H.B. No. 3158
 
 
 
 
AN ACT
  relating to the retirement systems for and the provision of other
  benefits to police and fire fighters in certain municipalities.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
  ARTICLE 1. CONTINGENT PROVISIONS:
  EFFECTIVE SEPTEMBER 1, 2017
         SECTION 1.01.  Section 1.01, Article 6243a-1, Revised
  Statutes, is amended to read as follows:
         Sec. 1.01.  AMENDMENT, RESTATEMENT, AND CONSOLIDATION. (a)
  The purpose of this article is to restate and amend the provisions
  of a former law governing the pension funds for police officers and
  fire fighters in certain municipalities (Chapter 4, Acts of the
  43rd Legislature, 1st Called Session, 1933, also known as Article
  6243a) having previously been amended and restated to permit the
  consolidation of the terms of certain pension plans created under
  Sections 1, 11A, and 11B of that Act for the purpose of simply and
  accurately reflecting the joint administration of the plans.
         (b)  [The provisions of this article are entirely consistent
  with all terms and conditions relating to benefits and benefit
  entitlement previously contained in the plans.] This article does
  not [intend to] take away or reduce any accrued benefit contained in
  the plans created under former Article 6243a or under this article
  as it existed on or before August 31, 2017.
         SECTION 1.02.  Section 2.01, Article 6243a-1, Revised
  Statutes, is amended to read as follows:
         Sec. 2.01.  DEFINITIONS. In this article:
               (1)  "415 compensation" means a member's wages, salary,
  and other amounts received for personal services rendered in the
  course of employment with the city during a limitation year and
  permitted to be treated as compensation for purposes of Section
  415(c) of the code, including differential wage payments described
  in Section 414(u)(12) of the code. The term does not include
  amounts picked up under Section 4.03(i) of this article.
               (2)  "Active service" means any period that a member
  receives compensation as a police officer or fire fighter from
  either department for services rendered.
               (3) [(2)]  "Actuarial equivalent" means a form of
  benefit differing in time, duration, or manner of payment from a
  standard benefit payable under this article but having the same
  value when computed using the assumptions set forth in this
  article.
               [(3)     "Administrator" means the person designated by
  the board to supervise the affairs of the pension system.]
               (4)  "Alternate payee" has the meaning given the term
  by Section 414(p) [414] of the code or any successor provision.
               (5)  "Alternative investment" means an investment in an
  asset other than a traditional asset. The term includes an
  investment in private equity funds, private real estate
  transactions, hedge funds, and infrastructure.
               (6) [(5)]  "Annual additions" means the sum of the
  following amounts credited to a member's account under any defined
  contribution plan maintained by the city for the limitation year:
                     (A)  city contributions;
                     (B)  member contributions, other than rollover
  contributions from a plan maintained by any employer other than the
  city;
                     (C)  forfeitures; and
                     (D)  amounts allocated after March 31, 1984, to an
  individual medical benefit account, as defined in Section 415(l)(2)
  [415(1)(2)] of the code, that is part of a pension or annuity plan
  maintained by the city.
         [The term does not include amounts described in Paragraph (D)
  of this subdivision for the purpose of computing the percentage
  limitation described in Section 415(c)(1)(B) of the code.] For any
  limitation year beginning before January 1, 1987, only that portion
  of member contributions equal to the lesser of member contributions
  in excess of six percent of 415 compensation or one-half of member
  contributions to the combined pension plan or any qualified defined
  contribution plan maintained by the city is treated as annual
  additions.
               (7) [(6)]  "Annual benefit" means the aggregate
  benefit attributable to city and member contributions payable
  annually under the combined pension plan, or any plan maintained by
  the city, exclusive of any benefit not required to be considered for
  purposes of applying the limitations of Section 415 of the code to
  the combined pension plan, payable in the form of a straight life
  annuity beginning at age 62 with no ancillary benefits. Solely for
  purposes of computing the limitations under the combined pension
  plan, benefits actually payable to a pensioner are adjusted to the
  actuarial equivalent of a straight life annuity pursuant to Section
  415(b) [8.01] of the code [this article] even though no member may
  actually receive a benefit in the form of a straight life annuity.
               (8) [(7)]  "Article 6243a" means Chapter 4, Acts of the
  43rd Legislature, 1st Called Session, 1933 (former Article 6243a,
  Vernon's Texas Civil Statutes), pertaining to a pension system for
  police officers, fire fighters, and fire alarm operators in certain
  cities.
               (9) [(8)]  "Assignment pay" means monthly pay, in
  addition to salary, granted to a Group B member and authorized by
  the city council for the performance of certain enumerated duty
  assignments.
               (10) [(9)]  "Base pay" means the maximum monthly civil
  service pay from time to time established by the city for a person
  who holds the rank of "police officer" in the city's police
  department or the rank of "fire and rescue officer" in the city's
  fire department [a police officer or fire fighter], exclusive of
  any other form of compensation. The term does not include
  compensation paid by the city to a person for prior periods of
  service or compensation that otherwise constitutes back pay unless
  the compensation is eligible back pay. The board may adopt rules
  and procedures necessary to include eligible back pay as base pay
  for purposes of this definition, including rules regarding how
  increases in benefits will be determined and administered.
               (11) [(10)]  "Base pension" means the amount of
  retirement, death, or disability benefits as determined [computed
  under this article] at the earliest of the time a Group B member
  and, solely for the purposes of Section 6.12 of this article, a
  Group A member:
                     (A)  begins participation in DROP;
                     (B)  leaves or left active service;
                     (C)  [leaves active service,] dies; [,] or
                     (D)  becomes entitled to a disability pension
  under the combined pension plan [disabled].
         Solely for purposes of this definition, when a member becomes
  entitled to a disability pension, the base pension shall be
  determined as of the date on which the disability pension begins.
               (12) [(11)]  "Board" means the board of trustees
  created under Section 3.01 of this article for the purpose of
  administering the pension system.
               (13) [(12)]  "Child" means a [an unmarried] person
  [under the age of 19] whose [natural or adoptive] parent, as
  recognized under the laws of this state, is a primary party.
               (14) [(13)]  "City" means each municipality having a
  population of more than 1.18 million and located predominantly in a
  county that has a total area of less than 1,000 square miles.
               (15)  "City attorney" means the chief legal officer of
  a city.
               (16) [(14)]  "City council" means the governing body of
  the city.
               (17)  "City manager" means the city manager of a city or
  the city manager's designee and includes, to the extent of any
  designation, an interim or acting city manager, chief financial
  officer, budget director, or assistant city manager. If a city does
  not have an individual serving in a position otherwise described by
  this subdivision, "city manager" means the mayor of that city.
               (18) [(15)]  "City service incentive pay" means annual
  incentive pay, adjusted by the city from time to time, in addition
  to the salary of a member granted to the member under the authority
  of the city charter and received by the member during active
  service.
               (19) [(16)]  "Code" means the United States Internal
  Revenue Code of 1986, as amended.
               (20) [(17)]  "Combined pension plan" means any pension
  plan created pursuant to this article before September 1, 2017.
               (21) [(18)]  "Computation pay" shall be used in
  determining the amount of the city's contribution under Section
  4.02(d) of this article and a Group B member's contribution under
  Section 4.03(d) of this article and in determining the base pension
  [of any benefits] to be paid to a Group B member or the benefits to
  be paid to the member's qualified survivors and means the sum of the
  following:
                     (A)  the biweekly [monthly] rate of pay of a
  [Group B] member for the highest civil service rank the person
  holds, from time to time, as a result of a competitive examination;
  plus
                     (B)  the [monthly rate of pay of a Group B member
  as] educational incentive pay of a member, computed on a biweekly
  basis; plus
                     (C)  the longevity [monthly rate of] pay of a
  [Group B] member [as longevity pay], as authorized by the
  legislature, computed on a biweekly basis; plus
                     (D)  the city service incentive pay, computed on a
  biweekly [monthly] basis, of a [Group B] member.
         The term includes only amounts actually paid in salary or
  payments made instead of salary to the member and member
  contributions picked up by the city, and does not include any
  imputed pay. Furthermore, any [Any] compensation received by a
  [Group B] member, other than that noted in Paragraphs (A)-(D) of
  this subdivision (for example, compensation for overtime work,
  certification pay, and the [monthly rate of] pay a member would
  receive from the city in the form of assignment pay), will not be
  considered in determining the computation pay of a [Group B]
  member. Any lump-sum payments for compensatory time, unused sick
  leave, unused vacation time, or city service incentive pay payable
  after a [Group B] member leaves active service, dies [death],
  becomes disabled [disability], or resigns [resignation], or after 
  any other type of termination may not be considered in determining
  the computation pay of any [Group B] member. Computation pay for a
  [Group B] member for any given period [month] is determined on the
  biweekly [monthly] rates of pay due the [Group B] member for the
  entire period [month]. The term does not include compensation paid
  by the city to a person for prior periods of service or compensation
  that otherwise constitutes back pay unless the compensation is
  eligible back pay. The board may adopt rules and procedures
  necessary to include eligible back pay as computation pay for
  purposes of this definition, including rules regarding how
  increases in benefits will be determined and administered. [If a
  Group B member works less than the member's assigned schedule for
  any given month, the computation pay for the Group B member shall be
  prorated for the portion of the month that the Group B member
  worked.
               [(19)     "Educational incentive pay" means incentive pay
  designed to reward completion of certain hours of college credit,
  adjusted by the city from time to time, that is paid to a member in
  addition to the member's salary.]
               (22) [(20)]  "Department" means either the police
  department of the city, the fire department of the city, or both the
  police and fire departments of the city together.
               (23) [(21)]  "Dependent parent" means a natural parent
  or parent who adopted a primary party and who immediately before the
  death of a primary party received over half of the parent's
  financial support from the primary party.
               (24) [(22)]  "Disability retirement" means any period
  that a pensioner receives periodic disability compensation or a
  disability pension.
               (25)  "DROP" means the deferred retirement option plan
  established in accordance with Section 6.14 of this article.
               (26)  "Educational incentive pay" means incentive pay
  designed to reward completion of certain hours of college credit,
  adjusted by the city from time to time, that is paid to a member in
  addition to the member's salary.
               (27)  "Eligible back pay," except as otherwise provided
  by this definition, means additional compensation paid by the city
  to a member or pensioner:
                     (A)  that constitutes back pay to the member's or
  pensioner's prior period of service and is otherwise considered
  taxable wages paid by the city to the member or pensioner for
  federal income tax purposes; and
                     (B)  for which the pension system receives:
                           (i)  an amount equal to the aggregate member
  and city contributions that the pension system would have collected
  with respect to the compensation for all time periods relating to
  the back pay compensation; and
                           (ii)  interest, calculated using the pension
  system's actuarial rate of return assumptions in effect for the
  periods relating to the back pay, compounded annually, on the
  contribution amounts for the period from the date that the
  contributions would have been received if the back pay compensation
  had been paid during the relevant periods of prior service through
  the date the amount relating to the contributions for back pay is
  actually received by the pension system.
         The term does not include any additional compensation paid by
  the city to a member or pensioner wholly or partly or directly or
  indirectly as the result of litigation instituted to recover back
  pay.
         The pension system is not obligated to collect the additional
  contributions or interest described in Paragraph (B) of this
  subdivision from the member, pensioner, or city. The pension system
  may not recognize back pay as eligible back pay until the
  contributions and interest described in Paragraph (B) of this
  subdivision have been received.
               (28)  "Executive director" means the person designated
  by the board to supervise the operation of the pension system.
               (29) [(23)     "415 compensation" means a member's wages,
  salary, and other amounts received for personal services rendered
  in the course of employment with the city during a limitation year,
  but does not include:
                     [(A)     contributions made by the city to a plan of
  deferred compensation, or a simplified employee pension plan, to
  the extent such contributions are excludable from the member's
  gross income;
                     [(B)     any distributions from a plan of deferred
  compensation, or a simplified employee pension plan, to the extent
  the distributions are excludable from the member's gross income;
                     [(C)     other amounts that received special tax
  benefits, such as premiums for group term life insurance, to the
  extent that the premiums are not includable in the gross income of
  the member, or contributions made by the city, including
  contributions toward the purchase of an annuity described by
  Section 403(b) of the code, whether or not contributed pursuant to a
  salary reduction agreement and whether or not the amounts are
  actually excludable from the gross income of the member; and
                     [(D)     for any limitation year beginning after
  December 31, 1988, compensation in excess of $200,000, adjusted in
  a manner permitted under Section 415(d) of the code.
               [(24)]  "Fund" means all funds and property held to
  provide benefits to [for the benefit of] all persons who are or who
  may become entitled to any benefits under any plan within the
  pension system, together with all income, profits, or other
  increments.
               (30) [(25)]  "Group A member" means any police officer
  or fire fighter included in Group A membership under [described by]
  Section 5.01(a)(1) of this article.
               (31) [(26)]  "Group B member" means any police officer
  or fire fighter included in Group B membership under [described by]
  Section 5.01(a)(2) of this article.
               (32) [(27)]  "Health director" means any qualified
  physician designated from time to time by the board.
               (33) [(28)]  "Limitation year" means the plan year of
  the combined pension plan and any defined benefit plan or defined
  contribution plan of the city in which a member participates.
               (34) [(29)]  "Longevity pay" means pay in addition to
  the salary of a member granted under Section 141.032, Local
  Government Code, for each year of active service completed by a
  member in either department.
               (35) [(30)]  "Member" means both Group A and Group B
  members.
               (36) [(31)]  "Member's account" means an account
  established and maintained for a member with respect to the
  member's total interest in one or more defined contribution plans
  under this article or maintained by the city resulting in annual
  additions.
               (37)  "Nominations committee" means the nominations
  committee established under Section 3.011 of this article.
               (38) [(32)]  "Old plan" means any pension plan created
  pursuant to Section 1 of Article 6243a.
               (39) [(33)]  "Pensioner," "Group A pensioner," or
  "Group B pensioner" means a former member of the pension system who
  is on either a service or disability retirement.
               (40) [(34)]  "Pension service" means the time, in
  years, and prorated for fractional years, that a member has
  contributed to the fund under the terms of the combined pension plan
  or any plan within the pension system, reduced to reflect refunds
  that have been received and not fully repaid.
               (41) [(35)]  "Pension system" means the fund and any
  plans created pursuant to this article or Article 6243a and that are
  intended to be qualified under Section 401(a) of the code.
               (42) [(36)]  "Plan A" means any plan created pursuant
  to Section 11A of Article 6243a.
               (43) [(37)]  "Plan B" means any plan created pursuant
  to Section 11B of Article 6243a.
               (44) [(38)]  "Police officer" or "fire fighter" means,
  as appropriate, a police officer, fire fighter, fire and rescue
  officer, fire alarm operator, fire inspector, apprentice police
  officer, apprentice fire fighter, or similar employee of either
  department as defined in the classifications of the human resources
  [personnel] department of the city.
               (45) [(39)]  "Primary party," "Group B primary party,"
  or "Group A primary party" means a member[, former member,] or
  pensioner.
               (46) [(40)]  "Qualified actuary" means either:
                     (A)  an individual who is a Fellow of the Society
  of Actuaries, a Fellow of the Conference of Consulting Actuaries
  [in Public Practice], or a member of the American Academy of
  Actuaries; or
                     (B)  a firm that employs one or more persons who
  are Fellows of the Society of Actuaries, Fellows of the Conference
  of Consulting Actuaries [in Public Practice], or members of the
  American Academy of Actuaries and are providing services to the
  pension system.
               (47) [(41)]  "Qualified domestic relations order" has
  the meaning provided by Section 414(p) [414] of the code.
               (48) [(42)]  "Qualified survivor" means a person who is
  eligible to receive death [survivor] benefits after the death of a
  primary party and includes only:
                     (A)  a surviving spouse, if the spouse was
  continuously married to the primary party from [both at] the date
  when the primary party either voluntarily or involuntarily left
  active service as a member through [and at] the date of the primary
  party's death;
                     (B)  all surviving, unmarried[, legitimate, and
  legally adopted] children who are either under 19 years of age or
  have a disability, as determined by the board under Section
  6.06(o-2) of this article, and who were:
                           (i)  born or adopted before the primary
  party [as a member] either voluntarily or involuntarily left active
  service; or
                           (ii) [who were] born after the primary party
  [a member] left active service if the mother was pregnant with the
  child before the primary party [member] left active service; and
                     (C)  a surviving dependent parent of a primary
  party if the primary party is not survived by a spouse or child
  eligible for benefits.
               (49) [(43)]  "Service retirement" means any period
  that a pensioner receives a retirement pension but does not include
  any period of disability retirement.
               (50) [(44)]  "Spouse" means the person to whom [husband
  or wife of] a primary party is legally married [recognized] under
  the laws of this state or any other state.
               (51)  "Traditional asset" includes stocks, bonds, and
  cash [(45) "Total wages and salaries" means all pay received by a
  member of any plan within the pension system from the city,
  excluding any lump-sum payments for unused sick time or unused
  vacation time accrued by any member and payable as the result of the
  member's death, disability, resignation, or any other reason for
  leaving active service].
               (52) [(46)]  "Trustee" means a member of the board.
               (53)  "Two-thirds vote," in reference to a vote of all
  the trustees, means a vote of 8 of the 11 trustees of the board.
         SECTION 1.03.  Sections 2.02(a) and (b), Article 6243a-1,
  Revised Statutes, are amended to read as follows:
         (a)  If the amount of any benefit or contribution is to be
  determined on the basis of actuarial assumptions that are not
  otherwise specifically set forth for that purpose in this article,
  the actuarial assumptions to be used are those earnings and
  mortality assumptions being used on the date of the determination
  by the pension system's qualified actuary and approved by the
  board.
         (b)  The actuarial assumptions being used at any particular
  time shall be attached by the executive director [administrator] as
  an addendum to this article and treated for all purposes as a part
  of any plan created by this article. The executive director shall
  promptly update any addendum to conform to any changed actuarial
  assumptions approved by the board.
         SECTION 1.04.  Part 2, Article 6243a-1, Revised Statutes, is
  amended by adding Sections 2.025 and 2.03 to read as follows:
         Sec. 2.025.  INDEPENDENT ACTUARIAL ANALYSIS AND LEGISLATIVE
  RECOMMENDATIONS. (a) Before July 1, 2024, the State Pension Review
  Board shall select an independent actuary who the board shall hire
  to perform an actuarial analysis of the most recently completed
  actuarial valuation of the pension system. The independent actuary
  shall submit the analysis to the State Pension Review Board and the
  board not later than October 1, 2024. The analysis must include the
  independent actuary's:
               (1)  conclusion regarding whether the pension system
  meets State Pension Review Board pension funding guidelines; and
               (2)  recommendations regarding changes to benefits or
  to member or city contribution rates.
         (b)  Subject to Subsection (d) of this section, not later
  than November 1, 2024, the board shall by rule adopt a plan that:
               (1)  complies with funding and amortization period
  requirements applicable to the pension system under Subchapter C,
  Chapter 802, Government Code; and
               (2)  takes into consideration the independent actuary's
  recommendations under Subsection (a)(2) of this section.
         (b-1)  The board shall provide a copy of the analysis
  prepared under Subsection (a) of this section and a summary of any
  rules adopted by the board under Subsection (b) of this section to
  the State Pension Review Board.
         (c)  Not later than December 1, 2024, the State Pension
  Review Board shall submit a report to the legislature regarding
  actions taken under this section. The report required under this
  section must include a copy of the analysis prepared under
  Subsection (a) of this section and a summary of rules adopted by the
  board under Subsection (b) of this section.
         (d)  Notwithstanding any other provision of this article, a
  rule adopted by the board under Subsection (b) of this section that
  conflicts with a provision of this article remains in effect until:
               (1)  a law that is enacted by the legislature and
  becomes law preempts the rule; or
               (2)  the board amends the rule and the amendment takes
  effect, provided the board may only amend the rule if the pension
  system complies with the funding and amortization period
  requirements applicable to the pension system under Subchapter C,
  Chapter 802, Government Code.
         (e)  This section expires September 1, 2025.
         Sec. 2.03.  REFERENCES TO CERTAIN LAW. A reference to a
  statute made in this article includes a reference to any
  regulation, rule, order, or notice made by a governmental entity
  with the authority under law to adopt the regulation, rule, order,
  or notice, and on which the governmental entity intends persons to
  rely, as appropriate.
         SECTION 1.05.  Section 3.01, Article 6243a-1, Revised
  Statutes, is amended by amending Subsections (a), (b), (d), (e),
  (f), (h), (i), (j), (n), and (o) and adding Subsections (b-1),
  (b-2), (b-3), (b-4), (j-1), (j-2), (j-3), (j-4), (j-5), (j-6),
  (j-7), (j-8), (j-9), (j-10), (o-1), (p), (q), (r), and (s) to read
  as follows:
         (a)  The pension system shall be administered by the board.
  The board shall execute its fiduciary duty to hold and administer
  the assets of the fund for the exclusive benefit of members and
  their beneficiaries under Section 802.203, Government Code,
  Section 67(f), Article XVI, Texas Constitution, and any other
  applicable law, in a manner that ensures the sustainability of the
  pension system for purposes of providing current and future
  benefits to members and their beneficiaries.
         (b)  Subject to Subsections (b-1) and (b-2) of this section,
  the [The] board consists of 11 [seven] trustees who shall be
  selected and shall serve as follows:
               (1)  six trustees appointed by the mayor, in
  consultation with the city council;
               (2)  three trustees elected under rules adopted by the
  board by the members and pensioners of the pension system from a
  slate of nominees, in a number determined under the rules, selected
  and vetted by the nominations committee;
               (3)  subject to Subsection (b-3) of this section, one
  trustee who is a current or former police officer of the city
  nominated and elected by members of the pension system under rules
  adopted by the board; and
               (4)  subject to Subsection (b-3) of this section, one
  trustee who is a current or former fire fighter of the city
  nominated and elected by members of the pension system under rules
  adopted by the board.
         (b-1)  To be appointed or elected a trustee under this
  section, a person:
               (1)  must have demonstrated financial, accounting,
  business, investment, budgeting, real estate, or actuarial
  expertise; and
               (2)  may not be an elected official of the city.
         (b-2)  To be appointed or elected a trustee under Subsection
  (b)(1) or (2) of this section a person may not be an active member or
  pensioner.
         (b-3)  If the board determines that it is not possible to
  nominate or elect a trustee under Subsection (b)(3) or (4) of this
  section who meets the requirements of Subsection (b-1) of this
  section, the board shall notify the nominations committee and the
  nominations committee shall select, vet, and nominate a slate of
  persons, the number of which is determined by board rule, who meet
  the requirements of Subsection (b-1) of this section, and the
  members of the pension system shall elect a trustee from the slate
  of nominees to represent the interests of police officers or fire
  fighters, as appropriate, of the city on the board.  The nomination
  and election of a trustee under this subsection may be made without
  regard to whether the trustee is qualified under Subsection (b)(3)
  or (4), as applicable, of this section.
         (b-4)  A trustee is not required to reside in a particular
  city or county of this state. [The city council shall name from
  among its members three council members who shall serve as trustees
  of the board. The council member trustees shall be named as soon as
  possible after the first Monday in May of each odd-numbered year and
  shall serve for the term of office to which they were elected as
  council members. If there is a vacancy in any of the council member
  trustees' seats on the board, the city council shall name another
  council member to serve out the remainder of the unexpired term.
               [(2)     The police and fire department members of the
  pension plans within the pension system shall separately, by
  department and not by plan, elect from among their respective
  memberships two active police officer and two active fire fighter
  members. On their election, each of the trustees under this
  subdivision shall execute a written affirmation of the person's
  undertaking to faithfully perform duties to the pension system.
  The police and fire department trustees shall serve terms of four
  years each, the terms being staggered so that one term, but not both
  from the same department, shall expire on June 1 of each
  odd-numbered year. If a vacancy occurs among the police and fire
  department trustees, the vacancy shall be filled in accordance with
  the provisions of Subsection (d) of this section. The police and
  fire department trustees will continue to serve beyond the
  expiration of their terms, if their successors have not been
  elected and affirmed in writing their undertaking to faithfully
  perform their duties to the pension system, until their successors
  are elected and have affirmed in writing their undertaking to
  faithfully perform their duties to the pension system.]
         (d)  A [If a] vacancy on the board in a trustee position under
  Subsection (b)(1) or (2) of this section shall be filled in the same
  manner as the original appointment, or election. The board by rule
  shall determine the manner by which a vacancy in a trustee position
  under Subsection (b)(3) or (4) of this section is filled [occurs
  among the police or fire department alternate trustees, for reasons
  other than the failure to elect a successor alternate trustee or the
  occurrence of a vacancy among the regular trustees of either
  department, the board shall appoint a new alternate trustee
