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AN ACT
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relating to the restructuring of fund obligations and accounts of |
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the Texas Municipal Retirement System and related actuarial and |
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accounting procedures. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 851.001, Government Code, is amended by |
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amending Subdivisions (1) and (16) and adding Subdivision (20) to |
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read as follows: |
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(1) "Accumulated contributions" means the sum of all |
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contributions made by a member and credited to the member's |
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individual account [in the employees saving fund], plus interest |
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allowed on the account as provided by this subtitle. |
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(16) "Member" means a person for whom an individual |
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account has been established in the retirement system [employees
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saving fund] and whose membership has not terminated under Section |
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852.104. |
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(20) "Individual account" means an individual account |
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for a member in the benefit accumulation fund, as established under |
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Section 855.306(a). |
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SECTION 2. Subsection (a), Section 852.103, Government |
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Code, is amended to read as follows: |
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(a) A living person who is not an employee of a |
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participating department and who has not retired may, after |
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application, withdraw all of the accumulated contributions |
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credited to the person's individual account [in the employees
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saving fund], and the retirement system shall close the account. |
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SECTION 3. Subsection (b), Section 852.105, Government |
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Code, is amended to read as follows: |
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(b) A governing body may not adopt an ordinance under this |
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section unless the actuary first determines, on the basis of |
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mortality and other tables adopted by the board of trustees, that |
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all obligations of the municipality to the benefit [municipality] |
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accumulation fund, including obligations proposed under the |
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ordinance, can be funded by the municipality within its maximum |
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contribution rate and within its amortization period. |
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SECTION 4. Subsection (d), Section 852.108, Government |
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Code, is amended to read as follows: |
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(d) Member contributions under Section 855.402 shall be |
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made on all compensation paid to the employee by the reemploying |
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municipality at the same rate as is required of other employees of |
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the department. The retirement system shall credit [deposit] the |
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contributions on receipt to the member's [in an] individual account |
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[for the member in the employees saving fund] and shall credit the |
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account with interest annually at the same rate and manner as the |
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accounts of other members are credited. The compensation paid to |
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the employee by the reemploying municipality shall be included in |
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computing the monthly contributions the municipality makes to the |
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benefit [municipality] accumulation fund. |
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SECTION 5. Subsections (b) and (d), Section 852.109, |
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Government Code, are amended to read as follows: |
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(b) Member contributions under Section 855.402 shall be |
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made on all compensation paid to the employee by the municipality at |
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the same rate as is required of other employees of the department. |
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The retirement system shall credit [deposit] the contributions on |
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receipt to the member's [in an] individual account [for the member
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in the employees saving fund] and shall credit the account with |
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interest at the same rate and in the same manner as the accounts of |
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other members are credited. The compensation paid to the employee |
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by the municipality shall be included in computing the monthly |
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contributions the municipality makes to the benefit [municipality] |
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accumulation fund. |
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(d) The additional service retirement benefit allowable to |
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a person to whom this section applies is, at the option of that |
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person, either: |
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(1) a refund of accumulated contributions made since |
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reemployment plus any accrued interest on the accumulated |
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contributions allowed by the retirement system; or |
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(2) a benefit consisting of: |
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(A) a basic annuity actuarially determined from |
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the sum of the member's contributions [deposits] made and |
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accumulated since the date the person last became a member together |
