85R21202 KFF-F
By: Flynn, Villalba, Koop, Alonzo, Meyer, H.B. No. 3158
et al.
Substitute the following for H.B. No. 3158:
By: Alonzo C.S.H.B. No. 3158
A BILL TO BE ENTITLED
AN ACT
relating to the retirement systems for and the provision of other
benefits to police and fire fighters in certain municipalities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 1.01, Article 6243a-1, Revised Statutes,
is amended to read as follows:
Sec. 1.01. AMENDMENT, RESTATEMENT, AND CONSOLIDATION. (a)
The purpose of this article is to restate and amend the provisions
of a former law governing the pension funds for police officers and
fire fighters in certain municipalities (Chapter 4, Acts of the
43rd Legislature, 1st Called Session, 1933, also known as Article
6243a) having previously been amended and restated to permit the
consolidation of the terms of certain pension plans created under
Sections 1, 11A, and 11B of that Act for the purpose of simply and
accurately reflecting the joint administration of the plans.
(b) [The provisions of this article are entirely consistent
with all terms and conditions relating to benefits and benefit
entitlement previously contained in the plans.] This article does
not [intend to] take away or reduce any accrued benefit contained in
the plans created under former Article 6243a or under this article
as it existed on or before August 31, 2017.
SECTION 2. Section 2.01, Article 6243a-1, Revised Statutes,
is amended to read as follows:
Sec. 2.01. DEFINITIONS. In this article:
(1) "415 compensation" means a member's wages, salary,
and other amounts received for personal services rendered in the
course of employment with the city during a limitation year and
permitted to be treated as compensation for purposes of Section
415(c) of the code, including differential wage payments described
in Section 414(u)(12) of the code. The term does not include
amounts picked up under Section 4.03(i) of this article.
(2) "Active service" means any period that a member
receives compensation as a police officer or fire fighter from
either department for services rendered.
(3) [(2)] "Actuarial equivalent" means a form of
benefit differing in time, duration, or manner of payment from a
standard benefit payable under this article but having the same
value when computed using the assumptions set forth in this
article.
[(3) "Administrator" means the person designated by
the board to supervise the affairs of the pension system.]
(4) "Alternate payee" has the meaning given the term
by Section 414(p) [414] of the code or any successor provision.
(5) "Alternative investment" means an investment in an
asset other than a traditional asset. The term includes an
investment in private equity funds, private real estate
transactions, hedge funds, and infrastructure.
(6) [(5)] "Annual additions" means the sum of the
following amounts credited to a member's account under any defined
contribution plan maintained by the city for the limitation year:
(A) city contributions;
(B) member contributions, other than rollover
contributions from a plan maintained by any employer other than the
city;
(C) forfeitures; and
(D) amounts allocated after March 31, 1984, to an
individual medical benefit account, as defined in Section 415(l)(2)
[415(1)(2)] of the code, that is part of a pension or annuity plan
maintained by the city.
[The term does not include amounts described in Paragraph (D)
of this subdivision for the purpose of computing the percentage
limitation described in Section 415(c)(1)(B) of the code.] For any
limitation year beginning before January 1, 1987, only that portion
of member contributions equal to the lesser of member contributions
in excess of six percent of 415 compensation or one-half of member
contributions to the combined pension plan or any qualified defined
contribution plan maintained by the city is treated as annual
additions.
(7) [(6)] "Annual benefit" means the aggregate
benefit attributable to city and member contributions payable
annually under the combined pension plan, or any plan maintained by
the city, exclusive of any benefit not required to be considered for
purposes of applying the limitations of Section 415 of the code to
the combined pension plan, payable in the form of a straight life
annuity beginning at age 62 with no ancillary benefits. Solely for
purposes of computing the limitations under the combined pension
plan, benefits actually payable to a pensioner are adjusted to the
actuarial equivalent of a straight life annuity pursuant to Section
415(b) [8.01] of the code [this article] even though no member may
actually receive a benefit in the form of a straight life annuity.
(8) [(7)] "Article 6243a" means Chapter 4, Acts of the
43rd Legislature, 1st Called Session, 1933 (former Article 6243a,
Vernon's Texas Civil Statutes), pertaining to a pension system for
police officers, fire fighters, and fire alarm operators in certain
cities.
(9) [(8)] "Assignment pay" means monthly pay, in
addition to salary, granted to a Group B member and authorized by
the city council for the performance of certain enumerated duty
assignments.
(10) [(9)] "Base pay" means the maximum monthly civil
service pay from time to time established by the city for a person
who holds the rank of "police officer" in the city's police
department or the rank of "fire and rescue officer" in the city's
fire department [a police officer or fire fighter], exclusive of
any other form of compensation. The term does not include
compensation paid by the city to a person for prior periods of
service or compensation that otherwise constitutes back pay unless
the compensation is eligible back pay. The board may adopt rules
and procedures necessary to include eligible back pay as base pay
for purposes of this definition, including rules regarding how
increases in benefits will be determined and administered.
(11) [(10)] "Base pension" means the amount of
retirement, death, or disability benefits as determined [computed
under this article] at the earliest of the time a Group B member
and, solely for the purposes of Section 6.12 of this article, a
Group A member:
(A) begins participation in DROP;
(B) leaves or left active service;
(C) [leaves active service,] dies; [,] or
(D) becomes entitled to a disability pension
under the combined pension plan [disabled].
Solely for purposes of this definition, when a member becomes
entitled to a disability pension, the base pension shall be
determined as of the date on which the disability pension begins.
(12) [(11)] "Board" means the board of trustees
created under Section 3.01 of this article for the purpose of
administering the pension system.
(13) [(12)] "Child" means a [an unmarried] person
[under the age of 19] whose [natural or adoptive] parent, as
recognized under the laws of this state, is a primary party.
(14) [(13)] "City" means each municipality having a
population of more than 1.18 million and located predominantly in a
county that has a total area of less than 1,000 square miles.
(15) "City attorney" means the chief legal officer of
a city.
(16) [(14)] "City council" means the governing body of
the city.
(17) "City manager" means the city manager of a city or
the city manager's designee and includes, to the extent of any
designation, an interim or acting city manager, chief financial
officer, budget director, or assistant city manager. If a city does
not have an individual serving in a position otherwise described by
this subdivision, "city manager" means the mayor of that city.
(18) [(15)] "City service incentive pay" means annual
incentive pay, adjusted by the city from time to time, in addition
to the salary of a member granted to the member under the authority
of the city charter and received by the member during active
service.
(19) [(16)] "Code" means the United States Internal
Revenue Code of 1986, as amended.
(20) [(17)] "Combined pension plan" means any pension
plan created pursuant to this article before September 1, 2017.
(21) [(18)] "Computation pay" shall be used in
determining the amount of the city's contribution under Section
4.02(d) of this article and a Group B member's contribution under
Section 4.03(d) of this article and in determining the base pension
[of any benefits] to be paid to a Group B member or the benefits to
be paid to the member's qualified survivors and means the sum of the
following:
(A) the biweekly [monthly] rate of pay of a
[Group B] member for the highest civil service rank the person
holds, from time to time, as a result of a competitive examination;
plus
(B) the [monthly rate of pay of a Group B member
as] educational incentive pay of a member, computed on a biweekly
basis; plus
(C) the longevity [monthly rate of] pay of a
[Group B] member [as longevity pay], as authorized by the
legislature, computed on a biweekly basis; plus
(D) the city service incentive pay, computed on a
biweekly [monthly] basis, of a [Group B] member.
The term includes only amounts actually paid in salary or
payments made instead of salary to the member and member
contributions picked up by the city, and does not include any
imputed pay. Furthermore, any [Any] compensation received by a
[Group B] member, other than that noted in Paragraphs (A)-(D) of
this subdivision (for example, compensation for overtime work,
certification pay, and the [monthly rate of] pay a member would
receive from the city in the form of assignment pay), will not be
considered in determining the computation pay of a [Group B]
member. Any lump-sum payments for compensatory time, unused sick
leave, unused vacation time, or city service incentive pay payable
after a [Group B] member leaves active service, dies [death],
becomes disabled [disability], or resigns [resignation], or after
any other type of termination may not be considered in determining
the computation pay of any [Group B] member. Computation pay for a
[Group B] member for any given period [month] is determined on the
biweekly [monthly] rates of pay due the [Group B] member for the
entire period [month]. The term does not include compensation paid
by the city to a person for prior periods of service or compensation
that otherwise constitutes back pay unless the compensation is
eligible back pay. The board may adopt rules and procedures
necessary to include eligible back pay as computation pay for
purposes of this definition, including rules regarding how
increases in benefits will be determined and administered. [If a
Group B member works less than the member's assigned schedule for
any given month, the computation pay for the Group B member shall be
prorated for the portion of the month that the Group B member
worked.
[(19) "Educational incentive pay" means incentive pay
designed to reward completion of certain hours of college credit,
adjusted by the city from time to time, that is paid to a member in
addition to the member's salary.]
(22) [(20)] "Department" means either the police
department of the city, the fire department of the city, or both the
police and fire departments of the city together.
(23) [(21)] "Dependent parent" means a natural parent
or parent who adopted a primary party and who immediately before the
death of a primary party received over half of the parent's
financial support from the primary party.
(24) [(22)] "Disability retirement" means any period
that a pensioner receives periodic disability compensation or a
disability pension.
(25) "DROP" means the deferred retirement option plan
established in accordance with Section 6.14 of this article.
(26) "Educational incentive pay" means incentive pay
designed to reward completion of certain hours of college credit,
adjusted by the city from time to time, that is paid to a member in
addition to the member's salary.
(27) "Eligible back pay," except as otherwise provided
by this definition, means additional compensation paid by the city
to a member or pensioner:
(A) that constitutes back pay to the member's or
pensioner's prior period of service and is otherwise considered
taxable wages paid by the city to the member or pensioner for
federal income tax purposes; and
(B) for which the pension system receives:
(i) an amount equal to the aggregate member
and city contributions that the pension system would have collected
with respect to the compensation for all time periods relating to
the back pay compensation; and
(ii) interest, calculated using the pension
system's actuarial rate of return assumptions in effect for the
periods relating to the back pay, compounded annually, on the
contribution amounts for the period from the date that the
contributions would have been received if the back pay compensation
had been paid during the relevant periods of prior service through
the date the amount relating to the contributions for back pay is
actually received by the pension system.
The term does not include any additional compensation paid by
the city to a member or pensioner wholly or partly or directly or
indirectly as the result of litigation instituted to recover back
pay.
The pension system is not obligated to collect the additional
contributions or interest described in Paragraph (B) of this
subdivision from the member, pensioner, or city. The pension system
may not recognize back pay as eligible back pay until the
contributions and interest described in Paragraph (B) of this
subdivision have been received.
(28) "Executive director" means the person designated
by the board to supervise the operation of the pension system.
(29) [(23) "415 compensation" means a member's wages,
salary, and other amounts received for personal services rendered
in the course of employment with the city during a limitation year,
but does not include:
[(A) contributions made by the city to a plan of
deferred compensation, or a simplified employee pension plan, to
the extent such contributions are excludable from the member's
gross income;
[(B) any distributions from a plan of deferred
compensation, or a simplified employee pension plan, to the extent
the distributions are excludable from the member's gross income;
[(C) other amounts that received special tax
benefits, such as premiums for group term life insurance, to the
extent that the premiums are not includable in the gross income of
the member, or contributions made by the city, including
contributions toward the purchase of an annuity described by
Section 403(b) of the code, whether or not contributed pursuant to a
salary reduction agreement and whether or not the amounts are
actually excludable from the gross income of the member; and
[(D) for any limitation year beginning after
December 31, 1988, compensation in excess of $200,000, adjusted in
a manner permitted under Section 415(d) of the code.
[(24)] "Fund" means all funds and property held to
provide benefits to [for the benefit of] all persons who are or who
may become entitled to any benefits under any plan within the
pension system, together with all income, profits, or other
increments.
(30) [(25)] "Group A member" means any police officer
or fire fighter included in Group A membership under [described by]
Section 5.01(a)(1) of this article.
(31) [(26)] "Group B member" means any police officer
or fire fighter included in Group B membership under [described by]
Section 5.01(a)(2) of this article.
(32) [(27)] "Health director" means any qualified
physician designated from time to time by the board.
(33) [(28)] "Limitation year" means the plan year of
the combined pension plan and any defined benefit plan or defined
contribution plan of the city in which a member participates.
(34) [(29)] "Longevity pay" means pay in addition to
the salary of a member granted under Section 141.032, Local
Government Code, for each year of active service completed by a
member in either department.
(35) [(30)] "Member" means both Group A and Group B
members.
(36) [(31)] "Member's account" means an account
established and maintained for a member with respect to the
member's total interest in one or more defined contribution plans
under this article or maintained by the city resulting in annual
additions.
(37) "Nominations committee" means the nominations
committee established under Section 3.011 of this article.
(38) [(32)] "Old plan" means any pension plan created
pursuant to Section 1 of Article 6243a.
(39) [(33)] "Pensioner," "Group A pensioner," or
"Group B pensioner" means a former member of the pension system who
is on either a service or disability retirement.
(40) [(34)] "Pension service" means the time, in
years, and prorated for fractional years, that a member has
contributed to the fund under the terms of the combined pension plan
or any plan within the pension system, reduced to reflect refunds
that have been received and not fully repaid.
(41) [(35)] "Pension system" means the fund and any
plans created pursuant to this article or Article 6243a and that are
intended to be qualified under Section 401(a) of the code.
(42) [(36)] "Plan A" means any plan created pursuant
to Section 11A of Article 6243a.
(43) [(37)] "Plan B" means any plan created pursuant
to Section 11B of Article 6243a.
(44) [(38)] "Police officer" or "fire fighter" means,
as appropriate, a police officer, fire fighter, fire and rescue
officer, fire alarm operator, fire inspector, apprentice police
officer, apprentice fire fighter, or similar employee of either
department as defined in the classifications of the human resources
[personnel] department of the city.
(45) [(39)] "Primary party," "Group B primary party,"
or "Group A primary party" means a member[, former member,] or
pensioner.
(46) [(40)] "Qualified actuary" means either:
(A) an individual who is a Fellow of the Society
of Actuaries, a Fellow of the Conference of Consulting Actuaries
[in Public Practice], or a member of the American Academy of
Actuaries; or
(B) a firm that employs one or more persons who
are Fellows of the Society of Actuaries, Fellows of the Conference
of Consulting Actuaries [in Public Practice], or members of the
American Academy of Actuaries and are providing services to the
pension system.
(47) [(41)] "Qualified domestic relations order" has
the meaning provided by Section 414(p) [414] of the code.
(48) [(42)] "Qualified survivor" means a person who is
eligible to receive death [survivor] benefits after the death of a
primary party and includes only:
(A) a surviving spouse, if the spouse was
continuously married to the primary party from [both at] the date
when the primary party either voluntarily or involuntarily left
active service as a member through [and at] the date of the primary
party's death;
(B) all surviving, unmarried[, legitimate, and
legally adopted] children who are either under 19 years of age or
have a disability, as determined by the board under Section
6.06(o-2) of this article, and who were:
(i) born or adopted before the primary
party [as a member] either voluntarily or involuntarily left active
service; or
(ii) [who were] born after the primary party
[a member] left active service if the mother was pregnant with the
child before the primary party [member] left active service; and
(C) a surviving dependent parent of a primary
party if the primary party is not survived by a spouse or child
eligible for benefits.
(49) [(43)] "Service retirement" means any period
that a pensioner receives a retirement pension but does not include
any period of disability retirement.
(50) [(44)] "Spouse" means the person to whom [husband
or wife of] a primary party is legally married [recognized] under
the laws of this state or any other state.
(51) "Traditional asset" includes stocks, bonds, and
cash [(45) "Total wages and salaries" means all pay received by a
member of any plan within the pension system from the city,
excluding any lump-sum payments for unused sick time or unused
vacation time accrued by any member and payable as the result of the
member's death, disability, resignation, or any other reason for
leaving active service].
(52) [(46)] "Trustee" means a member of the board.
SECTION 3. Sections 2.02(a) and (b), Article 6243a-1,
Revised Statutes, are amended to read as follows:
(a) If the amount of any benefit or contribution is to be
determined on the basis of actuarial assumptions that are not
otherwise specifically set forth for that purpose in this article,
the actuarial assumptions to be used are those earnings and
mortality assumptions being used on the date of the determination
by the pension system's qualified actuary and approved by the
board.
(b) The actuarial assumptions being used at any particular
time shall be attached by the executive director [administrator] as
an addendum to this article and treated for all purposes as a part
of any plan created by this article. The executive director shall
promptly update any addendum to conform to any changed actuarial
assumptions approved by the board.
SECTION 4. Part 2, Article 6243a-1, Revised Statutes, is
amended by adding Section 2.03 to read as follows:
Sec. 2.03. REFERENCES TO CERTAIN LAW. A reference to a
statute made in this article includes a reference to any
regulation, rule, order, or notice made by a governmental entity
with the authority under law to adopt the regulation, rule, order,
or notice, and on which the governmental entity intends persons to
rely, as appropriate.
SECTION 5. Section 3.01, Article 6243a-1, Revised Statutes,
is amended by amending Subsections (a), (b), (d), (e), (f), (h),
(i), (j), (n), and (o) and adding Subsections (b-1), (b-2), (b-3),
(b-4), (d-1), (j-1), (j-2), (j-3), (j-4), (j-5), (j-6), (j-7),
(j-8), (j-9), (p), (q), (r), and (s) to read as follows:
(a) The pension system shall be administered by the board.
The board shall execute its fiduciary duty to hold and administer
the assets of the fund for the exclusive benefit of members and
their beneficiaries under Section 802.203, Government Code,
Section 67(f), Article XVI, Texas Constitution, and any other
applicable law, in a manner that ensures the sustainability of the
pension system for purposes of providing current and future
benefits to members and their beneficiaries.
(b) Subject to Subsections (b-1) and (b-2), the [The] board
consists of 11 [seven] trustees who shall be selected and shall
serve as follows:
(1) five trustees appointed by the mayor;
(2) three trustees appointed by the nominations
committee;
(3) one trustee appointed jointly by the city manager
and the nominations committee;
(4) subject to Subsection (b-3) of this section, one
trustee who is a current or former police officer of the city
nominated and elected by members of the pension system under rules
adopted by the board; and
(5) subject to Subsection (b-3) of this section, one
trustee who is a current or former fire fighter of the city
nominated and elected by members of the pension system under rules
adopted by the board.
(b-1) To be appointed or elected a trustee under this
section, a person:
(1) must have demonstrated financial, accounting,
business, investment, budgeting, real estate, or actuarial
expertise; and
(2) may not be an elected official of the city.
(b-2) To be appointed a trustee under Subsection (b)(1),
(2), or (3) of this section a person may not be an active member or
pensioner.
(b-3) If the board determines that it is not possible to
nominate or elect a trustee under Subsection (b)(4) or (5) of this
section who meets the requirements of Subsection (b-1) of this
section, the board shall notify the nominations committee and the
nominations committee shall appoint a trustee who meets the
requirements of Subsection (b-1) of this section to represent the
interests of police officers or fire fighters, as appropriate, of
the city on the board. An appointment under this subsection may be
made without regard to whether the trustee is qualified under
Subsection (b)(4) or (5), as applicable, of this section.
(b-4) A trustee is not required to reside in a particular
city or county of this state. [The city council shall name from
among its members three council members who shall serve as trustees
of the board. The council member trustees shall be named as soon as
possible after the first Monday in May of each odd-numbered year and
shall serve for the term of office to which they were elected as
council members. If there is a vacancy in any of the council member
trustees' seats on the board, the city council shall name another
council member to serve out the remainder of the unexpired term.
[(2) The police and fire department members of the
pension plans within the pension system shall separately, by
department and not by plan, elect from among their respective
memberships two active police officer and two active fire fighter
members. On their election, each of the trustees under this
subdivision shall execute a written affirmation of the person's
undertaking to faithfully perform duties to the pension system.
The police and fire department trustees shall serve terms of four
years each, the terms being staggered so that one term, but not both
from the same department, shall expire on June 1 of each
odd-numbered year. If a vacancy occurs among the police and fire
department trustees, the vacancy shall be filled in accordance with
the provisions of Subsection (d) of this section. The police and
fire department trustees will continue to serve beyond the
expiration of their terms, if their successors have not been
elected and affirmed in writing their undertaking to faithfully
perform their duties to the pension system, until their successors
are elected and have affirmed in writing their undertaking to
faithfully perform their duties to the pension system.]
(d) A [If a] vacancy on the board in a trustee position under
Subsection (b)(1), (2), or (3) of this section shall be filled in
the same manner as the original appointment. The board by rule
shall determine the manner by which a vacancy in a trustee position
under Subsection (b)(4) or (5) of this section is filled [occurs
among the police or fire department alternate trustees, for reasons
other than the failure to elect a successor alternate trustee or the
occurrence of a vacancy among the regular trustees of either
department, the board shall appoint a new alternate trustee
representing the department from which the vacancy occurs to serve
as the alternate trustee for the remainder of the alternate
trustee's term]. [A candidate is not eligible for election to an
alternate trustee position and to a regular trustee position during
the same election.]
(d-1) The city manager and the nominations committee shall
jointly appoint a trustee to fill a vacancy under Subsection (b)(3)
of this section not later than the 60th day after the date of the
vacancy.
(e) The mayor shall determine whether all trustees
appointed under Subsection (b)(1) of this section hold office for
staggered two-year terms or staggered three-year terms. The
nominations committee shall determine whether all trustees
appointed or elected under Subsection (b)(2), (3), (4), or (5) of
this section hold office for staggered two-year terms or staggered
three-year terms. An appointed trustee may not serve for more than
six consecutive years on the board [If a vacancy occurs among the
police or fire department regular trustees, the alternate trustee
representing the department from which the vacancy occurs shall
serve as the regular trustee for the remainder of the unexpired
regular trustee's term]. [Thereafter, the board shall appoint a
new alternate trustee from the same department to serve for a period
ending on the earlier of the expiration of the regular trustee's
term or the original alternate trustee's term. If the original
alternate trustee's term has not expired after serving in place of
the regular trustee, then that person shall serve out the remainder
of the unexpired term. After a new regular trustee has been
elected, the original alternate trustee shall return to serve as an
alternate trustee until the regular trustee's term has expired.
However, if the original alternate trustee, while an alternate
trustee, is elected to a full term as a regular trustee before the
expiration of the term as an alternate trustee, the term of the new
alternate trustee extends until the expiration of the original
alternate trustee's term.]
(f) The nomination and election of the trustees under
Subsection (b)(4) or (5) of this section [representing the police
and fire departments] shall be held under the supervision of the
board, and the board shall adopt such rules [and regulations]
governing the election procedure as it considers appropriate, as
long as the rules [and regulations] are consistent with generally
accepted principles of secret ballot and majority rule. The rules
[and regulations] adopted by the board shall be recorded in the
minutes of the board and made available to the members of any
pension plan within the pension system.
(h) The executive director [administrator], or in the
executive director's [administrator's] absence a member of the
administrative staff designated by the board, shall serve as the
secretary of the board.
(i) The board shall serve without separate compensation
from the fund, but a trustee is entitled to reimbursement for travel
expenses and, if applicable, [with entitlement] to any appropriate
compensation from the city as if the trustee [board members] were
performing the trustee's [their] regular functions for the police
or fire department or for the city. The board shall meet not less
than once each month and may meet at any time on the call of its
chairman.
(j) The board has full power to make rules [and regulations]
pertaining to the conduct of its meetings and to the operation of
the pension system as long as its rules are not, subject to
Subsections (j-1) and (j-2) of this section, inconsistent with the
terms of this article, any pension plan within the pension system,
or the laws of this state or the United States to the extent
applicable. A board meeting may be held by telephone conference
call or by videoconference call in accordance with Sections 551.125
and 551.127, Government Code, except that Section 551.125(b),
Government Code, does not apply.
(j-1) The board may adopt a rule that conflicts with this
article:
(1) to ensure compliance with the code, including
Section 415 of the code, and other applicable federal law;
(2) subject to Subsections (j-5) through (j-8) of this
section, to amortize the unfunded actuarial accrued liability of
the pension system within a period that does not exceed 35 years, if
the board determines the rule is appropriate based on the
evaluations required under Subsection (j-5) of this section; or
(3) subject to Subsections (j-6) and (j-7) of this
section and notwithstanding any other law, to increase the benefits
provided under this article in any manner the board determines
appropriate if the increase will not cause the amortization period
of the unfunded actuarial accrued liability of the pension system
to exceed 25 years, after taking into account the impact of the
increase.
(j-2) Except as provided by Subsection (j-1) of this section
or Section 4.02(b) of this article, a provision of any plan provided
by the pension system may only be amended if approved by the board.
An amendment described by this subsection:
(1) may not cause the amortization period of the
unfunded actuarial accrued liability of the pension system to
exceed 35 years, after taking into account the impact of the
amendment, as determined by the board and reviewed by the State
Pension Review Board; and
(2) is not required to be ratified by the legislature.
(j-3) The board may correct any defect, supply any omission,
and reconcile any inconsistency that may appear in this article in a
manner and to the extent that the board believes would:
(1) be expedient for the administration of the pension
system;
(2) be for the greatest benefit of all members,
pensioners, and qualified survivors; and
(3) not adversely affect the benefits of a member,
pensioner, or qualified survivor.
(j-4) The board has full discretion and authority to
construe and interpret the combined pension plan and to do all acts
necessary to carry out the purpose of the combined pension plan. A
decision of the board is final and binding on all affected parties.
(j-5) Not later than January 1, 2018, the board shall
conduct an evaluation of:
(1) how benefits are computed under this article to
identify potential means of abusing the computation of benefits to
inflate pension benefits received by pensioners; and
(2) the impact, including the impact on the combined
pension plan, of establishing one or more alternative benefit
plans, including a defined contribution plan or a hybrid retirement
plan that combines elements of both a defined benefit plan and a
defined contribution plan, for newly hired employees of the city
and for members who voluntarily elect to transfer to an alternative
benefit plan.
(j-6) The board may not adopt a rule under Subsection
(j-1)(2) or (3) of this section unless the rule has first been
reviewed by the State Pension Review Board and the State Pension
Review Board finds that implementation of a rule under:
(1) Subsection (j-1)(2) of this section complies with
the amortization period prescribed by that subdivision and
Subsection (j-8) of this section; or
(2) Subsection (j-1)(3) of this section complies with
the amortization period prescribed by that subdivision.
(j-7) The board shall provide the State Pension Review Board
with a copy of a proposed rule for purposes of Subsection (j-6) of
this section at least 90 days before the date the board intends to
implement the rule.
(j-8) The board may not adopt a rule under Subsection
(j-1)(2) of this section based on an evaluation under Subsection
(j-5)(2) of this section if the board determines implementation of
the rule would cause the amortization period of the unfunded
actuarial accrued liability of the combined pension plan or any
plan established under this article by the pension system to exceed
35 years, after taking into account implementation of the rule.
(j-9) At least twice each year, the board shall have a
meeting to receive public input regarding the pension system and to
inform the public about the health and performance of the pension
system.
(n) Six [Four] trustees of the board constitute a quorum at
any [called] meeting[, except that a trustee from the police
department and a trustee from the fire department must be present to
conduct business].
(o) No action may be taken by the board except at a meeting.
Except as provided by Section 4.071 of this article, or as otherwise
specifically provided by law, [and] no action shall be taken during
a board meeting without the approval of a majority of the trustees
of the board [present]. Only actions of the board taken or approved
of during a meeting are binding on the board, and no other written
or oral statement or representation made by any person is binding on
the board or the pension system.
(p) The board may file suit on behalf of the pension system
in a court of competent jurisdiction regardless of the court's
location. The board has sole authority to litigate matters on
behalf of the pension system. Notwithstanding Chapter 15, Civil
Practice and Remedies Code, or any other law, an action against the
pension system or the board shall be brought in a court of competent
jurisdiction located in the city or county in which the pension
system is located.
(q) The board may purchase from one or more insurers one or
more insurance policies that provide for the reimbursement of a
trustee or employee of the pension system for liability imposed as
damages caused by, and for costs and expenses incurred by the
individual in defense of, an alleged act, error, or omission
committed by the individual in the individual's capacity as a
fiduciary or employee of the pension system. The board may not
purchase an insurance policy that provides for the reimbursement of
a trustee or employee of the pension system due to the trustee's or
employee's dishonesty, fraudulent breach of trust, lack of good
faith, intentional fraud or deception, or intentional failure to
act prudently.
(r) The board shall adopt a code or codes of ethics
consistent with Section 825.212, Government Code. In adopting or
amending a code or codes of ethics, the board may consider comments
on the policy from the city attorney of the city. The board shall:
(1) review the code or codes of ethics on an annual
basis and amend the code or codes as the board considers necessary;
(2) file a copy of the code or codes of ethics adopted
or amended in accordance with this subsection with the State
Pension Review Board; and
(3) provide a copy of the code or codes of ethics
adopted or amended in accordance with this subsection to the city
attorney.