  representing the department from which the vacancy occurs to serve
  as the alternate trustee for the remainder of the alternate
  trustee's term]. [A candidate is not eligible for election to an
  alternate trustee position and to a regular trustee position during
  the same election.]
         (e)  The mayor shall determine whether all trustees
  appointed under Subsection (b)(1) of this section hold office for
  staggered two-year terms or staggered three-year terms. The
  nominations committee shall determine whether all trustees elected
  under Subsection (b)(2), (3), or (4) of this section hold office for
  staggered two-year terms or staggered three-year terms. A trustee
  appointed or elected, as applicable, under Subsection (b)(1) or (2)
  of this section may not serve for more than six consecutive years on
  the board [If a vacancy occurs among the police or fire department
  regular trustees, the alternate trustee representing the
  department from which the vacancy occurs shall serve as the regular
  trustee for the remainder of the unexpired regular trustee's term].
  [Thereafter, the board shall appoint a new alternate trustee from
  the same department to serve for a period ending on the earlier of
  the expiration of the regular trustee's term or the original
  alternate trustee's term. If the original alternate trustee's term
  has not expired after serving in place of the regular trustee, then
  that person shall serve out the remainder of the unexpired term.
  After a new regular trustee has been elected, the original
  alternate trustee shall return to serve as an alternate trustee
  until the regular trustee's term has expired. However, if the
  original alternate trustee, while an alternate trustee, is elected
  to a full term as a regular trustee before the expiration of the
  term as an alternate trustee, the term of the new alternate trustee
  extends until the expiration of the original alternate trustee's
  term.]
         (f)  The election of the trustees under Subsection (b)(2),
  (3), or (4) of this section, including an election under Subsection
  (b-3) of this section to fill a trustee position under Subsection
  (b)(3) or (4) of this section, [representing the police and fire
  departments] shall be held under the supervision of the board, and
  the board shall adopt such rules [and regulations] governing the
  election procedure as it considers appropriate, as long as the
  rules [and regulations] are consistent with generally accepted
  principles of secret ballot and majority rule. The rules [and
  regulations] adopted by the board shall be recorded in the minutes
  of the board and made available to the members of any pension plan
  within the pension system.
         (h)  The executive director [administrator], or in the
  executive director's [administrator's] absence a member of the
  administrative staff designated by the board, shall serve as the
  secretary of the board.
         (i)  The board shall serve without separate compensation
  from the fund, but a trustee is entitled to reimbursement for travel
  expenses and, if applicable, [with entitlement] to any appropriate
  compensation from the city as if the trustee [board members] were
  performing the trustee's [their] regular functions for the police
  or fire department or for the city. The board shall meet not less
  than once each month and may meet at any time on the call of its
  chairman.
         (j)  The board has full power to make rules [and regulations]
  pertaining to the conduct of its meetings and to the operation of
  the pension system as long as its rules are not, subject to
  Subsections (j-1) and (j-2) of this section, inconsistent with the
  terms of this article, any pension plan within the pension system,
  or the laws of this state or the United States to the extent
  applicable. A board meeting may be held by telephone conference
  call or by videoconference call in accordance with Sections 551.125
  and 551.127, Government Code, except that Section 551.125(b),
  Government Code, does not apply.
         (j-1)  Subject to Subsection (o)(2) of this section, the
  board may adopt a rule that conflicts with this article:
               (1)  to ensure compliance with the code, including
  Section 415 of the code, and other applicable federal law;
               (2)  subject to Subsections (j-5) through (j-8) of this
  section, to amortize the unfunded actuarial accrued liability of
  the pension system within a period that does not exceed 35 years, if
  the board determines the rule is appropriate based on the
  evaluations required under Subsection (j-5) of this section; or
               (3)  subject to Subsections (j-6) and (j-7) of this
  section and notwithstanding any other law, to increase the benefits
  provided under this article in any manner the board determines
  appropriate if the increase will not cause the amortization period
  of the unfunded actuarial accrued liability of the pension system
  to exceed 25 years, after taking into account the impact of the
  increase.
         (j-2)  Except as provided by Subsection (j-1) of this section
  or Section 4.02(b) of this article, a provision of any plan provided
  by the pension system may only be amended if approved by the board.
  An amendment described by this subsection:
               (1)  may not cause the amortization period of the
  unfunded actuarial accrued liability of the pension system to
  exceed 35 years, after taking into account the impact of the
  amendment, as determined by the board and reviewed by the State
  Pension Review Board; and
               (2)  is not required to be ratified by the legislature.
         (j-3)  The board may correct any defect, supply any omission,
  and reconcile any inconsistency that may appear in this article in a
  manner and to the extent that the board believes would:
               (1)  be expedient for the administration of the pension
  system;
               (2)  be for the greatest benefit of all members,
  pensioners, and qualified survivors; and
               (3)  not adversely affect the benefits of a member,
  pensioner, or qualified survivor.
         (j-4)  The board has full discretion and authority to
  construe and interpret the combined pension plan and to do all acts
  necessary to carry out the purpose of the combined pension plan. A
  decision of the board is final and binding on all affected parties.
         (j-5)  Not later than January 1, 2018, the board shall
  conduct an evaluation of:
               (1)  how benefits are computed under this article to
  identify potential means of abusing the computation of benefits to
  inflate pension benefits received by pensioners; and
               (2)  the impact, including the impact on the combined
  pension plan, of establishing one or more alternative benefit
  plans, including a defined contribution plan or a hybrid retirement
  plan that combines elements of both a defined benefit plan and a
  defined contribution plan, for newly hired employees of the city
  and for members who voluntarily elect to transfer to an alternative
  benefit plan.
         (j-6)  The board may not adopt a rule under Subsection
  (j-1)(2) or (3) of this section unless the rule has first been
  reviewed by the State Pension Review Board and the State Pension
  Review Board finds that implementation of a rule under:
               (1)  Subsection (j-1)(2) of this section complies with
  the amortization period prescribed by that subdivision and
  Subsection (j-8) of this section; or
               (2)  Subsection (j-1)(3) of this section complies with
  the amortization period prescribed by that subdivision.
         (j-7)  The board shall provide the State Pension Review Board
  with a copy of a proposed rule for purposes of Subsection (j-6) of
  this section at least 90 days before the date the board intends to
  implement the rule.
         (j-8)  The board may not adopt a rule under Subsection
  (j-1)(2) of this section based on an evaluation under Subsection
  (j-5)(2) of this section if the board determines implementation of
  the rule would cause the amortization period of the unfunded
  actuarial accrued liability of the combined pension plan or any
  plan established under this article by the pension system to exceed
  35 years, after taking into account implementation of the rule.
         (j-9)  At least twice each year, the board shall have a
  meeting to receive public input regarding the pension system and to
  inform the public about the health and performance of the pension
  system. The State Pension Review Board is entitled to all documents
  and other information provided to the public or that are the basis
  for information provided to the public, as determined by the State
  Pension Review Board, for purposes of this subsection and shall
  independently review the information to ensure its validity.
         (j-10)  An employee or other agent acting on behalf of the
  pension system or the city must certify to the State Pension Review
  Board that any information provided by the pension system or city,
  as appropriate, under this article or other law is accurate and
  based on realistic assumptions.
         (n)  Six [Four] trustees of the board constitute a quorum at
  any [called] meeting[, except that a trustee from the police
  department and a trustee from the fire department must be present to
  conduct business].
         (o)  No action may be taken by the board except at a meeting.
  Except as otherwise specifically provided by this article or other
  law:
               (1)  [, and] no action shall be taken during a board
  meeting without the approval of a majority of the trustees of the
  board; and
               (2)  no action otherwise authorized by this article or
  other law may be taken that establishes an alternative benefit
  plan, reduces the city contribution rate, increases the member
  contribution rate, or reduces benefits, including accrued
  benefits, without the approval of at least a two-thirds vote of all
  the trustees of the board [present].
         (o-1)  Only actions of the board taken or approved of during
  a meeting are binding on the board, and no other written or oral
  statement or representation made by any person is binding on the
  board or the pension system.
         (p)  The board may file suit on behalf of the pension system
  in a court of competent jurisdiction regardless of the court's
  location. The board has sole authority to litigate matters on
  behalf of the pension system. Notwithstanding Chapter 15, Civil
  Practice and Remedies Code, or any other law, an action against the
  pension system or the board shall be brought in a court of competent
  jurisdiction located in the city or county in which the pension
  system is located.
         (q)  The board may purchase from one or more insurers one or
  more insurance policies that provide for the reimbursement of a
  trustee or employee of the pension system for liability imposed as
  damages caused by, and for costs and expenses incurred by the
  individual in defense of, an alleged act, error, or omission
  committed by the individual in the individual's capacity as a
  fiduciary or employee of the pension system. The board may not
  purchase an insurance policy that provides for the reimbursement of
  a trustee or employee of the pension system due to the trustee's or
  employee's dishonesty, fraudulent breach of trust, lack of good
  faith, intentional fraud or deception, or intentional failure to
  act prudently.
         (r)  The board shall adopt a code or codes of ethics
  consistent with Section 825.212, Government Code. In adopting or
  amending a code or codes of ethics, the board may consider comments
  on the policy from the city attorney of the city. The board shall:
               (1)  review the code or codes of ethics on an annual
  basis and amend the code or codes as the board considers necessary;
               (2)  file a copy of the code or codes of ethics adopted
  or amended in accordance with this subsection with the State
  Pension Review Board; and
               (3)  provide a copy of the code or codes of ethics
  adopted or amended in accordance with this subsection to the city
  attorney.
         (s)  The board shall develop an Internet website designed to
  give active members and pensioners access to the information
  concerning the pension system and the individual's participation in
  the pension system required by Section 802.106, Government Code, as
  well as information concerning the financial health of the pension
  system.
         SECTION 1.06.  Part 3, Article 6243a-1, Revised Statutes, is
  amended by adding Sections 3.011, 3.012, and 3.013 to read as
  follows:
         Sec. 3.011.  NOMINATIONS COMMITTEE. (a) Subject to
  Subsection (b) of this section, the nominations committee consists
  of:
               (1)  the executive director, who is a nonvoting member;
  and
               (2)  the president, chair, or other executive head of
  the following organizations or their successor organizations, or
  that person's designee:
                     (A)  the Dallas Black Firefighters Association;
                     (B)  the Black Police Association of Greater
  Dallas;
                     (C)  the National Latino Law Enforcement
  Organization; 
                     (D)  the Dallas Fraternal Order Police Lodge 588;
                     (E)  the Dallas Police Association; 
                     (F)  the Dallas Fire Fighters Association,
  International Association of Fire Fighters Local No. 58;
                     (G)  the Dallas Hispanic Firefighters
  Association, Inc.;
                     (H)  the Dallas Police Retired Officers
  Association;
                     (I)  the Dallas Retired Firefighters Association;
                     (J)  the Retired Black Firefighters Association
  of Dallas; and
                     (K)  the Dallas Hispanic Retired Fire Fighters
  Association.
         (b)  If an organization described by Subsection (a)(2) of
  this section elects not to participate on the nominations
  committee, is prohibited from participating on the nominations
  committee under Subsection (g) of this section, or ceases to exist,
  the nominations committee members appointed under that subsection
  consist only of representatives of the remaining organizations, if
  any.
         (c)  The executive director shall serve as presiding officer
  of the nominations committee.
         (d)  The nominations committee shall meet at the call of the
  presiding officer.
         (e)  The nominations committee shall nominate trustees to
  the board in accordance with Sections 3.01(b)(2) and (b-3) of this
  article.
         (f)  A person serving on the nominations committee under
  Subsection (a)(2) of this section serves without compensation and
  may not be reimbursed for travel or other expenses incurred while
  conducting the business of the nominations committee. The
  executive director may not receive additional compensation for
  service on the nominations committee.
         (g)  An organization described by Subsection (a)(2) of this
  section may not participate on the nominations committee unless the
  organization is in good standing with the secretary of state, if
  applicable.
         (h)  Chapter 2110, Government Code, does not apply to the
  nominations committee.
         (i)  The nominations committee may establish policies and
  procedures governing its operations.
         Sec. 3.012.  REMOVAL OF TRUSTEES. (a) In accordance with
  procedures adopted by board rule, a trustee:
               (1)  appointed under Section 3.01(b)(1) of this article
  may be removed by the mayor for cause; and
               (2)  elected under Section 3.01(b)(2), (3), or (4) of
  this article may be removed by the nominations committee for cause.
         (b)  It is a cause for removal of a trustee from the board
  that the trustee:
               (1)  does not have at the time of taking office the
  qualifications required by Section 3.01(b) or (b-1)(1) of this
  article, subject to Subsection (b-3) of that section;
               (2)  does not maintain during service on the board the
  qualifications required by Section 3.01(b) or (b-1)(1) of this
  article, subject to Subsection (b-3) of that section;
               (3)  is ineligible for membership under Section
  3.01(b-1)(2) or (b-2) of this article; or
               (4)  is absent from more than 40 percent of the meetings
  that the trustee is eligible to attend during a calendar year
  without an excuse approved by a majority vote of the board.
         (c)  The validity of an action of the board is not affected by
  the fact that it is taken when a cause for removal of a trustee
  exists.
         (d)  If the executive director has knowledge that a potential
  cause for removal exists, the executive director shall notify the
  chairman of the board of the potential cause. The chairman shall
  then notify the mayor or nominations committee, as appropriate,
  that a potential cause for removal exists. If the potential cause
  for removal involves the chairman, the executive director shall
  notify the vice chairman or next highest ranking officer of the
  board, who shall then notify the mayor or nominations committee, as
  appropriate, that a potential cause for removal exists.
         Sec. 3.013.  TRUSTEE TRAINING. (a) A person who is
  appointed or elected to the board and qualifies for office as a
  trustee shall complete a training program that complies with this
  section.
         (b)  The training program must provide the person with
  information regarding:
               (1)  the law governing the pension system's operations;
               (2)  the programs, functions, rules, and budget of the
  pension system;
               (3)  the scope of and limitations on the rulemaking
  authority of the board;
               (4)  the results of the most recent formal audit of the
  pension system;
               (5)  the requirements of:
                     (A)  laws relating to open meetings, public
  information, administrative procedure, and disclosing conflicts of
  interest; and
                     (B)  other laws applicable to a trustee in
  performing the trustee's duties, including the board's fiduciary
  duties described under Section 3.01(a) of this article;
               (6)  the code or codes of ethics adopted under Section
  3.01(r) of this article and any applicable ethics policies adopted
  by the Texas Ethics Commission; and
               (7)  financial training regarding the risks of
  investing in alternative investments.
         (c)  The executive director shall create a training manual
  that includes the information required by Subsection (b) of this
  section. The executive director shall distribute a copy of the
  training manual annually to each trustee. On receipt of the
  training manual, each trustee shall sign and submit to the
  executive director a statement acknowledging receipt of the
  training manual.
         SECTION 1.07.  Section 3.02, Article 6243a-1, Revised
  Statutes, is amended to read as follows:
         Sec. 3.02.  PROFESSIONAL CONSULTANTS. In addition to the
  authority of the board to employ the services of certain
  consultants set forth in this article, the board has the authority
  to employ the services of any professional consultant recommended
  by the executive director, including investment advisors and
  investment managers, whenever the services of the consultants
  [consultant] are considered necessary or desirable and in the best
  interests of the pension system, as determined by the board in
  consultation with the executive director. A professional
  consultant shall receive such compensation as may be determined by
  the board in accordance with Section 4.01 of this article.
         SECTION 1.08.  Part 3, Article 6243a-1, Revised Statutes, is
  amended by adding Section 3.025 to read as follows:
         Sec. 3.025.  CHIEF INVESTMENT OFFICER. The executive
  director may hire a chief investment officer, subject to
  confirmation by the board, to assist the pension system regarding
  the investment of assets of the fund. Compensation for a chief
  investment officer hired under this section shall be made in
  accordance with Section 4.01 of this article.
         SECTION 1.09.  Section 3.03, Article 6243a-1, Revised
  Statutes, is amended by amending Subsections (b) and (c) and adding
  Subsection (b-1) to read as follows:
         (b)  Subject to Subsection (b-1) of this section, the [The]
  city attorney or an assistant city attorney may [shall] attend
  board [all] meetings [of the board] and may advise the board on any
  matter on which the pension system [board] requests a legal opinion
  from the city attorney.
         (b-1)  The city attorney or an assistant city attorney is not
  required to provide an opinion under Subsection (b) of this section
  unless the opinion is requested by the city council on behalf of the
  pension system. The city attorney or assistant city attorney may
  decline to provide the opinion if the subject matter of the request
  is too dependent on disputed facts to permit a generalized opinion,
  as determined by the city attorney or assistant city attorney.
         (c)  The board may retain other attorneys to serve as legal
  advisors to [represent] the board [or to give advice]. The
  executive director may hire a chief legal officer, subject to
  confirmation by the board, or other attorneys if necessary to carry
  out the business of the pension system. Compensation for a chief
  legal officer or other attorneys hired under this subsection shall
  be made in accordance with Section 4.01 of this article.
         SECTION 1.10.  Section 3.04, Article 6243a-1, Revised
  Statutes, is amended to read as follows:
         Sec. 3.04.  APPOINTMENT OF EXECUTIVE DIRECTOR
  [ADMINISTRATOR]. (a) The board has the authority to appoint an
  executive director [administrator] to assist [carry out the
  business of] the board with administering the pension system and
  ensure that records are kept [to keep a record] of the proceedings
  of the board. Subject to Subsection (a-1) of this section, a person
  appointed executive director under this section:
               (1)  must have, to the extent possible, relevant
  experience in managing a similarly situated business entity; and
               (2)  may not be a current or former trustee [The
  administrator, in carrying out the business of the board within the
  scope of the administrator's responsibility, may not be considered
  a fiduciary with respect to the pension system].
         (a-1)  During any period in which the most recent actuarial
  valuation of the pension system indicates that the period needed to
  amortize the unfunded actuarial accrued liability of the pension
  system exceeds 35 years, the board shall, to the extent lapsed
  investments are a significant portion of the pension system's
  assets, ensure that the executive director appointed under
  Subsection (a) of this section has, or hires staff that has,
  appropriate experience in managing a business entity with lapsed
  investments in a manner that resulted in the improved liquidity or
  profitability of the business entity.
         (b)  Subject to Subsections (b-1) and (b-3) of this section 
  [the approval of the board], the executive director [administrator]
  may select any number of persons the executive director determines
  appropriate to assist the executive director in carrying out the
  executive director's duties under this section.  Subject to Section
  4.01 of this article, the titles and salaries of persons selected to
  assist the executive director shall be determined by the executive
  director.
         (b-1)  The executive director may not select a person to
  assist the executive director who is an active, former, or retired
  police officer or fire fighter of the city [administrator].
         (b-2)  The executive director shall establish the
  organizational structure of pension system employees to optimize
  administration of the pension system.
         (b-3)  A former or retired employee of the city may not
  before the second anniversary of the first day of the month
  following the date the person terminated employment with the city
  serve the pension system in any capacity other than as a trustee.
  Except as specifically provided by this article, including Section
  3.01(b)(3) or (4) of this article, or other law, an employee of the
  city may not serve the pension system in any capacity.
         (c)  The executive director [Both the administrator] and
  those persons selected to assist the executive director
  [administrator] may be considered employees of the city. Unless
  otherwise delegated to the executive director [administrator], the
  board shall have the ultimate authority to retain, discipline, or
  terminate the engagement of the executive director.
         (d)  If acting in the executive director's own discretion,
  the executive director owes a fiduciary duty to the pension system
  and shall ensure the sustainability of the pension system for the
  purpose of providing current and future benefits to members of the
  pension system and their beneficiaries [any persons selected under
  this subsection].  If the executive director is acting at the
  direction of the board and not exercising the executive director's
  own discretion, the executive director does not owe a fiduciary
  duty under this subsection.
         SECTION 1.11.  Sections 4.01(a), (c), and (d), Article
  6243a-1, Revised Statutes, are amended to read as follows:
         (a)  The board shall pay for all costs of administration out
  of the income from the fund when in the judgment of the board the
  costs are necessary, including the cost of:
               (1)  salaries and benefits for the executive director
  [of the administrator, assistant administrator,] and
  administrative staff;
               (2) [,]  office expenses;
               (3)  expenses associated with securing[,] adequate
  office space and associated utilities;
               (4)  compensation for [, and] professional
  consultants, professional investment managers, or other persons
  providing professional services; and
               (5)  any other expenses approved by the board[, out of
  income from the fund when it is actuarially determined that the
  payments will not have an adverse effect on the payment of benefits
  from any of the plans within the pension system and when in the
  judgment of the board the costs are necessary]. [The city shall
  provide for costs of administration if the board determines that
  payment of the costs by the fund will have an adverse effect on the
  payment of benefits from any plan within the pension system.]
         (c)  No expenditure for the costs of administration,
  including the [or] payment of any fee for professional consultants,
  professional investment management services, or any other person
  providing professional services, may be made from the fund without
  the approval of the board.
         (d)  After the board has developed an annual budget for the
  pension system, the budget shall be presented to the city manager
  [city's budget office] for comment. The city manager [city's budget
  office] may request the board to reconsider the appropriation for
  any expenditure at a board meeting, but the board shall make the
  final determination concerning any appropriation.
         SECTION 1.12.  Sections 4.02(b), (d), and (e), Article
  6243a-1, Revised Statutes, are amended to read as follows:
         (b)  Funds contributed by the city as its share of the amount
  required to finance the payment of benefits under the pension
  system may be used for no other purpose. The city is not
  responsible for the payment of any administrative or professional
  service fees of the pension system.  Any change to the [The]
  contributions required to be made to the pension system by the city
  [shall be annually appropriated by the city council and
  periodically paid on the basis of a percentage of the total wages
  and salaries of the members of the police and fire departments who
  are members of each of the plans within the pension system. The
  amount of this percentage and any change in it] may [be determined]
  only be made:
               (1)  by the legislature; [or]
               (2)  by a majority vote of the voters of the city; or
               (3)  in accordance with a written agreement entered
  into between the pension system, by at least a two-thirds vote of
  all trustees of the board, and the city, provided that a change made
  in accordance with this subdivision may not increase the period
  required to amortize the unfunded actuarial accrued liability of
  the fund.
         (d)  Subject to Section 4.025 of this article, the city shall
  make contributions to the pension system biweekly in an amount
  equal to the sum of:
               (1)  the greater of:
                     (A)  34.5 percent of the aggregate computation pay
  paid to members during the period for which the contribution is
  made; or
                     (B)  the applicable amount set forth below:
                           (i)  $5,173,000 for the biweekly pay periods
  beginning with the first biweekly pay period that begins after
  September 1, 2017, and ends on the last day of the first biweekly
  pay period that ends after December 31, 2017;
                           (ii)  $5,344,000 for the 26 biweekly pay
  periods immediately following the last biweekly pay period
  described by Subparagraph (i) of this paragraph;
                           (iii)  $5,571,000 for the 26 biweekly pay
  periods immediately following the last biweekly pay period
  described by Subparagraph (ii) of this paragraph;
                           (iv)  $5,724,000 for the 26 biweekly pay
  periods immediately following the last biweekly pay period
  described by Subparagraph (iii) of this paragraph;
                           (v)  $5,882,000 for the 26 biweekly pay
  periods immediately following the last biweekly pay period
  described by Subparagraph (iv) of this paragraph;
                           (vi)  $6,043,000 for the 26 biweekly pay
  periods immediately following the last biweekly pay period
  described by Subparagraph (v) of this paragraph;
                           (vii)  $5,812,000 for the 26 biweekly pay
  periods immediately following the last biweekly pay period
  described by Subparagraph (vi) of this paragraph; 
                           (viii)  $6,024,000 for the 26 biweekly pay
  periods immediately following the last biweekly pay period
  described by Subparagraph (vii) of this paragraph through the
  biweekly pay period that ends after December 31, 2024; and
                           (ix)  $0 for each subsequent biweekly pay
  period beginning with the first biweekly pay period following the
  last biweekly pay period described by Subparagraph (viii) of this
  paragraph; and
               (2)  except as provided by Subsection (e) of this
  section, an amount equal to 1/26th of $13 million. [The percentage
  of required contributions from the city shall be in accordance with
  the following schedule and any increase or decrease in city
  contributions shall occur automatically on any increases or
  decreases in the members' contribution percentage:
 
