Texas 2021 - 87th Regular

Texas House Bill HB1028 Compare Versions

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

Old	New	Differences
1	1	87R2748 KFF-F
2	2	By: Gates H.B. No. 1028
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to requiring the Employees Retirement System of Texas to
8	8	establish a defined contribution plan to provide retirement
9	9	benefits to certain employees.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Section 802.002, Government Code, is amended by
12	12	adding Subsection (e) to read as follows:
13	13	(e) Notwithstanding any other law, including Subsection
14	14	(a), a defined contribution plan established under Chapter 820 is
15	15	exempt from Sections 802.101, 802.1012, 802.1014, 802.103,
16	16	802.104, and 802.202(d). This subsection may not be construed to
17	17	exempt any plan from Section 802.105 or 802.106(h).
18	18	SECTION 2. Subtitle B, Title 8, Government Code, is amended
19	19	by adding Chapter 820 to read as follows:
20	20	CHAPTER 820. DEFINED CONTRIBUTION PLAN
21	21	SUBCHAPTER A. GENERAL PROVISIONS
22	22	Sec. 820.001. DEFINITIONS. In this chapter:
23	23	(1) "Defined benefit plan" means, as appropriate, the
24	24	plan that provides benefits to members of the employee class of the
25	25	retirement system under Chapters 811 through 815.
26	26	(2) "Defined contribution plan" has the meaning
27	27	assigned by Section 802.001.
28	28	(3) "Employee" means an employee or appointed officer
29	29	described by Section 812.003(a).
30	30	(4) "Qualified plan" means an employee benefit plan
31	31	qualified under Section 401(a), Internal Revenue Code of 1986 (26
32	32	U.S.C. Section 401).
33	33	Sec. 820.002. CONFLICT OF LAW. To the extent of a conflict
34	34	between this chapter, including a rule adopted by the retirement
35	35	system under authority of this chapter, and any other law, this
36	36	chapter prevails.
37	37	Sec. 820.003. CERTAIN REFERENCES IN LAW TO RETIREMENT
38	38	SYSTEM MEMBERS. A reference in law outside this subtitle to a
39	39	member of or membership in the retirement system includes a
40	40	participant of or participation in, as appropriate, a defined
41	41	contribution plan unless the reference is expressly defined
42	42	otherwise.
43	43	SUBCHAPTER B. CREATION OF DEFINED CONTRIBUTION PLAN
44	44	Sec. 820.051. DUTY TO CREATE PLAN. Notwithstanding any
45	45	other law and subject to the requirements of Subchapter C, the board
46	46	of trustees shall by rule establish and administer a defined
47	47	contribution plan to provide benefits to newly hired employees
48	48	under that plan instead of under a defined benefit plan.
49	49	SUBCHAPTER C. PLAN MINIMUM REQUIREMENTS
50	50	Sec. 820.101. MINIMUM REQUIREMENTS. In establishing a
51	51	defined contribution plan, the board of trustees of the retirement
52	52	system shall ensure the plan meets the requirements of this
53	53	subchapter.
54	54	Sec. 820.102. QUALIFIED PLAN. A defined contribution plan
55	55	created under this chapter must be a qualified plan.
56	56	Sec. 820.103. PARTICIPATION IN PLAN; RESUMPTION OF SERVICE.
57	57	(a) In adopting rules to establish a defined contribution plan, the
58	58	board of trustees shall designate the date by which all newly hired
59	59	employees shall begin participation in the plan, provided that date
60	60	is not later than January 1, 2023.
61	61	(b) A person who resumes employment with an employer on or
62	62	after the date designated by the board of trustees under Subsection
63	63	(a) and who is already a member of the retirement system eligible to
64	64	participate in a defined benefit plan remains eligible to
65	65	participate in the defined benefit plan and is not considered a
66	66	newly hired employee for purposes of this section.
67	67	(c) Notwithstanding any other law, including Section
68	68	812.003, an employee who participates in a defined contribution
69	69	plan established under this chapter is not eligible for membership
70	70	in the retirement system and may not participate in the defined
71	71	benefit plan administered by the retirement system.
72	72	Sec. 820.104. EFFECT OF EMPLOYMENT CHANGES. A person
73	73	participating in a defined contribution plan continues to
74	74	participate in the plan when the person changes employment to
75	75	another position included in the coverage of the retirement system.
76	76	Sec. 820.105. VESTING OF BENEFITS; TERMINATION OF
77	77	PARTICIPATION. (a) Benefits in a defined contribution plan vest in
78	78	a participant not later than the fifth anniversary of the date the
79	79	person begins to participate in the plan.
80	80	(b) A person terminates participation in a defined
81	81	contribution plan, without losing any vested benefits, by:
82	82	(1) death;
83	83	(2) retirement; or
84	84	(3) termination of employment in all positions
85	85	included in the coverage of the retirement system.
86	86	(c) The benefits of a product purchased under a defined
87	87	contribution plan become available under the terms of the annuity
88	88	but not before the earlier of the date:
89	89	(1) the member terminates participation as provided by
90	90	Subsection (b); or
91	91	(2) the sum of the member's age and years of service in
92	92	a position covered by the plan is equal to 80.
93	93	Sec. 820.106. CREDITABLE SERVICE. A person may not
94	94	establish in the defined benefit plan administered by the
95	95	retirement system credit for service performed during a period the
96	96	person was participating in a defined contribution plan.
97	97	Sec. 820.107. CONTRIBUTIONS. (a) A participant in a
98	98	defined contribution plan shall make contributions to the plan at
99	99	the same rate that a member of the retirement system participating
100	100	in a defined benefit plan is required to make for current service,
101	101	and the state and employers otherwise required to make
102	102	contributions to a defined benefit plan shall make contributions to
103	103	the defined contribution plan for each participant at the same rate
104	104	as the state and employers are required to contribute for
105	105	contributing members of the defined benefit plan. Contributions
106	106	required under this subsection shall be credited to the benefit of
107	107	the participant.
108	108	(b) A participant in a defined contribution plan and the
109	109	participant's employer shall execute an agreement under which the
110	110	salary of the participant is reduced by the amount of the
111	111	contribution required by this section. An agreement under this
112	112	subsection is irrevocable until the participant terminates
113	113	participation in the plan under Section 820.105.
114	114	(c) Participant, state, and employer contributions, as
115	115	applicable, shall be made in the manner provided by Subchapter E,
116	116	Chapter 815.
117	117	SECTION 3. This Act takes effect September 1, 2021.