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with interest accrued [accumulated] on that amount since the person |
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last became a member and an amount from the benefit [municipality] |
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accumulation fund equal to the amount of the member's contributions |
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[deposits] credited to the member's individual account since the |
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person last became a member together with interest accrued |
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[accumulated] on that amount since the person last became a member; |
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or |
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(B) a greater amount authorized by the |
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municipality under Section 855.501. |
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SECTION 6. Subsection (e), Section 853.003, Government |
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Code, is amended to read as follows: |
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(e) A governing body may not adopt an ordinance under |
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Subsection (a) unless the actuary first determines that all |
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obligations charged against the municipality's account in the |
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benefit [municipality] accumulation fund, including the |
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obligations proposed in the ordinance, can be funded by the |
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municipality within its maximum contribution rate and within its |
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amortization period. |
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SECTION 7. Subsection (c), Section 853.402, Government |
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Code, is amended to read as follows: |
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(c) The base updated service credit of a member is an amount |
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computed as the number 1.03, times the difference by which the |
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amount computed under Subdivision (1) exceeds the amount computed |
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under Subdivision (2), where: |
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(1) "(1)" is an amount equal to the accumulation at |
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three percent interest of a series of monthly amounts for the number |
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of months of credited service on the date prescribed by Subsection |
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(e), each amount of which equals the member's average updated |
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service compensation, times the sum of: |
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(A) the rate of contributions required of the |
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member for current service; plus |
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(B) the member's contribution rate, times the |
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municipal current service ratio in effect on the effective date of |
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the ordinance adopted under Section 853.401; and where |
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(2) "(2)" is an amount equal to the sum of: |
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(A) the amount credited to the member's |
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individual account [in the employees saving fund] on the date |
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prescribed by Subsection (e), subject to a 1 to 1 matching ratio, |
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times 2; plus |
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(B) the amount credited to the member's |
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individual account, subject to a 1.5 to 1 matching ratio, times 2.5; |
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plus |
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(C) the amount credited to the member's |
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individual account, subject to a 2 to 1 matching ratio, times 3. |
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SECTION 8. Subsection (a), Section 853.403, Government |
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Code, is amended to read as follows: |
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(a) An ordinance adopted under Section 853.401 may not take |
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effect unless the board of trustees approves the ordinance as |
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meeting the requirements of this section. The board may not approve |
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an ordinance unless the actuary first determines, and the board |
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concurs in the determination, that all obligations charged against |
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the municipality's account in the benefit [municipality] |
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accumulation fund, including obligations proposed in the |
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ordinance, can be funded by the municipality within its maximum |
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total contribution rate and within its amortization period as in |
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effect on the date the updated service credits take effect. |
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SECTION 9. Subsection (d), Section 853.404, Government |
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Code, is amended to read as follows: |
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(d) Except as provided by Subsection (e), an ordinance under |
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this section continues in effect for each year that the actuary |
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determines that all obligations charged against the municipality's |
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account in the benefit [municipality] accumulation fund, including |
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the obligations to become effective the next January 1, can be |
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funded by the municipality within its maximum contribution rate and |
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within its amortization period as in effect on the next January 1. |
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An ordinance under this section will cease to be in effect for |
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future years if the actuary cannot make that determination, but |
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shall again take effect for future years beginning January 1 of the |
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first year after the actuary can make that determination. |
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SECTION 10. Subsection (c), Section 853.505, Government |
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Code, is amended to read as follows: |
