| 1 | 1 | | 87R3527 JCG-F |
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| 2 | 2 | | By: Gates H.B. No. 1439 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to the payment of certain lump-sum benefits by the |
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| 8 | 8 | | Employees Retirement System of Texas. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Section 814.011, Government Code, is amended to |
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| 11 | 11 | | read as follows: |
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| 12 | 12 | | Sec. 814.011. LUMP-SUM PAYMENTS IN LIEU OF ANNUITIES. (a) |
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| 13 | 13 | | The retirement system may elect to make a lump-sum payment to a |
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| 14 | 14 | | retiree or beneficiary in lieu of annuity payments if: |
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| 15 | 15 | | (1) the actuarial present value of the annuity at the |
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| 16 | 16 | | time of retirement or death does not exceed $20,000; or |
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| 17 | 17 | | (2) at the time of the election: |
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| 18 | 18 | | (A) the retiree or beneficiary, as applicable, |
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| 19 | 19 | | agrees to payment in an amount that is less than the actuarial |
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| 20 | 20 | | present value of the annuity; and |
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| 21 | 21 | | (B) making the payment will result in a reduction |
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| 22 | 22 | | in the unfunded actuarial liabilities of the retirement system. |
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| 23 | 23 | | (b) Payment of a lump sum under this section does not affect |
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| 24 | 24 | | eligibility for any other program administered by the retirement |
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| 25 | 25 | | system. |
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| 26 | 26 | | SECTION 2. Section 814.1082, Government Code, is amended by |
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| 27 | 27 | | amending Subsections (b) and (c) and adding Subsection (c-1) to |
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| 28 | 28 | | read as follows: |
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| 29 | 29 | | (b) The amount of the lump-sum distribution under this |
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| 30 | 30 | | section may not exceed: |
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| 31 | 31 | | (1) the sum of 36 months of a standard service |
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| 32 | 32 | | retirement annuity computed without regard to this section; or |
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| 33 | 33 | | (2) another sum that the board of trustees determines |
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| 34 | 34 | | is appropriate and will result in a reduction in the unfunded |
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| 35 | 35 | | actuarial liabilities of the retirement system. |
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| 36 | 36 | | (c) If a member selects a lump-sum distribution described by |
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| 37 | 37 | | Subsection (b)(1), the [The] service retirement annuity selected by |
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| 38 | 38 | | the member shall be actuarially reduced to reflect the lump-sum |
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| 39 | 39 | | option selected by the member and shall be actuarially equivalent |
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| 40 | 40 | | to a standard or optional service retirement annuity, as |
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| 41 | 41 | | applicable, without the partial lump-sum distribution. The annuity |
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| 42 | 42 | | and lump sum shall be computed to result in no actuarial loss to the |
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| 43 | 43 | | retirement system. |
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| 44 | 44 | | (c-1) If a member selects a lump-sum distribution described |
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| 45 | 45 | | by Subsection (b)(2), the service retirement annuity selected by |
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| 46 | 46 | | the member shall be actuarially reduced by an amount that is: |
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| 47 | 47 | | (1) greater than the actuarial equivalent of the |
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| 48 | 48 | | lump-sum option selected by the member; and |
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| 49 | 49 | | (2) agreed to by the member after receiving written |
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| 50 | 50 | | notice under Subsection (g). |
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| 51 | 51 | | SECTION 3. This Act takes effect immediately if it receives |
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| 52 | 52 | | a vote of two-thirds of all the members elected to each house, as |
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| 53 | 53 | | provided by Section 39, Article III, Texas Constitution. If this |
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| 54 | 54 | | Act does not receive the vote necessary for immediate effect, this |
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| 55 | 55 | | Act takes effect September 1, 2021. |
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