Texas 2019 - 86th Regular

Texas Senate Bill SB2429 Compare Versions

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

Old	New	Differences
1	1	86R2693 KFF-D
2	2	By: Bettencourt S.B. No. 2429
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to authorizing certain municipalities to establish
8	8	defined contribution plans to provide retirement benefits to
9	9	certain employees.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Subtitle A, Title 8, Government Code, is amended
12	12	by adding Chapter 807 to read as follows:
13	13	CHAPTER 807. AUTHORITY OF CERTAIN MUNICIPALITIES TO ESTABLISH
14	14	DEFINED CONTRIBUTION PLANS
15	15	SUBCHAPTER A. GENERAL PROVISIONS
16	16	Sec. 807.001. DEFINITIONS. In this chapter:
17	17	(1) "Defined benefit plan" means a plan provided by a
18	18	public retirement system that provides participants specified
19	19	benefit payments calculated in accordance with a formula that is
20	20	based on factors such as a participant's earnings history, age, and
21	21	years of service.
22	22	(2) "Defined contribution plan" and "public
23	23	retirement system" have the meanings assigned by Section 802.001.
24	24	(3) "Employee" means a person, including a person
25	25	serving a period of probationary employment, who receives
26	26	compensation from and is certified by a municipality as being
27	27	regularly engaged in the performance of duties of:
28	28	(A) an appointive office or position that
29	29	normally requires services from the person for not less than 1,000
30	30	hours a year; or
31	31	(B) an elective office that normally requires
32	32	services from the person for not less than 1,000 hours a year.
33	33	(4) "Qualified plan" means an employee benefit plan
34	34	qualified under Section 401(a), Internal Revenue Code of 1986 (26
35	35	U.S.C. Section 401).
36	36	Sec. 807.002. APPLICABILITY. This chapter applies only to:
37	37	(1) a public retirement system that provides benefits
38	38	to municipal employees under a defined benefit plan; and
39	39	(2) a home-rule municipality that is the sponsoring
40	40	authority of a public retirement system described by Subdivision
41	41	(1).
42	42	Sec. 807.003. CONFLICT OF LAW. To the extent of a conflict
43	43	between this chapter, including an ordinance adopted by a
44	44	municipality or a rule adopted by a public retirement system under
45	45	authority of this chapter, and any other law, this chapter
46	46	prevails.
47	47	SUBCHAPTER B. AUTHORITY TO CREATE DEFINED CONTRIBUTION PLAN
48	48	Sec. 807.051. ELECTION TO ESTABLISH DEFINED CONTRIBUTION
49	49	PLAN. (a) On receipt of a petition requesting the election signed
50	50	by a number of registered voters of the municipality equal to at
51	51	least 10 percent of the number of voters who voted in the most
52	52	recent election of the municipality, the governing body of a
53	53	municipality shall order an election to authorize the creation of a
54	54	defined contribution plan for newly hired municipal employees or a
55	55	category of newly hired municipal employees in accordance with this
56	56	section.
57	57	(b) An election ordered under this section must be held as
58	58	part of the next regularly scheduled general election for municipal
59	59	officials that is held after the date the governing body of the
60	60	municipality orders the election and that allows sufficient time to
61	61	prepare the ballot in compliance with other requirements of law.
62	62	(c) The ballot for an election ordered under this section
63	63	shall be printed to permit voting for or against the proposition:
64	64	"Authorizing (name of municipality) to establish by
65	65	ordinance a defined contribution plan for (insert "employees" or
66	66	the category of employees to receive benefits under the plan)
67	67	initially hired by the municipality on or after (insert date) as
68	68	provided by state law."
69	69	(d) An election ordered under this section must be held and
70	70	the returns prepared and canvassed in conformity with the Election
71	71	Code.
72	72	(e) If an election authorized under this section is held,
73	73	the municipality may implement the other provisions of this chapter
74	74	only if a majority of the votes cast at the election favor the
75	75	proposition.
76	76	Sec. 807.052. CREATION OF DEFINED CONTRIBUTION PLAN.
77	77	Notwithstanding any other law, including Title 109, Revised
78	78	Statutes, and subject to the requirements of Subchapter C, if
79	79	authorized by an election under Section 807.051, the governing body
80	80	of a municipality that is the sponsoring authority of a public
81	81	retirement system shall establish by ordinance a defined
82	82	contribution plan to be administered by the public retirement
83	83	system to provide benefits to newly hired municipal employees or a
84	84	category of newly hired municipal employees, as applicable, under
85	85	the plan instead of under a defined benefit plan.
