Texas 2017 - 85th Regular

Texas Senate Bill SB1751 Compare Versions

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

Old	New	Differences
1	1	85R5591 KFF-D
2	2	By: Bettencourt S.B. No. 1751
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to authorizing the Employees Retirement System of Texas
8	8	and the Teacher Retirement System of Texas to establish defined
9	9	contribution plans or hybrid retirement plans to provide retirement
10	10	benefits to certain employees.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Section 802.002, Government Code, is amended by
13	13	adding Subsection (e) to read as follows:
14	14	(e) Notwithstanding any other law, including Subsection
15	15	(a), an alternative retirement plan established under Chapter 809
16	16	is exempt from Sections 802.101, 802.1012, 802.1014, 802.103,
17	17	802.104, and 802.202(d). This subsection may not be construed to
18	18	exempt any plan from Section 802.105 or 802.106(h).
19	19	SECTION 2. Subtitle A, Title 8, Government Code, is amended
20	20	by adding Chapter 809 to read as follows:
21	21	CHAPTER 809. AUTHORITY TO ESTABLISH ALTERNATIVE RETIREMENT PLANS
22	22	SUBCHAPTER A. GENERAL PROVISIONS
23	23	Sec. 809.001. DEFINITIONS. In this chapter:
24	24	(1) "Alternative retirement plan" means a defined
25	25	contribution plan or a hybrid retirement plan.
26	26	(2) "Board of trustees" means the board of trustees of
27	27	a retirement system.
28	28	(3) "Defined benefit plan" means, as appropriate, the
29	29	plan that provides benefits to:
30	30	(A) members of the employee class of the
31	31	Employees Retirement System of Texas under Subtitle B, Title 8; or
32	32	(B) members of the Teacher Retirement System of
33	33	Texas under Subtitle C, Title 8.
34	34	(4) "Defined contribution plan" has the meaning
35	35	assigned by Section 802.001.
36	36	(5) "Hybrid retirement plan" means a retirement plan
37	37	that combines elements of a defined benefit plan, a defined
38	38	contribution plan, or an individual retirement savings account.
39	39	(6) "Qualified plan" means an employee benefit plan
40	40	qualified under Section 401(a), Internal Revenue Code of 1986 (26
41	41	U.S.C. Section 401).
42	42	(7) "Retirement system" means the Employees
43	43	Retirement System of Texas or the Teacher Retirement System of
44	44	Texas, as appropriate.
45	45	Sec. 809.002. APPLICABILITY. This chapter applies only to:
46	46	(1) the Employees Retirement System of Texas; and
47	47	(2) the Teacher Retirement System of Texas.
48	48	Sec. 809.003. CONFLICT OF LAW. To the extent of a conflict
49	49	between this chapter, including a rule adopted by a retirement
50	50	system under authority of this chapter, and any other law, this
51	51	chapter prevails.
52	52	SUBCHAPTER B. AUTHORITY TO CREATE ALTERNATIVE PLANS
53	53	Sec. 809.051. CREATION OF ALTERNATIVE PLAN.
54	54	Notwithstanding any other law, including Subtitles B and C, Title
55	55	8, and subject to the requirements of Subchapter C, the board of
56	56	trustees may by rule establish and administer an alternative
57	57	retirement plan to provide benefits to newly hired employees under
58	58	that plan instead of under a defined benefit plan.
59	59	Sec. 809.052. CERTAIN REFERENCES IN LAW TO RETIREMENT
60	60	SYSTEM MEMBERS. If a retirement system establishes an alternative
61	61	retirement plan under this chapter, a reference in law to a member
62	62	of the retirement system includes a participant in the alternative
63	63	retirement plan unless the reference is expressly defined
64	64	otherwise.
65	65	SUBCHAPTER C. ALTERNATIVE PLAN MINIMUM REQUIREMENTS
66	66	Sec. 809.101. MINIMUM REQUIREMENTS. In establishing an
67	67	alternative retirement plan under this chapter, a retirement system
68	68	shall ensure the plan meets the requirements of this subchapter.
69	69	Sec. 809.102. QUALIFIED PLAN. An alternative retirement
70	70	plan created under this section must be a qualified plan.
71	71	Sec. 809.103. PARTICIPATION IN ALTERNATIVE PLAN;
72	72	RESUMPTION OF SERVICE. (a) In adopting rules to establish an
73	73	alternative retirement plan under this chapter, the board of
74	74	trustees shall designate the date by which all newly hired
75	75	employees shall begin participation in the plan.
76	76	(b) A person who resumes employment with an employer and who
77	77	is already a member of the retirement system eligible to
78	78	participate in a defined benefit plan remains eligible to
79	79	participate in the defined benefit plan and is not considered a new
80	80	employee for purposes of required participation in an alternative
81	81	retirement plan established under this chapter.
82	82	(c) Notwithstanding any other law, an employee who
83	83	participates in an alternative retirement plan established under
84	84	this chapter is not eligible to, and may not participate in, the
85	85	defined benefit plan administered by the retirement system.
