83R24007 T
By: Callegari, et al. H.B. No. 1884
Substitute the following for H.B. No. 1884:
By: Callegari C.S.H.B. No. 1884
A BILL TO BE ENTITLED
AN ACT
relating to contributions to, benefits from, and the administration
of systems and programs administered by the Teacher Retirement
System of Texas.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 824.202, Government Code, is amended by
amending Subsections (a), (b), (d), and (d-1) to read as follows:
(a) A [Except as provided by Subsection (a-1), a] member is
eligible to retire and receive a standard service retirement
annuity if:
(1) the member is at least 65 years old and has at
least five years of service credit in the retirement system; or
(2) the member is at least 62 [60] years old and has at
least five [20] years of service credit in the retirement system,
and[;
(3) the member is at least 50 years old and has at
least 30 years of service credit in the retirement system; or
(4)] the sum of the member's age and amount of service
credit in the retirement system equals the number 80.
(b) This subsection applies only to a person who is not
subject to Subsection [(b-1) or] (d) or (d-1). If a member subject
to this subsection is at least 55 years old and has at least five
years of service credit in the retirement system, the member is
eligible to retire and receive a service retirement annuity reduced
from the standard service retirement annuity available under
Subsection (a)(1), to a percentage derived from the following
table:
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
Age at date 55 56 57 58 59 60 61 62 63 64 65
of retirement of retirement
of retirement
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%
Percentage of 47% 51% 55% 59% 63% 67% 73% 80% 87% 93% 100%
standard annuity standard annuity
standard annuity
receivable receivable
receivable
(d) This subsection applies only to a person who has at
least five years of service credit in the retirement system on or
before August 31, 2014 and who retires on or after September 1, 2014
[is not subject to Subsection (d-1)]. If the sum of the member's
age and amount of service credit in the retirement system equals the
number 80, with at least five years of service credit, or if the [a]
member [subject to this subsection] has at least 30 [20] years of
service credit in the retirement system, the member is eligible to
retire regardless of age and receive a service retirement annuity
consisting of the standard service retirement annuity available
under Subsection (a)(2) [(a)] decreased by two percent for each
year of age under 62 years.
(d-1) [This subsection applies only to a person who becomes
a member of the retirement system on or after September 1, 2007.]
If the sum of the member's age and amount of service credit in the
retirement system equals the number 80, with at least five years of
service credit, or if the member has at least 30 years of service
credit in the retirement system, the member is eligible to retire
regardless of age and receive a service retirement annuity
consisting of[, reduced from] the standard service retirement
annuity available under Subsection (a)(2) decreased by five percent
for each year of age under 62 years[, to a percentage derived from
the following table:
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
Age at date of 50 51 52 53 54 55 56 57 58 59 60
retirement 50 51 52 53 54 55 56 57 58 59 60 retirement 50 51 52 53 54 55 56 57 58 59 60
retirement 50 51 52 53 54 55 56 57 58 59 60
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
Minimum years of 30 29 28 27 26 25 24 23 22 21 20
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
service credit 30 29 28 27 26 25 24 23 22 21 20
required 30 29 28 27 26 25 24 23 22 21 20 required 30 29 28 27 26 25 24 23 22 21 20
required 30 29 28 27 26 25 24 23 22 21 20
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%
Percentage of 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100%
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%
standard annuity 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100%
receivable 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100% receivable 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100%
receivable 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100%
For each year of age under 50 years with 30 years of service
credit, the standard service retirement annuity shall be five
percent less than the percentage for age 50 with 30 years of service
credit].
SECTION 2. Subchapter H, Chapter 824, Government Code, is
amended by adding Section 824.702 to read as follows:
Sec. 824.702. COST-OF-LIVING ADJUSTMENT. (a) The
retirement system shall make a one-time cost-of-living adjustment
payable to annuitants receiving a monthly death or retirement
benefit annuity, as provided by this section.
