Texas 2019 - 86th Regular

Texas House Bill HB2472 Compare Versions

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1	1	86R6249 KFF-D
2	2	By: Gutierrez H.B. No. 2472
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to retirement benefits for certain peace officers who are
8	8	members of the Teacher Retirement System of Texas, including the
9	9	creation of a peace officer supplemental retirement fund.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Section 821.001, Government Code, is amended by
12	12	adding Subdivision (11-a) to read as follows:
13	13	(11-a) "Peace officer" means a member of the
14	14	retirement system who is elected, employed, or appointed as a peace
15	15	officer under Article 2.12, Code of Criminal Procedure, Section
16	16	37.081 or 51.203, Education Code, or other law.
17	17	SECTION 2. Section 822.005, Government Code, is amended by
18	18	adding Subsection (e) to read as follows:
19	19	(e) For a peace officer, the withdrawal of accumulated
20	20	contributions under Subsection (a) includes all of the officer's
21	21	contributions made under Section 825.403.
22	22	SECTION 3. Section 824.202, Government Code, is amended by
23	23	adding Subsection (g) to read as follows:
24	24	(g) Notwithstanding any other law, a member who is at least
25	25	55 years old and who has at least 10 years of service credit as a
26	26	peace officer engaged in law enforcement activities by a school
27	27	district or institution of higher education is eligible to retire
28	28	and receive a service retirement annuity.
29	29	SECTION 4. Subchapter C, Chapter 824, Government Code, is
30	30	amended by adding Section 824.2035 to read as follows:
31	31	Sec. 824.2035. SERVICE RETIREMENT BENEFITS FOR CERTAIN
32	32	PEACE OFFICERS. (a) A member who has at least 20 years of service
33	33	credit as a peace officer is eligible to retire regardless of age
34	34	and receive a standard service retirement annuity in an amount and
35	35	to be funded as provided by this section.
36	36	(b) The standard service retirement annuity payable for at
37	37	least 20 years of service credit as a peace officer is an amount
38	38	computed on the basis of the member's average annual compensation
39	39	for the five years of service, whether or not consecutive, in which
40	40	the member received the highest annual compensation, times the sum
41	41	of the percentage factor used in the computation of a standard
42	42	service retirement annuity under Section 824.203 plus 0.5 percent.
43	43	(c) The standard combined service retirement annuity that
44	44	is payable under this section is based on retirement on or after the
45	45	attainment of the normal retirement age, which for purposes of this
46	46	section is the earlier of either the age of 57 or the age at which
47	47	the sum of the member's age and amount of service credit equals the
48	48	number 80. The annuity of a peace officer who retires before
49	49	reaching the age of 57 under any eligibility criteria is
50	50	actuarially reduced by five percent for each year of difference
51	51	between the member's age at retirement and 57. The actuarial
52	52	reduction described by this section is in addition to any other
53	53	actuarial reduction required by law.
54	54	(d) A peace officer who retires before attaining the age of
55	55	50 is entitled only to an annuity that is actuarially reduced from
56	56	the annuity available at the age of 50 to the peace officer whose
57	57	service credit annuity amount is based on the sum of the member's
58	58	age and amount of peace officer service credit and other service
59	59	credit, and is not entitled to have the annuity recalculated at
60	60	normal retirement age. The standard or reduced annuity under this
61	61	section is payable from appropriate accounts described by Section
62	62	825.306 and the peace officer supplemental retirement fund in a
63	63	ratio determined by the retirement system.
64	64	(e) Optional retirement annuities provided by Section
65	65	824.204 are available to a member eligible to receive a service
66	66	retirement annuity under this section, but the same optional plan
67	67	and beneficiary must be selected for the portion of the annuity
68	68	payable from the peace officer supplemental retirement fund and the
69	69	portion payable from appropriate accounts described by Section
70	70	825.306.
71	71	(f) The amount payable from the peace officer supplemental
72	72	retirement fund is reducible by the amount paid from appropriate
73	73	accounts described by Section 825.306 for service as a peace
74	74	officer. The total combined amount of an annuity under this section
75	75	may not be less than the authorized benefit under Subsection (b)
76	76	subtracted by any amount necessary because of selection of an
77	77	optional annuity, because of retirement before the normal
78	78	retirement age, or as provided by Subsection (g).
79	79	(g) The standard combined service retirement annuity
80	80	payable for at least 20 years of service credit as a peace officer
81	81	may not exceed 100 percent of the average compensation computed
82	82	under Subsection (b).
