Texas 2021 - 87th Regular

Texas Senate Bill SB321 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	S.B. No. 321
	1	+	By: Huffman, et al. S.B. No. 321
	2	+	(Bonnen)
2	3
3	4
	5	+	A BILL TO BE ENTITLED
4	6		AN ACT
5	7		relating to contributions to, benefits from, and the administration
6	8		of the Employees Retirement System of Texas.
7	9		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
8	10		SECTION 1. Section 803.202, Government Code, is amended by
9	11		adding Subsection (c) to read as follows:
10	12		(c) A member of the Employees Retirement System of Texas who
11	13		is subject to Chapter 820 is eligible to participate in the program
12	14		provided by this chapter.
13	15		SECTION 2. Chapter 805, Government Code, is amended by
14	16		adding Section 805.0015 to read as follows:
15	17		Sec. 805.0015. APPLICABILITY. This chapter does not apply
16	18		to a member of the employees retirement system who is subject to
17	19		Chapter 820.
18	20		SECTION 3. Section 811.001, Government Code, is amended by
19	21		adding Subdivision (5-a) and amending Subdivision (16) to read as
20	22		follows:
21	23		(5-a) "Cash balance group member" means a member
22	24		subject to Chapter 820.
23	25		(16) "Service credit" means the amount of membership
24	26		and, if applicable, military service ascribed to a person's account
25	27		in the retirement system for which all required contributions have
26	28		been made to, and are being held by, the retirement system.
27	29		SECTION 4. Section 812.101(c), Government Code, is amended
28	30		to read as follows:
29	31		(c) For a law enforcement or custodial officer, the
30	32		withdrawal of accumulated contributions under Subsection (a)
31	33		includes all of the officer's contributions made under Section
32	34		815.402(h) or 820.101(b), as applicable.
33	35		SECTION 5. Section 813.001, Government Code, is amended to
34	36		read as follows:
35	37		Sec. 813.001. TYPES OF CREDITABLE SERVICE. The types of
36	38		service creditable in the retirement system are membership service
37	39		and, if applicable, military service[,] and equivalent membership
38	40		service.
39	41		SECTION 6. Subchapter A, Chapter 813, Government Code, is
40	42		amended by adding Section 813.0015 to read as follows:
41	43		Sec. 813.0015. PROVISIONS APPLICABLE TO CASH BALANCE GROUP
42	44		MEMBERS. The following provisions of this chapter do not apply to a
43	45		cash balance group member:
44	46		(1) Sections 813.102, 813.104, 813.106, 813.202,
45	47		813.402, 813.403, 813.404, 813.502, 813.504, 813.505, 813.506,
46	48		813.509, 813.511, 813.513, and 813.514; and
47	49		(2) Subchapter D.
48	50		SECTION 7. Section 813.401, Government Code, is amended to
49	51		read as follows:
50	52		Sec. 813.401. SERVICE CREDITABLE IN ELECTED CLASS. Service
51	53		creditable in the elected class of membership is:
52	54		(1) membership service in an office included in that
53	55		class; and
54	56		(2) for members other than cash balance group members:
55	57		(A) military service established as provided by
56	58		Subchapter D; and
57	59		(B) [(3)] equivalent membership service
58	60		specifically made creditable in that class.
59	61		SECTION 8. Section 814.009(a), Government Code, is amended
60	62		to read as follows:
61	63		(a) A person who receives an annuity under this subtitle
62	64		[subchapter] may, on a form prescribed by and filed with the
63	65		retirement system, authorize the retirement system to deduct from
64	66		the person's monthly annuity payment the amount of a fee for the
65	67		person's membership in a state employee organization that:
66	68		(1) is a certified eligible state employee
67	69		organization under Section 403.0165; or
68	70		(2) has at least 2,500 retirees as members on January 1
69	71		preceding the fiscal year for which the deduction is made.
