Texas 2011 - 82nd Regular

Texas Senate Bill SB350 Compare Versions

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1	1	By: Williams S.B. No. 350
2	2	(Truitt)
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the restructuring of fund obligations and accounts of
8	8	the Texas Municipal Retirement System and related actuarial and
9	9	accounting procedures.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Section 851.001, Government Code, is amended by
12	12	amending Subdivisions (1) and (16) and adding Subdivision (20) to
13	13	read as follows:
14	14	(1) "Accumulated contributions" means the sum of all
15	15	contributions made by a member and credited to the member's
16	16	individual account [in the employees saving fund], plus interest
17	17	allowed on the account as provided by this subtitle.
18	18	(16) "Member" means a person for whom an individual
19	19	account has been established in the retirement system [employees
20	20	saving fund] and whose membership has not terminated under Section
21	21	852.104.
22	22	(20) "Individual account" means an individual account
23	23	for a member in the benefit accumulation fund, as established under
24	24	Section 855.306(a).
25	25	SECTION 2. Subsection (a), Section 852.103, Government
26	26	Code, is amended to read as follows:
27	27	(a) A living person who is not an employee of a
28	28	participating department and who has not retired may, after
29	29	application, withdraw all of the accumulated contributions
30	30	credited to the person's individual account [in the employees
31	31	saving fund], and the retirement system shall close the account.
32	32	SECTION 3. Subsection (b), Section 852.105, Government
33	33	Code, is amended to read as follows:
34	34	(b) A governing body may not adopt an ordinance under this
35	35	section unless the actuary first determines, on the basis of
36	36	mortality and other tables adopted by the board of trustees, that
37	37	all obligations of the municipality to the benefit [municipality]
38	38	accumulation fund, including obligations proposed under the
39	39	ordinance, can be funded by the municipality within its maximum
40	40	contribution rate and within its amortization period.
41	41	SECTION 4. Subsection (d), Section 852.108, Government
42	42	Code, is amended to read as follows:
43	43	(d) Member contributions under Section 855.402 shall be
44	44	made on all compensation paid to the employee by the reemploying
45	45	municipality at the same rate as is required of other employees of
46	46	the department. The retirement system shall credit [deposit] the
47	47	contributions on receipt to the member's [in an] individual account
48	48	[for the member in the employees saving fund] and shall credit the
49	49	account with interest annually at the same rate and manner as the
50	50	accounts of other members are credited. The compensation paid to
51	51	the employee by the reemploying municipality shall be included in
52	52	computing the monthly contributions the municipality makes to the
53	53	benefit [municipality] accumulation fund.
54	54	SECTION 5. Subsections (b) and (d), Section 852.109,
55	55	Government Code, are amended to read as follows:
56	56	(b) Member contributions under Section 855.402 shall be
57	57	made on all compensation paid to the employee by the municipality at
58	58	the same rate as is required of other employees of the department.
59	59	The retirement system shall credit [deposit] the contributions on
60	60	receipt to the member's [in an] individual account [for the member
61	61	in the employees saving fund] and shall credit the account with
62	62	interest at the same rate and in the same manner as the accounts of
63	63	other members are credited. The compensation paid to the employee
64	64	by the municipality shall be included in computing the monthly
65	65	contributions the municipality makes to the benefit [municipality]
66	66	accumulation fund.
67	67	(d) The additional service retirement benefit allowable to
68	68	a person to whom this section applies is, at the option of that
69	69	person, either:
70	70	(1) a refund of accumulated contributions made since
71	71	reemployment plus any accrued interest on the accumulated
72	72	contributions allowed by the retirement system; or
73	73	(2) a benefit consisting of:
74	74	(A) a basic annuity actuarially determined from
75	75	the sum of the member's contributions [deposits] made and
76	76	accumulated since the date the person last became a member together
77	77	with interest accrued [accumulated] on that amount since the person
78	78	last became a member and an amount from the benefit [municipality]
79	79	accumulation fund equal to the amount of the member's contributions
80	80	[deposits] credited to the member's individual account since the
81	81	person last became a member together with interest accrued
82	82	[accumulated] on that amount since the person last became a member;
83	83	or
84	84	(B) a greater amount authorized by the
85	85	municipality under Section 855.501.
86	86	SECTION 6. Subsection (e), Section 853.003, Government
87	87	Code, is amended to read as follows:
88	88	(e) A governing body may not adopt an ordinance under
89	89	Subsection (a) unless the actuary first determines that all
90	90	obligations charged against the municipality's account in the
91	91	benefit [municipality] accumulation fund, including the
92	92	obligations proposed in the ordinance, can be funded by the
93	93	municipality within its maximum contribution rate and within its
94	94	amortization period.