83	83	(h) For purposes of this section, service as a peace officer
84	84	is creditable as provided by rule of the board of trustees or on a
85	85	month-to-month basis, whichever is greater.
86	86	SECTION 5. Subchapter D, Chapter 824, Government Code, is
87	87	amended by adding Section 824.3045 to read as follows:
88	88	Sec. 824.3045. DISABILITY RETIREMENT BENEFITS FOR CERTAIN
89	89	PEACE OFFICERS. (a) An annuity payable for a disability resulting
90	90	from a risk to which peace officers are exposed because of the
91	91	nature of the officers' duties is payable under the same terms and
92	92	conditions that apply to other disability retirement annuities
93	93	under this subtitle, except that the source and amount of the
94	94	annuity are as provided by this section.
95	95	(b) Except as provided by Subsection (c), a disability
96	96	retirement annuity under this section is an amount, but not more
97	97	than 100 percent, computed on the basis of the officer's average
98	98	annual compensation, times a percentage derived by application of
99	99	Section 824.2035(b).
100	100	(c) A disability retirement annuity under this section is
101	101	not reducible because of age and may not be less than 50 percent of
102	102	the officer's average annual compensation regardless of the amount
103	103	of service credited to the officer.
104	104	(d) The portions of the annuity under this section payable
105	105	from the peace officer supplemental retirement fund are the amount
106	106	remaining after deduction of any amount payable under Section
107	107	824.304, except the portion of an amount that exceeds the minimum
108	108	payments provided by Section 824.304 and that is made for service
109	109	other than as a peace officer and any amount by which an annuity is
110	110	increased under Subsection (e).
111	111	(e) If a retiring member or retiree under this section
112	112	presents evidence satisfactory to the retirement system that the
113	113	person's disability makes the person incapable of substantial
114	114	gainful activity solely because of the disability and is considered
115	115	a total disability under federal social security law, the
116	116	retirement system shall increase the person's disability
117	117	retirement annuity to 100 percent of the officer's average annual
118	118	compensation.
119	119	(f) An annuity increase under Subsection (e) is not payable
120	120	before the first month following the month in which the
121	121	satisfactory evidence is received by the retirement system under
122	122	Subsection (e).
123	123	SECTION 6. Subchapter E, Chapter 824, Government Code, is
124	124	amended by adding Section 824.4025 to read as follows:
125	125	Sec. 824.4025. ANNUITY FOR SURVIVOR OF PEACE OFFICER. If a
126	126	member who has at least 20 years of service credit as a peace
127	127	officer dies, the amount of the death benefit annuity payable for
128	128	the member's service as a peace officer is an amount computed and
129	129	funded as provided by Section 824.2035, including any applicable
130	130	reduction factors.
131	131	SECTION 7. Section 825.102, Government Code, is amended to
132	132	read as follows:
133	133	Sec. 825.102. RULEMAKING. Subject to the limitations of
134	134	this subtitle, the board of trustees may adopt rules for:
135	135	(1) eligibility for membership;
136	136	(2) the administration of the funds of the retirement
137	137	system; [and]
138	138	(3) the transaction of business of the board; and
139	139	(4) the program of supplemental benefits for peace
140	140	officers.
141	141	SECTION 8. Section 825.103, Government Code, is amended by
142	142	adding Subsection (b-1) to read as follows:
143	143	(b-1) The board of trustees may authorize the executive
144	144	director to acquire, hold, manage, purchase, sell, assign, trade,
145	145	transfer, and dispose of any security, evidence of debt, or other
146	146	investment in which assets of the peace officer supplemental
147	147	retirement fund may be invested.
148	148	SECTION 9. Section 825.208, Government Code, is amended by
149	149	adding Subsection (d) to read as follows:
150	150	(d) The board of trustees shall make payments from the peace
151	151	officer supplemental retirement fund for services rendered by the
152	152	actuary for that fund and approved by the board.
