Texas 2025 - 89th Regular

Texas House Bill HB4029 Compare Versions

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Old	New	Differences
1	1	89R5292 RDR-D
2	2	By: Guillen H.B. No. 4029
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7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to retirement benefits for certain law enforcement
10	10	officers who are members of the Teacher Retirement System of Texas,
11	11	including the creation of a supplemental program retirement fund.
12	12	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	13	SECTION 1. Section 821.001, Government Code, is amended by
14	14	adding Subdivisions (17-a), (17-b), and (17-c) to read as follows:
15	15	(17-a) "Supplemental program member" means a member of
16	16	the retirement system who has, is earning, or is eligible to earn
17	17	credit for supplemental program service under Subchapter G, Chapter
18	18	823.
19	19	(17-b) "Supplemental program service" means
20	20	membership service that qualifies as supplemental program service
21	21	under Section 823.551.
22	22	(17-c) "Supplemental program service credit" means
23	23	the amount of supplemental program service credited to a member
24	24	under Subchapter G, Chapter 823.
25	25	SECTION 2. Section 822.005, Government Code, is amended by
26	26	adding Subsection (e) to read as follows:
27	27	(e) For a supplemental program member, the withdrawal of
28	28	accumulated contributions under Subsection (a) includes all of the
29	29	member's contributions made under Section 825.403.
30	30	SECTION 3. Chapter 823, Government Code, is amended by
31	31	adding Subchapter G to read as follows:
32	32	SUBCHAPTER G. SUPPLEMENTAL PROGRAM SERVICE CREDIT
33	33	Sec. 823.551. SUPPLEMENTAL PROGRAM SERVICE:
34	34	QUALIFICATIONS. Membership service qualifies as supplemental
35	35	program service if:
36	36	(1) the membership service was provided in a position
37	37	with an employer that required the member to hold an officer license
38	38	issued by the Texas Commission on Law Enforcement under Chapter
39	39	1701, Occupations Code; and
40	40	(2) the primary duty of the position was the
41	41	enforcement of the criminal or juvenile laws of this state.
42	42	Sec. 823.552. SUPPLEMENTAL PROGRAM SERVICE: BASIS OF
43	43	CREDIT. Supplemental program service credit is creditable as
44	44	provided by rule of the board of trustees or on a month-to-month
45	45	basis, whichever is greater.
46	46	SECTION 4. Subchapter C, Chapter 824, Government Code, is
47	47	amended by adding Section 824.2035 to read as follows:
48	48	Sec. 824.2035. SERVICE RETIREMENT BENEFITS FOR
49	49	SUPPLEMENTAL PROGRAM MEMBERS. (a) Notwithstanding Sections
50	50	824.202 and 824.203, a member who has at least 25 years of
51	51	supplemental program service credit is eligible to retire
52	52	regardless of age and receive a service retirement annuity in an
53	53	amount and to be funded as provided by this section.
54	54	(b) The service retirement annuity under this section is
55	55	payable in an amount computed on the basis of the member's average
56	56	annual compensation for the five years of service, whether or not
57	57	consecutive, in which the member received the highest annual
58	58	compensation, times the sum of the percentage factor used in the
59	59	computation of a standard service retirement annuity under Section
60	60	824.203 plus 0.5 percent.
61	61	(c) The service retirement annuity under this section is
62	62	based on retirement on or after the attainment of the normal
63	63	retirement age, which for purposes of this section is the earlier of
64	64	either the age of 57 or the age at which the sum of the member's age
65	65	and amount of service credit equals the number 80. The annuity of a
66	66	supplemental program member who retires before reaching the age of
67	67	57 under any eligibility criteria is actuarially reduced by five
68	68	percent for each year of difference between the member's age at
69	69	retirement and 57. The actuarial reduction described by this
70	70	section is in addition to any other actuarial reduction required by
71	71	law.
