Texas 2013 - 83rd Regular

Texas House Bill HB1884 Compare Versions

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1	1	83R24007 T
2	2	By: Callegari, et al. H.B. No. 1884
3	3	Substitute the following for H.B. No. 1884:
4	4	By: Callegari C.S.H.B. No. 1884
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to contributions to, benefits from, and the administration
10	10	of systems and programs administered by the Teacher Retirement
11	11	System of Texas.
12	12	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	13	SECTION 1. Section 824.202, Government Code, is amended by
14	14	amending Subsections (a), (b), (d), and (d-1) to read as follows:
15	15	(a) A [Except as provided by Subsection (a-1), a] member is
16	16	eligible to retire and receive a standard service retirement
17	17	annuity if:
18	18	(1) the member is at least 65 years old and has at
19	19	least five years of service credit in the retirement system; or
20	20	(2) the member is at least 62 [60] years old and has at
21	21	least five [20] years of service credit in the retirement system,
22	22	and[;
23	23	(3) the member is at least 50 years old and has at
24	24	least 30 years of service credit in the retirement system; or
25	25	(4)] the sum of the member's age and amount of service
26	26	credit in the retirement system equals the number 80.
27	27	(b) This subsection applies only to a person who is not
28	28	subject to Subsection [(b-1) or] (d) or (d-1). If a member subject
29	29	to this subsection is at least 55 years old and has at least five
30	30	years of service credit in the retirement system, the member is
31	31	eligible to retire and receive a service retirement annuity reduced
32	32	from the standard service retirement annuity available under
33	33	Subsection (a)(1), to a percentage derived from the following
34	34	table:
35	35	Age at date 55 56 57 58 59 60 61 62 63 64 65 Age at date 55 56 57 58 59 60 61 62 63 64 65
36	36	Age at date 55 56 57 58 59 60 61 62 63 64 65
37	37	of retirement of retirement
38	38	of retirement
39	39	Percentage of 47% 51% 55% 59% 63% 67% 73% 80% 87% 93% 100% Percentage of 47% 51% 55% 59% 63% 67% 73% 80% 87% 93% 100%
40	40	Percentage of 47% 51% 55% 59% 63% 67% 73% 80% 87% 93% 100%
41	41	standard annuity standard annuity
42	42	standard annuity
43	43	receivable receivable
44	44	receivable
45	45	(d) This subsection applies only to a person who has at
46	46	least five years of service credit in the retirement system on or
47	47	before August 31, 2014 and who retires on or after September 1, 2014
48	48	[is not subject to Subsection (d-1)]. If the sum of the member's
49	49	age and amount of service credit in the retirement system equals the
50	50	number 80, with at least five years of service credit, or if the [a]
51	51	member [subject to this subsection] has at least 30 [20] years of
52	52	service credit in the retirement system, the member is eligible to
53	53	retire regardless of age and receive a service retirement annuity
54	54	consisting of the standard service retirement annuity available
55	55	under Subsection (a)(2) [(a)] decreased by two percent for each
56	56	year of age under 62 years.
57	57	(d-1) [This subsection applies only to a person who becomes
58	58	a member of the retirement system on or after September 1, 2007.]
59	59	If the sum of the member's age and amount of service credit in the
60	60	retirement system equals the number 80, with at least five years of
61	61	service credit, or if the member has at least 30 years of service
62	62	credit in the retirement system, the member is eligible to retire
63	63	regardless of age and receive a service retirement annuity
64	64	consisting of[, reduced from] the standard service retirement
65	65	annuity available under Subsection (a)(2) decreased by five percent
66	66	for each year of age under 62 years[, to a percentage derived from
67	67	the following table:
68	68	Age at date of 50 51 52 53 54 55 56 57 58 59 60 Age at date of 50 51 52 53 54 55 56 57 58 59 60
69	69	Age at date of 50 51 52 53 54 55 56 57 58 59 60
70	70	retirement 50 51 52 53 54 55 56 57 58 59 60 retirement 50 51 52 53 54 55 56 57 58 59 60
71	71	retirement 50 51 52 53 54 55 56 57 58 59 60
72	72	Minimum years of 30 29 28 27 26 25 24 23 22 21 20 Minimum years of 30 29 28 27 26 25 24 23 22 21 20
73	73	Minimum years of 30 29 28 27 26 25 24 23 22 21 20
74	74	service credit 30 29 28 27 26 25 24 23 22 21 20 service credit 30 29 28 27 26 25 24 23 22 21 20
75	75	service credit 30 29 28 27 26 25 24 23 22 21 20
76	76	required 30 29 28 27 26 25 24 23 22 21 20 required 30 29 28 27 26 25 24 23 22 21 20
77	77	required 30 29 28 27 26 25 24 23 22 21 20
78	78	Percentage of 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100% Percentage of 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100%
79	79	Percentage of 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100%
80	80	standard annuity 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100% standard annuity 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100%
81	81	standard annuity 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100%
82	82	receivable 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100% receivable 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100%
83	83	receivable 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100%
84	84	For each year of age under 50 years with 30 years of service
85	85	credit, the standard service retirement annuity shall be five
86	86	percent less than the percentage for age 50 with 30 years of service
87	87	credit].
