Texas 2017 - 85th Regular

Texas House Bill HB1906 Compare Versions

Only one version of the bill is available at this time.

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1	1	85R7380 KFF-D
2	2	By: Anderson of Dallas H.B. No. 1906
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to retirement benefits for certain peace officers who are
8	8	members of the Teacher Retirement System of Texas, including the
9	9	creation of a peace officer supplemental retirement fund.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Section 821.001, Government Code, is amended by
12	12	adding Subdivision (11-a) to read as follows:
13	13	(11-a) "Peace officer" means a member of the
14	14	retirement system who is elected, employed, or appointed as a peace
15	15	officer under Article 2.12, Code of Criminal Procedure, Section
16	16	37.081 or 51.203, Education Code, or other law.
17	17	SECTION 2. Section 822.005, Government Code, is amended by
18	18	adding Subsection (e) to read as follows:
19	19	(e) For a peace officer, the withdrawal of accumulated
20	20	contributions under Subsection (a) includes all of the officer's
21	21	contributions made under Section 825.403.
22	22	SECTION 3. Section 824.202, Government Code, is amended by
23	23	adding Subsection (g) to read as follows:
24	24	(g) Notwithstanding any other law, a member who is at least
25	25	55 years old and who has at least 10 years of service credit as a
26	26	peace officer engaged in law enforcement activities by a school
27	27	district or institution of higher education is eligible to retire
28	28	and receive a service retirement annuity.
29	29	SECTION 4. Subchapter C, Chapter 824, Government Code, is
30	30	amended by adding Section 824.2035 to read as follows:
31	31	Sec. 824.2035. SERVICE RETIREMENT BENEFITS FOR CERTAIN
32	32	PEACE OFFICERS. (a) A member who has at least 20 years of service
33	33	credit as a peace officer is eligible to retire regardless of age
34	34	and receive a standard service retirement annuity in an amount and
35	35	to be funded as provided by this section.
36	36	(b) The standard service retirement annuity payable for at
37	37	least 20 years of service credit as a peace officer is an amount
38	38	computed on the basis of the member's average annual compensation
39	39	for the five years of service, whether or not consecutive, in which
40	40	the member received the highest annual compensation, times the sum
41	41	of the percentage factor used in the computation of a standard
42	42	service retirement annuity under Section 824.203 plus 0.5 percent.
43	43	(c) The standard combined service retirement annuity that
44	44	is payable under this section is based on retirement on or after the
45	45	attainment of the normal retirement age, which for purposes of this
46	46	section is the earlier of either the age of 57 or the age at which
47	47	the sum of the member's age and amount of service credit equals the
48	48	number 80. The annuity of a peace officer who retires before
49	49	reaching the age of 57 under any eligibility criteria is
50	50	actuarially reduced by five percent for each year of difference
51	51	between the member's age at retirement and 57. The actuarial
52	52	reduction described by this section is in addition to any other
53	53	actuarial reduction required by law.
54	54	(d) A peace officer who retires before attaining the age of
55	55	50 is entitled only to an annuity that is actuarially reduced from
56	56	the annuity available at the age of 50 to the peace officer whose
57	57	service credit annuity amount is based on the sum of the member's
58	58	age and amount of peace officer service credit and other service
59	59	credit, and is not entitled to have the annuity recalculated at
60	60	normal retirement age. The standard or reduced annuity under this
61	61	section is payable from appropriate accounts described by Section
62	62	825.306 and the peace officer supplemental retirement fund in a
63	63	ratio determined by the retirement system.
64	64	(e) Optional retirement annuities provided by Section
65	65	824.204 are available to a member eligible to receive a service
66	66	retirement annuity under this section, but the same optional plan
67	67	and beneficiary must be selected for the portion of the annuity
68	68	payable from the peace officer supplemental retirement fund and the
69	69	portion payable from appropriate accounts described by Section
70	70	825.306.
71	71	(f) The amount payable from the peace officer supplemental
72	72	retirement fund is reducible by the amount paid from appropriate
73	73	accounts described by Section 825.306 for service as a peace
74	74	officer. The total combined amount of an annuity under this section
75	75	may not be less than the authorized benefit under Subsection (b)
76	76	subtracted by any amount necessary because of selection of an
77	77	optional annuity, because of retirement before the normal
78	78	retirement age, or as provided by Subsection (g).