[City Contributions Member Contributions
 
28-1/2% 9%
 
27-1/2% 8-1/2%
 
26% 8%
 
24-1/2% 7-1/2%
 
23% 7%
 
21-1/2% 6-1/2%]
         (e)  The city is required to pay the contribution amount
  described by Subsection (d)(2) of this section only through the
  last biweekly pay period that ends after December 31, 2024 [may
  elect to contribute more than that required in the schedule
  provided by Subsection (d) of this section, except that the city's
  contribution percentage may not exceed 28-1/2 percent unless
  approved as provided by Subsection (b) of this section. Further, in
  no event may the city's contribution be less than 21-1/2 percent
  unless approved as provided by Subsection (b)].
         SECTION 1.13.  Part 4, Article 6243a-1, Revised Statutes, is
  amended by adding Section 4.025 to read as follows:
         Sec. 4.025.  CITY OR MEMBER CONTRIBUTIONS IF NO UNFUNDED
  ACTUARIAL LIABILITIES. Notwithstanding Section 4.02 or 4.03 of
  this article, if the pension system has no unfunded actuarial
  liability according to the most recent actuarial valuation, the
  annual normal costs must be equally divided between the city and the
  members unless equally dividing the costs would increase the member
  contribution rates beyond the rates prescribed by Section 4.03 of
  this article. The board shall adjust the city contribution rates
  under Section 4.02 of this article and the member contribution
  rates under Section 4.03 of this article accordingly, and certify
  the adjusted rates.  After the completion of a subsequent actuarial
  valuation showing unfunded actuarial liabilities, the contribution
  rates applicable under Sections 4.02 and 4.03 of this article
  apply.
         SECTION 1.14.  Section 4.03, Article 6243a-1, Revised
  Statutes, is amended by amending Subsections (a), (b), (c), (d),
  and (g) and adding Subsections (a-1), (d-1), (d-2), and (i) to read
  as follows:
         (a)  Subject to Subsection (a-1) of this section and except
  as provided by Section 4.025 of this article, each [Each] Group A
  member of the combined pension plan shall have 13.5 [6.5] percent of
  base pay deducted from the member's wages on a biweekly basis [each
  month], and the contributions shall be promptly remitted to the
  fund by the city.
         (a-1)  If a Group A member is assigned, for any period, to a
  job-sharing program or any similar work schedule that is considered
  by the member's department to be less than a full-time work
  schedule, the member's contributions are determined by multiplying
  the applicable contribution rate by a fraction, the numerator of
  which is the number of hours the member actually worked during the
  period and the denominator of which is the number of hours the
  member would have worked during the period if the member had been
  working a full-time work schedule.
         (b)  Each member shall [continue to] contribute to the fund
  under the applicable terms of this article [section] until the
  member leaves active service with either department. If a member
  leaves active service with a department, [or until the beginning of
  the member's 33rd year of pension service, at which time] the member
  shall cease making contributions.
         (c)  Each Group B member shall authorize the city to deduct
  from the member's salary a percentage of the member's computation
  pay. The authorization shall be in writing and filed with the
  executive director [administrator].
         (d)  Subject to Subsection (d-1) of this section and except
  as provided by Section 4.025 of this article, for pay periods
  starting on or after September 1, 2017, each [Each] Group B member
  shall have 13.5 [8.5] percent of the member's computation pay
  deducted from the member's wages on a biweekly basis [each month,]
  and the contributions shall be promptly remitted to the fund by the
  city.
         (d-1)  If a Group B member is assigned, for any period, to a
  job-sharing program or any similar work schedule that is considered
  by the member's department to be less than a full-time work
  schedule, the member's contributions are determined by multiplying
  the applicable contribution rate by a fraction, the numerator of
  which is the number of hours the member actually worked during the
  period and the denominator of which is the number of hours the
  member would have worked during the period if the member had been
  working a full-time work schedule.
         (d-2)  For purposes of Subsection (d) of this section,
  "computation pay" includes computation pay paid to a Group B member
  during any period the member is receiving workers' compensation.
         (g)  The percentage of base pay contributed by Group A
  members or computation pay contributed by Group B members may not be
  altered except by an adjustment under Section 4.025 [amendment
  pursuant to the terms of Section 4.02] of this article.
         (i)  Member contributions under this article or any payments
  a member is entitled to make under this article to receive
  additional pension service may be picked up by the city under the
  terms of an appropriate resolution of the city council.
         SECTION 1.15.  Section 4.04, Article 6243a-1, Revised
  Statutes, is amended by amending Subsections (a), (c), (d), (e),
  (f), (g), (h), (j), and (k) and adding Subsections (f-1) and (h-1)
  to read as follows:
         (a)  Except as provided by Subsection (d) or (e) of this
  section, a [A] Group B member who, either voluntarily or
  involuntarily, leaves active service is entitled to a refund from
  the fund of the total amount of the member's Plan B and Group B
  contributions, without interest, that were paid beginning with the
  effective date of the member's Group B membership or membership in
  Plan B. A refund under this subsection results in a total
  cancellation of pension service credit and the member and any
  person who would otherwise take by, through, or under the member is
  not entitled to any benefits from the pension system [an
  appropriate reduction of pension service].
         (c)  A [former] Group B member who desires [desiring] a
  refund of the Plan B or Group B contributions under Subsection (a)
  of this section [the person made to the fund] must make written
  application for the refund with the executive director
  [administrator]. In no case may any refund be made to a [any
  former] Group B member before the expiration of 30 days after the
  date the person leaves active service.
         (d)  Subject to Subsection (k) of this section, if a Group B
  member with less than five years of pension service either
  voluntarily or involuntarily leaves active service and fails to
  make written application for a refund of contributions within three
  years after the date of the notice described by Subsection (j) of
  this section [is] made by the board, the person forfeits the right
  to withdraw any portion of the contribution, and the total amount of
  Plan B and Group B contributions the person made will remain in the
  fund. If the Group B member described by this subsection dies after
  leaving active service, the [person's heirs or, if there are no
  heirs, the] deceased member's designee [estate] may apply for the
  refund of the person's contributions, resulting in an appropriate
  loss of pension service if the application is filed with the
  executive director [administrator] within three years after the
  date of the notice described by Subsection (j) of this section [is]
  made by the board. Subject to Subsection (k) of this section, if a
  Group B member's designee [heirs or estate] fails to apply for a
  refund of the Group B member's contributions within the three-year
  period described by this subsection, the designee forfeits [heirs
  and the estate forfeit] any right to the contributions, and the
  total amount of the Plan B and Group B contributions made by the
  Group B member will remain in the fund.
         (e)  Subject to Subsection (k) of this section, if a Group B
  member with five or more years of pension service either
  voluntarily or involuntarily leaves active service and fails to
  make written application for a refund of the person's Plan B and
  Group B contributions within three years after the date of the
  notice described by Subsection (j) of this section [is] made by the
  board, the person forfeits the right to withdraw any portion of the
  contributions, and the total amount of the contributions will
  remain in the fund. A Group B member described by this subsection
  may, however, apply for a Group B retirement pension [benefits]
  under Section 6.02 of this article or, if the Group B member dies
  before the member is eligible to apply for a Group B retirement
  pension, the member's qualified survivors [benefits, the person's
  heirs or, if there are no heirs, the deceased member's estate] may
  apply for Group B death benefits under Sections 6.06, 6.061, 6.062,
  and 6.063 of this article. If the Group B member dies before the
  member is eligible to apply for a Group B retirement pension and the
  member has no qualified survivors, the Group B member's designee
  [in accordance with the provisions of this article, or the heirs or
  the estate] may apply for a refund of the Group B member's Plan B and
  Group B contributions, resulting in a total cancellation [an
  appropriate loss] of pension service. Subject to Subsection (k) of
  this section, if a Group B member's designee [heirs or estate] fails
  to apply for a refund of the Group B and Plan B member's
  contributions within the three-year period described by this
  subsection, the designee forfeits [heirs and the estate forfeit]
  any right to the contributions, and the total amount of the Plan B
  and Group B contributions made by the Group B member will remain in
  the fund.
         (f)  Subject to Subsections (g) and (h) of this section, [If]
  a Group B member, other than a Group B member who elects or has
  elected to receive a Group A benefit or a benefit determined under
  the old plan or Plan A, who [with five or more years of pension
  service] either voluntarily or involuntarily leaves active service
  with five or more years of pension service [, the person] is
  entitled to:
               (1)  subject to Subsection (f-1) of this section, have
  the total amount of the person's Plan B and Group B contributions to
  the fund refunded in accordance with Subsection (a) of this
  section, which results in a loss of all of the person's accrued
  pension service; or
               (2)  if the Group B member first entered active service
  before January 1, 1999, elect to take a refund of less than the
  total amount of the person's Plan B and Group B contributions while
  leaving a sufficient amount to retain pension service amounting to
  five or more years.
         (f-1)  A Group B member who elects to receive a refund under
  Subsection (f)(1) of this section and any person who would
  otherwise take by, through, or under the member is not entitled to
  any benefits from the pension system.
         (g)  If a Group B member elects a refund of a portion of the
  person's contributions under Subsection (f)(2) of this section, the
  amount of the refund shall equal the total amount of the person's
  Plan B and Group B annual contributions, without interest, for each
  full year of pension service canceled [cancelled], computed based
  on the earliest contributions made.
         (h)  A [former] Group B member who first entered active
  service on or after January 1, 1999, is entitled to have the total
  amount of the person's Group B contributions refunded under
  Subsection (a) of this section in accordance with Subsection (f)(1)
  of this section, but may not receive a refund of less than the total
  amount in accordance with Subsection (f)(2) of this section.
         (h-1)  A Group B member who leaves active service and later
  returns to active service is permitted to repay to the fund any
  previously withdrawn employee contributions and receive pension
  service in accordance with Section 5.07(d) of this article as a
  Group B member to the extent that [if,] before again leaving active
  service, the Group B member repays [completely] to the fund the
  previously withdrawn contributions with interest, calculated at
  the interest rate from time to time used in the pension system's
  actuarial rate of return assumptions, compounded annually, on the
  previously withdrawn contributions [for the period from the date
  the contributions were withdrawn until the date the principal and
  accrued interest are repaid in full].
         (j)  On the 58th [50th] anniversary of the birth of a Group B
  member described by Subsection (d) or (e) of this section, or on the
  board's receipt of notice of the death of the Group B member, the
  board shall, by registered or certified mail, return receipt
  requested, attempt to notify the Group B member or designee [the
  member's heirs or estate], as applicable, of the status of the
  person's [their] entitlement to a refund of contributions from the
  fund.
         (k)  A Group B member or designee described by Subsection (d)
  or (e) of this section [or the heirs or estate of the Group B member]
  shall have the person's [their] right, title, interest, or claim to
  a refund of the Group B member's contributions reinstated only on
  the board's grant of their written request for a reinstatement and
  refund. The board's decision shall be based on a uniform and
  nondiscriminatory basis [policy that it shall, from time to time,
  adopt].
         SECTION 1.16.  Section 4.06(c), Article 6243a-1, Revised
  Statutes, is amended to read as follows:
         (c)  The authority of the board to make a custody account or
  master trust agreement is supplementary to its authority to make an
  investment management contract. Allocation of assets to a custody
  account or master trust shall be coordinated by the executive
  director [administrator], as authorized by the board, and the bank
  designated as custodian or master trustee for the assets.
         SECTION 1.17.  Section 4.07, Article 6243a-1, Revised
  Statutes, is amended by amending Subsections (a), (d), and (g) and
  adding Subsection (h) to read as follows:
         (a)  Subject to Section 4.071 of this article, if [If] the
  board determines that there is in the fund a surplus exceeding a
  reasonably safe amount to take care of current demands on the
  pension system, the board may invest or direct the investment of the
  surplus for the sole benefit of the pension system.
         (d)  The board also has the authority to contract for
  professional investment management services. Any contract that the
  board makes with an investment manager shall set forth the board's
  investment policies and guidelines [of the board for the use of
  standard rating services and shall include specific criteria for
  determining the quality of investments]. A professional investment
  management service shall receive such compensation as may be
  determined by the board in accordance with Section 4.01 of this
  article.
         (g)  A [No investment manager, other than a] bank or trust
  company that has custody and trustee powers and a contract with the
  board to provide assistance in making investments[,] shall be the
  custodian or master trustee of any of the securities or other assets
  of the fund. Pursuant to Section 4.06 of this article, the board
  may designate a bank to serve as custodian or master trustee, or
  subcustodian or submaster trustee, to perform the customary duty of
  safekeeping as well as duties incident to the execution of
  transactions. As the demands of the pension system require, the
  board shall withdraw from the custodian or master trustee money
  previously considered surplus in excess of current cash and
  proceeds from the sale of investments. The money may without
  distinction be used for the payment of benefits pursuant to each of
  the plans within the pension system and for other uses authorized by
  this article and approved by the board.
         (h)  The board through policy shall establish an investment
  advisory committee composed of trustees and outside investment
  professionals to review investment related matters as prescribed by
  the board and make recommendations to the board.  A majority of the
  members of the committee established under this subsection must be
  outside investment professionals.
         SECTION 1.18.  Part 4, Article 6243a-1, Revised Statutes, is
  amended by adding Section 4.071 to read as follows:
         Sec. 4.071.  BOARD APPROVAL OF CERTAIN ALTERNATIVE
  INVESTMENTS. (a) The executive director, an investment manager, a
  provider of professional investment management services or
  professional advisory services, or any other person delegated
  authority to invest or reinvest pension system assets under this
  article may not invest pension system assets in a single
  alternative investment unless the board votes to approve the
  investment by at least a two-thirds vote of all the trustees.
         (b)  The board may adopt rules necessary to implement this
  section.
         SECTION 1.19.  Section 4.08, Article 6243a-1, Revised
  Statutes, is amended by adding Subsection (c) to read as follows:
         (c)  On written request by the city, the executive director
  shall make available to the city's actuary or auditor the
  information and documents provided to or used by the pension
  system's actuary or auditor in conducting an actuarial valuation
  under this article or preparing any other document prepared under
  this article.
         SECTION 1.20.  Section 4.09, Article 6243a-1, Revised
  Statutes, is amended to read as follows:
         Sec. 4.09.  REWARDS, DONATIONS, AND CONTRIBUTIONS. Any
  reward, donation, or contribution given to any member as payment or
  gratuity for service performed in the line of duty shall be turned
  over to the chief of the member's department, who shall, in turn,
  forward the reward, donation, or contribution to the executive
  director [administrator] of the pension system for deposit in the
  fund.
         SECTION 1.21.  Section 5.01, Article 6243a-1, Revised
  Statutes, is amended to read as follows:
         Sec. 5.01.  MEMBERSHIP IN COMBINED PENSION PLAN. (a) Except
  as provided by Subsection (a-1) of this section, the [The]
  membership of the combined pension plan is composed of the
  following persons:
               (1)  Group A members:
                     (A)  police officers or fire fighters who are on
  active service and who as of February 28, 1973, had filed a written
  statement with the pension system of their desire to participate in
  either the old plan or Plan A;
                     (B)  police officers and fire fighters who are on
  active service and [,] who were employed and receiving compensation
  from the city as a police officer or a fire fighter before March 1,
  1973, and who made contributions to either the old plan or Plan A
  attributable to any period of employment before March 1, 1973; and
                     (C)  except as provided by Subsection (b) of this
  section, persons who elect to become Group A members under that
  subsection; and
               (2)  Group B members:
                     (A)  police officers and fire fighters who are on
  active service and who [,] were formerly members of either the old
  plan or Plan A[,] and who, as of April 30, 1973, had filed a written
  statement with the pension system of their desire to participate in
  Plan B;
                     (B)  police officers and fire fighters who are on
  active service and who on or after March 1, 1973, and before January
  1, 1993, became members of Plan B;
                     (C)  as a condition of employment, any police
  officer [office] or fire fighter who is initially employed as a
  police officer or a fire fighter by the city on or after January 1,
  1993;
                     (D)  as a condition of return to active service
  and except as provided by Subsection (b) of this section, former
  members of the old plan or Plan A who left active service before
  March 1, 1973;
                     (E)  as a condition of return to active service
  and except as provided by Subsection (c) of this section, former
  Group B members who are no longer on active service, whether or not
  the persons were ever a member of the old plan, Plan A, or the
  combined pension plan;
                     (F)  Group A members who are on active service and
  meet the requirements and make an election under Subsection (d) of
  this section; and
                     (G)  persons who are on active service and make an
  election under Subsection (e) of this section.
         (a-1)  Group A or Group B members do not include any employee
  of the city who is:
               (1)  required by ordinance or who elects, in accordance
  with an ordinance, to participate in an alternative benefit plan
  established under Section 3.01(j-1)(2) of this article based on an
  evaluation under Section 3.01(j-5)(2) of this article; or
               (2)  required by ordinance to participate in an
  alternative benefit plan established under Section 810.002,
  Government Code.
         (b)  A person who has received an old plan, Plan A, or
  combined pension plan retirement or disability pension on or after
  March 1, 1973, may, if the person returns to active service, elect
  to participate as a Group A or Group B member by filing a written
  application for membership with the executive director
  [administrator] not later than 60 days after the date of return to
  active service. [As a condition of either Group A or Group B
  membership, the board may require the person to undergo a physical
  examination and be certified by the health director as being
  capable of performing the duties to which the person will be
  assigned.] If the person described by this subsection does not
  elect to become a Group A or Group B member, the person shall on
  leaving active service receive a retirement pension in an amount
  that is unadjusted for the period of return to active service if the
  person meets all of the requirements of Group A membership.
         (c)  A Group B pensioner who was never a member of the old
  plan, Plan A, or the combined pension plan before January 1, 1993,
  may, if the person returns to active service, elect to become a
  Group B member by filing a written application for membership with
  the executive director [administrator] not later than 60 days after
  the date of return to active service. [As a condition of Group B
  membership, the board may require the pensioner to undergo a
  physical examination and be certified by the health director as
  being capable of performing the duties to which the person will be
  assigned.] If the person described by this subsection does not
  elect to again become a Group B member, on leaving active service,
  if the person meets all applicable requirements of this article,
  the person shall receive benefits in an amount equal to the amount
  the person was receiving as of the day before the day the person
  returned to active service, and the person's base pension shall be
  the same as the base pension originally computed before the return
  to active service.
         (d)  A person who is on active service and is a Group A member
  may, before the person participates in DROP, irrevocably elect to
  become a Group B member by filing a written application with the
  executive director [administrator]. On and after the filing of the
  application, the Group A member shall make contributions to the
  fund at the rate applicable to Group B members. However, the
  contributions do not, by themselves, establish [constitute] Group B
  membership. Group B membership is contingent on the satisfaction
  of the following conditions:
               (1)  the [The] person must, before the person elects to
  participate in DROP, pay an amount to the fund equal to the
  difference between the contributions the person would have made to
  the fund had the person been a Group B member for the entire period
  the person could otherwise have been a Group B member before making
  application for membership and the contributions the person
  actually made during that period, plus interest calculated in
  accordance with procedures adopted by the board from time to time;
  and[.]
               (2)  the [The] payments described by this subsection
  must be completed before the earlier of the date on which the person
  begins participation in DROP or leaves active service in accordance
  with procedures adopted by the board from time to time.
         (d-1)  If the fund does not receive payment under Subsection
  (d)(1) of this section by the [that] date prescribed by Subsection
  (d)(2) of this section, all payments made under Subsection (d)(1)
  of this section [of this type], as well as those contribution
  amounts paid by the person after the person's application for Group
  B membership that are in excess of the Group A member contribution
  rate, shall be returned without accrued interest to the person, or
  in the event of the person's death to the person's designee
  [surviving spouse, children, or estate], as applicable.
         (e)  A person who is on active service and has never been a
  member of any plan within the pension system may elect to become a
  Group B member on a prospective basis by filing a written
  application for membership with the executive director
  [administrator].
         SECTION 1.22.  Sections 5.02(a), (d), (e), (h), and (i),
  Article 6243a-1, Revised Statutes, are amended to read as follows:
         (a)  The effective date of Group B membership for a person
  who becomes a Group B member under [persons described by] Section
  5.01(a)(2)(A) or (B) of this article is the date the Group B member
  first became a member of Plan B [January 1, 1993].
         (d)  The effective date of Group B membership for a person
  [former Group B member] who again becomes a Group B member and is
  described by Section 5.01(a)(2)(E) of this article is the person's
  original effective date of Group B membership, adjusted for any
  period for which [that] the person was not on active service or [,
  if the person] has [not] withdrawn some, but not all, contributions
  to the fund pursuant to Section 4.04 of this article. If, however,
  the person withdraws [former Group B member has withdrawn] all
  contributions to the fund in accordance with Section 4.04 of this
  article, and the person does not replace the previously withdrawn
  contributions together with interest as provided by Section
  4.04(h-1) [4.04(h)] of this article, the effective date of the
  person's membership is the date of return to active service.
         (e)  The effective date of membership for a person who
  becomes a Group B member pursuant to Section 5.01(b) of this article
  is the date on which written application for the membership is filed
  with the executive director [administrator]. The effective date of
  membership for a person who becomes a Group A member pursuant to
  Section 5.01(b) of this article is the person's original effective
  date of membership in the old plan, Plan A, or the combined pension
  plan, whichever is applicable.
         (h)  A person described by Subsection (a), (c), (d), (e),
  (f), or (g) of this section shall be given full pension service for
  the time the person was a contributing member of the old plan, Plan
  A, the combined pension plan, and Plan B, and the pension service
  shall be counted as if it had been earned while a Group B member.
  Neither the length of time persons described by Subsection (a),
  (c), (d), (e), (f), or (g) of this section received a retirement or
  disability pension, whether under the old plan, Plan A, the
  combined pension plan or Plan B, nor the amount of any benefits paid
  to the person shall have any effect on the pension service earned by
  the person. No pension service may be earned while on service
  retirement or disability retirement, or when the person was not on
  active service. Except as provided by Sections 5.08 [5.02] and 5.09
  of this article, a person described by Subsection (a), (c), (d),
  (e), (f), or (g) of this section may not be allowed to contribute to
  the fund in order to receive pension service for the time the person
  was not on active service, regardless of whether the person was
  actually receiving a pension.
         (i)  The effective date of Group B membership for a person
  who becomes a Group B member pursuant to Section 5.01(e) of this
  article is the date on which written application for Group B
  membership is filed with the executive director [administrator].
         SECTION 1.23.  Section 5.03, Article 6243a-1, Revised
  Statutes, is amended by amending Subsections (c) and (d) and adding
  Subsection (c-1) to read as follows:
         (c)  A Group B member who is on active service and [or former
  Group B member who also] was a former contributing member of either
  the old plan or Plan A may elect, when applying for either a
  retirement or disability pension if applicable, to terminate
  membership and receive a Group A retirement or disability pension
  under the applicable provisions of this article, if the Group B
  member's application for retirement or disability pension is
  granted by the board.
         (c-1)  A Group B member who is not on active service and was a
  former contributing member of either the old plan or Plan A may
  elect, when applying for a retirement pension, to terminate
  membership and receive a Group A retirement pension under the
  applicable provisions of this article, if the Group B member's
  application for retirement pension is granted by the board.
         (d)  If a Group B member [or former Group B member] described
  by Subsection (c) or (c-1) of this section has elected and been
  granted a Group A retirement or disability pension under the
  applicable provisions of this article, the person is entitled to a
  reimbursement from the fund. The reimbursement shall be equal to
  that portion of the person's contributions to the fund, without
  interest, from the person's effective date of Group B membership
  until the time the person left active service[,] that is in excess
  of the total amount the person would have contributed as a Group A
  member or as a member of the old plan or Plan A for the same period.
  A Group B member [or former Group B member] desiring a refund of
  excess contributions must make written application for the refund
  with the executive director [administrator] within three years
  after the date the person's Group A retirement or disability
  pension, whichever is applicable, begins, otherwise, the person
  will [or] lose all right, title, interest, or claim to the refund
  until such time as the board grants the refund in response to the
  person's written request. The refund shall be made as soon as
  practicable after written application is filed with the executive
  director [administrator].
         SECTION 1.24.  Section 5.04, Article 6243a-1, Revised
  Statutes, is amended to read as follows:
         Sec. 5.04.  GROUP B MEMBERSHIP MAY BE DECLARED INACTIVE. (a)
  Except as provided by Subsection (d)(1) of this section, if [If] a
  Group B member with less than five years of pension service either
  voluntarily or involuntarily leaves active service, the person's
  Group B membership remains active as long as the person has not
  withdrawn the person's contributions pursuant to Section 4.04 of
  this article.
         (b)  Except as provided by Subsection (d)(2) of this section,
  if [If] a Group B member with five or more years of pension service
  either voluntarily or involuntarily leaves active service, the
  person's Group B membership remains active as long as the person has
  not withdrawn the person's entire contributions pursuant to Section
  4.04 of this article.
         (c)  Except as provided by Subsection (d)(3) of this section,
  if [If] the board receives valid information that a Group B primary
  party has died, [leaving one or more heirs,] the board shall, by
  registered or certified mail, return receipt requested, attempt to
  notify:
               (1)  the qualified survivors [heirs] of the primary
  party of the procedures for applying and qualifying for death
  [survivor] benefits under Section 6.06, 6.061, 6.062, or 6.063 of
  this article; or
               (2)  if the primary party does not have any qualified
  survivors, the primary party's designee of the procedures for
  applying for [or] a refund of the [Group B] primary party's
  contributions, if applicable, in accordance with Section 4.04 of
  this article.
         (d)(1)  Subject to the provisions of Subdivision (5)(A) of
  this subsection, the membership of a Group B member described by
  Subsection (a) of this section shall be declared inactive and all of
  the person's accrued pension service voided if the person does not
  return to active service within three years after the date of
  [receiving] the notice described by Subdivision (4) of this
  subsection.
               (2)  Subject to the provisions of Subdivision (5)(B) of
  this subsection, the membership of a Group B member described by
  Subsection (b) of this section shall be declared inactive and all of
  the person's accrued pension service voided if the person does not
  file an application for a Group B retirement pension with the board
  within three years after the date of [receiving] the notice
  described by Subdivision (4) of this subsection.
               (3)  Subject to the provisions of Subdivision (5)(C) of
  this subsection, if a primary party described by Subsection (c) of
