By: Huffman S.B. No. 463
(In the Senate - Filed February 5, 2015; February 10, 2015,
read first time and referred to Committee on State Affairs;
March 16, 2015, reported favorably by the following vote: Yeas 9,
Nays 0; March 16, 2015, sent to printer.)
Click here to see the committee vote
A BILL TO BE ENTITLED
AN ACT
relating to the restructuring of certain fund accounts of the Texas
County and District Retirement System.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 842.056, Government Code, is amended to
read as follows:
Sec. 842.056. CLASS C. If any assets remain after the
transfers are made under Sections 842.054 and 842.055, the
retirement system shall make a transfer to the closed subdivision
[current service] annuity reserve fund in an amount computed as
necessary to fund the basic and supplemental annuities of the
annuitants of the subdivision and a transfer to the individual
account of each member of the class eligible to retire in an amount
that equals the multiple matching credits and prior service credits
of the member. If necessary, the retirement system shall
proportionately reduce an individual's total credits or
supplemental annuity, as applicable, based on the ratio that the
individual's total actuarial equivalent of benefits described by
this section bears to the aggregate total actuarial equivalent of
all those benefits of the class.
SECTION 2. Section 844.002(b), Government Code, is amended
to read as follows:
(b) A basic annuity is an amount payable from the
subdivision accumulation [current service annuity reserve] fund
and is actuarially determined from the sum of a member's:
(1) accumulated contributions; and
(2) current service credit.
SECTION 3. Section 844.309(a), Government Code, is amended
to read as follows:
(a) If a disability retirement is canceled and the
retirement annuity terminated under this subchapter, the person
automatically resumes membership in the retirement system and the
retirement system shall transfer[:
[(1)] from the subdivision accumulation [current
service annuity reserve] fund and credit to the person's individual
account in the employees saving fund an amount equal to the amount
of accumulated contributions transferred to the subdivision
accumulation [current service annuity reserve] fund at the time of
retirement reduced by one percent for each year or part of a year
during which disability annuity payments were made[; and
[(2) from the current service annuity reserve fund to
the subdivision accumulation fund an amount equal to the amount
transferred from the subdivision accumulation fund to the current
service annuity reserve fund at the time of retirement reduced by
one percent for each year or part of a year during which disability
annuity payments were made].
SECTION 4. Section 844.402, Government Code, is amended by
amending Subsection (c) and adding Subsection (d) to read as
follows:
(c) The benefit provided by this section is payable from the
[current service annuity reserve fund and the] subdivision
accumulation fund [in the ratio that the parts of the retirement
annuity that were payable from the funds bear to the entire benefit
as determined on the effective date of retirement].
(d) For plans terminated under Subchapter A-1, Chapter 842,
the benefit provided by this section is payable from the closed
subdivision annuity reserve fund.
SECTION 5. Section 845.305(b), Government Code, is amended
to read as follows:
(b) All assets of the pension trust of the retirement system
shall be credited according to the purpose for which they are held
to one of the following funds:
(1) employees saving fund;
(2) subdivision accumulation fund;
(3) closed subdivision [current service] annuity
reserve fund;
(4) income fund;
(5) endowment fund; or
(6) expense fund.
SECTION 6. Section 845.307(b), Government Code, is amended
to read as follows:
(b) Subject to Subsection (c), the retirement system shall
pay from the subdivision accumulation fund all payments for
annuities and other benefit payments [under prior service annuities
granted before January 1, 1978, and currently in force and all
payments under supplemental annuities from credits] granted by a
participating subdivision. [The retirement system shall charge
payments from the fund to the participating subdivision's account.]
SECTION 7. Section 845.308, Government Code, is amended to
read as follows:
Sec. 845.308. CLOSED SUBDIVISION [CURRENT SERVICE] ANNUITY
RESERVE FUND. (a) The retirement system shall deposit and hold in
the closed subdivision [current service] annuity reserve fund all
reserves for annuities payable to annuitants who were members of
subdivisions that terminated participation with the retirement
system under Subchapter A-1, Chapter 842[:
[(1) current service annuities in force that were
granted before January 1, 1978; and
[(2) all basic annuities granted on or after January
1, 1978].
(b) The retirement system shall pay from the closed
subdivision [current service] annuity reserve fund annuities
described by Subsection (a) and all benefits in lieu of those
annuities as provided by this subtitle.
SECTION 8. Section 845.315(a), Government Code, is amended
to read as follows:
(a) As of December 31 of each year, the board of trustees
shall make the following allocations that in the aggregate equal
the net investment income or loss for the year:
(1) to the closed subdivision [current service]
annuity reserve fund, interest as allowed under this subtitle on
the mean amount in the closed subdivision [current service] annuity
reserve fund during that year;
(2) to the optional group term life fund, interest as
allowed under this subtitle on the mean amount in the optional group
term life fund during that year;
(3) to the general reserves account of the endowment
fund, a positive or negative amount determined by the board;
(4) to the employees saving fund, current interest as
allowed under this subtitle on the member account balances on
January 1 of that year of all persons who are members on December 31
of that year;
(5) to the accounts of subdivisions, other than
subdivisions otherwise described by this section, positive or
negative amounts as determined under rules adopted by the board
prescribing the allocation methodology for the accounts; and
(6) to the accounts of subdivisions to which Section
842.052 or 842.053 applies, positive or negative amounts as
determined by the board, and if a subdivision terminates
participation before December 31 of that year, the board shall
determine the allocation amount and transfer date before December
31 of that year.
SECTION 9. Section 845.316, Government Code, is amended by
amending Subsection (a) and adding Subsection (b) to read as
follows:
(a) When a member retires, the retirement system shall
transfer[:
[(1)] from the employees saving fund to the
subdivision accumulation [current service annuity reserve] fund,
the member's accumulated contributions[; and
[(2) from the subdivision accumulation fund to the
current service annuity reserve fund, an amount equal to the
member's current service credit].
(b) When a member retires from a subdivision that has
terminated participation with the retirement system under
Subchapter A-1, Chapter 842, the retirement system shall transfer
the member's individual account to the closed subdivision annuity
reserve fund.
SECTION 10. (a) Effective January 1, 2017, the current
service annuity reserve fund is renamed the closed subdivision
annuity reserve fund and consists of the assets and liabilities of
each of the respective accounts in the current service annuity
reserve fund for each formerly participating subdivision that has
terminated participation with the Texas County and District
Retirement System under Subchapter A-1, Chapter 842, Government
Code.
(b) Effective January 1, 2017, the Texas County and District
Retirement System shall transfer, if appropriate, the assets and
corresponding liabilities of each participating subdivision's
accounts in the closed subdivision annuity reserve fund, formerly
known as the current service annuity reserve fund, to the
appropriate account in the subdivision accumulation fund, as
determined by the board of trustees of the retirement system in
consultation with the retirement system's actuary.
(c) In administering Subtitle F, Title 8, Government Code,
as amended by this Act, including crediting interest and conducting
the actuarial valuation required under that subtitle, the Texas
County and District Retirement System shall make all necessary
computations to reflect the transfers of assets and liabilities
required by Subsection (b) of this section based on a valuation date
of December 31, 2016.
SECTION 11. This Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, this Act takes effect January 1, 2016.
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