88	88	SECTION 2. Subchapter H, Chapter 824, Government Code, is
89	89	amended by adding Section 824.702 to read as follows:
90	90	Sec. 824.702. COST-OF-LIVING ADJUSTMENT. (a) The
91	91	retirement system shall make a one-time cost-of-living adjustment
92	92	payable to annuitants receiving a monthly death or retirement
93	93	benefit annuity, as provided by this section.
94	94	(b) Subject to Subsections (c) and (d), to be eligible for
95	95	the adjustment, a person must be, on the effective date of the
96	96	adjustment and disregarding any forfeiture of benefits under
97	97	Section 824.601, an annuitant eligible to receive:
98	98	(1) a standard service or disability retirement
99	99	annuity payment;
100	100	(2) an optional service or disability retirement
101	101	annuity payment as either a retiree or beneficiary;
102	102	(3) an annuity payment under Section 824.402(a)(3) or
103	103	(4);
104	104	(4) an annuity payment under Section 824.502; or
105	105	(5) an alternate payee annuity payment under Section
106	106	804.005.
107	107	(c) If the annuitant:
108	108	(1) is a retiree, or is a beneficiary under an optional
109	109	retirement payment plan, to be eligible for the adjustment under
110	110	this section:
111	111	(A) the annuitant must be living on the effective
112	112	date of the adjustment; and
113	113	(B) the effective date of the retirement of the
114	114	member of the Teacher Retirement System of Texas must have been on
115	115	or before August 31, 1994;
116	116	(2) is a beneficiary under Section 824.402(a)(3) or
117	117	(4) or 824.502, to be eligible for the adjustment
118	118	(A) the annuitant must be living on the effective
119	119	date of the adjustment; and
120	120	(B) the date of death of the member of the
121	121	retirement system must have been on or before August 31, 1994;
122	122	(3) is an alternate payee under Section 804.005, the
123	123	annuitant is eligible for the adjustment only if the effective date
124	124	of the election to receive the annuity payment was on or before
125	125	August 31, 1994.
126	126	(d) An adjustment made under this section does not apply to
127	127	payments under:
128	128	(1) Section 824.203(d), relating to retirees who
129	129	receive a standard service retirement annuity in an amount fixed by
130	130	statute;
131	131	(2) Section 824.304(a), relating to disability
132	132	retirees with less than 10 years of service credit;
133	133	(3) Section 824.304(b)(2), relating to disability
134	134	retirees who receive a disability annuity in an amount fixed by
135	135	statute;
136	136	(4) Section 824.404(a), relating to active member
137	137	survivor beneficiaries who receive a survivor annuity in an amount
138	138	fixed by statute;
139	139	(5) Section 824.501(a), relating to retiree survivor
140	140	beneficiaries who receive a survivor annuity in an amount fixed by
141	141	statute; or
142	142	(6) Section 824.804(b), relating to participants in
143	143	the deferred retirement option plan with regard to payments from
144	144	their deferred retirement option plan accounts.
145	145	(e) An adjustment under this section
146	146	(1) must be made beginning with an annuity payable for
147	147	the month of September 2013; and
148	148	(2) is limited to the lesser of:
149	149	(A) an amount equal to three percent of the
150	150	monthly benefit subject to the increase; or
151	151	(B) $100 a month.