70	72		SECTION 9. Section 814.0095(a), Government Code, is amended
71	73		to read as follows:
72	74		(a) Except as provided by Section 814.0096(c), a person who
73	75		receives an annuity under this subtitle [subchapter] may, on a
74	76		printed or electronic form filed with the retirement system,
75	77		authorize the retirement system to deduct from the person's monthly
76	78		annuity payment the amount of a contribution to the state employee
77	79		charitable campaign in the manner and for the same purposes for
78	80		which a state employee may authorize deductions to that campaign
79	81		under Subchapter I, Chapter 659.
80	82		SECTION 10. Subchapter B, Chapter 814, Government Code, is
81	83		amended by adding Section 814.1005 to read as follows:
82	84		Sec. 814.1005. INAPPLICABILITY OF SUBCHAPTER TO CASH
83	85		BALANCE GROUP MEMBERS. This subchapter does not apply to a cash
84	86		balance group member.
85		-	SECTION 11. Subchapter B, Chapter 814, Government Code, is
86		-	amended by adding Section 814.109 to read as follows:
87		-	Sec. 814.109. ELIGIBILITY OF CERTAIN MEMBERS FOR SERVICE
88		-	RETIREMENT. Notwithstanding any other law other than Section
89		-	815.507:
90		-	(1) a member eligible to retire under this subchapter
91		-	from either class of membership may retire without separating from
92		-	a position in that class if the member:
93		-	(A) has accrued enough service credit in the
94		-	class to receive the maximum annuity permitted under this
95		-	subchapter; and
96		-	(B) is at least 60 years old; and
97		-	(2) a member who retires from either class of
98		-	membership under this section is not entitled to earn any
99		-	additional retirement benefits under this subtitle.
100		-	SECTION 12. Sections 815.311(a) and (b), Government Code,
	87	+	SECTION 11. Sections 815.311(a) and (b), Government Code,
101	88		are amended to read as follows:
102	89		(a) The retirement system shall deposit in a member's
103	90		individual account in the employees saving account the following
104	91		amounts, as applicable:
105	92		(1) the amount of contributions to the retirement
106	93		system that is deducted from the member's compensation;
107	94		(2) the portion of a deposit required to reinstate
108	95		service credit previously canceled that represents only the amount
109	96		withdrawn;
110	97		(3) the portion of a deposit required to establish
111	98		service credit not previously established that represents only the
112	99		required contribution; [and]
113	100		(4) the portion of a deposit required to establish
114	101		military service credit that represents only the member's
115	102		contribution for that credit; and
116	103		(5) interest and gain sharing interest in accordance
117	104		with Sections 820.102 and 820.103, respectively.
118	105		(b) Except as provided by Section 820.102 or 820.103,
119	106		interest [Interest] on money in an individual account in the
120	107		employees saving account is earned monthly and is computed at the
121	108		rate of two percent a year on the mean balance of the member's
122	109		account for the fiscal year.
123		-	SECTION 13. Section 815.314, Government Code, is amended to
	110	+	SECTION 12. Section 815.314, Government Code, is amended to
124	111		read as follows:
125	112		Sec. 815.314. INTEREST ACCOUNT. Except as provided by
126	113		Section 815.317, 820.102, or 820.103, the retirement system shall
127	114		deposit in the interest account all income, interest, and dividends
128	115		from deposits and investments of assets of the retirement system.
129		-	SECTION 14. Section 815.317(d), Government Code, is amended
	116	+	SECTION 13. Section 815.317(d), Government Code, is amended
130	117		to read as follows:
131	118		(d) Member contributions to the fund deducted under Section
132	119		815.402(h) or 820.101(b), as applicable:
133	120		(1) earn interest at the same rate as money in an
134	121		individual account in the employees saving account under Section
135	122		815.311; and
136	123		(2) are subject to the same computations and
137	124		limitations that apply to member contributions under Section
138	125		815.311.
139		-	SECTION 15. Section 815.401(a), Government Code, is amended
	126	+	SECTION 14. Section 815.401(a), Government Code, is amended
140	127		to read as follows:
141	128		(a) Each member annually shall pay a membership fee of $2. A
142	129		contributing member shall pay the fee with the member's first
143	130		contribution to the retirement system in each fiscal year in the
144	131		manner provided by Section 815.402 or 820.101, as applicable, for
145	132		payment of the member's contribution to the retirement system.
