Texas 2013 - 83rd Regular

Texas Senate Bill SB1459 Compare Versions

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1	1	By: Duncan, et al. S.B. No. 1459
2	2	(Callegari, et al.)
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the powers and duties of and contributions to and
8	8	benefits from the systems and programs administered by the
9	9	Employees Retirement System of Texas.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Subsection (a), Section 411.1402, Government
12	12	Code, is amended to read as follows:
13	13	(a) The Employees Retirement System of Texas is entitled to
14	14	obtain from the department, the Federal Bureau of Investigation
15	15	Criminal Justice Information Services Division, or another law
16	16	enforcement agency criminal history record information maintained
17	17	by the department, division, or agency that relates to a person who
18	18	is:
19	19	(1) an applicant for employment with, or who is or has
20	20	been employed by, the retirement system;
21	21	(2) a consultant, contract employee, independent
22	22	contractor, intern, or volunteer for the retirement system or an
23	23	applicant to serve in one of those positions; or
24	24	(3) a candidate for appointment or election to the
25	25	board of trustees of the retirement system or an advisory committee
26	26	to that board.
27	27	SECTION 2. Subsection (a), Section 661.091, Government
28	28	Code, is amended to read as follows:
29	29	(a) A contributing member of the Employees Retirement
30	30	System of Texas who retires is entitled to a lump-sum payment [be
31	31	paid in a lump sum], from funds of the agency or department from
32	32	which the member retires, for the member's accrued vacation time as
33	33	of the date of retirement, unless the member opts to receive for
34	34	that accrued vacation time service credit under Section 813.511(a).
35	35	SECTION 3. Section 811.007, Government Code, is amended to
36	36	read as follows:
37	37	Sec. 811.007. IMMUNITY FROM LIABILITY. The board of
38	38	trustees, executive director, members of an advisory committee
39	39	appointed by the board of trustees, and employees of the retirement
40	40	system are not liable for any action taken or omission made or
41	41	suffered by them in good faith in the performance of any duty in
42	42	connection with any program or system administered by the
43	43	retirement system.
44	44	SECTION 4. Subsection (b), Section 812.003, Government
45	45	Code, is amended to read as follows:
46	46	(b) An office or employment that is included in the coverage
47	47	of the Teacher Retirement System of Texas, the Judicial Retirement
48	48	System of Texas Plan One, or the Judicial Retirement System of Texas
49	49	Plan Two or, except as provided by Section 9.01, Chapter 238
50	50	(S.B. 378), Acts of the 73rd Legislature, Regular Session, 1993, is
51	51	with a university system or institution of higher education, as
52	52	defined by Section 61.003, Education Code, is not a position with a
53	53	department, commission, board, agency, or institution of the state
54	54	for purposes of this subtitle.
55	55	SECTION 5. Subsection (c), Section 813.202, Government
56	56	Code, is amended to read as follows:
57	57	(c) The state shall contribute for service established
58	58	under this section an amount in the same ratio to the member's
59	59	contribution and interest paid under Subsection (b) for the service
60	60	as the state's contribution bears to the contribution for current
61	61	service required of a member of the employee class at the time the
62	62	service is established under this section. The state's
63	63	contribution and interest must be paid from the fund or account from
64	64	which the member receives compensation at the time the service is
65	65	established or, if the member does not hold a position at the time
66	66	the service is established, from the fund or account from which the
67	67	member received compensation when the member most recently held a
68	68	position.
69	69	SECTION 6. Subsection (b), Section 813.302, Government
70	70	Code, is amended to read as follows:
71	71	(b) A member eligible to establish military service credit
72	72	is one who:
73	73	(1) does not receive and is not eligible to receive
74	74	federal retirement payments based on 20 years or more of active
75	75	federal military duty [or its equivalent];
76	76	(2) has been released from military duty under
77	77	conditions not dishonorable; and
78	78	(3) has credit in the retirement system for membership
79	79	service performed after the member's date of release from active
80	80	military duty.
81	81	SECTION 7. Subsection (k), Section 813.509, Government
82	82	Code, is amended to read as follows:
83	83	(k) A member [who was not a member on the date hired and was
84	84	hired on or after September 1, 2009,] or a death benefit beneficiary
85	85	of that member may use sick leave creditable under this section only
86	86	for purposes of calculating the member's or beneficiary's annuity.