(s) The board shall develop an Internet website designed to
give active members and pensioners access to the information
concerning the pension system and the individual's participation in
the pension system required by Section 802.106, Government Code, as
well as information concerning the financial health of the pension
system.
SECTION 6. Part 3, Article 6243a-1, Revised Statutes, is
amended by adding Sections 3.011, 3.012, and 3.013 to read as
follows:
Sec. 3.011. NOMINATIONS COMMITTEE. (a) Subject to
Subsection (b) of this section, the nominations committee consists
of:
(1) the executive director, who is a nonvoting member;
(2) the president, chair, or other executive head of
the following organizations or their successor organizations, or
that person's designee:
(A) the Dallas Black Firefighters Association;
(B) the Black Police Association of Greater
Dallas;
(C) the National Latino Law Enforcement
Organization;
(D) the Dallas Fraternal Order Police Lodge 588;
(E) the Dallas Police Association;
(F) the Dallas Fire Fighters Association,
International Association of Fire Fighters Local No. 58; and
(G) the Dallas Hispanic Firefighters
Association, Inc.;
(3) a pensioner who is:
(A) a former police officer of the city;
(B) appointed by the president, chair, or other
executive head of the Dallas Police Retired Officers Association;
and
(C) a member of the Dallas Police Retired
Officers Association; and
(4) a pensioner who is:
(A) a former fire fighter of the city;
(B) jointly appointed by the president, chair, or
other executive head of the following organizations:
(i) the Dallas Retired Firefighters
Association;
(ii) the Retired Black Firefighters
Association of Dallas; and
(iii) the Dallas Hispanic Retired Fire
Fighters Association; and
(C) a member of an organization described by
Paragraph (B) of this subdivision.
(b) If an organization described by Subsection (a)(2) of
this section elects not to participate on the nominations
committee, is prohibited from participating on the nominations
committee under Subsection (h) of this section, or ceases to exist,
the nominations committee members appointed under that subsection
consist only of representatives of the remaining organizations, if
any.
(c) A vacancy on the nominations committee in a position
under Subsection (a)(3) or (4) of this section shall be filled not
later than the 30th day after the date of the vacancy. If a vacancy
is not filled within the time prescribed by this subsection, the
position on the nominations committee is eliminated.
(d) The executive director shall serve as presiding officer
of the nominations committee.
(e) The nominations committee shall meet at the call of the
presiding officer.
(f) The nominations committee shall appoint trustees to the
board in accordance with Sections 3.01(b)(2), (b)(3), and (b-3) of
this article.
(g) Persons serving on the nominations committee under
Subsection (a)(2), (3), or (4) of this section serve without
compensation and may not be reimbursed for travel or other expenses
incurred while conducting the business of the nominations
committee. The executive director may not receive additional
compensation for service on the nominations committee.
(h) An organization described by Subsection (a)(2), (3), or
(4) of this section may not participate on or make appointments to
the nominations committee unless the organization is in good
standing with the secretary of state, if applicable.
(i) Chapter 2110, Government Code, does not apply to the
nominations committee.
(j) The nominations committee may establish policies and
procedures governing its operations.
Sec. 3.012. REMOVAL OF TRUSTEES. (a) In accordance with
procedures adopted by board rule, a trustee:
(1) appointed under Section 3.01(b)(1) of this article
may be removed by the mayor for cause;
(2) appointed or elected under Section 3.01(b)(2),
(4), or (5) of this article may be removed by the nominations
committee for cause; and
(3) appointed under Section 3.01(b)(3) of this article
may be removed jointly by the city manager and the nominations
committee for cause.
(b) It is a cause for removal of a trustee from the board
that the trustee:
(1) does not have at the time of taking office the
qualifications required by Section 3.01(b) or (b-1)(1) of this
article, subject to Subsection (b-3) of that section;
(2) does not maintain during service on the board the
qualifications required by Section 3.01(b) or (b-1)(1) of this
article, subject to Subsection (b-3) of that section;
(3) is ineligible for membership under Section
3.01(b-1)(2) or (b-2) of this article; or
(4) is absent from more than 40 percent of the meetings
that the trustee is eligible to attend during a calendar year
without an excuse approved by a majority vote of the board.
(c) The validity of an action of the board is not affected by
the fact that it is taken when a cause for removal of a trustee
exists.
(d) If the executive director has knowledge that a potential
cause for removal exists, the executive director shall notify the
chairman of the board of the potential cause. The chairman shall
then notify the appointing or nominating official or body, as
appropriate, that a potential cause for removal exists. If the
potential cause for removal involves the chairman, the executive
director shall notify the vice chairman or next highest ranking
officer of the board, who shall then notify the appointing or
nominating official or body, as appropriate, that a potential cause
for removal exists.
Sec. 3.013. TRUSTEE TRAINING. (a) A person who is
appointed to or selected for the board and qualifies for office as a
trustee shall complete a training program that complies with this
section.
(b) The training program must provide the person with
information regarding:
(1) the law governing the pension system's operations;
(2) the programs, functions, rules, and budget of the
pension system;
(3) the scope of and limitations on the rulemaking
authority of the board;
(4) the results of the most recent formal audit of the
pension system;
(5) the requirements of:
(A) laws relating to open meetings, public
information, administrative procedure, and disclosing conflicts of
interest; and
(B) other laws applicable to a trustee in
performing the trustee's duties, including the board's fiduciary
duties described under Section 3.01(a) of this article;
(6) the code or codes of ethics adopted under Section
3.01(r) of this article and any applicable ethics policies adopted
by the Texas Ethics Commission; and
(7) financial training regarding the risks of
investing in alternative investments.
(c) The executive director shall create a training manual
that includes the information required by Subsection (b) of this
section. The executive director shall distribute a copy of the
training manual annually to each trustee. On receipt of the
training manual, each trustee shall sign and submit to the
executive director a statement acknowledging receipt of the
training manual.
SECTION 7. Section 3.02, Article 6243a-1, Revised Statutes,
is amended to read as follows:
Sec. 3.02. PROFESSIONAL CONSULTANTS. In addition to the
authority of the board to employ the services of certain
consultants set forth in this article, the board has the authority
to employ the services of any professional consultant recommended
by the executive director, including investment advisors and
investment managers, whenever the services of the consultants
[consultant] are considered necessary or desirable and in the best
interests of the pension system, as determined by the board in
consultation with the executive director. A professional
consultant shall receive such compensation as may be determined by
the board in accordance with Section 4.01 of this article.
SECTION 8. Part 3, Article 6243a-1, Revised Statutes, is
amended by adding Section 3.025 to read as follows:
Sec. 3.025. CHIEF INVESTMENT OFFICER. The executive
director may hire a chief investment officer, subject to
confirmation by the board, to assist the pension system regarding
the investment of assets of the fund. Compensation for a chief
investment officer hired under this section shall be made in
accordance with Section 4.01 of this article.
SECTION 9. Section 3.03, Article 6243a-1, Revised Statutes,
is amended by amending Subsections (b) and (c) and adding
Subsection (b-1) to read as follows:
(b) Subject to Subsection (b-1) of this section, the [The]
city attorney or an assistant city attorney may [shall] attend
board [all] meetings [of the board] and may advise the board on any
matter on which the pension system [board] requests a legal opinion
from the city attorney.
(b-1) The city attorney or an assistant city attorney is not
required to provide an opinion under Subsection (b) of this section
unless the opinion is requested by the city council on behalf of the
pension system. The city attorney or assistant city attorney may
decline to provide the opinion if the subject matter of the request
is too dependent on disputed facts to permit a generalized opinion,
as determined by the city attorney or assistant city attorney.
(c) The board may retain other attorneys to serve as legal
advisors to [represent] the board [or to give advice]. The
executive director may hire a chief legal officer, subject to
confirmation by the board, or other attorneys if necessary to carry
out the business of the pension system. Compensation for a chief
legal officer or other attorneys hired under this subsection shall
be made in accordance with Section 4.01 of this article.
SECTION 10. Section 3.04, Article 6243a-1, Revised
Statutes, is amended to read as follows:
Sec. 3.04. APPOINTMENT OF EXECUTIVE DIRECTOR
[ADMINISTRATOR]. (a) The board has the authority to appoint an
executive director [administrator] to assist [carry out the
business of] the board with administering the pension system and
ensure that records are kept [to keep a record] of the proceedings
of the board. Subject to Subsection (a-1) of this section, a person
appointed executive director under this section:
(1) must have, to the extent possible, relevant
experience in managing a similarly situated business entity; and
(2) may not be a current or former trustee [The
administrator, in carrying out the business of the board within the
scope of the administrator's responsibility, may not be considered
a fiduciary with respect to the pension system].
(a-1) During any period in which the most recent actuarial
valuation of the pension system indicates that the period needed to
amortize the unfunded actuarial accrued liability of the pension
system exceeds 35 years, the board shall, to the extent lapsed
investments are a significant portion of the pension system's
assets, ensure that the executive director appointed under
Subsection (a) of this section has, or hires staff that has,
appropriate experience in managing a business entity with lapsed
investments in a manner that resulted in the improved liquidity or
profitability of the business entity.
(b) Subject to Subsection (b-1) of this section [the
approval of the board], the executive director [administrator] may
select any number of persons the executive director determines
appropriate to assist the executive director in carrying out the
executive director's duties under this section. Subject to Section
4.01 of this article, the titles and salaries of persons selected to
assist the executive director shall be determined by the executive
director.
(b-1) The executive director may not select a person to
assist the executive director who is an active, former, or retired
police officer or fire fighter of the city [administrator].
(b-2) The executive director shall establish the
organizational structure of pension system employees to optimize
administration of the pension system.
(c) The executive director [Both the administrator] and
those persons selected to assist the executive director
[administrator] may be considered employees of the city. Unless
otherwise delegated to the executive director [administrator], the
board shall have the ultimate authority to retain, discipline, or
terminate the engagement of the executive director.
(d) The executive director owes a fiduciary duty to the
pension system and shall ensure the sustainability of the pension
system for the purpose of providing current and future benefits to
members of the pension system and their beneficiaries [any persons
selected under this subsection].
SECTION 11. Sections 4.01(a), (c), and (d), Article
6243a-1, Revised Statutes, are amended to read as follows:
(a) The board shall pay for all costs of administration out
of the income from the fund when in the judgment of the board the
costs are necessary, including the cost of:
(1) salaries and benefits for the executive director
[of the administrator, assistant administrator,] and
administrative staff;
(2) [,] office expenses;
(3) expenses associated with securing[,] adequate
office space and associated utilities;
(4) compensation for [, and] professional
consultants, professional investment managers, or other persons
providing professional services; and
(5) any other expenses approved by the board[, out of
income from the fund when it is actuarially determined that the
payments will not have an adverse effect on the payment of benefits
from any of the plans within the pension system and when in the
judgment of the board the costs are necessary]. [The city shall
provide for costs of administration if the board determines that
payment of the costs by the fund will have an adverse effect on the
payment of benefits from any plan within the pension system.]
(c) No expenditure for the costs of administration,
including the [or] payment of any fee for professional consultants,
professional investment management services, or any other person
providing professional services, may be made from the fund without
the approval of the board.
(d) After the board has developed an annual budget for the
pension system, the budget shall be presented to the city manager
[city's budget office] for comment. The city manager [city's budget
office] may request the board to reconsider the appropriation for
any expenditure at a board meeting, but the board shall make the
final determination concerning any appropriation.
SECTION 12. Sections 4.02(b), (d), and (e), Article
6243a-1, Revised Statutes, are amended to read as follows:
(b) Funds contributed by the city as its share of the amount
required to finance the payment of benefits under the pension
system may be used for no other purpose. The city is not
responsible for the payment of any administrative or professional
service fees of the pension system. Any change to the [The]
contributions required to be made to the pension system by the city
[shall be annually appropriated by the city council and
periodically paid on the basis of a percentage of the total wages
and salaries of the members of the police and fire departments who
are members of each of the plans within the pension system. The
amount of this percentage and any change in it] may [be determined]
only be made:
(1) by the legislature; [or]
(2) by a majority vote of the voters of the city; or
(3) in accordance with a written agreement entered
into between the pension system and the city, unless the change
would increase the period required to amortize the unfunded
actuarial accrued liability of the fund.
(d) Subject to Section 4.025 of this article, the city shall
make contributions to the pension system biweekly in an amount
equal to the sum of:
(1) the greater of:
(A) 34.5 percent of the aggregate computation pay
paid to members during the period for which the contribution is
made; or
(B) the applicable amount set forth below:
(i) $5,173,000 for the biweekly pay periods
beginning with the first biweekly pay period that begins after
September 1, 2017, and ends on the last day of the first biweekly
pay period that ends after December 31, 2017;
(ii) $5,344,000 for the 26 biweekly pay
periods immediately following the last biweekly pay period
described by Subparagraph (i) of this paragraph;
(iii) $5,571,000 for the 26 biweekly pay
periods immediately following the last biweekly pay period
described by Subparagraph (ii) of this paragraph; and
(iv) an amount equal to the biweekly amount
applicable for the prior 26 biweekly pay periods, increased by a
2.75 percent compounded rate for each subsequent 26 biweekly pay
periods, beginning with the first biweekly pay period following the
last biweekly pay period described in Subparagraph (iii) of this
paragraph; and
(2) except as provided by Subsection (e) of this
section, an amount equal to 1/26th of $11 million. [The percentage
of required contributions from the city shall be in accordance with
the following schedule and any increase or decrease in city
contributions shall occur automatically on any increases or
decreases in the members' contribution percentage:
[City Contributions Member Contributions [City Contributions Member Contributions
[City Contributions Member Contributions
28-1/2% 9% 28-1/2% 9%
28-1/2% 9%
27-1/2% 8-1/2% 27-1/2% 8-1/2%
27-1/2% 8-1/2%
26% 8% 26% 8%
26% 8%
24-1/2% 7-1/2% 24-1/2% 7-1/2%
24-1/2% 7-1/2%
23% 7% 23% 7%
23% 7%
21-1/2% 6-1/2%] 21-1/2% 6-1/2%]
21-1/2% 6-1/2%]
(e) Beginning with the first biweekly pay period following
the last biweekly pay period that ends on or after September 1,
2019, the [The] city is only required to pay the contribution amount
described by Subsection (d)(2) of this section if the board
determines, based on the most recently completed actuarial
valuation, that with the contribution, the total contributions to
the pension system are sufficient to amortize the unfunded
actuarial accrued liabilities of the fund within 35 years. The
State Pension Review Board shall review the board's determination
under this subsection. The board and the State Pension Review Board
shall annually make the determination and conduct the review
required under this subsection [may elect to contribute more than
that required in the schedule provided by Subsection (d) of this
section, except that the city's contribution percentage may not
exceed 28-1/2 percent unless approved as provided by Subsection (b)
of this section. Further, in no event may the city's contribution
be less than 21-1/2 percent unless approved as provided by
Subsection (b)].
SECTION 13. Part 4, Article 6243a-1, Revised Statutes, is
amended by adding Section 4.025 to read as follows:
Sec. 4.025. CITY OR MEMBER CONTRIBUTIONS IF NO UNFUNDED
ACTUARIAL LIABILITIES. Notwithstanding Section 4.02 or 4.03 of
this article, if the pension system has no unfunded actuarial
liability according to the most recent actuarial valuation, the
annual normal costs must be equally divided between the city and the
members unless equally dividing the costs would increase the member
contribution rates beyond the rates prescribed by Section 4.03 of
this article. The board shall adjust the city contribution rates
under Section 4.02 of this article and the member contribution
rates under Section 4.03 of this article accordingly, and certify
the adjusted rates. After the completion of a subsequent actuarial
valuation showing unfunded actuarial liabilities, the contribution
rates applicable under Sections 4.02 and 4.03 of this article
apply.
SECTION 14. Section 4.03, Article 6243a-1, Revised
Statutes, is amended by amending Subsections (a), (b), (c), (d),
and (g) and adding Subsections (a-1), (d-1), (d-2), and (i) to read
as follows:
(a) Subject to Subsection (a-1) of this section and except
as provided by Section 4.025 of this article, each [Each] Group A
member of the combined pension plan shall have 13.5 [6.5] percent of
base pay deducted from the member's wages on a biweekly basis [each
month], and the contributions shall be promptly remitted to the
fund by the city.
(a-1) If a Group A member is assigned, for any period, to a
job-sharing program or any similar work schedule that is considered
by the member's department to be less than a full-time work
schedule, the member's contributions are determined by multiplying
the applicable contribution rate by a fraction, the numerator of
which is the number of hours the member actually worked during the
period and the denominator of which is the number of hours the
member would have worked during the period if the member had been
working a full-time work schedule.
(b) Each member shall [continue to] contribute to the fund
under the applicable terms of this article [section] until the
member leaves active service with either department. If a member
leaves active service with a department, [or until the beginning of
the member's 33rd year of pension service, at which time] the member
shall cease making contributions.
(c) Each Group B member shall authorize the city to deduct
from the member's salary a percentage of the member's computation
pay. The authorization shall be in writing and filed with the
executive director [administrator].
(d) Subject to Subsection (d-1) of this section and except
as provided by Section 4.025 of this article, for pay periods
starting on or after September 1, 2017, each [Each] Group B member
shall have 13.5 [8.5] percent of the member's computation pay
deducted from the member's wages on a biweekly basis [each month,]
and the contributions shall be promptly remitted to the fund by the
city.
(d-1) If a Group B member is assigned, for any period, to a
job-sharing program or any similar work schedule that is considered
by the member's department to be less than a full-time work
schedule, the member's contributions are determined by multiplying
the applicable contribution rate by a fraction, the numerator of
which is the number of hours the member actually worked during the
period and the denominator of which is the number of hours the
member would have worked during the period if the member had been
working a full-time work schedule.
(d-2) For purposes of Subsection (d) of this section,
"computation pay" includes computation pay paid to a Group B member
during any period the member is receiving workers' compensation.
(g) The percentage of base pay contributed by Group A
members or computation pay contributed by Group B members may not be
altered except by an adjustment under Section 4.025 [amendment
pursuant to the terms of Section 4.02] of this article.
(i) Member contributions under this article or any payments
a member is entitled to make under this article to receive
additional pension service may be picked up by the city under the
terms of an appropriate resolution of the city council.
SECTION 15. Section 4.04, Article 6243a-1, Revised
Statutes, is amended by amending Subsections (a), (c), (d), (e),
(f), (g), (h), (j), and (k) and adding Subsections (f-1) and (h-1)
to read as follows:
(a) Except as provided by Subsection (d) or (e) of this
section, a [A] Group B member who, either voluntarily or
involuntarily, leaves active service is entitled to a refund from
the fund of the total amount of the member's Plan B and Group B
contributions, without interest, that were paid beginning with the
effective date of the member's Group B membership or membership in
Plan B. A refund under this subsection results in a total
cancellation of pension service credit and the member and any
person who would otherwise take by, through, or under the member is
not entitled to any benefits from the pension system [an
appropriate reduction of pension service].
(c) A [former] Group B member who desires [desiring] a
refund of the Plan B or Group B contributions under Subsection (a)
of this section [the person made to the fund] must make written
application for the refund with the executive director
[administrator]. In no case may any refund be made to a [any
former] Group B member before the expiration of 30 days after the
date the person leaves active service.
(d) Subject to Subsection (k) of this section, if a Group B
member with less than five years of pension service either
voluntarily or involuntarily leaves active service and fails to
make written application for a refund of contributions within three
years after the date of the notice described by Subsection (j) of
this section [is] made by the board, the person forfeits the right
to withdraw any portion of the contribution, and the total amount of
Plan B and Group B contributions the person made will remain in the
fund. If the Group B member described by this subsection dies after
leaving active service, the [person's heirs or, if there are no
heirs, the] deceased member's designee [estate] may apply for the
refund of the person's contributions, resulting in an appropriate
loss of pension service if the application is filed with the
executive director [administrator] within three years after the
date of the notice described by Subsection (j) of this section [is]
made by the board. Subject to Subsection (k) of this section, if a
Group B member's designee [heirs or estate] fails to apply for a
refund of the Group B member's contributions within the three-year
period described by this subsection, the designee forfeits [heirs
and the estate forfeit] any right to the contributions, and the
total amount of the Plan B and Group B contributions made by the
Group B member will remain in the fund.
(e) Subject to Subsection (k) of this section, if a Group B
member with five or more years of pension service either
voluntarily or involuntarily leaves active service and fails to
make written application for a refund of the person's Plan B and
Group B contributions within three years after the date of the
notice described by Subsection (j) of this section [is] made by the
board, the person forfeits the right to withdraw any portion of the
contributions, and the total amount of the contributions will
remain in the fund. A Group B member described by this subsection
may, however, apply for a Group B retirement pension [benefits]
under Section 6.02 of this article or, if the Group B member dies
before the member is eligible to apply for a Group B retirement
pension, the member's qualified survivors [benefits, the person's
heirs or, if there are no heirs, the deceased member's estate] may
apply for Group B death benefits under Sections 6.06, 6.061, 6.062,
and 6.063 of this article. If the Group B member dies before the
member is eligible to apply for a Group B retirement pension and the
member has no qualified survivors, the Group B member's designee
[in accordance with the provisions of this article, or the heirs or
the estate] may apply for a refund of the Group B member's Plan B and
Group B contributions, resulting in a total cancellation [an
appropriate loss] of pension service. Subject to Subsection (k) of
this section, if a Group B member's designee [heirs or estate] fails
to apply for a refund of the Group B and Plan B member's
contributions within the three-year period described by this
subsection, the designee forfeits [heirs and the estate forfeit]
any right to the contributions, and the total amount of the Plan B
and Group B contributions made by the Group B member will remain in
the fund.
(f) Subject to Subsections (g) and (h) of this section, [If]
a Group B member, other than a Group B member who elects or has
elected to receive a Group A benefit or a benefit determined under
the old plan or Plan A, who [with five or more years of pension
service] either voluntarily or involuntarily leaves active service
with five or more years of pension service [, the person] is
entitled to:
(1) subject to Subsection (f-1) of this section, have
the total amount of the person's Plan B and Group B contributions to
the fund refunded in accordance with Subsection (a) of this
section, which results in a loss of all of the person's accrued
pension service; or
(2) if the Group B member first entered active service
before January 1, 1999, elect to take a refund of less than the
total amount of the person's Plan B and Group B contributions while
leaving a sufficient amount to retain pension service amounting to
five or more years.
(f-1) A Group B member who elects to receive a refund under
Subsection (f)(1) of this section and any person who would
otherwise take by, through, or under the member is not entitled to
any benefits from the pension system.
(g) If a Group B member elects a refund of a portion of the
person's contributions under Subsection (f)(2) of this section, the
amount of the refund shall equal the total amount of the person's
Plan B and Group B annual contributions, without interest, for each
full year of pension service canceled [cancelled], computed based
on the earliest contributions made.
(h) A [former] Group B member who first entered active
service on or after January 1, 1999, is entitled to have the total
amount of the person's Group B contributions refunded under
Subsection (a) of this section in accordance with Subsection (f)(1)
of this section, but may not receive a refund of less than the total
amount in accordance with Subsection (f)(2) of this section.
(h-1) A Group B member who leaves active service and later
returns to active service is permitted to repay to the fund any
previously withdrawn employee contributions and receive pension
service in accordance with Section 5.07(d) of this article as a
Group B member to the extent that [if,] before again leaving active
service, the Group B member repays [completely] to the fund the
previously withdrawn contributions with interest, calculated at
the interest rate from time to time used in the pension system's
actuarial rate of return assumptions, compounded annually, on the
previously withdrawn contributions [for the period from the date
the contributions were withdrawn until the date the principal and
accrued interest are repaid in full].
(j) On the 58th [50th] anniversary of the birth of a Group B
member described by Subsection (d) or (e) of this section, or on the
board's receipt of notice of the death of the Group B member, the
board shall, by registered or certified mail, return receipt
requested, attempt to notify the Group B member or designee [the
member's heirs or estate], as applicable, of the status of the
person's [their] entitlement to a refund of contributions from the
fund.
(k) A Group B member or designee described by Subsection (d)
or (e) of this section [or the heirs or estate of the Group B member]
shall have the person's [their] right, title, interest, or claim to
a refund of the Group B member's contributions reinstated only on
the board's grant of their written request for a reinstatement and
refund. The board's decision shall be based on a uniform and
nondiscriminatory basis [policy that it shall, from time to time,
adopt].
SECTION 16. Section 4.06(c), Article 6243a-1, Revised
Statutes, is amended to read as follows:
(c) The authority of the board to make a custody account or
master trust agreement is supplementary to its authority to make an
investment management contract. Allocation of assets to a custody
account or master trust shall be coordinated by the executive
director [administrator], as authorized by the board, and the bank
designated as custodian or master trustee for the assets.
SECTION 17. Section 4.07, Article 6243a-1, Revised
Statutes, is amended by amending Subsections (a), (d), and (g) and
adding Subsection (h) to read as follows:
(a) Subject to Section 4.071 of this article, if [If] the
board determines that there is in the fund a surplus exceeding a
reasonably safe amount to take care of current demands on the
pension system, the board may invest or direct the investment of the
surplus for the sole benefit of the pension system.
(d) The board also has the authority to contract for
professional investment management services. Any contract that the
board makes with an investment manager shall set forth the board's
investment policies and guidelines [of the board for the use of
standard rating services and shall include specific criteria for
determining the quality of investments]. A professional investment
management service shall receive such compensation as may be
determined by the board in accordance with Section 4.01 of this
article.
(g) A [No investment manager, other than a] bank or trust
company that has custody and trustee powers and a contract with the
board to provide assistance in making investments[,] shall be the
custodian or master trustee of any of the securities or other assets
of the fund. Pursuant to Section 4.06 of this article, the board
may designate a bank to serve as custodian or master trustee, or
subcustodian or submaster trustee, to perform the customary duty of
safekeeping as well as duties incident to the execution of
transactions. As the demands of the pension system require, the
board shall withdraw from the custodian or master trustee money
previously considered surplus in excess of current cash and
proceeds from the sale of investments. The money may without
distinction be used for the payment of benefits pursuant to each of
the plans within the pension system and for other uses authorized by
this article and approved by the board.
(h) The board through policy shall establish an investment
advisory committee composed of trustees and outside investment
professionals to review investment related matters as prescribed by
the board and make recommendations to the board. A majority of the
members of the committee established under this subsection must be
outside investment professionals.
SECTION 18. Part 4, Article 6243a-1, Revised Statutes, is
amended by adding Section 4.071 to read as follows:
Sec. 4.071. BOARD APPROVAL OF CERTAIN ALTERNATIVE
INVESTMENTS. (a) The executive director, an investment manager, a
provider of professional investment management services or
professional advisory services, or any other person delegated
authority to invest or reinvest pension system assets under this
article may not invest pension system assets in a single
alternative investment unless the board votes to approve the
investment by a two-thirds vote of all the trustees.
(b) The board may adopt rules necessary to implement this
section.
SECTION 19. Section 4.08, Article 6243a-1, Revised
Statutes, is amended by adding Subsection (c) to read as follows:
(c) On written request by the city, the executive director
shall make available to the city's actuary or auditor the
information and documents provided to or used by the pension
system's actuary or auditor in conducting an actuarial valuation
under this article or preparing any other document prepared under
this article.
SECTION 20. Section 4.09, Article 6243a-1, Revised
Statutes, is amended to read as follows:
Sec. 4.09. REWARDS, DONATIONS, AND CONTRIBUTIONS. Any
reward, donation, or contribution given to any member as payment or
gratuity for service performed in the line of duty shall be turned
over to the chief of the member's department, who shall, in turn,
forward the reward, donation, or contribution to the executive
director [administrator] of the pension system for deposit in the
fund.
SECTION 21. Section 5.01, Article 6243a-1, Revised
Statutes, is amended to read as follows:
Sec. 5.01. MEMBERSHIP IN COMBINED PENSION PLAN. (a) Except
as provided by Subsection (a-1) of this section, the [The]
membership of the combined pension plan is composed of the
following persons:
(1) Group A members:
(A) police officers or fire fighters who are on
active service and who as of February 28, 1973, had filed a written
statement with the pension system of their desire to participate in
either the old plan or Plan A;
(B) police officers and fire fighters who are on
active service and [,] who were employed and receiving compensation
from the city as a police officer or a fire fighter before March 1,
1973, and who made contributions to either the old plan or Plan A
attributable to any period of employment before March 1, 1973; and
(C) except as provided by Subsection (b) of this
section, persons who elect to become Group A members under that
subsection; and
(2) Group B members:
(A) police officers and fire fighters who are on
active service and who [,] were formerly members of either the old
plan or Plan A[,] and who, as of April 30, 1973, had filed a written
statement with the pension system of their desire to participate in
Plan B;
(B) police officers and fire fighters who are on
active service and who on or after March 1, 1973, and before January
1, 1993, became members of Plan B;
(C) as a condition of employment, any police
officer [office] or fire fighter who is initially employed as a
police officer or a fire fighter by the city on or after January 1,
1993;
(D) as a condition of return to active service
and except as provided by Subsection (b) of this section, former
members of the old plan or Plan A who left active service before
March 1, 1973;
(E) as a condition of return to active service
and except as provided by Subsection (c) of this section, former
Group B members who are no longer on active service, whether or not
the persons were ever a member of the old plan, Plan A, or the
combined pension plan;
(F) Group A members who are on active service and
meet the requirements and make an election under Subsection (d) of
this section; and
(G) persons who are on active service and make an
election under Subsection (e) of this section.