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(c) When a person who has military service credit under |
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Section 853.502 retires and has paid for military service credit |
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under former law, the retirement system shall compute an amount |
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equal to the sum of any [transfer to the current service annuity
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reserve fund the] accumulated amount paid by the person for the |
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military service credit under former law, plus [Section 853.504(b)
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and] an equal amount multiplied by [from the municipality account
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in the municipality accumulation fund equal to the accumulated
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amount paid by the person times] the municipality's current service |
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matching percent in effect on the date the member applied [applies] |
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for the military service credit [under Section 853.504(b)]. The |
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retirement system shall use the sum derived from that computation |
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[amounts] to make annuity payments to the person that are computed |
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in the same manner as is the person's current service annuity, but |
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the military service credit and the sum [amounts] may not be used in |
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other computations, including computations of updated service |
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credits or prior service credits. |
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SECTION 11. Subsection (a), Section 853.601, Government |
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Code, is amended to read as follows: |
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(a) The governing body of a participating municipality in |
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ordinances authorizing updated service credits under Section |
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853.401 on or after January 1, 1984, may provide that those members |
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who are eligible for such credits on the basis of service with the |
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granting municipality, who have unforfeited credit for prior |
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service or current service with another participating municipality |
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or municipalities by reason of previous employment, and who are |
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contributing members on the date prescribed by Section 853.402(e), |
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shall be credited in the retirement system with updated service |
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credit calculated in the manner prescribed by Sections 853.401 and |
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853.402, except that in determining the base updated service credit |
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of the member under Section 853.402(c)(1), all unforfeited credited |
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service performed by the member by reason of previous employment in |
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other participating municipalities prior to the date prescribed by |
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Section 853.402(e) shall be treated as if performed in the service |
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of the municipality adopting the ordinance, and that amount shall |
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be reduced by an amount equal to the sum of: |
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(1) 2 times the amount credited to the member's |
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individual account [accounts in the employees saving fund] on the |
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date prescribed in Section 853.402(e), which any participating |
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municipality has undertaken to match on a 1 to 1 ratio; plus |
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(2) 2.5 times the amount credited to the member's |
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individual account [accounts], subject to a 1.5 to 1 matching ratio |
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by any participating municipality; plus |
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(3) 3 times the amount credited to the member's |
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individual account [accounts], subject to a 2 to 1 matching ratio by |
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any participating municipality; and plus |
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(4) the sum of all updated service credits, prior |
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service credits, special prior service credits, and antecedent |
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service credits allowed to the member by any other participating |
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municipality by which the member was previously employed and to |
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which the member is entitled. |
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SECTION 12. Subsections (c) and (d), Section 854.002, |
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Government Code, are amended to read as follows: |
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(c) A current service annuity is actuarially determined on |
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the date of a member's retirement from the sum of: |
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(1) the amount credited to the member's individual |
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account [in the employees saving fund]; and |
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(2) an additional [the] amount from the benefit |
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[municipality] accumulation fund equal to the amount in the |
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member's individual account or a greater amount authorized by a |
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participating municipality under Section 855.501. |
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(d) Notwithstanding any other provision of this subtitle, |
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instead of an annuity, a person will receive from the retirement |
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system a single payment equal to the sum of the following if on the |
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date of that person's retirement that sum is $10,000 or less: |
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(1) any updated service credit or any prior service, |
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special prior service, or antecedent service credit for that person |