95	95	SECTION 7. Subsection (c), Section 853.402, Government
96	96	Code, is amended to read as follows:
97	97	(c) The base updated service credit of a member is an amount
98	98	computed as the number 1.03, times the difference by which the
99	99	amount computed under Subdivision (1) exceeds the amount computed
100	100	under Subdivision (2), where:
101	101	(1) "(1)" is an amount equal to the accumulation at
102	102	three percent interest of a series of monthly amounts for the number
103	103	of months of credited service on the date prescribed by Subsection
104	104	(e), each amount of which equals the member's average updated
105	105	service compensation, times the sum of:
106	106	(A) the rate of contributions required of the
107	107	member for current service; plus
108	108	(B) the member's contribution rate, times the
109	109	municipal current service ratio in effect on the effective date of
110	110	the ordinance adopted under Section 853.401; and where
111	111	(2) "(2)" is an amount equal to the sum of:
112	112	(A) the amount credited to the member's
113	113	individual account [in the employees saving fund] on the date
114	114	prescribed by Subsection (e), subject to a 1 to 1 matching ratio,
115	115	times 2; plus
116	116	(B) the amount credited to the member's
117	117	individual account, subject to a 1.5 to 1 matching ratio, times 2.5;
118	118	plus
119	119	(C) the amount credited to the member's
120	120	individual account, subject to a 2 to 1 matching ratio, times 3.
121	121	SECTION 8. Subsection (a), Section 853.403, Government
122	122	Code, is amended to read as follows:
123	123	(a) An ordinance adopted under Section 853.401 may not take
124	124	effect unless the board of trustees approves the ordinance as
125	125	meeting the requirements of this section. The board may not approve
126	126	an ordinance unless the actuary first determines, and the board
127	127	concurs in the determination, that all obligations charged against
128	128	the municipality's account in the benefit [municipality]
129	129	accumulation fund, including obligations proposed in the
130	130	ordinance, can be funded by the municipality within its maximum
131	131	total contribution rate and within its amortization period as in
132	132	effect on the date the updated service credits take effect.
133	133	SECTION 9. Subsection (d), Section 853.404, Government
134	134	Code, is amended to read as follows:
135	135	(d) Except as provided by Subsection (e), an ordinance under
136	136	this section continues in effect for each year that the actuary
137	137	determines that all obligations charged against the municipality's
138	138	account in the benefit [municipality] accumulation fund, including
139	139	the obligations to become effective the next January 1, can be
140	140	funded by the municipality within its maximum contribution rate and
141	141	within its amortization period as in effect on the next January 1.
142	142	An ordinance under this section will cease to be in effect for
143	143	future years if the actuary cannot make that determination, but
144	144	shall again take effect for future years beginning January 1 of the
145	145	first year after the actuary can make that determination.
146	146	SECTION 10. Subsection (c), Section 853.505, Government
147	147	Code, is amended to read as follows:
148	148	(c) When a person who has military service credit under
149	149	Section 853.502 retires and has paid for military service credit
150	150	under former law, the retirement system shall compute an amount
151	151	equal to the sum of any [transfer to the current service annuity
152	152	reserve fund the] accumulated amount paid by the person for the
153	153	military service credit under former law, plus [Section 853.504(b)
154	154	and] an equal amount multiplied by [from the municipality account
155	155	in the municipality accumulation fund equal to the accumulated
156	156	amount paid by the person times] the municipality's current service
157	157	matching percent in effect on the date the member applied [applies]
158	158	for the military service credit [under Section 853.504(b)]. The
159	159	retirement system shall use the sum derived from that computation
160	160	[amounts] to make annuity payments to the person that are computed
161	161	in the same manner as is the person's current service annuity, but
162	162	the military service credit and the sum [amounts] may not be used in
163	163	other computations, including computations of updated service
164	164	credits or prior service credits.
