Guillen Bill Gives School Police A 2.8 Percent Pension Multiplier

The text as introduced · 3,540 words

90R22 JCG-D

By: Guillen
H.B. No. 112

A BILL TO BE ENTITLED

AN ACT

relating to retirement benefits for certain law enforcement

officers who are members of the Teacher Retirement System of Texas,

including the creation of a supplemental retirement program.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 821.001, Government Code, is amended by

adding Subdivisions (17-a), (17-b), and (17-c) to read as follows:

(17-a) "Supplemental program member" means a member of

the retirement system who has, is earning, or is eligible to earn

credit for supplemental program service under Subchapter G, Chapter

823.

(17-b) "Supplemental program service" means

membership service that qualifies as supplemental program service

under Section 823.551.

(17-c) "Supplemental program service credit" means

the amount of supplemental program service credited to a member

under Subchapter G, Chapter 823.

SECTION 2. Section 822.005, Government Code, is amended by

adding Subsection (e) to read as follows:

(e) For a supplemental program member, the withdrawal of

accumulated contributions under Subsection (a) includes all of the

member's contributions made under Section 825.403.

SECTION 3. Chapter 823, Government Code, is amended by

adding Subchapter G to read as follows:

SUBCHAPTER G. SUPPLEMENTAL PROGRAM SERVICE CREDIT

Sec. 823.551. SUPPLEMENTAL PROGRAM SERVICE:

QUALIFICATIONS. Membership service qualifies as supplemental

program service if:

(1) the membership service was provided in a position

with an employer that required the member to hold an officer license

issued by the Texas Commission on Law Enforcement under Chapter

1701, Occupations Code; and

(2) the primary duty of the position was the

enforcement of the criminal or juvenile laws of this state.

Sec. 823.552. SUPPLEMENTAL PROGRAM SERVICE: BASIS OF

CREDIT. Supplemental program service credit is creditable as

provided by rule of the board of trustees.

SECTION 4. Section 824.203(a), Government Code, is amended

to read as follows:

(a) Except as provided by Subsections (c) and (d) and

Section 824.2035 , the standard service retirement annuity is an

amount computed on the basis of the member's average annual

compensation for the five years of service, whether or not

consecutive, in which the member received the highest annual

compensation, times 2.3 percent for each year of service credit in

the retirement system.

SECTION 5. Subchapter C, Chapter 824, Government Code, is

amended by adding Section 824.2035 to read as follows:

Sec. 824.2035. ENHANCED SERVICE RETIREMENT ANNUITY FOR

SUPPLEMENTAL PROGRAM MEMBERS; ELIGIBILITY. (a) Subject to

Subsections (c) and (d) and notwithstanding Section 824.203, the

standard service retirement annuity of a supplemental program

member under this section is an amount computed on the basis of the

member's average annual compensation for the five years of

supplemental program service, whether or not consecutive, in which

the member received the highest annual compensation, times 2.8

percent for each year of supplemental program service credit in the

retirement system. With respect to any year of the five years of

supplemental program service that is not supplemental service, the

annuity must be computed by applying the percentage factor required

under Section 824.203 instead of 2.8 percent for that year.

(b) Notwithstanding Section 824.202 and subject to

Subsections (c) and (d), a supplemental program member is eligible

to retire and receive the annuity described by Subsection (a) if the

member has at least 25 years of supplemental program service

credit, regardless of age.

(c) The annuity described by Subsection (a) of a

supplemental program member who retires before attaining the age of

57 under the eligibility criteria established by Subsection (b) is

actuarially reduced by five percent for each year of difference

between the member's age at retirement and 57. The actuarial

reduction described by this subsection is in addition to any other

actuarial reduction required by Subsection (d) or other law, and a

member is not entitled to have the annuity recalculated at age 57.

(d) A supplemental program member who retires under

Subsection (b) before attaining the age of 50 is entitled only to an

annuity that is actuarially reduced from the annuity available at

the age of 50 to the supplemental program member whose service

credit annuity amount is based on the sum of the member's age and

amount of supplemental program service credit and other service

credit, and is not entitled to have the annuity recalculated at age

57.

(e) A provision of law that applies to a member eligible to

retire under Section 824.202 or receiving a service retirement

annuity under Section 824.203 applies to the same extent and in the

same manner to a member eligible for or receiving a service

retirement annuity under this section, except to the extent the

provision conflicts with this section. Optional retirement

annuities provided by Section 824.204 are available to a member

eligible to receive a service retirement annuity under this

section.

(f) Notwithstanding any other provision of this subchapter,

a supplemental program member who is eligible to retire under this

section or Section 824.202 is entitled to whichever computation of

a service retirement annuity under this subchapter provides the

higher annuity.