87	87	SECTION 8. Subsections (a) and (j), Section 813.511,
88	88	Government Code, are amended to read as follows:
89	89	(a) A member who holds a position included in the employee
90	90	class of membership during the month that includes the effective
91	91	date of the member's retirement and who retires based on service or
92	92	a disability is entitled to service credit in the retirement system
93	93	for the member's annual leave that has accumulated and is unused on
94	94	the last day of employment, unless the member opts to receive for
95	95	that accumulated leave a lump-sum payment under Section 661.091.
96	96	(j) A member [who was not a member on the date hired and was
97	97	hired on or after September 1, 2009,] or a death benefit beneficiary
98	98	of that member may use annual leave creditable under this section
99	99	only for purposes of calculating the member's or beneficiary's
100	100	annuity.
101	101	SECTION 9. Subsections (a) and (d), Section 814.105,
102	102	Government Code, are amended to read as follows:
103	103	(a) The [Except as otherwise provided by this section, the]
104	104	standard service retirement annuity for service credited in the
105	105	employee class of membership is an amount computed as the member's
106	106	average monthly compensation for service in that class for the 60
107	107	[36] highest months of compensation multiplied by 2.3 percent for
108	108	each year of service credit in that class.
109	109	(d) The standard service retirement annuity computed under
110	110	this section [Subsection (c)] is reduced by five percent for each
111	111	year the member retires before the member reaches age 62 [60, with a
112	112	maximum possible reduction of 25 percent].
113	113	SECTION 10. Section 814.107, Government Code, is amended by
114	114	amending Subsections (b) and (c) and adding Subsection (c-1) to
115	115	read as follows:
116	116	(b) The standard service retirement annuity payable for at
117	117	least 20 years of service credit as a law enforcement or custodial
118	118	officer is an amount computed on the basis of the member's average
119	119	monthly compensation for the 60 [36] highest months of compensation
120	120	in the employee class, times the sum of the percentage factor used
121	121	in the computation of a standard service retirement annuity under
122	122	Section 814.105 plus .5 percent.
123	123	(c) The standard combined service retirement annuity that
124	124	is payable under this section is based on retirement on or after the
125	125	attainment of the normal retirement age, which for purposes of this
126	126	section is the earlier of either the age of 57 [50] or the age at
127	127	which the sum of the member's age and amount of service credit in
128	128	the employee class equals the number 80. The annuity of a law
129	129	enforcement or custodial officer who retires before reaching the
130	130	age of 57 under any eligibility criteria is actuarially reduced by
131	131	five percent for each year of difference between the member's age at
132	132	retirement and 57. The actuarial reduction described by this
133	133	section is in addition to any other actuarial reduction required by
134	134	law.
135	135	(c-1) A law enforcement or custodial officer who retires
136	136	before attaining the [normal retirement] age of 50 is entitled only
137	137	to an annuity that is actuarially reduced from the annuity
138	138	available at the [normal retirement] age of 50 to the law
139	139	enforcement or custodial officer whose service credit annuity
140	140	amount is based on the sum of the member's age and amount of law
141	141	enforcement or custodial officer service credit and employee class
142	142	service credit, and is not entitled to have the annuity
143	143	recalculated at normal retirement age. The standard or reduced
144	144	annuity under this section is payable from the trust fund
145	145	established by Section 815.310 and the law enforcement and
146	146	custodial officer supplemental retirement fund in a ratio
147	147	determined by the retirement system.
