Texas 2017 - 85th Regular

Texas Senate Bill SB1954 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	S.B. No. 1954
	1	+	By: Hughes S.B. No. 1954
	2	+	(Lozano)
2	3
3	4
	5	+	A BILL TO BE ENTITLED
4	6		AN ACT
5	7		relating to participation in and contributions to the optional
6	8		retirement program for certain employees of institutions of higher
7	9		education.
8	10		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	11		SECTION 1. Section 830.102, Government Code, is amended by
10	12		amending Subsection (c) and adding Subsections (c-1) and (c-2) to
11	13		read as follows:
12	14		(c) Except as provided by Subsections (c-1) and (c-2), a [A]
13	15		person who becomes eligible to participate in the optional
14	16		retirement program after the date the program becomes available at
15	17		the person's place of employment must elect to participate before
16	18		the 91st day after becoming eligible.
17	19		(c-1) A person who becomes eligible to participate in the
18	20		optional retirement program and is notified by the person's
19	21		employer of the opportunity to participate in the program after the
20	22		first day and before the 91st day after the date the person becomes
21	23		eligible must elect to participate in the program before the later
22	24		of:
23	25		(1) the 91st day after the date the person becomes
24	26		eligible; or
25	27		(2) the 31st day after the date the person receives
26	28		notice of the opportunity to participate in the program.
27	29		(c-2) A person who becomes eligible to participate in the
28	30		optional retirement program and is notified by the person's
29	31		employer of the opportunity to participate in the program on or
30	32		after the 91st day after the date the person becomes eligible must
31	33		be notified by the employer before the 151st day after the date the
32	34		person becomes eligible. The person must elect to participate in
33	35		the program before the later of:
34	36		(1) the 151st day after the date the person becomes
35	37		eligible; or
36	38		(2) the 31st day after the date the person receives
37	39		notice of the opportunity to participate in the program.
38	40		SECTION 2. Subchapter B, Chapter 830, Government Code, is
39	41		amended by adding Section 830.108 to read as follows:
40	42		Sec. 830.108. CORRECTION OF CERTAIN REPORTING ERRORS.
41	43		(a) For purposes of this section, an employer submits a member
42	44		contribution to the retirement system on behalf of a person in error
43	45		if the person:
44	46		(1) previously elected to participate in the optional
45	47		retirement program;
46	48		(2) participated in the program for at least one year;
47	49		and
48	50		(3) is or was employed by an institution of higher
49	51		education in a position normally covered by the retirement system
50	52		and is or was at the time of that employment not eligible for
51	53		membership in the retirement system under Section 830.106.
52	54		(b) If an employer commits an error described by Subsection
53	55		(a) and the person on whose behalf the member contribution is
54	56		erroneously made is a participant in the optional retirement
55	57		program:
56	58		(1) the person's participation in the program shall be
57	59		immediately restored; and
58	60		(2) in accordance with this section and as soon as
59	61		practicable, funds shall be deposited in the person's participant
60	62		account in the program or otherwise remitted to the person.
61	63		(c) Subject to Subsection (d), on discovery of an error
62	64		described by this section, the retirement system shall, on
63	65		certification by an employer that the employer committed the error:
64	66		(1) make a direct trustee-to-trustee transfer to the
65	67		trustee of the optional retirement program for deposit in the
66	68		person's participant account in an amount equal to the participant
67	69		contribution that would have been paid for the benefit of the person
68	70		to the program under Section 830.201 during the period in which
69	71		member contributions were submitted to the retirement system in
70	72		error, plus an amount representing earnings on the member
71	73		contribution at the assumed rate of return provided by Subsection
72	74		(g);
73	75		(2) credit the employer through the retirement
74	76		system's employer reporting system an amount equal to the amount of
75	77		any employer contributions made under Section 825.4041, 825.406,
76	78		825.407, or 825.4071 in error on compensation paid to the person;
77	79		and
78	80		(3) remit to the person:
79	81		(A) the amount of any member contribution made to
80	82		the retirement system in error that exceeds the amount of the
81	83		participant contribution that would have been paid for the benefit
82	84		of the person to the program during the period in which member
83	85		contributions were submitted to the retirement system in error;
84	86		(B) the amount of any member contribution made to
85	87		the retirement system in error that was made on an after-tax basis
86	88		and that the retirement system could not transfer via a direct
87	89		trustee-to-trustee transfer under applicable provisions of the
88	90		Internal Revenue Code, including regulations adopted under the
89	91		Internal Revenue Code, or under the terms of the program
90	92		established by the employer; and
91	93		(C) any amount paid by the person to the
92	94		retirement system to purchase or reinstate service credit during
93	95		the period the person was not eligible for membership in the
94	96		retirement system, including any administrative, reinstatement,
95	97		and installment fees paid in connection with the purchase.