SECTION 6. Sections 824.304(a) and (b), Government Code,

are amended to read as follows:

(a) Subject to Sections 824.3045 and [ Section ] 824.310, if a

member has a total of less than 10 years of service credit in the

retirement system on the date of disability retirement, the

retirement system shall pay the person a disability retirement

annuity of $150 a month for the shortest of the following periods:

(1) the duration of the disability;

(2) the number of months of creditable service the

person has at retirement; or

(3) the duration of the person's life.

(b) Subject to Sections 824.3045 and [ Section ] 824.310, if a

member has a total of at least 10 years of service credit in the

retirement system on the date of disability retirement, the

retirement system shall pay the person for the duration of the

disability a disability retirement annuity in an amount equal to

the greater of:

(1) a standard service retirement annuity computed

under Section 824.203; or

(2) $150 a month.

SECTION 7. Subchapter D, Chapter 824, Government Code, is

amended by adding Sections 824.3045 and 824.3046 to read as

follows:

Sec. 824.3045. OCCUPATIONAL DISABILITY RETIREMENT BENEFITS

FOR SUPPLEMENTAL PROGRAM MEMBERS. (a) Except as provided by

Subsection (b), an annuity payable under Section 824.304 for a

disability resulting from a risk to which supplemental program

members are exposed because of the nature of the members' duties is

an amount computed on the basis of the supplemental program

member's average annual compensation, times 2.8 percent.

(b) A disability retirement annuity described by Subsection

(a) is not reducible because of age and may not be less than 50

percent of the supplemental program member's average annual

compensation regardless of the amount of service credited to the

member.

(c) If a retiring member or retiree under this section

presents evidence satisfactory to the retirement system that the

person's disability makes the person incapable of substantial

gainful activity solely because of the disability and is considered

a total disability under federal social security law, the

retirement system shall increase the person's disability

retirement annuity to 100 percent of the member's average annual

compensation.

(d) An annuity increase under Subsection (c) is not payable

before the first month following the month in which the

satisfactory evidence is received by the retirement system under

that subsection.

(e) For purposes of this section, "average annual

compensation" means:

(1) a member's average annual compensation for the

three highest years of compensation attributable to supplemental

program service; or

(2) a member's average annual compensation

attributable to supplemental program service if a member retires

with less than three years of service.

Sec. 824.3046. INFORMATION ABOUT OCCUPATIONAL DISABILITY

OF SUPPLEMENTAL PROGRAM MEMBER. (a) A supplemental program member

who applies for retirement for a disability under Section 824.3045

shall furnish to the retirement system all information and other

data requested by the retirement system and relating to the

disability.

(b) The retirement system may require information and other

data relating to a disability retirement application to be

furnished by any officer or employee of the employer with which the

applicant holds a position.

(c) After receiving information and other data the

retirement system considers necessary, the executive director

shall determine, subject to review by the board of trustees,

whether or not the disability resulted from a risk described by

Section 824.3045(a).

SECTION 8. Subchapter E, Chapter 824, Government Code, is

amended by adding Section 824.4025 to read as follows:

Sec. 824.4025. ANNUITY FOR SURVIVOR OF SUPPLEMENTAL PROGRAM

MEMBER. If a supplemental program member who has at least 25 years

of supplemental program service credit dies, the amount of the

death benefit annuity payable for the member's supplemental program

service is the amount of the annuity computed as provided by Section

824.2035, including any applicable reduction factors.

SECTION 9. Section 825.102, Government Code, is amended to

read as follows:

Sec. 825.102. RULEMAKING. Subject to the limitations of

this subtitle, the board of trustees may adopt rules for:

(1) eligibility for membership;

(2) the administration of the funds of the retirement

system; [ and ]

(3) the transaction of business of the board ; and

(4) the administration of supplemental benefits for

supplemental program members .

SECTION 10. Section 825.403, Government Code, is amended by

adding Subsection (a-1) to read as follows:

(a-1) In addition to the contribution under Subsection (a),

each employer of a supplemental program member shall deduct an

additional 0.5 percent contribution from that member's

compensation, provided that the member's contribution rate for a

fiscal year is reduced by 0.1 percent for each 0.1 percent that the

state contribution rate established for that fiscal year under

Section 824.404(a)(2) is less than 0.5 percent.

SECTION 11. Sections 825.404(a) and (a-2), Government Code,

are amended to read as follows:

(a) Except as provided by Subsection (a-1) and subject to

Subsection (a-2), during each fiscal year, the state shall

contribute to the retirement system :

(1) an amount equal to at least six and not more than

10 percent of the aggregate annual compensation of all members of

the retirement system during that fiscal year ; and

(2) an additional amount equal to 1.5 percent of the

aggregate annual compensation of all supplemental program members

for that fiscal year .

