Texas 2015 - 84th Regular

Texas House Bill HB3349 Compare Versions

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11 84R12610 TSR-F
22 By: Rodriguez of Bexar H.B. No. 3349
33
44
55 A BILL TO BE ENTITLED
66 AN ACT
77 relating to the retirement system in certain municipalities for
88 firefighters and police officers.
99 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1010 SECTION 1. Sections 1.02(7) and (17), Chapter 824 (S.B.
1111 817), Acts of the 73rd Legislature, Regular Session, 1993 (Article
1212 6243o, Vernon's Texas Civil Statutes), are amended to read as
1313 follows:
1414 (7) "Dependent child" means:
1515 (A) a person who is less than 18 years of age and
1616 is a child of a deceased member or deceased retiree; or
1717 (B) a person:
1818 (i) who is at least 18 years of age;
1919 (ii) who is mentally or physically disabled
2020 to the extent that the person is not capable of being
2121 self-supporting; and
2222 (iii) whose natural or adoptive parent is a
2323 deceased member or deceased retiree [, provided that, for the year
2424 immediately preceding the death of the member or retiree, the
2525 deceased member or retiree claimed the person as a dependent on the
2626 member's or retiree's federal income tax return].
2727 (17) "Total salary" means all salary of a member:
2828 (A) including:
2929 (i) amounts picked up by the municipality
3030 under Section 4.04(b) of this Act; and
3131 (ii) amounts that would be included in
3232 salary but for an election under Section 125(d), 132(f)(4), 401(k),
3333 402(e)(3), 402(h)(1)(B), or 457(b) of the code; and
3434 (B) excluding [, except]:
3535 (i) [(A)] overtime pay, field training
3636 officer's pay, bomb squad pay, SWAT team pay, K-9 pay, and hostage
3737 team pay; and
3838 (ii) [(B)] pay for unused accrued vacation
3939 and sick leave, holiday pay, compensatory time pay, and bonus days
4040 leave, or any similar items of compensation that may be paid in the
4141 future.
4242 SECTION 2. Section 4.02(a), Chapter 824 (S.B. 817), Acts of
4343 the 73rd Legislature, Regular Session, 1993 (Article 6243o,
4444 Vernon's Texas Civil Statutes), is amended to read as follows:
4545 (a) If a member takes unpaid leave as provided by the
4646 federal Family and Medical Leave Act of 1993 (29 U.S.C. Section 2601
4747 et seq.), that member is entitled to make voluntary contributions
4848 for the leave period in the same amount as the member would have
4949 paid if the member had not taken the leave. Those payments must be
5050 made not later than the 30th day after the date the member returns
5151 from that leave. A computation of contributions under this section
5252 shall be made in the same manner as other computations under this
5353 Act. A municipality to which this Act applies shall pay to the fund
5454 an amount equal to the amount the municipality would have paid under
5555 Section 4.05(a) of this Act if the contributions made by the member
5656 under this section had been made by the member under Section 4.04(a)
5757 of this Act. The payment shall be made by the municipality not
5858 later than the 30th day after the date of notification by the fund
5959 that the member has made the contributions under this section
6060 [match an amount equal to twice the amount of each payment a member
6161 makes to the fund under this subsection].
6262 SECTION 3. Section 4.03, Chapter 824 (S.B. 817), Acts of the
6363 73rd Legislature, Regular Session, 1993 (Article 6243o, Vernon's
6464 Texas Civil Statutes), is amended by amending Subsection (h) and
6565 adding Subsection (i) to read as follows:
6666 (h) A municipality to which this Act applies shall pay to
6767 the fund an amount equal to the amount the municipality would have
6868 paid under Section 4.05(a) of this Act if the contributions made by
6969 the member under this section had been made by the member under
7070 Section 4.04(a) of this Act. The payment shall be made by the
7171 municipality not later than the 30th day after the date of
7272 notification by the fund that the member has made the contributions
7373 under this section [double-match payments made to the fund under
7474 this section].
7575 (i) In the case of a member of the fund who dies while
7676 performing qualified military service as defined by Section 414(u)
7777 of the code, the survivors of the member are entitled to any
7878 additional benefits, other than benefit accruals relating to the
7979 period of qualified military service, that would have been provided
8080 if the member had returned to active service and then immediately
8181 died.
