86R6249 KFF-D
By: Gutierrez H.B. No. 2472
A BILL TO BE ENTITLED
AN ACT
relating to retirement benefits for certain peace officers who are
members of the Teacher Retirement System of Texas, including the
creation of a peace officer supplemental retirement fund.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 821.001, Government Code, is amended by
adding Subdivision (11-a) to read as follows:
(11-a) "Peace officer" means a member of the
retirement system who is elected, employed, or appointed as a peace
officer under Article 2.12, Code of Criminal Procedure, Section
37.081 or 51.203, Education Code, or other law.
SECTION 2. Section 822.005, Government Code, is amended by
adding Subsection (e) to read as follows:
(e) For a peace officer, the withdrawal of accumulated
contributions under Subsection (a) includes all of the officer's
contributions made under Section 825.403.
SECTION 3. Section 824.202, Government Code, is amended by
adding Subsection (g) to read as follows:
(g) Notwithstanding any other law, a member who is at least
55 years old and who has at least 10 years of service credit as a
peace officer engaged in law enforcement activities by a school
district or institution of higher education is eligible to retire
and receive a service retirement annuity.
SECTION 4. Subchapter C, Chapter 824, Government Code, is
amended by adding Section 824.2035 to read as follows:
Sec. 824.2035. SERVICE RETIREMENT BENEFITS FOR CERTAIN
PEACE OFFICERS. (a) A member who has at least 20 years of service
credit as a peace officer is eligible to retire regardless of age
and receive a standard service retirement annuity in an amount and
to be funded as provided by this section.
(b) The standard service retirement annuity payable for at
least 20 years of service credit as a peace officer is an amount
computed on the basis of the member's average annual compensation
for the five years of service, whether or not consecutive, in which
the member received the highest annual compensation, times the sum
of the percentage factor used in the computation of a standard
service retirement annuity under Section 824.203 plus 0.5 percent.
(c) The standard combined service retirement annuity that
is payable under this section is based on retirement on or after the
attainment of the normal retirement age, which for purposes of this
section is the earlier of either the age of 57 or the age at which
the sum of the member's age and amount of service credit equals the
number 80. The annuity of a peace officer who retires before
reaching the age of 57 under any eligibility criteria is
actuarially reduced by five percent for each year of difference
between the member's age at retirement and 57. The actuarial
reduction described by this section is in addition to any other
actuarial reduction required by law.
(d) A peace officer who retires before attaining the age of
50 is entitled only to an annuity that is actuarially reduced from
the annuity available at the age of 50 to the peace officer whose
service credit annuity amount is based on the sum of the member's
age and amount of peace officer service credit and other service
credit, and is not entitled to have the annuity recalculated at
normal retirement age. The standard or reduced annuity under this
section is payable from appropriate accounts described by Section
825.306 and the peace officer supplemental retirement fund in a
ratio determined by the retirement system.
(e) Optional retirement annuities provided by Section
824.204 are available to a member eligible to receive a service
retirement annuity under this section, but the same optional plan
and beneficiary must be selected for the portion of the annuity
payable from the peace officer supplemental retirement fund and the
portion payable from appropriate accounts described by Section
825.306.
(f) The amount payable from the peace officer supplemental
retirement fund is reducible by the amount paid from appropriate
accounts described by Section 825.306 for service as a peace
officer. The total combined amount of an annuity under this section
may not be less than the authorized benefit under Subsection (b)
subtracted by any amount necessary because of selection of an
optional annuity, because of retirement before the normal
retirement age, or as provided by Subsection (g).
(g) The standard combined service retirement annuity
payable for at least 20 years of service credit as a peace officer
may not exceed 100 percent of the average compensation computed
under Subsection (b).
(h) For purposes of this section, service as a peace officer
is creditable as provided by rule of the board of trustees or on a
month-to-month basis, whichever is greater.
SECTION 5. Subchapter D, Chapter 824, Government Code, is
amended by adding Section 824.3045 to read as follows:
Sec. 824.3045. DISABILITY RETIREMENT BENEFITS FOR CERTAIN
PEACE OFFICERS. (a) An annuity payable for a disability resulting
from a risk to which peace officers are exposed because of the
nature of the officers' duties is payable under the same terms and
conditions that apply to other disability retirement annuities
under this subtitle, except that the source and amount of the
annuity are as provided by this section.
(b) Except as provided by Subsection (c), a disability
retirement annuity under this section is an amount, but not more
than 100 percent, computed on the basis of the officer's average
annual compensation, times a percentage derived by application of
Section 824.2035(b).
(c) A disability retirement annuity under this section is
not reducible because of age and may not be less than 50 percent of
the officer's average annual compensation regardless of the amount
of service credited to the officer.
(d) The portions of the annuity under this section payable
from the peace officer supplemental retirement fund are the amount
remaining after deduction of any amount payable under Section
824.304, except the portion of an amount that exceeds the minimum
payments provided by Section 824.304 and that is made for service
other than as a peace officer and any amount by which an annuity is
increased under Subsection (e).