(a-1) Group A or Group B members do not include any employee
of the city who is required by ordinance or who elects, in
accordance with an ordinance, to participate in an alternative
benefit plan established under Section 3.01(j-1)(2) of this article
based on an evaluation under Section 3.01(j-5)(2) of this article.
(b) A person who has received an old plan, Plan A, or
combined pension plan retirement or disability pension on or after
March 1, 1973, may, if the person returns to active service, elect
to participate as a Group A or Group B member by filing a written
application for membership with the executive director
[administrator] not later than 60 days after the date of return to
active service. [As a condition of either Group A or Group B
membership, the board may require the person to undergo a physical
examination and be certified by the health director as being
capable of performing the duties to which the person will be
assigned.] If the person described by this subsection does not
elect to become a Group A or Group B member, the person shall on
leaving active service receive a retirement pension in an amount
that is unadjusted for the period of return to active service if the
person meets all of the requirements of Group A membership.
(c) A Group B pensioner who was never a member of the old
plan, Plan A, or the combined pension plan before January 1, 1993,
may, if the person returns to active service, elect to become a
Group B member by filing a written application for membership with
the executive director [administrator] not later than 60 days after
the date of return to active service. [As a condition of Group B
membership, the board may require the pensioner to undergo a
physical examination and be certified by the health director as
being capable of performing the duties to which the person will be
assigned.] If the person described by this subsection does not
elect to again become a Group B member, on leaving active service,
if the person meets all applicable requirements of this article,
the person shall receive benefits in an amount equal to the amount
the person was receiving as of the day before the day the person
returned to active service, and the person's base pension shall be
the same as the base pension originally computed before the return
to active service.
(d) A person who is on active service and is a Group A member
may, before the person participates in DROP, irrevocably elect to
become a Group B member by filing a written application with the
executive director [administrator]. On and after the filing of the
application, the Group A member shall make contributions to the
fund at the rate applicable to Group B members. However, the
contributions do not, by themselves, establish [constitute] Group B
membership. Group B membership is contingent on the satisfaction
of the following conditions:
(1) the [The] person must, before the person elects to
participate in DROP, pay an amount to the fund equal to the
difference between the contributions the person would have made to
the fund had the person been a Group B member for the entire period
the person could otherwise have been a Group B member before making
application for membership and the contributions the person
actually made during that period, plus interest calculated in
accordance with procedures adopted by the board from time to time;
and[.]
(2) the [The] payments described by this subsection
must be completed before the earlier of the date on which the person
begins participation in DROP or leaves active service in accordance
with procedures adopted by the board from time to time.
(d-1) If the fund does not receive payment under Subsection
(d)(1) of this section by the [that] date prescribed by Subsection
(d)(2) of this section, all payments made under Subsection (d)(1)
of this section [of this type], as well as those contribution
amounts paid by the person after the person's application for Group
B membership that are in excess of the Group A member contribution
rate, shall be returned without accrued interest to the person, or
in the event of the person's death to the person's designee
[surviving spouse, children, or estate], as applicable.
(e) A person who is on active service and has never been a
member of any plan within the pension system may elect to become a
Group B member on a prospective basis by filing a written
application for membership with the executive director
[administrator].
SECTION 22. Sections 5.02(a), (d), (e), (h), and (i),
Article 6243a-1, Revised Statutes, are amended to read as follows:
(a) The effective date of Group B membership for a person
who becomes a Group B member under [persons described by] Section
5.01(a)(2)(A) or (B) of this article is the date the Group B member
first became a member of Plan B [January 1, 1993].
(d) The effective date of Group B membership for a person
[former Group B member] who again becomes a Group B member and is
described by Section 5.01(a)(2)(E) of this article is the person's
original effective date of Group B membership, adjusted for any
period for which [that] the person was not on active service or [,
if the person] has [not] withdrawn some, but not all, contributions
to the fund pursuant to Section 4.04 of this article. If, however,
the person withdraws [former Group B member has withdrawn] all
contributions to the fund in accordance with Section 4.04 of this
article, and the person does not replace the previously withdrawn
contributions together with interest as provided by Section
4.04(h-1) [4.04(h)] of this article, the effective date of the
person's membership is the date of return to active service.
(e) The effective date of membership for a person who
becomes a Group B member pursuant to Section 5.01(b) of this article
is the date on which written application for the membership is filed
with the executive director [administrator]. The effective date of
membership for a person who becomes a Group A member pursuant to
Section 5.01(b) of this article is the person's original effective
date of membership in the old plan, Plan A, or the combined pension
plan, whichever is applicable.
(h) A person described by Subsection (a), (c), (d), (e),
(f), or (g) of this section shall be given full pension service for
the time the person was a contributing member of the old plan, Plan
A, the combined pension plan, and Plan B, and the pension service
shall be counted as if it had been earned while a Group B member.
Neither the length of time persons described by Subsection (a),
(c), (d), (e), (f), or (g) of this section received a retirement or
disability pension, whether under the old plan, Plan A, the
combined pension plan or Plan B, nor the amount of any benefits paid
to the person shall have any effect on the pension service earned by
the person. No pension service may be earned while on service
retirement or disability retirement, or when the person was not on
active service. Except as provided by Sections 5.08 [5.02] and 5.09
of this article, a person described by Subsection (a), (c), (d),
(e), (f), or (g) of this section may not be allowed to contribute to
the fund in order to receive pension service for the time the person
was not on active service, regardless of whether the person was
actually receiving a pension.
(i) The effective date of Group B membership for a person
who becomes a Group B member pursuant to Section 5.01(e) of this
article is the date on which written application for Group B
membership is filed with the executive director [administrator].
SECTION 23. Section 5.03, Article 6243a-1, Revised
Statutes, is amended by amending Subsections (c) and (d) and adding
Subsection (c-1) to read as follows:
(c) A Group B member who is on active service and [or former
Group B member who also] was a former contributing member of either
the old plan or Plan A may elect, when applying for either a
retirement or disability pension if applicable, to terminate
membership and receive a Group A retirement or disability pension
under the applicable provisions of this article, if the Group B
member's application for retirement or disability pension is
granted by the board.
(c-1) A Group B member who is not on active service and was a
former contributing member of either the old plan or Plan A may
elect, when applying for a retirement pension, to terminate
membership and receive a Group A retirement pension under the
applicable provisions of this article, if the Group B member's
application for retirement pension is granted by the board.
(d) If a Group B member [or former Group B member] described
by Subsection (c) or (c-1) of this section has elected and been
granted a Group A retirement or disability pension under the
applicable provisions of this article, the person is entitled to a
reimbursement from the fund. The reimbursement shall be equal to
that portion of the person's contributions to the fund, without
interest, from the person's effective date of Group B membership
until the time the person left active service[,] that is in excess
of the total amount the person would have contributed as a Group A
member or as a member of the old plan or Plan A for the same period.
A Group B member [or former Group B member] desiring a refund of
excess contributions must make written application for the refund
with the executive director [administrator] within three years
after the date the person's Group A retirement or disability
pension, whichever is applicable, begins, otherwise, the person
will [or] lose all right, title, interest, or claim to the refund
until such time as the board grants the refund in response to the
person's written request. The refund shall be made as soon as
practicable after written application is filed with the executive
director [administrator].
SECTION 24. Section 5.04, Article 6243a-1, Revised
Statutes, is amended to read as follows:
Sec. 5.04. GROUP B MEMBERSHIP MAY BE DECLARED INACTIVE. (a)
Except as provided by Subsection (d)(1) of this section, if [If] a
Group B member with less than five years of pension service either
voluntarily or involuntarily leaves active service, the person's
Group B membership remains active as long as the person has not
withdrawn the person's contributions pursuant to Section 4.04 of
this article.
(b) Except as provided by Subsection (d)(2) of this section,
if [If] a Group B member with five or more years of pension service
either voluntarily or involuntarily leaves active service, the
person's Group B membership remains active as long as the person has
not withdrawn the person's entire contributions pursuant to Section
4.04 of this article.
(c) Except as provided by Subsection (d)(3) of this section,
if [If] the board receives valid information that a Group B primary
party has died, [leaving one or more heirs,] the board shall, by
registered or certified mail, return receipt requested, attempt to
notify:
(1) the qualified survivors [heirs] of the primary
party of the procedures for applying and qualifying for death
[survivor] benefits under Section 6.06, 6.061, 6.062, or 6.063 of
this article; or
(2) if the primary party does not have any qualified
survivors, the primary party's designee of the procedures for
applying for [or] a refund of the [Group B] primary party's
contributions, if applicable, in accordance with Section 4.04 of
this article.
(d)(1) Subject to the provisions of Subdivision (5)(A) of
this subsection, the membership of a Group B member described by
Subsection (a) of this section shall be declared inactive and all of
the person's accrued pension service voided if the person does not
return to active service within three years after the date of
[receiving] the notice described by Subdivision (4) of this
subsection.
(2) Subject to the provisions of Subdivision (5)(B) of
this subsection, the membership of a Group B member described by
Subsection (b) of this section shall be declared inactive and all of
the person's accrued pension service voided if the person does not
file an application for a Group B retirement pension with the board
within three years after the date of [receiving] the notice
described by Subdivision (4) of this subsection.
(3) Subject to the provisions of Subdivision (5)(C) of
this subsection, if a primary party described by Subsection (c) of
this section:
(A) does not have any qualified survivors, the
designee has [, the heirs or estate of a deceased primary party
described by Subsection (c) of this section have] no right, title,
interest, or claim for [benefits or] a refund of the primary party's
contributions to the fund[,] if the designee does not file an
application for the primary party's contributions within three
years after the date of the notice described in Subsection (c) of
this section; or
(B) has qualified survivors, the qualified
survivors have no right, title, interest, or claim to [heirs or the
estate, whichever is applicable, fails to file an application for]
the primary party's death benefits if the qualified survivor does
not file an application for the benefits [or contributions] within
three years after the date of [receiving] the notice described in
Subsection (c) [by Subdivision (4)] of this section [subsection].
(4) On the 58th [50th] anniversary of the birth of a
Group B member described by Subsection (a) or (b) of this section
[or on the board's receipt of notice of the death of a primary party
described by Subsection (c) of this section], the board shall, by
registered or certified mail, return receipt requested, attempt to
notify:
(A) the [Group B] member [or the heirs or estate
of a primary party, whichever is applicable,] of the status of the
member's [their] entitlement to benefits or contributions from the
fund; or
(B) if the board receives valid information that
the member has died, the qualified survivors of the deceased person
or, if none exists, the designee of the deceased person.
(5)(A) A Group B member described by Subdivision (1)
of this subsection shall have the person's Group B membership and
pension service reinstated on the person's return to active
service.
(B) A Group B member described by Subdivision (2)
of this subsection shall have the person's Group B membership and
pension service reinstated on the person's return to active service
or on the grant of the person's written request to the board of the
person's desire to apply for a Group B [service] retirement pension
under Section 6.02 of this article [benefit].
(C) A primary party's qualified survivors or
designee, as appropriate, [The heirs or estate of a primary party]
described by Subdivision (3) of this subsection shall have their
right, title, interest, or claim to the primary party's refund of
the party's contributions reinstated on the board's grant of their
written request [for the reinstatement and refund]. [The board's
decision shall be based on a uniform and nondiscriminatory policy
that it shall, from time to time, adopt.]
SECTION 25. Section 5.05, Article 6243a-1, Revised
Statutes, is amended to read as follows:
Sec. 5.05. PENSION SERVICE. (a) Subject to Subsection (d)
of this section and except as provided by Subsection (e) of this
section, a [A] member shall receive pension service for the time,
computed in years and fractional years for months and days,
completed as a member of the combined pension plan, the old plan,
Plan A, or Plan B.
(b) A member who elects to pay contributions for time spent
on military leave, authorized non-uniformed leave of absence, or
for an apprenticeship or probationary period, or for any other
reason provided for by this article may [not] receive [any] pension
service for [any part of] the time for which the member is
contributing only to the extent provided under Section 5.07(d),
5.08, or 5.09 of this article [until the entire amount due the fund
for the entire period involved has been paid as if the service were
performed as a member].
(c) If a member, either voluntarily or involuntarily,
leaves active service and later returns to active service, the
person shall receive full pension service for the period of the
person's original membership, if the person did not withdraw the
person's contributions pursuant to Section 4.04 of this article.
If, however, the member had withdrawn the person's contributions
and did [does] not replace the previously withdrawn contributions
[with interest] as required by Section 4.04 of this article, the
member [person] forfeits any pension service attributable to any
period of time for which the respective contributions were not
repaid [accrued while a member before the date of the person's
return to active service].
(d) If a member is assigned, for any period, to a
job-sharing program or any similar work schedule that is considered
by the member's department to be less than a full-time work
schedule, the member's pension service is determined by multiplying
the pension service that could have been earned for full-time work
during the period by a fraction, the numerator of which is the
number of hours the member actually worked during the period and the
denominator of which is the number of hours the member would have
worked during the period if the member had been working a full-time
work schedule. This proration may not affect the computation of
pension service for a member during any period the member is on
leave:
(1) because of an illness or injury; or
(2) receiving periodic payments of workers'
compensation.
(e) Notwithstanding any other provision in this section, a
member may not receive pension service attributable to nonqualified
service to the extent the pension service would result in either
more than five years of permissive service attributable to
nonqualified service being taken into account, or any permissive
service being taken into account before the member has completed at
least five years of active service. In this subsection,
"permissive service" and "nonqualified service" have the meanings
described by Section 415(n)(3) of the code.
SECTION 26. Sections 5.06, 5.07, 5.08, and 5.09, Article
6243a-1, Revised Statutes, are amended to read as follows:
Sec. 5.06. VESTED RIGHTS OF GROUP B MEMBERS. (a) If a Group
B member accrues five years of pension service, whether the pension
service is accrued while a Group B member or while a member of the
old plan, Plan B, Plan A, the combined pension plan, or a
combination of the plans, the Group B member has vested rights and
is eligible to apply for a retirement pension in accordance with
Section 6.02 of this article.
(b) If a Group B member has vested rights as determined
under Subsection (a) of this section, and the Group B member either
voluntarily or involuntarily leaves active service before becoming
eligible to receive any benefits under Section 6.02 of this
article, the person shall be provided with a letter approved by the
board and signed by the executive director [administrator] that,
barring unrepaid refunds, clerical error, miscalculation, or other
error, is incontestable and shall state:
(1) the total amount of pension service the Group B
member had accrued until the date the person left active service;
(2) the total amount of contributions the Group B
member made under the terms of Plan B and the combined pension plan;
and
(3) the monthly retirement pension due the Group B
member at age 58 [50].
Sec. 5.07. PURCHASE OF PENSION SERVICE BY GROUP B MEMBERS.
(a) A Group B member who is on active service and has previously
elected not to become a contributing member of the old plan or [and]
Plan A may purchase pension service from the fund for that period
during which the member performed active service with either
department until the effective date of the member's Group B
membership. No pension service may be given to the Group B member
except to the extent that [until] payment is made for the [entire
period described by this subsection, and no] pension service in
accordance with Subsection (d) of this section [may be purchased
for any period that is of greater or lesser length].
(b) Payment for the purchase of pension service under
Subsection (a) of this section shall be equal to the amount of
contributions the Group B member would have made to the old plan and
Plan A had the member been a contributing member of either of the
plans during the period for which the pension service is being
purchased [described by Subsection (a) of this section], plus
interest calculated in accordance with procedures adopted by the
board from time to time.
(c) Subject to Subsection (d) of this section, a [A] Group B
member who is on active service may repay the fund all or a portion
of the employee contributions withdrawn by an alternate payee
pursuant to the terms of a qualified domestic relations order [and
receive pension service as a Group B member attributable to the
contributions, if the Group B member repays completely to the fund
the withdrawn contributions] with interest, calculated at the
interest rate from time to time used in the pension system's
actuarial rate of return assumptions, compounded annually, on the
contributions for the period from the date the contributions were
withdrawn until the date the principal and accrued interest are
repaid, and receive pension service as a Group B member, in
accordance with Subsection (d) of this section, for the period for
which the contributions and interest were paid [in full].
(d) [No pension service may be given to a Group B member
under Subsection (b) or (c) of this section until the entire amount
described by Subsection (b) or (c) has been paid to the fund.] If
payment of the entire amount of pension service a member is entitled
to under Subsection (a) or (c) of this section or under Section
4.04(h-1) of this article is not completed by the earlier of the
date the Group B member begins participation in DROP or the date the
member [is not completed by the date the Group B member] leaves
active service, pension service will be provided only for the
number of full years of pension service that the contributions and
interest paid under those provisions will purchase, computed based
on the most recent years for which the member was entitled to
purchase pension service. Except for pension service that is
picked up by the city under the authority of Section 414(h)(2) of
the code, a fractional year of pension service may be purchased only
if less than a full year of pension service is available for
purchase.
(e) The amounts paid but insufficient to purchase one or
more whole years of pension service that remain available for
purchase, including any interest paid by the Group B member, must be
returned to the Group B member or, if the Group B member has died, to
the Group B member's designee, without any accrued interest on the
returned money.
(f) Notwithstanding any other provision of this section,
any amounts that have been picked up and paid by the city may not be
paid to a member or designee, and the member shall be given credit
for all years, and fractions of years, of pension service that can
be purchased with the picked-up contributions [all partial payments
shall be returned to the Group B member or, if the Group B member has
died, to the member's heirs or estate, whichever is applicable].
Sec. 5.08. MEMBERS IN UNIFORMED [ARMED] SERVICES. (a) In
this section, "service in the uniformed services" has the meaning
assigned by the federal Uniformed Services Employment and
Reemployment Rights Act of 1994 (38 U.S.C. Section 4301 et seq.), as
amended.
(a-1) A member who is reemployed by the city after an
absence due to service in the uniformed services shall receive
contributions, benefits, and pension service that are no less
favorable than those required by Section 414(u) of the code in
accordance with the procedure described by Subsection (c) of this
section [may receive pension service for time spent away from
either department while on active duty in any of the military
services of the United States, including service in any state or
National Guard or any reserve component of any military service in
accordance with the military leave provided by this section].
(b) To the extent a provision of this section that was in
effect before November 25, 1996, would provide a member who was on
active service with the pension system before November 25, 1996,
with greater rights, the prior provision of this section applies
[Any member inducted into the armed forces as a draftee must reapply
for reinstatement with the member's prior department within 90 days
after the date of honorable discharge or separation from military
service. On such reinstatement, the member may elect to repay the
member's contributions at any time under the procedure described by
Subsection (h) of this section].
(c) Payment for credit for pension service under this
section [Any member enlisting in the armed forces, other than as a
reservist, whose military service between June 24, 1948, and August
1, 1961, did not exceed four years, or whose military service began
after August 1, 1961, and did not exceed five years if the fifth
year is at the request and convenience of the federal government,
and who was honorably discharged or separated from service is
guaranteed, under the provisions of coverage described by this
subsection, the right to restore pension service under the
procedure described by Subsection (h) of this section. The four-
and five-year leaves permitted by this subsection apply to all of a
member's employment with the city. An enlistment plus any number of
reenlistments may not exceed the four- or five-year limitations
stated above.
[(d) Any member ordered to an initial period of active duty
for training in a reserve component of not less than 12 consecutive
weeks is entitled to restore pension service for the period absent
from the member's department, if the member returns to the member's
department within 31 days after the date of honorable discharge or
separation from duty in the reserve unit.
[(e) Any member serving in a reserve component, voluntarily
or involuntarily, may remain on military leave for four years,
which may be extended for periods when the President of the United
States calls the reserve unit into active duty. The service
extension for members joining a reserve unit voluntarily is
available only when the additional service is at the request and for
the convenience of the federal government. Any member returning to
the member's department under this provision must report back to
work within the time specified to the member by the department,
giving due regard for travel time and hospitalization, if required.
Any inquiry into the validity of orders extending terms of
reservist active duty for training will be referred to the
Department of Labor's Office of Veterans' Employment and Training.
[(f) Any member on military leave for short periods of
authorized training, such as two-week encampments, are treated as
on leave with pay for up to 15 working days in any one calendar year,
during which time pension service automatically accrues. Leave in
excess of 15 days will be treated as described by Subsection (e) of
this section.
[(g) With the exception of those circumstances described by
Subsection (f) of this section, the city is not required to match
contributions made by members under the terms of this section.
[(h) Repayment] shall be made in accordance with Section
5.07 of this article and a [the procedure set forth in any] uniform
and nondiscriminatory [military leave and payment] procedure
adopted by the board [and in effect from time to time].
Sec. 5.09. NON-UNIFORMED [NONMILITARY] LEAVE OF ABSENCE.
(a) An "authorized non-uniformed leave of absence" means any leave
of absence that meets one of the following requirements
[conditions]:
(1) the leave of absence was unpaid and granted by the
member's department in accordance with the federal Family and
Medical Leave Act of 1993 (29 U.S.C. Section 2601 et seq.); or
(2) the leave of absence was unpaid and was [must be]
an official leave authorized and certified by the chief of the
member's [either] department as being beneficial to[; and
[(2) the leave of absence must be for the purpose of
benefitting] the department.
(b) Subject to the requirements of this section and any
procedures adopted by the board, a [A] member may receive pension
service for time spent away from the member's [either] department
on an authorized non-uniformed [nonmilitary] leave of absence. To
receive pension service under this section [for a nonmilitary leave
of absence, the following conditions must be met:
[(1) before the date the member's leave of absence is to
begin], the member must file with the executive director
[administrator] a written application to pay to the fund both:
(1) the member contributions the member would have
made to the fund had the member remained on active service and had
there been no change in the member's position or hours of work
during the period of the authorized non-uniformed leave of absence;
and
(2) the contributions the city would have made to the
fund on the member's behalf [any contributions that will accrue
during the member's leave as set forth in Subdivisions (2) and (3)
of this subsection;
[(2) the member must agree to pay into the fund the
amount the member would have contributed had the member remained on
active service, the amount to be based on the computation pay the
member would have normally received had there been no change in the
member's position during the period of leave;
[(3) the member must agree to pay into the fund an
amount equal to the amount the city would have contributed computed
on the basis of total wages and salary the member would normally
have received] had the member remained on active service and had
there been no change in the member's position or hours of work
during the period of the authorized non-uniformed leave of absence.
(b-1) Contributions made under Subsection (b)(2) of this
section may not be refunded to the member.
(b-2) The written application described by Subsection (b)
of this section must be filed before the member's authorized
non-uniformed leave of absence begins, unless the pension system
determines that it would not be reasonable to expect the member to
file the application before the authorized non-uniformed leave of
absence begins, in which case the application must be filed as soon
as circumstances permit, as determined by the pension system.
[leave, the payment to represent the total amount that would have
been contributed by the city on the member's behalf had the member
remained on active service and paid in addition to the amount the
member must contribute as set forth in Subdivision (2) of this
subsection;]
(b-3) To receive pension service under this section, the
following additional conditions must also be met:
(1) [(4)] if the member's contribution rate, the
city's contribution rate, or both the member's and city's
contribution rates change before the end of the member's authorized
non-uniformed leave of absence [changes as provided by Section 4.02
of this article], the percentage [of total wages and salary]
required to be paid by the member also changes, so that the amount
paid by the member in accordance with this section always equals the
amount that would have been contributed by the member, and by the
city on the member's behalf had the member remained on active
service[, and in no event is the city required to pay into the fund
any contributions that would have been made on behalf of a member
had the member remained on active service during the period of an
authorized leave of absence];
(2) [(5)] payment of contributions as set forth in
Subsection (b) of this section [Subdivisions (3) and (4) of this
subsection] shall begin coincident with the beginning of the
applicable authorized non-uniformed leave of absence and shall be
made monthly to the executive director [administrator] for deposit
in the fund, unless the board authorizes the deferment of the
payments, in which case the payments must include interest
calculated in accordance with Subsection (b-4) of this section
[until the member has returned to active service];
(3) no pension service will be granted to the member
until the member returns to active service, and if the member does
not return to active service, the contributions paid, including any
interest paid, will be returned to the member except as provided by
Subsection (c) of this section;
(4) if the board authorizes the deferment of the
payments under Subdivision (2) of this subsection, the payment must
[may] be made either by authorizing the deduction of pro rata
portions of the total amount due from the member's salary over a
one-year period, or by cash payment made to the executive director
[administrator] within one year after the date of the member's
return to active service, except that the board may approve a longer
period for making the payment if it finds that the one-year limit
would work a financial hardship on the member;
(5) [(6)] the member must return to active service
within 90 days after the date the member's authorized non-uniformed
leave of absence expires, or if the member's authorized
non-uniformed leave of absence does not have a fixed expiration
date, within a reasonable time to be determined by the board, or the
member forfeits the right to pay for the leave time; and
(6) [(7)] no member may ever be allowed to pay leave of
absence contributions under this section for any time in excess of
the time actually spent on an authorized non-uniformed leave of
absence.
(b-4) For purposes of Subsection (b-3)(2) of this section,
interest is calculated from the date the member's payment was first
due, at the interest rate from time to time used in the pension
system's actuarial rate of return assumptions, compounded annually
until the date the principal and accrued interest are repaid in
full.
(c)(1) If a member of the combined pension plan is disabled
or dies while on an authorized non-uniformed leave of absence, the
member or the member's designee is [heirs are] entitled to [either]
a refund of contributions pursuant to Section 4.04 of this article
or the member or the member's qualified survivors are entitled to
benefits under the provisions of this article, to the extent
applicable.
(2) A member who is disabled or dies while on an
authorized non-uniformed leave of absence pursuant to this section
may receive no pension service for any portion of the period of the
leave,[;] except that if the member had, before the member's
disability or death, paid for contributions while on an authorized
non-uniformed leave of absence in accordance with [Subsection (a)
of] this section, the member shall receive pension service for the
leave time actually paid for at the time of the member's disability
or death. The [, but the] member may receive no pension service for
any portion of the period of leave for which contributions were
[have] not [been] paid to the executive director [administrator]
for deposit in the fund.
SECTION 27. Section 6.01, Article 6243a-1, Revised
Statutes, is amended by amending Subsections (a), (b), (d), (e),
(f), (g), and (h) and adding Subsections (a-1) and (a-2) to read as
follows:
(a) A Group A member [or former Group A member] must have 20
years of pension service to be eligible for a Group A retirement
pension under this section. A member's benefit election
[application] under this section, once approved [made], is
irrevocable.
(a-1) If a Group A pensioner returns to active service as a
police officer or fire fighter with the city, the person's Group A
retirement pension ceases until [the time] that [the] person again
leaves active service with the city.
(a-2) If a Group A pensioner resumes employment with the
city in a capacity other than as a police officer or fire fighter,
the pensioner's Group A retirement pension continues during the
period of employment, except the pensioner may not accrue
additional credit for pension service during this period.
Additional credit for pension service does not accrue during any
period in which a Group A pensioner becomes employed by the city
unless the additional credit is attributable to active service as a
police officer or fire fighter with the city.
(b) At age 50 a Group A member [or former Group A member] is
eligible to begin drawing a monthly Group A retirement pension. A
monthly Group A retirement pension equals 50 percent of the base pay
per month, plus 50 percent of any longevity pay the Group A member
was receiving at the time the member left active service. Although
the number of years used in the computation of longevity pay remains
fixed at the earlier of the time a Group A member [or former Group A
member] leaves active service or begins participation in DROP, the
monthly rate of longevity pay used in this computation is subject to
change in the event of an amendment to the state law governing
longevity pay. The monthly Group A retirement pension benefits of
Group A pensioners shall be adjusted from time to time in a like
manner.
(d) The element of annual retirement pension computed under
Subsection (c)(1) of this section is subject to the following
limitations:
(1) it shall be prorated for the year in which the
pensioner begins receiving a retirement pension;
(2) it shall be payable only to those Group A
pensioners who, as [a] Group A members [member] on active service,
received city service incentive pay and who receive a monthly Group
A retirement pension as determined under Subsection (b) of this
section on the last day of September of each year; and
(3) it shall be paid to Group A pensioners as long as
the city continues to pay city service incentive pay to Group A
members on active service.
