By: Metcalf H.B. No. 3340
A BILL TO BE ENTITLED
AN ACT
relating to relief and retirement funds for firefighters and police
officers in certain municipalities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
PART 1. FIREFIGHTERS
SECTION 1.1. The title of Article 6243e.2(1), Revised
Statutes, is amended to read as follows:
FIREFIGHTERS' RELIEF AND RETIREMENT FUND IN MUNICIPALITIES OF AT
LEAST 2,000,000 [1,600,000] POPULATION
SECTION 1.2. Section 1(13-e), Article 6243e.2(1), Revised
Statutes, is amended to read as follows:
(13-e) "Normal retirement age" means:
(A) [for a member, including a member who was hired
before the year 2017 effective date and who involuntarily separated
from service but has been retroactively reinstated in accordance
with an arbitration, civil service, or court ruling, hired before
the year 2017 effective date,] the age at which the member attains
20 years of service ; or
(B) [except as provided by Paragraph (A) of this
subdivision, for a member hired or rehired on or after the year 2017
effective date, the age at which the sum of the member's age, in
years, and the member's years of participation in the fund equals at
least 70] the age at which the member first attains the age of at
least 50 years and at least 10 years of service.
SECTION 1.3. Section 2(a), Article 6243e.2(1), Revised
Statutes, is amended to read as follows:
(a) A firefighters' relief and retirement fund is
established in each incorporated municipality that has a population
of at least 2,000,000 [1,600,000] and a fully paid fire department.
SECTION 1.4. Sections 4(a), Article 6243e.2(1), Revised
Statutes, are amended to read as follows:
(a) A member who terminates active service for any reason
other than death is entitled to receive a service pension provided
by this section if the member was:
(1) hired as a firefighter before the year 2017
effective date, including a member who was hired before the year
2017 effective date and who involuntarily separated from service
but has been retroactively reinstated in accordance with an
arbitration, civil service, or court ruling, at the age at which the
member attains 20 years of service; and
(2) except as provided by Subdivision (1) of this
subsection and subject to Subsection (b-2) of this section, hired
or rehired as a firefighter on or after the year 2017 effective
date, at the age at which the member attains 20 years of
service [when the sum of the member's age in years and the member's
years of participation in the fund equals at least 70].
SECTION 1.5. Sections 5(a), (b), (b-1), (c), (d), (l), and
(m), Article 6243e.2(1), Revised Statutes, are amended to read as
follows:
(a) A member who is eligible to receive a service pension
under Section 4 [4(a)(1)] of this article and who remains in active
service may elect to participate in the deferred retirement option
plan provided by this section. [A member who is eligible to receive
a service pension under Section 4(a)(2) of this article may not
elect to participate in the deferred retirement option plan
provided by this section.] On subsequently terminating active
service, a member who elected the DROP may apply for a monthly
service pension under Section 4 of this article, except that the
effective date of the member's election to participate in the DROP
will be considered the member's retirement date for determining the
amount of the member's monthly service pension. The member may also
apply for any DROP benefit provided under this section on
terminating active service. An election to participate in the DROP,
once approved by the board, is irrevocable.
(b) A member may elect to participate in the DROP by
complying with the election process established by the board. The
member's election may be made at any time beginning on the date the
member has completed 20 years of participation in the fund and is
otherwise eligible for a service pension under Section 4 [4(a)(1)]
of this article. Beginning on the first day of the month following
the month in which the member makes an election to participate in
the DROP, subject to board approval, and ending on the year 2017
effective date, amounts equal to the deductions made from the
member's salary under Section 13(c) of this article shall be
credited to the member's DROP account. Beginning after the year
2017 effective date, amounts equal to the deductions made from the
member's salary under Section 13(c) of this article may not be
credited to the member's DROP account.
(b-1) On or after the year 2017 effective date, an active
member may not participate in the DROP for more than 20 [13] years.
If a DROP participant remains in active service after the 20th
[13th] anniversary of the effective date of the member's DROP
election:
(1) subsequent deductions from the member's salary
under Section 13(c) of this article, except for unused leave pay,
may not be credited to the member's DROP account; and
(2) the account shall continue to be credited with
earnings in accordance with Subsection (d) of this section.
(c) After a member's DROP election becomes effective, an
amount equal to the monthly service pension the member would have
received under Section 4 of this article, if applicable, had the
member terminated active service on the effective date of the
member's DROP election shall be credited to a DROP account
maintained for the member. That monthly credit to the member's DROP
account shall continue until the earlier of the date the member
terminates active service or the 20th [13th] anniversary of the
date of the first credit to the member's DROP account.