152	152	(f) The board of trustees shall determine the eligibility
153	153	for and the amount of any adjustment in monthly annuities in
154	154	accordance with this section.
155	155	SECTION 3. Section 824.807, Government Code, is amended to
156	156	read as follows:
157	157	Sec. 824.807. INTEREST. Interest is creditable to a
158	158	member's account in the deferred retirement option account at an
159	159	annual, prorated rate equal to two [five] percent during the period
160	160	of participation in the plan and until all benefits are
161	161	distributed.
162	162	SECTION 4. Section 825.307(b), Government Code, is amended
163	163	to read as follows:
164	164	(b) Interest on a member's contribution is earned monthly
165	165	and computed at the rate of two [five] percent a year. Except as
166	166	provided by Subsection (c), interest is computed based on the mean
167	167	balance in the member's account during that fiscal year and shall be
168	168	credited on August 31 of each year.
169	169	SECTION 5. Section 825.402, Government Code, is amended to
170	170	read as follows:
171	171	Sec. 825.402. RATE OF MEMBER CONTRIBUTIONS. [(a)] The rate
172	172	of contributions for each member of the retirement system is:
173	173	(1) five percent of the member's annual compensation
174	174	or $180, whichever is less, for service rendered after August 31,
175	175	1937, and before September 1, 1957;
176	176	(2) six percent of the first $8,400 of the member's
177	177	annual compensation for service rendered after August 31, 1957, and
178	178	before September 1, 1969;
179	179	(3) six percent of the member's annual compensation
180	180	for service rendered after August 31, 1969, and before the first day
181	181	of the 1977-78 school year;
182	182	(4) 6.65 percent of the member's annual compensation
183	183	for service rendered after the last day of the period described by
184	184	Subdivision (3) and before September 1, 1985[; and]
185	185	(5) 6.4 percent of the member's annual compensation
186	186	for service rendered after August 31, 1985, and before September 1,
187	187	2014; and
188	188	(6) for service rendered on or after September 1,
189	189	2014, the greater of:
190	190	(A) 6.4 percent of the member's annual
191	191	compensation; or
192	192	(B) a percent of the member's annual compensation
193	193	equal to the state contribution rate, except that the member
194	194	contribution may not exceed 6.9 percent[, subject to Subsection
195	195	(b)].
196	196	[(b) Subject to Subsection (c), the board of trustees may by
197	197	order require that the rate of contributions for each member of the
198	198	retirement system under Subsection (a) is increased to not more
199	199	than 6.58 percent of the member's annual compensation for service
200	200	rendered after the date of the order if:
201	201	(1) the legislature by law requires or authorizes the
202	202	board of trustees to pay a supplemental payment to specified
203	203	annuitants; and
204	204	(2) the board of trustees finds, as of the time the
205	205	payment is to be made, that after the payment is made the
206	206	amortization period for the unfunded actuarial liabilities of the
207	207	retirement system would exceed 30 years by one or more years.
208	208	(c) Notwithstanding any other law, the board of trustees may
209	209	not make a supplemental payment required or authorized by the
210	210	legislature by law, and may not impose an increase in the rate of
211	211	contributions under Subsection (b), if the board of trustees finds
212	212	that after making the payment and imposing the increase the
213	213	amortization period for the unfunded actuarial liabilities of the
214	214	retirement system would exceed 30 years by one or more years.
215	215	(d) Notwithstanding any other law, the board of trustees may
216	216	delay making a supplemental payment required or authorized by the
217	217	legislature by law as necessary to make the determinations required
218	218	under Subsections (b) and (c).]
219	219	SECTION 6. Section 825.403(a), Government Code, is amended
220	220	to read as follows:
221	221	(a) Each payroll period, each employer shall deduct from the
222	222	compensation of each member employed by the employer the [an]
223	223	amount required by Section 825.402 [equal to 6.4 percent of the
224	224	member's compensation for that period].
