Texas 2021 - 87th Regular

Texas House Bill HB1437 Compare Versions

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

Old	New	Differences
1	1	87R3521 KFF-F
2	2	By: Gates H.B. No. 1437
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 hybrid retirement plan to provide retirement benefits
9	9	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 hybrid retirement 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. HYBRID RETIREMENT 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) "Hybrid retirement plan" means a retirement plan
31	31	that combines elements of a defined benefit plan, a defined
32	32	contribution plan, or an individual retirement savings account
33	33	established under this chapter.
34	34	(5) "Qualified plan" means an employee benefit plan
35	35	qualified under Section 401(a), Internal Revenue Code of 1986 (26
36	36	U.S.C. Section 401).
37	37	Sec. 820.002. CONFLICT OF LAW. To the extent of a conflict
38	38	between this chapter, including a rule adopted by the retirement
39	39	system under authority of this chapter, and any other law, this
40	40	chapter prevails.
41	41	Sec. 820.003. CERTAIN REFERENCES IN LAW TO RETIREMENT
42	42	SYSTEM MEMBERS. A reference in law outside this subtitle to a
43	43	member of or membership in the retirement system includes a
44	44	participant of or participation in, as appropriate, a hybrid
45	45	retirement plan unless the reference is expressly defined
46	46	otherwise.
47	47	SUBCHAPTER B. CREATION OF HYBRID RETIREMENT PLAN
48	48	Sec. 820.051. DUTY TO CREATE PLAN. Notwithstanding any
49	49	other law and subject to the requirements of Subchapter C, the board
50	50	of trustees shall by rule establish and administer a hybrid
51	51	retirement plan to provide benefits to newly hired employees under
52	52	that plan instead of under a defined benefit plan.
53	53	SUBCHAPTER C. PLAN MINIMUM REQUIREMENTS
54	54	Sec. 820.101. MINIMUM REQUIREMENTS. In establishing a
55	55	hybrid retirement plan, the board of trustees of the retirement
56	56	system shall ensure the plan meets the requirements of this
57	57	subchapter.
58	58	Sec. 820.102. QUALIFIED PLAN. A hybrid retirement plan
59	59	created under this chapter must be a qualified plan.
60	60	Sec. 820.103. PARTICIPATION IN PLAN; RESUMPTION OF SERVICE.
61	61	(a) In adopting rules to establish a hybrid retirement plan, the
62	62	board of trustees shall designate the date by which all newly hired
63	63	employees shall begin participation in the plan, provided that date
64	64	is not later than January 1, 2023.
65	65	(b) A person who resumes employment with an employer on or
66	66	after the date designated by the board of trustees under Subsection
67	67	(a) and who is already a member of the retirement system eligible to
68	68	participate in a defined benefit plan remains eligible to
69	69	participate in the defined benefit plan and is not considered a
70	70	newly hired employee for purposes of this section.
71	71	(c) Notwithstanding any other law, including Section
72	72	812.003, an employee who participates in a hybrid retirement plan
73	73	established under this chapter is not eligible for membership in
74	74	the retirement system and may not participate in the defined
75	75	benefit plan administered by the retirement system.
76	76	Sec. 820.104. EFFECT OF EMPLOYMENT CHANGES. A person
77	77	participating in a hybrid retirement plan continues to participate
78	78	in the plan when the person changes employment to another position
79	79	included in the coverage of the retirement system.
80	80	Sec. 820.105. VESTING OF BENEFITS; TERMINATION OF
81	81	PARTICIPATION. (a) Benefits in a hybrid retirement plan vest in a
82	82	participant not later than the fifth anniversary of the date the
83	83	person begins to participate in the plan.
84	84	(b) A person terminates participation in a hybrid
85	85	retirement plan, without losing any vested benefits, by:
86	86	(1) death;
87	87	(2) retirement; or
88	88	(3) termination of employment in all positions
89	89	included in the coverage of the retirement system.
90	90	(c) The benefits of a product purchased under a hybrid
91	91	retirement plan become available under the terms of the annuity but
92	92	not before the earlier of the date:
93	93	(1) the member terminates participation as provided by
94	94	Subsection (b); or
95	95	(2) the sum of the member's age and years of service in
96	96	a position covered by the plan is equal to 80.
97	97	Sec. 820.106. CREDITABLE SERVICE. A person may not
98	98	establish in the defined benefit plan administered by the
99	99	retirement system credit for service performed during a period the
100	100	person was participating in a hybrid retirement plan.
101	101	Sec. 820.107. CONTRIBUTIONS. (a) A participant in a hybrid
102	102	retirement plan shall make contributions to the plan at the same
103	103	rate that a member of the retirement system participating in a
104	104	defined benefit plan is required to make for current service, and
105	105	the state and employers otherwise required to make contributions to
106	106	a defined benefit plan shall make contributions to the hybrid
107	107	retirement plan for each participant at the same rate as the state
108	108	and employers are required to contribute for contributing members
109	109	of the defined benefit plan. Contributions required under this
110	110	subsection shall be credited to the benefit of the participant.
111	111	(b) A participant in a hybrid retirement plan and the
112	112	participant's employer shall execute an agreement under which the
113	113	salary of the participant is reduced by the amount of the
114	114	contribution required by this section. An agreement under this
115	115	subsection is irrevocable until the participant terminates
116	116	participation in the plan under Section 820.105.
117	117	(c) Participant, state, and employer contributions, as
118	118	applicable, shall be made in the manner provided by Subchapter E,
119	119	Chapter 815.
120	120	SECTION 3. This Act takes effect September 1, 2021.