(4) Notwithstanding Subsections (b) and (c) of this
section, a Group A member with a minimum of 20 years of pension
service may apply for an actuarially reduced retirement pension to
begin no earlier than when the member attains age 45 but before the
member attains age 50. The Group A member [or a former Group A
member] who has made an application may receive a retirement
pension calculated under Subsections (b) and (c) of this section
reduced by two-thirds of one percent per month for each whole
calendar month the benefit is payable before the month in which the
Group A member [or former Group A member] attains age 50.
(e) At age 55 a Group A member [or former Group A member] is
eligible to begin drawing a monthly retirement pension computed as
follows:
(1)(A) at the rate of three percent of base pay for
each year, prorated for fractional years, of pension service, with
a maximum of 32 years of pension service, or 96 percent of base pay;
or
(B) if the Group A member [or former Group A
member] had 34 or more years of pension service as of April 30,
1990, then the member's retirement pension is calculated at the
rate calculated under the terms of the combined pension plan in
effect on April 30, 1990, if the resulting amount would be greater
than the amount calculated under Paragraph (A) of this subdivision;
plus
(2) one-half of the longevity pay the Group A member
[or former Group A member] was receiving at the time the person left
active service; plus
(3) 1/24th, without subsequent adjustment, of the
annualized amount of the city service incentive pay the Group A
member [or former Group A member] received at the time the person
left active service.
(f) [Notwithstanding Subsection (e) of this section, Group
A pensioners payments under Subsection (e)(3) of this section are
contingent on the city's continuing payment of city service
incentive pay to Group A members on active service.] For purposes
of Subsection (e) of this section, base pay and longevity pay are
the amounts in effect on the earlier of the date the member begins
participation in DROP or the date benefits are to begin, without
subsequent adjustment.
(g) Notwithstanding Subsection (e) of this section, a Group
A member [or former Group A member] with 20 or more years of pension
service may apply for an actuarially reduced Group A retirement
pension beginning on or after the date the Group A member [or former
Group A member] attains age 50 but before the person attains age 55.
The Group A member [or former Group A member] may receive a
retirement pension calculated under Subsection (e) of this section
reduced by two-thirds of one percent per month for each whole
calendar month the benefit is payable before the month in which the
Group A member [or former Group A member] attains age 55.
(h) Entitlement to the Group A retirement pension described
by this section is subject to the following conditions:
(1) a written application must be filed with the
executive director [administrator];
(2) the grant of a Group A retirement pension by the
board must be made at a meeting of the board held during the month
the [Group A] retirement pension is to become effective, or as soon
after that as administratively possible; and
(3) the Group A member must no longer be on active
service.
SECTION 28. Section 6.02, Article 6243a-1, Revised
Statutes, is amended to read as follows:
Sec. 6.02. GROUP B RETIREMENT PENSION. (a) If a [A] Group B
member [or former Group B member who] has accrued five or more years
of pension service, is no longer on active service with the
department, has not withdrawn the member's contributions, and
otherwise meets the age and pension service requirements under the
applicable provision of this section, the member may apply [may
make application] for a Group B retirement pension under this
section. A member's benefit election application under a provision
of this section, once approved, is irrevocable.
(a-1) If a Group B pensioner returns to active service as a
police officer or fire fighter with the city, the person's [on
reaching 50 years of age, or for an actuarially reduced] Group B
retirement pension ceases until that person again leaves active
service with the city.
(a-2) If a Group B pensioner resumes employment with the
city in a capacity other than as a police officer or fire fighter,
the pensioner's Group B retirement pension continues during the
period of employment except the pensioner may not accrue additional
credit for pension service during this period. Additional credit
for pension service does not accrue during any period in which a
Group B pensioner becomes employed by the city unless the
additional credit is attributable to active service as a police
officer or fire fighter with the city [on reaching 45 years of age].
(b) A [former] Group B member who began active service
before March 1, 2011, and who has attained at least 50 years of age,
or who began active service on or after March 1, 2011, and has
attained at least 58 years of age, and who otherwise meets the
requirements of Subsection (a) of this section may elect to receive
a Group B retirement pension that shall be calculated as follows:
(1) for a member who began active service before March
1, 2011, the member's retirement pension shall be the sum of:
(A) the number of years of pension service before
September 1, 2017, prorated for fractional years, times three
percent of the average computation pay determined over the 36
consecutive months of pension service in which the Group B member
received the highest computation pay; plus
(B) the number of years of pension service on or
after September 1, 2017, prorated for fractional years, times the
applicable percentage prescribed by Subsection (b-1) of this
section of the average computation pay determined over the 60
consecutive months of pension service in which the Group B member
received the highest computation pay; or
(2) for a member who began active service on or after
March 1, 2011, the member's retirement pension shall be the number
of years of pension service, prorated for fractional years, times
2.5 percent of the average computation pay determined over the 60
consecutive months of pension service in which the member received
the highest computation pay.
(b-1) For purposes of Subsection (b)(1)(B) of this section,
the applicable percentage is based on the age of the Group B member
when the member's retirement pension begins as set forth below:
Age of Member When Retirement Pension Begins Percent Age of Member When Retirement Pension Begins Percent
Age of Member When Retirement Pension Begins Percent
58 and older 2.5% 58 and older 2.5%
58 and older 2.5%
57 2.4% 57 2.4%
57 2.4%
56 2.3% 56 2.3%
56 2.3%
55 2.2% 55 2.2%
55 2.2%
54 2.1% 54 2.1%
54 2.1%
53 and younger 2.0% 53 and younger 2.0%
53 and younger 2.0%
(b-2) Days during which the member earned no pension service
due to a termination of active service or otherwise must be
disregarded in determining the 36 or 60 consecutive months of
highest computation pay under Subsection (b)(1) or (2) of this
section, as appropriate. The pension benefit calculated under
Subsection (b) of this section may not exceed the greater of:
(1) 90 percent of the member's average computation pay
determined under the applicable subsection; or
(2) the vested and accrued benefit of a member as
determined on August 31, 2017. [or Group B pensioner who withdrew
any of the person's Plan B or Group B contributions and who on again
becoming a Group B member does not replace such previously
withdrawn contributions with interest thereon as provided by
Section 4.04 of this article must earn at least five years of
pension service after the time the person returns to active service
to be eligible for a Group B retirement pension.]
(c) Except as provided by Subsection (c-2) of this section,
[Entitlement to] a Group B member who has either attained at least
45 years of age on September 1, 2017, or who attains at least 53
years of age after September 1, 2017, and who otherwise meets the
requirements of Subsection (a) of this section may elect to receive
an actuarially reduced Group B retirement pension calculated in
accordance with Subsection (c-1) of this section:
(1) not earlier than the member's 45th or 53rd
birthday, as applicable; and
(2) not later than the member's 50th or 58th birthday,
as applicable.
(c-1) Except as provided by Subsection (c-2) of this section
and subject to Section 6.021 of this article, a Group B member who
applies for an actuarially reduced Group B retirement pension under
Subsection (c) of this section shall receive a pension calculated
under Subsection (b) of this section, reduced by two-thirds of one
percent per month, for each whole calendar month the benefit is
payable before the month in which the member attains:
(1) for members who attained at least 45 years of age
on September 1, 2017, 50 years of age; or
(2) for members not described by Subdivision (1) of
this subsection who attain at least 53 years of age after September
1, 2017, 58 years of age.
(c-2) If, for purposes of Subsection (c-1) of this section,
a Group B member's pension benefit calculated under Subsection (b)
of this section is equal to 90 percent of the member's average
computation pay, the member is entitled to a Group B retirement
pension under Subsection (c) of this section at 45 or 53 years of
age, as applicable, that is not actuarially reduced as provided
under Subsection (c-1) of this section [retirement pension as
described by Subsection (a) or (b) of this section is subject to the
following conditions:
[(1) written application must be filed with the
administrator;
[(2) the grant of the Group B retirement pension by the
board must be made at a meeting of the board held during the month
the Group B retirement pension is to become effective, or as soon
after that as possible; and
[(3) the Group B member may no longer be on active
service].
(d) Except as provided by Subsection (d-2) of this section,
a [A] Group B member who has accrued 20 or more years of pension
service and has been on active service at any time on or after
January 1, 1999, may elect to apply for a Group B retirement pension
beginning at any time after the Group B member leaves active
service, regardless of age. A Group B member may elect a Group B
retirement pension under this subsection as follows:
(1) if the member accrued 20 or more years of pension
service on or before September 1, 2017, the member may elect a
pension under this subsection that is computed in the same manner as
the Group B retirement pension under Subsection (b)(1) of this
section except that the percentage set forth below must be used
instead of the three percent multiplier prescribed by Subsection
(b)(1)(A) of this section:
Age of Member When Retirement Pension Begins Percent Age of Member When Retirement Pension Begins Percent
Age of Member When Retirement Pension Begins Percent
48 and 49 2.75% 48 and 49 2.75%
48 and 49 2.75%
47 2.5% 47 2.5%
47 2.5%
46 2.25% 46 2.25%
46 2.25%
45 and younger 2%; and 45 and younger 2%; and
45 and younger 2%; and
(2) except as provided by Subsection (d-2) of this
section and subject to Section 6.021 of this article, if the member
accrued 20 or more years of pension service after September 1, 2017,
the member may elect a pension under this subsection computed in the
same manner as the Group B retirement pension under Subsection
(b)(2) of this section except that the percentage set forth below
must be used instead of the 2.5 percent multiplier prescribed by
Subsection (b)(2) of this section:
Age of Member When Retirement Pension Begins Percent Age of Member When Retirement Pension Begins Percent
Age of Member When Retirement Pension Begins Percent
57 2.4% 57 2.4%
57 2.4%
56 2.3% 56 2.3%
56 2.3%
55 2.2% 55 2.2%
55 2.2%
54 2.1% 54 2.1%
54 2.1%
53 and younger 2.0% 53 and younger 2.0%
53 and younger 2.0%
(d-1) A member who elects a pension under Subsection (d) of
this section is not entitled to:
(1) minimum benefits under either Section 6.10A or
6.11 of this article; or
(2) benefits under Subsection (g) of this section.
(d-2) If, for purposes of Subsection (d) of this section, a
Group B member's pension benefit calculated under Subsection (b) of
this section is equal to 90 percent of the member's average
computation pay, the member is entitled to a Group B retirement
pension under Subsection (d) of this section that is not reduced as
provided under Subsection (d)(1) or (2) of this section [retirement
pension shall be computed at the rate of three percent of the
average computation pay determined over the 60 consecutive months
in which the Group B member received the highest computation pay,
multiplied by the number of years, prorated for fractional years,
of pension service to a maximum of 32 years of pension service or 96
percent of the computation pay as determined under this
subsection].
(e) A [However, a] Group B member or former Group B member
with 34 or more years of pension service as of April 30, 1990, is
entitled to [shall] receive the greater of a Group B retirement
pension calculated under the terms of Plan B as in effect on that
date or a Group B retirement pension calculated pursuant to
Subsection (b) [(d)] of this section.
[(f) A Group B member, or any former Group B member who was a
Group B member as of any date after April 30, 1990, may apply for an
actuarially reduced Group B retirement pension beginning no earlier
than the person's 45th birthday but before the person's 50th
birthday. A Group B member or former Group B member who applies for
an actuarially reduced Group B retirement pension beginning on or
after the person's 45th birthday shall receive a pension calculated
under Subsection (d) of this section, reduced by two-thirds of one
percent per month for each whole calendar month the pension would be
payable before the month in which the Group B member or former Group
B member attains age 50.]
(g) In no event may any Group B member [or former Group B
member] who was at any time a Group A member or a contributing
member of the old plan or Plan A, and who satisfied the applicable
age and length-of-service requirements of the applicable plan at
the time the person left active service, receive a retirement
pension in an amount less than the amount the person would be
entitled to receive as a Group A member.
(h) Notwithstanding any other provision of this section, a
[A former] Group B member who was not a Group B member on or after
January 1, 1993 [May 1, 1990], shall receive a retirement pension
calculated under the applicable provisions of Plan B [this plan] as
that plan existed [in effect] on the date the member terminated
[person left] active service.
(i) Entitlement to a Group B retirement pension under
Subsection (b), (c), (d), or (e) of this section is subject to the
following conditions:
(1) a written application must be filed with the
executive director;
(2) the grant of the Group B retirement pension by the
board must be made at a meeting of the board held during the month
the retirement pension is to become effective, or as soon after as
administratively possible; and
(3) the Group B member may no longer be on active
service [A former Group B member who was not a Group B member after
April 30, 1990, may request an actuarially reduced retirement
pension beginning no earlier than the person's 45th birthday but
before the person's 50th birthday]. [A former Group B member
described by this subsection shall receive a retirement pension
under the applicable provisions of Plan B as in effect on the date
the person left active service, reduced by two-thirds of one
percent per month for each whole calendar month the pension would be
payable before the month in which the former Group B member attains
age 50.]
SECTION 29. Part 6, Article 6243a-1, Revised Statutes, is
amended by adding Sections 6.021 and 6.022 to read as follows:
Sec. 6.021. AUTHORITY TO ADOPT ALTERNATIVE MULTIPLIERS FOR
COMPUTATION OF CERTAIN GROUP B BENEFITS. (a) For purposes of
Section 6.02(c-1) or (d)(2) of this article, the board by rule may
adopt alternative multipliers, including an alternative table
prescribing actuarially appropriate multipliers. In adopting
rules under this subsection, the board shall designate the date on
which the alternative multiplier shall take effect.
(b) Copies of any alternative multipliers adopted under
this section must be maintained at the principal office of the
pension system and published on the pension system's publicly
available Internet website.
Sec. 6.022. AUTHORITY TO REDUCE RETIREMENT AGE.
Notwithstanding any other law, the board may reduce the age at which
a Group B member is eligible to begin receiving a retirement
pension, including an actuarially reduced retirement pension,
under Section 6.02 of this article if the board determines that the
reduction will not cause the amortization period of the unfunded
actuarial accrued liability of the pension system to exceed 25
years, after taking into account the impact of the reduction. A
board action under this section may not take effect until the State
Pension Review Board reviews the board's determination described by
this section.
SECTION 30. Section 6.03, Article 6243a-1, Revised
Statutes, is amended by amending Subsections (a), (d), (f), and (g)
and adding Subsections (k) and (l) to read as follows:
(a) If a member who is on active service, other than a member
participating in DROP, becomes disabled to the extent that the
member cannot perform the member's duties with the member's
department, the member may apply for a disability pension, subject
to [in accordance with] any uniform and nondiscriminatory
disability application procedure and recall and review procedure
adopted by the board and in effect from time to time.
(d) No disability pension may be paid to a member for any
disability if the disability was a result of an intentionally
self-inflicted injury or a chronic illness resulting from an
addiction by the member through a protracted course of [noncoerced]
indulgence in alcohol, narcotics, or other substance abuse that was
not coerced.
(f) No disability pension may be paid if the chief of the
member's department is able to provide the member with duties that
are within the member's physical or mental capabilities, [as long
as the board agrees that the duties are within the member's
capabilities,] even though the duties are different from the duties
the member performed before the disability.
(g) Written application for a disability pension must be
filed with the executive director not later than the 180th day after
the date the member leaves active service [administrator]. The
application must be accompanied by a recommendation from the health
director. This recommendation shall contain a statement indicating
whether the member became disabled while the member was on duty or
off duty and whether the disability was service-connected or was
not service-connected [nonservice-connected].
(k) For purposes of Sections 6.04 and 6.05 of this article
and this section:
(1) longevity pay and incentive pay are the amounts in
effect on the date the benefits are to begin, without subsequent
adjustment; and
(2) except as provided by Section 6.05(b-1) of this
article, base pay is the amount in effect on the date benefits are
to begin, without subsequent adjustment.
(l) Notwithstanding any other law, Subchapter B, Chapter
607, Government Code, applies to all members without regard to the
employing department or job assignment.
SECTION 31. Part 6, Article 6243a-1, Revised Statutes, is
amended by adding Section 6.035 to read as follows:
Sec. 6.035. DISABILITY BENEFITS FOR CERTAIN PERSONS IN
UNIFORMED SERVICES. (a) In this section, "uniformed services" has
the meaning assigned by the federal Uniformed Services Employment
and Reemployment Rights Act of 1994 (38 U.S.C. Section 4301 et
seq.).
(b) This section applies to a person who was released from
the uniformed services after December 17, 2001, under conditions
that would have made the person eligible for benefits under Section
414(u) of the code if the person could have returned to active
service.
(c) If a person subject to this section was unable to return
to active service by reason of disability incurred while on a leave
of absence due to service in the uniformed services, that person is
entitled to a regular disability pension in accordance with Section
6.03 of this article, calculated in accordance with Section 6.04 of
this article.
(d) Notwithstanding Section 6.03(g) of this article, a
written application for a disability pension must be filed not
later than the 180th day after the date of the person's release from
the uniformed services.
(e) A person subject to this section is entitled to receive
pension service for the period of service with the uniformed
services only to the extent that contributions are made for that
period in accordance with this article.
SECTION 32. Section 6.04, Article 6243a-1, Revised
Statutes, is amended to read as follows:
Sec. 6.04. CALCULATION OF REGULAR [GROUP A] DISABILITY
BENEFITS [PENSION]. (a) Subject to Subsection (g) of this section,
if [If] a Group A member's application for a Group A disability
pension has been approved by the board pursuant to Section 6.03 of
this article, including any procedures adopted under that section,
the Group A member may elect to receive a Group A disability pension
calculated:
(1) in the same manner as the benefit under Sections
6.01(b) and (c) of this article; or
(2) under Subsection (c) [(b)] of this section.
(b) An election under Subsection (a) of this section, once
approved by the board [made], is irrevocable.
[(b) When a Group A member elects to accept a Group A
disability pension under this section, it shall be calculated as
provided by Subsections (c), (d), and (e) of this section.]
(c) Subject to Subsection (g) of this section, [If] a Group
A [member's disability results during the performance of duties
with either department, the] member who elects to have benefits
determined under this subsection is entitled to a monthly
disability pension calculated as follows:
(1) at a rate of three percent of base pay for each
year, prorated for fractional years, of pension service, with a
[minimum of 20 years of pension service being deemed credited and a]
maximum of 32 years of pension service being credited, or 96 percent
of base pay [or], except that if the Group A member had 34 or more
years of pension service as of April 30, 1990 [May 1, 1990], the
member is entitled to [shall] receive the greater of a disability
pension calculated under the terms of the combined pension plan in
effect on that date or as calculated under this subdivision; plus
(2) one-half of the longevity pay the Group A member
was receiving at the time the member left active service; plus
(3) subject to Subsection (d) of this section,
1/24th[, without subsequent adjustment,] of the annualized amount
of city service incentive pay the Group A member received at the
time the member left active service.
(c-1) The disability pension calculated under Subsection
(c) of this section may not exceed the greater of:
(1) 90 percent of the member's average base pay
determined under the applicable subsection; or
(2) the vested and accrued disability pension of the
member as determined on August 31, 2017.
(d) Payments of the amounts described by [Notwithstanding
Subsection (c) of this section, the amount of a disability
retirement benefit of a Group A pensioner who is on disability
retirement under] Subsection (c)(3) of this section are [is]
contingent on the city's continuing payment of city service
incentive pay to Group A members on active service. [For purposes
of this subsection, base pay and longevity pay are the amounts in
effect on the date the benefits are to begin, without subsequent
adjustment.]
(e) If a Group B [A] member's application for a Group B
disability pension has been approved by the board under Section
6.03 of this article, including any procedures adopted under that
section, the Group B member may elect to receive a Group B
disability pension calculated in the manner described by Subsection
(f) or (f-1) of this section, subject to Subsection (g) of this
section [disability does not result during the performance of the
member's duties with either department, the member is entitled to a
monthly disability pension calculated:
[(1) at a rate of three percent of base pay for each
year, prorated for fractional years, of pension service, with a
maximum of 32 years of pension service, or 96 percent of base pay,
except that if the Group A member had 34 or more years of pension
service as of April 30, 1990, the member shall receive the greater
of a disability pension calculated under the combined pension plan
in effect on that date or as calculated under this subdivision; plus
[(2) one-half of the longevity pay the Group A member
was receiving at the time the member left active service; plus
[(3) 1/24th of the annualized amount of city service
incentive pay the Group A member received at the time the member
left active service, without regard to any subsequent adjustment].
(f) Subject to Subsections (f-1), (f-3), and (g) of this
section, the disability pension of a Group B member shall be
calculated as follows:
(1) for a member who began active service before March
1, 2011, the member's disability pension shall be the sum of:
(A) the member's number of years of pension
service earned before September 1, 2017, prorated for fractional
years, times three percent of the average computation pay
determined over the 36 consecutive months of pension service in
which the member received the highest computation pay; plus
(B) the number of years of pension service,
including pension service credit imputed under Section 6.05(c) of
this article, earned on or after September 1, 2017, prorated for
fractional years, times the applicable percentage prescribed by
Section 6.02(b-1) of this article of the average computation pay
determined over the 60 consecutive months of pension service in
which the member received the highest computation pay; or
(2) for a member who began active service on or after
March 1, 2011, the member's disability pension shall be the number
of years of pension service, including pension service credit
imputed under Section 6.05(c) of this article, prorated for
fractional years, times 2.5 percent of the average computation pay
determined over the 60 consecutive months of pension service in
which the member received the highest computation pay.
(f-1) Notwithstanding Subsection (f) of this section, for a
Group B member who had 34 or more years of pension service as of
April 30, 1990, the member is entitled to receive the greater of a
disability pension calculated under the terms of Plan B in effect on
April 30, 1990, or calculated under Subsection (f) of this section.
(f-2) For purposes of Subsections (f) and (f-1) of this
section:
(1) any partial year of pension service for a Group B
member's first 20 years of pension service is counted as a full year
of pension service, if the member was considered by the member's
department to have worked a normal full-time schedule at the time of
the disability;
(2) if the member has less than 36 or 60 consecutive
months of pension service, as applicable, the member's average
computation pay will be computed based on the member's entire
pension service; and
(3) days during which the member earned no pension
service due to a termination of active service or otherwise must be
disregarded in determining the 36 or 60 consecutive months of
highest computation pay.
(f-3) The disability pension calculated under Subsection
(f) or (f-1) of this section may not exceed the greater of:
(1) 90 percent of the member's average computation pay
determined under the applicable subsection; or
(2) the vested and accrued disability pension of the
member as determined on August 31, 2017 [Payments of the amounts
described by Subsection (e)(3) of this section are contingent on
the city's continuing payment of city service incentive pay to
Group A members on active service].
(g) The disability pension calculated in accordance with
this section, including both a Group A benefit described by
Subsection (a) of this section and a Group B benefit described by
Subsection (f) of this section, shall be reduced dollar-for-dollar
by any monthly disability compensation benefit received under
Section 6.05 of this article. If the monthly disability
compensation benefit provided to a member under Section 6.05 of
this article equals or exceeds any benefit the member is entitled to
under this section or Section 6.01(b) or (c) of this article, the
member may not receive the benefit under this section [For purposes
of Subsection (e)(3) of this section, base pay and longevity pay are
the amounts in effect on the date the benefits are to begin, without
subsequent adjustment].
SECTION 33. The heading to Section 6.05, Article 6243a-1,
Revised Statutes, is amended to read as follows:
Sec. 6.05. COMPENSATION BENEFITS FOR SERVICE-CONNECTED
[CALCULATION OF GROUP B] DISABILITY [BENEFITS].
SECTION 34. Section 6.05, Article 6243a-1, Revised
Statutes, is amended by amending Subsections (a), (b), and (c) and
adding Subsection (b-1) to read as follows:
(a) If a member leaves active service at any time due to
disability and the board determines that the member with the
disability became unable to perform the member's duties with the
member's department due to an injury or sickness incurred in the
performance of the member's duties, the member is entitled to
periodic disability compensation benefits in accordance with this
section [Group B member's application for a Group B disability
pension has been approved by the board pursuant to Section 6.03 of
this article, including any procedures adopted under that section,
the Group B member may, depending on the circumstances, elect to
receive a Group B disability pension calculated in the manner
described by Subsection (b) or (c) of this section].
(b) Subject to Subsection (b-1), [If] a Group A [B] member
whose disability, as determined by the board, was caused by an
injury or sickness incurred in the performance of the member's duty
shall receive a monthly benefit equal to 60 percent of the member's
base pay. For purposes of this subsection, "base pay" is the amount
in effect on the date compensation benefits under this section are
to begin, without subsequent adjustment.
(b-1) Instead of receiving a periodic disability
compensation benefit under Subsection (b) of this section, a Group
A member who is entitled to periodic disability compensation
benefits under this section may elect, before the benefits begin,
to receive those benefits as a monthly benefit equal to 50 percent
of the member's base pay adjusted from time to time to reflect
changes in base pay that occur after the member began receiving a
monthly compensation benefit under this section [becomes disabled
during the performance of the member's duties with either
department, the member is entitled to a monthly disability pension
calculated at a rate of three percent of the average computation pay
determined over the 60 consecutive months in which the Group B
member received the member's highest computation pay multiplied by
the number of years, prorated for fractional years, of the member's
pension service with a minimum of 20 years of pension service being
deemed credited, or 60 percent of average computation pay
determined over the 60 consecutive months in which the Group B
member received the member's highest computation pay, except that
if the Group B member has less than five years of pension service,
the Group B member's average computation pay will be computed based
on the member's entire pension service. If a Group B member had 34
or more years of pension service as of April 30, 1990, the Group B
member is entitled to receive the greater of a Group B disability
pension calculated under the terms of Plan B in effect on that date
or calculated pursuant to this subsection].
(c) A [The Group B disability pension for any] Group B
member whose disability, as determined by the board, was caused by
an injury or sickness incurred in the performance of the member's
duty shall receive a monthly benefit equal to the disability
pension under Sections 6.04(f), (f-1), (f-2), and (f-3) of this
article except that if the member:
(1) does not have 20 years of pension service, the
member is considered to have 20 years of pension service for the
purposes of calculating the disability pension under that section;
and
(2) has less than 36 or 60 consecutive months, as
applicable, of employment with the department, the member's average
computation pay will be computed based on all the member's
computation pay, and days during which the member earned no pension
service due to a termination of active service or otherwise must be
disregarded in determining either the 36 or 60 consecutive months
of highest computation pay [does not result during the performance
of the member's duties with either department shall be computed at a
rate of three percent of the average computation pay determined
over the 60 consecutive months in which the Group B member received
the member's highest computation pay multiplied by the number of
years, prorated for fractional years, of the member's pension
service, except that any partial year of pension service for the
first 20 years of pension service shall be counted as a full year of
pension service. If the Group B member has less than five years of
pension service, the Group B member's average computation pay will
be computed based on the member's entire pension service, and if a
Group B member had 34 or more years of pension service as of April
30, 1990, the Group B member is entitled to receive the greater of a
disability pension calculated under the terms of Plan B in effect on
that date or calculated pursuant to this subsection].
SECTION 35. Section 6.05(d), Article 6243a-1, Revised
Statutes, is redesignated as Section 6.055, Article 6243a-1,
Revised Statutes, and amended to read as follows:
Sec. 6.055. REDUCTION IN DISABILITY OR COMPENSATION
BENEFITS FOR CERTAIN PERSONS. (a) In this section, "earned income"
means income earned by a Group B pensioner in the form of wages,
salaries, commissions, fees, tips, unemployment benefits, and
other amounts received by virtue of employment or self-employment
but paid before any deduction for taxes or insurance. In addition,
earned income also includes those amounts contributed on a
before-tax basis to any retirement plan or employee health and
welfare benefit plan.
(b) [(d)] The board shall require any Group B pensioner who
became a member of Plan B or the combined pension plan on or after
May 1, 1990, and who is receiving a Group B disability pension under
Section 6.04 of this article or a periodic disability compensation
under Section 6.05 of this article [in accordance with Subsection
(b) or (c) of this section] to provide the board annually, on or
before July 1 [May 1] of each year, with a true and complete copy of
those portions of the person's federal and, if applicable, state
tax return, including appropriate schedules, for the previous
calendar year that indicate the person's occupations, if any, and
earned income for the previous calendar year. If the pensioner did
not file a tax return for the previous calendar year, the board may
require other documentation reflecting the pensioner's occupation
or earned income that the board determines appropriate.
(c) The pension system [However, the board] may waive the
July 1 [May 1] date under Subsection (b) of this section in lieu of
one later in the same calendar year if the Group B pensioner
provides the board with a true and complete copy of a grant of an
extension of time for the filing of the person's tax return from the
appropriate governmental agency or a true and complete copy of an
extension request that results in any automatic extension.
(d) If, after evaluating the information received under
Subsection (b) of this section, the board finds the Group B
pensioner is or has been receiving earned income from one or more
employments, including self-employment, during the preceding year,
the board shall reduce future disability retirement [pension]
payments to the Group B pensioner in accordance with the following
formula: $1 for each $1 that the sum of "a" + "b" is greater than
"c," where "a" is the earned income of the Group B pensioner
attributable to the previous calendar year from the person's
employments, "b" is the total amount of Group B disability
retirement payments [pension] received by the Group B pensioner the
previous calendar year, and "c" is the annualized amount of the
average computation pay the Group B pensioner received as of the
date the person left active service.