8282 SECTION 4. Sections 4.05(a), (b), and (d), Chapter 824
8383 (S.B. 817), Acts of the 73rd Legislature, Regular Session, 1993
8484 (Article 6243o, Vernon's Texas Civil Statutes), are amended to read
8585 as follows:
8686 (a) Except as provided by Subsection (a-1) of this section,
8787 a municipality to which this Act applies shall pay into the fund:
8888 (1) an amount equal to double the sum total of all
8989 member contributions made in accordance with Section 4.04 of this
9090 Act for full pay periods ending before October 1, 2015; and
9191 (2) an amount equal to 23.25 percent of the total
9292 salary of each fire fighter and police officer in the employment of
9393 the municipality for full pay periods ending after September 30,
9494 2015.
9595 (b) The payments into the fund by the municipality, both as
9696 to deductions and payments under Subsection (a) of this section
9797 [double-matching amounts], shall be made on the same day the
9898 contributions are deducted from the members' total salary.
9999 (d) The municipality's payments to the fund
100100 [double-matching amount] under this section are [is] in place of
101101 all other payments previously required by law to be made by the
102102 municipality.
103103 SECTION 5. Section 5.01, Chapter 824 (S.B. 817), Acts of the
104104 73rd Legislature, Regular Session, 1993 (Article 6243o, Vernon's
105105 Texas Civil Statutes), is amended by adding Subsection (f-2) and
106106 amending Subsection (g) to read as follows:
107107 (f-2) The board shall compute the retirement annuity of a
108108 member who retires after September 30, 2015, at the rate of 2.375
109109 percent of the member's average total salary for each of the first
110110 20 years of service, plus five percent of the member's average total
111111 salary for each of the next seven years of service, plus 2.5 percent
112112 of the member's average total salary for the next year of service,
113113 plus 0.5 percent of the member's average total salary for each of
114114 the next five years of service, with fractional years of service
115115 prorated based on full months served as a contributing member. In
116116 making the computation for a year, the year is considered to begin
117117 on the first day a contribution is made. A retirement annuity under
118118 this subsection may not exceed, as of the date of retirement, 87.5
119119 percent of the member's average total salary.
