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AN ACT
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relating to participation in and contributions to the optional |
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retirement program for certain employees of institutions of higher |
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education. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 830.102, Government Code, is amended by |
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amending Subsection (c) and adding Subsections (c-1) and (c-2) to |
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read as follows: |
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(c) Except as provided by Subsections (c-1) and (c-2), a [A] |
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person who becomes eligible to participate in the optional |
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retirement program after the date the program becomes available at |
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the person's place of employment must elect to participate before |
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the 91st day after becoming eligible. |
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(c-1) A person who becomes eligible to participate in the |
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optional retirement program and is notified by the person's |
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employer of the opportunity to participate in the program after the |
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first day and before the 91st day after the date the person becomes |
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eligible must elect to participate in the program before the later |
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of: |
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(1) the 91st day after the date the person becomes |
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eligible; or |
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(2) the 31st day after the date the person receives |
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notice of the opportunity to participate in the program. |
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(c-2) A person who becomes eligible to participate in the |
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optional retirement program and is notified by the person's |
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employer of the opportunity to participate in the program on or |
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after the 91st day after the date the person becomes eligible must |
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be notified by the employer before the 151st day after the date the |
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person becomes eligible. The person must elect to participate in |
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the program before the later of: |
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(1) the 151st day after the date the person becomes |
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eligible; or |
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(2) the 31st day after the date the person receives |
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notice of the opportunity to participate in the program. |
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SECTION 2. Subchapter B, Chapter 830, Government Code, is |
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amended by adding Section 830.108 to read as follows: |
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Sec. 830.108. CORRECTION OF CERTAIN REPORTING ERRORS. |
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(a) For purposes of this section, an employer submits a member |
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contribution to the retirement system on behalf of a person in error |
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if the person: |
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(1) previously elected to participate in the optional |
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retirement program; |
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(2) participated in the program for at least one year; |
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and |
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(3) is or was employed by an institution of higher |
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education in a position normally covered by the retirement system |
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and is or was at the time of that employment not eligible for |
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membership in the retirement system under Section 830.106. |
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(b) If an employer commits an error described by Subsection |
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(a) and the person on whose behalf the member contribution is |
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erroneously made is a participant in the optional retirement |
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program: |
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(1) the person's participation in the program shall be |
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immediately restored; and |
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(2) in accordance with this section and as soon as |
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practicable, funds shall be deposited in the person's participant |
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account in the program or otherwise remitted to the person. |
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(c) Subject to Subsection (d), on discovery of an error |
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described by this section, the retirement system shall, on |
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certification by an employer that the employer committed the error: |
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(1) make a direct trustee-to-trustee transfer to the |
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trustee of the optional retirement program for deposit in the |
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person's participant account in an amount equal to the participant |
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contribution that would have been paid for the benefit of the person |
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to the program under Section 830.201 during the period in which |
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member contributions were submitted to the retirement system in |
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error, plus an amount representing earnings on the member |
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contribution at the assumed rate of return provided by Subsection |
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(g); |
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(2) credit the employer through the retirement |
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system's employer reporting system an amount equal to the amount of |
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any employer contributions made under Section 825.4041, 825.406, |
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825.407, or 825.4071 in error on compensation paid to the person; |
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and |
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(3) remit to the person: |
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(A) the amount of any member contribution made to |
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the retirement system in error that exceeds the amount of the |
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participant contribution that would have been paid for the benefit |
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of the person to the program during the period in which member |
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contributions were submitted to the retirement system in error; |
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(B) the amount of any member contribution made to |
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the retirement system in error that was made on an after-tax basis |
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and that the retirement system could not transfer via a direct |
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trustee-to-trustee transfer under applicable provisions of the |
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Internal Revenue Code, including regulations adopted under the |
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Internal Revenue Code, or under the terms of the program |
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established by the employer; and |
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(C) any amount paid by the person to the |
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retirement system to purchase or reinstate service credit during |
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the period the person was not eligible for membership in the |
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retirement system, including any administrative, reinstatement, |
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and installment fees paid in connection with the purchase. |
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(d) A transfer described by Subsection (c) may not include |
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the amount of any member contribution made to the retirement system |
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in error that: |
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(1) exceeds the amount of the participant contribution |
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that would have been paid for the benefit of the person to the |
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optional retirement program under Section 830.201; or |
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(2) was made on an after-tax basis unless the plan |
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document for each employer program: |
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(A) permits the employer program to receive |
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direct trustee-to-trustee transfers of after-tax amounts; and |
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(B) provides that the trustee of the employer |
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program agrees to separately account for amounts transferred and |
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earnings on amounts transferred, including accounting for the |
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portion of the distribution that is includable in gross income and |
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the portion of the distribution that is not includable in gross |
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income. |
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(e) On certification by an employer that the employer |
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committed an error described by this section, the comptroller shall |
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transfer to or credit the employer an amount equal to the state |
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contribution that would have been paid for the benefit of the person |
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under Section 830.201 plus an amount representing earnings on the |
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state contribution at the assumed rate of return provided by |
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Subsection (g). |
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(f) An employer that commits an error described by this |
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section shall deposit in the person's participant account in the |
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program: |
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(1) in accordance with Subsection (c), the amount of |
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the employer contribution that would have been paid for the benefit |
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of the person as a participant under Section 830.201 and under any |
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other law, rule, or employer policy; |
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(2) an amount representing earnings on the employer |
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contribution at the assumed rate of return determined by the |
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employer in accordance with applicable Internal Revenue Code |
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correction requirements; and |
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(3) an amount equal to the state contribution that |
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would have been paid for the benefit of the person under Section |
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830.201 plus the amount representing earnings credited to the |
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employer under Subsection (e). |
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(g) The assumed rate of return is earned monthly and |
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computed at the rate of four percent per year. Except as provided |
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by this subsection, the amount of earnings based on the assumed rate |
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of return is credited annually at the end of each 12-month period. |
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The first 12-month period begins with the month the first deposit |
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was submitted in error. The amount of assumed earnings is prorated |
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to the month of payment. |
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(h) Amounts paid, transferred, or credited under this |
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section are reduced by any amount required to be withheld by law or |
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court order. |
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SECTION 3. Section 830.108, Government Code, as added by |
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this Act, applies to a member contribution submitted in error as |
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provided by that section and maintained by a retirement system, |
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regardless of whether the contribution was submitted before, on, or |
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after the effective date of this Act. |
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SECTION 4. This Act takes effect September 1, 2017. |
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______________________________ |
______________________________ |
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President of the Senate |
Speaker of the House |
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I hereby certify that S.B. No. 1954 passed the Senate on |
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April 19, 2017, by the following vote: Yeas 31, Nays 0. |
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______________________________ |
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Secretary of the Senate |
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I hereby certify that S.B. No. 1954 passed the House on |
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May 17, 2017, by the following vote: Yeas 140, Nays 0, two |
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present not voting. |
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______________________________ |
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Chief Clerk of the House |
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Approved: |
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______________________________ |
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Date |
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______________________________ |
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Governor |