72	72	(d) A supplemental program member who retires before
73	73	attaining the age of 50 is entitled only to an annuity that is
74	74	actuarially reduced from the annuity available at the age of 50 to
75	75	the supplemental program member whose service credit annuity amount
76	76	is based on the sum of the member's age and amount of supplemental
77	77	program service credit and other service credit, and is not
78	78	entitled to have the annuity recalculated at normal retirement age.
79	79	The standard or reduced annuity under this section is payable from
80	80	appropriate accounts described by Section 825.306 and the
81	81	supplemental program retirement fund in a ratio determined by the
82	82	retirement system.
83	83	(e) Optional retirement annuities provided by Section
84	84	824.204 are available to a supplemental program member eligible to
85	85	receive a service retirement annuity under this section, but the
86	86	same optional plan and beneficiary must be selected for the portion
87	87	of the annuity payable from the supplemental program retirement
88	88	fund and the portion payable from appropriate accounts described by
89	89	Section 825.306.
90	90	(f) The amount payable from the supplemental program
91	91	retirement fund is reducible by the amount paid from appropriate
92	92	accounts described by Section 825.306 for supplemental program
93	93	service. The total combined amount of an annuity under this section
94	94	may not be less than the authorized benefit under Subsection (b)
95	95	subtracted by any amount necessary because of selection of an
96	96	optional annuity, because of retirement before the normal
97	97	retirement age, or as provided by Subsection (g).
98	98	(g) The service retirement annuity under this section may
99	99	not exceed 100 percent of the average compensation computed under
100	100	Subsection (b).
101	101	SECTION 5. Subchapter D, Chapter 824, Government Code, is
102	102	amended by adding Section 824.3045 to read as follows:
103	103	Sec. 824.3045. DISABILITY RETIREMENT BENEFITS FOR
104	104	SUPPLEMENTAL PROGRAM MEMBERS. (a) An annuity payable for a
105	105	disability resulting from a risk to which supplemental program
106	106	members are exposed because of the nature of the members' duties is
107	107	payable under the same terms and conditions that apply to other
108	108	disability retirement annuities under this subtitle, except that
109	109	the source and amount of the annuity are as provided by this
110	110	section.
111	111	(b) Except as provided by Subsection (c), a disability
112	112	retirement annuity under this section is an amount, but not more
113	113	than 100 percent, computed on the basis of the supplemental program
114	114	member's average annual compensation, times a percentage derived by
115	115	application of Section 824.2035(b).
116	116	(c) A disability retirement annuity under this section is
117	117	not reducible because of age and may not be less than 50 percent of
118	118	the supplemental program member's average annual compensation
119	119	regardless of the amount of service credited to the member.
120	120	(d) The portions of the annuity under this section payable
121	121	from the supplemental program retirement fund are the amount
122	122	remaining after deduction of any amount payable under Section
123	123	824.304, except the portion of an amount that exceeds the minimum
124	124	payments provided by Section 824.304 and that is made for service
125	125	other than supplemental program service and any amount by which an
126	126	annuity is increased under Subsection (e).
127	127	(e) If a retiring member or retiree under this section
128	128	presents evidence satisfactory to the retirement system that the
129	129	person's disability makes the person incapable of substantial
130	130	gainful activity solely because of the disability and is considered
131	131	a total disability under federal social security law, the
132	132	retirement system shall increase the person's disability
133	133	retirement annuity to 100 percent of the member's average annual
134	134	compensation.
135	135	(f) An annuity increase under Subsection (e) is not payable
136	136	before the first month following the month in which the
137	137	satisfactory evidence is received by the retirement system under
138	138	Subsection (e).
139	139	(g) For purposes of this section, "average annual
140	140	compensation" means:
141	141	(1) a member's average annual compensation for the
142	142	three highest years of compensation; or
143	143	(2) a member's average annual compensation if a member
144	144	retires with less than three years of service.
