By: Duncan S.B. No. 1668
(In the Senate - Filed March 11, 2011; March 23, 2011, read
first time and referred to Committee on State Affairs;
April 21, 2011, reported favorably by the following vote: Yeas 9,
Nays 0; April 21, 2011, sent to printer.)
A BILL TO BE ENTITLED
AN ACT
relating to purchase of service credit in the Teacher Retirement
System of Texas.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. The heading to Section 823.304, Government Code,
is amended to read as follows:
Sec. 823.304. USERRA [REEMPLOYED VETERAN'S] CREDIT.
SECTION 2. Subsections (a), (c), and (d), Section 823.304,
Government Code, are amended to read as follows:
(a) A person eligible to establish USERRA [reemployed
veteran's] credit is one who qualifies under the Uniformed Services
Employment and [Veteran's] Reemployment Rights Act of 1994, 38
U.S.C. Section 4301 [2021] et seq., for the benefits of
reemployment in a position included within the membership of the
retirement system and who is entitled under that Act to additional
credit and benefits from the retirement system because of the
person's active duty in the armed forces of the United States.
(c) A person may establish credit under this section by
depositing with the retirement system for each year of service
claimed an amount equal to[:
[(1)] the member contributions to the retirement
system, as determined by the retirement system, that the person
would have made had the person continued to be employed in the
person's former position covered by the retirement system during
the entire period of active duty in the armed forces for which the
person is to receive retirement credit[; and
[(2) a fee of five percent, compounded annually, of
the required contribution from the date of the person's first
eligibility to establish the credit to the date of deposit].
(d) To the extent required by the Uniformed Services
Employment and [Veteran's] Reemployment Rights Act of 1994 and
permitted by Sections 401(a) and 415 of the Internal Revenue Code of
1986 (26 U.S.C. Sections 401 and 415), the retirement system may:
(1) grant the person service credit for the period of
active duty in the armed forces as if the person had been employed
in a position eligible for membership and credit with the
retirement system if the person establishes credit by making the
required deposits, or, if the person has not made the required
deposits, consider the period of active duty for the purpose of
determining whether the person meets the length-of-service
eligibility requirements for retirement or other benefits
administered by the retirement system as if the person had
established the credit; and
(2) include in relevant benefit computations under
this subtitle the annual compensation, as determined by the
retirement system, that would have been otherwise received by the
person for service covered by the retirement system during any year
in which the person had active duty in the armed forces.
SECTION 3. Subsection (c), Section 823.401, Government
Code, is amended to read as follows:
(c) A member eligible to establish credit under this section
is one who has at least five years of service credit in the
retirement system for actual service in public schools, including
at least one year completed after the relevant out-of-state
service.
SECTION 4. Subsections (c), (d), and (e), Section 823.402,
Government Code, are amended to read as follows:
(c) A member eligible to establish credit under this section
is one who:
(1) has at least five years of service credited
[credit] in the retirement system before the developmental leave
occurs; [and]
(2) has, [is an employee of a public school] at the
time the required deposits for the credit are paid, at least one
year of membership service credit in the retirement system
following the developmental leave; and
(3) has at least five years of service credited in the
retirement system at the time the required deposits for the credit
are paid [is sought].
(d) On or before the date a member takes developmental
leave, the member must [shall] file with the retirement system a
notice of intent to take developmental leave, and the member's
employer must [shall] file with the retirement system a
certification that the leave meets the requirements of Subsection
(b). The notice of intent and the certification must be in the form
required by the retirement system. Leave is not creditable in the
retirement system if the member does not submit notice of intent and
obtain the certification required by this subsection.
(e) A member may establish credit under this section by
depositing with the retirement system for each year of
developmental leave certified the actuarial present value, at the
time of deposit, of the additional standard retirement annuity
benefits that would be attributable to the purchase of the service
credit under this section, based on rates and tables recommended by
the retirement system's actuary and adopted by the board of
trustees [claimed an amount equal to the sum of:
[(1) the rate of member contributions required during
the year of leave, times the member's annual rate of compensation
during the member's most recent year of creditable service that
preceded the year of leave; plus
[(2) the amount that the state would have contributed
had the member performed membership service during the year of
leave at the member's annual rate of compensation during the most
recent year of service that preceded the leave].