153	153	SECTION 10. Section 825.301(a), Government Code, is amended
154	154	to read as follows:
155	155	(a) The board of trustees shall invest and reinvest assets
156	156	of the retirement system without distinction as to their source in
157	157	accordance with Section 67, Article XVI, Texas Constitution, and
158	158	hold securities purchased with the assets described by this
159	159	subsection collectively for the proportionate benefit of all
160	160	accounts listed under Section 825.306 and the peace officer
161	161	supplemental retirement fund. For purposes of the investment
162	162	authority of the board of trustees under Section 67, Article XVI,
163	163	Texas Constitution, "securities" includes any investment
164	164	instrument within the meaning of the term as defined by Section 4,
165	165	The Securities Act (Article 581-4, Vernon's Texas Civil Statutes),
166	166	15 U.S.C. Section 77b(a)(1), or 15 U.S.C. Section 78c(a)(10), any
167	167	derivative instrument, and any other instrument commonly used by
168	168	institutional investors to manage institutional investment
169	169	portfolios. An interest in a limited partnership or investment
170	170	contract is considered a security without regard to the number of
171	171	investors or the control, access to information, or rights granted
172	172	to or retained by the retirement system. Any instrument or contract
173	173	intended to manage transaction or currency exchange risk in
174	174	purchasing, selling, or holding securities is considered to be a
175	175	security. Investment decisions are subject to the standard
176	176	provided in the Texas Trust Code by Section 117.004(b), Property
177	177	Code.
178	178	SECTION 11. Section 825.305, Government Code, is amended to
179	179	read as follows:
180	180	Sec. 825.305. AVAILABLE CASH. The board of trustees may
181	181	keep on deposit with the comptroller available cash not exceeding
182	182	10 percent of the total assets of the retirement system, to pay
183	183	annuity and other disbursements, excluding the assets of the peace
184	184	officer supplemental retirement fund.
185	185	SECTION 12. Section 825.306(a), Government Code, is amended
186	186	to read as follows:
187	187	(a) The assets of the retirement system, except assets of
188	188	the peace officer supplemental retirement fund, shall be maintained
189	189	and reported in a manner that reflects the source of the assets or
190	190	the purpose for which the assets are held, using appropriate
191	191	ledgers and subledgers, in accordance with generally accepted
192	192	accounting principles prescribed by the Governmental Accounting
193	193	Standards Board or its successor. In addition, the maintenance and
194	194	reporting of the assets must be in compliance with applicable tax
195	195	law and consistent with any fiduciary duty owed with respect to the
196	196	trust. In the alternative, the assets may be credited, according
197	197	to the purpose for which they are held, to one of the following
198	198	accounts:
199	199	(1) member savings account;
200	200	(2) state contribution account;
201	201	(3) retired reserve account;
202	202	(4) interest account;
203	203	(5) expense account; or
204	204	(6) deferred retirement option account.
205	205	SECTION 13. Subchapter D, Chapter 825, Government Code, is
206	206	amended by adding Section 825.316 to read as follows:
207	207	Sec. 825.316. PEACE OFFICER SUPPLEMENTAL RETIREMENT FUND.
208	208	(a) The retirement system shall deposit in the peace officer
209	209	supplemental retirement fund state contributions and other
210	210	appropriations made by the legislature to the fund and proceeds
211	211	from investment of the fund.
212	212	(b) The retirement system may use money from the fund only
213	213	to pay supplemental retirement, disability, and death benefits to
214	214	peace officers as provided by this subtitle and to pay for the
215	215	administration of the fund.
216	216	(c) Money appropriated to pay benefits from the fund as
217	217	provided by this subtitle may not be diverted or used to pay any
218	218	other benefits.
219	219	(d) Member contributions to the fund deducted under Section
220	220	825.403(a-1):
221	221	(1) earn interest at the same rate as money in an
222	222	individual account in the member savings account under Section
223	223	825.307; and
224	224	(2) are subject to the same computations and
225	225	limitations that apply to member contributions under Section
226	226	825.307.
227	227	SECTION 14. Section 825.403, Government Code, is amended by
228	228	adding Subsection (a-1) to read as follows:
229	229	(a-1) In addition to the contribution under Subsection (a),
230	230	each employer of a peace officer shall deduct an additional 0.5
231	231	percent contribution from that member's compensation, to be
232	232	deposited in the peace officer supplemental retirement fund,
233	233	provided that, if the state contribution to the peace officer
234	234	supplemental retirement fund is computed using a percentage less
235	235	than 0.5 percent, the member's contribution is computed using a
236	236	percentage equal to the percentage used to compute the state
237	237	contribution.
238	238	SECTION 15. Sections 825.404(a), (a-1), (b), and (b-1),
239	239	Government Code, are amended to read as follows:
240	240	(a) Except as provided by Subsection (a-1), during each
241	241	fiscal year, the state shall contribute to the retirement system:
242	242	(1) an amount equal to at least six and not more than
243	243	10 percent of the aggregate annual compensation of all members of
244	244	the retirement system during that fiscal year;
245	245	(2) an amount for the peace officer supplemental
246	246	retirement fund equal to 2.13 percent of the aggregate state
247	247	compensation of all peace officers for that fiscal year; and
248	248	(3) money necessary for the administration of the
249	249	peace officer supplemental retirement fund.