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on the date of retirement, plus accumulated interest; |
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(2) the amount credited to the person's individual |
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account [in the employees saving fund]; and |
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(3) an additional [the] amount from the benefit |
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[municipality] accumulation fund equal to the amount in the |
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member's individual account or a greater amount authorized by a |
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participating municipality under Section 855.501. |
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SECTION 13. Subsection (b), Section 854.008, Government |
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Code, is amended to read as follows: |
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(b) The amount of a lump-sum distribution under this section |
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may not exceed three-fourths of the total contributions and |
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accumulated interest in the member's individual account [in the
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employees saving fund] at the time of the member's retirement. |
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SECTION 14. Subsection (c), Section 854.201, Government |
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Code, is amended to read as follows: |
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(c) A governing body may not adopt an ordinance under this |
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section unless the actuary first determines that all obligations |
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charged against the municipality's account in the benefit |
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[municipality] accumulation fund, including the obligations |
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proposed in the ordinance, can be funded by the municipality within |
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its maximum contribution rate and within its amortization period. |
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SECTION 15. Subsection (d), Section 854.202, Government |
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Code, is amended to read as follows: |
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(d) An ordinance adopted under this section must also |
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include the provisions specified in Section 852.105. A governing |
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body may not adopt an ordinance under this section unless the |
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actuary first determines, on the basis of mortality and other |
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tables adopted by the board of trustees, that all obligations of the |
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municipality to the benefit [municipality] accumulation fund, |
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including obligations proposed under the ordinance, can be funded |
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by the municipality within its maximum contribution rate and within |
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its amortization period. |
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SECTION 16. Subsections (f) and (g), Section 854.203, |
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Government Code, are amended to read as follows: |
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(f) The amount by which an increase under this section |
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exceeds all previously granted increases to an annuitant is payable |
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as a prior service annuity, is an obligation of the municipality's |
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account in the benefit [municipality] accumulation fund, and is |
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subject to reduction under Section 855.308(f). |
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(g) An ordinance under this section may not take effect |
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until it is approved by the board of trustees as meeting the |
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requirements of this section. The board may not approve an |
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ordinance unless the actuary first determines that all obligations |
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charged against the municipality's account in the benefit |
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[municipality] accumulation fund, including the obligations |
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proposed in the ordinance, can be funded by the municipality within |
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its maximum contribution rate and within its amortization period as |
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in effect on the effective date of the increases. |
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SECTION 17. Subsections (a) and (c), Section 854.309, |
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Government Code, are amended to read as follows: |
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(a) Except as provided by Subsection (b), if a disability |
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retirement annuity is discontinued under Section 854.307 or the |
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right to an annuity revoked under Section 854.306(b) [854.306(c)], |
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the retiree is entitled to a lump-sum payment in an amount, if any, |
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by which the amount in the retiree's individual account [in the
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employees saving fund] at the time of disability retirement exceeds |
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the amount of current service annuity payments made before the date |
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the annuity was discontinued or the right to an annuity revoked. |
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(c) The benefit provided by this section is payable from the |
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benefit accumulation [current service annuity reserve] fund. |
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SECTION 18. Subsection (b), Section 854.405, Government |
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Code, is amended to read as follows: |
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(b) A governing body may not adopt an ordinance under this |
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section unless the actuary first determines, on the basis of |
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mortality and other tables adopted by the board of trustees, that |
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all obligations of the municipality to the benefit [municipality] |
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accumulation fund, including obligations proposed under the |
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ordinance, can be funded by the municipality within its maximum |