(e) If a retiring member or retiree under this section
presents evidence satisfactory to the retirement system that the
person's disability makes the person incapable of substantial
gainful activity solely because of the disability and is considered
a total disability under federal social security law, the
retirement system shall increase the person's disability
retirement annuity to 100 percent of the officer's average annual
compensation.
(f) An annuity increase under Subsection (e) is not payable
before the first month following the month in which the
satisfactory evidence is received by the retirement system under
Subsection (e).
SECTION 6. Subchapter E, Chapter 824, Government Code, is
amended by adding Section 824.4025 to read as follows:
Sec. 824.4025. ANNUITY FOR SURVIVOR OF PEACE OFFICER. If a
member who has at least 20 years of service credit as a peace
officer dies, the amount of the death benefit annuity payable for
the member's service as a peace officer is an amount computed and
funded as provided by Section 824.2035, including any applicable
reduction factors.
SECTION 7. Section 825.102, Government Code, is amended to
read as follows:
Sec. 825.102. RULEMAKING. Subject to the limitations of
this subtitle, the board of trustees may adopt rules for:
(1) eligibility for membership;
(2) the administration of the funds of the retirement
system; [and]
(3) the transaction of business of the board; and
(4) the program of supplemental benefits for peace
officers.
SECTION 8. Section 825.103, Government Code, is amended by
adding Subsection (b-1) to read as follows:
(b-1) The board of trustees may authorize the executive
director to acquire, hold, manage, purchase, sell, assign, trade,
transfer, and dispose of any security, evidence of debt, or other
investment in which assets of the peace officer supplemental
retirement fund may be invested.
SECTION 9. Section 825.208, Government Code, is amended by
adding Subsection (d) to read as follows:
(d) The board of trustees shall make payments from the peace
officer supplemental retirement fund for services rendered by the
actuary for that fund and approved by the board.
SECTION 10. Section 825.301(a), Government Code, is amended
to read as follows:
(a) The board of trustees shall invest and reinvest assets
of the retirement system without distinction as to their source in
accordance with Section 67, Article XVI, Texas Constitution, and
hold securities purchased with the assets described by this
subsection collectively for the proportionate benefit of all
accounts listed under Section 825.306 and the peace officer
supplemental retirement fund. For purposes of the investment
authority of the board of trustees under Section 67, Article XVI,
Texas Constitution, "securities" includes any investment
instrument within the meaning of the term as defined by Section 4,
The Securities Act (Article 581-4, Vernon's Texas Civil Statutes),
15 U.S.C. Section 77b(a)(1), or 15 U.S.C. Section 78c(a)(10), any
derivative instrument, and any other instrument commonly used by
institutional investors to manage institutional investment
portfolios. An interest in a limited partnership or investment
contract is considered a security without regard to the number of
investors or the control, access to information, or rights granted
to or retained by the retirement system. Any instrument or contract
intended to manage transaction or currency exchange risk in
purchasing, selling, or holding securities is considered to be a
security. Investment decisions are subject to the standard
provided in the Texas Trust Code by Section 117.004(b), Property
Code.
SECTION 11. Section 825.305, Government Code, is amended to
read as follows:
Sec. 825.305. AVAILABLE CASH. The board of trustees may
keep on deposit with the comptroller available cash not exceeding
10 percent of the total assets of the retirement system, to pay
annuity and other disbursements, excluding the assets of the peace
officer supplemental retirement fund.
SECTION 12. Section 825.306(a), Government Code, is amended
to read as follows:
(a) The assets of the retirement system, except assets of
the peace officer supplemental retirement fund, shall be maintained
and reported in a manner that reflects the source of the assets or
the purpose for which the assets are held, using appropriate
ledgers and subledgers, in accordance with generally accepted
accounting principles prescribed by the Governmental Accounting
Standards Board or its successor. In addition, the maintenance and
reporting of the assets must be in compliance with applicable tax
law and consistent with any fiduciary duty owed with respect to the
trust. In the alternative, the assets may be credited, according
to the purpose for which they are held, to one of the following
accounts:
(1) member savings account;
(2) state contribution account;
(3) retired reserve account;
(4) interest account;
(5) expense account; or
(6) deferred retirement option account.
SECTION 13. Subchapter D, Chapter 825, Government Code, is
amended by adding Section 825.316 to read as follows:
Sec. 825.316. PEACE OFFICER SUPPLEMENTAL RETIREMENT FUND.
(a) The retirement system shall deposit in the peace officer
supplemental retirement fund state contributions and other
appropriations made by the legislature to the fund and proceeds
from investment of the fund.
(b) The retirement system may use money from the fund only
to pay supplemental retirement, disability, and death benefits to
peace officers as provided by this subtitle and to pay for the
administration of the fund.