(b) Subject to Subsections (c) and (d), to be eligible for
the adjustment, a person must be, on the effective date of the
adjustment and disregarding any forfeiture of benefits under
Section 824.601, an annuitant eligible to receive:
(1) a standard service or disability retirement
annuity payment;
(2) an optional service or disability retirement
annuity payment as either a retiree or beneficiary;
(3) an annuity payment under Section 824.402(a)(3) or
(4);
(4) an annuity payment under Section 824.502; or
(5) an alternate payee annuity payment under Section
804.005.
(c) If the annuitant:
(1) is a retiree, or is a beneficiary under an optional
retirement payment plan, to be eligible for the adjustment under
this section:
(A) the annuitant must be living on the effective
date of the adjustment; and
(B) the effective date of the retirement of the
member of the Teacher Retirement System of Texas must have been on
or before August 31, 1994;
(2) is a beneficiary under Section 824.402(a)(3) or
(4) or 824.502, to be eligible for the adjustment
(A) the annuitant must be living on the effective
date of the adjustment; and
(B) the date of death of the member of the
retirement system must have been on or before August 31, 1994;
(3) is an alternate payee under Section 804.005, the
annuitant is eligible for the adjustment only if the effective date
of the election to receive the annuity payment was on or before
August 31, 1994.
(d) An adjustment made under this section does not apply to
payments under:
(1) Section 824.203(d), relating to retirees who
receive a standard service retirement annuity in an amount fixed by
statute;
(2) Section 824.304(a), relating to disability
retirees with less than 10 years of service credit;
(3) Section 824.304(b)(2), relating to disability
retirees who receive a disability annuity in an amount fixed by
statute;
(4) Section 824.404(a), relating to active member
survivor beneficiaries who receive a survivor annuity in an amount
fixed by statute;
(5) Section 824.501(a), relating to retiree survivor
beneficiaries who receive a survivor annuity in an amount fixed by
statute; or
(6) Section 824.804(b), relating to participants in
the deferred retirement option plan with regard to payments from
their deferred retirement option plan accounts.
(e) An adjustment under this section
(1) must be made beginning with an annuity payable for
the month of September 2013; and
(2) is limited to the lesser of:
(A) an amount equal to three percent of the
monthly benefit subject to the increase; or
(B) $100 a month.
(f) The board of trustees shall determine the eligibility
for and the amount of any adjustment in monthly annuities in
accordance with this section.
SECTION 3. Section 824.807, Government Code, is amended to
read as follows:
Sec. 824.807. INTEREST. Interest is creditable to a
member's account in the deferred retirement option account at an
annual, prorated rate equal to two [five] percent during the period
of participation in the plan and until all benefits are
distributed.
SECTION 4. Section 825.307(b), Government Code, is amended
to read as follows:
(b) Interest on a member's contribution is earned monthly
and computed at the rate of two [five] percent a year. Except as
provided by Subsection (c), interest is computed based on the mean
balance in the member's account during that fiscal year and shall be
credited on August 31 of each year.
SECTION 5. Section 825.402, Government Code, is amended to
read as follows:
Sec. 825.402. RATE OF MEMBER CONTRIBUTIONS. [(a)] The rate
of contributions for each member of the retirement system is:
(1) five percent of the member's annual compensation
or $180, whichever is less, for service rendered after August 31,
1937, and before September 1, 1957;
(2) six percent of the first $8,400 of the member's
annual compensation for service rendered after August 31, 1957, and
before September 1, 1969;
(3) six percent of the member's annual compensation
for service rendered after August 31, 1969, and before the first day
of the 1977-78 school year;
(4) 6.65 percent of the member's annual compensation
for service rendered after the last day of the period described by
Subdivision (3) and before September 1, 1985[; and]
(5) 6.4 percent of the member's annual compensation
for service rendered after August 31, 1985, and before September 1,
2014; and
(6) for service rendered on or after September 1,
2014, the greater of:
(A) 6.4 percent of the member's annual
compensation; or
(B) a percent of the member's annual compensation
equal to the state contribution rate, except that the member
contribution may not exceed 6.9 percent[, subject to Subsection
(b)].
