119	119	severance from employment. If excess annual additions are made to
120	120	any member's account despite the efforts of the board of trustees,
121	121	the amount shall be treated in accordance with 26 C.F.R. Section
122	122	1.402(g)-1(e)(2) or (3).
123	123	(c) Notwithstanding any other provision of this Act, the
124	124	applicable mortality table for purposes of adjusting a benefit due
125	125	to the limitations provided under Section 415(b)(2)(B) or (D),
126	126	Internal Revenue Code of 1986, is the table prescribed by Revenue
127	127	Ruling 2001-62.
128	128	SECTION 4. Sections 13.01(b)(2) and (3), Chapter 452 (S.B.
129	129	738), Acts of the 72nd Legislature, Regular Session, 1991 (Article
130	130	6243n-1, Vernon's Texas Civil Statutes), are amended to read as
131	131	follows:
132	132	(2) "Eligible retirement plan" means[:
133	133	[(A)] an individual retirement account described
134	134	by Section 408(a) of the Internal Revenue Code of 1986 (26 U.S.C.
135	135	Section 408), an individual retirement annuity described in Section
136	136	408(b) of the Internal Revenue Code of 1986 (26 U.S.C. Section 408),
137	137	an annuity plan described in Section 403(a) of the Internal Revenue
138	138	Code of 1986 (26 U.S.C. Section 403), [or] a qualified trust
139	139	described in Section 401(a) of the Internal Revenue Code of 1986 (26
140	140	U.S.C. Section 401), an annuity contract described by Section
141	141	403(b) of the Internal Revenue Code of 1986 (26 U.S.C. Section 403),
142	142	or an eligible plan under Section 457(b) of the Internal Revenue
143	143	Code of 1986 (26 U.S.C. Section 457), that is maintained by a state,
144	144	a political subdivision of a state, or any agency or
145	145	instrumentality of a state or political subdivision of a state that
146	146	agrees to separately account for amounts transferred from the plan,
147	147	provided that any of the vehicles described above [that] accepts
148	148	the distributee's eligible rollover distribution[; or
149	149	[(B) an individual retirement account or
150	150	individual retirement annuity, in the case of an eligible rollover
151	151	distribution to a surviving spouse]. The term includes a
152	152	distribution to a surviving spouse or to a spouse or former spouse
153	153	who is the alternate payee under a qualified domestic relations
154	154	order within the meaning of Chapter 804, Government Code. In the
155	155	case of an eligible rollover distribution to a non-spouse
156	156	beneficiary, an eligible retirement plan includes only an
157	157	individual retirement account or individual retirement annuity
158	158	described above.
159	159	(3) "Distributee" means a member or former member, the
160	160	member's or former member's surviving spouse, [or] the member's or
161	161	former member's spouse or former spouse who is the alternate payee
162	162	under a qualified domestic relations order, as prescribed by
163	163	Section 804.003, Government Code, or the member's or former
164	164	member's non-spouse beneficiary.
165	165	SECTION 5. This Act takes effect September 1, 2009.