(c) Money appropriated to pay benefits from the fund as
provided by this subtitle may not be diverted or used to pay any
other benefits.
(d) Member contributions to the fund deducted under Section
825.403(a-1):
(1) earn interest at the same rate as money in an
individual account in the member savings account under Section
825.307; and
(2) are subject to the same computations and
limitations that apply to member contributions under Section
825.307.
SECTION 14. Section 825.403, Government Code, is amended by
adding Subsection (a-1) to read as follows:
(a-1) In addition to the contribution under Subsection (a),
each employer of a peace officer shall deduct an additional 0.5
percent contribution from that member's compensation, to be
deposited in the peace officer supplemental retirement fund,
provided that, if the state contribution to the peace officer
supplemental retirement fund is computed using a percentage less
than 0.5 percent, the member's contribution is computed using a
percentage equal to the percentage used to compute the state
contribution.
SECTION 15. Sections 825.404(a), (a-1), (b), and (b-1),
Government Code, are amended to read as follows:
(a) Except as provided by Subsection (a-1), during each
fiscal year, the state shall contribute to the retirement system:
(1) an amount equal to at least six and not more than
10 percent of the aggregate annual compensation of all members of
the retirement system during that fiscal year;
(2) an amount for the peace officer supplemental
retirement fund equal to 2.13 percent of the aggregate state
compensation of all peace officers for that fiscal year; and
(3) money necessary for the administration of the
peace officer supplemental retirement fund.
(a-1) In computing the amount owed by the state under
Subsection (a)(1) [(a)], the compensation of members who are
employed by public junior colleges or public junior college
districts shall be included in the aggregate annual compensation as
follows:
(1) 50 percent of the eligible creditable compensation
of employees who:
(A) otherwise are eligible for membership in the
retirement system; and
(B) are instructional or administrative
employees whose salaries may be fully paid from funds appropriated
under the General Appropriations Act, regardless of whether such
salaries are actually paid from appropriated funds; and
(2) none of the eligible creditable compensation of
all other employees who:
(A) do not meet the requirements of Subdivision
(1)(B) but are otherwise eligible for membership in the retirement
system; or
(B) cannot be included as a qualifying employee
under Subdivision (1) by application of Subsection (b-1).
(b) Before November 2 of each even-numbered year, the board
of trustees, in coordination with the Legislative Budget Board,
shall certify to the comptroller of public accounts for review and
adoption an estimate of the amount necessary to pay the state's
contributions to the retirement system for the following biennium
and, as a separate item, an estimate of the amount required to
administer the peace officer supplemental retirement fund for the
following biennium. For qualifying employees under Subsection
(a-1)(1), the board of trustees shall include only the amount
payable by the state under Subsection (a-1)(1) in determining the
amount to be certified.
(b-1) In determining the amount necessary to pay the state's
contribution under [described by] Subsection (b), excluding the
amount required to administer the peace officer supplemental
retirement fund, the number of qualifying employees under
Subsection (a-1)(1) whose compensation may be included for each
public junior college or public junior college district in each
biennium may not be adjusted in a proportion greater than the change
in student enrollment at each college during the reporting period
except that a college that experiences a decline in student
enrollment may petition the Legislative Budget Board to maintain
the number of eligible employees up to 98 percent of the level of
the prior biennium.
SECTION 16. Subchapter F, Chapter 825, Government Code, is
amended by adding Section 825.5155 to read as follows:
Sec. 825.5155. CERTIFICATION OF NAMES OF PEACE OFFICERS.
Not later than the 12th day of the month following the month in
which a person begins or ceases employment as a peace officer, the
employer shall certify to the retirement system, in the manner
prescribed by the system, the name of the employee and such other
information as the system determines is necessary for the crediting
of service and financing of benefits under this subtitle.
SECTION 17. (a) Except as provided by Subsection (b) of
this section, employers participating in the Teacher Retirement
System of Texas shall begin making deductions and collecting the
contributions for the peace officer supplemental retirement fund as
provided by Section 825.403(a-1), Government Code, as added by this
Act, based on service that is performed on or after December 31,
2019.
(b) The board of trustees of the Teacher Retirement System
of Texas shall adopt rules as soon as possible after the effective
date of this Act to implement the changes in law made by this Act,
including rules governing the treatment of a member of the Teacher
Retirement System of Texas whose employment as a peace officer
began before December 31, 2019. Rules adopted under this section
relating to a member whose employment as a peace officer began
before December 31, 2019, must include rules that:
(1) notwithstanding any provision of this Act, allow
the member to opt out of participating in the peace officer
supplemental retirement fund provided by Section 825.403(a-1),
Government Code, as added by this Act; and
(2) ensure that any benefit paid to the member from the
peace officer supplemental retirement fund is reasonably related to
the member's contribution to the fund.
SECTION 18. This Act takes effect September 1, 2019.