Bill Text: TX HB1003 | 2011-2012 | 82nd Legislature | Introduced

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Bill Title: Relating to a deferred retirement option for certain members of the Employees Retirement System of Texas.

Sponsorship: Partisan Bill (Republican 1)

Status: (Introduced - Dead) 2011-02-28 - Referred to Pensions, Investments & Financial Services [HB1003 Detail]

Download: Texas-2011-HB1003-Introduced.html

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82R2198 KFF-F
By: Hopson H.B. No. 1003

A BILL TO BE ENTITLED
AN ACT
relating to a deferred retirement option for certain members of the
Employees Retirement System of Texas.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 814, Government Code, is amended by
adding Subchapter H to read as follows:
SUBCHAPTER H. DEFERRED RETIREMENT OPTION PLAN
Sec. 814.701. DEFINITION. In this subchapter, "plan" means
the deferred retirement option plan provided by this subchapter.
Sec. 814.702. PARTICIPATION IN PLAN. (a) A contributing
member of the retirement system who is a commissioned peace officer
for the Department of Public Safety, the Texas Alcoholic Beverage
Commission, the Parks and Wildlife Department, or the office of the
inspector general of the Texas Department of Criminal Justice may
elect to participate in the plan if the member:
(1) is eligible to retire and receive a standard
service retirement annuity;
(2) meets one of the following requirements:
(A) has at least 25 years of service credit as a
commissioned peace officer; or
(B) is at least 55 years old with at least 20
years of service credit as a commissioned peace officer; and
(3) remains in a position with the state.
(b) An election to participate in the plan must be on a form
prescribed by and filed with the retirement system. An election may
be made only once and must state the period that the member wishes
to participate in the plan. The maximum period a member may
participate in the plan is 60 consecutive months. An election under
this section is irrevocable after filing.
(c) The effective date of a member's participation in the
plan is the first day of the month after the month in which an
election is filed and approved by the retirement system. The
retirement system shall approve each election filed by a member who
is eligible to make the election.
(d) The filing of an election to participate in the plan is
not considered for any purpose an application for retirement and a
participant of the plan is not considered a retiree for any purpose.
Sec. 814.703. COMPUTATION OF PARTICIPANT'S SERVICE AND
ANNUITY. (a) A person participating in the plan remains a member of
the retirement system during the period of participation, unless
the member terminates membership under Section 812.005, but the
member may not, during participation, accrue additional service
credit in the retirement system. A member and the state continue to
make contributions for the member's service performed during the
member's participation in the plan, and those contributions are not
eligible for withdrawal by the participant.
(b) For purposes of the plan, the computation of the service
retirement annuity of a member participating in the plan is
determined as of the effective date of participation.
(c) Participation in the plan does not affect a member's
participation in the group benefits program under Chapter 1551,
Insurance Code.
(d) A participating member is not eligible to receive a
partial lump-sum distribution under Section 814.1082.
Sec. 814.704. BENEFITS UNDER PLAN. (a) On the effective
date of a member's participation in the plan, the retirement system
shall make the transfers required by Section 815.319(a) to the
retirement annuity reserve account as if the member had retired on
that date. The retirement system shall transfer monthly, during
the period of the member's participation in the plan, from the
retirement annuity reserve account to an account for the member in
the deferred retirement option account the amount the member would
have received that month if the member had retired on the effective
date of plan participation.
(b) When a member who is participating in or who has
participated in the plan leaves employment, including a member who
leaves employment due to a disability, the person is entitled to the
accumulated amount in the member's account in the deferred
retirement option account. The amount is payable in a lump sum or
in periodic installments at the option of the member. The board of
trustees by rule shall determine the number and frequency of
installment payments.
(c) If a member dies during participation in the plan or
after participation but before retirement, the decedent's
designated beneficiary is entitled to the accumulated amount in the
decedent's account in the deferred retirement option account as if
the decedent had retired immediately before dying.
(d) Payment of the benefit provided under the plan is in
addition to any annuity otherwise payable under this subtitle.
Sec. 814.705. INTEREST. Interest on money in a member's
account in the deferred retirement option account is earned monthly
and is computed at the rate of 2.5 percent a year on the mean balance
of the account.
Sec. 814.706. TERMINATION OF PARTICIPATION IN PLAN. A
member terminates participation in the plan by:
(1) termination of employment;
(2) death; or
(3) expiration of the period for which participation
was approved.
Sec. 814.707. ADMINISTRATIVE COSTS. Only to the extent
necessary to cover the costs associated with administering the
plan, the retirement system may require participating members to
pay a fee in an amount set by rule. A fee charged under this section
may be assessed against the participating member's contributions to
the plan.
Sec. 814.708. PLAN CONTINGENT ON CERTAIN TAX TREATMENT.
(a) This subchapter may take effect only on receipt by the
retirement system of a favorable private letter ruling from the
Internal Revenue Service regarding the federal tax consequences of
the creation and implementation of the plan on the qualified status
of the retirement system benefit plan.
(b) If the retirement system does not receive the favorable
private letter ruling described by Subsection (a), this subchapter
has no effect.
SECTION 2. Section 815.310(b), Government Code, is amended
to read as follows:
(b) All assets of the trust fund shall be credited,
according to the purpose for which they are held, to one of the
following accounts:
(1) employees saving account;
(2) state accumulation account;
(3) retirement annuity reserve account;
(4) interest account; [or]
(5) expense account; or
(6) deferred retirement option account.
SECTION 3. Subchapter D, Chapter 815, Government Code, is
amended by adding Section 815.316 to read as follows:
Sec. 815.316. DEFERRED RETIREMENT OPTION ACCOUNT. (a) The
retirement system shall deposit in the deferred retirement option
account the amounts required to be deposited in the account by
Section 814.704(a).
(b) The retirement system shall pay from the account all
benefits accrued during participation in the deferred retirement
option plan.
SECTION 4. (a) Not later than the 30th day after the
effective date of this Act, the Employees Retirement System of
Texas shall seek the private letter ruling described by Section
814.708(a), Government Code, as added by this Act.
(b) The Employees Retirement System of Texas shall
implement the deferred retirement option plan established under
Subchapter H, Chapter 814, Government Code, as added by this Act,
not later than the first day of the month following the receipt of a
favorable private letter ruling under Section 814.708(a),
Government Code, as added by this Act. If the Employees Retirement
System of Texas does not receive a favorable private letter ruling
under Section 814.708(a), Government Code, as added by this Act,
the Employees Retirement System shall notify the standing
committees of the legislature with primary jurisdiction over public
retirement systems that Subchapter H, Chapter 814, Government Code,
should be repealed or other legislative action taken.
SECTION 5. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2011.