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contribution rate and within its amortization period. |
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SECTION 19. Subsection (a), Section 854.501, Government |
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Code, is amended to read as follows: |
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(a) Except as provided by Subsection (c), if a member dies |
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before retirement, a lump-sum death benefit is payable from the |
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benefit accumulation [employees saving] fund in the amount of: |
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(1) the amount credited to the member's individual |
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account [in the fund]; plus |
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(2) interest computed from the beginning of the year |
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in which death occurs through the end of the month immediately |
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preceding the month in which death occurs at the rate allowed on |
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member contributions during the preceding year. |
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SECTION 20. Section 854.502, Government Code, is amended to |
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read as follows: |
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Sec. 854.502. REFUND OF UNRECOVERED CONTRIBUTIONS. (a) If |
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monthly payments of any standard service retirement annuity under |
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Section 854.103, optional service retirement annuity under Section |
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854.104, standard disability retirement annuity under Section |
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854.304, optional disability retirement annuity under Section |
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854.305, standard occupational disability retirement annuity under |
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Section 854.408, or optional occupational disability retirement |
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annuity under Section 854.410 cease before the sum of all payments |
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of the annuity equals or exceeds the amount of accumulated |
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contributions credited to [in] the member's individual account [in
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the employees saving fund] at the time of retirement of the member |
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on whose service the annuity was based, a lump-sum benefit equal to |
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the amount by which the amount of the accumulated contributions |
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exceeds the sum of all payments made by reason of the annuity is |
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payable: |
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(1) to the designated beneficiary, if living, or if |
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not living, to the estate of the designated beneficiary, if the |
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designated beneficiary survived the retiree; or |
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(2) to the estate of the retiree, if the designated |
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beneficiary predeceased the retiree. |
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(b) The benefit provided by this section is payable from the |
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benefit [current service annuity reserve fund and the municipality] |
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accumulation fund [in the ratio that the part of the annuity that
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was payable from each of those funds bears to the entire benefit
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determined on the effective date of retirement]. |
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SECTION 21. Subsection (c), Section 855.305, Government |
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Code, is amended to read as follows: |
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(c) All assets of the retirement system shall be credited, |
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according to the purpose for which they are held, to one of the |
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following funds: |
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(1) benefit [employees saving fund;
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[(2) municipality] accumulation fund; |
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[(3) current service annuity reserve fund;] |
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(2) [(4)] interest fund; |
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(3) [(5)] endowment fund; |
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(4) [(6)] expense fund; |
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(5) [(7)] supplemental disability benefits fund; or |
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(6) [(8)] supplemental death benefits fund. |
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SECTION 22. The heading to Section 855.306, Government |
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Code, is amended to read as follows: |
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Sec. 855.306. MEMBER'S INDIVIDUAL ACCOUNT [EMPLOYEES
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SAVING FUND]. |
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SECTION 23. Section 855.306, Government Code, is amended by |
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amending Subsection (a) and adding Subsection (d) to read as |
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follows: |
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(a) The retirement system shall establish in the |
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participating municipality's account in the benefit accumulation |
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fund an individual account for each person who is a member of the |
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system through employment in that municipality. The retirement |
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system shall credit to [deposit in] a member's individual account |
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[in the employees saving fund]: |
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(1) the amount of contributions to the retirement |
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system deducted from the member's compensation; |
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(2) interest allowed on amounts credited to [money in] |
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the account in accordance with this subtitle; and |
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(3) the portion of a deposit required by Section |
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853.003 to reinstate credited service previously canceled that |
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represents the amount withdrawn. |
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(d) If a retiree resumes employment under Section 854.308, |