120120 (g) A member may not receive an award from the fund for
121121 service retirement until the member has at least 20 years of service
122122 in the fire or police department and has also contributed the
123123 required amount of money for at least 20 years. In determining the
124124 number of years of service in a department, the member shall be
125125 given full credit for the period the member was an active member
126126 plus the time the member was actively engaged in service with any
127127 uniformed service in accordance with Section 4.03 of this Act and
128128 for absences taken under the Family and Medical Leave Act of 1993
129129 (29 U.S.C. Section 2601 et seq.), in accordance with Section 4.02 of
130130 this Act. Disciplinary suspensions of 15 days or less may not be
131131 subtracted from a member's service credit under this Act if the
132132 member has paid into the fund, within 30 days after the later of the
133133 termination date of each suspension or the exhaustion of any appeal
134134 with respect to the suspension, a sum of money equal to the amount
135135 of money that would have been deducted from that person's salary
136136 during that period of suspension if it had not been for that
137137 suspension. A municipality to which this Act applies shall pay to
138138 the fund an amount equal to the amount the municipality would have
139139 paid under Section 4.05(a) of this Act if the contributions made by
140140 the member under this section had been made by the member under
141141 Section 4.04(a) of this Act. The payment shall be made by the
142142 municipality not later than the 30th day after the date of
143143 notification by the fund that the member has made the contributions
144144 under this section [double-match a payment made under this
145145 subsection]. Members of the fund at the time of their retirement
146146 shall also receive service credit for all unused sick leave
147147 accumulated by them under Chapter 143, Local Government Code, but
148148 only to the extent the unused sick leave exceeds 90 days. Service
149149 credit for unused sick leave shall be prorated based on each full
150150 month of sick leave. A member's service credit under this section
151151 includes any service credit purchased in accordance with
152152 Subsections (k)-(m) of this section.
153153 SECTION 6. Sections 5.015(d) and (e), Chapter 824 (S.B.
154154 817), Acts of the 73rd Legislature, Regular Session, 1993 (Article
155155 6243o, Vernon's Texas Civil Statutes), are amended to read as
156156 follows:
157157 (d) The amount of a lump-sum payment to which a member
158158 making a Back DROP election is entitled shall be computed in the
159159 manner provided by this subsection and Subsection (d-1) of this
160160 section. The member's retirement annuity shall be computed in the
161161 manner provided by Section 5.01 of this Act, except that the amount
162162 of service credit and average total salary used in making that
163163 computation shall be determined in accordance with this
164164 subsection. For purposes of this subsection, the member's average
165165 total salary shall be computed based on the member's Back DROP
166166 retirement date, which is the member's actual retirement date less
167167 the amount of time the member elects under Subsection (b)(1) of this
168168 section. For purposes of this subsection, the member's service
169169 credit shall be the member's service credit determined in
170170 accordance with Section 5.01(g) of this Act less the amount of time
171171 for:
172172 (1) any service credit in excess of 33 [34] years of
173173 service, other than service credit for sick leave unused on the date
174174 of actual retirement;
175175 (2) any service credit given for sick leave unused on
176176 the date of actual retirement; and
177177 (3) any service credit in excess of 20 years but not in
178178 excess of the amount permitted under Subsection (b)(1) of this
179179 section that the member elects for computing the amount of the
180180 lump-sum payment.
181181 (e) For purposes of computing the monthly pension of a
182182 member making a Back DROP election, the member's retirement annuity
183183 shall be computed in the manner provided by Section 5.01 of this
184184 Act, except that:
185185 (1) the amount of service credit used in making that
186186 computation shall be the member's service credit determined in
187187 accordance with Section 5.01(g) of this Act less:
188188 (A) the amount of time the member elects under
189189 Subsection (b)(1) of this section; and
190190 (B) any service credit in excess of 33 [34] years
191191 of service excluding any service credit for sick leave unused on the
192192 date of actual retirement; and
193193 (2) the member's average total salary shall be
194194 computed as if the member's retirement date were the member's actual
195195 retirement date less the amount of time the member elects under
196196 Subsection (b)(1) of this section.
197197 SECTION 7. Section 5.03(c), Chapter 824 (S.B. 817), Acts of
198198 the 73rd Legislature, Regular Session, 1993 (Article 6243o,
199199 Vernon's Texas Civil Statutes), is amended to read as follows:
200200 (c) Except as provided by Subsection (d) of this section, a
201201 member of the fund who is on suspension and who becomes disabled as
202202 a result of an injury sustained or disease contracted while the
203203 member is on suspension is eligible for a disability retirement
204204 annuity under Subsection (a) or (a-1) of this section, as
205205 applicable, if the suspended member makes up each deducted
206206 contribution lost by reason of the suspension not later than the
207207 30th day after the later of the termination date of the suspension
208208 or the exhaustion of any appeal with respect to the suspension. A
209209 municipality to which this Act applies shall pay to the fund an
210210 amount equal to the amount the municipality would have paid under
211211 Section 4.05(a) of this Act if the contributions made by the member
212212 under this section had been made by the member under Section 4.04(a)
213213 of this Act. The payment shall be made by the municipality not
214214 later than the 30th day after the date of notification by the fund
215215 that the member has made the contributions under this section
216216 [double-match all contributions made by a member under this
217217 subsection].
218218 SECTION 8. Section 5.04(a), Chapter 824 (S.B. 817), Acts of
219219 the 73rd Legislature, Regular Session, 1993 (Article 6243o,
220220 Vernon's Texas Civil Statutes), is amended to read as follows:
221221 (a) A member who is eligible to retire and receive a
222222 disability retirement annuity under Section 5.03(a) of this Act is
223223 entitled to receive an annuity from the fund equal to:
224224 (1) 50 percent of the member's average total salary if
225225 the date of retirement is on or before September 30, 2015, or 47.5
226226 percent of the member's average total salary if the date of
227227 retirement is after September 30, 2015, if the member has served
228228 three years or more before the date of retirement;
229229 (2) 50 percent of the member's average monthly salary
230230 as of the date of retirement multiplied by 12 if the date of
231231 retirement is on or before September 30, 2015, or 47.5 percent of
232232 the member's average monthly salary as of the date of retirement
233233 multiplied by 12 if the date of retirement is after September 30,
234234 2015, if the member has served at least two months and less than
235235 three years before the date of retirement; or
236236 (3) 50 percent of the member's average daily salary as
237237 of the date of retirement multiplied by 360 if the date of
238238 retirement is on or before September 30, 2015, or 47.5 percent of
239239 the member's average daily salary as of the date of retirement if
240240 the date of retirement is after September 30, 2015, if the member
241241 has served less than two months before the date of retirement.