(e) For purposes of the [this] computation under Subsection
(d) of this section, the average computation pay shall be deemed
increased at a rate of 2.75 percent [of four percent simple
interest], without compounding during the year, as of each January
1 that the Group B pensioner receives a Group B disability
retirement payment [pension].
SECTION 36. Section 6.06, Article 6243a-1, Revised
Statutes, is amended by amending Subsections (b), (e), (f), (g),
(h), (j), (k), (l), (m), (n), (o), (p), (q), (r), and (t) and adding
Subsections (e-1), (e-2), (j-1), (o-1), (o-2), (u), and (v) to read
as follows:
(b) A written application for benefits must be filed with
the executive director [administrator].
(e) If [the qualified] surviving children of a primary party
are not qualified survivors entitled to death benefits, the
[qualified surviving] spouse of the primary party who is a
qualified survivor is entitled only to receive a share of the death
benefits in the amount calculated under Section 6.07(a) [or (b)] or
Section 6.08(b)(1), (c)(1), (d)(1), or (e)(1) of this article,
whichever is applicable, and is not entitled to what otherwise
would be the [qualified] surviving children's share.
(e-1) If a primary party had [there is] no [qualifying]
surviving spouse, any [qualified] surviving child who is a
qualified survivor [children] shall receive only the amount
calculated under Section 6.07(a) [or (b)] or Section 6.08(b)(2),
(c)(2), (d)(2), or (e)(2) of this article, whichever is applicable,
and is [are] not entitled to what otherwise would be the [qualified]
surviving spouse's share.
(e-2) If a primary party does not have a [there is no
qualified surviving] spouse or [qualified surviving] children who
are qualified survivors, any [qualified] dependent parent of the
primary party who is a qualified survivor shall receive only the
amount calculated under Section 6.07(c) or Section 6.08(b)(3),
(d)(3), or (e)(3) of this article, whichever is applicable, and is
not entitled to what otherwise would be the [qualified] surviving
spouse's or [qualified] surviving children's share.
(f) The total monthly death benefits [benefit] received by
the qualified survivors of a primary party under this article,
including the primary party's [surviving] spouse, [qualified
surviving] children, or [qualified] dependent parents, [parent]
may not exceed the pension to which the deceased primary party was
entitled per month.
(g) If there is no surviving spouse or legal guardian for
the [qualified] surviving children of a primary party who are
qualified survivors and if the board determines that the
[qualified] surviving children lack the discretion to handle money,
or in other appropriate circumstances, notwithstanding any other
provision of this section, the board may request a court of
competent jurisdiction to appoint a suitable person to receive and
administer the [qualified] surviving children's money or in those
circumstances described in Subsection (n) of this section, appoint
a new trustee to administer the [qualified] surviving children's
[support] trust.
(h) With the exception of a [support] trust described in
Subsection (n) of this section, no death benefits awarded to
[qualified] surviving children may be used for any purpose other
than to benefit the [qualified] surviving children. [The board may
withhold payment of benefits if it has reason to believe the
benefits are not being properly applied.]
(j) With the exception of those circumstances described in
Subsection (n) of this section, death benefits payable [paid] to
[qualified] surviving children [living with a person other than the
surviving spouse] shall be delivered to the legal guardian of the
estate of the surviving children if one has been appointed and the
pension system has been provided proof of the appointment. If no
legal guardian has been appointed, death benefits shall be
delivered to one of the following persons, provided there is
evidence that the person is [person with whom the qualified
surviving children are living, if the board has designated the
person as being] a suitable person to receive and administer the
benefits:
(1) the surviving spouse with whom the child resides;
or
(2) the adult head of the household with whom the child
resides, if the child does not reside with the surviving spouse.
(j-1) In accordance with Subsection (h) of this section, the
recipient of a surviving child's death benefits under Subsection
(j) of this section must use the death benefits to benefit the
child. The board may[, however,] withhold payment of benefits to
anyone, if presented with evidence that the death benefits are not
being used to benefit the surviving child [but the legal guardian of
the qualified surviving children and may require proof that a
person has been appointed legal guardian of the qualified surviving
children before authorizing any benefits to be delivered to that
person].
(k) Dependent [The qualified surviving dependent] parents
of a primary party [member] who are entitled to receive death [any
survivor] benefits provided by this article may only receive the
benefits for the remainder of the dependent parents' [their] lives.
(l) The pension system [board] may require all qualified
survivors [persons] receiving death benefits[, including qualified
surviving spouses, qualified surviving children or their
guardians, and qualified surviving dependent parents,] to file
[with the administrator, at least once every two years,] a sworn
statement with the executive director concerning the qualified
survivor's [their] eligibility to continue to receive death
benefits at least once every two years, or at any other time the
executive director considers a sworn statement to be appropriate to
evidence the continued eligibility of the qualified survivor. [The
board may also require a sworn statement from any person receiving
death benefits at any time.] The board may withhold death benefits
from any person who fails or refuses to file a statement when
requested to do so.
(m) When the last qualified survivor of any primary party
becomes ineligible to continue to receive death benefits, [that
survivor shall be paid in a lump sum] an amount equal to the excess
[difference], if any, of [between] the total amount of all
contributions made to the fund by the primary party while a member
over [, and] the sum of all benefits paid to the primary party and
all of the primary party's [his] qualified survivors shall be paid
in a lump sum to the last person to receive benefits as a qualified
survivor or, if none exists, to the member's designee. The total
amount to be paid in benefits to the primary party and all qualified
survivors shall never be less than the total amount of
contributions the primary party made to the fund while a member.
(n) Notwithstanding any other provision of this section:
(1) [,] death benefits awarded to an unmarried child
who is a qualified survivor [surviving child of a primary party] who
is determined by the board to be disabled [handicapped] under the
terms of Subsection (o-2) [(o)] of this section may be paid to the
trustee of a management trust, supplemental needs or special needs
trust, or comparable trust [support trust] established for the
benefit of the child, if the trust meets the requirements set forth
in a procedure adopted from time to time by the board [qualified
surviving child if:
[(1) an opinion of counsel of the trustee of the
support trust is furnished to the board indicating that payments
made to the support trust will not, under existing law, be
considered a resource of the qualified surviving child under Title
42, Section 1396(a)(17), of the United States Code or any successor
statute, as well as applicable state law or regulations governing
the situation]; and
(2) as soon as practicable after the pension system
has knowledge of an event listed in this subdivision, the pension
system shall terminate payment of death benefits to a [coincident
with the furnishing of the opinion of counsel, the board is provided
with an executed original of the support trust document for the
records of the pension system;
[(3) the terms of the trust provide that the board will
receive an annual accounting of the support trust from its trustee,
although the board has no legal responsibility to oversee the
support trust; and
[(4) the support] trust described by Subdivision (1) of
this subsection effective [will terminate as soon as practicable]
on the earlier occurrence of the following events:
(A) the date as of [on] which the [qualified
surviving] child is determined by the board to no longer be disabled
[handicapped] under the terms of this section;
(B) the date on which the [qualified surviving]
child is lawfully married;
(C) the date on which the [qualified surviving]
child is deceased;
(D) the date on which the pension system becomes
aware that the assets of the [support] trust are deemed to be the
resources of the child under applicable federal or state laws or
regulations; or
(E) if [unless otherwise excused by the board,]
the trustee of the child's [support] trust fails to provide a court
of competent jurisdiction [the board] with an annual accounting of
the child's trust, the date occurring [within] six months after the
date of the close of the [support] trust's fiscal year.
(o) When a child who, as a qualified survivor, [surviving
child who] is entitled to receive death benefits under this article
reaches the age of 19, the [qualified surviving] child may no longer
participate in the division of the benefits, but the same
undiminished [qualified surviving] child's share as determined by
this section shall be paid to any remaining [qualified surviving]
children who are qualified survivors who remain eligible to
continue to receive death benefits.
(o-1) If benefits are no longer payable to the trust
described in Subsection (n)(1) of this section in accordance with
Subsection (n)(2) of this section, the benefits are divisible and
payable to any remaining children who are qualified survivors who
remain eligible to receive death benefits.
(o-2) If an unmarried child [under 19 years of age.
However, a handicapped qualified surviving child may not be removed
from participation in the division of benefits on reaching the age
of 19 nor may the child be barred from original participation at any
time after reaching the age of 19, and the payments shall continue
for the duration of the handicap. If a qualified surviving child is
not married and], after cessation of entitlement to death benefits
[(]because of attainment of age 19[) but before age 23], becomes
disabled before age 23 [handicapped], the child is entitled to
participate in the division of death benefits under this article.
Notwithstanding the preceding, all death benefits granted under
this subsection are conditioned on the board finding that:
(1) the [qualified surviving] child is so physically
or mentally disabled [handicapped], either congenitally or through
injury suffered or disease contracted, as to be unable to be
self-supporting or to secure and hold gainful employment or pursue
an occupation;
(2) the [qualified surviving] child is not married;
(3) the disability [handicap] was not the result of an
occupational injury for which the [qualified surviving] child
received compensation equal to or greater than that provided under
this article;
(4) the disability [handicap] was not the result of an
intentional self-inflicted injury or a chronic illness itself
resulting from an addiction of the [qualified surviving] child
through a protracted course of [noncoerced] indulgence in alcohol,
narcotics, or other substance abuse that was not coerced; and
(5) the disability [handicap] did not occur as a
result of the [qualified surviving] child's participation in the
commission of a felony.
(p) If a [handicapped qualified surviving] child with a
disability received or is receiving workers' compensation
resulting from an occupational injury equal to an amount less than
the death benefit to be provided under this section, the difference
shall be paid out of the assets of the fund in the form otherwise
payable as monthly benefits. For purposes of Subsections
[Subsection] (o), (o-1), and (o-2) of this section, if a lump sum is
awarded for an injury, the fund's actuary may compute a
corresponding monthly equivalent. A finding relating to a
[qualified surviving] child's disability [handicap] is subject to
periodic review and modification by the board.
(q) On the death or marriage of a [qualified surviving]
child granted death benefits under this article, the death benefits
shall cease being paid to that child; however, the same
undiminished [qualified surviving] child's share as determined by
this section shall be uniformly distributed among any remaining
unmarried [qualified surviving] children who are:
(1) under 19 years of age; or
(2) disabled [and any unmarried qualified surviving
children who are handicapped] as described by Subsection (o-2)
[(o)] of this section and entitled to death benefits as qualified
survivors.
(r) A spouse of a primary party who married the primary
party [resulting from any marriage to a former member or pensioner]
after the date the primary party terminated [member or pensioner
leaves] active service is not a qualified survivor [surviving
spouse] and is [not] entitled only to those death benefits, if
applicable, provided under Section 6.063 of this article.
(t) A [qualified] surviving spouse who first remarried on or
after April 21, 1988, is eligible to receive death benefits for the
remainder of the [qualified surviving] spouse's life provided the
surviving spouse is a qualified survivor. This subsection may not
be applied retroactively.
(u) The eligibility of a surviving spouse who first
remarried before April 21, 1988, is governed by Section 6.061 of
this article.
(v) The qualified survivors of a member who dies while
performing qualified military service are entitled to any
additional benefits, other than benefits relating to the qualified
military service, that qualified survivors would have received if
the member had returned from qualified military service the day
before death, resumed employment, and then died.
SECTION 37. Part 6, Article 6243a-1, Revised Statutes, is
amended by adding Sections 6.061, 6.062, 6.063, and 6.064 to read as
follows:
Sec. 6.061. PROSPECTIVE REINSTATEMENT OF CERTAIN DEATH
BENEFITS. (a) Subject to Subsection (c) of this section, the
surviving spouse of a primary party who was a member of the old
plan, Plan A, or Plan B whose death benefits, also referred to as
"survivor benefits" or "widow benefits," terminated because of a
remarriage of the surviving spouse that occurred before April 21,
1988, is entitled to receive death benefits, on a prospective basis
only, as of the first day of the month following the month in which
the executive director receives the application.
(b) The board shall make reasonable efforts to notify all
known living surviving spouses who may be entitled to a
reinstatement of benefits under this section.
(c) A surviving spouse's properly completed, board-approved
application for reinstatement of death benefits under this section
must be received by the executive director not later than the 180th
day after the date the board completes, as determined by the board,
the reasonable efforts required by Subsection (b) of this section.
(d) A surviving spouse's application for reinstatement of
death benefits under this section constitutes the spouse's waiver
of any claims against the pension system, the board, the executive
director, or any other employee of the board or the pension system
arising out of any claim for death benefits.
(e) This section may not be applied retroactively. A
surviving spouse may not receive death benefits attributable to
periods before the executive director's receipt of a properly
completed and board-approved application, and any benefit provided
to a surviving spouse described in this section must be calculated
as if the benefits had not terminated on the surviving spouse's
remarriage notwithstanding the fact the reinstatement of benefits
is not retroactive.
Sec. 6.062. LUMP-SUM PAYMENT ON DEATH OF CERTAIN MEMBERS.
(a) If an unmarried member dies while on active service and before
beginning participation in DROP, the last person to receive
benefits as the member's qualified survivor or, if the member does
not have a qualified survivor living, the member's designee, shall
be paid a lump-sum payment determined in accordance with this
section if, at the time of the member's death, the member:
(1) had no qualified survivors; or
(2) only had qualified survivors who are children who
become ineligible to receive death benefits before the benefits
were paid for at least 120 consecutive months.
(b) The amount of the lump-sum payment under this section is
the greater of:
(1) the payment that could have been provided under
Section 6.06(m) of this article; or
(2) an amount equal to the actuarial equivalent of the
remainder of the monthly benefits that would have been paid for the
period from the last monthly benefit payment to the end of the 120
months, starting with the date of the first monthly benefit
payment, if any.
(c) If no death benefit payments have been made with respect
to the member, the amount of a monthly death benefit payment shall
be considered to be the monthly death benefit that would have been
paid if the member had died leaving only one dependent parent who
was a qualified survivor.
(d) If a qualified survivor or designee is entitled to
payment under both this section and Section 6.06(m) of this
article, payments shall be made only under this section.
(e) The payment required under this section shall be made as
soon as practicable after the later of the date:
(1) of the death of the member; or
(2) the last qualified survivor becomes ineligible to
receive monthly death benefit payments.
Sec. 6.063. AUTHORITY TO ELECT CERTAIN ACTUARIALLY REDUCED
BENEFITS. (a) The board shall adopt policies under which a member
who is leaving active service or a pensioner may elect to accept
actuarially reduced benefits to provide the following optional
benefits:
(1) a 100 percent joint and survivor annuity with the
member's or pensioner's spouse;
(2) a 50 percent joint and survivor annuity with a
spouse who is not a qualified survivor because the marriage to the
pensioner occurred after the pensioner terminated active service,
provided the election is made not later than one year after the date
of the marriage; or
(3) a death benefit for a child who is not a qualified
survivor because the child was born or adopted after the member left
active service, but only if the child:
(A) is a dependent of the pensioner, within the
meaning of Section 152(a)(1) of the code; and
(B) has not attained 18 years of age at the time
of the election.
(b) An election under this section may not be revoked by the
member or pensioner after it is filed with the pension system.
(c) Notwithstanding any other provision of this article, an
election under this section shall result in benefits being paid as
prescribed by this section instead of as prescribed by Section
6.01, 6.02, 6.04, 6.05, 6.07, or 6.08 of this article, as
applicable.
(d) A pensioner who desires to make an election under
Subsection (a)(1) of this section after having made an election
under Subsection (a)(2) of this section shall incur a second
actuarial reduction in benefits to pay for the increased survivor
annuity.
(e) Except as provided by Subsection (f) of this section, a
person is not entitled to the payment of benefits under this section
with respect to a pensioner who makes an election after termination
of active service and dies within one year after making the
election, except the amount by which the pensioner's benefits were
reduced are paid to the person who is entitled to receive payments
under Section 6.064 of this article.
(f) Subsection (e) of this section does not apply to a
person who makes an election under Subsection (a)(1) of this
section to receive a 100 percent joint and survivor annuity with a
spouse who is a qualified survivor at the time:
(1) the board grants a retirement pension; or
(2) a retirement pension would have been granted but
for the fact that the person elected to participate in DROP after
retirement.
(g) The actuarially reduced benefits being paid to the
pensioner under this section will not be increased if the spouse
dies before the pensioner, or if the child attains 19 years of age
before the pensioner dies.
(h) The joint and survivor annuity or the pensioner's
pension and child's death benefit payable under this section is the
actuarial equivalent of the pension and death benefits, if any,
that would have been payable, at the time of the election, if the
election had not been made. On the death of the pensioner:
(1) the surviving spouse of a pensioner who made an
election under Subsection (a)(1) of this section receives a pension
that is equal to the reduced pension being received by the pensioner
at the time of death; and
(2) a surviving spouse who is not a qualified survivor
of a pensioner who made an election under Subsection (a)(2) of this
section receives a pension that is 50 percent of the reduced pension
being received by the pensioner at the time of death.
(i) A pensioner and surviving spouse receiving a death
benefit payable under this section are eligible for adjustments
under Sections 6.12 and 6.13 of this article, if the pensioner or
surviving spouse, as applicable, is otherwise entitled to those
adjustments, except that in each case the adjustment shall be
calculated so that the total pension or death benefit paid is
reduced by the same percentage the pensioner's pension is otherwise
reduced under this section.
(j) A pensioner and surviving spouse receiving a death
benefit payable under this section are not entitled to the minimum
benefits provided under Section 6.10A, 6.10B, or 6.11 of this
article.
(k) A surviving spouse receiving a death benefit payable
under this section is not entitled to the special death benefit
provided under Section 6.09 of this article.
(l) During a period in which there are two or more qualified
survivors of a member who has made a joint and survivor annuity
election under this section, the spousal benefit will be divided
among the eligible survivors under Section 6.07 or 6.08 of this
article, as applicable.
(m) A child's death benefit elected under Subsection (a)(3)
of this section is treated the same way as a death benefit to a child
who is a qualified survivor, except that it is based on the
actuarially reduced pension.
Sec. 6.064. DESIGNEES. (a) A member, pensioner, or
qualified survivor may at any time designate, in writing, one or
more persons as a designee to receive any lump-sum payment due from
the pension system on the death of the member, pensioner, or
qualified survivor, as applicable.
(b) A designation under this section of a person other than
the spouse of the member, pensioner, or qualified survivor, as
appropriate, must be made with the written consent of the spouse, if
the individual has a spouse.
(c) A designation made under this section:
(1) may be revoked or changed at any time; and
(2) is void if the person designated dies or goes out
of existence before the payment is made.
(d) If a member, pensioner, or qualified survivor
designates a spouse to receive a payment and the parties are later
divorced, the designation is void at the time of the divorce unless
ratified in writing at the time of the divorce or after that time.
(e) A designation by a member under this section is void at
the time the member becomes a pensioner unless ratified in writing
at the time the member becomes a pensioner or after that time.
(f) If a member, pensioner, or qualified survivor does not
have a valid designee on file with the pension system at the time of
death, the designee is:
(1) the spouse;
(2) the qualified survivors, if any, if there is no
spouse;
(3) the estate of the person, if there is no spouse or
qualified survivors; or
(4) the heirs of the person, if there is no spouse,
qualified survivors, or estate.
SECTION 38. Sections 6.07, 6.08, 6.09, and 6.10A, Article
6243a-1, Revised Statutes, are amended to read as follows:
Sec. 6.07. GROUP A DEATH BENEFITS. (a)(1) If a Group A
member dies before leaving active service [retirement] and before
the Group A member had [has] 20 years of pension service, the Group
A member's [leaving both a qualified surviving] spouse and
[qualified surviving] children who are [, the] qualified [surviving
spouse shall make an election for all] survivors shall, in the
aggregate, [to] receive a Group A death benefit [consisting in the
aggregate of an amount] equal to a Group A retirement pension
computed under the terms of Section 6.01 of this article as if the
Group A member had completed 20 years of pension service. [An
election under this subdivision, once made, is irrevocable. This
Group A death benefit shall be divided one-half to the qualified
surviving spouse and one-half to the qualified surviving children.]
(2) If a Group A [pensioner dies during disability
retirement and before the Group A pensioner had 20 years of pension
service, leaving both a qualified surviving spouse and qualified
children, the survivors in the aggregate shall receive a Group A
death benefit calculated either under Sections 6.01(b) and (c) of
this article if the Group A pensioner's Group A disability pension
was calculated under Section 6.04(a) of this article, or under
Section 6.01(e) of this article if the Group A pensioner's Group A
disability pension was calculated under Section 6.04(b) of this
article. This Group A death benefit shall be divided one-half to
the qualified surviving spouse and one-half to the qualified
surviving children.
[(b)(1) If a Group A member or former Group A] member dies
before service retirement and after the Group A member has [or
former Group A member has] 20 years of pension service, the Group A
member's [leaving both a qualified surviving] spouse and [qualified
surviving] children[,] who are [the] qualified [surviving spouse
shall make an election for all] survivors shall, in the aggregate,
[to] receive a Group A death benefit calculated under Section 6.01
of this article as if the Group A member [of an amount equal to a
Group A retirement pension the Group A member or former Group A
member would have received] had [the person] left active service on
the date of the [death, computed under the terms of Section 6.01 of
this article. An election under this subdivision, once made, is
irrevocable. This] Group A member's death [benefit shall be
divided one-half to the qualified surviving spouse and one-half to
the qualified surviving children].
(3) If a Group A pensioner dies during service
retirement, the Group A pensioner's spouse and children who are
qualified survivors shall, in the aggregate, receive a Group A
death benefit in an amount equal to the Group A retirement pension
being received by the Group A pensioner on the date of the
pensioner's death.
(4) If a Group A pensioner dies after November 25,
1996, while receiving periodic disability compensation under
Section 6.05 of this article or a disability pension under Section
6.04 of this article, and before the Group A pensioner has 20 years
of pension service, the Group A pensioner's spouse and children who
are qualified survivors shall, in the aggregate, receive a Group A
death benefit calculated under Section 6.04 or 6.05 of this
article, as applicable, in the same manner as the Group A
pensioner's periodic disability compensation or disability
pension, but as if the Group A pensioner had completed 20 years of
pension service.
(5) [(2)(A)] If a Group A pensioner who has 20 or more
years of pension service dies during disability retirement, the
Group A pensioner's spouse and children who are qualified survivors
shall, in the aggregate, [dies leaving both a qualified surviving
spouse and qualified surviving children, the qualified surviving
spouse shall make an election for all survivors to] receive a Group
A death benefit in an [the] amount equal to [of] the Group A
disability [retirement] pension being received by the Group A
pensioner on the date of the pensioner's death.
(b) [before the person's death. This] Group A death
benefits under Subsection (a) of this section [benefit] shall:
(1) be divided one-half to the [qualified surviving]
spouse and one-half to the [qualified surviving] children who are
qualified survivors; and [.]
(2) subject to [(B) With] the terms of Sections
[exception of those circumstances described by Section] 6.06(n),
(o), (o-1), and (o-2) of this article, be distributed in an equal
and uniform manner to the children described by Subdivision (1) of
this subsection [the Group A death benefits awarded to the
qualified survivors under this subsection shall be paid entirely to
the qualified surviving spouse and the qualified surviving
children. The qualified surviving children's one-half share shall
be equally and uniformly distributed by the qualified surviving
spouse to them].
(c) [(c)(1)] If a Group A member or pensioner [former Group
A member] dies leaving no [qualified surviving] spouse or
[qualified surviving] children who are qualified survivors, the
[but leaves surviving one or both qualified surviving dependent
parents, the qualified surviving] dependent parents who are
qualified survivors shall [may elect to] receive a Group A death
benefit equal to the death benefit otherwise payable under
Subsection (a) of this section. The death benefit payable to the
dependent parents under this subsection shall be divided equally
between the parents regardless of whether the parents are married
or living at the same residence. [Group A retirement pension the
Group A member or former Group A member would have been entitled to
under Section 6.01 of this article after leaving active service. If
there are two qualified dependent parents, the election must be
mutual. An election under this subdivision, once made, is
irrevocable. The qualified surviving dependent parents of a Group
A pensioner shall receive a Group A death benefit equal to the
amount of the actual Group A retirement pension being received at
the time of the pensioner's death, divided equally between the
qualified surviving dependent parents.
[(2) If a Group A pensioner dies during disability
retirement and before the Group A pensioner had 20 years of pension
service, leaving no qualified surviving spouse or qualified
surviving children, but leaves surviving one or both qualified
surviving dependent parents, the qualified surviving dependent
parents may elect to receive a Group A death benefit calculated
either: under Sections 6.01(b) and (c) of this article if the Group
A pensioner's Group A disability pension was calculated under
Section 6.04(a) of this article, or under Section 6.01(e) of this
article if the Group A pensioner's Group A disability pension was
calculated under Section 6.04(b) of this article. An election
under this subdivision, once made, is irrevocable.
[(d)] If there is only one [qualified surviving] dependent
parent, that [the] parent is entitled to one-half of the death
benefit described in [amount determined under Subsection (c)(1) or
(c)(2) of] this subsection [section].
Sec. 6.08. GROUP B DEATH BENEFITS. (a) If a Group B member
dies while on active service, a [former] Group B member who left
active service and is vested under Section 5.06 of this article
dies, or a Group B pensioner dies while receiving [on] service or
disability retirement or while receiving periodic disability
compensation under Section 6.05 of this article, the person's
qualified survivors, or the person described in Section 6.06(g) or
(j) of this article as the recipient of the children's benefits
[guardian of the qualified surviving children if no qualified
surviving spouse exists], may make application for Group B death
benefits. If the deceased [The qualified surviving spouse of a
Group B member or former Group B member described by this
subsection, the guardian of the qualified surviving children of the
person if no qualified surviving spouse exists, or the qualified
dependent parents if no qualified surviving spouse or qualified
surviving children exist, have the option to select whether Group A
or Group B death benefits are received, if the Group B member or
former] Group B member was previously eligible to elect whether to
receive either a Group A or Group B retirement pension, the option
to elect whether Group A or Group B death benefits are received
shall be exercised by one of the following:
(1) a qualified survivor who is the spouse of the
deceased Group B member described by this subsection;
(2) the person described in Section 6.06(g) or (j) of
this article as the recipient of benefits on behalf of the deceased
member's children who are qualified survivors, if no spouse is a
qualified survivor; or
(3) the qualified survivors who are dependent parents
of the deceased member, if there is neither a spouse nor children
who are qualified survivors.
(a-1) A qualified survivor who receives Group A death
benefits under Subsection (a) of this section [subsection] is
entitled to a ratable portion of a reimbursement from the fund in
the same amount and manner determined under Section 5.03(d) of this
article. A qualified survivor or guardian desiring a refund of
excess contributions must make application for the refund with the
executive director [administrator] within three years after the
date the qualified survivor or guardian makes application for Group
A death benefits. The option contained in this subsection is not
available to qualified survivors of a Group B member [or former
Group B member] who had, at the time of death, already applied for a
retirement pension and selected a Group A retirement pension as
provided by Section 5.03(c) or (c-1) of this article, but the
qualified survivors are entitled to receive a Group A death
benefit.
(b) Subject to Subsection (b-2) of this section, death
[Death] benefits shall be computed as follows for the qualified
survivors of Group B members who die while on active service:
(1) the [A qualified surviving spouse's Group B] death
benefit of a qualified survivor who is the spouse of a member who
began active service:
(A) before March 1, 2011, shall be the sum of:
(i) the number of years of pension service
earned before September 1, 2017, prorated for fractional years,
times 1.5 percent of the [computed at the rate of 1.5 percent of the
Group B member's] average computation pay determined over the 36
[60] consecutive months of pension service in which the Group B
member received the highest computation pay; plus
(ii) the number of [, for each year, and
prorated for fractional years, of pension service with a minimum of
20] years of pension service, including pension service credit
imputed under Section 6.05(c) of this article, after September 1,
2017, prorated for fractional years, times the applicable
percentage rate set forth below [assumed, or 30 percent] of the
average computation pay determined over the 60 consecutive months
of pension service in which the Group B member received the highest
computation pay:
Age of Member When Retirement Pension Begins Percent Age of Member When Retirement Pension Begins Percent
Age of Member When Retirement Pension Begins Percent
58 and older 1.25% 58 and older 1.25%
58 and older 1.25%
57 1.2% 57 1.2%
57 1.2%
56 1.15% 56 1.15%
56 1.15%
55 1.10% 55 1.10%
55 1.10%
54 1.05% 54 1.05%
54 1.05%
53 and younger 1.0%; or 53 and younger 1.0%; or
53 and younger 1.0%; or
(B) on or after March 1, 2011, shall be the number
of years of pension service, including pension service imputed
under Section 6.05(c) of this article, prorated for fractional
years, times 1.25 percent of the average computation pay determined
over the 60 consecutive months of pension service in which the Group
B member received the highest computation pay;
(2) the death benefit of qualified survivors who are a
member's children shall be computed in the same manner as a spouse's
benefit is computed under Subdivision (1)(A) or (B) of this
subsection, as applicable, and shall be divided equally among all
of the children who are qualified survivors; and
(3) the death benefit of each qualified survivor who
is a member's dependent parent shall be computed in the same manner
as a spouse's Group B benefit is computed under Subdivision (1)(A)
or (B) of this subsection, as applicable.