146		-	SECTION 16. The heading to Section 815.402, Government
	133	+	SECTION 15. The heading to Section 815.402, Government
147	134		Code, is amended to read as follows:
148	135		Sec. 815.402. COLLECTION OF CERTAIN MEMBER CONTRIBUTIONS.
149		-	SECTION 17. Section 815.402(a), Government Code, is amended
	136	+	SECTION 16. Section 815.402(a), Government Code, is amended
150	137		to read as follows:
151	138		(a) Except as provided by Section 813.201, each payroll
152	139		period, each department or agency of the state shall cause to be
153	140		deducted from the [each member's] compensation of each member,
154	141		other than a cash balance group member, a contribution of:
155	142		(1) 9.5 percent of the compensation if the member is
156	143		not a member of the legislature, for service rendered after August
157	144		31, 2015, and before September 1, 2017;
158	145		(2) for service by a member who is not a member of the
159	146		legislature rendered on or after September 1, 2017, the lesser of:
160	147		(A) 9.5 percent of the [member's annual]
161	148		compensation; or
162	149		(B) a percentage of the [member's annual]
163	150		compensation equal to 9.5 percent reduced by one-tenth of one
164	151		percent for each one-tenth of one percent that the state
165	152		contribution rate for the fiscal year to which the service relates
166	153		is less than the state contribution rate established for the 2017
167	154		fiscal year; or
168	155		(3) 9.5 percent of the compensation if the member is a
169	156		member of the legislature.
170		-	SECTION 18. Section 815.403(a), Government Code, is amended
	157	+	SECTION 17. Section 815.403(a), Government Code, is amended
171	158		to read as follows:
172	159		(a) During each fiscal year, the state shall contribute to
173	160		the retirement system:
174	161		(1) an amount equal to 9.5 [7.4] percent of the total
175	162		compensation of all members of the retirement system for that year;
176	163		(2) money to pay lump-sum death benefits for retirees
177	164		under Section 814.501;
178	165		(3) an amount for the law enforcement and custodial
179	166		officer supplemental retirement fund equal to 2.13 percent of the
180	167		aggregate state compensation of all custodial and law enforcement
181	168		officers for that year;
182	169		(4) money necessary for the administration of the law
183	170		enforcement and custodial officer supplemental retirement fund;
184	171		and
185	172		(5) money for service credit not previously
186	173		established, as provided by Section 813.202(c) or 813.302(d).
187		-	SECTION 19. Sections 815.406(a) and (c), Government Code,
	174	+	SECTION 18. Sections 815.406(a) and (c), Government Code,
188	175		are amended to read as follows:
189	176		(a) The state shall pick up the employee contribution
190	177		required of each of its employees by Section 815.402 or 820.101, as
191	178		applicable, for all compensation earned [after December 31, 1987].
192	179		The state shall pay to the retirement system the picked-up
193	180		contributions from the same source of funds that is used in paying
194	181		earnings to the employees. Such payments shall be in lieu of
195	182		contributions by the employees. The state shall pick up these
196	183		contributions by a corresponding reduction in the cash salary of
197	184		the employees, by an offset against a future salary increase, or by
198	185		a combination of a salary reduction and offset against a future
199	186		salary increase. Employees do not have the option of choosing to
200	187		receive the contributed amounts directly instead of having them
201	188		paid by the state to the retirement system.
202	189		(c) Employee contributions picked up as provided by
203	190		Subsection (a) shall be transmitted to the retirement system in the
204	191		manner required by Section 815.402 or 820.101, as applicable.
205	192		Employee contributions picked up by the state and credited to the
206	193		employee's account shall be treated for all other purposes as if the
207	194		amount were a part of the member's compensation and had been
208	195		deducted pursuant to Section 815.403(a).