165	165	SECTION 11. Subsection (a), Section 853.601, Government
166	166	Code, is amended to read as follows:
167	167	(a) The governing body of a participating municipality in
168	168	ordinances authorizing updated service credits under Section
169	169	853.401 on or after January 1, 1984, may provide that those members
170	170	who are eligible for such credits on the basis of service with the
171	171	granting municipality, who have unforfeited credit for prior
172	172	service or current service with another participating municipality
173	173	or municipalities by reason of previous employment, and who are
174	174	contributing members on the date prescribed by Section 853.402(e),
175	175	shall be credited in the retirement system with updated service
176	176	credit calculated in the manner prescribed by Sections 853.401 and
177	177	853.402, except that in determining the base updated service credit
178	178	of the member under Section 853.402(c)(1), all unforfeited credited
179	179	service performed by the member by reason of previous employment in
180	180	other participating municipalities prior to the date prescribed by
181	181	Section 853.402(e) shall be treated as if performed in the service
182	182	of the municipality adopting the ordinance, and that amount shall
183	183	be reduced by an amount equal to the sum of:
184	184	(1) 2 times the amount credited to the member's
185	185	individual account [accounts in the employees saving fund] on the
186	186	date prescribed in Section 853.402(e), which any participating
187	187	municipality has undertaken to match on a 1 to 1 ratio; plus
188	188	(2) 2.5 times the amount credited to the member's
189	189	individual account [accounts], subject to a 1.5 to 1 matching ratio
190	190	by any participating municipality; plus
191	191	(3) 3 times the amount credited to the member's
192	192	individual account [accounts], subject to a 2 to 1 matching ratio by
193	193	any participating municipality; and plus
194	194	(4) the sum of all updated service credits, prior
195	195	service credits, special prior service credits, and antecedent
196	196	service credits allowed to the member by any other participating
197	197	municipality by which the member was previously employed and to
198	198	which the member is entitled.
199	199	SECTION 12. Subsections (c) and (d), Section 854.002,
200	200	Government Code, are amended to read as follows:
201	201	(c) A current service annuity is actuarially determined on
202	202	the date of a member's retirement from the sum of:
203	203	(1) the amount credited to the member's individual
204	204	account [in the employees saving fund]; and
205	205	(2) an additional [the] amount from the benefit
206	206	[municipality] accumulation fund equal to the amount in the
207	207	member's individual account or a greater amount authorized by a
208	208	participating municipality under Section 855.501.
209	209	(d) Notwithstanding any other provision of this subtitle,
210	210	instead of an annuity, a person will receive from the retirement
211	211	system a single payment equal to the sum of the following if on the
212	212	date of that person's retirement that sum is $10,000 or less:
213	213	(1) any updated service credit or any prior service,
214	214	special prior service, or antecedent service credit for that person
215	215	on the date of retirement, plus accumulated interest;
216	216	(2) the amount credited to the person's individual
217	217	account [in the employees saving fund]; and
218	218	(3) an additional [the] amount from the benefit
219	219	[municipality] accumulation fund equal to the amount in the
220	220	member's individual account or a greater amount authorized by a
221	221	participating municipality under Section 855.501.
222	222	SECTION 13. Subsection (b), Section 854.008, Government
223	223	Code, is amended to read as follows:
224	224	(b) The amount of a lump-sum distribution under this section
225	225	may not exceed three-fourths of the total contributions and
226	226	accumulated interest in the member's individual account [in the
227	227	employees saving fund] at the time of the member's retirement.
228	228	SECTION 14. Subsection (c), Section 854.201, Government
229	229	Code, is amended to read as follows:
230	230	(c) A governing body may not adopt an ordinance under this
231	231	section unless the actuary first determines that all obligations
232	232	charged against the municipality's account in the benefit
233	233	[municipality] accumulation fund, including the obligations
234	234	proposed in the ordinance, can be funded by the municipality within
235	235	its maximum contribution rate and within its amortization period.
236	236	SECTION 15. Subsection (d), Section 854.202, Government
237	237	Code, is amended to read as follows:
238	238	(d) An ordinance adopted under this section must also
239	239	include the provisions specified in Section 852.105. A governing
240	240	body may not adopt an ordinance under this section unless the
241	241	actuary first determines, on the basis of mortality and other
242	242	tables adopted by the board of trustees, that all obligations of the
243	243	municipality to the benefit [municipality] accumulation fund,
244	244	including obligations proposed under the ordinance, can be funded
245	245	by the municipality within its maximum contribution rate and within
246	246	its amortization period.
247	247	SECTION 16. Subsections (f) and (g), Section 854.203,
248	248	Government Code, are amended to read as follows:
249	249	(f) The amount by which an increase under this section
250	250	exceeds all previously granted increases to an annuitant is payable
251	251	as a prior service annuity, is an obligation of the municipality's
252	252	account in the benefit [municipality] accumulation fund, and is
253	253	subject to reduction under Section 855.308(f).
254	254	(g) An ordinance under this section may not take effect
255	255	until it is approved by the board of trustees as meeting the
256	256	requirements of this section. The board may not approve an
257	257	ordinance unless the actuary first determines that all obligations
258	258	charged against the municipality's account in the benefit
259	259	[municipality] accumulation fund, including the obligations
260	260	proposed in the ordinance, can be funded by the municipality within
261	261	its maximum contribution rate and within its amortization period as
262	262	in effect on the effective date of the increases.