79	79	(g) The standard combined service retirement annuity
80	80	payable for at least 20 years of service credit as a peace officer
81	81	may not exceed 100 percent of the average compensation computed
82	82	under Subsection (b).
83	83	(h) For purposes of this section, service as a peace officer
84	84	is creditable as provided by rule of the board of trustees or on a
85	85	month-to-month basis, whichever is greater.
86	86	SECTION 5. Subchapter D, Chapter 824, Government Code, is
87	87	amended by adding Section 824.3045 to read as follows:
88	88	Sec. 824.3045. DISABILITY RETIREMENT BENEFITS FOR CERTAIN
89	89	PEACE OFFICERS. (a) An annuity payable for a disability resulting
90	90	from a risk to which peace officers are exposed because of the
91	91	nature of the officers' duties is payable under the same terms and
92	92	conditions that apply to other disability retirement annuities
93	93	under this subtitle, except that the source and amount of the
94	94	annuity are as provided by this section.
95	95	(b) Except as provided by Subsection (c), a disability
96	96	retirement annuity under this section is an amount, but not more
97	97	than 100 percent, computed on the basis of the officer's average
98	98	annual compensation, times a percentage derived by application of
99	99	Section 824.2035(b).
100	100	(c) A disability retirement annuity under this section is
101	101	not reducible because of age and may not be less than 50 percent of
102	102	the officer's average annual compensation regardless of the amount
103	103	of service credited to the officer.
104	104	(d) The portions of the annuity under this section payable
105	105	from the peace officer supplemental retirement fund are the amount
106	106	remaining after deduction of any amount payable under Section
107	107	824.304, except the portion of an amount that exceeds the minimum
108	108	payments provided by Section 824.304 and that is made for service
109	109	other than as a peace officer and any amount by which an annuity is
110	110	increased under Subsection (e).
111	111	(e) If a retiring member or retiree under this section
112	112	presents evidence satisfactory to the retirement system that the
113	113	person's disability makes the person incapable of substantial
114	114	gainful activity solely because of the disability and is considered
115	115	a total disability under federal social security law, the
116	116	retirement system shall increase the person's disability
117	117	retirement annuity to 100 percent of the officer's average annual
118	118	compensation.
119	119	(f) An annuity increase under Subsection (e) is not payable
120	120	before the first month following the month in which the
121	121	satisfactory evidence is received by the retirement system under
122	122	Subsection (e).
123	123	SECTION 6. Subchapter E, Chapter 824, Government Code, is
124	124	amended by adding Section 824.4025 to read as follows:
125	125	Sec. 824.4025. ANNUITY FOR SURVIVOR OF PEACE OFFICER. If a
126	126	member who has at least 20 years of service credit as a peace
127	127	officer dies, the amount of the death benefit annuity payable for
128	128	the member's service as a peace officer is an amount computed and
129	129	funded as provided by Section 824.2035, including any applicable
130	130	reduction factors.
131	131	SECTION 7. Section 825.102, Government Code, is amended to
132	132	read as follows:
133	133	Sec. 825.102. RULEMAKING. Subject to the limitations of
134	134	this subtitle, the board of trustees may adopt rules for:
135	135	(1) eligibility for membership;
136	136	(2) the administration of the funds of the retirement
137	137	system; [and]
138	138	(3) the transaction of business of the board; and
139	139	(4) the program of supplemental benefits for peace
140	140	officers.
141	141	SECTION 8. Section 825.103, Government Code, is amended by
142	142	adding Subsection (b-1) to read as follows:
143	143	(b-1) The board of trustees may authorize the executive
144	144	director to acquire, hold, manage, purchase, sell, assign, trade,
145	145	transfer, and dispose of any security, evidence of debt, or other
146	146	investment in which assets of the peace officer supplemental
147	147	retirement fund may be invested.
148	148	SECTION 9. Section 825.208, Government Code, is amended by
149	149	adding Subsection (d) to read as follows:
150	150	(d) The board of trustees shall make payments from the peace
151	151	officer supplemental retirement fund for services rendered by the
152	152	actuary for that fund and approved by the board.