(d) A member's DROP account shall be credited with earnings
at an annual rate equal to 70 [65] percent of the [compounded]
average annual return earned by the fund over the five years
preceding, but not including, the year during which the credit is
given. Notwithstanding the preceding, however, the credit to the
member's DROP account shall be at an annual rate of not less than
2.5 percent, irrespective of actual earnings.
(l) A member who participates in the DROP is ineligible for
disability benefits described by Section 6 of this article, except
that a member with less than 13 years of DROP participation is
eligible for the benefits described by Section 6(c). If a member who
has a disability described by Section 6(c) of this article is a DROP
participant with less than 13 years of DROP participation, the
disability benefit provided by Section 6(c)(1) shall be paid to the
member, as a monthly pension benefit, in addition to payments from
the DROP account balance. If a member who dies under the conditions
described by Section 7(c) of this article is a DROP participant at
the time of death or disability resulting in death, the benefit
provided by Section 7(c) shall be paid to the member's eligible
survivors, as a monthly pension benefit, in addition to payments
from the DROP account balance.
(m) A DROP participant with a break in service may receive
service credit within DROP for days worked after the regular
expiration of the maximum DROP participation period prescribed by
this section. The service credit shall be limited to the number of
days in which the participant experienced a break in service or the
number of days required to constitute 20 [13] years of DROP
participation, whichever is smaller. A retired member who
previously participated in the DROP and who returns to active
service is subject to the terms of this section in effect at the
time of the member's return to active service.
SECTION 1.6. Sections 8(a) and (c), Article 6243e.2(1),
Revised Statutes, are amended to read as follows:
(a) A [On or after the year 2017 effective date, a] member
who [is hired as a firefighter before the year 2017 effective date,
including a member who was hired before the year 2017 effective date
and who involuntarily separated from service but has been
retroactively reinstated in accordance with an arbitration, civil
service, or court ruling,] terminates active service for any reason
other than death with at least 10 years of participation, but less
than 20 years of participation, is entitled to a monthly deferred
pension benefit, beginning at age 50, in an amount equal to 1.7
percent of the member's average monthly salary multiplied by the
amount of the member's years of participation.
(c) A [Except as provided by Subsection (a) of this section,
a member who is hired or rehired as a firefighter on or after the
year 2017 effective date or a] member who terminates employment for
any reason other than death before the member has completed 10 years
of participation is entitled only to a refund of the member's
contributions without interest and is not entitled to a deferred
pension benefit under this section or to any other benefit under
this article. The member's refund shall be paid as soon as
administratively practicable after the effective date of the
member's termination of active service.
PART 2. POLICE OFFICERS
SECTION 2.1. Section 2(14-c), Art. 6243g-4, Revised
Statutes, is amended to read as follows:
(14-c) "Normal retirement age" means:
(A) [for a member hired before October 9, 2004,
including a member hired before October 9, 2004, who involuntarily
separated from service but was retroactively reinstated under an
arbitration, civil service, or court ruling after October 9, 2004,
the earlier of:
[(i)] the age at which the member attains 20
years of service; or
(B) [(ii)] the age at which the member first
attains both the age of at least 60 and at least 10 years of
service[; or
[(B) except as provided by Paragraph (A) of this
subdivision, for a member hired or rehired on or after October 9,
2004, the age at which the sum of the member's age in years and years
of service equals at least 70].
SECTION 2.2. Section 12(a), Article 6243g-4, Revised
Statutes, is amended to read as follows:
(a) A member who separates from service after at least 20
years of participation in the system [attaining normal retirement
age] is eligible to receive a monthly service pension, beginning in
the month of separation from service. [A member who separates from
service as a classified police officer with the city after November
23, 1998, after earning 10 or more but less than 20 years of service
in the pension system and who complies with all applicable
requirements of Section 19 of this article is eligible to receive a
monthly service pension, beginning in the month the individual
attains normal retirement age.] An individual may not receive a
pension under this article while still an active member. All
service pensions end with the month in which the retired member
dies. The city shall supply all personnel, financial, and payroll
records necessary to establish the member's eligibility for a
benefit, the member's credited service, and the amount of the
benefit. The city must provide those records in the format
specified by the pension system.
SECTION 2.3. Section 14(e), Article 6243g-4, Revised
Statutes, is amended to read as follows:
(e) As of the end of each month an amount is credited to each
active member's notional DROP account at the rate of one-twelfth of
a hypothetical earnings rate on amounts in the account. The
hypothetical earnings rate is determined for each calendar year
based on the [compounded] average of the aggregate annual rate of
return on investments of the pension system for the five
consecutive fiscal years ending June 30 preceding the calendar year
to which the earnings rate applies, multiplied by 70 [65] percent.
The hypothetical earnings rate may not be less than 2.5 percent.
PART 3. EFFECTIVE DATE
SECTION 3.1. This Act takes effect immediately if it
receives a vote of two-thirds of all 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, 2023.