| 1 | 1 | | H.B. No. 1393 |
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| 3 | 3 | | |
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| 4 | 4 | | AN ACT |
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| 5 | 5 | | relating to an optional service retirement annuity that provides an |
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| 6 | 6 | | increasing annuity under the Employees Retirement System of Texas. |
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| 7 | 7 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 8 | 8 | | SECTION 1. Subchapter B, Chapter 814, Government Code, is |
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| 9 | 9 | | amended by adding Section 814.110 to read as follows: |
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| 10 | 10 | | Sec. 814.110. INCREASING ANNUITY OPTION. (a) A member who |
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| 11 | 11 | | is eligible for a service retirement annuity not reduced because of |
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| 12 | 12 | | age may select a standard retirement annuity or an optional service |
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| 13 | 13 | | retirement annuity described by Section 814.108 together with the |
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| 14 | 14 | | option for an increasing annuity as described by this section. |
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| 15 | 15 | | (b) The retirement system shall provide the increasing |
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| 16 | 16 | | annuity option by reducing the member's annuity for an appropriate |
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| 17 | 17 | | implementation period beginning immediately after the member's |
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| 18 | 18 | | retirement and annually increasing the amount of the annuity by two |
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| 19 | 19 | | percent or by another percentage rate, as determined by the system |
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| 20 | 20 | | under Subsection (c), for each year during the applicable |
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| 21 | 21 | | implementation period. |
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| 22 | 22 | | (c) The retirement system may offer other increasing |
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| 23 | 23 | | annuity options similar to the option described by Subsection (b), |
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| 24 | 24 | | including increasing annuity options providing a different |
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| 25 | 25 | | percentage rate of increase or a different implementation period. |
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| 26 | 26 | | (d) If a member elects to receive an increasing annuity |
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| 27 | 27 | | option under this section, the member's annuity must be calculated |
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| 28 | 28 | | to reflect the option selected and be actuarially equivalent to a |
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| 29 | 29 | | standard or optional service retirement annuity, as applicable, |
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| 30 | 30 | | that the member would have been entitled to had the member not |
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| 31 | 31 | | elected to receive the option. The annuity must be computed to |
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| 32 | 32 | | result in no actuarial loss to the retirement system. |
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| 33 | 33 | | (e) The increasing annuity option under this section may be |
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| 34 | 34 | | elected only once by a member and may not be elected by a retiree. A |
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| 35 | 35 | | member retiring under the proportionate retirement program under |
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| 36 | 36 | | Chapter 803 is not eligible for the option. |
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| 37 | 37 | | (f) This section does not apply to: |
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| 38 | 38 | | (1) a disability retirement annuity; or |
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| 39 | 39 | | (2) an annuity based on service credited in the |
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| 40 | 40 | | elected class. |
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| 41 | 41 | | (g) Before a retiring member selects an increasing annuity |
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| 42 | 42 | | option under this section, the retirement system must provide a |
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| 43 | 43 | | written notice to the member of the amount by which the member's |
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| 44 | 44 | | annuity will be reduced and the implementation period applicable |
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| 45 | 45 | | because of that selection. The retirement system shall maintain a |
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| 46 | 46 | | copy of the notice required under this subsection that is signed by |
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| 47 | 47 | | the member. |
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| 48 | 48 | | (h) The board of trustees may adopt rules for the |
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| 49 | 49 | | implementation of this section. |
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| 50 | 50 | | SECTION 2. Section 814.110, Government Code, as added by |
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| 51 | 51 | | this Act, applies only to a retirement that occurs on or after |
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| 52 | 52 | | September 1, 2024. |
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| 53 | 53 | | SECTION 3. This Act takes effect September 1, 2023. |
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| 54 | 54 | | ______________________________ ______________________________ |
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| 55 | 55 | | President of the Senate Speaker of the House |
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| 56 | 56 | | I certify that H.B. No. 1393 was passed by the House on April |
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| 57 | 57 | | 26, 2023, by the following vote: Yeas 148, Nays 0, 1 present, not |
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| 58 | 58 | | voting; and that the House concurred in Senate amendments to H.B. |
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| 59 | 59 | | No. 1393 on May 17, 2023, by the following vote: Yeas 143, Nays 0, |
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| 60 | 60 | | 1 present, not voting. |
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| 61 | 61 | | ______________________________ |
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| 62 | 62 | | Chief Clerk of the House |
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| 63 | 63 | | I certify that H.B. No. 1393 was passed by the Senate, with |
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| 64 | 64 | | amendments, on May 15, 2023, by the following vote: Yeas 31, Nays |
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| 65 | 65 | | 0. |
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| 66 | 66 | | ______________________________ |
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| 67 | 67 | | Secretary of the Senate |
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| 68 | 68 | | APPROVED: __________________ |
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| 69 | 69 | | Date |
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| 70 | 70 | | __________________ |
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| 71 | 71 | | Governor |
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