209		-	SECTION 20. Subchapter E, Chapter 815, Government Code, is
	196	+	SECTION 19. Subchapter E, Chapter 815, Government Code, is
210	197		amended by adding Section 815.407 to read as follows:
211	198		Sec. 815.407. LEGACY PAYMENTS. (a) In addition to the
212	199		state contributions required by this subtitle, each fiscal year the
213	200		state shall make an actuarially determined payment in the amount
214	201		necessary to amortize the system's unfunded actuarial liabilities
215	202		by not later than the fiscal year ending August 31, 2054.
216	203		(b) Before each regular legislative session, the retirement
217	204		system shall provide the Legislative Budget Board with the amount
218	205		necessary to make the actuarially determined payment required under
219	206		Subsection (a). The director of the Legislative Budget Board,
220	207		under the direction of the Legislative Budget Board, shall include
221	208		that payment in the general appropriations bill prepared for
222	209		introduction at each regular legislative session under Section
223	210		322.008. This subsection expires September 1, 2055.
224		-	SECTION 21. Subtitle B, Title 8, Government Code, is
	211	+	SECTION 20. Subtitle B, Title 8, Government Code, is
225	212		amended by adding Chapter 820 to read as follows:
226	213		CHAPTER 820. CASH BALANCE BENEFIT
227	214		SUBCHAPTER A. GENERAL PROVISIONS
228	215		Sec. 820.001. DEFINITION. In this chapter, "accumulated
229	216		account balance" means the total of amounts in a member's
230	217		individual account in the employees saving account, including:
231	218		(1) amounts deducted from the compensation of the
232	219		member;
233	220		(2) other member deposits required to be placed in the
234	221		member's individual account; and
235	222		(3) interest credited to amounts in the member's
236	223		individual account, including interest and gain sharing interest
237	224		credited in accordance with Sections 820.102 and 820.103,
238	225		respectively.
239	226		Sec. 820.002. APPLICABILITY. This chapter applies only to
240	227		a member of the employee or elected class of membership who:
241	228		(1) was hired or took office on or after September 1,
242	229		2022; and
243	230		(2) was not a member on the date the member was hired
244	231		or took office.
245	232		Sec. 820.003. CONFLICT OF LAW. To the extent of a conflict
246	233		between this chapter, including a rule adopted by the retirement
247	234		system under authority of this chapter, and any other law, this
248	235		chapter prevails.
249	236		Sec. 820.004. RULES. The board of trustees may adopt rules
250	237		necessary to implement this chapter.
251	238		SUBCHAPTER B. CASH BALANCE BENEFITS
252	239		Sec. 820.051. APPLICATION FOR CASH BALANCE BENEFIT. (a) A
253	240		member may apply for a cash balance annuity by filing an application
254	241		for retirement with the board of trustees.
255	242		(b) An application for a cash balance annuity may not be
256	243		made:
257	244		(1) after the date the member wishes to retire; or
258	245		(2) more than 90 days before the date the member wishes
259	246		to retire.
260	247		Sec. 820.052. ELIGIBILITY FOR CASH BALANCE BENEFIT. A
261	248		member:
262	249		(1) who has service credit in the employee class of
263	250		membership is eligible to retire and receive a cash balance annuity
264	251		if the member:
265	252		(A) is at least 65 years old and has five years of
266	253		service credit in that class; or
267	254		(B) has at least five years of service credit in
268	255		that class and the sum of the member's age and amount of service
269	256		credit in that class, including months of age and credit, equals or
270	257		exceeds the number 80;
271	258		(2) who:
272	259		(A) has at least 20 years of service credit as a
273	260		law enforcement or custodial officer is eligible to retire
274	261		regardless of age and receive a cash balance annuity in an amount
275	262		computed and funded as provided by Section 820.053; or
276	263		(B) is at least 55 years old and has at least 10
277	264		years of service credit as a law enforcement or custodial officer is
278	265		eligible to retire and receive a cash balance annuity in an amount
279	266		computed and funded as provided by Section 820.053, provided that
280	267		the member is only entitled to the enhanced benefit described by
281	268		Section 820.053(a)(2)(B) if the member has at least 20 years of
282	269		service as a law enforcement or custodial officer; or
283	270		(3) who has service credit in the elected class of
284	271		membership is eligible to retire and receive a cash balance annuity
285	272		if the member:
286	273		(A) is at least 60 years old and has eight years
287	274		of service credit in that class; or
288	275		(B) is at least 50 years old and has 12 years of
289	276		service credit in that class.