225	225	SECTION 7. Subchapter E, Chapter 825, Government Code, is
226	226	amended by adding Section 825.4035 to read as follows:
227	227	Sec. 825.4035. EMPLOYER CONTRIBUTIONS FOR CERTAIN EMPLOYED
228	228	MEMBERS FOR WHOM THE EMPLOYER IS NOT MAKING CONTRIBUTIONS TO THE
229	229	FEDERAL OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE PROGRAM. (a)
230	230	This section:
231	231	(1) applies to an employer who reports to the
232	232	retirement system under Section 825.403 the employment of a member
233	233	for whom the employer is not making contributions to the federal
234	234	Old-Age, Survivors, and Disability Insurance (OASDI) program; and
235	235	(2) does not apply to an employer that is an
236	236	institution of higher education.
237	237	(b) Except as provided in Subsection (c), for each member
238	238	the employer reports to the retirement system and for whom the
239	239	employer is not making contributions to the OASDI program, the
240	240	employer shall contribute monthly to the retirement system for each
241	241	such member an amount equal to one percent of the member's
242	242	compensation.
243	243	(c) If a member is entitled to the minimum salary for
244	244	certain school personnel under Section 21.402, Education Code, or
245	245	if a member would have been entitled to the minimum salary for
246	246	certain school personnel under former Section 16.056, Education
247	247	Code, as that section existed on January 1, 1995, the employer
248	248	shall, in addition to any contributions required under Section
249	249	825.405, contribute monthly to the retirement system for each such
250	250	member an amount equal to one percent of the statutory minimum
251	251	salary determined under Section 825.405(b).
252	252	(d) Contributions under this section:
253	253	(1) are subject to the requirements of Section
254	254	825.408; and
255	255	(2) must be used to fund the normal cost of the
256	256	retirement system.
257	257	SECTION 8. Section 1575.158(a), Insurance Code, is amended
258	258	to read as follows:
259	259	(a) Subject to Section 1575.1581, the [The] trustee may, in
260	260	addition to providing a basic plan, contract for and make available
261	261	an optional group health benefit plan for retirees, dependents,
262	262	surviving spouses, or surviving dependent children.
263	263	SECTION 9. Chapter 1575, Insurance Code, is amended by
264	264	adding Section 1575.1581 to read as follows:
265	265	Sec. 1575.1581. LIMITATION ON ENROLLMENT IN OPTIONAL GROUP
266	266	HEALTH BENEFIT PLAN. (a) A service retiree and any dependent of a
267	267	service retiree are not eligible to participate in an optional
268	268	group health benefit plan made available under Section 1571.158,
269	269	unless the retiree:
270	270	(1) is at least 62 years of age or older; and
271	271	(2) meets the definition of retiree under Section
272	272	1575.004(a)(1).
273	273	(b) A retiree subject to Subsection (a) may, on the date the
274	274	retiree reaches 62 years of age, under rules adopted by the trustee:
275	275	(1) enroll in any coverage tier under the group
276	276	program; and
277	277	(2) enroll, in the same coverage tier, the retiree's
278	278	dependents who are enrolled in the group program as of the date the
279	279	retiree reaches 62 years of age.
280	280	SECTION 10. The following provisions are repealed:
281	281	(a) Sections 824.202(a-1) and (b-1), Government Code; and
282	282	(b) Section 1579.103, Insurance Code.
283	283	SECTION 11. (a) Except as provided in this section, the
284	284	changes in law made by this Act to Section 824.202, Government Code,
285	285	do not apply to, and the former law is continued in effect for, a
286	286	person who retires under the Teacher Retirement System of Texas on
287	287	or after September 1, 2014, and who meets one or more of the
288	288	following requirements on or before August 31, 2014:
289	289	(1) the person has attained age 50;
290	290	(2) the sum of the person's age and amount of service
291	291	credit in the retirement system equals 70 or greater; or
292	292	(3) the person has at least 25 years of service credit
293	293	in the retirement system.