  this section:
                     (A)  does not have any qualified survivors, the
  designee has [, the heirs or estate of a deceased primary party
  described by Subsection (c) of this section have] no right, title,
  interest, or claim for [benefits or] a refund of the primary party's
  contributions to the fund[,] if the designee does not file an
  application for the primary party's contributions within three
  years after the date of the notice described in Subsection (c) of
  this section; or
                     (B)  has qualified survivors, the qualified
  survivors have no right, title, interest, or claim to [heirs or the
  estate, whichever is applicable, fails to file an application for]
  the primary party's death benefits if the qualified survivor does
  not file an application for the benefits [or contributions] within
  three years after the date of [receiving] the notice described in
  Subsection (c) [by Subdivision (4)] of this section [subsection].
               (4)  On the 58th [50th] anniversary of the birth of a
  Group B member described by Subsection (a) or (b) of this section
  [or on the board's receipt of notice of the death of a primary party
  described by Subsection (c) of this section], the board shall, by
  registered or certified mail, return receipt requested, attempt to
  notify:
                     (A)  the [Group B] member [or the heirs or estate
  of a primary party, whichever is applicable,] of the status of the
  member's [their] entitlement to benefits or contributions from the
  fund; or
                     (B)  if the board receives valid information that
  the member has died, the qualified survivors of the deceased person
  or, if none exists, the designee of the deceased person.
               (5)(A)  A Group B member described by Subdivision (1)
  of this subsection shall have the person's Group B membership and
  pension service reinstated on the person's return to active
  service.
                     (B)  A Group B member described by Subdivision (2)
  of this subsection shall have the person's Group B membership and
  pension service reinstated on the person's return to active service
  or on the grant of the person's written request to the board of the
  person's desire to apply for a Group B [service] retirement pension
  under Section 6.02 of this article [benefit].
                     (C)  A primary party's qualified survivors or
  designee, as appropriate, [The heirs or estate of a primary party]
  described by Subdivision (3) of this subsection shall have their
  right, title, interest, or claim to the primary party's refund of
  the party's contributions reinstated on the board's grant of their
  written request [for the reinstatement and refund]. [The board's
  decision shall be based on a uniform and nondiscriminatory policy
  that it shall, from time to time, adopt.]
         SECTION 1.25.  Section 5.05, Article 6243a-1, Revised
  Statutes, is amended to read as follows:
         Sec. 5.05.  PENSION SERVICE. (a) Subject to Subsection (d)
  of this section and except as provided by Subsection (e) of this
  section, a [A] member shall receive pension service for the time,
  computed in years and fractional years for months and days,
  completed as a member of the combined pension plan, the old plan,
  Plan A, or Plan B.
         (b)  A member who elects to pay contributions for time spent
  on military leave, authorized non-uniformed leave of absence, or
  for an apprenticeship or probationary period, or for any other
  reason provided for by this article may [not] receive [any] pension
  service for [any part of] the time for which the member is
  contributing only to the extent provided under Section 5.07(d),
  5.08, or 5.09 of this article [until the entire amount due the fund
  for the entire period involved has been paid as if the service were
  performed as a member].
         (c)  If a member, either voluntarily or involuntarily,
  leaves active service and later returns to active service, the
  person shall receive full pension service for the period of the
  person's original membership, if the person did not withdraw the
  person's contributions pursuant to Section 4.04 of this article.
  If, however, the member had withdrawn the person's contributions
  and did [does] not replace the previously withdrawn contributions
  [with interest] as required by Section 4.04 of this article, the
  member [person] forfeits any pension service attributable to any
  period of time for which the respective contributions were not
  repaid [accrued while a member before the date of the person's
  return to active service].
         (d)  If a member is assigned, for any period, to a
  job-sharing program or any similar work schedule that is considered
  by the member's department to be less than a full-time work
  schedule, the member's pension service is determined by multiplying
  the pension service that could have been earned for full-time work
  during the period by a fraction, the numerator of which is the
  number of hours the member actually worked during the period and the
  denominator of which is the number of hours the member would have
  worked during the period if the member had been working a full-time
  work schedule. This proration may not affect the computation of
  pension service for a member during any period the member is on
  leave:
               (1)  because of an illness or injury; or
               (2)  receiving periodic payments of workers'
  compensation.
         (e)  Notwithstanding any other provision in this section, a
  member may not receive pension service attributable to nonqualified
  service to the extent the pension service would result in either
  more than five years of permissive service attributable to
  nonqualified service being taken into account, or any permissive
  service being taken into account before the member has completed at
  least five years of active service. In this subsection,
  "permissive service" and "nonqualified service" have the meanings
  described by Section 415(n)(3) of the code.
         SECTION 1.26.  Sections 5.06, 5.07, 5.08, and 5.09, Article
  6243a-1, Revised Statutes, are amended to read as follows:
         Sec. 5.06.  VESTED RIGHTS OF GROUP B MEMBERS. (a) If a Group
  B member accrues five years of pension service, whether the pension
  service is accrued while a Group B member or while a member of the
  old plan, Plan B, Plan A, the combined pension plan, or a
  combination of the plans, the Group B member has vested rights and
  is eligible to apply for a retirement pension in accordance with
  Section 6.02 of this article.
         (b)  If a Group B member has vested rights as determined
  under Subsection (a) of this section, and the Group B member either
  voluntarily or involuntarily leaves active service before becoming
  eligible to receive any benefits under Section 6.02 of this
  article, the person shall be provided with a letter approved by the
  board and signed by the executive director [administrator] that,
  barring unrepaid refunds, clerical error, miscalculation, or other
  error, is incontestable and shall state:
               (1)  the total amount of pension service the Group B
  member had accrued until the date the person left active service;
               (2)  the total amount of contributions the Group B
  member made under the terms of Plan B and the combined pension plan;
  and
               (3)  the monthly retirement pension due the Group B
  member at age 58 [50].
         Sec. 5.07.  PURCHASE OF PENSION SERVICE BY GROUP B MEMBERS.
  (a) A Group B member who is on active service and has previously
  elected not to become a contributing member of the old plan or [and]
  Plan A may purchase pension service from the fund for that period
  during which the member performed active service with either
  department until the effective date of the member's Group B
  membership. No pension service may be given to the Group B member
  except to the extent that [until] payment is made for the [entire
  period described by this subsection, and no] pension service in
  accordance with Subsection (d) of this section [may be purchased
  for any period that is of greater or lesser length].
         (b)  Payment for the purchase of pension service under
  Subsection (a) of this section shall be equal to the amount of
  contributions the Group B member would have made to the old plan and
  Plan A had the member been a contributing member of either of the
  plans during the period for which the pension service is being
  purchased [described by Subsection (a) of this section], plus
  interest calculated in accordance with procedures adopted by the
  board from time to time.
         (c)  Subject to Subsection (d) of this section, a [A] Group B
  member who is on active service may repay the fund all or a portion
  of the employee contributions withdrawn by an alternate payee
  pursuant to the terms of a qualified domestic relations order [and
  receive pension service as a Group B member attributable to the
  contributions, if the Group B member repays completely to the fund
  the withdrawn contributions] with interest, calculated at the
  interest rate from time to time used in the pension system's
  actuarial rate of return assumptions, compounded annually, on the
  contributions for the period from the date the contributions were
  withdrawn until the date the principal and accrued interest are
  repaid, and receive pension service as a Group B member, in
  accordance with Subsection (d) of this section, for the period for
  which the contributions and interest were paid [in full].
         (d)  [No pension service may be given to a Group B member
  under Subsection (b) or (c) of this section until the entire amount
  described by Subsection (b) or (c) has been paid to the fund.] If
  payment of the entire amount of pension service a member is entitled
  to under Subsection (a) or (c) of this section or under Section
  4.04(h-1) of this article is not completed by the earlier of the
  date the Group B member begins participation in DROP or the date the
  member [is not completed by the date the Group B member] leaves
  active service, pension service will be provided only for the
  number of full years of pension service that the contributions and
  interest paid under those provisions will purchase, computed based
  on the most recent years for which the member was entitled to
  purchase pension service. Except for pension service that is
  picked up by the city under the authority of Section 414(h)(2) of
  the code, a fractional year of pension service may be purchased only
  if less than a full year of pension service is available for
  purchase.
         (e)  The amounts paid but insufficient to purchase one or
  more whole years of pension service that remain available for
  purchase, including any interest paid by the Group B member, must be
  returned to the Group B member or, if the Group B member has died, to
  the Group B member's designee, without any accrued interest on the
  returned money.
         (f)  Notwithstanding any other provision of this section,
  any amounts that have been picked up and paid by the city may not be
  paid to a member or designee, and the member shall be given credit
  for all years, and fractions of years, of pension service that can
  be purchased with the picked-up contributions [all partial payments
  shall be returned to the Group B member or, if the Group B member has
  died, to the member's heirs or estate, whichever is applicable].
         Sec. 5.08.  MEMBERS IN UNIFORMED [ARMED] SERVICES. (a)  In
  this section, "service in the uniformed services" has the meaning
  assigned by the federal Uniformed Services Employment and
  Reemployment Rights Act of 1994 (38 U.S.C. Section 4301 et seq.), as
  amended.
         (a-1)  A member who is reemployed by the city after an
  absence due to service in the uniformed services shall receive
  contributions, benefits, and pension service that are no less
  favorable than those required by Section 414(u) of the code in
  accordance with the procedure described by Subsection (c) of this
  section [may receive pension service for time spent away from
  either department while on active duty in any of the military
  services of the United States, including service in any state or
  National Guard or any reserve component of any military service in
  accordance with the military leave provided by this section].
         (b)  To the extent a provision of this section that was in
  effect before November 25, 1996, would provide a member who was on
  active service with the pension system before November 25, 1996,
  with greater rights, the prior provision of this section applies
  [Any member inducted into the armed forces as a draftee must reapply
  for reinstatement with the member's prior department within 90 days
  after the date of honorable discharge or separation from military
  service. On such reinstatement, the member may elect to repay the
  member's contributions at any time under the procedure described by
  Subsection (h) of this section].
         (c)  Payment for credit for pension service under this
  section [Any member enlisting in the armed forces, other than as a
  reservist, whose military service between June 24, 1948, and August
  1, 1961, did not exceed four years, or whose military service began
  after August 1, 1961, and did not exceed five years if the fifth
  year is at the request and convenience of the federal government,
  and who was honorably discharged or separated from service is
  guaranteed, under the provisions of coverage described by this
  subsection, the right to restore pension service under the
  procedure described by Subsection (h) of this section. The four-
  and five-year leaves permitted by this subsection apply to all of a
  member's employment with the city. An enlistment plus any number of
  reenlistments may not exceed the four- or five-year limitations
  stated above.
         [(d)     Any member ordered to an initial period of active duty
  for training in a reserve component of not less than 12 consecutive
  weeks is entitled to restore pension service for the period absent
  from the member's department, if the member returns to the member's
  department within 31 days after the date of honorable discharge or
  separation from duty in the reserve unit.
         [(e)     Any member serving in a reserve component, voluntarily
  or involuntarily, may remain on military leave for four years,
  which may be extended for periods when the President of the United
  States calls the reserve unit into active duty. The service
  extension for members joining a reserve unit voluntarily is
  available only when the additional service is at the request and for
  the convenience of the federal government. Any member returning to
  the member's department under this provision must report back to
  work within the time specified to the member by the department,
  giving due regard for travel time and hospitalization, if required.
  Any inquiry into the validity of orders extending terms of
  reservist active duty for training will be referred to the
  Department of Labor's Office of Veterans' Employment and Training.
         [(f)     Any member on military leave for short periods of
  authorized training, such as two-week encampments, are treated as
  on leave with pay for up to 15 working days in any one calendar year,
  during which time pension service automatically accrues. Leave in
  excess of 15 days will be treated as described by Subsection (e) of
  this section.
         [(g)     With the exception of those circumstances described by
  Subsection (f) of this section, the city is not required to match
  contributions made by members under the terms of this section.
         [(h)  Repayment] shall be made in accordance with Section
  5.07 of this article and a [the procedure set forth in any] uniform
  and nondiscriminatory [military leave and payment] procedure
  adopted by the board [and in effect from time to time].
         Sec. 5.09.  NON-UNIFORMED [NONMILITARY] LEAVE OF ABSENCE.
  (a) An "authorized non-uniformed leave of absence" means any leave
  of absence that meets one of the following requirements
  [conditions]:
               (1)  the leave of absence was unpaid and granted by the
  member's department in accordance with the federal Family and
  Medical Leave Act of 1993 (29 U.S.C. Section 2601 et seq.); or
               (2)  the leave of absence was unpaid and was [must be]
  an official leave authorized and certified by the chief of the
  member's [either] department as being beneficial to[; and
               [(2) the leave of absence must be for the purpose of
  benefitting] the department.
         (b)  Subject to the requirements of this section and any
  procedures adopted by the board, a [A] member may receive pension
  service for time spent away from the member's [either] department
  on an authorized non-uniformed [nonmilitary] leave of absence. To
  receive pension service under this section [for a nonmilitary leave
  of absence, the following conditions must be met:
               [(1) before the date the member's leave of absence is to
  begin], the member must file with the executive director
  [administrator] a written application to pay to the fund both:
               (1)  the member contributions the member would have
  made to the fund had the member remained on active service and had
  there been no change in the member's position or hours of work
  during the period of the authorized non-uniformed leave of absence;
  and
               (2)  the contributions the city would have made to the
  fund on the member's behalf [any contributions that will accrue
  during the member's leave as set forth in Subdivisions (2) and (3)
  of this subsection;
               [(2) the member must agree to pay into the fund the
  amount the member would have contributed had the member remained on
  active service, the amount to be based on the computation pay the
  member would have normally received had there been no change in the
  member's position during the period of leave;
               [(3) the member must agree to pay into the fund an
  amount equal to the amount the city would have contributed computed
  on the basis of total wages and salary the member would normally
  have received] had the member remained on active service and had
  there been no change in the member's position or hours of work
  during the period of the authorized non-uniformed leave of absence.
         (b-1)  Contributions made under Subsection (b)(2) of this
  section may not be refunded to the member.
         (b-2)  The written application described by Subsection (b)
  of this section must be filed before the member's authorized
  non-uniformed leave of absence begins, unless the pension system
  determines that it would not be reasonable to expect the member to
  file the application before the authorized non-uniformed leave of
  absence begins, in which case the application must be filed as soon
  as circumstances permit, as determined by the pension system. 
  [leave, the payment to represent the total amount that would have
  been contributed by the city on the member's behalf had the member
  remained on active service and paid in addition to the amount the
  member must contribute as set forth in Subdivision (2) of this
  subsection;]
         (b-3)  To receive pension service under this section, the
  following additional conditions must also be met:
               (1) [(4)]  if the member's contribution rate, the
  city's contribution rate, or both the member's and city's
  contribution rates change before the end of the member's authorized
  non-uniformed leave of absence [changes as provided by Section 4.02
  of this article], the percentage [of total wages and salary]
  required to be paid by the member also changes, so that the amount
  paid by the member in accordance with this section always equals the
  amount that would have been contributed by the member, and by the
  city on the member's behalf had the member remained on active
  service[, and in no event is the city required to pay into the fund
  any contributions that would have been made on behalf of a member
  had the member remained on active service during the period of an
  authorized leave of absence];
               (2) [(5)]  payment of contributions as set forth in
  Subsection (b) of this section [Subdivisions (3) and (4) of this
  subsection] shall begin coincident with the beginning of the
  applicable authorized non-uniformed leave of absence and shall be
  made monthly to the executive director [administrator] for deposit
  in the fund, unless the board authorizes the deferment of the
  payments, in which case the payments must include interest
  calculated in accordance with Subsection (b-4) of this section
  [until the member has returned to active service];
               (3)  no pension service will be granted to the member
  until the member returns to active service, and if the member does
  not return to active service, the contributions paid, including any
  interest paid, will be returned to the member except as provided by
  Subsection (c) of this section;
               (4)  if the board authorizes the deferment of the
  payments under Subdivision (2) of this subsection, the payment must
  [may] be made either by authorizing the deduction of pro rata
  portions of the total amount due from the member's salary over a
  one-year period, or by cash payment made to the executive director
  [administrator] within one year after the date of the member's
  return to active service, except that the board may approve a longer
  period for making the payment if it finds that the one-year limit
  would work a financial hardship on the member;
               (5) [(6)]  the member must return to active service
  within 90 days after the date the member's authorized non-uniformed 
  leave of absence expires, or if the member's authorized
  non-uniformed leave of absence does not have a fixed expiration
  date, within a reasonable time to be determined by the board, or the
  member forfeits the right to pay for the leave time; and
               (6) [(7)]  no member may ever be allowed to pay leave of
  absence contributions under this section for any time in excess of
  the time actually spent on an authorized non-uniformed leave of
  absence.
         (b-4)  For purposes of Subsection (b-3)(2) of this section,
  interest is calculated from the date the member's payment was first
  due, at the interest rate from time to time used in the pension
  system's actuarial rate of return assumptions, compounded annually
  until the date the principal and accrued interest are repaid in
  full.
         (c)(1)  If a member of the combined pension plan is disabled
  or dies while on an authorized non-uniformed leave of absence, the
  member or the member's designee is [heirs are] entitled to [either]
  a refund of contributions pursuant to Section 4.04 of this article
  or the member or the member's qualified survivors are entitled to
  benefits under the provisions of this article, to the extent
  applicable.
               (2)  A member who is disabled or dies while on an
  authorized non-uniformed leave of absence pursuant to this section
  may receive no pension service for any portion of the period of the
  leave,[;] except that if the member had, before the member's
  disability or death, paid for contributions while on an authorized
  non-uniformed leave of absence in accordance with [Subsection (a)
  of] this section, the member shall receive pension service for the
  leave time actually paid for at the time of the member's disability
  or death. The [, but the] member may receive no pension service for
  any portion of the period of leave for which contributions were
  [have] not [been] paid to the executive director [administrator]
  for deposit in the fund.
         SECTION 1.27.  Section 6.01, Article 6243a-1, Revised
  Statutes, is amended by amending Subsections (a), (b), (d), (e),
  (f), (g), and (h) and adding Subsections (a-1) and (a-2) to read as
  follows:
         (a)  A Group A member [or former Group A member] must have 20
  years of pension service to be eligible for a Group A retirement
  pension under this section. A member's benefit election
  [application] under this section, once approved [made], is
  irrevocable.
         (a-1)  If a Group A pensioner returns to active service as a
  police officer or fire fighter with the city, the person's Group A
  retirement pension ceases until [the time] that [the] person again
  leaves active service with the city.
         (a-2)  If a Group A pensioner resumes employment with the
  city in a capacity other than as a police officer or fire fighter,
  the pensioner's Group A retirement pension continues during the
  period of employment, except the pensioner may not accrue
  additional credit for pension service during this period.
  Additional credit for pension service does not accrue during any
  period in which a Group A pensioner becomes employed by the city
  unless the additional credit is attributable to active service as a
  police officer or fire fighter with the city.
         (b)  At age 50 a Group A member [or former Group A member] is
  eligible to begin drawing a monthly Group A retirement pension. A
  monthly Group A retirement pension equals 50 percent of the base pay
  per month, plus 50 percent of any longevity pay the Group A member
  was receiving at the time the member left active service. Although
  the number of years used in the computation of longevity pay remains
  fixed at the earlier of the time a Group A member [or former Group A
  member] leaves active service or begins participation in DROP, the
  monthly rate of longevity pay used in this computation is subject to
  change in the event of an amendment to the state law governing
  longevity pay. The monthly Group A retirement pension benefits of
  Group A pensioners shall be adjusted from time to time in a like
  manner.
         (d)  The element of annual retirement pension computed under
  Subsection (c)(1) of this section is subject to the following
  limitations:
               (1)  it shall be prorated for the year in which the
  pensioner begins receiving a retirement pension;
               (2)  it shall be payable only to those Group A
  pensioners who, as [a] Group A members [member] on active service,
  received city service incentive pay and who receive a monthly Group
  A retirement pension as determined under Subsection (b) of this
  section on the last day of September of each year; and
               (3)  it shall be paid to Group A pensioners as long as
  the city continues to pay city service incentive pay to Group A
  members on active service.
               (4)  Notwithstanding Subsections (b) and (c) of this
  section, a Group A member with a minimum of 20 years of pension
  service may apply for an actuarially reduced retirement pension to
  begin no earlier than when the member attains age 45 but before the
  member attains age 50. The Group A member [or a former Group A
  member] who has made an application may receive a retirement
  pension calculated under Subsections (b) and (c) of this section
  reduced by two-thirds of one percent per month for each whole
  calendar month the benefit is payable before the month in which the
  Group A member [or former Group A member] attains age 50.
         (e)  At age 55 a Group A member [or former Group A member] is
  eligible to begin drawing a monthly retirement pension computed as
  follows:
               (1)(A)  at the rate of three percent of base pay for
  each year, prorated for fractional years, of pension service, with
  a maximum of 32 years of pension service, or 96 percent of base pay;
  or
                     (B)  if the Group A member [or former Group A
  member] had 34 or more years of pension service as of April 30,
  1990, then the member's retirement pension is calculated at the
  rate calculated under the terms of the combined pension plan in
  effect on April 30, 1990, if the resulting amount would be greater
  than the amount calculated under Paragraph (A) of this subdivision;
  plus
               (2)  one-half of the longevity pay the Group A member
  [or former Group A member] was receiving at the time the person left
  active service; plus
               (3)  1/24th, without subsequent adjustment, of the
  annualized amount of the city service incentive pay the Group A
  member [or former Group A member] received at the time the person
  left active service.
         (f)  [Notwithstanding Subsection (e) of this section, Group
  A pensioners payments under Subsection (e)(3) of this section are
  contingent on the city's continuing payment of city service
  incentive pay to Group A members on active service.] For purposes
  of Subsection (e) of this section, base pay and longevity pay are
  the amounts in effect on the earlier of the date the member begins
  participation in DROP or the date benefits are to begin, without
  subsequent adjustment.
         (g)  Notwithstanding Subsection (e) of this section, a Group
  A member [or former Group A member] with 20 or more years of pension
  service may apply for an actuarially reduced Group A retirement
  pension beginning on or after the date the Group A member [or former
  Group A member] attains age 50 but before the person attains age 55.
  The Group A member [or former Group A member] may receive a
  retirement pension calculated under Subsection (e) of this section
  reduced by two-thirds of one percent per month for each whole
  calendar month the benefit is payable before the month in which the
  Group A member [or former Group A member] attains age 55.
         (h)  Entitlement to the Group A retirement pension described
  by this section is subject to the following conditions:
               (1)  a written application must be filed with the
  executive director [administrator];
               (2)  the grant of a Group A retirement pension by the
  board must be made at a meeting of the board held during the month
  the [Group A] retirement pension is to become effective, or as soon
  after that as administratively possible; and
               (3)  the Group A member must no longer be on active
  service.
         SECTION 1.28.  Section 6.02, Article 6243a-1, Revised
  Statutes, is amended to read as follows:
         Sec. 6.02.  GROUP B RETIREMENT PENSION.  (a) If a [A] Group B
  member [or former Group B member who] has accrued five or more years
  of pension service, is no longer on active service with the
  department, has not withdrawn the member's contributions, and
  otherwise meets the age and pension service requirements under the
  applicable provision of this section, the member may apply [may
  make application] for a Group B retirement pension under this
  section. A member's benefit election application under a provision
  of this section, once approved, is irrevocable.
         (a-1)  If a Group B pensioner returns to active service as a
  police officer or fire fighter with the city, the person's [on
  reaching 50 years of age, or for an actuarially reduced] Group B
  retirement pension ceases until that person again leaves active
  service with the city.
         (a-2)  If a Group B pensioner resumes employment with the
  city in a capacity other than as a police officer or fire fighter,
  the pensioner's Group B retirement pension continues during the
  period of employment except the pensioner may not accrue additional
  credit for pension service during this period. Additional credit
  for pension service does not accrue during any period in which a
  Group B pensioner becomes employed by the city unless the
  additional credit is attributable to active service as a police
  officer or fire fighter with the city [on reaching 45 years of age].
         (b)  A [former] Group B member who began active service
  before March 1, 2011, and who has attained at least 50 years of age,
  or who began active service on or after March 1, 2011, and has
  attained at least 58 years of age, and who otherwise meets the
  requirements of Subsection (a) of this section may elect to receive
  a Group B retirement pension that shall be calculated as follows:
               (1)  for a member who began active service before March
  1, 2011, the member's retirement pension shall be the sum of:
                     (A)  the number of years of pension service before
  September 1, 2017, prorated for fractional years, times three
  percent of the average computation pay determined over the 36
  consecutive months of pension service in which the Group B member
  received the highest computation pay; plus
                     (B)  the number of years of pension service on or
  after September 1, 2017, prorated for fractional years, times the
  applicable percentage prescribed by Subsection (b-1) of this
  section of the average computation pay determined over the 60
  consecutive months of pension service in which the Group B member
  received the highest computation pay; or
               (2)  for a member who began active service on or after
  March 1, 2011, the member's retirement pension shall be the number
  of years of pension service, prorated for fractional years, times
  2.5 percent of the average computation pay determined over the 60
  consecutive months of pension service in which the member received
  the highest computation pay.
         (b-1)  For purposes of Subsection (b)(1)(B) of this section,
  the applicable percentage is based on the age of the Group B member
  when the member's retirement pension begins as set forth below:
 