263	263	SECTION 17. Subsections (a) and (c), Section 854.309,
264	264	Government Code, are amended to read as follows:
265	265	(a) Except as provided by Subsection (b), if a disability
266	266	retirement annuity is discontinued under Section 854.307 or the
267	267	right to an annuity revoked under Section 854.306(b) [854.306(c)],
268	268	the retiree is entitled to a lump-sum payment in an amount, if any,
269	269	by which the amount in the retiree's individual account [in the
270	270	employees saving fund] at the time of disability retirement exceeds
271	271	the amount of current service annuity payments made before the date
272	272	the annuity was discontinued or the right to an annuity revoked.
273	273	(c) The benefit provided by this section is payable from the
274	274	benefit accumulation [current service annuity reserve] fund.
275	275	SECTION 18. Subsection (b), Section 854.405, Government
276	276	Code, is amended to read as follows:
277	277	(b) A governing body may not adopt an ordinance under this
278	278	section unless the actuary first determines, on the basis of
279	279	mortality and other tables adopted by the board of trustees, that
280	280	all obligations of the municipality to the benefit [municipality]
281	281	accumulation fund, including obligations proposed under the
282	282	ordinance, can be funded by the municipality within its maximum
283	283	contribution rate and within its amortization period.
284	284	SECTION 19. Subsection (a), Section 854.501, Government
285	285	Code, is amended to read as follows:
286	286	(a) Except as provided by Subsection (c), if a member dies
287	287	before retirement, a lump-sum death benefit is payable from the
288	288	benefit accumulation [employees saving] fund in the amount of:
289	289	(1) the amount credited to the member's individual
290	290	account [in the fund]; plus
291	291	(2) interest computed from the beginning of the year
292	292	in which death occurs through the end of the month immediately
293	293	preceding the month in which death occurs at the rate allowed on
294	294	member contributions during the preceding year.
295	295	SECTION 20. Section 854.502, Government Code, is amended to
296	296	read as follows:
297	297	Sec. 854.502. REFUND OF UNRECOVERED CONTRIBUTIONS. (a) If
298	298	monthly payments of any standard service retirement annuity under
299	299	Section 854.103, optional service retirement annuity under Section
300	300	854.104, standard disability retirement annuity under Section
301	301	854.304, optional disability retirement annuity under Section
302	302	854.305, standard occupational disability retirement annuity under
303	303	Section 854.408, or optional occupational disability retirement
304	304	annuity under Section 854.410 cease before the sum of all payments
305	305	of the annuity equals or exceeds the amount of accumulated
306	306	contributions credited to [in] the member's individual account [in
307	307	the employees saving fund] at the time of retirement of the member
308	308	on whose service the annuity was based, a lump-sum benefit equal to
309	309	the amount by which the amount of the accumulated contributions
310	310	exceeds the sum of all payments made by reason of the annuity is
311	311	payable:
312	312	(1) to the designated beneficiary, if living, or if
313	313	not living, to the estate of the designated beneficiary, if the
314	314	designated beneficiary survived the retiree; or
315	315	(2) to the estate of the retiree, if the designated
316	316	beneficiary predeceased the retiree.
317	317	(b) The benefit provided by this section is payable from the
318	318	benefit [current service annuity reserve fund and the municipality]
319	319	accumulation fund [in the ratio that the part of the annuity that
320	320	was payable from each of those funds bears to the entire benefit
321	321	determined on the effective date of retirement].
322	322	SECTION 21. Subsection (c), Section 855.305, Government
323	323	Code, is amended to read as follows:
324	324	(c) All assets of the retirement system shall be credited,
325	325	according to the purpose for which they are held, to one of the
326	326	following funds:
327	327	(1) benefit [employees saving fund;
328	328	[(2) municipality] accumulation fund;
329	329	[(3) current service annuity reserve fund;]
330	330	(2) [(4)] interest fund;
331	331	(3) [(5)] endowment fund;
332	332	(4) [(6)] expense fund;
333	333	(5) [(7)] supplemental disability benefits fund; or
334	334	(6) [(8)] supplemental death benefits fund.
335	335	SECTION 22. The heading to Section 855.306, Government
336	336	Code, is amended to read as follows:
337	337	Sec. 855.306. MEMBER'S INDIVIDUAL ACCOUNT [EMPLOYEES
338	338	SAVING FUND].