145	145	SECTION 6. Subchapter E, Chapter 824, Government Code, is
146	146	amended by adding Section 824.4025 to read as follows:
147	147	Sec. 824.4025. ANNUITY FOR SURVIVOR OF SUPPLEMENTAL PROGRAM
148	148	MEMBER. If a supplemental program member who has at least 25 years
149	149	of supplemental program service credit dies, the amount of the
150	150	death benefit annuity payable for the member's supplemental program
151	151	service is an amount computed and funded as provided by Section
152	152	824.2035, including any applicable reduction factors.
153	153	SECTION 7. Section 825.102, Government Code, is amended to
154	154	read as follows:
155	155	Sec. 825.102. RULEMAKING. Subject to the limitations of
156	156	this subtitle, the board of trustees may adopt rules for:
157	157	(1) eligibility for membership;
158	158	(2) the administration of the funds of the retirement
159	159	system; [and]
160	160	(3) the transaction of business of the board; and
161	161	(4) the administration of supplemental benefits for
162	162	supplemental program members.
163	163	SECTION 8. Section 825.103, Government Code, is amended by
164	164	adding Subsection (b-1) to read as follows:
165	165	(b-1) The board of trustees may authorize the executive
166	166	director to acquire, hold, manage, purchase, sell, assign, trade,
167	167	transfer, and dispose of any security, evidence of debt, or other
168	168	investment in which assets of the supplemental program retirement
169	169	fund may be invested.
170	170	SECTION 9. Section 825.208, Government Code, is amended by
171	171	adding Subsection (d) to read as follows:
172	172	(d) The board of trustees shall make payments from the
173	173	supplemental program retirement fund for services rendered by the
174	174	actuary for that fund and approved by the board.
175	175	SECTION 10. Section 825.301(a), Government Code, is amended
176	176	to read as follows:
177	177	(a) The board of trustees shall invest and reinvest assets
178	178	of the retirement system without distinction as to their source in
179	179	accordance with Section 67, Article XVI, Texas Constitution, and
180	180	hold securities purchased with the assets described by this
181	181	subsection collectively for the proportionate benefit of all
182	182	accounts listed under Section 825.306 and the supplemental program
183	183	retirement fund. For purposes of the investment authority of the
184	184	board of trustees under Section 67, Article XVI, Texas
185	185	Constitution, "securities" includes any investment instrument
186	186	within the meaning of the term as defined by Section 4001.068, 15
187	187	U.S.C. Section 77b(a)(1), or 15 U.S.C. Section 78c(a)(10), any
188	188	derivative instrument, and any other instrument commonly used by
189	189	institutional investors to manage institutional investment
190	190	portfolios. An interest in a limited partnership or investment
191	191	contract is considered a security without regard to the number of
192	192	investors or the control, access to information, or rights granted
193	193	to or retained by the retirement system. Any instrument or contract
194	194	intended to manage transaction or currency exchange risk in
195	195	purchasing, selling, or holding securities is considered to be a
196	196	security. Subject to Section 825.3013, an interest in a
197	197	title-holding entity that is wholly owned, organized, and
198	198	controlled by the retirement system is considered a security.
199	199	Investment decisions are subject to the standard provided in the
200	200	Texas Trust Code by Section 117.004(b), Property Code.
201	201	SECTION 11. Section 825.305, Government Code, is amended to
202	202	read as follows:
203	203	Sec. 825.305. AVAILABLE CASH. The board of trustees may
204	204	keep on deposit with the comptroller available cash not exceeding
205	205	10 percent of the total assets of the retirement system, to pay
206	206	annuity and other disbursements, excluding the assets of the
207	207	supplemental program retirement fund.