Age of Member When Retirement Pension Begins Percent
 
58 and older 2.5%
 
57 2.4%
 
56 2.3%
 
55 2.2%
 
54 2.1%
 
53 and younger 2.0%
         (b-2)  Days during which the member earned no pension service
  due to a termination of active service or otherwise must be
  disregarded in determining the 36 or 60 consecutive months of
  highest computation pay under Subsection (b)(1) or (2) of this
  section, as appropriate. The pension benefit calculated under
  Subsection (b) of this section may not exceed the greater of:
               (1)  90 percent of the member's average computation pay
  determined under the applicable subsection; or
               (2)  the vested and accrued benefit of a member as
  determined on August 31, 2017. [or Group B pensioner who withdrew
  any of the person's Plan B or Group B contributions and who on again
  becoming a Group B member does not replace such previously
  withdrawn contributions with interest thereon as provided by
  Section 4.04 of this article must earn at least five years of
  pension service after the time the person returns to active service
  to be eligible for a Group B retirement pension.]
         (c)  Except as provided by Subsection (c-2) of this section,
  [Entitlement to] a Group B member who has either attained at least
  45 years of age on September 1, 2017, or who attains at least 53
  years of age after September 1, 2017, and who otherwise meets the
  requirements of Subsection (a) of this section may elect to receive
  an actuarially reduced Group B retirement pension calculated in
  accordance with Subsection (c-1) of this section:
               (1)  not earlier than the member's 45th or 53rd
  birthday, as applicable; and
               (2)  not later than the member's 50th or 58th birthday,
  as applicable.
         (c-1)  Except as provided by Subsection (c-2) of this section
  and subject to Section 6.021 of this article, a Group B member who
  applies for an actuarially reduced Group B retirement pension under
  Subsection (c) of this section shall receive a pension calculated
  under Subsection (b) of this section, reduced by two-thirds of one
  percent per month, for each whole calendar month the benefit is
  payable before the month in which the member attains:
               (1)  for members who attained at least 45 years of age
  on September 1, 2017, 50 years of age; or
               (2)  for members not described by Subdivision (1) of
  this subsection who attain at least 53 years of age after September
  1, 2017, 58 years of age.
         (c-2)  Subject to Subsection (d-3) of this section and for
  purposes of Subsection (c-1) of this section, if a Group B member's
  pension benefit calculated under Subsection (b) of this section is
  equal to 90 percent of the member's average computation pay, the
  member is entitled to a Group B retirement pension under Subsection
  (c) of this section at 45 or 53 years of age, as applicable, that is
  not actuarially reduced as provided under Subsection (c-1) of this
  section [retirement pension as described by Subsection (a) or (b)
  of this section is subject to the following conditions:
               [(1)     written application must be filed with the
  administrator;
               [(2)     the grant of the Group B retirement pension by the
  board must be made at a meeting of the board held during the month
  the Group B retirement pension is to become effective, or as soon
  after that as possible; and
               [(3)     the Group B member may no longer be on active
  service].
         (d)  Except as provided by Subsection (d-2) of this section,
  a [A] Group B member who has accrued 20 or more years of pension
  service and has been on active service at any time on or after
  January 1, 1999, may elect to apply for a Group B retirement pension
  beginning at any time after the Group B member leaves active
  service, regardless of age. A Group B member may elect a Group B
  retirement pension under this subsection as follows:
               (1)  if the member accrued 20 or more years of pension
  service on or before September 1, 2017, the member may elect a
  pension under this subsection that is computed in the same manner as
  the Group B retirement pension under Subsection (b)(1) of this
  section except that the percentage set forth below must be used
  instead of the three percent multiplier prescribed by Subsection
  (b)(1)(A) of this section:
 
Age of Member When Retirement Pension Begins Percent
 
48 and 49 2.75%
 
47 2.5%
 
46 2.25%
 
45 and younger 2%; and
               (2)  except as provided by Subsection (d-2) of this
  section and subject to Section 6.021 of this article, if the member
  accrued 20 or more years of pension service after September 1, 2017,
  the member may elect a pension under this subsection computed in the
  same manner as the Group B retirement pension under Subsection
  (b)(2) of this section except that the percentage set forth below
  must be used instead of the 2.5 percent multiplier prescribed by
  Subsection (b)(2) of this section:
 
