87R3527 JCG-F
By: Gates H.B. No. 1439
A BILL TO BE ENTITLED
AN ACT
relating to the payment of certain lump-sum benefits by the
Employees Retirement System of Texas.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 814.011, Government Code, is amended to
read as follows:
Sec. 814.011. LUMP-SUM PAYMENTS IN LIEU OF ANNUITIES. (a)
The retirement system may elect to make a lump-sum payment to a
retiree or beneficiary in lieu of annuity payments if:
(1) the actuarial present value of the annuity at the
time of retirement or death does not exceed $20,000; or
(2) at the time of the election:
(A) the retiree or beneficiary, as applicable,
agrees to payment in an amount that is less than the actuarial
present value of the annuity; and
(B) making the payment will result in a reduction
in the unfunded actuarial liabilities of the retirement system.
(b) Payment of a lump sum under this section does not affect
eligibility for any other program administered by the retirement
system.
SECTION 2. Section 814.1082, Government Code, is amended by
amending Subsections (b) and (c) and adding Subsection (c-1) to
read as follows:
(b) The amount of the lump-sum distribution under this
section may not exceed:
(1) the sum of 36 months of a standard service
retirement annuity computed without regard to this section; or
(2) another sum that the board of trustees determines
is appropriate and will result in a reduction in the unfunded
actuarial liabilities of the retirement system.
(c) If a member selects a lump-sum distribution described by
Subsection (b)(1), the [The] service retirement annuity selected by
the member shall be actuarially reduced to reflect the lump-sum
option selected by the member and shall be actuarially equivalent
to a standard or optional service retirement annuity, as
applicable, without the partial lump-sum distribution. The annuity
and lump sum shall be computed to result in no actuarial loss to the
retirement system.
(c-1) If a member selects a lump-sum distribution described
by Subsection (b)(2), the service retirement annuity selected by
the member shall be actuarially reduced by an amount that is:
(1) greater than the actuarial equivalent of the
lump-sum option selected by the member; and
(2) agreed to by the member after receiving written
notice under Subsection (g).
SECTION 3. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2021.