250	250	(a-1) In computing the amount owed by the state under
251	251	Subsection (a)(1) [(a)], the compensation of members who are
252	252	employed by public junior colleges or public junior college
253	253	districts shall be included in the aggregate annual compensation as
254	254	follows:
255	255	(1) 50 percent of the eligible creditable compensation
256	256	of employees who:
257	257	(A) otherwise are eligible for membership in the
258	258	retirement system; and
259	259	(B) are instructional or administrative
260	260	employees whose salaries may be fully paid from funds appropriated
261	261	under the General Appropriations Act, regardless of whether such
262	262	salaries are actually paid from appropriated funds; and
263	263	(2) none of the eligible creditable compensation of
264	264	all other employees who:
265	265	(A) do not meet the requirements of Subdivision
266	266	(1)(B) but are otherwise eligible for membership in the retirement
267	267	system; or
268	268	(B) cannot be included as a qualifying employee
269	269	under Subdivision (1) by application of Subsection (b-1).
270	270	(b) Before November 2 of each even-numbered year, the board
271	271	of trustees, in coordination with the Legislative Budget Board,
272	272	shall certify to the comptroller of public accounts for review and
273	273	adoption an estimate of the amount necessary to pay the state's
274	274	contributions to the retirement system for the following biennium
275	275	and, as a separate item, an estimate of the amount required to
276	276	administer the peace officer supplemental retirement fund for the
277	277	following biennium. For qualifying employees under Subsection
278	278	(a-1)(1), the board of trustees shall include only the amount
279	279	payable by the state under Subsection (a-1)(1) in determining the
280	280	amount to be certified.
281	281	(b-1) In determining the amount necessary to pay the state's
282	282	contribution under [described by] Subsection (b), excluding the
283	283	amount required to administer the peace officer supplemental
284	284	retirement fund, the number of qualifying employees under
285	285	Subsection (a-1)(1) whose compensation may be included for each
286	286	public junior college or public junior college district in each
287	287	biennium may not be adjusted in a proportion greater than the change
288	288	in student enrollment at each college during the reporting period
289	289	except that a college that experiences a decline in student
290	290	enrollment may petition the Legislative Budget Board to maintain
291	291	the number of eligible employees up to 98 percent of the level of
292	292	the prior biennium.
293	293	SECTION 16. Subchapter F, Chapter 825, Government Code, is
294	294	amended by adding Section 825.5155 to read as follows:
295	295	Sec. 825.5155. CERTIFICATION OF NAMES OF PEACE OFFICERS.
296	296	Not later than the 12th day of the month following the month in
297	297	which a person begins or ceases employment as a peace officer, the
298	298	employer shall certify to the retirement system, in the manner
299	299	prescribed by the system, the name of the employee and such other
300	300	information as the system determines is necessary for the crediting
301	301	of service and financing of benefits under this subtitle.
302	302	SECTION 17. (a) Except as provided by Subsection (b) of
303	303	this section, employers participating in the Teacher Retirement
304	304	System of Texas shall begin making deductions and collecting the
305	305	contributions for the peace officer supplemental retirement fund as
306	306	provided by Section 825.403(a-1), Government Code, as added by this
307	307	Act, based on service that is performed on or after December 31,
308	308	2019.
309	309	(b) The board of trustees of the Teacher Retirement System
310	310	of Texas shall adopt rules as soon as possible after the effective
311	311	date of this Act to implement the changes in law made by this Act,
312	312	including rules governing the treatment of a member of the Teacher
313	313	Retirement System of Texas whose employment as a peace officer
314	314	began before December 31, 2019. Rules adopted under this section
315	315	relating to a member whose employment as a peace officer began
316	316	before December 31, 2019, must include rules that:
317	317	(1) notwithstanding any provision of this Act, allow
318	318	the member to opt out of participating in the peace officer
319	319	supplemental retirement fund provided by Section 825.403(a-1),
320	320	Government Code, as added by this Act; and
321	321	(2) ensure that any benefit paid to the member from the
322	322	peace officer supplemental retirement fund is reasonably related to
323	323	the member's contribution to the fund.
324	324	SECTION 18. This Act takes effect September 1, 2019.