Age of Member When Retirement Pension Begins Percent
 
57 2.4%
 
56 2.3%
 
55 2.2%
 
54 2.1%
 
53 and younger 2.0%
         (d-1)  A member who elects a pension under Subsection (d) of
  this section is not entitled to:
               (1)  minimum benefits under either Section 6.10A or
  6.11 of this article; or
               (2)  benefits under Subsection (g) of this section.
         (d-2)  Subject to Subsection (d-3) of this section and for
  purposes of Subsection (d) of this section, if a Group B member's
  pension benefit calculated under Subsection (b) of this section is
  equal to 90 percent of the member's average computation pay, the
  member is entitled to a Group B retirement pension under Subsection
  (d) of this section that is not reduced as provided under Subsection
  (d)(1) or (2) of this section [retirement pension shall be computed
  at the rate of three percent of the average computation pay
  determined over the 60 consecutive months in which the Group B
  member received the highest computation pay, multiplied by the
  number of years, prorated for fractional years, of pension service
  to a maximum of 32 years of pension service or 96 percent of the
  computation pay as determined under this subsection].
         (d-3)  For purposes of Subsections (c-2) and (d-2) of this
  section, a Group B member's pension benefit calculated under
  Subsection (b) of this section shall be calculated without
  application of any reduction under Subsection (b-1) of this
  section.
         (e)  A [However, a] Group B member or former Group B member
  with 34 or more years of pension service as of April 30, 1990, is
  entitled to [shall] receive the greater of a Group B retirement
  pension calculated under the terms of Plan B as in effect on that
  date or a Group B retirement pension calculated pursuant to
  Subsection (b) [(d)] of this section.
         [(f)     A Group B member, or any former Group B member who was a
  Group B member as of any date after April 30, 1990, may apply for an
  actuarially reduced Group B retirement pension beginning no earlier
  than the person's 45th birthday but before the person's 50th
  birthday. A Group B member or former Group B member who applies for
  an actuarially reduced Group B retirement pension beginning on or
  after the person's 45th birthday shall receive a pension calculated
  under Subsection (d) of this section, reduced by two-thirds of one
  percent per month for each whole calendar month the pension would be
  payable before the month in which the Group B member or former Group
  B member attains age 50.]
         (g)  In no event may any Group B member [or former Group B
  member] who was at any time a Group A member or a contributing
  member of the old plan or Plan A, and who satisfied the applicable
  age and length-of-service requirements of the applicable plan at
  the time the person left active service, receive a retirement
  pension in an amount less than the amount the person would be
  entitled to receive as a Group A member.
         (h)  Notwithstanding any other provision of this section, a
  [A former] Group B member who was not a Group B member on or after
  January 1, 1993 [May 1, 1990], shall receive a retirement pension
  calculated under the applicable provisions of Plan B [this plan] as
  that plan existed [in effect] on the date the member terminated
  [person left] active service.
         (i)  Entitlement to a Group B retirement pension under
  Subsection (b), (c), (d), or (e) of this section is subject to the
  following conditions:
               (1)  a written application must be filed with the
  executive director;
               (2)  the grant of the Group B retirement pension by the
  board must be made at a meeting of the board held during the month
  the retirement pension is to become effective, or as soon after as
  administratively possible; and
               (3)  the Group B member may no longer be on active
  service [A former Group B member who was not a Group B member after
  April 30, 1990, may request an actuarially reduced retirement
  pension beginning no earlier than the person's 45th birthday but
  before the person's 50th birthday]. [A former Group B member
  described by this subsection shall receive a retirement pension
  under the applicable provisions of Plan B as in effect on the date
  the person left active service, reduced by two-thirds of one
  percent per month for each whole calendar month the pension would be
  payable before the month in which the former Group B member attains
  age 50.]
         SECTION 1.29.  Part 6, Article 6243a-1, Revised Statutes, is
  amended by adding Sections 6.021 and 6.022 to read as follows:
         Sec. 6.021.  AUTHORITY TO ADOPT ALTERNATIVE MULTIPLIERS FOR
  COMPUTATION OF CERTAIN GROUP B BENEFITS. (a)  For purposes of
  Section 6.02(c-1) or (d)(2) of this article, the board by rule may
  adopt alternative multipliers, including an alternative table
  prescribing actuarially appropriate multipliers. In adopting
  rules under this subsection, the board shall designate the date on
  which the alternative multiplier shall take effect.
         (b)  Copies of any alternative multipliers adopted under
  this section must be maintained at the principal office of the
  pension system and published on the pension system's publicly
  available Internet website.
         Sec. 6.022.  AUTHORITY TO REDUCE RETIREMENT AGE.
  Notwithstanding any other law, the board may reduce the age at which
  a Group B member is eligible to begin receiving a retirement
  pension, including an actuarially reduced retirement pension,
  under Section 6.02 of this article if the board determines that the
  reduction will not cause the amortization period of the unfunded
  actuarial accrued liability of the pension system to exceed 25
  years, after taking into account the impact of the reduction.  A
  board action under this section may not take effect until the State
  Pension Review Board reviews the board's determination described by
  this section.
         SECTION 1.30.  Section 6.03, Article 6243a-1, Revised
  Statutes, is amended by amending Subsections (a), (d), (f), and (g)
  and adding Subsections (k) and (l) to read as follows:
         (a)  If a member who is on active service, other than a member
  participating in DROP, becomes disabled to the extent that the
  member cannot perform the member's duties with the member's
  department, the member may apply for a disability pension, subject
  to [in accordance with] any uniform and nondiscriminatory
  disability application procedure and recall and review procedure
  adopted by the board and in effect from time to time.
         (d)  No disability pension may be paid to a member for any
  disability if the disability was a result of an intentionally
  self-inflicted injury or a chronic illness resulting from an
  addiction by the member through a protracted course of [noncoerced]
  indulgence in alcohol, narcotics, or other substance abuse that was
  not coerced.
         (f)  No disability pension may be paid if the chief of the
  member's department is able to provide the member with duties that
  are within the member's physical or mental capabilities, [as long
  as the board agrees that the duties are within the member's
  capabilities,] even though the duties are different from the duties
  the member performed before the disability.
         (g)  Written application for a disability pension must be
  filed with the executive director not later than the 180th day after
  the date the member leaves active service [administrator]. The
  application must be accompanied by a recommendation from the health
  director. This recommendation shall contain a statement indicating
  whether the member became disabled while the member was on duty or
  off duty and whether the disability was service-connected or was
  not service-connected [nonservice-connected].
         (k)  For purposes of Sections 6.04 and 6.05 of this article
  and this section:
               (1)  longevity pay and incentive pay are the amounts in
  effect on the date the benefits are to begin, without subsequent
  adjustment; and
               (2)  except as provided by Section 6.05(b-1) of this
  article, base pay is the amount in effect on the date benefits are
  to begin, without subsequent adjustment.
         (l)  Notwithstanding any other law, Subchapter B, Chapter
  607, Government Code, applies to all members without regard to the
  employing department or job assignment.
         SECTION 1.31.  Part 6, Article 6243a-1, Revised Statutes, is
  amended by adding Section 6.035 to read as follows:
         Sec. 6.035.  DISABILITY BENEFITS FOR CERTAIN PERSONS IN
  UNIFORMED SERVICES. (a)  In this section, "uniformed services" has
  the meaning assigned by the federal Uniformed Services Employment
  and Reemployment Rights Act of 1994 (38 U.S.C. Section 4301 et
  seq.).
         (b)  This section applies to a person who was released from
  the uniformed services after December 17, 2001, under conditions
  that would have made the person eligible for benefits under Section
  414(u) of the code if the person could have returned to active
  service.
         (c)  If a person subject to this section was unable to return
  to active service by reason of disability incurred while on a leave
  of absence due to service in the uniformed services, that person is
  entitled to a regular disability pension in accordance with Section
  6.03 of this article, calculated in accordance with Section 6.04 of
  this article.
         (d)  Notwithstanding Section 6.03(g) of this article, a
  written application for a disability pension must be filed not
  later than the 180th day after the date of the person's release from
  the uniformed services.
         (e)  A person subject to this section is entitled to receive
  pension service for the period of service with the uniformed
  services only to the extent that contributions are made for that
  period in accordance with this article.
         SECTION 1.32.  Section 6.04, Article 6243a-1, Revised
  Statutes, is amended to read as follows:
         Sec. 6.04.  CALCULATION OF REGULAR [GROUP A] DISABILITY
  BENEFITS [PENSION]. (a) Subject to Subsection (g) of this section,
  if [If] a Group A member's application for a Group A disability
  pension has been approved by the board pursuant to Section 6.03 of
  this article, including any procedures adopted under that section,
  the Group A member may elect to receive a Group A disability pension
  calculated:
               (1)  in the same manner as the benefit under Sections
  6.01(b) and (c) of this article; or
               (2)  under Subsection (c) [(b)] of this section.
         (b)  An election under Subsection (a) of this section, once
  approved by the board [made], is irrevocable.
         [(b)     When a Group A member elects to accept a Group A
  disability pension under this section, it shall be calculated as
  provided by Subsections (c), (d), and (e) of this section.]
         (c)  Subject to Subsection (g) of this section, [If] a Group
  A [member's disability results during the performance of duties
  with either department, the] member who elects to have benefits
  determined under this subsection is entitled to a monthly
  disability pension calculated as follows:
               (1)  at a rate of three percent of base pay for each
  year, prorated for fractional years, of pension service, with a
  [minimum of 20 years of pension service being deemed credited and a]
  maximum of 32 years of pension service being credited, or 96 percent
  of base pay [or], except that if the Group A member had 34 or more
  years of pension service as of April 30, 1990 [May 1, 1990], the
  member is entitled to [shall] receive the greater of a disability
  pension calculated under the terms of the combined pension plan in
  effect on that date or as calculated under this subdivision; plus
               (2)  one-half of the longevity pay the Group A member
  was receiving at the time the member left active service; plus
               (3)  subject to Subsection (d) of this section,
  1/24th[, without subsequent adjustment,] of the annualized amount
  of city service incentive pay the Group A member received at the
  time the member left active service.
         (c-1)  The disability pension calculated under Subsection
  (c) of this section may not exceed the greater of:
               (1)  90 percent of the member's average base pay
  determined under the applicable subsection; or
               (2)  the vested and accrued disability pension of the
  member as determined on August 31, 2017.
         (d)  Payments of the amounts described by [Notwithstanding
  Subsection (c) of this section, the amount of a disability
  retirement benefit of a Group A pensioner who is on disability
  retirement under] Subsection (c)(3) of this section are [is]
  contingent on the city's continuing payment of city service
  incentive pay to Group A members on active service. [For purposes
  of this subsection, base pay and longevity pay are the amounts in
  effect on the date the benefits are to begin, without subsequent
  adjustment.]
         (e)  If a Group B [A] member's application for a Group B
  disability pension has been approved by the board under Section
  6.03 of this article, including any procedures adopted under that
  section, the Group B member may elect to receive a Group B
  disability pension calculated in the manner described by Subsection
  (f) or (f-1) of this section, subject to Subsection (g) of this
  section [disability does not result during the performance of the
  member's duties with either department, the member is entitled to a
  monthly disability pension calculated:
               [(1)     at a rate of three percent of base pay for each
  year, prorated for fractional years, of pension service, with a
  maximum of 32 years of pension service, or 96 percent of base pay,
  except that if the Group A member had 34 or more years of pension
  service as of April 30, 1990, the member shall receive the greater
  of a disability pension calculated under the combined pension plan
  in effect on that date or as calculated under this subdivision; plus
               [(2)     one-half of the longevity pay the Group A member
  was receiving at the time the member left active service; plus
               [(3)     1/24th of the annualized amount of city service
  incentive pay the Group A member received at the time the member
  left active service, without regard to any subsequent adjustment].
         (f)  Subject to Subsections (f-1), (f-3), and (g) of this
  section, the disability pension of a Group B member shall be
  calculated as follows:
               (1)  for a member who began active service before March
  1, 2011, the member's disability pension shall be the sum of:
                     (A)  the member's number of years of pension
  service earned before September 1, 2017, prorated for fractional
  years, times three percent of the average computation pay
  determined over the 36 consecutive months of pension service in
  which the member received the highest computation pay; plus
                     (B)  the number of years of pension service,
  including pension service credit imputed under Section 6.05(c) of
  this article, earned on or after September 1, 2017, prorated for
  fractional years, times the applicable percentage prescribed by
  Section 6.02(b-1) of this article of the average computation pay
  determined over the 60 consecutive months of pension service in
  which the member received the highest computation pay; or
               (2)  for a member who began active service on or after
  March 1, 2011, the member's disability pension shall be the number
  of years of pension service, including pension service credit
  imputed under Section 6.05(c) of this article, prorated for
  fractional years, times 2.5 percent of the average computation pay
  determined over the 60 consecutive months of pension service in
  which the member received the highest computation pay.
         (f-1)  Notwithstanding Subsection (f) of this section, for a
  Group B member who had 34 or more years of pension service as of
  April 30, 1990, the member is entitled to receive the greater of a
  disability pension calculated under the terms of Plan B in effect on
  April 30, 1990, or calculated under Subsection (f) of this section.
         (f-2)  For purposes of Subsections (f) and (f-1) of this
  section:
               (1)  any partial year of pension service for a Group B
  member's first 20 years of pension service is counted as a full year
  of pension service, if the member was considered by the member's
  department to have worked a normal full-time schedule at the time of
  the disability;
               (2)  if the member has less than 36 or 60 consecutive
  months of pension service, as applicable, the member's average
  computation pay will be computed based on the member's entire
  pension service; and
               (3)  days during which the member earned no pension
  service due to a termination of active service or otherwise must be
  disregarded in determining the 36 or 60 consecutive months of
  highest computation pay.
         (f-3)  The disability pension calculated under Subsection
  (f) or (f-1) of this section may not exceed the greater of:
               (1)  90 percent of the member's average computation pay
  determined under the applicable subsection; or 
               (2)  the vested and accrued disability pension of the
  member as determined on August 31, 2017 [Payments of the amounts
  described by Subsection (e)(3) of this section are contingent on
  the city's continuing payment of city service incentive pay to
  Group A members on active service].
         (g)  The disability pension calculated in accordance with
  this section, including both a Group A benefit described by
  Subsection (a) of this section and a Group B benefit described by
  Subsection (f) of this section, shall be reduced dollar-for-dollar
  by any monthly disability compensation benefit received under
  Section 6.05 of this article. If the monthly disability
  compensation benefit provided to a member under Section 6.05 of
  this article equals or exceeds any benefit the member is entitled to
  under this section or Section 6.01(b) or (c) of this article, the
  member may not receive the benefit under this section [For purposes
  of Subsection (e)(3) of this section, base pay and longevity pay are
  the amounts in effect on the date the benefits are to begin, without
  subsequent adjustment].
         SECTION 1.33.  The heading to Section 6.05, Article 6243a-1,
  Revised Statutes, is amended to read as follows:
         Sec. 6.05.  COMPENSATION BENEFITS FOR SERVICE-CONNECTED 
  [CALCULATION OF GROUP B] DISABILITY [BENEFITS].
         SECTION 1.34.  Section 6.05, Article 6243a-1, Revised
  Statutes, is amended by amending Subsections (a), (b), and (c) and
  adding Subsection (b-1) to read as follows:
         (a)  If a member leaves active service at any time due to
  disability and the board determines that the member with the
  disability became unable to perform the member's duties with the
  member's department due to an injury or sickness incurred in the
  performance of the member's duties, the member is entitled to
  periodic disability compensation benefits in accordance with this
  section [Group B member's application for a Group B disability
  pension has been approved by the board pursuant to Section 6.03 of
  this article, including any procedures adopted under that section,
  the Group B member may, depending on the circumstances, elect to
  receive a Group B disability pension calculated in the manner
  described by Subsection (b) or (c) of this section].
         (b)  Subject to Subsection (b-1), [If] a Group A [B] member
  whose disability, as determined by the board, was caused by an
  injury or sickness incurred in the performance of the member's duty
  shall receive a monthly benefit equal to 60 percent of the member's
  base pay. For purposes of this subsection, "base pay" is the amount
  in effect on the date compensation benefits under this section are
  to begin, without subsequent adjustment.
         (b-1)  Instead of receiving a periodic disability
  compensation benefit under Subsection (b) of this section, a Group
  A member who is entitled to periodic disability compensation
  benefits under this section may elect, before the benefits begin,
  to receive those benefits as a monthly benefit equal to 50 percent
  of the member's base pay adjusted from time to time to reflect
  changes in base pay that occur after the member began receiving a
  monthly compensation benefit under this section [becomes disabled
  during the performance of the member's duties with either
  department, the member is entitled to a monthly disability pension
  calculated at a rate of three percent of the average computation pay
  determined over the 60 consecutive months in which the Group B
  member received the member's highest computation pay multiplied by
  the number of years, prorated for fractional years, of the member's
  pension service with a minimum of 20 years of pension service being
  deemed credited, or 60 percent of average computation pay
  determined over the 60 consecutive months in which the Group B
  member received the member's highest computation pay, except that
  if the Group B member has less than five years of pension service,
  the Group B member's average computation pay will be computed based
  on the member's entire pension service. If a Group B member had 34
  or more years of pension service as of April 30, 1990, the Group B
  member is entitled to receive the greater of a Group B disability
  pension calculated under the terms of Plan B in effect on that date
  or calculated pursuant to this subsection].
         (c)  A [The Group B disability pension for any] Group B
  member whose disability, as determined by the board, was caused by
  an injury or sickness incurred in the performance of the member's
  duty shall receive a monthly benefit equal to the disability
  pension under Sections 6.04(f), (f-1), (f-2), and (f-3) of this
  article except that if the member:
               (1)  does not have 20 years of pension service, the
  member is considered to have 20 years of pension service for the
  purposes of calculating the disability pension under that section;
  and
               (2)  has less than 36 or 60 consecutive months, as
  applicable, of employment with the department, the member's average
  computation pay will be computed based on all the member's
  computation pay, and days during which the member earned no pension
  service due to a termination of active service or otherwise must be
  disregarded in determining either the 36 or 60 consecutive months
  of highest computation pay [does not result during the performance
  of the member's duties with either department shall be computed at a
  rate of three percent of the average computation pay determined
  over the 60 consecutive months in which the Group B member received
  the member's highest computation pay multiplied by the number of
  years, prorated for fractional years, of the member's pension
  service, except that any partial year of pension service for the
  first 20 years of pension service shall be counted as a full year of
  pension service. If the Group B member has less than five years of
  pension service, the Group B member's average computation pay will
  be computed based on the member's entire pension service, and if a
  Group B member had 34 or more years of pension service as of April
  30, 1990, the Group B member is entitled to receive the greater of a
  disability pension calculated under the terms of Plan B in effect on
  that date or calculated pursuant to this subsection].
         SECTION 1.35.  Section 6.05(d), Article 6243a-1, Revised
  Statutes, is redesignated as Section 6.055, Article 6243a-1,
  Revised Statutes, and amended to read as follows:
         Sec. 6.055.  REDUCTION IN DISABILITY OR COMPENSATION
  BENEFITS FOR CERTAIN PERSONS. (a) In this section, "earned income"
  means income earned by a Group B pensioner in the form of wages,
  salaries, commissions, fees, tips, unemployment benefits, and
  other amounts received by virtue of employment or self-employment
  but paid before any deduction for taxes or insurance. In addition,
  earned income also includes those amounts contributed on a
  before-tax basis to any retirement plan or employee health and
  welfare benefit plan.
         (b) [(d)]  The board shall require any Group B pensioner who
  became a member of Plan B or the combined pension plan on or after
  May 1, 1990, and who is receiving a Group B disability pension under
  Section 6.04 of this article or a periodic disability compensation
  under Section 6.05 of this article [in accordance with Subsection
  (b) or (c) of this section] to provide the board annually, on or
  before July 1 [May 1] of each year, with a true and complete copy of
  those portions of the person's federal and, if applicable, state
  tax return, including appropriate schedules, for the previous
  calendar year that indicate the person's occupations, if any, and
  earned income for the previous calendar year. If the pensioner did
  not file a tax return for the previous calendar year, the board may
  require other documentation reflecting the pensioner's occupation
  or earned income that the board determines appropriate.
         (c)  The pension system [However, the board] may waive the
  July 1 [May 1] date under Subsection (b) of this section in lieu of
  one later in the same calendar year if the Group B pensioner
  provides the board with a true and complete copy of a grant of an
  extension of time for the filing of the person's tax return from the
  appropriate governmental agency or a true and complete copy of an
  extension request that results in any automatic extension.
         (d)  If, after evaluating the information received under
  Subsection (b) of this section, the board finds the Group B
  pensioner is or has been receiving earned income from one or more
  employments, including self-employment, during the preceding year,
  the board shall reduce future disability retirement [pension]
  payments to the Group B pensioner in accordance with the following
  formula: $1 for each $1 that the sum of "a" + "b" is greater than
  "c," where "a" is the earned income of the Group B pensioner
  attributable to the previous calendar year from the person's
  employments, "b" is the total amount of Group B disability
  retirement payments [pension] received by the Group B pensioner the
  previous calendar year, and "c" is the annualized amount of the
  average computation pay the Group B pensioner received as of the
  date the person left active service.
         (e)  For purposes of the [this] computation under Subsection
  (d) of this section, the average computation pay shall be deemed
  increased at a rate of 2.75 percent [of four percent simple
  interest], without compounding during the year, as of each January
  1 that the Group B pensioner receives a Group B disability
  retirement payment [pension].
         SECTION 1.36.  Section 6.06, Article 6243a-1, Revised
  Statutes, is amended by amending Subsections (b), (e), (f), (g),
  (h), (j), (k), (l), (m), (n), (o), (p), (q), (r), and (t) and adding
  Subsections (e-1), (e-2), (j-1), (o-1), (o-2), (u), and (v) to read
  as follows:
         (b)  A written application for benefits must be filed with
  the executive director [administrator].
         (e)  If [the qualified] surviving children of a primary party
  are not qualified survivors entitled to death benefits, the
  [qualified surviving] spouse of the primary party who is a
  qualified survivor is entitled only to receive a share of the death
  benefits in the amount calculated under Section 6.07(a) [or (b)] or
  Section 6.08(b)(1), (c)(1), (d)(1), or (e)(1) of this article,
  whichever is applicable, and is not entitled to what otherwise
  would be the [qualified] surviving children's share.
         (e-1)  If a primary party had [there is] no [qualifying]
  surviving spouse, any [qualified] surviving child who is a
  qualified survivor [children] shall receive only the amount
  calculated under Section 6.07(a) [or (b)] or Section 6.08(b)(2),
  (c)(2), (d)(2), or (e)(2) of this article, whichever is applicable,
  and is [are] not entitled to what otherwise would be the [qualified]
  surviving spouse's share.
         (e-2)  If a primary party does not have a [there is no
  qualified surviving] spouse or [qualified surviving] children who
  are qualified survivors, any [qualified] dependent parent of the
  primary party who is a qualified survivor shall receive only the
  amount calculated under Section 6.07(c) or Section 6.08(b)(3),
  (d)(3), or (e)(3) of this article, whichever is applicable, and is
  not entitled to what otherwise would be the [qualified] surviving
  spouse's or [qualified] surviving children's share.
         (f)  The total monthly death benefits [benefit] received by
  the qualified survivors of a primary party under this article,
  including the primary party's [surviving] spouse, [qualified
  surviving] children, or [qualified] dependent parents, [parent]
  may not exceed the pension to which the deceased primary party was
  entitled per month.
         (g)  If there is no surviving spouse or legal guardian for
  the [qualified] surviving children of a primary party who are
  qualified survivors and if the board determines that the
  [qualified] surviving children lack the discretion to handle money,
  or in other appropriate circumstances, notwithstanding any other
  provision of this section, the board may request a court of
  competent jurisdiction to appoint a suitable person to receive and
  administer the [qualified] surviving children's money or in those
  circumstances described in Subsection (n) of this section, appoint
  a new trustee to administer the [qualified] surviving children's
  [support] trust.
         (h)  With the exception of a [support] trust described in
  Subsection (n) of this section, no death benefits awarded to
  [qualified] surviving children may be used for any purpose other
  than to benefit the [qualified] surviving children. [The board may
  withhold payment of benefits if it has reason to believe the
  benefits are not being properly applied.]
         (j)  With the exception of those circumstances described in
  Subsection (n) of this section, death benefits payable [paid] to
  [qualified] surviving children [living with a person other than the
  surviving spouse] shall be delivered to the legal guardian of the
  estate of the surviving children if one has been appointed and the
  pension system has been provided proof of the appointment. If no
  legal guardian has been appointed, death benefits shall be
  delivered to one of the following persons, provided there is
  evidence that the person is [person with whom the qualified
  surviving children are living, if the board has designated the
  person as being] a suitable person to receive and administer the
  benefits:
               (1)  the surviving spouse with whom the child resides;
  or
               (2)  the adult head of the household with whom the child
  resides, if the child does not reside with the surviving spouse.
         (j-1)  In accordance with Subsection (h) of this section, the
  recipient of a surviving child's death benefits under Subsection
  (j) of this section must use the death benefits to benefit the
  child. The board may[, however,] withhold payment of benefits to
  anyone, if presented with evidence that the death benefits are not
  being used to benefit the surviving child [but the legal guardian of
  the qualified surviving children and may require proof that a
  person has been appointed legal guardian of the qualified surviving
  children before authorizing any benefits to be delivered to that
  person].
         (k)  Dependent [The qualified surviving dependent] parents
  of a primary party [member] who are entitled to receive death [any
  survivor] benefits provided by this article may only receive the