242242 SECTION 9. Section 5.05(c), Chapter 824 (S.B. 817), Acts of
243243 the 73rd Legislature, Regular Session, 1993 (Article 6243o,
244244 Vernon's Texas Civil Statutes), is amended to read as follows:
245245 (c) For those retired because of disability on or after
246246 August 30, 1971, the disability retirement annuity may not be
247247 reduced to an amount that is less than the product of:
248248 (1) 2.375 [2.25] percent multiplied by the number of
249249 years that the retiree served in the department and contributed a
250250 portion of salary as a member of the fund multiplied by the
251251 retiree's average total salary, if the retiree served three years
252252 or more before the date of retirement;
253253 (2) 2.375 [2.25] percent multiplied by the number of
254254 years that the retiree served in the department and contributed a
255255 portion of salary as a member of the fund multiplied by the
256256 retiree's average monthly salary as of the date of retirement
257257 multiplied by 12, if the retiree served at least two months and less
258258 than three years before the date of retirement; or
259259 (3) 2.375 [2.25] percent multiplied by the number of
260260 years that the retiree served in the department and contributed a
261261 portion of salary as a member of the fund multiplied by the
262262 retiree's average daily salary as of the date of retirement
263263 multiplied by 360, if the member has served less than two months
264264 before the date of retirement.
265265 SECTION 10. Section 5.09, Chapter 824 (S.B. 817), Acts of
266266 the 73rd Legislature, Regular Session, 1993 (Article 6243o,
267267 Vernon's Texas Civil Statutes), is amended by amending Subsection
268268 (a) and adding Subsection (a-2) to read as follows:
269269 (a) At or before its regular meeting in the month of March,
270270 the board annually shall review the Consumer's Price Index for All
271271 Urban Consumers (CPI-U), U.S. City Average or the nearest
272272 equivalent published by the United States Bureau of Labor
273273 Statistics for the preceding calendar year. If that index shows an
274274 increase during the preceding calendar year in the cost of living as
275275 compared with that index at the close of the previous year, the
276276 board shall order an increase of all service, disability, and death
277277 benefit retirement annuities by a percentage that varies by the
278278 date of the member's service or disability retirement, or, in the
279279 case of a member who died before retirement, the date on which the
280280 member died. If the member's service retirement, disability
281281 retirement, or death before retirement occurred before August 30,
282282 1971, the annuity shall be increased by a percentage equal to the
283283 percentage increase in the cost of living index. If the member's
284284 service retirement, disability retirement, or death before
285285 retirement occurred on or after August 30, 1971, but before October
286286 1, 2003 [1999], or a later date the board may designate under
287287 Subsection (a-2) of this section, the annuity shall be increased as
288288 follows: if the percentage increase in the cost of living index is
289289 eight percent or less, the annuity shall be increased by a
290290 percentage equal to the percentage increase, and if the percentage
291291 increase in the cost of living index is more than eight percent, the
292292 annuity shall be increased by eight percent plus a percentage equal
293293 to 75 percent of the percentage increase that is more than eight
294294 percent. If the member's service retirement, disability
295295 retirement, or death before retirement occurred on or after October
296296 1, 2003 [1999], or a later date the board may designate under
297297 Subsection (a-2) of this section, the annuity shall be increased by
298298 a percentage equal to 75 percent of the percentage increase in the
299299 cost of living index. A percentage increase in annuities shall be
300300 rounded to the nearest one-tenth percentage point for a cost of
301301 living increase.
302302 (a-2) The board may designate another date for the date
303303 October 1, 2003, in Subsection (a) of this section, provided that
304304 the designation will not cause the fund's ratio of actuarial value
305305 of assets to actuarial accrued liability to be less than 90 percent
306306 as of the date of the board's action.