(a-2) The state contribution required by Subsection (a)(1)

[ Subsection (a) ] is:

(1) for the fiscal years beginning on September 1,

2019, and September 1, 2020, 7.5 percent of the aggregate annual

compensation of all members of the retirement system during the

applicable fiscal year;

(2) for the fiscal year beginning on September 1,

2021, 7.75 percent of the aggregate annual compensation of all

members of the retirement system during that fiscal year;

(3) for the fiscal year beginning on September 1,

2022, eight percent of the aggregate annual compensation of all

members of the retirement system during that fiscal year; and

(4) for the fiscal year beginning on September 1,

2023, and each subsequent fiscal year, 8.25 percent of the

aggregate annual compensation of all members of the retirement

system during that fiscal year.

SECTION 12. Section 825.4092, Government Code, is amended

by adding Subsection (f) to read as follows:

(f) If a retiree is employed in a position for which member

service would qualify as supplemental program service, the current

contribution amount that a reporting employer is required to

contribute under Subsection (b) must include contributions that

would be required to be contributed by an active supplemental

program member under Section 825.403(a-1) and by the state under

Section 825.404(a)(2).

SECTION 13. Subchapter F, Chapter 825, Government Code, is

amended by adding Section 825.5155 to read as follows:

Sec. 825.5155. CERTIFICATION OF NAMES OF SUPPLEMENTAL

PROGRAM MEMBERS. Not later than the sixth day of the month

following the month in which a person begins or ceases employment in

a position described by Section 823.551, the employer shall certify

to the retirement system, in the manner prescribed by the system,

the name of the employee and any other information the system

determines necessary for the crediting of service and financing of

benefits under this subtitle.

SECTION 14. Section 1551.102, Insurance Code, is amended by

adding Subsection (c-3) to read as follows:

(c-3) An individual is eligible to participate in the group

benefits program as provided by Subsection (a) if the individual:

(1) retires under the jurisdiction of the Teacher

Retirement System of Texas with at least 10 years of eligible

service credit;

(2) retires under Section 824.2035, Government Code;

and

(3) was employed, as the last state employment before

retirement, including employment by a public junior college, by a

state agency whose employees are authorized to participate in the

group benefits program.

SECTION 15. Section 1575.004(a), Insurance Code, is amended

to read as follows:

(a) In this chapter, "retiree" means:

(1) an individual not eligible for coverage under a

plan provided under Chapter 1551 or 1601 who:

(A) has taken a service retirement under the

Teacher Retirement System of Texas after September 1, 2005, with at

least 10 years of service credit in the system, which may include up

to five years of military service credit, but which may not include

any other service credit purchased for equivalent or special

service credit, and who meets any of the following criteria

[ either ]:

(i) the sum of the retiree's age and years

of service credit in the retirement system equals or exceeds 80 at

the time of retirement, regardless of whether the retiree had a

reduction in the retirement annuity for early age; [ or ]

(ii) the retiree has 30 or more years of

service credit in the retirement system at the time of retirement;

or

(iii) the retiree's service retirement was

taken under Section 824.2035, Government Code;

(B) has taken a service retirement under the

Teacher Retirement System of Texas after September 1, 2004, but on

or before August 31, 2005, and on September 1, 2005, either:

(i) meets the requirements for eligibility

for the group program for coverage as a retiree as those

requirements existed on August 31, 2004;

(ii) meets the requirements of Paragraph

(A); or

(iii) is enrolled in the group program and

was enrolled in the group program on August 31, 2005; or

(C) has taken a service retirement under the

Teacher Retirement System of Texas on or before August 31, 2004, and

who is enrolled in the group program on August 31, 2005;

(2) an individual who:

(A) has taken a disability retirement under the

Teacher Retirement System of Texas; and

(B) is entitled to receive monthly benefits from

the Teacher Retirement System of Texas; or

(3) an individual who:

(A) has taken a disability retirement under the

Teacher Retirement System of Texas;

(B) has at least 10 years of service credit in the

Teacher Retirement System of Texas on the date of disability

retirement, as determined under Section 824.304, Government Code;

and

(C) is not entitled to receive monthly benefits

from the Teacher Retirement System of Texas because those benefits

have been suspended in accordance with Section 824.310, Government

Code.

SECTION 16. Section 1601.102, Insurance Code, is amended by

amending Subsection (f) and adding Subsection (j) to read as

follows:

(f) Notwithstanding Subsections (b)-(d), and except as

provided by Subsection (j), an individual is eligible to

participate in the uniform program only if the individual:

(1) has at least 10 years of service credit and the sum

of the person's age and amount of service credit, including months

of age and credit, equals or exceeds the number 80; or

(2) is at least 65 years old and has at least 10 years

of service credit.