  benefits for the remainder of the dependent parents' [their] lives.
         (l)  The pension system [board] may require all qualified
  survivors [persons] receiving death benefits[, including qualified
  surviving spouses, qualified surviving children or their
  guardians, and qualified surviving dependent parents,] to file
  [with the administrator, at least once every two years,] a sworn
  statement with the executive director concerning the qualified
  survivor's [their] eligibility to continue to receive death
  benefits at least once every two years, or at any other time the
  executive director considers a sworn statement to be appropriate to
  evidence the continued eligibility of the qualified survivor. [The
  board may also require a sworn statement from any person receiving
  death benefits at any time.] The board may withhold death benefits
  from any person who fails or refuses to file a statement when
  requested to do so.
         (m)  When the last qualified survivor of any primary party
  becomes ineligible to continue to receive death benefits, [that
  survivor shall be paid in a lump sum] an amount equal to the excess
  [difference], if any, of [between] the total amount of all
  contributions made to the fund by the primary party while a member
  over [, and] the sum of all benefits paid to the primary party and
  all of the primary party's [his] qualified survivors shall be paid
  in a lump sum to the last person to receive benefits as a qualified
  survivor or, if none exists, to the member's designee.  The total
  amount to be paid in benefits to the primary party and all qualified
  survivors shall never be less than the total amount of
  contributions the primary party made to the fund while a member.
         (n)  Notwithstanding any other provision of this section:
               (1)  [,] death benefits awarded to an unmarried child
  who is a qualified survivor [surviving child of a primary party] who
  is determined by the board to be disabled [handicapped] under the
  terms of Subsection (o-2) [(o)] of this section may be paid to the
  trustee of a management trust, supplemental needs or special needs
  trust, or comparable trust [support trust] established for the
  benefit of the child, if the trust meets the requirements set forth
  in a procedure adopted from time to time by the board [qualified
  surviving child if:
               [(1)     an opinion of counsel of the trustee of the
  support trust is furnished to the board indicating that payments
  made to the support trust will not, under existing law, be
  considered a resource of the qualified surviving child under Title
  42, Section 1396(a)(17), of the United States Code or any successor
  statute, as well as applicable state law or regulations governing
  the situation]; and
               (2)  as soon as practicable after the pension system
  has knowledge of an event listed in this subdivision, the pension
  system shall terminate payment of death benefits to a [coincident
  with the furnishing of the opinion of counsel, the board is provided
  with an executed original of the support trust document for the
  records of the pension system;
               [(3) the terms of the trust provide that the board will
  receive an annual accounting of the support trust from its trustee,
  although the board has no legal responsibility to oversee the
  support trust; and
               [(4) the support] trust described by Subdivision (1) of
  this subsection effective [will terminate as soon as practicable]
  on the earlier occurrence of the following events:
                     (A)  the date as of [on] which the [qualified
  surviving] child is determined by the board to no longer be disabled
  [handicapped] under the terms of this section;
                     (B)  the date on which the [qualified surviving]
  child is lawfully married;
                     (C)  the date on which the [qualified surviving]
  child is deceased;
                     (D)  the date on which the pension system becomes
  aware that the assets of the [support] trust are deemed to be the
  resources of the child under applicable federal or state laws or
  regulations; or
                     (E)  if [unless otherwise excused by the board,]
  the trustee of the child's [support] trust fails to provide a court
  of competent jurisdiction [the board] with an annual accounting of
  the child's trust, the date occurring [within] six months after the
  date of the close of the [support] trust's fiscal year.
         (o)  When a child who, as a qualified survivor, [surviving
  child who] is entitled to receive death benefits under this article
  reaches the age of 19, the [qualified surviving] child may no longer
  participate in the division of the benefits, but the same
  undiminished [qualified surviving] child's share as determined by
  this section shall be paid to any remaining [qualified surviving]
  children who are qualified survivors who remain eligible to
  continue to receive death benefits.
         (o-1)  If benefits are no longer payable to the trust
  described in Subsection (n)(1) of this section in accordance with
  Subsection (n)(2) of this section, the benefits are divisible and
  payable to any remaining children who are qualified survivors who
  remain eligible to receive death benefits.
         (o-2)  If an unmarried child [under 19 years of age.
  However, a handicapped qualified surviving child may not be removed
  from participation in the division of benefits on reaching the age
  of 19 nor may the child be barred from original participation at any
  time after reaching the age of 19, and the payments shall continue
  for the duration of the handicap. If a qualified surviving child is
  not married and], after cessation of entitlement to death benefits
  [(]because of attainment of age 19[) but before age 23], becomes
  disabled before age 23 [handicapped], the child is entitled to
  participate in the division of death benefits under this article.
  Notwithstanding the preceding, all death benefits granted under
  this subsection are conditioned on the board finding that:
               (1)  the [qualified surviving] child is so physically
  or mentally disabled [handicapped], either congenitally or through
  injury suffered or disease contracted, as to be unable to be
  self-supporting or to secure and hold gainful employment or pursue
  an occupation;
               (2)  the [qualified surviving] child is not married;
               (3)  the disability [handicap] was not the result of an
  occupational injury for which the [qualified surviving] child
  received compensation equal to or greater than that provided under
  this article;
               (4)  the disability [handicap] was not the result of an
  intentional self-inflicted injury or a chronic illness itself
  resulting from an addiction of the [qualified surviving] child
  through a protracted course of [noncoerced] indulgence in alcohol,
  narcotics, or other substance abuse that was not coerced; and
               (5)  the disability [handicap] did not occur as a
  result of the [qualified surviving] child's participation in the
  commission of a felony.
         (p)  If a [handicapped qualified surviving] child with a
  disability received or is receiving workers' compensation
  resulting from an occupational injury equal to an amount less than
  the death benefit to be provided under this section, the difference
  shall be paid out of the assets of the fund in the form otherwise
  payable as monthly benefits. For purposes of Subsections
  [Subsection] (o), (o-1), and (o-2) of this section, if a lump sum is
  awarded for an injury, the fund's actuary may compute a
  corresponding monthly equivalent. A finding relating to a
  [qualified surviving] child's disability [handicap] is subject to
  periodic review and modification by the board.
         (q)  On the death or marriage of a [qualified surviving]
  child granted death benefits under this article, the death benefits
  shall cease being paid to that child; however, the same
  undiminished [qualified surviving] child's share as determined by
  this section shall be uniformly distributed among any remaining
  unmarried [qualified surviving] children who are:
               (1)  under 19 years of age; or
               (2)  disabled [and any unmarried qualified surviving
  children who are handicapped] as described by Subsection (o-2)
  [(o)] of this section and entitled to death benefits as qualified
  survivors.
         (r)  A spouse of a primary party who married the primary
  party [resulting from any marriage to a former member or pensioner]
  after the date the primary party terminated [member or pensioner
  leaves] active service is not a qualified survivor [surviving
  spouse] and is [not] entitled only to those death benefits, if
  applicable, provided under Section 6.063 of this article.
         (t)  A [qualified] surviving spouse who first remarried on or
  after April 21, 1988, is eligible to receive death benefits for the
  remainder of the [qualified surviving] spouse's life provided the
  surviving spouse is a qualified survivor. This subsection may not
  be applied retroactively.
         (u)  The eligibility of a surviving spouse who first
  remarried before April 21, 1988, is governed by Section 6.061 of
  this article.
         (v)  The qualified survivors of a member who dies while
  performing qualified military service are entitled to any
  additional benefits, other than benefits relating to the qualified
  military service, that qualified survivors would have received if
  the member had returned from qualified military service the day
  before death, resumed employment, and then died.
         SECTION 1.37.  Part 6, Article 6243a-1, Revised Statutes, is
  amended by adding Sections 6.061, 6.062, 6.063, and 6.064 to read as
  follows:
         Sec. 6.061.  PROSPECTIVE REINSTATEMENT OF CERTAIN DEATH
  BENEFITS. (a)  Subject to Subsection (c) of this section, the
  surviving spouse of a primary party who was a member of the old
  plan, Plan A, or Plan B whose death benefits, also referred to as
  "survivor benefits" or "widow benefits," terminated because of a
  remarriage of the surviving spouse that occurred before April 21,
  1988, is entitled to receive death benefits, on a prospective basis
  only, as of the first day of the month following the month in which
  the executive director receives the application.
         (b)  The board shall make reasonable efforts to notify all
  known living surviving spouses who may be entitled to a
  reinstatement of benefits under this section.
         (c)  A surviving spouse's properly completed, board-approved
  application for reinstatement of death benefits under this section
  must be received by the executive director not later than the 180th
  day after the date the board completes, as determined by the board,
  the reasonable efforts required by Subsection (b) of this section.
         (d)  A surviving spouse's application for reinstatement of
  death benefits under this section constitutes the spouse's waiver
  of any claims against the pension system, the board, the executive
  director, or any other employee of the board or the pension system
  arising out of any claim for death benefits. 
         (e)  This section may not be applied retroactively. A
  surviving spouse may not receive death benefits attributable to
  periods before the executive director's receipt of a properly
  completed and board-approved application, and any benefit provided
  to a surviving spouse described in this section must be calculated
  as if the benefits had not terminated on the surviving spouse's
  remarriage notwithstanding the fact the reinstatement of benefits
  is not retroactive.
         Sec. 6.062.  LUMP-SUM PAYMENT ON DEATH OF CERTAIN MEMBERS.
  (a) If an unmarried member dies while on active service and before
  beginning participation in DROP, the last person to receive
  benefits as the member's qualified survivor or, if the member does
  not have a qualified survivor living, the member's designee, shall
  be paid a lump-sum payment determined in accordance with this
  section if, at the time of the member's death, the member:
               (1)  had no qualified survivors; or
               (2)  only had qualified survivors who are children who
  become ineligible to receive death benefits before the benefits
  were paid for at least 120 consecutive months.
         (b)  The amount of the lump-sum payment under this section is
  the greater of:
               (1)  the payment that could have been provided under
  Section 6.06(m) of this article; or
               (2)  an amount equal to the actuarial equivalent of the
  remainder of the monthly benefits that would have been paid for the
  period from the last monthly benefit payment to the end of the 120
  months, starting with the date of the first monthly benefit
  payment, if any.
         (c)  If no death benefit payments have been made with respect
  to the member, the amount of a monthly death benefit payment shall
  be considered to be the monthly death benefit that would have been
  paid if the member had died leaving only one dependent parent who
  was a qualified survivor.
         (d)  If a qualified survivor or designee is entitled to
  payment under both this section and Section 6.06(m) of this
  article, payments shall be made only under this section.
         (e)  The payment required under this section shall be made as
  soon as practicable after the later of the date:
               (1)  of the death of the member; or
               (2)  the last qualified survivor becomes ineligible to
  receive monthly death benefit payments.
         Sec. 6.063.  AUTHORITY TO ELECT CERTAIN ACTUARIALLY REDUCED
  BENEFITS. (a) The board shall adopt policies under which a member
  who is leaving active service or a pensioner may elect to accept
  actuarially reduced benefits to provide the following optional
  benefits:
               (1)  a 100 percent joint and survivor annuity with the
  member's or pensioner's spouse;
               (2)  a 50 percent joint and survivor annuity with a
  spouse who is not a qualified survivor because the marriage to the
  pensioner occurred after the pensioner terminated active service,
  provided the election is made not later than one year after the date
  of the marriage; or
               (3)  a death benefit for a child who is not a qualified
  survivor because the child was born or adopted after the member left
  active service, but only if the child:
                     (A)  is a dependent of the pensioner, within the
  meaning of Section 152(a)(1) of the code; and
                     (B)  has not attained 18 years of age at the time
  of the election.
         (b)  An election under this section may not be revoked by the
  member or pensioner after it is filed with the pension system.
         (c)  Notwithstanding any other provision of this article, an
  election under this section shall result in benefits being paid as
  prescribed by this section instead of as prescribed by Section
  6.01, 6.02, 6.04, 6.05, 6.07, or 6.08 of this article, as
  applicable.
         (d)  A pensioner who desires to make an election under
  Subsection (a)(1) of this section after having made an election
  under Subsection (a)(2) of this section shall incur a second
  actuarial reduction in benefits to pay for the increased survivor
  annuity.
         (e)  Except as provided by Subsection (f) of this section, a
  person is not entitled to the payment of benefits under this section
  with respect to a pensioner who makes an election after termination
  of active service and dies within one year after making the
  election, except the amount by which the pensioner's benefits were
  reduced are paid to the person who is entitled to receive payments
  under Section 6.064 of this article.
         (f)  Subsection (e) of this section does not apply to a
  person who makes an election under Subsection (a)(1) of this
  section to receive a 100 percent joint and survivor annuity with a
  spouse who is a qualified survivor at the time:
               (1)  the board grants a retirement pension; or
               (2)  a retirement pension would have been granted but
  for the fact that the person elected to participate in DROP after
  retirement.
         (g)  The actuarially reduced benefits being paid to the
  pensioner under this section will not be increased if the spouse
  dies before the pensioner, or if the child attains 19 years of age
  before the pensioner dies.
         (h)  The joint and survivor annuity or the pensioner's
  pension and child's death benefit payable under this section is the
  actuarial equivalent of the pension and death benefits, if any,
  that would have been payable, at the time of the election, if the
  election had not been made. On the death of the pensioner:
               (1)  the surviving spouse of a pensioner who made an
  election under Subsection (a)(1) of this section receives a pension
  that is equal to the reduced pension being received by the pensioner
  at the time of death; and
               (2)  a surviving spouse who is not a qualified survivor
  of a pensioner who made an election under Subsection (a)(2) of this
  section receives a pension that is 50 percent of the reduced pension
  being received by the pensioner at the time of death.
         (i)  A pensioner and surviving spouse receiving a death
  benefit payable under this section are eligible for adjustments
  under Sections 6.12 and 6.13 of this article, if the pensioner or
  surviving spouse, as applicable, is otherwise entitled to those
  adjustments, except that in each case the adjustment shall be
  calculated so that the total pension or death benefit paid is
  reduced by the same percentage the pensioner's pension is otherwise
  reduced under this section.
         (j)  A pensioner and surviving spouse receiving a death
  benefit payable under this section are not entitled to the minimum
  benefits provided under Section 6.10A, 6.10B, or 6.11 of this
  article.
         (k)  A surviving spouse receiving a death benefit payable
  under this section is not entitled to the special death benefit
  provided under Section 6.09 of this article.
         (l)  During a period in which there are two or more qualified
  survivors of a member who has made a joint and survivor annuity
  election under this section, the spousal benefit will be divided
  among the eligible survivors under Section 6.07 or 6.08 of this
  article, as applicable.
         (m)  A child's death benefit elected under Subsection (a)(3)
  of this section is treated the same way as a death benefit to a child
  who is a qualified survivor, except that it is based on the
  actuarially reduced pension.
         Sec. 6.064.  DESIGNEES. (a) A member, pensioner, or
  qualified survivor may at any time designate, in writing, one or
  more persons as a designee to receive any lump-sum payment due from
  the pension system on the death of the member, pensioner, or
  qualified survivor, as applicable.
         (b)  A designation under this section of a person other than
  the spouse of the member, pensioner, or qualified survivor, as
  appropriate, must be made with the written consent of the spouse, if
  the individual has a spouse.
         (c)  A designation made under this section:
               (1)  may be revoked or changed at any time; and
               (2)  is void if the person designated dies or goes out
  of existence before the payment is made.
         (d)  If a member, pensioner, or qualified survivor
  designates a spouse to receive a payment and the parties are later
  divorced, the designation is void at the time of the divorce unless
  ratified in writing at the time of the divorce or after that time.
         (e)  A designation by a member under this section is void at
  the time the member becomes a pensioner unless ratified in writing
  at the time the member becomes a pensioner or after that time.
         (f)  If a member, pensioner, or qualified survivor does not
  have a valid designee on file with the pension system at the time of
  death, the designee is:
               (1)  the spouse;
               (2)  the qualified survivors, if any, if there is no
  spouse;
               (3)  the estate of the person, if there is no spouse or
  qualified survivors; or
               (4)  the heirs of the person, if there is no spouse,
  qualified survivors, or estate.
         SECTION 1.38.  Sections 6.07, 6.08, 6.09, and 6.10A, Article
  6243a-1, Revised Statutes, are amended to read as follows:
         Sec. 6.07.  GROUP A DEATH BENEFITS. (a)(1) If a Group A
  member dies before leaving active service [retirement] and before
  the Group A member had [has] 20 years of pension service, the Group
  A member's [leaving both a qualified surviving] spouse and
  [qualified surviving] children who are [, the] qualified [surviving
  spouse shall make an election for all] survivors shall, in the
  aggregate, [to] receive a Group A death benefit [consisting in the
  aggregate of an amount] equal to a Group A retirement pension
  computed under the terms of Section 6.01 of this article as if the
  Group A member had completed 20 years of pension service. [An
  election under this subdivision, once made, is irrevocable. This
  Group A death benefit shall be divided one-half to the qualified
  surviving spouse and one-half to the qualified surviving children.]
               (2)  If a Group A [pensioner dies during disability
  retirement and before the Group A pensioner had 20 years of pension
  service, leaving both a qualified surviving spouse and qualified
  children, the survivors in the aggregate shall receive a Group A
  death benefit calculated either under Sections 6.01(b) and (c) of
  this article if the Group A pensioner's Group A disability pension
  was calculated under Section 6.04(a) of this article, or under
  Section 6.01(e) of this article if the Group A pensioner's Group A
  disability pension was calculated under Section 6.04(b) of this
  article. This Group A death benefit shall be divided one-half to
  the qualified surviving spouse and one-half to the qualified
  surviving children.
         [(b)(1)  If a Group A member or former Group A] member dies
  before service retirement and after the Group A member has [or
  former Group A member has] 20 years of pension service, the Group A
  member's [leaving both a qualified surviving] spouse and [qualified
  surviving] children[,] who are [the] qualified [surviving spouse
  shall make an election for all] survivors shall, in the aggregate,
  [to] receive a Group A death benefit calculated under Section 6.01
  of this article as if the Group A member [of an amount equal to a
  Group A retirement pension the Group A member or former Group A
  member would have received] had [the person] left active service on
  the date of the [death, computed under the terms of Section 6.01 of
  this article. An election under this subdivision, once made, is
  irrevocable. This] Group A member's death [benefit shall be
  divided one-half to the qualified surviving spouse and one-half to
  the qualified surviving children].
               (3)  If a Group A pensioner dies during service
  retirement, the Group A pensioner's spouse and children who are
  qualified survivors shall, in the aggregate, receive a Group A
  death benefit in an amount equal to the Group A retirement pension
  being received by the Group A pensioner on the date of the
  pensioner's death.
               (4)  If a Group A pensioner dies after November 25,
  1996, while receiving periodic disability compensation under
  Section 6.05 of this article or a disability pension under Section
  6.04 of this article, and before the Group A pensioner has 20 years
  of pension service, the Group A pensioner's spouse and children who
  are qualified survivors shall, in the aggregate, receive a Group A
  death benefit calculated under Section 6.04 or 6.05 of this
  article, as applicable, in the same manner as the Group A
  pensioner's periodic disability compensation or disability
  pension, but as if the Group A pensioner had completed 20 years of
  pension service.
               (5)  [(2)(A)] If a Group A pensioner who has 20 or more
  years of pension service dies during disability retirement, the
  Group A pensioner's spouse and children who are qualified survivors
  shall, in the aggregate, [dies leaving both a qualified surviving
  spouse and qualified surviving children, the qualified surviving
  spouse shall make an election for all survivors to] receive a Group
  A death benefit in an [the] amount equal to [of] the Group A
  disability [retirement] pension being received by the Group A
  pensioner on the date of the pensioner's death.
         (b)  [before the person's death. This] Group A death
  benefits under Subsection (a) of this section [benefit] shall:
               (1)  be divided one-half to the [qualified surviving]
  spouse and one-half to the [qualified surviving] children who are
  qualified survivors; and [.]
               (2)  subject to [(B) With] the terms of Sections
  [exception of those circumstances described by Section] 6.06(n),
  (o), (o-1), and (o-2) of this article, be distributed in an equal
  and uniform manner to the children described by Subdivision (1) of
  this subsection [the Group A death benefits awarded to the
  qualified survivors under this subsection shall be paid entirely to
  the qualified surviving spouse and the qualified surviving
  children. The qualified surviving children's one-half share shall
  be equally and uniformly distributed by the qualified surviving
  spouse to them].
         (c) [(c)(1)]  If a Group A member or pensioner [former Group
  A member] dies leaving no [qualified surviving] spouse or
  [qualified surviving] children who are qualified survivors, the
  [but leaves surviving one or both qualified surviving dependent
  parents, the qualified surviving] dependent parents who are
  qualified survivors shall [may elect to] receive a Group A death
  benefit equal to the death benefit otherwise payable under
  Subsection (a) of this section. The death benefit payable to the
  dependent parents under this subsection shall be divided equally
  between the parents regardless of whether the parents are married
  or living at the same residence. [Group A retirement pension the
  Group A member or former Group A member would have been entitled to
  under Section 6.01 of this article after leaving active service. If
  there are two qualified dependent parents, the election must be
  mutual. An election under this subdivision, once made, is
  irrevocable. The qualified surviving dependent parents of a Group
  A pensioner shall receive a Group A death benefit equal to the
  amount of the actual Group A retirement pension being received at
  the time of the pensioner's death, divided equally between the
  qualified surviving dependent parents.
               [(2) If a Group A pensioner dies during disability
  retirement and before the Group A pensioner had 20 years of pension
  service, leaving no qualified surviving spouse or qualified
  surviving children, but leaves surviving one or both qualified
  surviving dependent parents, the qualified surviving dependent
  parents may elect to receive a Group A death benefit calculated
  either: under Sections 6.01(b) and (c) of this article if the Group
  A pensioner's Group A disability pension was calculated under
  Section 6.04(a) of this article, or under Section 6.01(e) of this
  article if the Group A pensioner's Group A disability pension was
  calculated under Section 6.04(b) of this article. An election
  under this subdivision, once made, is irrevocable.
         [(d)]  If there is only one [qualified surviving] dependent
  parent, that [the] parent is entitled to one-half of the death
  benefit described in [amount determined under Subsection (c)(1) or
  (c)(2) of] this subsection [section].
         Sec. 6.08.  GROUP B DEATH BENEFITS. (a) If a Group B member
  dies while on active service, a [former] Group B member who left
  active service and is vested under Section 5.06 of this article
  dies, or a Group B pensioner dies while receiving [on] service or
  disability retirement or while receiving periodic disability
  compensation under Section 6.05 of this article, the person's
  qualified survivors, or the person described in Section 6.06(g) or
  (j) of this article as the recipient of the children's benefits
  [guardian of the qualified surviving children if no qualified
  surviving spouse exists], may make application for Group B death
  benefits. If the deceased [The qualified surviving spouse of a
  Group B member or former Group B member described by this
  subsection, the guardian of the qualified surviving children of the
  person if no qualified surviving spouse exists, or the qualified
  dependent parents if no qualified surviving spouse or qualified
  surviving children exist, have the option to select whether Group A
  or Group B death benefits are received, if the Group B member or
  former] Group B member was previously eligible to elect whether to
  receive either a Group A or Group B retirement pension, the option
  to elect whether Group A or Group B death benefits are received
  shall be exercised by one of the following:
               (1)  a qualified survivor who is the spouse of the
  deceased Group B member described by this subsection;
               (2)  the person described in Section 6.06(g) or (j) of
  this article as the recipient of benefits on behalf of the deceased
  member's children who are qualified survivors, if no spouse is a
  qualified survivor; or
               (3)  the qualified survivors who are dependent parents
  of the deceased member, if there is neither a spouse nor children
  who are qualified survivors.
         (a-1)  A qualified survivor who receives Group A death
  benefits under Subsection (a) of this section [subsection] is
  entitled to a ratable portion of a reimbursement from the fund in
  the same amount and manner determined under Section 5.03(d) of this
  article. A qualified survivor or guardian desiring a refund of
  excess contributions must make application for the refund with the
  executive director [administrator] within three years after the
  date the qualified survivor or guardian makes application for Group
  A death benefits. The option contained in this subsection is not
  available to qualified survivors of a Group B member [or former
  Group B member] who had, at the time of death, already applied for a
  retirement pension and selected a Group A retirement pension as
  provided by Section 5.03(c) or (c-1) of this article, but the
  qualified survivors are entitled to receive a Group A death
  benefit.
         (b)  Subject to Subsection (b-2) of this section, death
  [Death] benefits shall be computed as follows for the qualified
  survivors of Group B members who die while on active service:
               (1)  the [A qualified surviving spouse's Group B] death
  benefit of a qualified survivor who is the spouse of a member who
  began active service:
                     (A)  before March 1, 2011, shall be the sum of:
                           (i)  the number of years of pension service
  earned before September 1, 2017, prorated for fractional years,
  times 1.5 percent of the [computed at the rate of 1.5 percent of the
  Group B member's] average computation pay determined over the 36
  [60] consecutive months of pension service in which the Group B
  member received the highest computation pay; plus
                           (ii)  the number of [, for each year, and
  prorated for fractional years, of pension service with a minimum of
  20] years of pension service, including pension service credit
  imputed under Section 6.05(c) of this article, after September 1,
  2017, prorated for fractional years, times the applicable
  percentage rate set forth below [assumed, or 30 percent] of the
  average computation pay determined over the 60 consecutive months
  of pension service in which the Group B member received the highest
  computation pay:
 