[(b) Subject to Subsection (c), the board of trustees may by
order require that the rate of contributions for each member of the
retirement system under Subsection (a) is increased to not more
than 6.58 percent of the member's annual compensation for service
rendered after the date of the order if:
(1) the legislature by law requires or authorizes the
board of trustees to pay a supplemental payment to specified
annuitants; and
(2) the board of trustees finds, as of the time the
payment is to be made, that after the payment is made the
amortization period for the unfunded actuarial liabilities of the
retirement system would exceed 30 years by one or more years.
(c) Notwithstanding any other law, the board of trustees may
not make a supplemental payment required or authorized by the
legislature by law, and may not impose an increase in the rate of
contributions under Subsection (b), if the board of trustees finds
that after making the payment and imposing the increase the
amortization period for the unfunded actuarial liabilities of the
retirement system would exceed 30 years by one or more years.
(d) Notwithstanding any other law, the board of trustees may
delay making a supplemental payment required or authorized by the
legislature by law as necessary to make the determinations required
under Subsections (b) and (c).]
SECTION 6. Section 825.403(a), Government Code, is amended
to read as follows:
(a) Each payroll period, each employer shall deduct from the
compensation of each member employed by the employer the [an]
amount required by Section 825.402 [equal to 6.4 percent of the
member's compensation for that period].
SECTION 7. Subchapter E, Chapter 825, Government Code, is
amended by adding Section 825.4035 to read as follows:
Sec. 825.4035. EMPLOYER CONTRIBUTIONS FOR CERTAIN EMPLOYED
MEMBERS FOR WHOM THE EMPLOYER IS NOT MAKING CONTRIBUTIONS TO THE
FEDERAL OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE PROGRAM. (a)
This section:
(1) applies to an employer who reports to the
retirement system under Section 825.403 the employment of a member
for whom the employer is not making contributions to the federal
Old-Age, Survivors, and Disability Insurance (OASDI) program; and
(2) does not apply to an employer that is an
institution of higher education.
(b) Except as provided in Subsection (c), for each member
the employer reports to the retirement system and for whom the
employer is not making contributions to the OASDI program, the
employer shall contribute monthly to the retirement system for each
such member an amount equal to one percent of the member's
compensation.
(c) If a member is entitled to the minimum salary for
certain school personnel under Section 21.402, Education Code, or
if a member would have been entitled to the minimum salary for
certain school personnel under former Section 16.056, Education
Code, as that section existed on January 1, 1995, the employer
shall, in addition to any contributions required under Section
825.405, contribute monthly to the retirement system for each such
member an amount equal to one percent of the statutory minimum
salary determined under Section 825.405(b).
(d) Contributions under this section:
(1) are subject to the requirements of Section
825.408; and
(2) must be used to fund the normal cost of the
retirement system.
SECTION 8. Section 1575.158(a), Insurance Code, is amended
to read as follows:
(a) Subject to Section 1575.1581, the [The] trustee may, in
addition to providing a basic plan, contract for and make available
an optional group health benefit plan for retirees, dependents,
surviving spouses, or surviving dependent children.
SECTION 9. Chapter 1575, Insurance Code, is amended by
adding Section 1575.1581 to read as follows:
Sec. 1575.1581. LIMITATION ON ENROLLMENT IN OPTIONAL GROUP
HEALTH BENEFIT PLAN. (a) A service retiree and any dependent of a
service retiree are not eligible to participate in an optional
group health benefit plan made available under Section 1571.158,
unless the retiree:
(1) is at least 62 years of age or older; and
(2) meets the definition of retiree under Section
1575.004(a)(1).
(b) A retiree subject to Subsection (a) may, on the date the
retiree reaches 62 years of age, under rules adopted by the trustee:
(1) enroll in any coverage tier under the group
program; and
(2) enroll, in the same coverage tier, the retiree's
dependents who are enrolled in the group program as of the date the
retiree reaches 62 years of age.
SECTION 10. The following provisions are repealed:
(a) Sections 824.202(a-1) and (b-1), Government Code; and
(b) Section 1579.103, Insurance Code.