153	153	SECTION 10. Section 825.301(a), Government Code, is amended
154	154	to read as follows:
155	155	(a) The board of trustees shall invest and reinvest assets
156	156	of the retirement system without distinction as to their source in
157	157	accordance with Section 67, Article XVI, Texas Constitution, and
158	158	hold securities purchased with the assets described by this
159	159	subsection collectively for the proportionate benefit of all
160	160	accounts listed under Section 825.306 and the peace officer
161	161	supplemental retirement fund. For purposes of the investment
162	162	authority of the board of trustees under Section 67, Article XVI,
163	163	Texas Constitution, "securities" means any investment instrument
164	164	within the meaning of the term as defined by Section 4, The
165	165	Securities Act (Article 581-4, Vernon's Texas Civil Statutes), 15
166	166	U.S.C. Section 77b(a)(1), or 15 U.S.C. Section 78c(a)(10). An
167	167	interest in a limited partnership or investment contract is
168	168	considered a security without regard to the number of investors or
169	169	the control, access to information, or rights granted to or
170	170	retained by the retirement system. Any instrument or contract
171	171	intended to manage transaction or currency exchange risk in
172	172	purchasing, selling, or holding securities is considered to be a
173	173	security. Investment decisions are subject to the standard
174	174	provided in the Texas Trust Code by Section 117.004(b), Property
175	175	Code.
176	176	SECTION 11. Section 825.305, Government Code, is amended to
177	177	read as follows:
178	178	Sec. 825.305. AVAILABLE CASH. The board of trustees may
179	179	keep on deposit with the comptroller available cash not exceeding
180	180	10 percent of the total assets of the retirement system, to pay
181	181	annuity and other disbursements, excluding the assets of the peace
182	182	officer supplemental retirement fund.
183	183	SECTION 12. Section 825.306, Government Code, is amended to
184	184	read as follows:
185	185	Sec. 825.306. CREDITING SYSTEM ASSETS. The assets of the
186	186	retirement system, except assets of the peace officer supplemental
187	187	retirement fund, shall be credited, according to the purpose for
188	188	which they are held, to one of the following accounts:
189	189	(1) member savings account;
190	190	(2) state contribution account;
191	191	(3) retired reserve account;
192	192	(4) interest account;
193	193	(5) expense account; or
194	194	(6) deferred retirement option account.
195	195	SECTION 13. Subchapter D, Chapter 825, Government Code, is
196	196	amended by adding Section 825.316 to read as follows:
197	197	Sec. 825.316. PEACE OFFICER SUPPLEMENTAL RETIREMENT FUND.
198	198	(a) The retirement system shall deposit in the peace officer
199	199	supplemental retirement fund state contributions and other
200	200	appropriations made by the legislature to the fund and proceeds
201	201	from investment of the fund.
202	202	(b) The retirement system may use money from the fund only
203	203	to pay supplemental retirement, disability, and death benefits to
204	204	peace officers as provided by this subtitle and to pay for the
205	205	administration of the fund.
206	206	(c) Money appropriated to pay benefits from the fund as
207	207	provided by this subtitle may not be diverted or used to pay any
208	208	other benefits.
209	209	(d) Member contributions to the fund deducted under Section
210	210	825.403(a-1):
211	211	(1) earn interest at the same rate as money in an
212	212	individual account in the member savings account under Section
213	213	825.307; and
214	214	(2) are subject to the same computations and
215	215	limitations that apply to member contributions under Section
216	216	825.307.
217	217	SECTION 14. Section 825.403, Government Code, is amended by
218	218	adding Subsection (a-1) to read as follows:
219	219	(a-1) In addition to the contribution under Subsection (a),
220	220	each employer of a peace officer shall deduct an additional 0.5
221	221	percent contribution from that member's compensation, to be
222	222	deposited in the peace officer supplemental retirement fund,
223	223	provided that, if the state contribution to the peace officer
224	224	supplemental retirement fund is computed using a percentage less
225	225	than 0.5 percent, the member's contribution is computed using a
226	226	percentage equal to the percentage used to compute the state
227	227	contribution.
228	228	SECTION 15. Sections 825.404(a), (a-1), (b), and (b-1),
229	229	Government Code, are amended to read as follows:
230	230	(a) Except as provided by Subsection (a-1), during each
231	231	fiscal year, the state shall contribute to the retirement system:
232	232	(1) an amount equal to at least six and not more than
233	233	10 percent of the aggregate annual compensation of all members of
234	234	the retirement system during that fiscal year;
235	235	(2) an amount for the peace officer supplemental
236	236	retirement fund equal to 2.13 percent of the aggregate state
237	237	compensation of all peace officers for that fiscal year; and
238	238	(3) money necessary for the administration of the
239	239	peace officer supplemental retirement fund.