339	339	SECTION 23. Section 855.306, Government Code, is amended by
340	340	amending Subsection (a) and adding Subsection (d) to read as
341	341	follows:
342	342	(a) The retirement system shall establish in the
343	343	participating municipality's account in the benefit accumulation
344	344	fund an individual account for each person who is a member of the
345	345	system through employment in that municipality. The retirement
346	346	system shall credit to [deposit in] a member's individual account
347	347	[in the employees saving fund]:
348	348	(1) the amount of contributions to the retirement
349	349	system deducted from the member's compensation;
350	350	(2) interest allowed on amounts credited to [money in]
351	351	the account in accordance with this subtitle; and
352	352	(3) the portion of a deposit required by Section
353	353	853.003 to reinstate credited service previously canceled that
354	354	represents the amount withdrawn.
355	355	(d) If a retiree resumes employment under Section 854.308,
356	356	the retirement system shall reestablish an individual account for
357	357	the member in the participating municipality's account in the
358	358	benefit accumulation fund and credit to that account the portion of
359	359	the balance of the person's retirement reserve that is attributable
360	360	to the person's prior accumulated contributions.
361	361	SECTION 24. Section 855.307, Government Code, is amended to
362	362	read as follows:
363	363	Sec. 855.307. BENEFIT [MUNICIPALITY] ACCUMULATION FUND:
364	364	CURRENT SERVICE. (a) The retirement system shall credit or charge
365	365	to the account of a participating municipality in the benefit
366	366	[municipality] accumulation fund:
367	367	(1) all current service contributions made by the
368	368	municipality to the retirement system;
369	369	(2) net investment income or loss allocated to the
370	370	fund under Section 855.317; and
371	371	(3) the withdrawal charge for reinstatement of
372	372	credited service as provided by Section 853.003.
373	373	(b) The retirement system shall pay from the account of a
374	374	participating municipality in the benefit [municipality]
375	375	accumulation fund:
376	376	(1) all payments under annuities arising from current
377	377	service credits [money to the current service annuity reserve fund
378	378	in accordance with Section 855.318]; and
379	379	(2) refunds to certain municipalities in accordance
380	380	with Section 855.319.
381	381	(c) If credited service previously canceled is reinstated
382	382	in accordance with Section 853.003, the retirement system shall
383	383	charge the municipality's account in the benefit [municipality]
384	384	accumulation fund with the necessary reserves to fund the credits
385	385	based on current service that are restored to the member.
386	386	(d) The annuities payable as provided by this section are
387	387	liabilities and obligations of the participating municipality for
388	388	which the service was performed on which the annuities are based and
389	389	are payable from the municipality's account in the benefit
390	390	accumulation fund.
391	391	SECTION 25. The heading to Section 855.308, Government
392	392	Code, is amended to read as follows:
393	393	Sec. 855.308. BENEFIT [MUNICIPALITY] ACCUMULATION FUND:
394	394	PRIOR SERVICE.
395	395	SECTION 26. Section 855.308, Government Code, is amended by
396	396	amending Subsections (a), (b), (d), and (f) and adding Subsection
397	397	(g) to read as follows:
398	398	(a) In addition to amounts credited or charged as provided
399	399	by Section 855.307, the retirement system shall credit to the
400	400	account of a participating municipality in the benefit
401	401	[municipality] accumulation fund all prior service contributions
402	402	made by the municipality to the retirement system.
403	403	(b) In addition to amounts paid as provided by Section
404	404	855.307, the retirement system shall pay from the account of a
405	405	participating municipality in the benefit [municipality]
406	406	accumulation fund:
407	407	(1) all payments under annuities arising from prior
408	408	service credits, special prior service credits, antecedent service
409	409	credits, or updated service credits authorized by a participating
410	410	municipality; and
411	411	(2) optional increased payments authorized by a
412	412	participating municipality under Section 854.203.
413	413	(d) If credited service previously canceled is reinstated
414	414	in accordance with Section 853.003, the retirement system shall
415	415	charge the municipality's account in the benefit [municipality]
416	416	accumulation fund with the necessary reserves to fund credits based
417	417	on prior service that are restored to the member.
418	418	(f) The board of trustees may proportionately reduce all
419	419	payments under annuities payable under this section, at any time
420	420	and for a period necessary, to prevent those payments for a year
421	421	from exceeding the amount available in the participating
422	422	municipality's account for prior service.
423	423	(g) The annuities payable as provided by this section are
424	424	liabilities and obligations of the participating municipality for
425	425	which the service was performed, or granted as the result of
426	426	reinstated service previously canceled, on which the annuities are
427	427	based and are payable from the municipality's account in the
428	428	benefit accumulation fund.