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the retirement system shall reestablish an individual account for |
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the member in the participating municipality's account in the |
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benefit accumulation fund and credit to that account the portion of |
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the balance of the person's retirement reserve that is attributable |
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to the person's prior accumulated contributions. |
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SECTION 24. Section 855.307, Government Code, is amended to |
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read as follows: |
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Sec. 855.307. BENEFIT [MUNICIPALITY] ACCUMULATION FUND: |
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CURRENT SERVICE. (a) The retirement system shall credit or charge |
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to the account of a participating municipality in the benefit |
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[municipality] accumulation fund: |
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(1) all current service contributions made by the |
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municipality to the retirement system; |
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(2) net investment income or loss allocated to the |
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fund under Section 855.317; and |
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(3) the withdrawal charge for reinstatement of |
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credited service as provided by Section 853.003. |
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(b) The retirement system shall pay from the account of a |
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participating municipality in the benefit [municipality] |
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accumulation fund: |
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(1) all payments under annuities arising from current |
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service credits [money to the current service annuity reserve fund
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in accordance with Section 855.318]; and |
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(2) refunds to certain municipalities in accordance |
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with Section 855.319. |
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(c) If credited service previously canceled is reinstated |
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in accordance with Section 853.003, the retirement system shall |
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charge the municipality's account in the benefit [municipality] |
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accumulation fund with the necessary reserves to fund the credits |
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based on current service that are restored to the member. |
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(d) The annuities payable as provided by this section are |
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liabilities and obligations of the participating municipality for |
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which the service was performed on which the annuities are based and |
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are payable from the municipality's account in the benefit |
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accumulation fund. |
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SECTION 25. The heading to Section 855.308, Government |
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|
Code, is amended to read as follows: |
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Sec. 855.308. BENEFIT [MUNICIPALITY] ACCUMULATION FUND: |
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PRIOR SERVICE. |
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SECTION 26. Section 855.308, Government Code, is amended by |
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amending Subsections (a), (b), (d), and (f) and adding Subsection |
|
|
(g) to read as follows: |
|
|
(a) In addition to amounts credited or charged as provided |
|
|
by Section 855.307, the retirement system shall credit to the |
|
|
account of a participating municipality in the benefit |
|
|
[municipality] accumulation fund all prior service contributions |
|
|
made by the municipality to the retirement system. |
|
|
(b) In addition to amounts paid as provided by Section |
|
|
855.307, the retirement system shall pay from the account of a |
|
|
participating municipality in the benefit [municipality] |
|
|
accumulation fund: |
|
|
(1) all payments under annuities arising from prior |
|
|
service credits, special prior service credits, antecedent service |
|
|
credits, or updated service credits authorized by a participating |
|
|
municipality; and |
|
|
(2) optional increased payments authorized by a |
|
|
participating municipality under Section 854.203. |
|
|
(d) If credited service previously canceled is reinstated |
|
|
in accordance with Section 853.003, the retirement system shall |
|
|
charge the municipality's account in the benefit [municipality] |
|
|
accumulation fund with the necessary reserves to fund credits based |
|
|
on prior service that are restored to the member. |
|
|
(f) The board of trustees may proportionately reduce all |
|
|
payments under annuities payable under this section, at any time |
|
|
and for a period necessary, to prevent those payments for a year |
|
|
from exceeding the amount available in the participating |
|
|
municipality's account for prior service. |
|
|
(g) The annuities payable as provided by this section are |
|
|
liabilities and obligations of the participating municipality for |
|
|
which the service was performed, or granted as the result of |
|
|
reinstated service previously canceled, on which the annuities are |
|
|
based and are payable from the municipality's account in the |
|
|
benefit accumulation fund. |
|
|
SECTION 27. Subsection (e), Section 855.311, Government |
|
|
Code, is amended to read as follows: |
|
|
(e) If the board of trustees determines that the amount |
|
|
credited to the distributive benefits account on December 31 of any |
|
|
year is sufficient to do so, the board by resolution may: |
|
|
(1) authorize the distribution and payment of all or |
|
|
part of the money credited to the account to persons who were |
|
|
annuitants on that day in the ratio of the rate of the monthly |
|
|
benefit of each annuitant to the total of all annuity payments made |
|
|
by the system for the final month of the year; or |
|
|
(2) authorize the distribution of all or part of the |
|
|
amount credited to the account to each member's individual account |
|
|
[in the employees saving fund] as supplemental interest in the |
|
|
ratio of the amount of interest paid on the individual's account to |
|
|
the interest paid to all individual accounts for the year. |
|
|
SECTION 28. Subsection (d), Section 855.313, Government |
|
|
Code, is amended to read as follows: |
|
|
(d) [As soon as practicable after December 31, 1988, the
|
|
|
actuary shall calculate the amount of reserves required to pay all
|
|
|
annuities that are obligations of the supplemental disability
|
|
|
benefits fund. If the board of trustees determines, on the basis of