86	86	SUBCHAPTER C. MINIMUM REQUIREMENTS FOR DEFINED CONTRIBUTION PLAN
87	87	Sec. 807.101. MINIMUM REQUIREMENTS. In establishing a
88	88	defined contribution plan under this chapter, the governing body of
89	89	a municipality shall ensure the plan meets the requirements of this
90	90	subchapter.
91	91	Sec. 807.102. QUALIFIED PLAN. A defined contribution plan
92	92	created under this section must be a qualified plan.
93	93	Sec. 807.103. PARTICIPATION IN DEFINED CONTRIBUTION PLAN;
94	94	RESUMPTION OF SERVICE. (a) In the ordinance establishing a defined
95	95	contribution plan under this chapter, the governing body of a
96	96	municipality shall designate the date by which all newly hired
97	97	municipal employees shall begin participation in the plan.
98	98	(b) A person who resumes employment with a municipality on
99	99	or after the date designated by the governing body of a municipality
100	100	under Subsection (a) and who is already eligible to participate in a
101	101	defined benefit plan administered by a public retirement system
102	102	because of the person's prior employment remains eligible to
103	103	participate in the defined benefit plan and is not considered a
104	104	newly hired employee for purposes of required participation in a
105	105	defined contribution plan established under this chapter.
106	106	(c) Notwithstanding any other law, an employee who
107	107	participates in a defined contribution plan established under this
108	108	chapter is not eligible to, and may not participate in, the defined
109	109	benefit plan administered by a public retirement system.
110	110	Sec. 807.104. EFFECT OF EMPLOYMENT CHANGES. A person
111	111	participating in a defined contribution plan continues to
112	112	participate in the plan when the person changes employment to
113	113	another position included in the coverage of the public retirement
114	114	system.
115	115	Sec. 807.105. VESTING OF BENEFITS; TERMINATION OF
116	116	PARTICIPATION. (a) Benefits in a defined contribution plan vest in
117	117	a participant not later than the fifth anniversary of the date the
118	118	person begins to participate in the plan.
119	119	(b) A person terminates participation in a defined
120	120	contribution plan, without losing any vested benefits, by:
121	121	(1) death;
122	122	(2) retirement; or
123	123	(3) termination of employment in all positions
124	124	included in the coverage of the public retirement system.
125	125	(c) The benefits of a product purchased under a defined
126	126	contribution plan become available under the terms of the annuity
127	127	but not before the earlier of the date:
128	128	(1) the member terminates participation as provided by
129	129	Subsection (b); or
130	130	(2) the sum of the member's age and years of service in
131	131	a position covered by the plan is equal to 80.
132	132	Sec. 807.106. CREDITABLE SERVICE. A person may not
133	133	establish in the defined benefit plan administered by a public
134	134	retirement system credit for service related to employment for
135	135	which the person received a municipal contribution under a defined
136	136	contribution plan also administered by the public retirement
137	137	system.
138	138	Sec. 807.107. CONTRIBUTIONS. (a) A participant in a
139	139	defined contribution plan shall make contributions to the plan at
140	140	the same rate that a participant in a defined benefit plan
141	141	administered by the same public retirement system is required to
142	142	make for current service, and the municipality shall make
143	143	contributions to the defined contribution plan for each participant
144	144	in the defined contribution plan at the same rate as the
145	145	municipality is required to contribute for contributing
146	146	participants in the defined benefit plan administered by the same
147	147	public retirement system. Contributions required under this
148	148	subsection shall be credited to the benefit of the participant in
149	149	the defined contribution plan.
150	150	(b) A participant in a defined contribution plan and the
151	151	municipality shall execute an agreement under which the salary of
152	152	the participant is reduced by the amount of the contribution
153	153	required by this section. An agreement under this subsection is
154	154	irrevocable until the participant terminates participation in the
155	155	plan under Section 807.105.
156	156	Sec. 807.108. HEALTH BENEFITS AND OTHER COVERAGES.
157	157	Notwithstanding any other law, a person who participates or who is
158	158	eligible to participate in a defined contribution plan established
159	159	under this chapter is eligible for health benefits and other
160	160	coverages to the same extent as a person who participates in a
161	161	defined benefit plan administered by the same public retirement
162	162	system.
163	163	SECTION 2. This Act takes effect September 1, 2019.