148	148	SECTION 11. Subsection (a), Section 814.1081, Government
149	149	Code, is amended to read as follows:
150	150	(a) A person who retired and selected an optional service
151	151	retirement annuity described by Section 814.108(c)(1), (c)(2), or
152	152	(c)(5) may change the optional annuity selection to the selection
153	153	of a standard service retirement annuity if:
154	154	(1) pursuant to a divorce decree, a court orders the
155	155	change in the annuity selection to a standard service retirement
156	156	annuity; or
157	157	(2) the retiree files [by filing] with the retirement
158	158	system a request to change the annuity selection, if the retiree
159	159	designated a person as beneficiary who:
160	160	(A) [(1)] was not at the time of designation and
161	161	is not currently the retiree's spouse or dependent child; or
162	162	(B) is not currently the retiree's spouse or
163	163	dependent child and [(2)] has executed since the designation a
164	164	written, notarized instrument that releases the retirement system
165	165	from any claim to the annuity by the beneficiary and that transfers
166	166	all [transfer and release, approved by a court of competent
167	167	jurisdiction pursuant to a divorce decree,] of the beneficiary's
168	168	interest in the annuity to the retiree [and is not currently the
169	169	retiree's spouse or dependent child].
170	170	SECTION 12. Subchapter G, Chapter 814, Government Code, is
171	171	amended by adding Section 814.604 to read as follows:
172	172	Sec. 814.604. COST-OF-LIVING ADJUSTMENT. (a) The
173	173	retirement system shall grant a one-time cost-of-living adjustment
174	174	as provided by Subsections (b) and (c) on a finding by the board of
175	175	trustees that, as determined by an actuarial valuation:
176	176	(1) the amortization period for the unfunded actuarial
177	177	liabilities of the retirement system does not exceed 30 years by one
178	178	or more years; and
179	179	(2) as a result of paying the adjustment, the time
180	180	required to amortize the unfunded actuarial liabilities of the
181	181	retirement system would not be increased to a period that exceeds 30
182	182	years by one or more years.
183	183	(b) The retirement system shall pay the cost-of-living
184	184	adjustment under this section to a retiree who has been retired for
185	185	20 years or more on the date the board of trustees makes the finding
186	186	in Subsection (a), or to a beneficiary of the retiree, as an
187	187	increase to a monthly service retirement benefit, disability
188	188	retirement benefit, or death benefit, as applicable, paid under
189	189	this chapter for service credited in the employee class.
190	190	(c) A cost-of-living adjustment under this section is
191	191	limited to the lesser of:
192	192	(1) an amount equal to three percent of the monthly
193	193	benefit subject to the increase; or
194	194	(2) $100 a month.
195	195	SECTION 13. Subsection (b), Section 815.311, Government
196	196	Code, is amended to read as follows:
197	197	(b) Interest on money in an individual account in the
198	198	employees saving account is earned monthly and is computed at the
199	199	rate of two [five] percent a year on the mean balance of the
200	200	member's account for the fiscal year.
201	201	SECTION 14. Section 815.317, Government Code, is amended by
202	202	adding Subsection (d) to read as follows:
203	203	(d) Member contributions to the fund deducted under Section
204	204	815.402(h):
205	205	(1) earn interest at the same rate as money in an
206	206	individual account in the employees saving account under Section
207	207	815.311; and
208	208	(2) are subject to the same computations and
209	209	limitations that apply to member contributions under Section
210	210	815.311.
211	211	SECTION 15. Subsection (a), Section 815.402, Government
212	212	Code, is amended to read as follows:
213	213	(a) Except as provided by Section 813.201, each payroll
214	214	period, each department or agency of the state shall cause to be
215	215	deducted from each member's compensation a contribution of:
216	216	(1) 6.6 [6.5] percent of the compensation if the
217	217	member is not a member of the legislature, for service rendered
218	218	after August 31, 2013, and before September 1, 2014;
219	219	(2) 6.9 percent of the compensation if the member is
220	220	not a member of the legislature, for service rendered after August
221	221	31, 2014, and before September 1, 2015;
222	222	(3) 7.2 percent of the compensation if the member is
223	223	not a member of the legislature, for service rendered after August
224	224	31, 2015, and before September 1, 2016;
225	225	(4) 7.5 percent of the compensation if the member is
226	226	not a member of the legislature, for service rendered after August
227	227	31, 2016;
228	228	(5) for service rendered on or after September 1,
229	229	2017, the lesser of:
230	230	(A) 7.5 percent of the member's annual
231	231	compensation; or
232	232	(B) a percentage of the member's annual
233	233	compensation equal to 7.5 percent reduced by one-tenth of one
234	234	percent for each one-tenth of one percent that the state
235	235	contribution rate for the fiscal year to which the service relates
236	236	is less than the state contribution rate established for the 2015
237	237	fiscal year [provided that if the state contribution to the
238	238	retirement system is computed using a percentage less than 6.5
239	239	percent, the member's contribution is computed using a percentage
240	240	equal to the percentage used to compute the state contribution,
241	241	which may not be less than six percent]; or
242	242	(6) [(2)] eight percent of the compensation if the
243	243	member is a member of the legislature.