86	86	Sec. 809.104. EFFECT OF EMPLOYMENT CHANGES. A person
87	87	participating in an alternative retirement plan continues to
88	88	participate in the plan when the person changes employment to
89	89	another position included in the coverage of the retirement system.
90	90	Sec. 809.105. VESTING OF BENEFITS; TERMINATION OF
91	91	PARTICIPATION. (a) Benefits in an alternative retirement plan
92	92	vest in a participant not later than the fifth anniversary of the
93	93	date the person begins to participate in the plan.
94	94	(b) A person terminates participation in an alternative
95	95	retirement plan, without losing any vested benefits, by:
96	96	(1) death;
97	97	(2) retirement; or
98	98	(3) termination of employment in all positions
99	99	included in the coverage of the retirement system.
100	100	(c) The benefits of a product purchased under an alternative
101	101	retirement plan become available under the terms of the annuity but
102	102	not before the earlier of the date:
103	103	(1) the member terminates participation as provided by
104	104	Subsection (b); or
105	105	(2) the member's age and years of service in a position
106	106	covered by the plan equal 80.
107	107	Sec. 809.106. CREDITABLE SERVICE. A person may not
108	108	establish in the defined benefit plan administered by the
109	109	retirement system credit for service performed during a period the
110	110	person was participating in an alternative retirement plan.
111	111	Sec. 809.107. CONTRIBUTIONS. (a) A participant in an
112	112	alternative retirement plan shall make contributions to the plan at
113	113	the same rate that a member of the retirement system participating
114	114	in a defined benefit plan is required to make for current service,
115	115	and the state and employers otherwise required to make
116	116	contributions to a defined benefit plan shall make contributions to
117	117	the alternative retirement plan for each participant at the same
118	118	rate as the state and employers are required to contribute for
119	119	contributing members of the defined benefit plan. Contributions
120	120	required under this subsection shall be credited to the benefit of
121	121	the participant.
122	122	(b) A participant in an alternative retirement plan and the
123	123	participant's employer shall execute an agreement under which the
124	124	salary of the participant is reduced by the amount of the
125	125	contribution required by this section. An agreement under this
126	126	subsection is irrevocable until the participant terminates
127	127	participation in the plan under Section 809.105.
128	128	(c) Participant contributions shall be made in the manner
129	129	provided by Subchapter F, Chapter 815, or Subchapter E, Chapter
130	130	825, as applicable.
131	131	Sec. 809.108. HEALTH BENEFITS AND OTHER COVERAGES. A
132	132	person who participates or who is eligible to participate in an
133	133	alternative retirement plan established under this chapter is
134	134	eligible for health benefits and other coverages under Subtitle H,
135	135	Title 8, Insurance Code, and Subchapter D, Chapter 22, Education
136	136	Code, if applicable, to the same extent as a person who is a member
137	137	or who is eligible to be a member of the retirement system.
138	138	SECTION 3. Section 830.002(b), Government Code, is amended
139	139	to read as follows:
140	140	(b) Participation in the optional retirement program is an
141	141	alternative to active membership in the retirement system or
142	142	participation in an alternative retirement plan under Chapter 809,
143	143	as appropriate.
144	144	SECTION 4. Sections 830.102(a) and (d), Government Code,
145	145	are amended to read as follows:
146	146	(a) A person included in the coverage [member] of the
147	147	retirement system who is eligible [to participate in the optional
148	148	retirement program] may elect to [continue as a member of the
149	149	retirement system or to] participate in the optional retirement
150	150	program.
151	151	(d) An eligible person who does not elect to participate in
152	152	the optional retirement program is considered to have chosen to
153	153	continue membership in the retirement system or to participate in
154	154	an alternative retirement plan established under Chapter 809, as
155	155	applicable.
156	156	SECTION 5. Section 830.106, Government Code, is amended to
157	157	read as follows:
158	158	Sec. 830.106. ELIGIBILITY FOR RESUMPTION OF MEMBERSHIP. A
159	159	participant in the optional retirement program is not eligible for
160	160	participation [membership] in the retirement system unless the
161	161	person:
162	162	(1) terminates employment covered by the optional
163	163	retirement program; and
164	164	(2) becomes employed in the public school system or
165	165	with a state agency in a position that is not eligible for
166	166	participation in the optional retirement program.
167	167	SECTION 6. This Act takes effect September 1, 2017.