429	429	SECTION 27. Subsection (e), Section 855.311, Government
430	430	Code, is amended to read as follows:
431	431	(e) If the board of trustees determines that the amount
432	432	credited to the distributive benefits account on December 31 of any
433	433	year is sufficient to do so, the board by resolution may:
434	434	(1) authorize the distribution and payment of all or
435	435	part of the money credited to the account to persons who were
436	436	annuitants on that day in the ratio of the rate of the monthly
437	437	benefit of each annuitant to the total of all annuity payments made
438	438	by the system for the final month of the year; or
439	439	(2) authorize the distribution of all or part of the
440	440	amount credited to the account to each member's individual account
441	441	[in the employees saving fund] as supplemental interest in the
442	442	ratio of the amount of interest paid on the individual's account to
443	443	the interest paid to all individual accounts for the year.
444	444	SECTION 28. Subsection (d), Section 855.313, Government
445	445	Code, is amended to read as follows:
446	446	(d) [As soon as practicable after December 31, 1988, the
447	447	actuary shall calculate the amount of reserves required to pay all
448	448	annuities that are obligations of the supplemental disability
449	449	benefits fund. If the board of trustees determines, on the basis of
450	450	the calculations made by the actuary, that the money to the credit
451	451	of the fund is materially in excess of the amount of reserves needed
452	452	to assure payment of all annuities that are obligations of the fund,
453	453	the board may direct that a portion of the excess shall be
454	454	transferred from the supplemental disability benefits fund to the
455	455	municipality accumulation fund and credited to the respective
456	456	accounts of the participating municipalities in such proportions as
457	457	the board of trustees determines to be the ratio of their respective
458	458	contributions to the total of all contributions to the supplemental
459	459	disability benefits fund.] When all annuities payable from the
460	460	supplemental disability benefits fund have been finally paid and
461	461	discharged, the board of trustees shall direct that the money
462	462	remaining in the supplemental disability benefits fund shall be
463	463	transferred and credited to the accounts of the respective
464	464	participating municipalities in the benefit [municipality]
465	465	accumulation fund in proportion to the same ratios of their
466	466	contributions to the total of all contributions to the supplemental
467	467	disability benefits fund.
468	468	SECTION 29. Section 855.316, Government Code, is amended to
469	469	read as follows:
470	470	Sec. 855.316. INTEREST RATES AND CREDITING. (a) Unless
471	471	this subtitle expressly specifies another rate of interest, for
472	472	periods after December 31, 2008, the rate of interest is five
473	473	percent compounded annually, plus any other amounts the board of
474	474	trustees is expressly authorized to provide. Notwithstanding any
475	475	other provision in this chapter, the interest credited to a
476	476	member's individual account [the employees saving fund] in a
477	477	calendar year may not be less than five percent [as allocated under
478	478	Section 855.317(a)].
479	479	(b) Effective as of December 31 of each year, the board of
480	480	trustees shall credit interest on the accumulated contributions in
481	481	a member's individual account as of January 1 of that year in
482	482	accordance with Subsection (a) and Section 855.306.
483	483	SECTION 30. Subsections (a) and (b), Section 855.317,
484	484	Government Code, are amended to read as follows:
485	485	(a) Effective as of December 31 of each year, the board of
486	486	trustees shall make the following allocations from the interest
487	487	fund that in the aggregate equal the net investment income or loss
488	488	for the year:
489	489	(1) [to the current service annuity reserve fund,
490	490	interest on the mean amount in the current service annuity reserve
491	491	fund during that year;
492	492	[(2)] to the supplemental disability benefits fund,
493	493	interest on the mean amount in the supplemental disability benefits
494	494	fund during that year;
495	495	(2) [(3)] to the supplemental death benefits fund,
496	496	interest on the mean amount in the supplemental death benefits fund
497	497	during that year;
498	498	(3) [(4)] to the accounts in the benefit
499	499	[municipality] accumulation fund, an amount derived by applying a
500	500	positive or negative rate, as determined by the board of trustees in
501	501	its sole discretion to the January 1 balances of that year for each
502	502	of those accounts; and
503	503	(4) [(5)] to the interest reserve account of the
504	504	endowment fund, a positive or negative amount as determined by the
505	505	board of trustees in its sole discretion[; and
506	506	[(6) to the employees saving fund, interest on the sum
507	507	of the accumulated contributions in the employees saving fund
508	508	credited on January 1 of that year to all persons who are members on
509	509	December 31 of that year before any transfers for retirement
510	510	effective December 31 of that year are made].