244	244	SECTION 16. Subchapter E, Chapter 815, Government Code, is
245	245	amended by adding Section 815.4035 to read as follows:
246	246	Sec. 815.4035. COLLECTION OF STATE RETIREMENT
247	247	CONTRIBUTION. (a) Except as provided by Section 813.201, the
248	248	board of trustees shall assess each employer whose employees are
249	249	members of the retirement system a state retirement contribution in
250	250	an amount equal to 0.5 percent of the employer's total payroll, as
251	251	determined by the General Appropriations Act.
252	252	(b) The board of trustees shall deposit the state retirement
253	253	contribution to the credit of the trust fund established by Section
254	254	815.310 to be used for the purposes specified by Section 815.103.
255	255	SECTION 17. Section 837.002, Government Code, is amended to
256	256	read as follows:
257	257	Sec. 837.002. TERMINATION OF MEMBERSHIP. A person's
258	258	membership in the retirement system is terminated by:
259	259	(1) death of the person;
260	260	(2) retirement based on service credited in the
261	261	retirement system; or
262	262	(3) withdrawal of all of the person's accumulated
263	263	contributions[; or
264	264	[(4) transfer of the person's accumulated contributions
265	265	under Section 840.401(f)].
266	266	SECTION 18. Subsection (b), Section 838.103, Government
267	267	Code, is amended to read as follows:
268	268	(b) A member eligible to establish military service credit
269	269	is one who:
270	270	(1) has at least eight years of service credit in the
271	271	retirement system;
272	272	(2) does not receive and is not eligible to receive
273	273	federal retirement payments based on 20 years or more of active
274	274	federal military duty [or its equivalent]; and
275	275	(3) has been released from military duty under
276	276	conditions not dishonorable.
277	277	SECTION 19. Subsections (a) and (c), Section 838.106,
278	278	Government Code, are amended to read as follows:
279	279	(a) A member may establish service credit in the retirement
280	280	system for any calendar year during which the member[:
281	281	[(1)] held an office included in the membership of the
282	282	retirement system[; or
283	283	[(2) was eligible to take the oath for an office
284	284	included in the membership of the retirement system].
285	285	(c) For the purpose of Subsection (a) [(a)(1)], the term of
286	286	a member leaving judicial office ends not later than December 31
287	287	regardless of the date on which the member's successor takes the
288	288	oath of office.
289	289	SECTION 20. Subsection (a), Section 840.102, Government
290	290	Code, is amended to read as follows:
291	291	(a) Except as provided by Subsections (g) and (h), each
292	292	payroll period, a judicial officer who is a member of the retirement
293	293	system is required to contribute:
294	294	(1) 6.6 [six] percent of the officer's state
295	295	compensation for service rendered after August 31, 2013, and before
296	296	September 1, 2014;
297	297	(2) 6.9 percent of the officer's state compensation
298	298	for service rendered after August 31, 2014, and before September 1,
299	299	2015;
300	300	(3) 7.2 percent of the officer's state compensation
301	301	for service rendered after August 31, 2015, and before September 1,
302	302	2016;
303	303	(4) 7.5 percent of the officer's state compensation
304	304	for service rendered after August 31, 2016; or
305	305	(5) for service rendered on or after September 1,
306	306	2017, the lesser of:
307	307	(A) 7.5 percent of the officer's state
308	308	compensation; or
309	309	(B) a percentage of the officer's state
310	310	compensation equal to 7.5 percent reduced by one-tenth of one
311	311	percent for each one-tenth of one percent that the state
312	312	contribution rate for the fiscal year to which the service relates
313	313	is less than the state contribution rate established for the 2015
314	314	fiscal year [the period to the retirement system].