307307 SECTION 11. Section 5.10, Chapter 824 (S.B. 817), Acts of
308308 the 73rd Legislature, Regular Session, 1993 (Article 6243o,
309309 Vernon's Texas Civil Statutes), is amended by amending Subsections
310310 (b), (c), (d), (f), and (j) and adding Subsection (b-1) to read as
311311 follows:
312312 (b) A distributee may elect, at the time and in the manner
313313 prescribed by the board, to have any portion of an eligible rollover
314314 distribution paid directly to an eligible retirement plan specified
315315 by the distributee in a direct rollover. [Any member or beneficiary
316316 who is entitled to receive any distribution that is an eligible
317317 rollover distribution as defined by Section 402(c)(4) of the code
318318 is entitled to have that distribution transferred directly to
319319 another eligible retirement plan of the member's or beneficiary's
320320 choice on providing direction to the fund regarding that transfer
321321 in accordance with procedures established by the board.]
322322 (b-1) For purposes of Subsection (b) of this section:
323323 (1) "Eligible retirement plan" means an individual
324324 retirement account described by Section 408(a) of the code, an
325325 individual retirement annuity described by Section 408(b) of the
326326 code, an annuity plan described by Section 403(a) of the code, a
327327 qualified trust described by Section 401(a) of the code, an
328328 eligible deferred compensation plan described by Section 457(b) of
329329 the code that is maintained by an eligible employer described by
330330 Section 457(e)(1)(A) of the code, or an annuity contract described
331331 by Section 403(b) of the code that accepts the distributee's
332332 eligible rollover distribution. However, in the case of an
333333 eligible rollover distribution to a designated beneficiary who is
334334 not the surviving spouse, or the spouse or former spouse under a
335335 qualified domestic relations order, an eligible retirement plan is
336336 an individual retirement account or individual retirement annuity
337337 only.
338338 (2) "Eligible rollover distribution" means a
339339 distribution of all or any portion of the balance to the credit of
340340 the distributee. The term does not include:
341341 (A) a distribution that is one of a series of
342342 substantially equal periodic payments, paid not less frequently
343343 than once a year, made over the life, or life expectancy, of the
344344 distributee or the joint lives, or joint life expectancies, of the
345345 distributee and the distributee's designated beneficiary;
346346 (B) a series of payments for a specified period
347347 of 10 years or more;
348348 (C) a distribution to the extent such
349349 distribution is required under Section 401(a)(9) of the code; or
350350 (D) the portion of a distribution that is not
351351 includable in gross income, unless the distributee directs that the
352352 eligible rollover distribution be transferred directly to a
353353 qualified trust that is part of a defined contribution plan that
354354 agrees to separately account for the portion that is includable in
355355 gross income and the portion that is not, or to an individual
356356 retirement account or individual annuity.
357357 (3) "Direct rollover" means a payment by the
358358 retirement system to the eligible retirement plan specified by a
359359 distributee.
360360 (4) "Distributee" means a member or former member.
361361 The term includes a member's or former member's surviving spouse or
362362 designated beneficiary and a member's or former member's spouse or
363363 former spouse who is the alternate payee under a qualified domestic
364364 relations order, as defined by Section 414(p) of the code, with
365365 regard to the interest of the spouse or former spouse.
366366 (c) The total salary taken into account for any purpose
367367 under this Act [for any member of the fund] may not exceed the 2009
368368 annual compensation limitations under Section 401(a)(17) of the
369369 code, which are $360,000 [$200,000 per year] for an eligible member
370370 [participant] or $245,000 [$150,000 per year] for an ineligible
371371 member [participant]. For purposes of this subsection, an eligible
372372 member is any employee who first became a member in a year
373373 commencing before 1996 and an ineligible member is any other
374374 member. The [These] dollar limits shall be [periodically] adjusted
375375 annually for cost-of-living increases as provided by Section
376376 401(a)(17) of the code [in accordance with guidelines provided by
377377 the United States secretary of the treasury. For purposes of this
378378 subsection, an eligible participant is any person who first became
379379 a member before 1996, and an ineligible participant is any member
380380 who is not an eligible participant].
381381 (d) Accrued benefits under this Act become 100 percent
382382 vested for a member on the earlier of:
383383 (1) the date the member has completed 20 years of
384384 service;
385385 (2) the earlier termination or partial termination of
386386 the pension plan created by this Act, if it affects the member; [or]
387387 (3) the complete discontinuance of contributions by
388388 the municipality to the fund; or
389389 (4) the date the member attains normal retirement age.