511	511	(b) In making allocations under this section, the board of
512	512	trustees shall, without regard to the amount of net investment
513	513	income or loss for the calendar year, first allocate interest as
514	514	specified in Section 855.316(a) [855.316] to those funds or
515	515	accounts referenced in Subsections (a)(1) and[,] (2) of this
516	516	section[, (3), and (6)]. The board shall then allocate the
517	517	remaining net investment income or loss between the funds or
518	518	accounts referenced in Subsections (a)(3) and (4) of this section
519	519	[(a)(4) and (5)] in rates or amounts determined by the board in its
520	520	sole discretion. The board of trustees shall accumulate the amount
521	521	of assets in the interest reserve account of the endowment fund that
522	522	the board in its sole discretion determines is necessary:
523	523	(1) to provide adequate reserves to:
524	524	(A) mitigate the effects of future investment
525	525	return volatility and insufficient net investment income; and
526	526	(B) provide reasonable rate stabilization for
527	527	participating municipalities;
528	528	(2) to provide adequate reserves against special and
529	529	contingency requirements of other funds of the system; and
530	530	(3) to provide the amount required for the
531	531	administration expenses of the system for the following year.
532	532	SECTION 31. Section 855.319, Government Code, is amended to
533	533	read as follows:
534	534	Sec. 855.319. PAYMENT TO FORMERLY PARTICIPATING
535	535	MUNICIPALITY. If a participating municipality has no employees who
536	536	are members of the retirement system and has no present or potential
537	537	liabilities resulting from the participation of former employees,
538	538	the municipality's participation in the system stops and the system
539	539	shall repay to the municipality on application any amount in the
540	540	benefit [municipality] accumulation fund that is credited to the
541	541	municipality.
542	542	SECTION 32. Subsection (g), Section 855.402, Government
543	543	Code, is amended to read as follows:
544	544	(g) After the deductions for member contributions are paid,
545	545	the board of trustees shall:
546	546	(1) record all receipts; and
547	547	(2) deposit the receipts in the benefit accumulation
548	548	fund and credit the appropriate amounts to the members' individual
549	549	accounts [credit of the employees saving fund].
550	550	SECTION 33. Sections 855.405 and 855.406, Government Code,
551	551	are amended to read as follows:
552	552	Sec. 855.405. MUNICIPALITY NORMAL CONTRIBUTION. Each
553	553	participating municipality shall pay to the benefit [municipality]
554	554	accumulation fund, as its normal contribution, an amount equal to a
555	555	percentage of the compensation of members employed by the
556	556	municipality for that month. The rate of contribution is the normal
557	557	contribution rate determined annually by the actuary and approved
558	558	by the board of trustees.
559	559	Sec. 855.406. MUNICIPALITY PRIOR SERVICE CONTRIBUTION.
560	560	(a) Each participating municipality shall pay to the benefit
561	561	[municipality] accumulation fund, as its prior service
562	562	contribution, an amount equal to a percentage of the compensation
563	563	of members employed by the municipality for that month.
564	564	(b) The rate of contribution is the rate determined annually
565	565	by the actuary and approved by the board of trustees as being the
566	566	rate required to fund all obligations charged against the
567	567	municipality's account in the benefit [municipality] accumulation
568	568	fund within the municipality's amortization period without
569	569	resulting in a probable future depletion of that account.
570	570	SECTION 34. Subsection (a), Section 855.4065, Government
571	571	Code, is amended to read as follows:
572	572	(a) In addition to the contributions a participating
573	573	municipality is required to make under this subtitle, the board of
574	574	trustees, after consultation with the actuary, by rule may
575	575	authorize a participating municipality to make lump-sum or periodic
576	576	employer contributions to the retirement system to be deposited in
577	577	the municipality's account in the benefit [municipality]
578	578	accumulation fund.
579	579	SECTION 35. Subsections (d), (f), and (g), Section 855.407,
580	580	Government Code, are amended to read as follows:
581	581	(d) If the dates of participation of each department of a
582	582	municipality are not the same, the governing body of the
583	583	municipality may request that, to determine the municipality normal
584	584	contribution rate and prior service contribution rate and to
585	585	determine the period during which the municipality must fund the
586	586	obligations charged against its account in the benefit
587	587	[municipality] accumulation fund, all of its departments have a
588	588	single composite participation date. The actuary shall determine
589	589	the composite participation date by computing an average weighted
590	590	according to the number of members entering the retirement system
591	591	on the actual dates of participation of the departments involved.
592	592	(f) The governing body of a municipality that is determined
593	593	by the actuary to be unable to finance all obligations charged
594	594	against its account in the benefit [municipality] accumulation fund
595	595	within 25 years after its most recent actuarial valuation date may
596	596	elect to have the municipality contribute to its account in the
597	597	benefit [municipality] accumulation fund at a rate that does not
598	598	exceed in any year the sum of two percent and the maximum
599	599	contribution rate specified by Subsection (a) and by Section
600	600	855.501, if applicable, and that the actuary annually may determine
601	601	as necessary to finance the existing levels of benefits before the
602	602	expiration of 25 years after the most recent actuarial valuation
603	603	date.