(j) An individual is eligible to participate in the uniform

program as provided by Subsection (a) if the individual:

(1) meets the minimum requirements of Subsection (b);

(2) is at least 50 years old; and

(3) retires under Section 824.2035, Government Code,

with at least 10 years of service credit.

SECTION 17. (a) An employer participating in the Teacher

Retirement System of Texas shall begin making deductions and

collecting the contributions for the supplemental program as

provided by Section 825.403(a-1), Government Code, as added by this

Act, based on service that is performed on or after September 1,

2029. The employer shall also begin making the additional

contributions under Section 825.4092(f), Government Code, as added

by this Act, and provide the certification required by Section

825.5155, Government Code, as added by this Act, based on service

that is performed on or after September 1, 2029.

(b) The board of trustees of the Teacher Retirement System

of Texas shall adopt rules as soon as possible after the effective

date of this Act to implement the changes in law made by this Act,

including rules governing the treatment of a member of the Teacher

Retirement System of Texas whose employment in a position described

by Section 823.551, Government Code, as added by this Act, began

before September 1, 2029.

SECTION 18. (a) In this section, "supplemental program

member" and "supplemental program service credit" have the meanings

assigned by Section 821.001, Government Code, as amended by this

Act.

(b) Subject to the requirements of this section, the changes

in law made by this Act apply only to a member of the Teacher

Retirement System of Texas who, on or after the effective date of

this Act, is a supplemental program member.

(c) A member described by Subsection (b) of this section and

the member's beneficiaries are not entitled to receive payment of a

benefit under Section 824.2035, 824.3045, or 824.4025, Government

Code, as added by this Act, until September 1, 2029. The Teacher

Retirement System of Texas shall pay the benefit described by this

subsection to a member or beneficiary who accrues entitlement to

the benefit under this subsection between the effective date of

this Act and September 1, 2029, as soon as practicable after

September 1, 2029, but not later than September 1, 2030. Between

the effective date of this Act and September 1, 2029, the retirement

system may provide a service, disability, or death benefit, as

appropriate, to a member or beneficiary who is otherwise eligible

for that benefit under Chapter 824, Government Code, as that

chapter existed immediately before the effective date of this Act.

If the retirement system provides a benefit under prior law in

accordance with this subsection, on September 1, 2029, the

retirement system shall recompute that benefit under Section

824.2035, 824.3045, or 824.4025, Government Code, as added by this

Act, as applicable, as of the date of the member's retirement or

death, as applicable, and pay to the member or the member's

beneficiaries, in a lump sum, the difference between:

(1) the sum of the amount of the recomputed benefit

accrued between the effective date of this Act and September 1,

2029; and

(2) the sum of the amount of the benefit paid to the

member or beneficiary under authority of this subsection between

the effective date of this Act and September 1, 2029.

(d) Except as provided by Subsection (f) of this section,

service credit earned by a member described by Subsection (b) of

this section before September 1, 2029, qualifies as supplemental

program service credit only if:

(1) the member verifies in accordance with Subsection

(e) of this section that the service credit qualifies as

supplemental program service credit under Section 823.551,

Government Code, as added by this Act; and

(2) subject to Subsection (e) of this section, the

board of trustees of the Teacher Retirement System of Texas

determines the prior supplemental program service credit can be

established in the retirement system without increasing the period

required to amortize the unfunded actuarial liabilities of the

retirement system to a period that exceeds 30 years by one or more

years.

(e) As soon as practicable after the effective date of this

Act, the board of trustees of the Teacher Retirement System of Texas

shall determine whether the legislature appropriated sufficient

money to the retirement system for the retirement system to provide

prior supplemental program service credit in accordance with

Subsection (d)(2) of this section. If the board determines that

insufficient money was appropriated by the legislature to the

retirement system to provide prior supplemental program service

credit in accordance with Subsection (d)(2) of this section, the

board shall adopt rules governing how a supplemental program member

may establish supplemental program service credit for service

performed before September 1, 2029, by verifying that service and

depositing with the retirement system, for each year of

supplemental program service credit, the actuarial present value,

at the time of deposit, of the additional standard retirement

annuity benefits that would be attributable to the purchase of

service credit under this section, based on rates and tables

recommended by the retirement system's actuary and adopted by the

board. The rules must require that the verification of prior

service as supplemental program service credit be completed not

later than September 1, 2030.

(f) If a member described by Subsection (b) of this section

fails to establish prior supplemental program service credit in

accordance with this section before September 1, 2029, the member

is not entitled to establish the supplemental program service

credit or receive the related benefits authorized by this Act.

SECTION 19. This Act takes effect September 1, 2027.