294	294	(b) Only service actually credited in the Teacher
295	295	Retirement System of Texas, the Employees Retirement System of
296	296	Texas, or a retirement system participating in the proportionate
297	297	retirement program under Chapter 803, Government Code, on or before
298	298	August 31, 2014, may be used to determine eligibility under
299	299	Subsection (a)(2) and (3) of this section. Purchased service
300	300	credit in the retirement system is:
301	301	(1) not considered actually credited in the retirement
302	302	system for purposes of Subsection (a)(2) or (3) of this section, as
303	303	applicable, if the service credit is established only after
304	304	completion of an installment payment plan under which any
305	305	installment payment is required to be made after August 31, 2014;
306	306	and
307	307	(2) considered actually credited in the retirement
308	308	system for purposes of Subsection (a)(2) or (3) of this section, as
309	309	applicable, if:
310	310	(A) payment in full for the purchase of service
311	311	credit is made by a direct rollover or otherwise on or before August
312	312	31, 2014; or
313	313	(B) payment in full by direct rollover or
314	314	otherwise is made after August 31, 2014, if:
315	315	(i) the member's request to purchase
316	316	service credit occurred on or before August 31, 2014; and
317	317	(ii) payment to purchase the service credit
318	318	is made in accordance with uniform administrative requirements,
319	319	including payment deadlines, established by the retirement system.
320	320	(c) For members who meet the eligibility requirements of
321	321	Subsection (a) of this section and who otherwise would be subject to
322	322	Section 824.202(d-1) as it formerly existed before being amended by
323	323	this Act, instead of the five percent reduction for each year the
324	324	member is less than age 60, the reduction will be two percent for
325	325	each year the member is less than age 60.
326	326	SECTION 12. Sections 824.807 and 825.307(b), Government
327	327	Code, as amended by this Act, apply only to interest accrued on or
328	328	after the effective date of this Act. Interest accrued before the
329	329	effective date of this Act is governed by the law in effect on the
330	330	date the interest accrued, and that law is continued in effect for
331	331	that purpose.
332	332	SECTION 13. (a) The change in law made by this Act to
333	333	Chapter 1575, Insurance Code, does not apply to, and the former law
334	334	is continued in effect for, a person who takes a service retirement
335	335	under the Teacher Retirement System of Texas on or after September
336	336	1, 2014, and who meets one or more of the following requirements on
337	337	or before August 31, 2014:
338	338	(1) the sum of the person's age and amount of service
339	339	credit in the retirement system equals 70 or greater; or
340	340	(2) the person has at least 25 years of service credit
341	341	in the retirement system.
342	342	(b) Only service actually credited in the Teacher
343	343	Retirement System of Texas or the Employees Retirement System of
344	344	Texas, on or before August 31, 2014, may be used to determine
345	345	eligibility under this section. Purchased service credit in the
346	346	retirement system is:
347	347	(1) not considered actually credited in the retirement
348	348	system for purposes of this section if the service credit is
349	349	established only after completion of an installment payment plan
350	350	under which any installment payment is required to be made after
351	351	August 31, 2014; and
352	352	(2) considered actually credited in the retirement
353	353	system for purposes of this section if:
354	354	(A) payment in full for the purchase of service
355	355	credit is made by a direct rollover or otherwise on or before August
356	356	31, 2014; or
357	357	(B) payment in full by direct rollover or
358	358	otherwise is made after August 31, 2014, if:
359	359	(i) the member's request to purchase
360	360	service credit occurred on or before August 31, 2014; and
361	361	(ii) payment to purchase the service credit
362	362	is made in accordance with uniform administrative requirements,
363	363	including payment deadlines, established by the retirement system.
364	364	SECTION 14. (a) Except as provided by Subsection (b) of
365	365	this section, this Act takes effect September 1, 2014.
366	366	(b) Section 824.702, Government Code, as added by this Act,
367	367	and the repeal by this Act of Section 1579.103, Insurance Code, take
368	368	effect September 1, 2013.
369	369
370	370	Age at date 55 56 57 58 59 60 61 62 63 64 65
371	371
372	372	of retirement
373	373
374	374	Percentage of 47% 51% 55% 59% 63% 67% 73% 80% 87% 93% 100%
375	375
376	376	standard annuity
377	377
378	378	receivable
379	379
380	380	Age at date of 50 51 52 53 54 55 56 57 58 59 60
381	381
382	382	retirement 50 51 52 53 54 55 56 57 58 59 60
383	383
384	384	Minimum years of 30 29 28 27 26 25 24 23 22 21 20
385	385
386	386	service credit 30 29 28 27 26 25 24 23 22 21 20
387	387
388	388	required 30 29 28 27 26 25 24 23 22 21 20
389	389
390	390	Percentage of 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100%
391	391
392	392	standard annuity 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100%
393	393
394	394	receivable 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100%