SECTION 5. Subsection (c), Section 823.501, Government
Code, is amended to read as follows:
(c) A member may reinstate canceled credit under this
section by depositing with the retirement system:
(1) the amount withdrawn or refunded; plus
(2) a reinstatement fee of eight [six] percent,
compounded annually, of the amount withdrawn or refunded from the
date of withdrawal or refund to the date of redeposit.
SECTION 6. Subsections (h) and (j), Section 825.403,
Government Code, are amended to read as follows:
(h) If deductions were previously required but not paid, the
retirement system may not provide benefits based on the service or
compensation unless the deposits required by this section have been
fully paid. The person's employer at the time the unreported
service was rendered or compensation was paid must verify the
service or compensation as required by Subsection (j) and the
person must submit the verification to the retirement system not
later than five years after [member shall pay the amount of those
deductions plus a fee computed at a rate of five percent a year on
the unpaid amount from] the end of the school year in which the
service was rendered or compensation was paid. To establish the
service or compensation credit, the person must deposit with the
retirement system the actuarial present value, at the time of
deposit, of the additional standard retirement annuity benefits
that would be attributable to the purchase of service or
compensation credit under this section, based on rates and tables
recommended by the retirement system's actuary and adopted by the
board of trustees [deductions first became due or the end of the
1974-75 school year, whichever is later, to the date of payment].
The board of trustees shall:
(1) prescribe terms for payments under this
subsection; and
(2) credit the person [member] for prior service to
which the person [member] is entitled under this subtitle[; and
[(3) deposit the fee required by this subsection in
the state contribution account].
(j) If deductions were previously required [of a member] but
not paid, proof of service satisfactory to the retirement system
must be made before service credit is granted or payment for the
credit is required. Proof of service is sufficient if the person's
[member's] employer documents that the employer has records made at
or near the time of service that establish the amount of time worked
and salary earned. [A member may submit in lieu of employer
documentation internal revenue, social security, bank, or other
written records that were made at or near the time of service and
that establish the amount of time worked and salary earned.] An
affidavit based on memory without written records made at or near
the time of service is not sufficient documentation for the
establishment of service credit. The retirement system may audit
records used for documentation under this subsection. A person who
does not obtain proof of service as required by this section may not
establish the service or compensation credit.
SECTION 7. (a) The following sections of the Government
Code are repealed:
(1) Subsection (i), Section 823.401;
(2) Subsections (g) and (h), Section 823.402; and
(3) Subsection (e), Section 823.501.
(b) Section 57, Chapter 1359 (S.B. 1691), Acts of the 79th
Legislature, Regular Session, 2005, is repealed.
SECTION 8. Subsections (d) and (e), Section 823.401,
Government Code, as amended by Section 10, Chapter 1359 (S.B.
1691), Acts of the 79th Legislature, Regular Session, effective
September 1, 2005, apply to a person who was a member of the Teacher
Retirement System of Texas on December 31, 2005, and to
out-of-state service performed before January 1, 2006,
notwithstanding Section 57 of that Act.
SECTION 9. For unreported service rendered or unreported
compensation paid before the effective date of this Act, the
verification required under Subsection (h), Section 825.403,
Government Code, as amended by this Act, must be received by the
Teacher Retirement System of Texas not later than August 31, 2016.
SECTION 10. (a) Notwithstanding the service credit cost
provisions of Section 8 of this Act and Subsection (e), Section
823.402, Subdivision (2), Subsection (c), Section 823.501, and
Subsection (h), Section 825.403, Government Code, as amended by
this Act, a person may establish service credit by paying the
deposits and fees required under Sections 823.402, 823.501, and
825.403, Government Code, and by Section 57, Chapter 1359 (S.B.
1691), Acts of the 79th Legislature, Regular Session, 2005, as
those sections existed before amendment or repeal by this Act, if:
(1) the person otherwise meets all eligibility
requirements under those sections as amended by this Act;
(2) the service for which credit is sought to be
established was rendered, or the compensation for which credit is
sought was paid, before the effective date of this Act; and
(3) the person makes payment for the service credit,
or enters into an installment agreement for payment, not later than
August 31, 2013.
(b) If a person has an installment agreement under
Subsection (a) of this section that is terminated after August 31,
2013, before the person has made all of the payments, the person may
establish credit only as provided by Sections 823.402, 823.501, and
825.403, Government Code, as amended by this Act, and by Section 8
of this Act.
SECTION 11. This Act takes effect September 1, 2011.
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