208	208	SECTION 12. Section 825.306(a), Government Code, is amended
209	209	to read as follows:
210	210	(a) The assets of the retirement system, except assets of
211	211	the supplemental program retirement fund, shall be maintained and
212	212	reported in a manner that reflects the source of the assets or the
213	213	purpose for which the assets are held, using appropriate ledgers
214	214	and subledgers, in accordance with generally accepted accounting
215	215	principles prescribed by the Governmental Accounting Standards
216	216	Board or its successor. In addition, the maintenance and reporting
217	217	of the assets must be in compliance with applicable tax law and
218	218	consistent with any fiduciary duty owed with respect to the
219	219	trust. In the alternative, the assets may be credited, according
220	220	to the purpose for which they are held, to one of the following
221	221	accounts:
222	222	(1) member savings account;
223	223	(2) state contribution account;
224	224	(3) retired reserve account;
225	225	(4) interest account;
226	226	(5) expense account; or
227	227	(6) deferred retirement option account.
228	228	SECTION 13. Subchapter D, Chapter 825, Government Code, is
229	229	amended by adding Section 825.316 to read as follows:
230	230	Sec. 825.316. SUPPLEMENTAL PROGRAM RETIREMENT FUND. (a)
231	231	The retirement system shall deposit in the supplemental program
232	232	retirement fund state contributions and other appropriations made
233	233	by the legislature to the fund and proceeds from investment of the
234	234	fund.
235	235	(b) The retirement system may use money from the fund only
236	236	to pay supplemental retirement, disability, and death benefits to
237	237	supplemental program members and related beneficiaries as provided
238	238	by this subtitle and to pay for the administration of the fund.
239	239	(c) Money appropriated to pay benefits from the fund as
240	240	provided by this subtitle may not be diverted or used to pay any
241	241	other benefits.
242	242	(d) Member contributions to the fund deducted under Section
243	243	825.403(a-1):
244	244	(1) earn interest at the same rate as money in an
245	245	individual account in the member savings account under Section
246	246	825.307; and
247	247	(2) are subject to the same computations and
248	248	limitations that apply to member contributions under Section
249	249	825.307.
250	250	SECTION 14. Section 825.403, Government Code, is amended by
251	251	adding Subsection (a-1) to read as follows:
252	252	(a-1) In addition to the contribution under Subsection (a),
253	253	each employer of a supplemental program member shall deduct an
254	254	additional 0.5 percent contribution from that member's
255	255	compensation, to be deposited in the supplemental program
256	256	retirement fund, provided that, if the state contribution to the
257	257	supplemental program retirement fund is computed using a percentage
258	258	less than 0.5 percent, the member's contribution is computed using
259	259	a percentage equal to the percentage used to compute the state
260	260	contribution.
261	261	SECTION 15. Sections 825.404(a), (a-1), (a-2), (b), and
262	262	(b-1), Government Code, are amended to read as follows:
263	263	(a) Except as provided by Subsection (a-1) and subject to
264	264	Subsection (a-2), during each fiscal year, the state shall
265	265	contribute to the retirement system:
266	266	(1) an amount equal to at least six and not more than
267	267	10 percent of the aggregate annual compensation of all members of
268	268	the retirement system during that fiscal year;
269	269	(2) an amount for the supplemental program retirement
270	270	fund equal to 9.75 percent of the aggregate state compensation of
271	271	all members for that fiscal year; and
272	272	(3) money necessary for the administration of the
273	273	supplemental program retirement fund.
274	274	(a-1) In computing the amount owed by the state under
275	275	Subsections (a)(1) and (a-2) [this section], the compensation of
276	276	members who are employed by public junior colleges or public junior
277	277	college districts shall be included in the aggregate annual
278	278	compensation as follows:
279	279	(1) 50 percent of the eligible creditable compensation
280	280	of employees who:
281	281	(A) otherwise are eligible for membership in the
282	282	retirement system; and
283	283	(B) are instructional or administrative
284	284	employees whose salaries may be fully paid from funds appropriated
285	285	under the General Appropriations Act, regardless of whether such
286	286	salaries are actually paid from appropriated funds; and
287	287	(2) none of the eligible creditable compensation of
288	288	all other employees who:
289	289	(A) do not meet the requirements of Subdivision
290	290	(1)(B) but are otherwise eligible for membership in the retirement
291	291	system; or
292	292	(B) cannot be included as a qualifying employee
293	293	under Subdivision (1) by application of Subsection (b-1).