Age of Member When Retirement Pension Begins Percent
 
58 and older 1.25%
 
57 1.2%
 
56 1.15%
 
55 1.10%
 
54 1.05%
 
53 and younger 1.0%; or
                     (B)  on or after March 1, 2011, shall be the number
  of years of pension service, including pension service imputed
  under Section 6.05(c) of this article, prorated for fractional
  years, times 1.25 percent of the average computation pay determined
  over the 60 consecutive months of pension service in which the Group
  B member received the highest computation pay;
               (2)  the death benefit of qualified survivors who are a
  member's children shall be computed in the same manner as a spouse's
  benefit is computed under Subdivision (1)(A) or (B) of this
  subsection, as applicable, and shall be divided equally among all
  of the children who are qualified survivors; and
               (3)  the death benefit of each qualified survivor who
  is a member's dependent parent shall be computed in the same manner
  as a spouse's Group B benefit is computed under Subdivision (1)(A)
  or (B) of this subsection, as applicable.
         (b-1)  Pension service for purposes of the calculation under
  Subsection (b) of this section may not be less than 20 years. Any
  partial year of pension service for the first 20 years of pension
  service is counted as a full year of pension service, if the member
  was considered by the member's department to have worked a normal
  full-time schedule at the time of the member's death.
         (b-2)  The death benefit calculated under Subsection (b) of
  this section may not exceed the greater of:
               (1)  45 [a computation for 32 years of pension service,
  or 48] percent of the member's average computation pay determined
  over the 36 or 60 consecutive months, as applicable, in which the
  Group B member received the highest computation pay; or 
               (2)  the vested and accrued death benefit as determined
  on August 31, 2017.
         (b-3)  For purposes of Subsections (b) through (b-2) of this
  section:
               (1)  if [If] the Group B member had less than 36 or 60
  consecutive months, as applicable, [five years] of pension service,
  the average computation pay will be computed based on the person's
  entire pension service; and
               (2)  days during which the member earned no pension
  service due to a termination of active service or otherwise must be
  disregarded in determining the 36 or 60 consecutive months of
  highest computation pay.
               [(2)     A qualified surviving child's Group B death
  benefit shall be computed in the same manner as a qualified
  surviving spouse's benefit is computed under Subdivision (1) of
  this subsection and shall be divided equally among all of the
  qualified surviving children.
               [(3)     Each qualified surviving dependent parent's Group
  B death benefit shall be computed in the same manner as a qualified
  surviving spouse's Group B benefit is computed under Subdivision
  (1) of this subsection.]
         (c)  Group B death benefits shall be computed as follows for
  the qualified survivors of any [former] Group B member who died
  after leaving active service and who had vested rights under
  Section 5.06 of this article but who had not received [Group B]
  retirement benefits [under Section 6.02 of this article] at the
  time of death:
               (1)  the death benefit of a [The] qualified survivor
  who is the member's [surviving] spouse [of the former Group B
  member] is [entitled to a Group B death benefit] equal to 50 percent
  of any [Group B] retirement pension the [former Group B] member
  would have been entitled to [under Section 6.02 of this article] as
  of the date the [former Group B] member left active service;[.]
               (2)  the death benefits of [The] qualified survivors
  who are the member's [surviving] children [of the former Group B
  member] are [entitled to a Group B benefit] calculated in the same
  manner as the spouse's benefit is computed under Subdivision (1) of
  this subsection [Group B death benefit of a qualified surviving
  spouse], to be divided equally between the [qualified surviving]
  children; and[.]
               (3)  the death benefit of each [Each of the] qualified
  survivor who is the member's [surviving] dependent parent [parents
  of the former Group B member] is [entitled to a Group B death
  benefit] equal to 50 percent of any [Group B] retirement pension the
  [former Group B] member would have been entitled to [under the
  provisions of Section 6.02 of this article] as of the date the
  [former Group B] member left active service.
         (d)  Group B death benefits shall be computed as follows for
  the qualified survivors of any Group B pensioner [of this plan] who
  dies while receiving service [a Group B] retirement [pension]:
               (1)  the death benefit of a [The] qualified [surviving]
  survivor who is the pensioner's spouse [of a Group B pensioner] is
  [entitled to Group B death benefits] equal to 50 percent of any
  retirement pension the Group B pensioner was receiving at the time
  of death;[.]
               (2)  the death benefits of qualified survivors who are
  the pensioner's [The qualified surviving] children [of a Group B
  pensioner] are [entitled to a Group B death benefit] calculated in
  the same manner as the spouse's benefit is computed under
  Subdivision (1) of this subsection [Group B death benefit of a
  qualified surviving spouse], to be divided equally between the
  [qualified surviving] children; and[.]
               (3)  the death benefit of each [Each of the] qualified
  survivor who is the pensioner's [surviving] dependent parent
  [parents of a Group B pensioner] is [entitled to a Group B death
  benefit] equal to 50 percent of any retirement pension the Group B
  pensioner was receiving at the time of death.
         (e)  Group B death benefits shall be computed as follows for
  the qualified survivors of any Group B pensioner who dies while
  receiving disability retirement or while receiving periodic [a
  Group B] disability compensation under Section 6.05 of this article
  [pension due to either a service-connected or nonservice-connected
  disability]:
               (1)  the death benefit of a [The] qualified survivor
  who is the pensioner's [surviving] spouse [of the Group B
  pensioner] is [entitled to the greater of a Group B death benefit]
  equal to 50 percent of any Group B periodic disability compensation
  or disability pension the Group B pensioner would have been
  entitled to [under Section 6.05 of this article] as of the date the
  Group B pensioner left active service because of disability, or a
  Group B death benefit equal to 50 percent of any periodic disability
  compensation or [Group B] disability pension the Group B pensioner
  was receiving at the time of death;[.]
               (2)  the death benefits of [The] qualified survivors
  who are the pensioner's [surviving] children [of the Group B
  pensioner] are [entitled to a Group B death benefit] calculated in
  the same manner as the spouse's [Group B death] benefit is computed
  under Subdivision (1) of this subsection [of a qualified surviving
  spouse], to be divided equally between the [qualified surviving]
  children; and[.]
               (3)  the death benefit of each [Each of the] qualified
  survivor who is the pensioner's [surviving] dependent parent
  [parents of the Group B pensioner] is [entitled to the greater of a
  Group B death benefit] equal to 50 percent of any periodic
  disability compensation or disability pension the Group B pensioner
  would have been entitled to [under Section 6.05 of this article] as
  of the date the Group B pensioner left active service because of
  disability, or a Group B death benefit equal to 50 percent of any
  periodic disability compensation or [Group B] disability pension
  the Group B pensioner was receiving at the time of death.
         Sec. 6.09.  QUALIFIED SURVIVING SPOUSE SPECIAL DEATH
  BENEFIT. (a) A person who is the [Notwithstanding Sections 6.06
  and 6.07 of this article, the qualified surviving] spouse of a Group
  A primary party, who is a qualified survivor, and who is entitled to
  death benefits under Sections 6.06, 6.061, 6.062, 6.063, and 6.07
  of this article is also entitled to a special death benefit under
  this section if:
               (1)  the Group A primary party:
                     (A)  [elected to receive a Group A retirement
  pension and later died, was receiving a disability or retirement
  pension either under the terms of Plan A before the original
  enactment of this article or elected to receive a Group A retirement
  pension under Sections 6.01(e), (f), and (g) of this article and
  later died, or was receiving a Group A disability pension under
  Section 6.04(c) of this article and later died;
               [(2) the Group A primary party (i)] had at least 20
  years of pension service, [and] left active service after October
  1, 1985, and was at least 55 years of age on the earlier of the date
  the primary party:
                           (i)  left active service; or
                           (ii)  began participation in DROP [or
  older]; or
                     (B)  had [(ii) on or after May 1, 1990, the Group A
  primary party, after accruing] at least 20 years of pension
  service, left active service on or after May 31, 2000, and on the
  earlier of the date the primary party left active service or began
  participation in DROP, [and] had a total of at least 78 [80]
  credits, with each year of pension service, prorated for fractional
  years, equal to one credit and with each year of age, prorated for
  fractional years, equal to one credit; or [and]
               (2)  the [(3) the qualified surviving] spouse has
  attained 55 years of age and there are no [qualified surviving]
  children who are qualified survivors eligible for death benefits.
         (b)  Until the requirements of Subsection (a) of this section
  are satisfied, a qualified survivor who is the spouse of a Group A
  primary party [surviving spouse] shall receive a Group A death
  benefit in accordance with Section 6.07 of this article.
         (c)  The special Group A death benefit under Subsection (a)
  of this section is calculated based on the following formula:
  (P x P x A) + (P x C) + D, where
         A = base pay at the time the Group A primary party began
  participation in DROP, begins service retirement, dies, or becomes
  disabled, plus longevity pay, plus one-twelfth of last-received
  city service incentive pay;
         B = Group A primary party's benefit calculated at the time the
  Group A primary party began participation in DROP, begins service
  retirement, dies, or becomes disabled;
         P = B/A (expressed as a percentage or a decimal);
         C = the number of adjustments made to a Group A primary
  party's [Group A] retirement pension, disability pension, or
  periodic [Group A] disability compensation, [pension under Section
  6.04 of this article] multiplied by the amount of the adjustments;
  and
         D = the number of adjustments made under this article to the
  [a qualified surviving spouse's] Group A death benefit of a spouse
  who is a qualified survivor under Section 6.07 of this article,
  multiplied by the amount of the adjustments.
         (d)  A person who is the [Notwithstanding Sections 6.03 and
  6.05 of this article, a qualified surviving] spouse of a Group B
  primary party, who is a qualified survivor, and who is entitled to
  any death benefits under Sections 6.06, 6.061, 6.062, 6.063, and
  [or] 6.08 of this article is also entitled to a special benefit
  under this section if:
               (1)  the Group B primary party [elected to receive a
  Group B retirement pension and later died, or was receiving a Group
  B disability or retirement pension under this article and died;
               [(2) the Group B primary party]:
                     (A)  had at least 20 years of pension service,
  left active service after October 1, 1985, and was at least 55 years
  of age at the earlier of the date the primary party left [time of
  leaving] active service or began participation in DROP; or
                     (B)  on or after May 31, 2000 [1, 1990], [the Group
  B primary party] left active service or began participation in
  DROP, whichever was earlier, having a total of at least 78 [80]
  credits, with each year of pension service, prorated for fractional
  years, equal to one credit and with each year of age, determined at
  the time the Group B primary party left active service or began
  participation in DROP, prorated for fractional years, equal to one
  credit; or [and]
               (2) [(3)]  the [qualified surviving] spouse has
  attained 55 years of age, and there are no [qualified surviving]
  children of the primary party who are qualified survivors.
         (d-1)  Until the requirements of Subsection (d) [(c)] of this
  section are satisfied, a spouse who is a qualified survivor
  [surviving spouse] may only receive a Group B death benefit in
  accordance with Sections 6.06, 6.061, 6.062, 6.063, [6.03] and 6.08
  [6.05] of this article.
         (e)  The [This] special Group B death [survivor] benefit
  under Subsection (d) of this section is calculated based on the
  following formula:
  (P x P x A) + (P x C) + D, where
         A = average monthly computation pay at the time the Group B
  primary party begins service retirement, dies, [or] becomes
  disabled, or begins participation in DROP;
         B = the Group B primary party's benefit [Group B retirement or
  Group B disability pension] calculated at the time the Group B
  primary party begins participation in DROP, begins to receive
  service [or disability] retirement, [or] dies, or becomes disabled;
         P = B/A (expressed as a percentage or a decimal);
         C = the number of post-retirement [postretirement]
  adjustments made to a Group B primary party's [Group B] retirement
  pension, disability pension, or periodic [Group B] disability
  compensation [pension under Section 6.05 of this article]
  multiplied by the amount of the adjustments; and
         D = the number of adjustments made to the [a qualified
  surviving spouse's] Group B death benefit of a qualified survivor
  who is the primary party's spouse under Section 6.08 of this article
  multiplied by the amount of the adjustments.
         Sec. 6.10A.  MINIMUM BENEFITS TO CERTAIN GROUP A PRIMARY
  PARTIES WHO WERE GROUP A, OLD PLAN, OR COMBINED PENSION PLAN MEMBERS
  [ELECT TO RECEIVE RETIREMENT PENSION UNDER SECTIONS 6.01(B) AND
  (C)] AND THEIR QUALIFIED SURVIVORS. (a) Except as provided by
  Section 6.063 of this article or Subsections (b) and (h) of this
  section and notwithstanding any benefit computation and
  determination to the contrary contained in this article, the
  minimum Group A benefits provided by this section shall be paid to
  any Group A primary party who elects to receive a Group A retirement
  pension under Sections 6.01(b) and (c) of this article, the old
  plan, or former Section 14(a) of this article, or to the primary
  party's qualified survivors [. The benefits under this section
  shall be distributed in accordance with Sections 6.01(b) and (c),
  6.04(a), or 6.07 of this article, as applicable], except that a
  Group A primary party who elects to receive an actuarially reduced
  [Group A retirement pension because of the primary party's request
  to receive a Group A] retirement pension before 50 years of age and
  the primary party's qualified survivors are not entitled to the
  [Group A] minimum benefits specified under this section. An
  alternate payee is not entitled to the Group A minimum benefits
  specified in this section.
         (b)  A Group A primary party who elects to receive a Group A
  retirement pension under Sections 6.01(b) and (c) of this article,
  the old plan, or former Section 14(a) of this article and who left
  active service with 20 or more years of pension service is entitled
  to receive a minimum Group A retirement pension of $2,200 [$1,500] a
  month. [If the Group A primary party's Group A retirement pension
  is subject to a qualified domestic relations order and the sum of
  the actuarial equivalents of the monthly benefits payable to the
  Group A primary party and the alternate payee is less than the
  actuarial equivalent of the minimum monthly Group A retirement
  pension described by this subsection, the Group A primary party's
  monthly Group A retirement pension will be increased so that the sum
  of the actuarial equivalents of the alternate payee's and the Group
  A primary party's monthly Group A retirement pension equals the
  actuarial equivalent of the minimum monthly Group A retirement
  pension calculated under this subsection.]
         (c)  In the absence of children who are [A] qualified
  survivors, a [surviving] spouse who is a qualified survivor of a
  Group A primary party who elected to receive a Group A retirement
  pension under Sections 6.01(b) and (c) of this article, the old
  plan, or former Section 14(a) of this article will receive a minimum
  monthly Group A death benefit of $1,200 [$750].
         (d)  A spouse who is a qualified survivor [surviving spouse]
  of a Group A primary party who elected to receive a Group A
  retirement pension under Sections 6.01(b) and (c) of this article,
  the old plan, or former Section 14(a) of this article will receive,
  if there are children who are qualified survivors [surviving
  children], a minimum Group A death benefit of $1,100 [$750] a month.
  [The qualified surviving children, as a group, will receive a
  minimum Group A death benefit of $750 a month, to be divided equally
  among them.]
         (e)  In the absence of a spouse who is a qualified survivor
  [surviving spouse] of a Group A primary party who elected to receive
  a Group A retirement pension under Section [Sections] 6.01(b),
  [and] (c), or (e) of this article, the old plan, or former Section
  14(a) of this article, the primary party's children who are
  qualified survivors [surviving children], as a group, will receive
  a minimum Group A death benefit of $1,100 [$750] a month, to be
  divided equally among them.
         (f)  If there is neither a [In the absence of both a qualified
  surviving] spouse nor a child who is a [and] qualified survivor
  [surviving children] of a Group A primary party who elected to
  receive a Group A retirement pension under Sections 6.01(b) and (c)
  of this article, the old plan, or former Section 14(a) of this
  article, each [qualified surviving] dependent parent who is a
  qualified survivor will receive a minimum Group A death benefit of
  $1,100 [$750] a month. If only one of them is surviving, that [the
  qualified surviving] dependent parent will receive a minimum Group
  A death benefit equal to $1,100 [$750] a month.
         (g)  Notwithstanding the minimum monthly benefit described
  in other subsections of this section, a Group A primary party who
  receives periodic disability compensation under Section 6.05(b) of
  this article or a Group A disability pension under Section 6.04(a)
  of this article, the old plan, or former Section 17(a) of this
  article, [calculated in the same manner as a Group A retirement
  pension under Sections 6.01(b) and (c) of this article,] shall
  receive a minimum Group A disability pension equal to $2,200
  [$1,500] a month.
         (h)  If a Group A pensioner who received a monthly benefit
  under Section 6.05(b-1) of this article or a disability pension
  under Section 6.04(a) of this article, calculated in the same
  manner as a Group A retirement pension under Sections 6.01(b) and
  (c) of this article, the old plan, or former Section 17(a) of this
  article [primary party's disability pension is subject to a
  qualified domestic relations order and the sum of the actuarial
  equivalents of the monthly benefits payable to the Group A primary
  party and the alternate payee is less than the actuarial equivalent
  of the minimum monthly Group A disability pension determined under
  Subsection (g) of this section, the Group A primary party's minimum
  monthly Group A disability pension will be increased so that the sum
  of the actuarial equivalents of the alternate payee's and the Group
  A primary party's minimum monthly Group A disability pension equals
  the amount determined under Subsection (g) of this section.
         [(i)     If a Group A pensioner who received a disability under
  Section 6.04(a) of this article, calculated in the same manner as a
  Group A retirement pension under Sections 6.01(b) and (c) of this
  article] before the completion of 20 years of pension service dies,
  the qualified survivors will receive a minimum Group A death
  benefit as provided under Subsection (c), (d), (e), or (f) of this
  section, as applicable, whichever is greatest.
         SECTION 1.39.  The heading to Section 6.10B, Article
  6243a-1, Revised Statutes, is amended to read as follows:
         Sec. 6.10B.  MINIMUM BENEFITS TO CERTAIN GROUP A PRIMARY
  PARTIES WHO WERE GROUP A, PLAN A, OR COMBINED PLAN MEMBERS [ELECT TO
  RECEIVE RETIREMENT PENSION UNDER SECTION 6.01(E)] AND THEIR
  QUALIFIED SURVIVORS.
         SECTION 1.40.  Sections 6.10B(a), (b), (c), (d), (e), (f),
  (g), and (i), Article 6243a-1, Revised Statutes, are amended to
  read as follows:
         (a)  Except as provided by Section 6.063 of this article and
  Subsection [Subsections] (b) [and (h)] of this section and
  notwithstanding any benefit computation and determination to the
  contrary contained in this article, the minimum Group A benefits
  provided by this section shall be paid to any Group A primary party
  who elects to receive a Group A retirement pension under Section
  6.01(e) of this article, Plan A, or former Section 14(b) of this
  article or to the primary party's qualified survivors[. The
  benefits under this section shall be distributed in accordance with
  Section 6.01(e), 6.04(b), or 6.07 of this article, as applicable],
  except that a Group A primary party who elects to receive an
  actuarially reduced Group A retirement pension [because of the
  primary party's request to receive a Group A retirement pension]
  before 55 years of age and the primary party's qualified survivors
  are not entitled to the [Group A] minimum benefits specified in
  [under] this section. An alternate payee is not entitled to the
  Group A minimum benefits specified in this section.
         (b)  A Group A primary party who elects [elected] to receive
  a Group A retirement pension under Section 6.01(e) of this article,
  Plan A, or former Section 14(b) of this article and who left active
  service with 20 or more years of pension service is entitled to
  receive a minimum [Group A] retirement pension equal to the greater
  of $2,200 [(i) $1,500] a month or [(ii)] $1,000 a month adjusted, if
  applicable, in the manner described by Section 6.12 [6.12(a)] of
  this article. [If the Group A primary party's Group A retirement
  pension is subject to a qualified domestic relations order and the
  sum of the actuarial equivalents of the monthly benefits payable to
  the Group A primary party and the alternate payee is less than the
  actuarial equivalent of the minimum monthly Group A retirement
  pension described by this subsection, the Group A primary party's
  monthly Group A retirement pension will be increased so that the sum
  of the actuarial equivalents of the alternate payee's and the Group
  A primary party's monthly Group A retirement pension equals the
  actuarial equivalent of the minimum monthly Group A retirement
  pension calculated under this subsection.]
         (c)  In the absence of children who are [A] qualified
  survivors, a [surviving] spouse who is a qualified survivor of a
  Group A primary party who elects [elected] to receive a Group A
  retirement pension under Section 6.01(e) of this article, Plan A,
  or former Section 14(b) of this article will receive a minimum
  monthly [Group A] death benefit equal to the greater of $1,200 
  [(i)  $750] a month or [(ii)] $500 a month adjusted, if applicable,
  in the manner described by Section 6.12 [6.12(a)] of this article.
         (d)  A spouse who is a qualified survivor [surviving spouse]
  of a Group A primary party who elects to receive a Group A
  retirement pension under Section 6.01(e) of this article, Plan A,
  or former Section 14(b) of this article will receive, if there are
  children who are qualified survivors [surviving children], a
  minimum Group A death benefit equal to the greater of $1,100 [(i)
  $750] a month or [(ii)] $500 a month adjusted, if applicable, in the
  manner described by Section 6.12 [6.12(a)] of this article. The
  children who are qualified survivors [surviving children], as a
  group, will receive a minimum [Group A] death benefit equal to the
  greater of $1,100 [(iii) $750] a month or [(iv)] $500 a month
  adjusted, if applicable, in the manner described by Section 6.12 
  [6.12(a)] of this article, to be divided equally among them.
         (e)  In the absence of a spouse who is a qualified survivor
  [surviving spouse] of a Group A primary party who elected to receive
  a Group A retirement pension under Section 6.01(e) of this article,
  Plan A, or former Section 14(b) of this article, the [the qualified
  surviving children of a Group A] primary party's children who are
  qualified survivors [party], as a group, will receive a minimum
  Group A death benefit equal to the greater of $1,100 [(i) $750] a
  month or [(ii)] $500 a month adjusted, if applicable, in the manner
  described by Section 6.12 [6.12(a)] of this article, to be divided
  equally among them.
         (f)  If there is neither a [In the absence of both a qualified
  surviving] spouse nor child who is a [and] qualified survivor
  [surviving children] of a Group A primary party who elected to
  receive a Group A retirement pension under Section 6.01(e) of this
  article, Plan A, or the former Section 14(b) of this article, each
  [qualified surviving] dependent parent who is a qualified survivor
  will receive a minimum Group A death benefit equal to the greater of
  $1,100 [(i) $750] a month or [(ii)] $500 a month adjusted, if
  applicable, in the manner described by Section 6.12 [6.12(a)] of
  this article. If only one of them is surviving, that [the qualified
  surviving] dependent parent will receive a minimum Group A death
  benefit equal to the greater of $1,100 [(iii) $750] a month or
  [(iv)] $500 a month adjusted, if applicable, in the manner
  described by Section 6.12 [6.12(a)] of this article.
         (g)  Notwithstanding the minimum monthly benefit as
  described in other subsections of this section, a Group A primary
  party who leaves active service on a non-service-connected
  [nonservice-connected] disability under Section 6.04(a)
  [6.04(b)(2)] of this article, Plan A, or former Section 17(b)(2) of
  this article with less than 20 years of pension service shall
  receive a minimum monthly Group A disability pension equal to the
  greater of $110 [(i) $75] multiplied by the number of years of the
  primary party's pension service or [(ii)] $50 multiplied by the
  number of years of the primary party's pension service, the product
  adjusted, if applicable, in the manner described by Section 6.12 
  [6.12(a)] of this article.
         (i)  If a Group A pensioner who received a
  non-service-connected [nonservice-connected] disability pension 
  under Section 6.04(a) [6.04(b)(2)] of this article, Plan A, or
  former Section 17(b)(2) of this article before the completion of 20
  years of pension service dies, the qualified survivors will each
  receive the amount specified in Section 6.07 of this article or the
  minimum [monthly] Group A death benefit as provided under
  Subsection (c), (d), (e), or (f) of this section, as applicable,
  whichever is greatest.
         SECTION 1.41.  Sections 6.11, 6.12, and 6.13,
  Article 6243a-1, Revised Statutes, are amended to read as follows:
         Sec. 6.11.  MINIMUM BENEFITS TO GROUP B PRIMARY PARTIES AND
  THEIR QUALIFIED SURVIVORS. (a) Except as provided by Section 6.063
  of this article or Subsections (b), (c), and (h) of this section and
  notwithstanding any benefit computation and determination to the
  contrary contained in this article, the minimum Group B benefits
  provided by this section shall be paid to any Group B primary party
  or the primary party's qualified survivors, except further that a
  Group B primary party who elects to receive an actuarially reduced
  [Group B] retirement pension, including a request for a benefit
  under Sections 6.02(c) and (d) of this article, [because of the
  primary party's request to receive the pension at or after age 45,
  but before age 50] and the primary party's qualified survivors[,]
  or [an] alternate payee [of the primary party], are not entitled to
  the Group B minimum benefits specified by this section.
         (b)  If a Group B primary party leaves active service with 20
  or more years of pension service, the Group B primary party is
  entitled to receive a Group B minimum retirement pension equal to
  the greater of $2,200 [(i) $1,500] a month or [(ii)] $925 a month,
  which sum may (A) increase at the rate of $5 a month for each year of
  pension service beyond 20 years, but the increase may not exceed $75
  and (B) be adjusted, if applicable, in the manner described by
  Section 6.12 [6.12(a)] of this article. [If a Group B primary
  party's Group B retirement pension is or becomes subject to a
  qualified domestic relations order and the sum of the actuarial
  equivalents of the monthly Group B retirement pension payable to
  the Group B primary party and the alternate payee is less than the
  actuarial equivalent of the minimum monthly Group B retirement
  pension as calculated under this subsection, the Group B primary
  party's monthly Group B retirement pension will be increased so
  that the sum of the actuarial equivalents of both the alternate
  payee's and the Group B primary party's Group B retirement pensions
  equals the actuarial equivalent of the minimum monthly Group B
  retirement pension as calculated under this subsection.]
         (c)  If a Group B primary party leaves active service with
  less than 20 years of pension service, the primary party is entitled
  to receive a minimum monthly Group B retirement pension equal to the
  greater of:
               (1)  $2,200 [(i) $1,500] a month divided by 20 and
  multiplied by the Group B primary party's number of years of pension
  service; or
               (2) [(ii)]  $925 a month divided by 20 and multiplied
  by the Group B primary party's number of years of pension service,
  which amount is then adjusted, if applicable, in the manner
  described by Section 6.12 [6.12(a)] of this article. [If a Group B
  primary party's retirement pension is or becomes subject to a
  qualified domestic relations order and the sum of the actuarial
  equivalents of the monthly Group B retirement pension payable to
  the Group B primary party and the alternate payee is less than the
  actuarial equivalent of the monthly retirement pension as
  calculated under this subsection, the Group B primary party's
  monthly Group B retirement pension will be increased so that the sum
  of the actuarial equivalents of the alternate payee's and the Group
  B primary party's monthly Group B retirement pensions equals the
  actuarial equivalent of the minimum monthly Group B retirement
  pension as calculated under this subsection.]
         (d)  In the absence of children who are qualified survivors,
  a spouse who is a [surviving children, the] qualified survivor
  [surviving spouse] of a Group B primary party will receive a minimum
  Group B death benefit equal to the greater of:
               (1)  $1,200 [(i) $750] a month; or
               (2) [(ii)]  $600 a month adjusted, if applicable, in
  the manner described by Section 6.12 [6.12(a)] of this article.
         (e)  A spouse who is a qualified survivor [surviving spouse]
  of a Group B primary party [will receive], if there are children who
  are qualified survivors [surviving children], will receive [the
  greater of a minimum Group B death benefit of 50 percent of the
  primary party's minimum monthly Group B retirement pension
  described by Subsection (b) or (c) of this section, whichever is
  applicable. The qualified surviving children, as a group, will
  receive the greater of] a minimum [monthly] Group B death benefit of
  $1,100 a month [50 percent of the minimum monthly Group B retirement
  pension described by Subsection (b) or (c) of this section,
  whichever is applicable, to be divided equally among them].
         (f)  The [In the absence of a qualified surviving spouse, the
  qualified surviving] children who are qualified survivors of a
  Group B primary party, as a group, will receive a minimum Group B
  death benefit equal to the greater of $1,100 [(i) $750] a month or
  [(ii)] $600 a month adjusted, if applicable, in the manner
  described by Section 6.12 [6.12(a)] of this article, to be divided
  equally between them.
         (g)  If there is neither a [In the absence of either a
  qualified surviving] spouse nor a child who is a [or] qualified
  survivor [surviving children], each [qualified surviving]
  dependent parent who is a qualified survivor of the deceased Group B
  primary party will receive a minimum death benefit of $1,100 a month
  [Group B minimum death benefit equal to the greater of 50 percent of
  the Group B primary party's minimum monthly Group B retirement
  pension described by Subsection (b) or (c) of this section,
  whichever is applicable. If only one qualified surviving dependent
  parent is surviving, the parent will receive a Group B minimum death
  benefit of 50 percent of the minimum monthly Group B retirement
  pension described by Subsection (b) or (c) of this section,
  whichever is applicable].
         (h)  Notwithstanding the minimum monthly [Group B]
  retirement pension otherwise described by this section, a Group B
  primary party who left active service on a non-service-connected
  [nonservice-connected] disability with less than 20 years of
  pension service will receive a minimum monthly [Group B] disability
  pension equal to the greater of $110 [(i) $75] multiplied by the
  number of years of the primary party's pension service or [(ii)]
  $46.25 multiplied by the number of years of the primary party's
  pension service, the product adjusted in the manner, if applicable,
  described by Section 6.12 [6.12(a)] of this article. [If the Group
  B primary party's Group B disability pension is or becomes subject
  to a qualified domestic relations order and the sum of the actuarial
  equivalents of the monthly Group B disability pension payable to
  the Group B primary party and the alternate payee is less than the
  actuarial equivalent of the monthly disability pension as
  calculated under this subsection, the Group B primary party's
  monthly Group B disability pension will be increased so that the sum
  of the actuarial equivalents of the alternate payee's and the Group
  B primary party's monthly Group B disability pensions equals the
  actuarial equivalents of the minimum monthly Group B disability
  pension as calculated under this subsection.] If a Group B primary
  party who was receiving a non-service-connected
  [nonservice-connected Group B] disability pension before the
  completion of 20 years pension service dies, the qualified
  survivors will receive the amount specified in Section 6.08 of this
  article, or the [Group B] minimum monthly death benefits granted to
  qualified survivors as provided by Subsections (d), (e), (f), and
  (g) of this section, as applicable, whichever is greater.
         Sec. 6.12.  ADJUSTMENTS TO RETIREMENT AND DISABILITY PENSION
  BENEFITS. (a) This section applies to the following benefits
  provided under this article:
               (1)  [Annually on the first day of October,] a
  retirement pension calculated under Section 6.01(e) [Section 6.01]
  or 6.02 of this article;
               (2) [,]  a disability pension calculated under Section
  6.04 of this article, other than under Section 6.04(a) of this
  article;
               (3)  periodic disability compensation benefit under
  Section [or] 6.05 of this article, other than Section 6.05(b-1) of
  this article; [,] or
               (4)  a death benefit calculated under:
                     (A)  Section 6.07 of this article, if calculated
  in the manner of a retirement pension under Section 6.01(e) of this
  article or in the manner of a disability compensation benefit under
  Section 6.05(b) of this article; or
                     (B)  Section 6.08 of this article currently in pay