Texas 2011 - 82nd Regular

Texas Senate Bill SB642 Compare Versions

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1	1	By: Seliger S.B. No. 642
2	2	(Smithee, Truitt, Orr, Nash)
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to optional annuity increases for certain retirees and
8	8	beneficiaries of the Texas Municipal Retirement System.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 853.404, Government Code, is amended by
11	11	amending Subsection (c) and adding Subsection (f) to read as
12	12	follows:
13	13	(c) The governing body of a participating municipality that
14	14	adopts an ordinance under Section 854.203 providing for increased
15	15	annuities effective January 1 of a designated year may further
16	16	provide in the ordinance that increases in annuities will be
17	17	credited effective January 1 of each year following the designated
18	18	year based on recomputations made as provided by Section 854.203(b)
19	19	[854.203(b)(1)] for each year following the initial computation,
20	20	and using the fraction specified in the ordinance as required under
21	21	Section 854.203(b) [854.203(b)(2)] in the recomputations.
22	22	(f) If an ordinance described by Subsection (c) will cease
23	23	to be in effect for a future year, or if an increase in annuities
24	24	specified in an ordinance described by Subsection (c) will be
25	25	changed or discontinued as provided by this section, the governing
26	26	body of the participating municipality shall provide notice to
27	27	members and annuitants by regular mail not later than the 60th day
28	28	before the date on which the ordinance will cease to be in effect or
29	29	the increase will be changed or discontinued. For an annuitant who
30	30	receives a periodic check or advice of deposit from the retirement
31	31	system by regular mail, the notice required by this subsection must
32	32	be included with the annuitant's check or advice of deposit.
33	33	SECTION 2. Section 854.203, Government Code, is amended by
34	34	amending Subsections (b) and (f) and adding Subsection (b-1) to
35	35	read as follows:
36	36	(b) The amount of annuity increase under this section is
37	37	computed by one of the following methods:
38	38	(1) as the sum of the prior and current service
39	39	annuities on the effective date of retirement of the person on whose
40	40	service the annuities are based, multiplied by:
41	41	(A) [(1)] the percentage change in the Consumer
42	42	Price Index for All Urban Consumers, published by the Bureau of
43	43	Labor Statistics of the United States Department of Labor, from
44	44	December of the year immediately preceding the effective date of
45	45	the person's retirement to the December that is 13 months before the
46	46	effective date of the ordinance providing the increase; and
47	47	(B) [(2)] 30 percent, 50 percent, or 70 percent,
48	48	as specified by the governing body in the ordinance, except that if
49	49	the governing body has specified a different percentage in an
50	50	ordinance adopted under Section 853.404(c) and in effect on
51	51	December 31, 1999, the percentage used in computing annuity
52	52	increases for retirees of that municipality remains in effect until
53	53	changed or discontinued under Section 853.404; or
54	54	(2) as the sum of the prior and current service
55	55	annuities of the person on whose service the annuities are based on
56	56	the effective date of the annuity increase multiplied by the
57	57	percentage increase specified in the ordinance adopted by the
58	58	governing body, except that an adjustment to an annuity after the
59	59	annuity starting date for annuity increases under this subdivision
60	60	may not cause an annuitant's annuity to exceed the amount that the
61	61	annuitant would be entitled to had the maximum amount of the annuity
62	62	increase allowed under Subdivision (1) been applied to the
63	63	annuitant's annuity.
64	64	(b-1) An increase under Subsection (b)(2) applies to all
65	65	annuities for which the effective date of retirement of the person
66	66	on whose service the annuity is based is at least 12 months before
67	67	the effective date of the increase. Notwithstanding any other
68	68	provision of this subtitle, each distribution of a benefit under
69	69	this subtitle must be determined and made in accordance with
70	70	Section 401(a)(9), Internal Revenue Code of 1986. The board of
71	71	trustees may adopt rules it considers necessary to comply with the
72	72	distribution requirements.
73	73	(f) An increase granted to an annuitant under Subsection
74	74	(b)(2), or the [The] amount by which an increase under Subsection
75	75	(b)(1) [this section] exceeds all previously granted increases to
76	76	an annuitant is:
77	77	(1) payable as a prior service annuity;
78	78	(2) [, is] an obligation of the municipality's account
79	79	in the municipality accumulation fund;[,] and
80	80	(3) [is] subject to reduction under Section
81	81	855.308(f).
82	82	SECTION 3. This Act takes effect immediately if it receives
83	83	a vote of two-thirds of all the members elected to each house, as
84	84	provided by Section 39, Article III, Texas Constitution. If this
85	85	Act does not receive the vote necessary for immediate effect, this
86	86	Act takes effect September 1, 2011.