290	277		Sec. 820.053. CASH BALANCE BENEFITS FOR MEMBERS. (a) The
291	278		state match for the cash balance benefit for:
292	279		(1) service credited to the employee class of
293	280		membership is an amount computed by multiplying the member's
294	281		accumulated account balance by 150 percent;
295	282		(2) service credited to the employee class of
296	283		membership by a member eligible to retire under this chapter as a
297	284		law enforcement or custodial officer is an amount computed by
298	285		multiplying the member's accumulated account balance by:
299	286		(A) except as provided by Paragraph (B), 150
300	287		percent; and
301	288		(B) for the portion of the accumulated account
302	289		balance based on the member's additional two percent contribution
303	290		under Section 820.101(b), including interest, attributable to
304	291		service as a law enforcement or custodial officer, 300 percent,
305	292		paid from the law enforcement and custodial officer supplemental
306	293		retirement fund; and
307	294		(3) subject to Subsection (c), service credited to the
308	295		elected class of membership is an amount computed by multiplying
309	296		the member's accumulated account balance by 150 percent.
310	297		(b) The retirement system shall compute a member's cash
311	298		balance annuity under this section by taking the sum of the member's
312	299		accumulated account balance and the state match computed under
313	300		Subsection (a) and annuitizing that amount over the life expectancy
314	301		of the member as of the effective date of the member's retirement
315	302		using mortality and other tables adopted by the board for that
316	303		purpose under Section 815.105.
317	304		(c) For purposes of this section, a member of the elected
318	305		class of membership under Section 812.002(a)(2) shall have the
319	306		member's accumulated account balance computed as if the
320	307		contributions to the account were based on the state base salary,
321	308		excluding longevity pay payable under Section 659.0445, being paid
322	309		a district judge as set by the General Appropriations Act in
323	310		accordance with Section 659.012(a).
324	311		Sec. 820.054. DEATH AND DISABILITY BENEFITS.
325	312		(a) Notwithstanding any other law, a member subject to this
326	313		chapter, a retiree receiving a cash balance annuity under this
327	314		chapter, or the beneficiary of a member or retiree described by this
328	315		subsection, who qualifies for a death or survivor benefit annuity
329	316		or a disability retirement annuity under Chapter 814 is entitled to
330	317		a cash balance annuity under Section 820.053 instead of the annuity
331	318		otherwise provided under Chapter 814.
332	319		(b) The board of trustees may enter into contracts to
333	320		provide additional death and disability benefits under this
334	321		chapter.
335	322		SUBCHAPTER C. CONTRIBUTIONS AND INTEREST
336	323		Sec. 820.101. COLLECTION OF MEMBER CONTRIBUTIONS.
337	324		(a) Each payroll period, each department or agency of the state
338	325		shall cause to be deducted from the compensation of a member subject
339	326		to this chapter a contribution of six percent of the compensation of
340	327		the member.
341	328		(b) In addition to the contribution under Subsection (a),
342	329		each department or agency of the state that employs a law
343	330		enforcement or custodial officer who is a member subject to this
344	331		chapter shall deduct an additional two percent contribution from
345	332		the member's compensation, to be deposited in the law enforcement
346	333		and custodial officer supplemental retirement fund.
347	334		Sec. 820.102. ANNUAL INTEREST ADJUSTMENT. Each fiscal
348	335		year, the retirement system shall deposit for a member subject to
349	336		this chapter an amount equal to four percent of the member's
350	337		accumulated account balance deposited into the member's individual
351	338		account in the employees saving account.