(b-1) Pension service for purposes of the calculation under
Subsection (b) of this section may not be less than 20 years. Any
partial year of pension service for the first 20 years of pension
service is counted as a full year of pension service, if the member
was considered by the member's department to have worked a normal
full-time schedule at the time of the member's death.
(b-2) The death benefit calculated under Subsection (b) of
this section may not exceed the greater of:
(1) 45 [a computation for 32 years of pension service,
or 48] percent of the member's average computation pay determined
over the 36 or 60 consecutive months, as applicable, in which the
Group B member received the highest computation pay; or
(2) the vested and accrued death benefit as determined
on August 31, 2017.
(b-3) For purposes of Subsections (b) through (b-2) of this
section:
(1) if [If] the Group B member had less than 36 or 60
consecutive months, as applicable, [five years] of pension service,
the average computation pay will be computed based on the person's
entire pension service; and
(2) days during which the member earned no pension
service due to a termination of active service or otherwise must be
disregarded in determining the 36 or 60 consecutive months of
highest computation pay.
[(2) A qualified surviving child's Group B death
benefit shall be computed in the same manner as a qualified
surviving spouse's benefit is computed under Subdivision (1) of
this subsection and shall be divided equally among all of the
qualified surviving children.
[(3) Each qualified surviving dependent parent's Group
B death benefit shall be computed in the same manner as a qualified
surviving spouse's Group B benefit is computed under Subdivision
(1) of this subsection.]
(c) Group B death benefits shall be computed as follows for
the qualified survivors of any [former] Group B member who died
after leaving active service and who had vested rights under
Section 5.06 of this article but who had not received [Group B]
retirement benefits [under Section 6.02 of this article] at the
time of death:
(1) the death benefit of a [The] qualified survivor
who is the member's [surviving] spouse [of the former Group B
member] is [entitled to a Group B death benefit] equal to 50 percent
of any [Group B] retirement pension the [former Group B] member
would have been entitled to [under Section 6.02 of this article] as
of the date the [former Group B] member left active service;[.]
(2) the death benefits of [The] qualified survivors
who are the member's [surviving] children [of the former Group B
member] are [entitled to a Group B benefit] calculated in the same
manner as the spouse's benefit is computed under Subdivision (1) of
this subsection [Group B death benefit of a qualified surviving
spouse], to be divided equally between the [qualified surviving]
children; and[.]
(3) the death benefit of each [Each of the] qualified
survivor who is the member's [surviving] dependent parent [parents
of the former Group B member] is [entitled to a Group B death
benefit] equal to 50 percent of any [Group B] retirement pension the
[former Group B] member would have been entitled to [under the
provisions of Section 6.02 of this article] as of the date the
[former Group B] member left active service.
(d) Group B death benefits shall be computed as follows for
the qualified survivors of any Group B pensioner [of this plan] who
dies while receiving service [a Group B] retirement [pension]:
(1) the death benefit of a [The] qualified [surviving]
survivor who is the pensioner's spouse [of a Group B pensioner] is
[entitled to Group B death benefits] equal to 50 percent of any
retirement pension the Group B pensioner was receiving at the time
of death;[.]
(2) the death benefits of qualified survivors who are
the pensioner's [The qualified surviving] children [of a Group B
pensioner] are [entitled to a Group B death benefit] calculated in
the same manner as the spouse's benefit is computed under
Subdivision (1) of this subsection [Group B death benefit of a
qualified surviving spouse], to be divided equally between the
[qualified surviving] children; and[.]
(3) the death benefit of each [Each of the] qualified
survivor who is the pensioner's [surviving] dependent parent
[parents of a Group B pensioner] is [entitled to a Group B death
benefit] equal to 50 percent of any retirement pension the Group B
pensioner was receiving at the time of death.
(e) Group B death benefits shall be computed as follows for
the qualified survivors of any Group B pensioner who dies while
receiving disability retirement or while receiving periodic [a
Group B] disability compensation under Section 6.05 of this article
[pension due to either a service-connected or nonservice-connected
disability]:
(1) the death benefit of a [The] qualified survivor
who is the pensioner's [surviving] spouse [of the Group B
pensioner] is [entitled to the greater of a Group B death benefit]
equal to 50 percent of any Group B periodic disability compensation
or disability pension the Group B pensioner would have been
entitled to [under Section 6.05 of this article] as of the date the
Group B pensioner left active service because of disability, or a
Group B death benefit equal to 50 percent of any periodic disability
compensation or [Group B] disability pension the Group B pensioner
was receiving at the time of death;[.]
(2) the death benefits of [The] qualified survivors
who are the pensioner's [surviving] children [of the Group B
pensioner] are [entitled to a Group B death benefit] calculated in
the same manner as the spouse's [Group B death] benefit is computed
under Subdivision (1) of this subsection [of a qualified surviving
spouse], to be divided equally between the [qualified surviving]
children; and[.]
(3) the death benefit of each [Each of the] qualified
survivor who is the pensioner's [surviving] dependent parent
[parents of the Group B pensioner] is [entitled to the greater of a
Group B death benefit] equal to 50 percent of any periodic
disability compensation or disability pension the Group B pensioner
would have been entitled to [under Section 6.05 of this article] as
of the date the Group B pensioner left active service because of
disability, or a Group B death benefit equal to 50 percent of any
periodic disability compensation or [Group B] disability pension
the Group B pensioner was receiving at the time of death.
Sec. 6.09. QUALIFIED SURVIVING SPOUSE SPECIAL DEATH
BENEFIT. (a) A person who is the [Notwithstanding Sections 6.06
and 6.07 of this article, the qualified surviving] spouse of a Group
A primary party, who is a qualified survivor, and who is entitled to
death benefits under Sections 6.06, 6.061, 6.062, 6.063, and 6.07
of this article is also entitled to a special death benefit under
this section if:
(1) the Group A primary party:
(A) [elected to receive a Group A retirement
pension and later died, was receiving a disability or retirement
pension either under the terms of Plan A before the original
enactment of this article or elected to receive a Group A retirement
pension under Sections 6.01(e), (f), and (g) of this article and
later died, or was receiving a Group A disability pension under
Section 6.04(c) of this article and later died;
[(2) the Group A primary party (i)] had at least 20
years of pension service, [and] left active service after October
1, 1985, and was at least 55 years of age on the earlier of the date
the primary party:
(i) left active service; or
(ii) began participation in DROP [or
older]; or
(B) had [(ii) on or after May 1, 1990, the Group A
primary party, after accruing] at least 20 years of pension
service, left active service on or after May 31, 2000, and on the
earlier of the date the primary party left active service or began
participation in DROP, [and] had a total of at least 78 [80]
credits, with each year of pension service, prorated for fractional
years, equal to one credit and with each year of age, prorated for
fractional years, equal to one credit; or [and]
(2) the [(3) the qualified surviving] spouse has
attained 55 years of age and there are no [qualified surviving]
children who are qualified survivors eligible for death benefits.
(b) Until the requirements of Subsection (a) of this section
are satisfied, a qualified survivor who is the spouse of a Group A
primary party [surviving spouse] shall receive a Group A death
benefit in accordance with Section 6.07 of this article.
(c) The special Group A death benefit under Subsection (a)
of this section is calculated based on the following formula:
(P x P x A) + (P x C) + D, where
A = base pay at the time the Group A primary party began
participation in DROP, begins service retirement, dies, or becomes
disabled, plus longevity pay, plus one-twelfth of last-received
city service incentive pay;
B = Group A primary party's benefit calculated at the time the
Group A primary party began participation in DROP, begins service
retirement, dies, or becomes disabled;
P = B/A (expressed as a percentage or a decimal);
C = the number of adjustments made to a Group A primary
party's [Group A] retirement pension, disability pension, or
periodic [Group A] disability compensation, [pension under Section
6.04 of this article] multiplied by the amount of the adjustments;
and
D = the number of adjustments made under this article to the
[a qualified surviving spouse's] Group A death benefit of a spouse
who is a qualified survivor under Section 6.07 of this article,
multiplied by the amount of the adjustments.
(d) A person who is the [Notwithstanding Sections 6.03 and
6.05 of this article, a qualified surviving] spouse of a Group B
primary party, who is a qualified survivor, and who is entitled to
any death benefits under Sections 6.06, 6.061, 6.062, 6.063, and
[or] 6.08 of this article is also entitled to a special benefit
under this section if:
(1) the Group B primary party [elected to receive a
Group B retirement pension and later died, or was receiving a Group
B disability or retirement pension under this article and died;
[(2) the Group B primary party]:
(A) had at least 20 years of pension service,
left active service after October 1, 1985, and was at least 55 years
of age at the earlier of the date the primary party left [time of
leaving] active service or began participation in DROP; or
(B) on or after May 31, 2000 [1, 1990], [the Group
B primary party] left active service or began participation in
DROP, whichever was earlier, having a total of at least 78 [80]
credits, with each year of pension service, prorated for fractional
years, equal to one credit and with each year of age, determined at
the time the Group B primary party left active service or began
participation in DROP, prorated for fractional years, equal to one
credit; or [and]
(2) [(3)] the [qualified surviving] spouse has
attained 55 years of age, and there are no [qualified surviving]
children of the primary party who are qualified survivors.
(d-1) Until the requirements of Subsection (d) [(c)] of this
section are satisfied, a spouse who is a qualified survivor
[surviving spouse] may only receive a Group B death benefit in
accordance with Sections 6.06, 6.061, 6.062, 6.063, [6.03] and 6.08
[6.05] of this article.
(e) The [This] special Group B death [survivor] benefit
under Subsection (d) of this section is calculated based on the
following formula:
(P x P x A) + (P x C) + D, where
A = average monthly computation pay at the time the Group B
primary party begins service retirement, dies, [or] becomes
disabled, or begins participation in DROP;
B = the Group B primary party's benefit [Group B retirement or
Group B disability pension] calculated at the time the Group B
primary party begins participation in DROP, begins to receive
service [or disability] retirement, [or] dies, or becomes disabled;
P = B/A (expressed as a percentage or a decimal);
C = the number of post-retirement [postretirement]
adjustments made to a Group B primary party's [Group B] retirement
pension, disability pension, or periodic [Group B] disability
compensation [pension under Section 6.05 of this article]
multiplied by the amount of the adjustments; and
D = the number of adjustments made to the [a qualified
surviving spouse's] Group B death benefit of a qualified survivor
who is the primary party's spouse under Section 6.08 of this article
multiplied by the amount of the adjustments.
Sec. 6.10A. MINIMUM BENEFITS TO CERTAIN GROUP A PRIMARY
PARTIES WHO WERE GROUP A, OLD PLAN, OR COMBINED PENSION PLAN MEMBERS
[ELECT TO RECEIVE RETIREMENT PENSION UNDER SECTIONS 6.01(B) AND
(C)] AND THEIR QUALIFIED SURVIVORS. (a) Except as provided by
Section 6.063 of this article or Subsections (b) and (h) of this
section and notwithstanding any benefit computation and
determination to the contrary contained in this article, the
minimum Group A benefits provided by this section shall be paid to
any Group A primary party who elects to receive a Group A retirement
pension under Sections 6.01(b) and (c) of this article, the old
plan, or former Section 14(a) of this article, or to the primary
party's qualified survivors [. The benefits under this section
shall be distributed in accordance with Sections 6.01(b) and (c),
6.04(a), or 6.07 of this article, as applicable], except that a
Group A primary party who elects to receive an actuarially reduced
[Group A retirement pension because of the primary party's request
to receive a Group A] retirement pension before 50 years of age and
the primary party's qualified survivors are not entitled to the
[Group A] minimum benefits specified under this section. An
alternate payee is not entitled to the Group A minimum benefits
specified in this section.
(b) A Group A primary party who elects to receive a Group A
retirement pension under Sections 6.01(b) and (c) of this article,
the old plan, or former Section 14(a) of this article and who left
active service with 20 or more years of pension service is entitled
to receive a minimum Group A retirement pension of $2,200 [$1,500] a
month. [If the Group A primary party's Group A retirement pension
is subject to a qualified domestic relations order and the sum of
the actuarial equivalents of the monthly benefits payable to the
Group A primary party and the alternate payee is less than the
actuarial equivalent of the minimum monthly Group A retirement
pension described by this subsection, the Group A primary party's
monthly Group A retirement pension will be increased so that the sum
of the actuarial equivalents of the alternate payee's and the Group
A primary party's monthly Group A retirement pension equals the
actuarial equivalent of the minimum monthly Group A retirement
pension calculated under this subsection.]
(c) In the absence of children who are [A] qualified
survivors, a [surviving] spouse who is a qualified survivor of a
Group A primary party who elected to receive a Group A retirement
pension under Sections 6.01(b) and (c) of this article, the old
plan, or former Section 14(a) of this article will receive a minimum
monthly Group A death benefit of $1,200 [$750].
(d) A spouse who is a qualified survivor [surviving spouse]
of a Group A primary party who elected to receive a Group A
retirement pension under Sections 6.01(b) and (c) of this article,
the old plan, or former Section 14(a) of this article will receive,
if there are children who are qualified survivors [surviving
children], a minimum Group A death benefit of $1,100 [$750] a month.
[The qualified surviving children, as a group, will receive a
minimum Group A death benefit of $750 a month, to be divided equally
among them.]
(e) In the absence of a spouse who is a qualified survivor
[surviving spouse] of a Group A primary party who elected to receive
a Group A retirement pension under Section [Sections] 6.01(b),
[and] (c), or (e) of this article, the old plan, or former Section
14(a) of this article, the primary party's children who are
qualified survivors [surviving children], as a group, will receive
a minimum Group A death benefit of $1,100 [$750] a month, to be
divided equally among them.
(f) If there is neither a [In the absence of both a qualified
surviving] spouse nor a child who is a [and] qualified survivor
[surviving children] of a Group A primary party who elected to
receive a Group A retirement pension under Sections 6.01(b) and (c)
of this article, the old plan, or former Section 14(a) of this
article, each [qualified surviving] dependent parent who is a
qualified survivor will receive a minimum Group A death benefit of
$1,100 [$750] a month. If only one of them is surviving, that [the
qualified surviving] dependent parent will receive a minimum Group
A death benefit equal to $1,100 [$750] a month.
(g) Notwithstanding the minimum monthly benefit described
in other subsections of this section, a Group A primary party who
receives periodic disability compensation under Section 6.05(b) of
this article or a Group A disability pension under Section 6.04(a)
of this article, the old plan, or former Section 17(a) of this
article, [calculated in the same manner as a Group A retirement
pension under Sections 6.01(b) and (c) of this article,] shall
receive a minimum Group A disability pension equal to $2,200
[$1,500] a month.
(h) If a Group A pensioner who received a monthly benefit
under Section 6.05(b-1) of this article or a disability pension
under Section 6.04(a) of this article, calculated in the same
manner as a Group A retirement pension under Sections 6.01(b) and
(c) of this article, the old plan, or former Section 17(a) of this
article [primary party's disability pension is subject to a
qualified domestic relations order and the sum of the actuarial
equivalents of the monthly benefits payable to the Group A primary
party and the alternate payee is less than the actuarial equivalent
of the minimum monthly Group A disability pension determined under
Subsection (g) of this section, the Group A primary party's minimum
monthly Group A disability pension will be increased so that the sum
of the actuarial equivalents of the alternate payee's and the Group
A primary party's minimum monthly Group A disability pension equals
the amount determined under Subsection (g) of this section.
[(i) If a Group A pensioner who received a disability under
Section 6.04(a) of this article, calculated in the same manner as a
Group A retirement pension under Sections 6.01(b) and (c) of this
article] before the completion of 20 years of pension service dies,
the qualified survivors will receive a minimum Group A death
benefit as provided under Subsection (c), (d), (e), or (f) of this
section, as applicable, whichever is greatest.
SECTION 39. The heading to Section 6.10B, Article 6243a-1,
Revised Statutes, is amended to read as follows:
Sec. 6.10B. MINIMUM BENEFITS TO CERTAIN GROUP A PRIMARY
PARTIES WHO WERE GROUP A, PLAN A, OR COMBINED PLAN MEMBERS [ELECT TO
RECEIVE RETIREMENT PENSION UNDER SECTION 6.01(E)] AND THEIR
QUALIFIED SURVIVORS.
SECTION 40. Sections 6.10B(a), (b), (c), (d), (e), (f),
(g), and (i), Article 6243a-1, Revised Statutes, are amended to
read as follows:
(a) Except as provided by Section 6.063 of this article and
Subsection [Subsections] (b) [and (h)] of this section and
notwithstanding any benefit computation and determination to the
contrary contained in this article, the minimum Group A benefits
provided by this section shall be paid to any Group A primary party
who elects to receive a Group A retirement pension under Section
6.01(e) of this article, Plan A, or former Section 14(b) of this
article or to the primary party's qualified survivors[. The
benefits under this section shall be distributed in accordance with
Section 6.01(e), 6.04(b), or 6.07 of this article, as applicable],
except that a Group A primary party who elects to receive an
actuarially reduced Group A retirement pension [because of the
primary party's request to receive a Group A retirement pension]
before 55 years of age and the primary party's qualified survivors
are not entitled to the [Group A] minimum benefits specified in
[under] this section. An alternate payee is not entitled to the
Group A minimum benefits specified in this section.
(b) A Group A primary party who elects [elected] to receive
a Group A retirement pension under Section 6.01(e) of this article,
Plan A, or former Section 14(b) of this article and who left active
service with 20 or more years of pension service is entitled to
receive a minimum [Group A] retirement pension equal to the greater
of $2,200 [(i) $1,500] a month or [(ii)] $1,000 a month adjusted, if
applicable, in the manner described by Section 6.12 [6.12(a)] of
this article. [If the Group A primary party's Group A retirement
pension is subject to a qualified domestic relations order and the
sum of the actuarial equivalents of the monthly benefits payable to
the Group A primary party and the alternate payee is less than the
actuarial equivalent of the minimum monthly Group A retirement
pension described by this subsection, the Group A primary party's
monthly Group A retirement pension will be increased so that the sum
of the actuarial equivalents of the alternate payee's and the Group
A primary party's monthly Group A retirement pension equals the
actuarial equivalent of the minimum monthly Group A retirement
pension calculated under this subsection.]
(c) In the absence of children who are [A] qualified
survivors, a [surviving] spouse who is a qualified survivor of a
Group A primary party who elects [elected] to receive a Group A
retirement pension under Section 6.01(e) of this article, Plan A,
or former Section 14(b) of this article will receive a minimum
monthly [Group A] death benefit equal to the greater of $1,200
[(i) $750] a month or [(ii)] $500 a month adjusted, if applicable,
in the manner described by Section 6.12 [6.12(a)] of this article.
(d) A spouse who is a qualified survivor [surviving spouse]
of a Group A primary party who elects to receive a Group A
retirement pension under Section 6.01(e) of this article, Plan A,
or former Section 14(b) of this article will receive, if there are
children who are qualified survivors [surviving children], a
minimum Group A death benefit equal to the greater of $1,100 [(i)
$750] a month or [(ii)] $500 a month adjusted, if applicable, in the
manner described by Section 6.12 [6.12(a)] of this article. The
children who are qualified survivors [surviving children], as a
group, will receive a minimum [Group A] death benefit equal to the
greater of $1,100 [(iii) $750] a month or [(iv)] $500 a month
adjusted, if applicable, in the manner described by Section 6.12
[6.12(a)] of this article, to be divided equally among them.
(e) In the absence of a spouse who is a qualified survivor
[surviving spouse] of a Group A primary party who elected to receive
a Group A retirement pension under Section 6.01(e) of this article,
Plan A, or former Section 14(b) of this article, the [the qualified
surviving children of a Group A] primary party's children who are
qualified survivors [party], as a group, will receive a minimum
Group A death benefit equal to the greater of $1,100 [(i) $750] a
month or [(ii)] $500 a month adjusted, if applicable, in the manner
described by Section 6.12 [6.12(a)] of this article, to be divided
equally among them.
(f) If there is neither a [In the absence of both a qualified
surviving] spouse nor child who is a [and] qualified survivor
[surviving children] of a Group A primary party who elected to
receive a Group A retirement pension under Section 6.01(e) of this
article, Plan A, or the former Section 14(b) of this article, each
[qualified surviving] dependent parent who is a qualified survivor
will receive a minimum Group A death benefit equal to the greater of
$1,100 [(i) $750] a month or [(ii)] $500 a month adjusted, if
applicable, in the manner described by Section 6.12 [6.12(a)] of
this article. If only one of them is surviving, that [the qualified
surviving] dependent parent will receive a minimum Group A death
benefit equal to the greater of $1,100 [(iii) $750] a month or
[(iv)] $500 a month adjusted, if applicable, in the manner
described by Section 6.12 [6.12(a)] of this article.
(g) Notwithstanding the minimum monthly benefit as
described in other subsections of this section, a Group A primary
party who leaves active service on a non-service-connected
[nonservice-connected] disability under Section 6.04(a)
[6.04(b)(2)] of this article, Plan A, or former Section 17(b)(2) of
this article with less than 20 years of pension service shall
receive a minimum monthly Group A disability pension equal to the
greater of $110 [(i) $75] multiplied by the number of years of the
primary party's pension service or [(ii)] $50 multiplied by the
number of years of the primary party's pension service, the product
adjusted, if applicable, in the manner described by Section 6.12
[6.12(a)] of this article.
(i) If a Group A pensioner who received a
non-service-connected [nonservice-connected] disability pension
under Section 6.04(a) [6.04(b)(2)] of this article, Plan A, or
former Section 17(b)(2) of this article before the completion of 20
years of pension service dies, the qualified survivors will each
receive the amount specified in Section 6.07 of this article or the
minimum [monthly] Group A death benefit as provided under
Subsection (c), (d), (e), or (f) of this section, as applicable,
whichever is greatest.
SECTION 41. Sections 6.11, 6.12, and 6.13, Article 6243a-1,
Revised Statutes, are amended to read as follows:
Sec. 6.11. MINIMUM BENEFITS TO GROUP B PRIMARY PARTIES AND
THEIR QUALIFIED SURVIVORS. (a) Except as provided by Section 6.063
of this article or Subsections (b), (c), and (h) of this section and
notwithstanding any benefit computation and determination to the
contrary contained in this article, the minimum Group B benefits
provided by this section shall be paid to any Group B primary party
or the primary party's qualified survivors, except further that a
Group B primary party who elects to receive an actuarially reduced
[Group B] retirement pension, including a request for a benefit
under Sections 6.02(c) and (d) of this article, [because of the
primary party's request to receive the pension at or after age 45,
but before age 50] and the primary party's qualified survivors[,]
or [an] alternate payee [of the primary party], are not entitled to
the Group B minimum benefits specified by this section.
(b) If a Group B primary party leaves active service with 20
or more years of pension service, the Group B primary party is
entitled to receive a Group B minimum retirement pension equal to
the greater of $2,200 [(i) $1,500] a month or [(ii)] $925 a month,
which sum may (A) increase at the rate of $5 a month for each year of
pension service beyond 20 years, but the increase may not exceed $75
and (B) be adjusted, if applicable, in the manner described by
Section 6.12 [6.12(a)] of this article. [If a Group B primary
party's Group B retirement pension is or becomes subject to a
qualified domestic relations order and the sum of the actuarial
equivalents of the monthly Group B retirement pension payable to
the Group B primary party and the alternate payee is less than the
actuarial equivalent of the minimum monthly Group B retirement
pension as calculated under this subsection, the Group B primary
party's monthly Group B retirement pension will be increased so
that the sum of the actuarial equivalents of both the alternate
payee's and the Group B primary party's Group B retirement pensions
equals the actuarial equivalent of the minimum monthly Group B
retirement pension as calculated under this subsection.]
(c) If a Group B primary party leaves active service with
less than 20 years of pension service, the primary party is entitled
to receive a minimum monthly Group B retirement pension equal to the
greater of:
(1) $2,200 [(i) $1,500] a month divided by 20 and
multiplied by the Group B primary party's number of years of pension
service; or
(2) [(ii)] $925 a month divided by 20 and multiplied
by the Group B primary party's number of years of pension service,
which amount is then adjusted, if applicable, in the manner
described by Section 6.12 [6.12(a)] of this article. [If a Group B
primary party's retirement pension is or becomes subject to a
qualified domestic relations order and the sum of the actuarial
equivalents of the monthly Group B retirement pension payable to
the Group B primary party and the alternate payee is less than the
actuarial equivalent of the monthly retirement pension as
calculated under this subsection, the Group B primary party's
monthly Group B retirement pension will be increased so that the sum
of the actuarial equivalents of the alternate payee's and the Group
B primary party's monthly Group B retirement pensions equals the
actuarial equivalent of the minimum monthly Group B retirement
pension as calculated under this subsection.]
(d) In the absence of children who are qualified survivors,
a spouse who is a [surviving children, the] qualified survivor
[surviving spouse] of a Group B primary party will receive a minimum
Group B death benefit equal to the greater of:
(1) $1,200 [(i) $750] a month; or
(2) [(ii)] $600 a month adjusted, if applicable, in
the manner described by Section 6.12 [6.12(a)] of this article.
(e) A spouse who is a qualified survivor [surviving spouse]
of a Group B primary party [will receive], if there are children who
are qualified survivors [surviving children], will receive [the
greater of a minimum Group B death benefit of 50 percent of the
primary party's minimum monthly Group B retirement pension
described by Subsection (b) or (c) of this section, whichever is
applicable. The qualified surviving children, as a group, will
receive the greater of] a minimum [monthly] Group B death benefit of
$1,100 a month [50 percent of the minimum monthly Group B retirement
pension described by Subsection (b) or (c) of this section,
whichever is applicable, to be divided equally among them].
(f) The [In the absence of a qualified surviving spouse, the
qualified surviving] children who are qualified survivors of a
Group B primary party, as a group, will receive a minimum Group B
death benefit equal to the greater of $1,100 [(i) $750] a month or
[(ii)] $600 a month adjusted, if applicable, in the manner
described by Section 6.12 [6.12(a)] of this article, to be divided
equally between them.
(g) If there is neither a [In the absence of either a
qualified surviving] spouse nor a child who is a [or] qualified
survivor [surviving children], each [qualified surviving]
dependent parent who is a qualified survivor of the deceased Group B
primary party will receive a minimum death benefit of $1,100 a month
[Group B minimum death benefit equal to the greater of 50 percent of
the Group B primary party's minimum monthly Group B retirement
pension described by Subsection (b) or (c) of this section,
whichever is applicable. If only one qualified surviving dependent
parent is surviving, the parent will receive a Group B minimum death
benefit of 50 percent of the minimum monthly Group B retirement
pension described by Subsection (b) or (c) of this section,
whichever is applicable].
(h) Notwithstanding the minimum monthly [Group B]
retirement pension otherwise described by this section, a Group B
primary party who left active service on a non-service-connected
[nonservice-connected] disability with less than 20 years of
pension service will receive a minimum monthly [Group B] disability
pension equal to the greater of $110 [(i) $75] multiplied by the
number of years of the primary party's pension service or [(ii)]
$46.25 multiplied by the number of years of the primary party's
pension service, the product adjusted in the manner, if applicable,
described by Section 6.12 [6.12(a)] of this article. [If the Group
B primary party's Group B disability pension is or becomes subject
to a qualified domestic relations order and the sum of the actuarial
equivalents of the monthly Group B disability pension payable to
the Group B primary party and the alternate payee is less than the
actuarial equivalent of the monthly disability pension as
calculated under this subsection, the Group B primary party's
monthly Group B disability pension will be increased so that the sum
of the actuarial equivalents of the alternate payee's and the Group
B primary party's monthly Group B disability pensions equals the
actuarial equivalents of the minimum monthly Group B disability
pension as calculated under this subsection.] If a Group B primary
party who was receiving a non-service-connected
[nonservice-connected Group B] disability pension before the
completion of 20 years pension service dies, the qualified
survivors will receive the amount specified in Section 6.08 of this
article, or the [Group B] minimum monthly death benefits granted to
qualified survivors as provided by Subsections (d), (e), (f), and
(g) of this section, as applicable, whichever is greater.