604	604	(g) A municipality that begins participation in the
605	605	retirement system on or after December 31, 1999, and any
606	606	municipality already participating in the retirement system on that
607	607	date whose governing body elects to have the municipality do so
608	608	shall contribute to its account in the benefit [municipality]
609	609	accumulation fund at the combined rate of total compensation paid
610	610	to its employees as the actuary determines is necessary to fund all
611	611	obligations chargeable to its account in the fund within the
612	612	municipality's amortization period, regardless of other provisions
613	613	of this subtitle.
614	614	SECTION 36. Subsection (a), Section 855.410, Government
615	615	Code, is amended to read as follows:
616	616	(a) A participating municipality that fails to remit before
617	617	the 16th day of the month all contributions required by this
618	618	subchapter to be made and remitted to the retirement system by that
619	619	date shall pay to the retirement system, in addition to the
620	620	contributions, interest on the past-due amounts at an annual rate
621	621	that is the total of the system's investment return assumption
622	622	[rates of interest credited by the retirement system to accounts in
623	623	the municipality accumulation fund] for the preceding calendar
624	624	year, plus two percent. The retirement system shall notify
625	625	participating municipalities of the rate of interest that will be
626	626	due on late payments.
627	627	SECTION 37. Subsection (b), Section 855.501, Government
628	628	Code, is amended to read as follows:
629	629	(b) The governing body of a municipality electing to provide
630	630	for increased reserves by ordinance shall provide that for each
631	631	month of current service rendered by a participating employee of
632	632	the municipality after the date of its election the municipality
633	633	will provide a contribution [as provided by Subsection (c)] equal
634	634	to 150 or 200 percent of the member's accumulated contribution to
635	635	the retirement system for that month.
636	636	SECTION 38. Subsection (c), Section 855.608, Government
637	637	Code, is amended to read as follows:
638	638	(c) Money for the payment of benefits to a participant under
639	639	this section shall be paid to the separate fund created by this
640	640	section from the contributions that otherwise would be deposited in
641	641	the benefit [municipality] accumulation fund account of the
642	642	municipality that employed the member. If the benefit is payable as
643	643	a result of service with more than one participating municipality,
644	644	there shall be paid from the contributions that otherwise would be
645	645	deposited in the benefit [municipality] accumulation fund account
646	646	of each affected municipality the amount chargeable to that
647	647	municipality for the member. When feasible, the monthly amount to
648	648	pay benefits under this section shall be paid not later than the
649	649	15th day before the date of a monthly payment to a person receiving
650	650	annuity benefits under this section.
651	651	SECTION 39. The following provisions of the Government Code
652	652	are repealed:
653	653	(1) Section 855.309;
654	654	(2) Section 855.318; and
655	655	(3) Subsections (c) and (d), Section 855.501.
656	656	SECTION 40. (a) The Texas Municipal Retirement System
657	657	shall:
658	658	(1) transfer the assets and liabilities of each
659	659	participating municipality's members' individual accounts in the
660	660	employees saving fund to the appropriate municipality's accounts in
661	661	the benefit accumulation fund and dissolve the employees saving
662	662	fund; and
663	663	(2) transfer the assets and, if appropriate,
664	664	liabilities of the current service annuity reserve fund to the
665	665	interest reserve account in the endowment fund and the benefit
666	666	accumulation fund, as determined by the board of trustees in
667	667	consultation with the actuary, and dissolve the current service
668	668	annuity reserve fund.
669	669	(b) For purposes of clarification, as of the effective date
670	670	of this Act, the municipality accumulation fund is renamed the
671	671	benefit accumulation fund, and the Texas Municipal Retirement
672	672	System shall transfer the assets and liabilities of the employees
673	673	saving fund and the current service annuity reserve fund to the
674	674	benefit accumulation fund as described by Subsection (a) of this
675	675	section.
676	676	(c) In implementing Subtitle G, Title 8, Government Code, as
677	677	amended by this Act, including without limitation crediting
678	678	interest and conducting the actuarial valuation required by that
679	679	subtitle, the Texas Municipal Retirement System shall make all
680	680	necessary computations based on an accounting record adjusted to
681	681	reflect the transfers of assets and liabilities required by
682	682	Subsection (a) of this section as though the transfers had taken
683	683	place on December 31, 2010.
684	684	SECTION 41. This Act takes effect immediately if it
685	685	receives a vote of two-thirds of all the members elected to each
686	686	house, as provided by Section 39, Article III, Texas Constitution.
687	687	If this Act does not receive the vote necessary for immediate
688	688	effect, this Act takes effect September 1, 2011.