|
|
|
the calculations made by the actuary, that the money to the credit
|
|
|
of the fund is materially in excess of the amount of reserves needed
|
|
|
to assure payment of all annuities that are obligations of the fund,
|
|
|
the board may direct that a portion of the excess shall be
|
|
|
transferred from the supplemental disability benefits fund to the
|
|
|
municipality accumulation fund and credited to the respective
|
|
|
accounts of the participating municipalities in such proportions as
|
|
|
the board of trustees determines to be the ratio of their respective
|
|
|
contributions to the total of all contributions to the supplemental
|
|
|
disability benefits fund.] When all annuities payable from the |
|
|
supplemental disability benefits fund have been finally paid and |
|
|
discharged, the board of trustees shall direct that the money |
|
|
remaining in the supplemental disability benefits fund shall be |
|
|
transferred and credited to the accounts of the respective |
|
|
participating municipalities in the benefit [municipality] |
|
|
accumulation fund in proportion to the same ratios of their |
|
|
contributions to the total of all contributions to the supplemental |
|
|
disability benefits fund. |
|
|
SECTION 29. Section 855.316, Government Code, is amended to |
|
|
read as follows: |
|
|
Sec. 855.316. INTEREST RATES AND CREDITING. (a) Unless |
|
|
this subtitle expressly specifies another rate of interest, for |
|
|
periods after December 31, 2008, the rate of interest is five |
|
|
percent compounded annually, plus any other amounts the board of |
|
|
trustees is expressly authorized to provide. Notwithstanding any |
|
|
other provision in this chapter, the interest credited to a |
|
|
member's individual account [the employees saving fund] in a |
|
|
calendar year may not be less than five percent [as allocated under
|
|
|
Section 855.317(a)]. |
|
|
(b) Effective as of December 31 of each year, the board of |
|
|
trustees shall credit interest on the accumulated contributions in |
|
|
a member's individual account as of January 1 of that year in |
|
|
accordance with Subsection (a) and Section 855.306. |
|
|
SECTION 30. Subsections (a) and (b), Section 855.317, |
|
|
Government Code, are amended to read as follows: |
|
|
(a) Effective as of December 31 of each year, the board of |
|
|
trustees shall make the following allocations from the interest |
|
|
fund that in the aggregate equal the net investment income or loss |
|
|
for the year: |
|
|
(1) [to the current service annuity reserve fund,
|
|
|
interest on the mean amount in the current service annuity reserve
|
|
|
fund during that year;
|
|
|
[(2)] to the supplemental disability benefits fund, |
|
|
interest on the mean amount in the supplemental disability benefits |
|
|
fund during that year; |
|
|
(2) [(3)] to the supplemental death benefits fund, |
|
|
interest on the mean amount in the supplemental death benefits fund |
|
|
during that year; |
|
|
(3) [(4)] to the accounts in the benefit |
|
|
[municipality] accumulation fund, an amount derived by applying a |
|
|
positive or negative rate, as determined by the board of trustees in |
|
|
its sole discretion to the January 1 balances of that year for each |
|
|
of those accounts; and |
|
|
(4) [(5)] to the interest reserve account of the |
|
|
endowment fund, a positive or negative amount as determined by the |
|
|
board of trustees in its sole discretion[; and
|
|
|
[(6)
to the employees saving fund, interest on the sum
|
|
|
of the accumulated contributions in the employees saving fund
|
|
|
credited on January 1 of that year to all persons who are members on
|
|
|
December 31 of that year before any transfers for retirement
|
|
|
effective December 31 of that year are made]. |
|
|
(b) In making allocations under this section, the board of |
|
|
trustees shall, without regard to the amount of net investment |
|
|
income or loss for the calendar year, first allocate interest as |
|
|
specified in Section 855.316(a) [855.316] to those funds or |
|
|
accounts referenced in Subsections (a)(1) and[,] (2) of this |
|
|
section[, (3), and (6)]. The board shall then allocate the |
|
|
remaining net investment income or loss between the funds or |
|
|
accounts referenced in Subsections (a)(3) and (4) of this section |
|
|
[(a)(4) and (5)] in rates or amounts determined by the board in its |
|
|
sole discretion. The board of trustees shall accumulate the amount |
|
|
of assets in the interest reserve account of the endowment fund that |
|
|
the board in its sole discretion determines is necessary: |
|
|
(1) to provide adequate reserves to: |
|
|
(A) mitigate the effects of future investment |
|
|
return volatility and insufficient net investment income; and |
|
|
(B) provide reasonable rate stabilization for |
|
|
participating municipalities; |
|
|
(2) to provide adequate reserves against special and |
|
|
contingency requirements of other funds of the system; and |
|
|
(3) to provide the amount required for the |
|
|
administration expenses of the system for the following year. |
|
|
SECTION 31. Section 855.319, Government Code, is amended to |
|
|
read as follows: |
|
|
Sec. 855.319. PAYMENT TO FORMERLY PARTICIPATING |
|
|
MUNICIPALITY. If a participating municipality has no employees who |
|
|
are members of the retirement system and has no present or potential |
|
|
liabilities resulting from the participation of former employees, |
|
|
the municipality's participation in the system stops and the system |
|
|
shall repay to the municipality on application any amount in the |
|
|
benefit [municipality] accumulation fund that is credited to the |
|
|
municipality. |
|
|
SECTION 32. Subsection (g), Section 855.402, Government |
|
|
Code, is amended to read as follows: |
|
|
(g) After the deductions for member contributions are paid, |
|
|
the board of trustees shall: |
|
|
(1) record all receipts; and |
|
|
(2) deposit the receipts in the benefit accumulation |
|
|
fund and credit the appropriate amounts to the members' individual |
|
|
accounts [credit of the employees saving fund]. |
|
|
SECTION 33. Sections 855.405 and 855.406, Government Code, |
|
|
are amended to read as follows: |
|
|
Sec. 855.405. MUNICIPALITY NORMAL CONTRIBUTION. Each |
|
|
participating municipality shall pay to the benefit [municipality] |
|
|
accumulation fund, as its normal contribution, an amount equal to a |
|
|
percentage of the compensation of members employed by the |
|
|
municipality for that month. The rate of contribution is the normal |
|
|
contribution rate determined annually by the actuary and approved |
|
|
by the board of trustees. |
|
|
Sec. 855.406. MUNICIPALITY PRIOR SERVICE CONTRIBUTION. |
|
|
(a) Each participating municipality shall pay to the benefit |
|
|
[municipality] accumulation fund, as its prior service |
|
|
contribution, an amount equal to a percentage of the compensation |
|
|
of members employed by the municipality for that month. |
|
|
(b) The rate of contribution is the rate determined annually |
|
|
by the actuary and approved by the board of trustees as being the |
|
|
rate required to fund all obligations charged against the |
|
|
municipality's account in the benefit [municipality] accumulation |
|
|
fund within the municipality's amortization period without |
|
|
resulting in a probable future depletion of that account. |
|
|
SECTION 34. Subsection (a), Section 855.4065, Government |
|
|
Code, is amended to read as follows: |
|
|
(a) In addition to the contributions a participating |
|
|
municipality is required to make under this subtitle, the board of |
|
|
trustees, after consultation with the actuary, by rule may |