352	339		Sec. 820.103. GAIN SHARING INTEREST ADJUSTMENT. (a) Each
353	340		fiscal year and subject to Subsection (b), the retirement system
354	341		shall compute the gain sharing interest rate applicable to the
355	342		subsequent fiscal year by:
356	343		(1) determining the average return on the investment
357	344		of the system's cash and securities during the preceding five
358	345		fiscal years, expressed as a percentage rate;
359	346		(2) subtracting four percentage points from the
360	347		percentage rate determined under Subdivision (1); and
361	348		(3) multiplying the sum determined under Subdivision
362	349		(2) by 50 percent.
363	350		(b) Subject to Subsection (c), in addition to the amount
364	351		deposited under Section 820.102, each fiscal year, the retirement
365	352		system shall:
366	353		(1) deposit into each member's individual account in
367	354		the employees saving account an amount equal to the gain sharing
368	355		interest rate determined under Subsection (a) for the fiscal year
369	356		multiplied by the member's accumulated account balance; and
370	357		(2) recalculate the annuity of a retiree or annuitant
371	358		under this chapter by multiplying the annuity by an amount equal to
372	359		the gain sharing interest rate determined under Subsection (a).
373	360		(c) The gain sharing interest rate applied under Subsection
374	361		(b) may not be less than zero or more than three percent.
375	362		(d) Subsection (b) applies only to a retiree who is
376	363		receiving a cash balance annuity under Section 820.053.
377		-	SECTION 22. Section 1551.102(b), Insurance Code, is amended
	364	+	SECTION 21. Section 1551.102(b), Insurance Code, is amended
378	365		to read as follows:
379	366		(b) An individual is eligible to participate in the group
380	367		benefits program as provided by Subsection (a) if:
381	368		(1) the individual retires under the jurisdiction of
382	369		the Employees Retirement System of Texas; and
383	370		(2) the individual:
384	371		(A) receives or is eligible to receive an annuity
385	372		under Section 814.104(a)(2), Government Code, and has at least 10
386	373		years of eligible service credit;
387	374		(B) receives or is eligible to receive an annuity
388	375		under Chapter 803 or Section 814.104(a)(1), Government Code, has at
389	376		least 10 years of eligible service credit, and is at least 65 years
390	377		of age; [or]
391	378		(C) receives or is eligible to receive an annuity
392	379		that is based on eligibility under Section 814.002, 814.102,
393	380		814.104(b), 814.107(a), 834.101, or 839.101, Government Code; or
394	381		(D) receives or is eligible to receive an annuity
395	382		under Subchapter B, Chapter 820, Government Code, and has at least
396	383		10 years of eligible service credit.
397		-	SECTION 23. The Employees Retirement System of Texas is
	384	+	SECTION 22. The Employees Retirement System of Texas is
398	385		required to implement a provision of this Act only if the
399	386		legislature appropriates money specifically for that purpose. If
400	387		the legislature does not appropriate money specifically for that
401	388		purpose, the Employees Retirement System of Texas may, but is not
402	389		required to, implement a provision of this Act using other
403	390		appropriations available for that purpose.
404		-	SECTION 24. This Act takes effect immediately if it
	391	+	SECTION 23. This Act takes effect immediately if it
405	392		receives a vote of two-thirds of all the members elected to each
406	393		house, as provided by Section 39, Article III, Texas Constitution.
407	394		If this Act does not receive the vote necessary for immediate
408	395		effect, this Act takes effect September 1, 2021.
409		-	______________________________ ______________________________
410		-	President of the Senate Speaker of the House
411		-	I hereby certify that S.B. No. 321 passed the Senate on
412		-	April 28, 2021, by the following vote: Yeas 20, Nays 11; and that
413		-	the Senate concurred in House amendment on May 30, 2021, by the
414		-	following vote: Yeas 19, Nays 12.
415		-	______________________________
416		-	Secretary of the Senate
417		-	I hereby certify that S.B. No. 321 passed the House, with
418		-	amendment, on May 26, 2021, by the following vote: Yeas 80,
419		-	Nays 66, one present not voting.
420		-	______________________________
421		-	Chief Clerk of the House
422		-	Approved:
423		-	______________________________
424		-	Date
425		-	______________________________
426		-	Governor