294	294	(a-2) The state contribution required by Subsection (a)(1)
295	295	[Subsection (a)] is:
296	296	(1) for the fiscal years beginning on September 1,
297	297	2019, and September 1, 2020, 7.5 percent of the aggregate annual
298	298	compensation of all members of the retirement system during the
299	299	applicable fiscal year;
300	300	(2) for the fiscal year beginning on September 1,
301	301	2021, 7.75 percent of the aggregate annual compensation of all
302	302	members of the retirement system during that fiscal year;
303	303	(3) for the fiscal year beginning on September 1,
304	304	2022, eight percent of the aggregate annual compensation of all
305	305	members of the retirement system during that fiscal year; and
306	306	(4) for the fiscal year beginning on September 1,
307	307	2023, and each subsequent fiscal year, 8.25 percent of the
308	308	aggregate annual compensation of all members of the retirement
309	309	system during that fiscal year.
310	310	(b) Before November 2 of each even-numbered year, the board
311	311	of trustees, in coordination with the Legislative Budget Board,
312	312	shall certify to the comptroller of public accounts for review and
313	313	adoption an estimate of the amount necessary to pay the state's
314	314	contributions to the retirement system for the following biennium
315	315	and, as a separate item, an estimate of the amount required to
316	316	administer the supplemental program retirement fund for the
317	317	following biennium. For qualifying employees under Subsection
318	318	(a-1)(1), the board of trustees shall include only the amount
319	319	payable by the state under Subsection (a-1)(1) in determining the
320	320	amount to be certified.
321	321	(b-1) In determining the amount necessary to pay the state's
322	322	contribution under [described by] Subsection (b), excluding the
323	323	amount required to administer the supplemental program retirement
324	324	fund, the number of qualifying employees under Subsection (a-1)(1)
325	325	whose compensation may be included for each public junior college
326	326	or public junior college district in each biennium may not be
327	327	adjusted in a proportion greater than the change in student
328	328	enrollment at each college during the reporting period except that
329	329	a college that experiences a decline in student enrollment may
330	330	petition the Legislative Budget Board to maintain the number of
331	331	eligible employees up to 98 percent of the level of the prior
332	332	biennium.
333	333	SECTION 16. Subchapter F, Chapter 825, Government Code, is
334	334	amended by adding Section 825.5155 to read as follows:
335	335	Sec. 825.5155. CERTIFICATION OF NAMES OF SUPPLEMENTAL
336	336	PROGRAM MEMBERS. Not later than the 12th day of the month following
337	337	the month in which a person begins or ceases employment in a
338	338	position described by Section 823.551, the employer shall certify
339	339	to the retirement system, in the manner prescribed by the system,
340	340	the name of the employee and any other information the system
341	341	determines necessary for the crediting of service and financing of
342	342	benefits under this subtitle.
343	343	SECTION 17. (a) Except as provided by Subsection (b) of
344	344	this section, employers participating in the Teacher Retirement
345	345	System of Texas shall begin making deductions and collecting the
346	346	contributions for the supplemental program retirement fund as
347	347	provided by Section 825.403(a-1), Government Code, as added by this
348	348	Act, based on service that is performed on or after September 1,
349	349	2026.
350	350	(b) The board of trustees of the Teacher Retirement System
351	351	of Texas shall adopt rules as soon as possible after the effective
352	352	date of this Act to implement the changes in law made by this Act,
353	353	including rules governing the treatment of a member of the Teacher
354	354	Retirement System of Texas whose employment in a position described
355	355	by Section 823.551, Government Code, as added by this Act, began
356	356	before September 1, 2026.
357	357	SECTION 18. This Act takes effect September 1, 2025.