315	315	SECTION 21. Subdivisions (9) and (11), Section 1551.003,
316	316	Insurance Code, are amended to read as follows:
317	317	(9) "Full-time employee" means an employee designated
318	318	as a full-time employee under Section 1551.319(c) or (d) or an
319	319	employee designated by the employer as working 30 [40] or more hours
320	320	a week.
321	321	(11) "Part-time employee" means an employee
322	322	designated by the employer as working less than 30 [40] hours a
323	323	week. For purposes of this chapter, an individual described by
324	324	Section 1551.101(e)(2) is considered a part-time employee.
325	325	SECTION 22. Subsection (b), Section 1551.004, Insurance
326	326	Code, is amended to read as follows:
327	327	(b) In this section, "child" includes:
328	328	(1) a natural child, adopted child, stepchild, [or]
329	329	foster child, or child in the possession of a participant who is
330	330	designated as managing conservator of the child under an
331	331	irrevocable or unrevoked affidavit of relinquishment under Chapter
332	332	161, Family Code; or
333	333	(2) a child who is related by blood or marriage and was
334	334	claimed as a dependent on the federal income tax return of an
335	335	individual who is eligible to participate in the group benefits
336	336	program under Section 1551.101 or 1551.102 for the calendar year
337	337	preceding the plan year in which the child is first enrolled as a
338	338	dependent under Subchapter D, and for each subsequent year in which
339	339	the child is enrolled as a dependent.
340	340	SECTION 23. Subsections (a) and (b), Section 1551.1055,
341	341	Insurance Code, are amended to read as follows:
342	342	(a) Except as provided by Subsection (c) or (d), eligibility
343	343	under Section 1551.101 begins not later than [on the first day of
344	344	the calendar month that begins after] the 90th day after the date
345	345	the employee performs services for a state agency or is qualified
346	346	for and begins to hold elected or appointed office.
347	347	(b) Except as provided by Subsection (c), eligibility under
348	348	Section 1551.102, for an individual who does not retire at the end
349	349	of the last month for which the individual is on the payroll of a
350	350	state agency before retirement, begins not later than [on the first
351	351	day of the calendar month that begins after] the 90th day after the
352	352	date the individual retires.
353	353	SECTION 24. Subsection (a), Section 1551.158, Insurance
354	354	Code, is amended to read as follows:
355	355	(a) A dependent child who is unmarried and whose coverage
356	356	under this chapter ends when the child becomes 26 [25] years of age
357	357	may, on expiration of continuation coverage under the Consolidated
358	358	Omnibus Budget Reconciliation Act of 1985 (Pub. L. No. 99-272),
359	359	reinstate health benefit plan coverage under this chapter if the
360	360	child, or the child's participating parent, pays the full cost of
361	361	the health benefit plan coverage.
362	362	SECTION 25. Subchapter G, Chapter 1551, Insurance Code, is
363	363	amended by adding Section 1551.3196 to read as follows:
364	364	Sec. 1551.3196. AMOUNT OF CONTRIBUTION FOR CERTAIN
365	365	ANNUITANTS. (a) An annuitant receives the benefits of a state
366	366	contribution for coverage under this chapter based on the
367	367	annuitant's eligible service credit, as follows:
368	368	(1) for an annuitant with 20 years or more of eligible
369	369	service credit, a full state contribution;
370	370	(2) for an annuitant with at least 15 years but less
371	371	than 20 years of eligible service credit, 75 percent of a full state
372	372	contribution; and
373	373	(3) for an annuitant with less than 15 years of
374	374	eligible service credit, 50 percent of a full state contribution.
375	375	(b) An annuitant receiving a reduced state contribution
376	376	under Subsection (a) shall have any state contribution for
377	377	dependent coverage reduced in an amount proportional to the
378	378	reduction under Subsection (a).
379	379	(c) This section does not apply to an individual who:
380	380	(1) receives or is eligible to receive an annuity that
381	381	is based on eligibility under Section 814.002, 814.102, 834.101, or
382	382	839.101, Government Code; or
383	383	(2) is eligible to participate in the group benefits
384	384	program under:
385	385	(A) Section 1551.102(d) because of a disability;
386	386	or
387	387	(B) Section 1551.102(f).