96	98		(d) A transfer described by Subsection (c) may not include
97	99		the amount of any member contribution made to the retirement system
98	100		in error that:
99	101		(1) exceeds the amount of the participant contribution
100	102		that would have been paid for the benefit of the person to the
101	103		optional retirement program under Section 830.201; or
102	104		(2) was made on an after-tax basis unless the plan
103	105		document for each employer program:
104	106		(A) permits the employer program to receive
105	107		direct trustee-to-trustee transfers of after-tax amounts; and
106	108		(B) provides that the trustee of the employer
107	109		program agrees to separately account for amounts transferred and
108	110		earnings on amounts transferred, including accounting for the
109	111		portion of the distribution that is includable in gross income and
110	112		the portion of the distribution that is not includable in gross
111	113		income.
112	114		(e) On certification by an employer that the employer
113	115		committed an error described by this section, the comptroller shall
114	116		transfer to or credit the employer an amount equal to the state
115	117		contribution that would have been paid for the benefit of the person
116	118		under Section 830.201 plus an amount representing earnings on the
117	119		state contribution at the assumed rate of return provided by
118	120		Subsection (g).
119	121		(f) An employer that commits an error described by this
120	122		section shall deposit in the person's participant account in the
121	123		program:
122	124		(1) in accordance with Subsection (c), the amount of
123	125		the employer contribution that would have been paid for the benefit
124	126		of the person as a participant under Section 830.201 and under any
125	127		other law, rule, or employer policy;
126	128		(2) an amount representing earnings on the employer
127	129		contribution at the assumed rate of return determined by the
128	130		employer in accordance with applicable Internal Revenue Code
129	131		correction requirements; and
130	132		(3) an amount equal to the state contribution that
131	133		would have been paid for the benefit of the person under Section
132	134		830.201 plus the amount representing earnings credited to the
133	135		employer under Subsection (e).
134	136		(g) The assumed rate of return is earned monthly and
135		-	computed at the rate of four percent per year. Except as provided
136		-	by this subsection, the amount of earnings based on the assumed rate
137		-	of return is credited annually at the end of each 12-month period.
138		-	~~The~~ first 12-month period begins with the month the first deposit
139		-	~~was~~ submitted in error. The amount of assumed earnings is prorated
140		-	to the month of payment.
	137	+	computed at the rate of four percent per year. Except as provided by
	138	+	this subsection, the amount of earnings based on the assumed rate of
	139	+	return is credited annually at the end of each 12-month period. The
	140	+	first 12-month period begins with the month the first deposit was
	141	+	submitted in error. The amount of assumed earnings is prorated to
	142	+	the month of payment.
141	143		(h) Amounts paid, transferred, or credited under this
142	144		section are reduced by any amount required to be withheld by law or
143	145		court order.
144	146		SECTION 3. Section 830.108, Government Code, as added by
145	147		this Act, applies to a member contribution submitted in error as
146	148		provided by that section and maintained by a retirement system,
147	149		regardless of whether the contribution was submitted before, on, or
148	150		after the effective date of this Act.
149	151		SECTION 4. This Act takes effect September 1, 2017.
150		-	______________________________ ______________________________
151		-	President of the Senate Speaker of the House
152		-	I hereby certify that S.B. No. 1954 passed the Senate on
153		-	April 19, 2017, by the following vote: Yeas 31, Nays 0.
154		-	______________________________
155		-	Secretary of the Senate
156		-	I hereby certify that S.B. No. 1954 passed the House on
157		-	May 17, 2017, by the following vote: Yeas 140, Nays 0, two
158		-	present not voting.
159		-	______________________________
160		-	Chief Clerk of the House
161		-	Approved:
162		-	______________________________
163		-	Date
164		-	______________________________
165		-	Governor