240	240	(a-1) In computing the amount owed by the state under
241	241	Subsection (a)(1) [(a)], the compensation of members who are
242	242	employed by public junior colleges or public junior college
243	243	districts shall be included in the aggregate annual compensation as
244	244	follows:
245	245	(1) 50 percent of the eligible creditable compensation
246	246	of employees who:
247	247	(A) otherwise are eligible for membership in the
248	248	retirement system; and
249	249	(B) are instructional or administrative
250	250	employees whose salaries may be fully paid from funds appropriated
251	251	under the General Appropriations Act, regardless of whether such
252	252	salaries are actually paid from appropriated funds; and
253	253	(2) none of the eligible creditable compensation of
254	254	all other employees who:
255	255	(A) do not meet the requirements of Subdivision
256	256	(1)(B) but are otherwise eligible for membership in the retirement
257	257	system; or
258	258	(B) cannot be included as a qualifying employee
259	259	under Subdivision (1) by application of Subsection (b-1).
260	260	(b) Before November 2 of each even-numbered year, the board
261	261	of trustees, in coordination with the Legislative Budget Board,
262	262	shall certify to the comptroller of public accounts for review and
263	263	adoption an estimate of the amount necessary to pay the state's
264	264	contributions to the retirement system for the following biennium
265	265	and, as a separate item, an estimate of the amount required to
266	266	administer the peace officer supplemental retirement fund for the
267	267	following biennium. For qualifying employees under Subsection
268	268	(a-1)(1), the board of trustees shall include only the amount
269	269	payable by the state under Subsection (a-1)(1) in determining the
270	270	amount to be certified.
271	271	(b-1) In determining the amount necessary to pay the state's
272	272	contribution under [described by] Subsection (b), excluding the
273	273	amount required to administer the peace officer supplemental
274	274	retirement fund, the number of qualifying employees under
275	275	Subsection (a-1)(1) whose compensation may be included for each
276	276	public junior college or public junior college district in each
277	277	biennium may not be adjusted in a proportion greater than the change
278	278	in student enrollment at each college during the reporting period
279	279	except that a college that experiences a decline in student
280	280	enrollment may petition the Legislative Budget Board to maintain
281	281	the number of eligible employees up to 98 percent of the level of
282	282	the prior biennium.
283	283	SECTION 16. Subchapter F, Chapter 825, Government Code, is
284	284	amended by adding Section 825.5155 to read as follows:
285	285	Sec. 825.5155. CERTIFICATION OF NAMES OF PEACE OFFICERS.
286	286	Not later than the 12th day of the month following the month in
287	287	which a person begins or ceases employment as a peace officer, the
288	288	employer shall certify to the retirement system, in the manner
289	289	prescribed by the system, the name of the employee and such other
290	290	information as the system determines is necessary for the crediting
291	291	of service and financing of benefits under this subtitle.
292	292	SECTION 17. (a) Except as provided by Subsection (b) of this
293	293	section, employers participating in the Teacher Retirement System
294	294	of Texas shall begin making deductions and collecting the
295	295	contributions for the peace officer supplemental retirement fund as
296	296	provided by Section 825.403(a-1), Government Code, as added by this
297	297	Act, based on service that is performed on or after December 31,
298	298	2017.
299	299	(b) The board of trustees of the Teacher Retirement System
300	300	of Texas shall adopt rules as soon as possible after the effective
301	301	date of this Act to implement the changes in law made by this Act,
302	302	including rules governing the treatment of a member of the Teacher
303	303	Retirement System of Texas whose employment as a peace officer
304	304	began before December 31, 2017. Rules adopted under this section
305	305	relating to a member whose employment as a peace officer began
306	306	before December 31, 2017, must include rules that:
307	307	(1) notwithstanding any provision of this Act, allow
308	308	the member to opt out of participating in the peace officer
309	309	supplemental retirement fund provided by Section 825.403(a-1),
310	310	Government Code, as added by this Act; and
311	311	(2) ensure that any benefit paid to the member from the
312	312	peace officer supplemental retirement fund is reasonably related to
313	313	the member's contribution to the fund.
314	314	SECTION 18. This Act takes effect September 1, 2017.