390390 (f) Distribution of benefits must begin not later than April
391391 1 of the year following the later of the calendar year in [during]
392392 which the member becomes 70-1/2 years of age, or the calendar year
393393 in which the employee retires, and must otherwise conform to
394394 Section 401(a)(9) of the code and the regulations under that
395395 section of the code, including the incidental benefit rule.
396396 (j) Notwithstanding any other provision of this Act, the
397397 limit on maximum benefits imposed by Section 415 of the code and
398398 Subsection (a) of this section shall be adjusted each year to the
399399 extent permitted by cost-of-living increases announced by the
400400 secretary of the treasury under Section 415(d) of the code and
401401 applicable law. Any such benefit increases shall apply to members
402402 who have terminated employment, including members who have begun
403403 receiving benefits before the effective date of the change, and any
404404 benefits previously denied. Benefits paid to make up for benefits
405405 previously denied are not considered to be extra compensation
406406 earned after retirement, but shall be considered the delayed
407407 payment of benefits earned before retirement. [To the extent
408408 permitted by law, the board may adjust the benefits of retired
409409 members and beneficiaries by increasing any retirement benefit that
410410 was reduced because of Section 415 of the code. If Section 415 of
411411 the code is amended to permit the payment of amounts previously
412412 precluded under Section 415 of the code, the board may adjust the
413413 benefits of retired members and beneficiaries, including the
414414 restoration of benefits previously denied. Benefits paid under
415415 this subsection are not considered as extra compensation earned
416416 after retirement but as the delayed payment of benefits earned
417417 before retirement.]
418418 SECTION 12. Sections 6.02(a) and (g), Chapter 824 (S.B.
419419 817), Acts of the 73rd Legislature, Regular Session, 1993 (Article
420420 6243o, Vernon's Texas Civil Statutes), are amended to read as
421421 follows:
422422 (a) Subject to Section 6.03 of this Act and the provisions
423423 of this section, if a member or retiree receiving a disability
424424 pension under Section 5.04(a) [5.03(a)] of this Act dies leaving a
425425 surviving spouse or at least one dependent child, the surviving
426426 spouse and the children are entitled to receive from the fund an
427427 aggregate death benefit annuity, computed and payable from the date
428428 of the member's death. The surviving spouse may elect the annuity
429429 in an amount that is equal to [either]:
430430 (1) 50 percent of the member's average total salary, if
431431 the surviving spouse is the surviving spouse of a disability
432432 retiree who was awarded a disability pension before October 1,
433433 2015; [or]
434434 (2) 47.5 percent of the member's average total salary;
435435 or
436436 (3) the same percentage of the member's average total
437437 salary that the member would have been entitled to receive as a
438438 retirement annuity if the member could have retired on the date of
439439 death.
440440 (g) A child who is adopted after the date of retirement of
441441 the member is not entitled to a death benefit under this Act. A
442442 child who is born after the date of retirement of the member is not
443443 entitled to a death benefit annuity under this Act unless the
444444 retiree was married to the other parent of the child on the date of
445445 retirement. A surviving spouse of a retiree whose status as a
446446 surviving spouse resulted from a marriage after the date of the
447447 retirement of the retiree is entitled to receive only the benefits,
448448 if any, provided under Subsection (g-1) of this section or Section
449449 6.08 of this Act.
450450 SECTION 13. Section 6.06, Chapter 824 (S.B. 817), Acts of
451451 the 73rd Legislature, Regular Session, 1993 (Article 6243o,
452452 Vernon's Texas Civil Statutes), is amended to read as follows:
453453 Sec. 6.06. COMMON-LAW MARRIAGES. Common-law marriages are
454454 not recognized under this Act and benefits may not be conferred on
455455 common-law spouses as beneficiaries unless a declaration of
456456 informal marriage was made and recorded under Sections 2.402 and
457457 2.404, Family Code, [and their subsequent amendments,] or any
458458 successor statutes, before the member's death. The date the
459459 declaration of informal marriage is recorded is the date of
460460 marriage for the purpose of determining whether any benefit is to be
461461 awarded to a surviving common-law spouse as a beneficiary.
462462 SECTION 14. This Act takes effect October 1, 2015.