SECTION 11. (a) Except as provided in this section, the
changes in law made by this Act to Section 824.202, Government Code,
do not apply to, and the former law is continued in effect for, a
person who retires under the Teacher Retirement System of Texas on
or after September 1, 2014, and who meets one or more of the
following requirements on or before August 31, 2014:
(1) the person has attained age 50;
(2) the sum of the person's age and amount of service
credit in the retirement system equals 70 or greater; or
(3) the person has at least 25 years of service credit
in the retirement system.
(b) Only service actually credited in the Teacher
Retirement System of Texas, the Employees Retirement System of
Texas, or a retirement system participating in the proportionate
retirement program under Chapter 803, Government Code, on or before
August 31, 2014, may be used to determine eligibility under
Subsection (a)(2) and (3) of this section. Purchased service
credit in the retirement system is:
(1) not considered actually credited in the retirement
system for purposes of Subsection (a)(2) or (3) of this section, as
applicable, if the service credit is established only after
completion of an installment payment plan under which any
installment payment is required to be made after August 31, 2014;
and
(2) considered actually credited in the retirement
system for purposes of Subsection (a)(2) or (3) of this section, as
applicable, if:
(A) payment in full for the purchase of service
credit is made by a direct rollover or otherwise on or before August
31, 2014; or
(B) payment in full by direct rollover or
otherwise is made after August 31, 2014, if:
(i) the member's request to purchase
service credit occurred on or before August 31, 2014; and
(ii) payment to purchase the service credit
is made in accordance with uniform administrative requirements,
including payment deadlines, established by the retirement system.
(c) For members who meet the eligibility requirements of
Subsection (a) of this section and who otherwise would be subject to
Section 824.202(d-1) as it formerly existed before being amended by
this Act, instead of the five percent reduction for each year the
member is less than age 60, the reduction will be two percent for
each year the member is less than age 60.
SECTION 12. Sections 824.807 and 825.307(b), Government
Code, as amended by this Act, apply only to interest accrued on or
after the effective date of this Act. Interest accrued before the
effective date of this Act is governed by the law in effect on the
date the interest accrued, and that law is continued in effect for
that purpose.
SECTION 13. (a) The change in law made by this Act to
Chapter 1575, Insurance Code, does not apply to, and the former law
is continued in effect for, a person who takes a service retirement
under the Teacher Retirement System of Texas on or after September
1, 2014, and who meets one or more of the following requirements on
or before August 31, 2014:
(1) the sum of the person's age and amount of service
credit in the retirement system equals 70 or greater; or
(2) the person has at least 25 years of service credit
in the retirement system.
(b) Only service actually credited in the Teacher
Retirement System of Texas or the Employees Retirement System of
Texas, on or before August 31, 2014, may be used to determine
eligibility under this section. Purchased service credit in the
retirement system is:
(1) not considered actually credited in the retirement
system for purposes of this section if the service credit is
established only after completion of an installment payment plan
under which any installment payment is required to be made after
August 31, 2014; and
(2) considered actually credited in the retirement
system for purposes of this section if:
(A) payment in full for the purchase of service
credit is made by a direct rollover or otherwise on or before August
31, 2014; or
(B) payment in full by direct rollover or
otherwise is made after August 31, 2014, if:
(i) the member's request to purchase
service credit occurred on or before August 31, 2014; and
(ii) payment to purchase the service credit
is made in accordance with uniform administrative requirements,
including payment deadlines, established by the retirement system.
SECTION 14. (a) Except as provided by Subsection (b) of
this section, this Act takes effect September 1, 2014.
(b) Section 824.702, Government Code, as added by this Act,
and the repeal by this Act of Section 1579.103, Insurance Code, take
effect September 1, 2013.
Age at date 55 56 57 58 59 60 61 62 63 64 65
of retirement
Percentage of 47% 51% 55% 59% 63% 67% 73% 80% 87% 93% 100%
standard annuity
receivable
Age at date of 50 51 52 53 54 55 56 57 58 59 60
retirement 50 51 52 53 54 55 56 57 58 59 60
Minimum years of 30 29 28 27 26 25 24 23 22 21 20
service credit 30 29 28 27 26 25 24 23 22 21 20
required 30 29 28 27 26 25 24 23 22 21 20
Percentage of 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100%
standard annuity 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100%
receivable 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100%