388	388	SECTION 26. (a) The following provisions of the Government
389	389	Code are repealed:
390	390	(1) Subsection (i), Section 76.006;
391	391	(2) Subsection (f), Section 606.030;
392	392	(3) Subsections (d) and (e), Section 813.509;
393	393	(4) Subsections (d) and (e), Section 813.511;
394	394	(5) Subsection (c), Section 814.105;
395	395	(6) Section 814.1075; and
396	396	(7) Section 840.401.
397	397	(b) Section 1551.321, Insurance Code, is repealed.
398	398	SECTION 27. The changes in law made by this Act to Sections
399	399	661.091, 813.509, 813.511, 814.105, and 814.107, Government Code,
400	400	apply only to a person who is hired on or after September 1, 2013, to
401	401	work in a position that requires membership in the Employees
402	402	Retirement System of Texas. A person hired before September 1,
403	403	2013, to work in a position that requires membership in the
404	404	Employees Retirement System of Texas is subject to those laws as
405	405	they existed immediately before that date, and the former law is
406	406	continued in effect for that purpose.
407	407	SECTION 28. Section 815.311, Government Code, as amended by
408	408	this Act, applies only to interest accrued on or after January 1,
409	409	2014. Interest accrued before that date is governed by the law in
410	410	effect on the date the interest was accrued, and that law is
411	411	continued in effect for that purpose.
412	412	SECTION 29. Section 1551.3196, Insurance Code, as added by
413	413	this Act, applies only to an individual who does not have five years
414	414	of eligible service credit on September 1, 2014. An individual who
415	415	has at least five years of eligible service credit, or is
416	416	participating in the group benefits program as a retiree, on that
417	417	date is governed by the law in effect on August 31, 2014, and the
418	418	former law is continued in effect for that purpose.
419	419	SECTION 30. (a) Notwithstanding any other law, for the
420	420	2014-2015 state fiscal biennium, it is the intent of the
421	421	legislature that all state retirement assets and liabilities
422	422	attributable to members and retirees of the law enforcement and
423	423	custodial officer supplemental retirement fund be measured and
424	424	accounted for in aggregate and separately from the retirement
425	425	assets and liabilities attributable to members and retirees in any
426	426	other retirement plan for purposes of determining an actuarially
427	427	required contribution or making any other actuarial calculation.
428	428	(b) For purposes of Section 811.006, Government Code, the
429	429	law enforcement and custodial officer supplemental retirement fund
430	430	shall be considered a part of the retirement system, as that term is
431	431	defined by Subdivision (15), Section 811.001, Government Code, and
432	432	shall be subject to all other provisions of Subtitle B, Title 8,
433	433	Government Code, that do not directly conflict with Subsection (a)
434	434	of this section.
435	435	(c) The board of trustees of the Employees Retirement System
436	436	of Texas may adopt rules necessary to implement or administer this
437	437	section.
438	438	SECTION 31. The Employees Retirement System of Texas shall
439	439	conduct an interim study on the feasibility of adding custodial
440	440	officers employed by the Texas Juvenile Justice Department to the
441	441	class of employees eligible to participate in the law enforcement
442	442	and custodial officer supplemental retirement fund as custodial
443	443	officers. Not later than September 1, 2014, the retirement system
444	444	shall report the findings of the study to the governor, the
445	445	lieutenant governor, the speaker of the house of representatives,
446	446	and each senate and house committee that has jurisdiction over the
447	447	retirement system.
448	448	SECTION 32. Subsection (a), Section 840.102, Government
449	449	Code, as amended by this Act, takes effect September 1, 2013.
450	450	SECTION 33. (a) Except as provided by Subsections (b),
451	451	(c), and (d) of this section, this Act takes effect September 1,
452	452	2013.
453	453	(b) Section 815.311, Government Code, as amended by this
454	454	Act, takes effect January 1, 2014.
455	455	(c) The changes in law made by this Act to Section
456	456	1551.1055, Insurance Code, take effect September 1, 2014.
457	457	(d) Section 1551.3196, Insurance Code, as added by this Act,
458	458	takes effect September 1, 2014.