Texas 2011 - 82nd Regular

Texas Senate Bill SB1164 Compare Versions

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1	1	By: Wentworth S.B. No. 1164
2	2	(In the Senate - Filed March 4, 2011; March 16, 2011, read
3	3	first time and referred to Committee on State Affairs;
4	4	April 26, 2011, reported adversely, with favorable Committee
5	5	Substitute by the following vote: Yeas 9, Nays 0; April 26, 2011,
6	6	sent to printer.)
7	7	COMMITTEE SUBSTITUTE FOR S.B. No. 1164 By: Van de Putte
8	8
9	9
10	10	A BILL TO BE ENTITLED
11	11	AN ACT
12	12	relating to optional annuity increases and annual supplemental
13	13	payments for certain retirees and beneficiaries of the Texas
14	14	Municipal Retirement System.
15	15	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
16	16	SECTION 1. Subsection (c), Section 853.404, Government
17	17	Code, is amended to read as follows:
18	18	(c) The governing body of a participating municipality that
19	19	adopts an ordinance under Section 854.203 providing for increased
20	20	annuities effective January 1 of a designated year may further
21	21	provide in the ordinance that increases in annuities will be
22	22	credited effective January 1 of each year following the designated
23	23	year based on recomputations made as provided by Section 854.203(b)
24	24	[854.203(b)(1)] for each year following the initial computation,
25	25	and using the fraction specified in the ordinance as required under
26	26	Section 854.203(b) [854.203(b)(2)] in the recomputations.
27	27	SECTION 2. The heading to Section 854.203, Government Code,
28	28	is amended to read as follows:
29	29	Sec. 854.203. OPTIONAL ANNUITY INCREASE OR ANNUAL
30	30	SUPPLEMENTAL PAYMENTS [IN RETIREMENT ANNUITIES].
31	31	SECTION 3. Section 854.203, Government Code, is amended by
32	32	amending Subsections (a), (b), (f), and (g) and adding Subsections
33	33	(b-1), (b-2), (b-3), and (b-4) to read as follows:
34	34	(a) The governing body of a participating municipality by
35	35	ordinance, from time to time but not more frequently than once in
36	36	each 12-month period, may authorize and provide for an increased
37	37	annuity, a supplemental payment, or both [annuities] to be paid to
38	38	retirees and beneficiaries of deceased retirees of the
39	39	municipality. An annuity increased under this section replaces any
40	40	annuity or increased annuity previously granted to the same person.
41	41	(b) The amount of annuity increase under this section is
42	42	computed by one of the following methods:
43	43	(1) as the sum of the prior and current service
44	44	annuities on the effective date of retirement of the person on whose
45	45	service the annuities are based, multiplied by:
46	46	(A) [(1)] the percentage change in the Consumer
47	47	Price Index for All Urban Consumers, published by the Bureau of
48	48	Labor Statistics of the United States Department of Labor, from
49	49	December of the year immediately preceding the effective date of
50	50	the person's retirement to the December that is 13 months before the
51	51	effective date of the ordinance providing the annuity increase; and
52	52	(B) [(2)] 30 percent, 50 percent, or 70 percent,
53	53	as specified by the governing body in the ordinance, except that if
54	54	the governing body has specified a different percentage in an
55	55	ordinance adopted under Section 853.404(c) and in effect on
56	56	December 31, 1999, the percentage used in computing annuity
57	57	increases for retirees of that municipality remains in effect until
58	58	changed or discontinued under Section 853.404; or
59	59	(2) as the sum of the prior and current service
60	60	annuities of the person on whose service the annuities are based on
61	61	the effective date of the annuity increase multiplied by the
62	62	percentage increase specified in the ordinance adopted by the
63	63	governing body, except that an adjustment to an annuity after the
64	64	annuity starting date for annuity increases under this subdivision
65	65	may not cause an annuitant's annuity to exceed the amount that the
66	66	annuitant would be entitled to had 100 percent of the amount
67	67	described by Subdivision (1)(A) been applied to the annuitant's
68	68	annuity on the effective date of retirement.
69	69	(b-1) An increase under Subsection (b)(2) applies to all
70	70	annuities for which the effective date of retirement of the person
71	71	on whose service the annuity is based is at least 12 months before
72	72	the effective date of the increase. Notwithstanding any other
73	73	provision of this subtitle, each distribution of a benefit under
74	74	this subtitle must be determined and made in accordance with
75	75	Section 401(a)(9), Internal Revenue Code of 1986. The board of
76	76	trustees may adopt rules it considers necessary to comply with the
77	77	distribution requirements.
78	78	(b-2) The amount of a supplemental payment under this
79	79	section is an amount equal to the sum of the prior and current
80	80	service annuities of the person on whose service the annuities are
81	81	based on the date that is the 30th day after the effective date of
82	82	the ordinance as described by Subsection (c) multiplied by the
83	83	percentage specified in the ordinance adopted by the governing
84	84	body, which may not exceed 120 percent. A supplemental payment
85	85	under this section must be issued on:
86	86	(1) March 31, if the effective date of the ordinance
87	87	described by Subsection (c) is January 1; or
88	88	(2) the 60th day after the date on which the amount of
89	89	the payment is calculated under this subsection, if the effective
90	90	date of the ordinance is not January 1.
91	91	(b-3) If the effective date of retirement of the person on
92	92	whose service the annuity is based is less than 12 months before the
93	93	date on which the amount of the payment is calculated under
94	94	Subsection (b-2), the supplemental payment shall be prorated based
95	95	on the number of months the person is retired.
96	96	(b-4) A supplemental payment under this section is an
97	97	obligation of the municipality's account in the municipality
98	98	accumulation fund.
99	99	(f) An increase granted to an annuitant under Subsection
100	100	(b)(2), or the [The] amount by which an increase under Subsection
101	101	(b)(1) [this section] exceeds all previously granted increases to
102	102	an annuitant is:
103	103	(1) payable as a prior service annuity;
104	104	(2) [, is] an obligation of the municipality's account
105	105	in the municipality accumulation fund;[,] and
106	106	(3) [is] subject to reduction under Section
107	107	855.308(f).
108	108	(g) An ordinance under this section may not take effect
109	109	until it is approved by the board of trustees as meeting the
110	110	requirements of this section. The board may not approve an
111	111	ordinance unless the actuary first determines that all obligations
112	112	charged against the municipality's account in the municipality
113	113	accumulation fund, including the obligations proposed in the
114	114	ordinance, can be funded by the municipality within its maximum
115	115	contribution rate and within its amortization period as in effect
116	116	on the effective date of the annuity increases or supplemental
117	117	payments.
118	118	SECTION 4. This Act takes effect immediately if it receives
119	119	a vote of two-thirds of all the members elected to each house, as
120	120	provided by Section 39, Article III, Texas Constitution. If this
121	121	Act does not receive the vote necessary for immediate effect, this
122	122	Act takes effect September 1, 2011.
123	123	* * * * *