Sec. 6.12. ADJUSTMENTS TO RETIREMENT AND DISABILITY PENSION
BENEFITS. (a) This section applies to the following benefits
provided under this article:
(1) [Annually on the first day of October,] a
retirement pension calculated under Section 6.01(e) [Section 6.01]
or 6.02 of this article;
(2) [,] a disability pension calculated under Section
6.04 of this article, other than under Section 6.04(a) of this
article;
(3) periodic disability compensation benefit under
Section [or] 6.05 of this article, other than Section 6.05(b-1) of
this article; [,] or
(4) a death benefit calculated under:
(A) Section 6.07 of this article, if calculated
in the manner of a retirement pension under Section 6.01(e) of this
article or in the manner of a disability compensation benefit under
Section 6.05(b) of this article; or
(B) Section 6.08 of this article currently in pay
status, or pending board approval on the last day of September [,
will be increased by an amount equal to four percent, not
compounded, of the original amount of the retirement or disability
pension or death benefit].
(b) Except as provided by Subsection (d) of this section,
annually on the first day of October, the pension system shall
increase the base pension of a benefit described by Subsection (a)
of this section by a percentage equal to the average annual rate of
actual investment return of the pension system for the five-year
period ending on the December 31 preceding the effective date of the
adjustment less five percent.
(c) An adjustment under this section may not be less than
zero percent or exceed four percent of the applicable base pension
benefit.
(d) The pension system may only make an adjustment to
benefits under this section if the ratio of the amount of the
pension system's market value of assets divided by the amount of the
pension system's actuarial accrued liabilities, after giving
effect to the adjustment, is not less than .70.
(e) For purposes of Subsection (d) of this section, the
amount of the pension system's market value of assets and the amount
of the pension system's actuarial accrued liabilities shall be
based on and determined as of the date of the most recently
completed actuarial valuation.
(f) The following persons may not receive an adjustment
under this section:
(1) a member on active service, including a DROP
participant;
(2) a pensioner until the first October 1 occurring
after both the pensioner's retirement and the earlier of:
(A) the date the pensioner reaches 62 years of
age; or
(B) the third anniversary of the date the
pensioner retired; or
(3) a qualified survivor until the first October 1
occurring after the earlier of:
(A) the date the qualified survivor reaches 62
years of age;
(B) the third anniversary of the date the primary
party retired; or
(C) the third anniversary of the date of the
member's or pensioner's death.
(g) [(b)] A [Group B] retirement or [Group B] disability
pension or periodic disability compensation paid to any Group B
pensioner may not be less than the Group B pensioner's base pension.
(h) The death benefit of the qualified survivors who are the
[a Group B qualified surviving] spouse, [Group B qualified
surviving] dependent parent, or child of a Group B pensioner
[parents, as a group, or Group B qualified surviving children], as a
group, may not be less than 50 percent of the [a Group B]
pensioner's base pension.
Sec. 6.13. SUPPLEMENT TO CERTAIN RECIPIENTS 55 YEARS OF AGE
OR OLDER. (a) Except as provided by Subsection (b) of this
section, if [If] a pensioner had at least 20 years of pension
service under any plan adopted pursuant to Article 6243a or this
article, or if a pensioner is receiving the periodic [a
service-connected] disability compensation benefit under Section
6.05 of this article [pension], the pensioner, the pensioner's
[qualified surviving] spouse who is a qualified survivor eligible
to receive benefits under this article, or the pensioner's
[qualified surviving] children who are qualified survivors, as a
group, under Section 6.06 [6.06(o)] of this article are entitled to
receive, when the pensioner or spouse who is a qualified survivor
[surviving spouse] attains 55 years of age, provided the pensioner
or spouse attains 55 years of age before September 1, 2017, [the
greater of] a monthly supplement equal to the greater of $50 or
three percent of their total monthly benefit[,] and for months
[years] beginning on and after January 1, 1991, a [the] monthly
supplement [will be] equal to the greater of $75 or three percent of
their total monthly benefit. For purposes only of calculating this
supplement, the phrase "their total monthly benefit" means the
amount payable to a pensioner or qualified survivors under the
terms of the plans described by this section under which the
pensioner or qualified survivor elected to receive benefits but
does not include the supplement authorized by this section or any
adjustments under Section 6.12 of this article made after September
1, 2017.
(b) A person described by Subsection (a) of this section
who, on September 1, 2017, is not receiving or has not received a
supplemental benefit under this section is not entitled to receive
a supplemental benefit under this section.
SECTION 42. Section 6.14, Article 6243a-1, Revised
Statutes, is amended by amending Subsections (a), (b), (c), (d),
(e), (f), (g), (h), and (j) and adding Subsections (e-1), (e-2),
(e-3), (e-4), (f-1), (g-1), (l), (m), (n), and (o) to read as
follows:
(a) A [In lieu of either leaving active service and
commencing a retirement pension as provided for under Section 6.01
or 6.02 of this article, whichever is applicable, or remaining in
active service and continuing to accrue additional pension benefits
as provided under Section 6.01 or 6.02, a] member who remains on
active service after becoming [is] eligible to receive a [an
unreduced] retirement pension under either Section 6.01 or 6.02 of
this article may [remain in active service,] become a participant
in the deferred retirement option plan [Deferred Retirement Option
Plan ("DROP")] in accordance with Subsections (b) and (c) of this
section, and defer the beginning of the person's retirement
pension. Once an election to participate in the DROP has been made,
the election continues in effect at least as long as the member
remains in active service. On leaving active service, the member
may:
(1) apply for a retirement pension under Sections
6.01(b) and (c), Section 6.01(e), or Sections 6.02(b), (c), (d), or
(e) [Section 6.02] of this article, whichever is applicable,
together with any DROP benefit provided under this section; or
(2) continue to participate in DROP except the member
is ineligible for disability benefits described by Subsection (g-1)
of this section.
(b) The election to participate in the DROP shall be made in
accordance with procedures set forth in any uniform and
nondiscriminatory election form adopted by the board and in effect
from time to time. To determine the proper amount to be credited to
a member's DROP account, the election shall indicate whether the
member desires to receive a retirement pension under Sections
6.01(b) and (c), Section 6.01(e), or Section 6.02(b), (c), (d), or
(e) [6.02] of this article, whichever is applicable. The election
may be made at any time on or after the date the member becomes
eligible for a [an unreduced] retirement pension as provided by
this subsection. The election [under Sections 6.01(b) and (c),
Section 6.01(e), or Section 6.02 of this article, whichever is
applicable, and] becomes effective on the first day of the first
month on or after the date on which the member makes the election,
except that an election that would otherwise have been effective on
October 1, 1993, and every October 1 after that date, is considered,
for purposes of this section and Section 6.12 of this article, to be
effective on September 30 of the year in which it would otherwise
have been effective. On and after the effective date of the
election, the member will no longer be eligible for any refund of
[make member] contributions [to the fund, notwithstanding Section
4.03(b) or (f) of this article, whichever is applicable]. The
election by one or more members to participate in the DROP has no
effect on the amount of city contributions to the fund under Section
4.02 of this article.
(c) Each month after a member has made an election to
participate in the DROP and indicated a desire to receive a
retirement pension under Sections 6.01(b) and (c), Section 6.01(e),
or Section 6.02(b), (c), (d), or (e) [Section 6.02] of this article,
whichever is applicable, and through the month before the month in
which [until] the member leaves active service, an amount equal to
the retirement pension the member would have received under the
[Sections 6.01(b) and (c), Section 6.01(e), or Section 6.02,
whichever is] applicable subsection[,] for that month if the member
had left active service and been granted a retirement pension by the
board on the effective date of DROP participation shall be credited
[transferred] to a separate DROP account maintained within the fund
for the benefit of the member. Amounts held in the DROP account of a
member [member's DROP account] shall be credited at the end of each
calendar month [with interest at a rate that will approximately
equal one-twelfth of the annual rate assumed by the pension
system's qualified actuary and approved by the board as the assumed
actuarial rate of return for the fund]. Notwithstanding this
section, effective January 1, 2018, a member on active service who
has 10 years or more of participation in DROP shall no longer have
the amount of the member's retirement pension credited to the
member's DROP account while the member is on active service.
(d) A [On leaving active service and on the board's grant of
a retirement pension, a] member may not [who participates in DROP
shall begin to] receive a [the balance in the person's DROP account
under one of the following methods of] distribution from the
member's DROP account while the member is on active service
[elected by the member:
[(1) a single-sum distribution made at a time selected
by the member but not later than April 1 of the year after the member
attains 70-1/2 years of age;
[(2) an annuity to be paid in equal monthly payments
for the life of the member, or for the life of the member and a
designated beneficiary in the same manner as a retirement pension
computed under Sections 6.01(b) and (c), Section 6.01(e), or
Section 6.02 of this article, whichever is applicable, determined
as of the date the member leaves active service based on the
person's account balance and age and the age of the designated
beneficiary, if applicable, on that date and using the mortality
and earnings assumptions being used on that date by the pension
system's qualified actuary and approved by the board as the assumed
actuarial rate of return for the fund; or
[(3) substantially equal monthly or annual payments of
the person's account balance beginning at a time selected by the
member that is on or before April 1st of the year after the member
attains 70-1/2 years of age and extending over a fixed period that
does not exceed the life expectancy of the member, or the life
expectancy of the member and the member's designated beneficiary,
if applicable].
(e) Except as provided by Subsections (e-1) and (l) of this
section, the balance in the [The] DROP account [balance] of a member
who terminated from active service on or before September 1, 2017,
or who terminates from active service shall be distributed to the
member in the form of an annuity by annuitizing the amount credited
to the DROP account over the life expectancy of the member as of the
date of the annuitization using mortality tables recommended by the
pension system's qualified actuary. The annuity shall be
distributed beginning as promptly as administratively feasible
after the later of, as applicable:
(1) the date the member retires and is granted a
retirement pension; or
(2) September 1, 2017 [elects the method of
distribution described by Subsection (d)(3) of this section shall
be credited with interest on the unpaid balance at the end of each
calendar month in the same manner as is prescribed by Subsection (c)
of this section].
(e-1) The board may adopt a shorter period for annuitizing
DROP account balances under Subsection (e) of this section if the
pension system's qualified actuary determines that the shorter
period will not cause the pension system's amortization period to
exceed 25 years [A member may change a distribution election at any
time before the member attains 70-1/2 years of age to receive one or
more additional payments or to accelerate or delay any payment not
then due, if the change is communicated to the plan administrator,
in accordance with procedures then in effect, not less than 30 days
before the day it is to take effect and if the change does not result
in a failure of the distributions to satisfy the requirements of
Section 401(a)(9) of the code].
(e-2) The annuitization of a DROP account under Subsection
(e) of this section must reflect the accrual of interest on the
amount in the DROP account as of September 1, 2017, over the
annuitization period applied to the account under this section.
The interest rate applied under this subsection must be a rate as
reasonably equivalent as practicable to the interest rate on a note
issued by the United States Department of the Treasury or other
federal treasury note with a duration that is reasonably comparable
to the annuitization period applied to the account, as determined
by the board. The portion of an annuity attributable to amounts
credited to a member's DROP account on or after September 1, 2017,
may not reflect the accrual of this interest on annuitization.
(e-3) The board may by rule allow a DROP participant who has
terminated active service and who is eligible for a retirement
pension to:
(1) assign the distribution from the participant's
annuitized DROP account to a third party provided the pension
system receives a favorable private letter ruling from the Internal
Revenue Service ruling that such an assignment will not negatively
impact the pension system's qualified plan status; and
(2) subject to Subsection (e-4) of this section, in
the event of an unforeseeable emergency or hardship obtain a
lump-sum distribution from the participant's DROP account
resulting in a corresponding reduction in the total number or in the
amount of annuity payments.
(e-4) The board shall adopt rules necessary to implement
Subsection (e-3)(2) of this section, including rules regarding what
constitutes an unforeseeable emergency or hardship.
(f) The board may adopt rules and policies relating to the
administration of Subsections (e), (e-1), and (e-2) of this section
if the rules and policies are:
(1) consistent with the qualification of the plan
under Section 401 of the code; and
(2) in the best interest of the pension system [Any
election made in accordance with Subsection (d) of this section may
be changed at any time before leaving active service to any other
election permitted by that subsection, subject to the requirements
for spousal consent, in Section 6.14(d)(1), if applicable].
(f-1) The DROP account of a member who begins participating
in DROP on or after September 1, 2017, does not accrue interest.
(g) The provisions of Sections 6.06, 6.061, 6.062, 6.063,
6.07, and 6.08 of this article pertaining to death benefits of a
qualified survivor do not apply to amounts held in a member's or
pensioner's DROP account [, and the class of persons eligible to
become qualified survivors of a member closes on the effective date
of the member's participation in DROP]. Instead, a member or
pensioner who participates in DROP may designate a beneficiary to
receive the annuity payments under this section over the remaining
annuitization period [balance of the member's DROP account] in the
event of the member's or pensioner's death subject to any rights
provided under Subsection (e-3) of this section and in the
[following] manner allowed by Section 401(a)(9) of the code and any
policy adopted by the board. A member or pensioner who is or
becomes married is considered to have designated the member's or
pensioner's spouse as the member's or pensioner's beneficiary,
notwithstanding any prior beneficiary designation, unless the
member or pensioner has made a different designation in accordance
with a policy adopted by the board. If a member or pensioner does
not have a spouse or the spouse predeceases the member or pensioner,
the member's or pensioner's, as applicable, DROP account will be
distributed to the member's or pensioner's, as applicable,
designee. Notwithstanding anything in this section to the
contrary, if a member or pensioner has previously designated the
member's or pensioner's spouse as the beneficiary or co-beneficiary
of the DROP account and the member or pensioner and spouse are
subsequently divorced, the divorce automatically results in the
invalidation of the designation of the spouse as a beneficiary and,
if there is no additional beneficiary designated, the member's or
pensioner's DROP account shall be distributed as provided by
Subsection (e) of this section. If there are beneficiaries who
survive the deceased member or pensioner, the surviving
beneficiaries share equally in that portion that would have
otherwise been payable to the former spouse. [:
[(1) The beneficiary designation must be made on an
election form adopted by the board and in effect from time to time
and in accordance with the conditions on the form, except that if
the member is married, the designation of a beneficiary other than
the member's spouse is valid only if the spouse consents to the
designation at the time, in the manner, and on the consent form as
is adopted by the board and in effect from time to time.
[(2) If a member who participates in DROP dies while in
active service or before the beginning of the member's DROP
account, distributions will begin no more than one year after the
date of the member's death under a method described by Subsection
(d) of this section and shall be completed within the life, or life
expectancy, of the designated beneficiary.
[(3) If a member who participates in DROP dies after
having begun to receive distributions in accordance with Subsection
(d) of this section, the balance in the member's DROP account shall
continue to be distributed to the member's designated beneficiary
or other person described by Subdivision (4) of this subsection in
accordance with any elections that had been made under Subsection
(d) of this section.
[(4) If the deceased member has not designated a
beneficiary or has designated a beneficiary but not a method of
distribution, the member's DROP account shall be distributed in a
single-sum payment as soon as administratively feasible after the
member's death to the beneficiary if one was designated and
otherwise to the spouse if the member was married at the time of
death or, if the member was not married, to the member's estate.]
(g-1) [(5)] A member who [participates in DROP] becomes a
DROP participant is ineligible for any disability benefits
described by Section [Sections] 6.03, 6.04, or [and] 6.05 of this
article, but is entitled to [instead, on the board's acknowledgment
of a disability that would otherwise qualify the member for
disability benefits, the board shall grant] a retirement pension in
accordance with Sections 6.01(b) and (c), Section 6.01(e), or
Section 6.02 of this article, whichever is applicable, on
termination from active service, and [the member] is also entitled
to receive annuity payments [both a retirement pension and a
distribution of the DROP account] in accordance with Subsection (e)
[(d)] of this section.
(h) The base pay or computation pay, whichever is
applicable, in effect as of the effective date of a [Group A]
member's participation in DROP shall be used in calculating the
member's [Group A] retirement pension under Section 6.01 or 6.02 of
this article. A [Group A] member who elects to participate in DROP
does not accrue additional pension service for purposes of
computing a [the Group A] retirement pension [provided under
Section 6.01(e) of this article] for any period after the effective
date of the election.
(j) Except as provided by Subsection (l) of this section, if
[If] a pensioner who has been a [participated in] DROP participant
returns to active service, the person must [once again] become a
participant in DROP under the terms and conditions in effect at the
time of [the person's] return to active service.
(l) Notwithstanding any other provision of this section and
except as provided by Subsection (o) of this section, a member who
has entered DROP before June 1, 2017, may revoke the DROP election
at any time on or after September 1, 2017, and before the earlier
of:
(1) February 28, 2018; or
(2) the member's termination of active service.
(m) If a member revokes participation in DROP under
Subsection (l) of this section:
(1) the member's DROP account balance is eliminated;
and
(2) the member shall receive pension service credited
for all or a portion of the period of the revoked DROP participation
on payment of the required contributions for the period of the
revoked DROP participation in accordance with a uniform and
nondiscriminatory procedure adopted by the board that results in
the payment of the amount of member contributions that would have
been made if the member had never participated in DROP.
(n) A member who revokes the member's DROP election under
Subsection (l) of this section is entitled to only a monthly pension
computed on the basis of the member's pension service, including
pension service purchased under Subsection (m) of this section:
(1) that is based on the member's average computation
pay at the time of leaving active service, if the member is a Group B
member; or
(2) as provided by Section 6.01(b) of this article, if
the member is a Group A member.
(o) A member may not revoke DROP participation under
Subsection (l) of this section if any money has been transferred out
of the member's DROP account.
SECTION 43. Sections 6.15(a), (b), and (e), Article
6243a-1, Revised Statutes, are amended to read as follows:
(a) The board may require the following pensioners
receiving a disability pension or a periodic disability
compensation benefit to appear and undergo a medical examination by
the health director or, if the health director approves, by any
licensed medical practitioner, to determine if the pensioner's
disability continues or has been removed to the extent that the
pensioner is able to resume duties with the department:
(1) any Group A pensioner who has served less than 20
years;
(2) any Group A pensioner who elected a Group A [B]
disability pension under Section 6.04 [6.04(e)] of this article,
periodic disability compensation under Section 6.05 of this
article, or a non-service-connected disability pension under Plan A
or former Section 17(b)(2) of this article, and who had [has served]
more than 20 years of pension service, but is less than 55 years of
age; and
(3) any Group B pensioner who was granted [elected] a
Group B disability pension under Section 6.04 of this article or
periodic disability compensation under Section 6.05 of this article
or a disability pension under the terms of Plan B and is less than 50
years of age.
(b) Any medical examination under this section is subject to
the following conditions:
(1) Except as otherwise provided by this section, the
board has complete discretion to require a pensioner to appear and
undergo a medical examination as well as the time that may pass
between examinations. When it becomes clear to the board from
reliable medical evidence that the disability is unequivocally
permanent and is not expected to diminish, the board may waive [not
require] subsequent examinations.
(2) A pensioner may not be required to undergo a
medical examination more often than once in a six-month period,
except that the board may order the pensioner to undergo an
examination at any time if the board has reason to believe the
pensioner's disability has been removed and that the pensioner may
be able to resume duties with the pensioner's former department or
if the pensioner requests to be allowed to return to duty.
(3) If a pensioner fails to undergo an examination
after being notified by the board that the examination is required,
the board may discontinue disability benefits until the pensioner
has undergone the examination and the results of the examination
have been sent to the board.
(4) If the pensioner is examined by an approved
outside medical practitioner other than the health director, the
reasonable and customary cost of the examination, if any, is
payable from the assets of the fund.
(e) Pursuant to its authority under Section 6.06(o-2)
[6.06(o)] of this article to review and modify any funding relating
to the disability of a child who is a qualified survivor [surviving
child's handicap], the board may require the [a handicapped]
qualified survivor with a disability [surviving child] receiving
death benefits to appear and undergo medical examination by the
health director or, if the health director approves, by any
licensed medical practitioner, to determine if the disability
[handicap] continues or if the disability [handicap] has been
removed.
SECTION 44. Sections 6.16, 6.18, and 6.19, Article 6243a-1,
Revised Statutes, are amended to read as follows:
Sec. 6.16. WAIVER OF BENEFITS. (a) A primary party
[pensioner who is on either service or disability retirement], [a]
qualified survivor [surviving spouse, a handicapped qualified
surviving child, a member who may be a participant in DROP], or [a]
beneficiary of a member's [deceased former] DROP account
[participant, or a qualified surviving dependent parent] may, on a
form prescribed by the board and filed with the executive director
[administrator], [irrevocably] waive all or a portion of the
benefits[,] to which the person [who waives the benefit] is or may
be entitled. The waiver may state whether it is revocable or
irrevocable, and is irrevocable unless the waiver clearly states it
is revocable.
(b) The [irrevocable] waiver described by Subsection (a) of
this section applies only to [retirement, disability, or DROP
survivor] benefits that become payable on or after the date the
waiver is filed.
(b-1) Benefits waived by a revocable waiver are forfeited
and the person making the waiver has no right, title, claim, or
interest in the benefits.
(c) If two or more persons are or may be entitled to benefits
under this article [there are two qualified surviving dependent
parents receiving death benefits], the waiver described by
Subsection (a) of this section must be executed by each person to
become effective. The living parent or parents or legal guardian or
guardians of a child must sign the waiver described by Subsection
(a) of this section on behalf of the child [both of the parents].
Sec. 6.18. INVESTIGATION. (a) The board shall consider all
applications for retirement and disability pensions [of members],
all applications for death benefits [by qualified survivors], and
all elections to participate [for participation by a member] in
DROP. The board shall give notice to [those] persons applying for
benefits, advising them of their right to appear before the board
and offer such sworn evidence as they may desire. Any [primary
party, survivor, or other] person claiming retirement, disability,
or DROP benefits may appear before the board [in person] and offer
testimony that is relevant to a contested application for a
retirement pension, a disability pension, death benefits
[benefit], or DROP benefits [benefit]. The chairman of the board
may issue process for witnesses, administer oaths to witnesses, and
examine any witness as to any matter affecting benefits under any
plan within the pension system. Process for witnesses shall be
served by any [member of the police or fire department or by any
other] method of serving process [or person] permitted by the state
law in any civil judicial proceeding. A witness who fails or
refuses to attend and testify may be compelled to attend and
testify, as in any judicial proceeding. The board may seek
assistance from any court of competent jurisdiction to further
compel or sanction a witness who fails or refuses to attend and
testify.
(b) Any [primary party, spouse, child, dependent parent, or
other] person [claiming DROP benefits] who is aggrieved by a
determination of the board regarding [on the person's application
for or continuation of] a retirement pension, a disability pension,
[or] death benefits [benefit], or [an election for] DROP benefits
may appeal the board determination to a state district court in the
city [county] where the pension system is located by giving written
notice of appeal. The notice shall contain a statement of the
grounds and reasons why the party feels aggrieved. The notice shall
be served personally on the executive director [secretary of the
board] within 20 days after the date of the board's determination.
After service of the notice, the party appealing shall file with the
state district court a copy of the notice of intention to appeal,
together with an affidavit of the party making service showing how,
when, and on whom the notice was served.
(c) Within 30 days after the date of service of the notice of
appeal on the board, the executive director [secretary of the
board] shall make up and file with the state district court a
transcript of all nonprivileged papers and proceedings in the case
before the board. When the copy of the notice of appeal and the
transcript has been filed with the court, the appeal is perfected,
and the court shall docket the appeal, assign the appeal a number,
fix a date for hearing the appeal, and notify both the appellant and
the board of the date fixed for the hearing.
(d) At any time before the rendering of its decision on
[the] appeal, the court may require further or additional proof or
information, either documentary or under oath. On rendition of a
decision on appeal, the court shall give to each party to the appeal
a copy of the decision of the case. The decision [or order] of the
court is appealable in the same manner as are civil cases generally.
(e) As provided by Section 4.01 of this article, the [The]
board shall approve all money used for investigations [as provided
under Section 4.01 of this article]. The board may request the
investigative services of either the police or fire departments in
connection with any matter arising under this section.
Sec. 6.19. CERTIFICATE OF MEMBER PENSION BENEFIT
ELIGIBILITY [RETIREMENT]. When a member has earned five [20] years
of pension service, the member shall be issued an [a certificate of
retirement that, barring administrative error, miscalculation, or
other error, after issuance is] incontestable five-year
certificate indicating that the member is entitled to pension
benefits subject to the effect of any withdrawals as permitted
under Article 6243a or this article. The certificate shall state
that the calculation of the retirement pension to which the member
is entitled, or any disability benefits to which the member may
become entitled, shall be determined solely under the actual terms
of the combined pension plan as in effect at the time the member
leaves active service. The certificate shall further state that in
the case of the member's death, the member's qualified survivors, if
any, may become [shall be] entitled to death [survivor] benefits as
determined solely under the actual terms of the combined pension
plan as in effect at the time of the member's death. The
certificate shall bear a seal and be signed by the executive
director [mayor, or the mayor pro tem, or the city manager] and [by
the] chairman of the board [and attested under the seal of the city
by the city secretary].
SECTION 45. Part 6, Article 6243a-1, Revised Statutes, is
amended by adding Section 6.20 to read as follows:
Sec. 6.20. ERRONEOUS PAYMENTS OR OVERPAYMENTS. (a) If the
pension system pays money to any person not entitled to the payment,
whether by reason of an error of the pension system as to
entitlement to or the amount of a benefit or otherwise, or an act or
error of some other person, including the recipient of the payment,
the recipient of the payment holds the funds to which the recipient
was not entitled in constructive trust for the pension system and
those funds are subject to demand by the pension system at any time.
(b) The recipient of an erroneous payment from the pension
system shall repay to the pension system all funds associated with
the erroneous payment.
(c) Subject to Subsection (e) of this section, the board may
by rule adopt a procedure to enable the pension system to offset the
future benefit or other payments of a recipient described by this
section. In addition, the board may take any additional action,
including the bringing of a lawsuit, the board considers necessary
to recover an erroneous payment the pension system is entitled to
under this section.
(d) If the pension system determines that a person is
entitled to additional benefits as a result of an error made by the
pension system, the pension system shall promptly pay the
additional benefits owed.
(e) The board's correction procedures must comply with the
Internal Revenue Service's Employee Plans Compliance Resolution
System and Revenue Procedure 2016-51, including subsequent
guidance.
SECTION 46. Article 6243a-1, Revised Statutes, is amended
by adding Part 6A to read as follows:
PART 6A. EQUITABLE ADJUSTMENTS
Sec. 6A.01. EQUITABLE ADJUSTMENTS TO BENEFITS. (a)
Subject to this section and notwithstanding any other provision of
this article, the board shall consider and adopt rules requiring
the equitable return of funds paid to or credited to the benefit of
a member or pensioner under this article before September 1, 2017,
to the extent the funds exceeded reasonable amounts that should be
paid or credited given the circumstances of the pension system at
the time the payment or credit was made, including the return of
excessive interest credited to a member's DROP account and
excessive adjustments made under Section 6.12 of this article.
(b) For purposes of Subsection (a) of this section,
"reasonable amounts" includes the amounts that would have been paid
or credited:
(1) if the interest rate applied in determining a
benefit, including the interest rate applied to a DROP account,
equaled the actual, audited rate of return of the plan at the time
the interest was credited to the account; or
(2) if the percentage increase applied under Section
6.12 of this article equaled the percentage increase, if any, in the
Consumer Price Index for Urban Wage Earners and Clerical Workers
(CPI-W) most recently published by the Bureau of Labor Statistics
of the United States Department of Labor and used by the United
States Social Security Administration to provide a cost-of-living
adjustment for social security benefit payments payable beginning
in January of the next year.
Sec. 6A.02. ADJUDICATION OF CERTAIN CHALLENGES. (a) The
Texas Supreme Court has exclusive and original jurisdiction over a
challenge to the constitutionality under the Texas Constitution of
Section 6A.01 of this article. An action under this section is
authorized to the full extent permitted by Section 3, Article V,
Texas Constitution. The Texas Supreme Court may issue any
injunctive, declaratory, or equitable relief the court deems
appropriate or necessary to effectuate the court's mandamus
jurisdiction in connection with a challenge under this section.
(b) Any action brought under this section must be filed not
later than the 90th day after the date the board adopts a rule under
Section 6A.01 of this article.
(c) If an action brought under this section is timely filed,
the board may not enforce or otherwise administer any rules adopted
pursuant to Section 6A.01 of this article during the pendency of the
action.
SECTION 47. Section 8.01, Article 6243a-1, Revised
Statutes, is amended to read as follows:
Sec. 8.01. QUALIFICATION UNDER FEDERAL TAX LAW. (a) The
plans within the pension system and the assets of the fund are
intended to qualify as a governmental plan under Sections [Section]
401 and 414(d) of the code, be exempt from federal income taxes
under Section 501(a) of the code, and conform at all times to
applicable requirements of law, regulations, and orders of duly
constituted federal governmental authorities. Accordingly, if any
provision of this article is subject to more than one construction,
one of which will permit the qualification of a plan that is within
the pension system, that construction that will permit the plan to
qualify and conform will prevail.