|
|
authorize a participating municipality to make lump-sum or periodic |
|
|
employer contributions to the retirement system to be deposited in |
|
|
the municipality's account in the benefit [municipality] |
|
|
accumulation fund. |
|
|
SECTION 35. Subsections (d), (f), and (g), Section 855.407, |
|
|
Government Code, are amended to read as follows: |
|
|
(d) If the dates of participation of each department of a |
|
|
municipality are not the same, the governing body of the |
|
|
municipality may request that, to determine the municipality normal |
|
|
contribution rate and prior service contribution rate and to |
|
|
determine the period during which the municipality must fund the |
|
|
obligations charged against its account in the benefit |
|
|
[municipality] accumulation fund, all of its departments have a |
|
|
single composite participation date. The actuary shall determine |
|
|
the composite participation date by computing an average weighted |
|
|
according to the number of members entering the retirement system |
|
|
on the actual dates of participation of the departments involved. |
|
|
(f) The governing body of a municipality that is determined |
|
|
by the actuary to be unable to finance all obligations charged |
|
|
against its account in the benefit [municipality] accumulation fund |
|
|
within 25 years after its most recent actuarial valuation date may |
|
|
elect to have the municipality contribute to its account in the |
|
|
benefit [municipality] accumulation fund at a rate that does not |
|
|
exceed in any year the sum of two percent and the maximum |
|
|
contribution rate specified by Subsection (a) and by Section |
|
|
855.501, if applicable, and that the actuary annually may determine |
|
|
as necessary to finance the existing levels of benefits before the |
|
|
expiration of 25 years after the most recent actuarial valuation |
|
|
date. |
|
|
(g) A municipality that begins participation in the |
|
|
retirement system on or after December 31, 1999, and any |
|
|
municipality already participating in the retirement system on that |
|
|
date whose governing body elects to have the municipality do so |
|
|
shall contribute to its account in the benefit [municipality] |
|
|
accumulation fund at the combined rate of total compensation paid |
|
|
to its employees as the actuary determines is necessary to fund all |
|
|
obligations chargeable to its account in the fund within the |
|
|
municipality's amortization period, regardless of other provisions |
|
|
of this subtitle. |
|
|
SECTION 36. Subsection (a), Section 855.410, Government |
|
|
Code, is amended to read as follows: |
|
|
(a) A participating municipality that fails to remit before |
|
|
the 16th day of the month all contributions required by this |
|
|
subchapter to be made and remitted to the retirement system by that |
|
|
date shall pay to the retirement system, in addition to the |
|
|
contributions, interest on the past-due amounts at an annual rate |
|
|
that is the total of the system's investment return assumption |
|
|
[rates of interest credited by the retirement system to accounts in
|
|
|
the municipality accumulation fund] for the preceding calendar |
|
|
year, plus two percent. The retirement system shall notify |
|
|
participating municipalities of the rate of interest that will be |
|
|
due on late payments. |
|
|
SECTION 37. Subsection (b), Section 855.501, Government |
|
|
Code, is amended to read as follows: |
|
|
(b) The governing body of a municipality electing to provide |
|
|
for increased reserves by ordinance shall provide that for each |
|
|
month of current service rendered by a participating employee of |
|
|
the municipality after the date of its election the municipality |
|
|
will provide a contribution [as provided by Subsection (c)] equal |
|
|
to 150 or 200 percent of the member's accumulated contribution to |
|
|
the retirement system for that month. |
|
|
SECTION 38. Subsection (c), Section 855.608, Government |
|
|
Code, is amended to read as follows: |
|
|
(c) Money for the payment of benefits to a participant under |
|
|
this section shall be paid to the separate fund created by this |
|
|
section from the contributions that otherwise would be deposited in |
|
|
the benefit [municipality] accumulation fund account of the |
|
|
municipality that employed the member. If the benefit is payable as |
|
|
a result of service with more than one participating municipality, |
|
|
there shall be paid from the contributions that otherwise would be |
|
|
deposited in the benefit [municipality] accumulation fund account |
|
|
of each affected municipality the amount chargeable to that |
|
|
municipality for the member. When feasible, the monthly amount to |
|
|
pay benefits under this section shall be paid not later than the |
|
|
15th day before the date of a monthly payment to a person receiving |
|
|
annuity benefits under this section. |
|
|
SECTION 39. The following provisions of the Government Code |
|
|
are repealed: |
|
|
(1) Section 855.309; |
|
|
(2) Section 855.318; and |
|
|
(3) Subsections (c) and (d), Section 855.501. |
|
|
SECTION 40. (a) The Texas Municipal Retirement System |
|
|
shall: |
|
|
(1) transfer the assets and liabilities of each |
|
|
participating municipality's members' individual accounts in the |
|
|
employees saving fund to the appropriate municipality's accounts in |
|
|
the benefit accumulation fund and dissolve the employees saving |
|
|
fund; and |
|
|
(2) transfer the assets and, if appropriate, |
|
|
liabilities of the current service annuity reserve fund to the |
|
|
interest reserve account in the endowment fund and the benefit |
|
|
accumulation fund, as determined by the board of trustees in |
|
|
consultation with the actuary, and dissolve the current service |
|
|
annuity reserve fund. |
|
|
(b) For purposes of clarification, as of the effective date |
|
|
of this Act, the municipality accumulation fund is renamed the |
|
|
benefit accumulation fund, and the Texas Municipal Retirement |
|
|
System shall transfer the assets and liabilities of the employees |
|
|
saving fund and the current service annuity reserve fund to the |
|
|
benefit accumulation fund as described by Subsection (a) of this |
|
|
section. |
|
|
(c) In implementing Subtitle G, Title 8, Government Code, as |
|
|
amended by this Act, including without limitation crediting |
|
|
interest and conducting the actuarial valuation required by that |
|
|
subtitle, the Texas Municipal Retirement System shall make all |
|
|
necessary computations based on an accounting record adjusted to |
|
|
reflect the transfers of assets and liabilities required by |
|
|
Subsection (a) of this section as though the transfers had taken |
|
|
place on December 31, 2010. |
|
|
SECTION 41. This Act takes effect immediately if it |
|
|
receives a vote of two-thirds of all the 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, 2011. |
|
|
|
|
|
|
| |
| |
| |
| |
______________________________ |
______________________________ |
| |
President of the Senate |
Speaker of the House |
| |
|
|
I hereby certify that S.B. No. 350 passed the Senate on |
|
|
March 17, 2011, by the following vote: Yeas 31, Nays 0. |
|
|
|
| |
| |
______________________________ |
| |
Secretary of the Senate |
| |
|
|
I hereby certify that S.B. No. 350 passed the House on |
|
|
May 23, 2011, by the following vote: Yeas 143, Nays 0, two |
|
|
present not voting. |
|
|
|
| |
| |
______________________________ |
| |
Chief Clerk of the House |
| |
|
|
|
| |
|
|
Approved: |
|
|
|
|
|
______________________________ |
|
|
Date |
|
|
|
|
|
|
|
|
______________________________ |
|
|
Governor |