(b) The plans within the pension system as well as the
assets of the fund shall be maintained for the exclusive benefit of
members and their beneficiaries. At no time before the termination
of all the plans within the pension system and the satisfaction of
all liabilities with respect to members and their beneficiaries
under all plans shall any part of the principal or interest from the
assets of the fund be used for or diverted to purposes other than
the exclusive benefit of the members and beneficiaries.
(c) Notwithstanding any other provisions of this article,
the annual benefit [pension] provided with respect to any member
[may not exceed an annual benefit computed in accordance with the
limitations prescribed by this subsection.
[(1) The maximum annual benefit payable] in any
limitation year [to a member] may not exceed the amount permitted by
Section 415(b) of the code for the limitation year, and the sum of
the member contributions and all other annual additions for any
limitation year may not exceed the amount permitted under Section
415(c) of the code for the limitation year. If the aggregated
annual benefit or aggregated annual additions under [lesser of:
[(A) $90,000; or
[(B) 100 percent of a member's 415 compensation
averaged over the three consecutive limitation years, or the actual
number of limitation years for a member whose total pension service
is less than three consecutive limitation years, during which the
member had the greatest aggregate 415 compensation from the city.
[(2) Benefits provided to a member under this article
and under any defined benefit plan or plans maintained by the city
shall be aggregated for purposes of determining whether the
limitations in Subdivision (1) of this subsection are met. If the
aggregate benefits otherwise payable from] any qualified plans
created under this article and any other defined benefit plan or
plans maintained by the city would otherwise exceed the limitations
of Section 415 of the code [Subdivision (1) of this subsection], the
required reductions in benefits or contributions shall first be
made to the extent possible from the other plan or plans. The
limitations referenced in this subsection shall be adjusted
annually in accordance with Section 415(d) of the code and any
adjustment to benefits applies to the benefits of active and
terminated members and applies without regard to whether a
terminated member is a pensioner.
[(3) The adjustments on retirement are the following:
[(A) If the annual benefit begins before a member
attains age 62, the $90,000 limitation, as adjusted, shall be
reduced in a manner prescribed by the secretary of the treasury.
However, that adjustment may not reduce the member's annual benefit
below $75,000, if the member's benefit begins after age 55, or the
actuarial equivalent of $75,000 beginning at age 55 if benefits
begin before age 55. Furthermore, except as provided by Paragraph
(C) of this subdivision, an adjustment may not reduce the member's
annual benefit below $50,000, regardless of the age at which the
benefit begins.
[(B) If the annual benefit begins after a member
attains age 65, the $90,000 limitation, as adjusted, will be
increased so that it is the actuarial equivalent of the $90,000
limitation at age 65.
[(C) If a member's benefits begin before the
member has at least 15 years of pension service as a full-time
employee of the police or fire department, or both, including
credit for full-time service in the armed forces of the United
States, Paragraphs (A) and (B) of this subdivision shall be applied
by substituting "social security retirement age" for "age 62" and
for "age 65," and the last two sentences of Paragraph (A) of this
subdivision do not apply in computing the benefit limitation for
that member.
[(D) The portion of a member's benefit that is
attributable to the member's own contributions is not part of the
annual benefit subject to the limitations of Subdivision (1) of
this subsection. Instead, the amount of those contributions is
treated as an annual addition to a qualified defined contribution
plan maintained by the city.
[(4)(A) The dollar limitation on annual benefits
provided by Subdivision (1) of this subsection, and the $50,000
limitation provided by Subdivision (3) of this subsection, but not
the $75,000 limitation provided by that subsection, shall be
adjusted annually as provided by Section 415(d) of the code and the
regulations prescribed by the secretary of the treasury. The
adjusted limitation is effective as of January 1 of each calendar
year and is applicable to limitation years ending with or within
that calendar year.
[(B) The limitation provided by this paragraph
for a member who has separated from service with a vested right to a
pension shall be adjusted annually as provided by Section 415(d) of
the code and the regulations prescribed by the secretary of the
treasury.
[(5) The following interest rate assumptions shall be
used in computing the limitations under this section:
[(A) For the purpose of determining the portion
of the annual benefit that is purchased with member contributions,
the interest rate assumption is 8.5 percent, compounded annually,
for plan years beginning before 1988 and 120 percent of the federal
mid-term rate, as in effect under Section 1274 of the code,
compounded annually, for plan years beginning after 1987.
[(B) For the purpose of adjusting the annual
benefit to a straight life annuity, the interest rate assumption is
five percent, unless a different rate is required by the secretary
of the treasury.
[(C) For the purpose of adjusting the $90,000
limitation after a member attains age 65, the interest rate
assumption is five percent, unless a different rate is required by
the secretary of the treasury, and the mortality decrement shall be
ignored to the extent that a forfeiture does not occur at death.
[(6) For purposes of Subdivisions (1) and (3) of this
subsection, an adjustment under Section 415(d) of the code may not
be taken into account before the limitation year for which that
adjustment first takes effect. For purposes of Subdivisions (1)
and (5) of this subsection, an adjustment is not required for the
value of qualified joint and survivor annuity benefits,
preretirement death benefits, postretirement medical benefits, or
postretirement cost-of-living increases made in accordance with
Section 415(d) of the code and Section 1.415-3(c) of the Income Tax
Regulations.
[(7) This plan may pay an annual benefit to any member
in excess of the member's maximum annual benefit otherwise allowed
if:
[(A) the annual benefit derived from the city's
contributions under any qualified plans within this article and all
defined benefit plans maintained by the city does not in the
aggregate exceed $10,000 for the limitation year or for any prior
limitation year; and
[(B) the member has not at any time participated
in a defined contribution plan maintained by the city.
[For purposes of this subdivision, member contributions to
the plan are not considered a separate defined contribution plan
maintained by the city.
[(8) If a member has less than 10 years of pension
service in the plan at the time the member begins to receive
benefits under the plan, the $90,000 limitation, as adjusted, shall
be reduced by multiplying the limitation by a fraction in which the
numerator is the number of years of pension service and the
denominator is 10; provided, however, that the fraction may not be
less than one-tenth. The 100 percent limitation of Subdivision
(1)(B) of this subsection, and the $10,000 limitation of
Subdivision (7) of this subsection shall be reduced in the same
manner as provided by this subdivision, except the numerator shall
be the number of years of employment with the city rather than years
of pension service.
[(9) If a member is or has been a participant in one or
more defined benefit plans and one or more defined contribution
plans maintained by the city, the following provisions shall apply:
[(A) The sum of the defined benefit plan fraction
and the defined contribution plan fraction for any limitation year
may not exceed 1.0.
[(B) The defined benefit plan fraction for any
limitation year is a fraction in which:
[(I) the numerator is the projected annual
benefit of a member, determined as of the close of the limitation
year pursuant to Section 1.415-7(b)(3) of the Income Tax
Regulations; and
[(II) the denominator is the lesser of:
[(i) the product of 1.25 and the maximum
dollar limitation provided by Subdivision (1)(A) of this
subsection, as adjusted, for the limitation year; or
[(ii) the product of 1.4 and the amount that
may be taken into account under Subdivision (1)(B) of this
subsection for the limitation year.
[(C) The defined contribution plan fraction for
any limitation year is a fraction in which:
[(I) the numerator is the sum of the annual
additions to the member's account as of the close of the limitation
year; and
[(II) the denominator is the sum of the
lesser of the following amounts determined for the limitation year
and each prior year of service with the city:
[(i) the product of 1.25 and the dollar
limitation in effect under Section 415(c)(1)(A) of the code for the
limitation year, determined without regard to Section 415(c)(6) of
the code; or
[(ii) the product of 1.4 and the amount that
may be taken into account under Section 415(c)(1)(B) of the code for
the limitation year beginning before January 1, 1987; the annual
additions may not be recomputed to treat all member contributions
as an annual addition.
[(D) If the sum of the defined benefit plan
fraction and the defined contribution plan fraction exceeds 1.0 in
any limitation year for any member of any plan within the pension
system, the administrator shall limit, to the extent necessary, the
annual additions to the member's account for that limitation year.
If after limiting to the extent possible the annual additions to the
member's account for the limitation year, the sum of the defined
benefit plan fraction and the defined contribution plan fraction
still exceeds 1.0, the administrator shall adjust the benefits
under the defined benefit plan fraction so that the sum of both
fractions shall not exceed 1.0 in any limitation year for the
member.
[(10) For purposes of determining the limits provided
by this section, all qualified defined benefit plans, whether
terminated or not, ever maintained by or contributed to by the city,
shall be treated as one defined benefit plan, and all qualified
defined contribution plans, whether terminated or not, ever
maintained by or contributed to by the city, shall be treated as one
defined contribution plan.]
(c-1) [(11)] Notwithstanding anything contained in this
section to the contrary, the limitations, adjustments, and other
requirements prescribed by this section shall at all times be
computed in the manner most favorable to the affected members, to
the extent permitted by guidelines issued by the Internal Revenue
Service [comply with the requirements of Section 415 of the code and
all regulations promulgated under the code]. If any provision of
Section 415 of the code is repealed or is not enforced by the
Internal Revenue Service, that provision may not reduce the
benefits of any member after the effective date of the repeal of the
provision or during the period in which the provision is not
enforced.
(c-2) Any benefit reductions that are required to be made
under this section shall be applied to reduce the monthly benefit
that would otherwise have been payable to the member, unless the
value of the member's DROP account accrued under Section 6.14 of
this article exceeds the amount that may be paid under this section.
If the value of the DROP account exceeds the value of the payments
that may be made under this section, the member shall receive a
lump-sum payment from the account of the maximum amount that may be
paid under this section and the payment shall permanently reduce
the benefits the member would otherwise have been entitled to
receive under the combined pension plan.
(d) A member's retirement pension may not begin later than
April 1 of the year after the later of the year in which the member
leaves active service or the year in which the member attains age
70-1/2 and must at all times comply with the requirements of Section
401(a)(9) of the code. [Benefits to a qualified beneficiary may not
begin later than one year after the date of the member's death].
(e) Any person [member or beneficiary] who receives any
distribution from any plan within the pension system that is an
eligible rollover distribution as defined by Section 402(f)(2)(A)
of the code is entitled to have that distribution transferred
directly to another eligible retirement plan as defined by Section
402(c)(8)(B) of the code of the person's [member's or beneficiary's]
choice on providing direction regarding that transfer to the
executive director [administrator] in accordance with procedures
established by the executive director [administrator].
(e-1) If an eligible rollover distribution described by
Subsection (e) of this section is to a designated beneficiary who is
not the spouse or former spouse of the member, the transfer may only
be to an individual retirement account or an individual retirement
annuity.
(f) For the 2017 calendar year, the [The] annual
compensation taken into account for any purpose under the combined
pension plan [this article] may not exceed $400,000 for an eligible
participant or $270,000 for an ineligible participant [$200,000 for
any calendar year]. For a Group A member the term "annual
compensation" means the aggregate of the member's base pay. For a
Group B member the term "annual compensation" means the aggregate
of the member's computation pay for any given plan year. These
dollar limits [The $200,000 limit] shall be adjusted from [on
January 1 of each year at the same] time to time [and] in accordance
with guidelines [the same manner as] provided by the secretary of
the treasury. For [Section 415(d) of the code. In determining the
compensation of a member for] purposes of this subsection, an:
(1) "eligible participant" means any person who first
became a member of the pension system before January 1, 1996; and
(2) "ineligible participant" means any member who is
not an eligible participant [limitation, the family aggregation
rules of Section 414(q)(6) of the code apply, except that the term
"family member" includes only the spouse of the member and any
lineal descendants of the member who have not attained age 19 at the
end of the plan year. If as a result of this family aggregation
requirement, the $200,000 limit is exceeded, the limitation shall
be prorated among the affected individuals in proportion to each
individual's compensation as determined before application of the
limit].
(g) For purposes of Subsection (h) of this section, "normal
retirement age" means the earlier of:
(1) the attainment of 50 years of age on or before
September 1, 2017, and completion of at least five years of pension
service;
(2) the attainment of 58 years of age after September
1, 2017, and completion of at least five years of pension service;
or
(3) completion of 20 years of pension service.
(h) The retirement benefit earned by a member is
nonforfeitable:
(1) on attainment of normal retirement age, if not
already nonforfeitable; or
(2) to the extent the benefit is funded, if not already
nonforfeitable, on the termination or partial termination of the
combined pension plan or the complete discontinuance of city
contributions to the fund.
(i) In accordance with Section 401(a)(8) of the code,
forfeitures arising under the combined pension plan may not be used
to increase the benefits any member would otherwise receive under
the terms of the plan. Forfeitures may be used first to reduce
administrative expenses, then to reduce required city
contributions.
(j) Subject to procedures adopted by the board, the pension
system shall accept an eligible rollover distribution from another
eligible retirement plan as defined by Section 402(f)(2)(B) of the
code as payment of all or a portion of any payment a member is
permitted to make to the pension system for past pension service
credit. The pension system shall separately account for any
after-tax contributions transferred from any plan under this
subsection.
SECTION 48. Section 8.02, Article 6243a-1, Revised
Statutes, is amended to read as follows:
Sec. 8.02. EXCESS BENEFIT PLAN FOR POLICE OFFICERS AND FIRE
FIGHTERS. The board may by rule establish and administer [On the
enactment of federal legislation enabling public retirement
systems to establish excess benefit plans for the benefit of
employees for whom additional benefits from retirement plans
qualified under Section 401 of the code would exceed the
limitations of Section 415 of the code, there is created outside the
pension system] a separate[,] qualified governmental
[nonqualified] excess benefit arrangement and associated trust for
the arrangement in accordance with Section 415(m) of the code.
[plan containing the following terms and provisions:
[(a)(1) All definitions prescribed by Section 2.01 of this
article are applicable to the plan created pursuant to this section
except:
[(A) if a different definition is set forth in
this subsection; or
[(B) the context in which a term is used in this
section indicates a different meaning is clearly intended than that
prescribed by Section 2.01 of this article.
[(2) "Excess benefit plan" means this separate,
nonqualified, unfunded excess benefit plan as created by this
section for the benefit of eligible members, as amended or restated
from time to time.
[(3) "Qualified plan" means any plan maintained within
the pension system or maintained by the city outside the pension
system for the exclusive benefit of some or all of the employees of
the city if the plan has been found by the Internal Revenue Service
to be qualified or has been treated by the city as a qualified plan
under Section 401 of the code.
[(4) "Maximum benefit" means the retirement benefit a
member or, the spouse, any child, or any dependent parent of a
member if those persons are entitled, is entitled to receive from
all qualified plans in any month after giving effect to Section 8.01
of this article and any similar provisions of any other qualified
plans designed to conform to Section 415 of the code.
[(5) "Excess benefit participant" means any member
whose retirement benefits as determined on the basis of all
qualified plans without regard to the limitations of Section 8.01
of this article and comparable provisions of other qualified plans
would exceed the maximum benefit permitted under Section 415 of the
code.
[(6) "Unrestricted benefit" means the monthly
retirement benefit a member, or the spouse or any child of a member,
would have received under the terms of all qualified plans except
for the restrictions of Section 8.01 of this article and any similar
provisions of any other qualified plans designed to conform to
Section 415 of the code.
[(b)(1) An excess benefit participant who is receiving
benefits from an applicable qualified plan is entitled to a monthly
benefit under this excess benefit plan in an amount equal to the
lesser of:
[(A) the member's unrestricted benefit less the
maximum benefit; or
[(B) the amount by which the member's monthly
benefit from the qualified plan or plans approved by the members has
been reduced due to the limitations of Section 415 of the code.
[(2) In the case of the death of an excess benefit
participant whose spouse or child is entitled to preretirement or
postretirement death benefits under a qualified plan, the excess
benefit participant's surviving spouse or child is entitled to a
monthly benefit under the excess benefit plan equal to the benefit
determined in accordance with the qualified plans without regard to
the limitations under Section 8.01 of this article or Section 415 of
the code, less the maximum benefit.
[(3) Unless the excess benefit participant makes a
timely election to the contrary, a retirement benefit payable under
this excess benefit plan shall be paid in the form and at the time it
would have been paid under the applicable qualified plan except for
the limitations under Section 415 of the code. However, retirement
benefits payable under this excess benefit plan shall be paid at the
time and in the form, including a single-sum distribution, as the
excess benefit participant elects from among the benefit payment
forms made available under the election form as approved by the
board. An excess benefit participant makes an election under this
subdivision by sending written notice to the administrator on the
election form approved by the board. Each optional benefit form
permitted under this excess benefit plan shall be the actuarial
equivalent of each other permitted benefit form. On or after an
excess benefit participant's leaving active service with an
entitlement to a retirement benefit under any qualified plan
approved by the members, a benefit under this subdivision may be
elected to be paid.
[(c)(1) This plan shall be administered by the board, and
the administrator shall also carry out the business of the board
with respect to this excess benefit plan. Except as provided to the
contrary by this subsection, the rights, duties, and
responsibilities of the board and administrator shall be the same
for this excess benefit plan as for the qualified pension plans
within the pension system.
[(2) The qualified actuary employed pursuant to
Section 4.08 of this article is responsible for determining the
amount of benefits that may not be provided under the qualified
plans solely by reason of the limitations of Section 415 of the code
and thus the amount of city contributions that will be made to this
excess benefit plan rather than to a qualified plan.
[(3) The legal advisors described by Section 3.03 of
this article shall also provide advice to the board for this excess
benefit plan.
[(d) Contributions may not be accumulated under this excess
benefit plan to pay future retirement benefits. Instead, each
payment of city contributions that would otherwise be made to the
fund pursuant to Section 4.02 of this article or comparable
provisions of other qualified plans approved by the members shall
be reduced by the amount determined by the administrator as
necessary to meet the requirements for retirement benefits under
this excess benefit plan until the next payment of city
contributions is expected to be made to the fund by the city. The
city shall then pay to this excess benefit plan, out of the withheld
city contributions no earlier than the 14th day before the date of
each distribution of monthly retirement benefits is required to be
made from this excess benefit plan, the amount necessary to satisfy
the obligation to pay this excess benefit plan monthly retirement
benefits. The administrator shall satisfy the obligation of this
excess benefit plan to pay retirement benefits out of the city
contributions so transferred for that month. The city
contributions otherwise required to the pension system pursuant to
Section 4.02 of this article and any other qualified plan approved
by the members shall be divided into those contributions required
to pay retirement benefits pursuant to this section and those
contributions paid into and accumulated to pay the maximum benefits
required under the qualified plans. City contributions made to
provide retirement benefits pursuant to this section may not be
commingled with the monies of the fund or any other qualified plan.
[(e) Amendments to this excess benefit plan shall be made in
the same manner provided by Section 7.01 of this article.]
SECTION 49. Section 8.03, Article 6243a-1, Revised
Statutes, is amended to read as follows:
Sec. 8.03. EXEMPTION OF BENEFITS FROM JUDICIAL PROCESS OR
ALIENATION. (a) A portion of the fund or benefit or amount awarded
to any primary party, qualified survivor, [or] beneficiary of a
member's DROP account, excess benefit participant, or survivor of
an excess benefit participant under this article may not be held,
seized, taken, subjected to, or detained or levied on by virtue of
any execution, attachment, garnishment, injunction, or other writ,
order, or decree, or any process or proceedings issued from or by
any court for the payment or satisfaction, in whole or in part, of
any debt, damage, claim, demands, or judgment against any person
entitled to benefits from any plan within the pension system or from
the excess benefit plan. The fund and the excess benefit plan or
any claim against the fund or the excess benefit plan may not be
directly or indirectly assigned or transferred, and any attempt to
transfer or assign the fund or the excess benefit plan or a claim
against the fund or the excess benefit plan is void.
(b) A benefit under any plan created or existing pursuant to
this article or Article 6243a is subject to division pursuant to the
terms of a qualified domestic relations order. The executive
director [administrator] shall determine the qualifications of a
domestic relations order according to a uniform, consistent
procedure approved by the board. The total benefit payable to a
primary party or to an alternate payee under a qualified domestic
relations order may not actuarially exceed the benefits to which a
primary party would be entitled in the absence of the qualified
domestic relations order. In calculating the alternate payee's
benefits under a qualified domestic relations order, the interest
rate is the rate used by the pension system's actuary in the
actuarial evaluation for that year, except that the minimum
interest rate for this purpose is the minimum required by Section
414 of the code.
(c) This section does not preclude:
(1) the payment of death benefits to a [support] trust
for certain [surviving] children of a primary party pursuant to
Section 6.06(n) of this article;
(2) the withholding of federal taxes from pension
benefits;
(3) the recovery by the board of overpayments of
benefits previously made to any person;
(4) the direct deposit of benefit payments to an
account in a bank, savings and loan association, credit union, or
other financial institution, provided the arrangement is not an
alienation;
(5) under any policy adopted by the board and
uniformly applied to voluntary arrangements entered into by a
primary party or qualified survivor, any voluntary and revocable
arrangement entered into by a pensioner or a qualified survivor
that permits the withholding and direct payment of health care or
life insurance premiums or similar payments from the monthly
benefit payments; or
(6) an assignment of the distribution from an
annuitized DROP account to a third party under Section 6.14(e-3)(1)
of this article.
(d) For purposes of Subsection (c) of this section, an
attachment, garnishment, levy, execution, or other legal process is
not considered a voluntary arrangement.
SECTION 50. The following provisions of Article 6243a-1,
Revised Statutes, are repealed:
(1) Section 1.01(b);
(2) Section 3.01(c);
(3) Section 4.01(b);
(4) Section 4.02(f);
(5) Sections 6.06(i) and (s);
(6) Section 6.10B(h);
(7) Sections 6.14(i) and (k); and
(8) Part 7.
SECTION 51. (a) In this section, "board," "city," "city
manager," "nominations committee," "pension system," and "trustee"
have the meanings assigned by Section 2.01, Article 6243a-1,
Revised Statutes, as amended by this Act.
(b) The terms of the current trustees expire on the
effective date of this Act. Subject to Subsection (e) of this
section, on that date or as soon as possible after that date:
(1) the mayor, nominations committee, and city
manager, as applicable, shall appoint new trustees to the board in
accordance with the requirements of Sections 3.01(b)(1), (2), and
(3), Article 6243a-1, Revised Statutes, as added by this Act; and
(2) notwithstanding the requirements of Sections
3.01(b)(4) and (5) and (f), Article 6243a-1, Revised Statutes, as
added or amended by this Act, that the board adopt rules governing
the nomination and election of trustees appointed under Sections
3.01(b)(4) and (5), Article 6243a-1, Revised Statutes, as added by
this Act, the nominations committee shall adopt procedures for
nominating and electing the initial trustees nominated and elected
under Sections 3.01(b)(4) and (5), Article 6243a-1, Revised
Statutes, as added by this Act.
(c) Notwithstanding Section 3.01(o), Article 6243a-1,
Revised Statutes, as amended by this Act, and except as provided by
Subsections (d) and (h) of this section, the board may not take any
action authorized by Article 6243a-1, Revised Statutes, until at
least 10 initial trustees have been appointed or elected, unless
the action is in the ordinary course of business of the board and is
required for the continued administration of the pension system.
(d) Once all trustees have been appointed to the board under
this section, the board shall by majority vote adopt rules
establishing a process for nominating and electing trustees under
Sections 3.01(b)(4) and (5), Article 6243a-1, Revised Statutes, as
added by this Act.
(e) The city manager and the nominations committee shall
jointly appoint a new trustee to the board under Section
3.01(b)(3), Article 6243a-1, Revised Statutes, as added by this
Act, not later than the 60th day after the effective date of this
Act.
(f) As soon as possible after the effective date of this
Act, the mayor and the nominations committee shall:
(1) make a determination under Section 3.01(e),
Article 6243a-1, Revised Statutes, as amended by this Act,
regarding the term limits of the board established under that
article; and
(2) notwithstanding Section 3.01(e), Article 6243a-1,
Revised Statutes, as amended by this Act, determine the terms of
initial trustees to ensure the appropriate staggering of trustee
terms.
(g) Notwithstanding Section 3.01(g), Article 6243a-1,
Revised Statutes, the board shall elect from among its trustees an
initial chairman, vice chairman, and deputy vice chairman as soon
as possible after all trustees have been appointed or elected in
accordance with this Act and, if the board elects to do so, an
initial second deputy vice chairman.
(h) Not later than the 90th day after the date all trustees
under Section 3.01, Article 6243a-1, Revised Statutes, as amended
by this Act, have been appointed or elected, the board shall vote on
and, if the board determines it is appropriate, amend the existing
rules relating to the governance and conduct of the board.
SECTION 52. (a) Not later than January 1, 2018, the board
of trustees of the pension system established under Article
6243a-1, Revised Statutes, shall:
(1) establish the ethics policy required by Section
3.01(r), Article 6243a-1, Revised Statutes, as added by this Act;
and
(2) appoint an executive director under Section 3.04,
Article 6243a-1, Revised Statutes, as amended by this Act.
(b) As soon as possible after the executive director is
appointed under Subsection (a) of this section, the executive
director may hire, subject to confirmation by the board of trustees
of the pension system established under Article 6243a-1, Revised
Statutes, a chief investment officer as authorized under Section
3.025, Article 6243a-1, Revised Statutes, as added by this Act, and
a chief legal officer as authorized under Section 3.03(c), Article
6243a-1, Revised Statutes, as amended by this Act.
SECTION 53. (a) In this section, "executive director,"
"nominations committee," and "pensioner" have the meanings
assigned by Section 2.01, Article 6243a-1, Revised Statutes, as
amended by this Act.
(b) As soon as possible after the effective date of this
Act, but not later than the 30th day after the effective date of
this Act:
(1) the president, chair, or other executive head of
an organization described by Section 3.011(a)(2), Article 6243a-1,
Revised Statutes, as added by this Act, that is eligible to and
intends to participate on the nominations committee shall notify
the executive director of:
(A) the organization's intent to participate on
the nominations committee; and
(B) whether the president, chair, or other
executive head, as appropriate, or that person's designee will
serve on the committee; and
(2) the president, chair, or other executive head of
an organization described by Section 3.011(a)(3)(B) or (4)(B),
Article 6243a-1, Revised Statutes, as added by this Act, that is
eligible to and intends to participate in appointing a pensioner to
the nominations committee shall:
(A) notify the executive director of the
organization's intent to participate in appointing a pensioner to
the nominations committee; and
(B) appoint or jointly appoint, as applicable, a
pensioner to serve on the nominations committee in accordance with
Sections 3.011(a)(3) and (4), Article 6243a-1, Revised Statutes, as
added by this Act.
SECTION 54. Section 4.025, Article 6243a-1, Revised
Statutes, as added by this Act, applies only to a contribution made
on or after the date of the most recently completed actuarial
valuation following the effective date of this Act.
SECTION 55. Not earlier than June 1, 2019, and not later
than August 15, 2019, the board of trustees established under
Article 6243a-1, Revised Statutes, shall make and submit to the
State Pension Review Board for review an initial determination
under Section 4.02(e), Article 6243a-1, Revised Statutes, as
amended by this Act, based on the most recently completed actuarial
valuation. Each subsequent annual determination under Section
4.02(e), Article 6243a-1, Revised Statutes, as amended by this Act,
shall be based on the most recently completed actuarial valuation.
SECTION 56. The board of trustees of the pension system
established under Article 6243a-1, Revised Statutes, shall review
all investments held on the effective date of this Act under Section
4.071, Article 6243a-1, Revised Statutes, as added by this Act.
SECTION 57. Changes in law to Part 5, Article 6243a-1,
Revised Statutes, as amended by this Act, apply to membership in a
pension system established under Article 6243a-1, Revised
Statutes, on or after the effective date of this Act.
SECTION 58. A rollover distribution to a plan administered
by the pension system established under Article 6243a-1, Revised
Statutes, that was made on or after January 1, 2002, is validated as
of the date the distribution occurred. A distribution described by
this section may not be held invalid because the distribution was
not performed in accordance with Section 8.01(j), Article 6243a-1,
Revised Statutes, as added by this Act, or other applicable law.
SECTION 59. If any provision of this Act or its application
to any person or circumstance is held invalid, the invalidity does
not affect other provisions or applications of this Act that can be
given effect without the invalid provision or application, and to
this end the provisions of this Act are declared to be severable.
SECTION 60. This Act takes effect September 1, 2017.
[City Contributions Member Contributions
28-1/2% 9%
27-1/2% 8-1/2%
26% 8%
24-1/2% 7-1/2%
23% 7%
21-1/2% 6-1/2%]
Age of Member When Retirement Pension Begins Percent
58 and older 2.5%
57 2.4%
56 2.3%
55 2.2%
54 2.1%
53 and younger 2.0%
Age of Member When Retirement Pension Begins Percent
48 and 49 2.75%
47 2.5%
46 2.25%
45 and younger 2%; and
Age of Member When Retirement Pension Begins Percent
57 2.4%
56 2.3%
55 2.2%
54 2.1%
53 and younger 2.0%
Age of Member When Retirement Pension Begins Percent
58 and older 1.25%
57 1.2%
56 1.15%
55 1.10%
54 1.05%
53 and younger 1.0%; or