Bill Text: TX HB2472 | 2019-2020 | 86th Legislature | Introduced
Bill Title: Relating to retirement benefits for certain peace officers who are members of the Teacher Retirement System of Texas, including the creation of a peace officer supplemental retirement fund.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2019-05-02 - No action taken in committee [HB2472 Detail]
Download: Texas-2019-HB2472-Introduced.html
86R6249 KFF-D | ||
By: Gutierrez | H.B. No. 2472 |
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relating to retirement benefits for certain peace officers who are | ||
members of the Teacher Retirement System of Texas, including the | ||
creation of a peace officer supplemental retirement fund. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 821.001, Government Code, is amended by | ||
adding Subdivision (11-a) to read as follows: | ||
(11-a) "Peace officer" means a member of the | ||
retirement system who is elected, employed, or appointed as a peace | ||
officer under Article 2.12, Code of Criminal Procedure, Section | ||
37.081 or 51.203, Education Code, or other law. | ||
SECTION 2. Section 822.005, Government Code, is amended by | ||
adding Subsection (e) to read as follows: | ||
(e) For a peace officer, the withdrawal of accumulated | ||
contributions under Subsection (a) includes all of the officer's | ||
contributions made under Section 825.403. | ||
SECTION 3. Section 824.202, Government Code, is amended by | ||
adding Subsection (g) to read as follows: | ||
(g) Notwithstanding any other law, a member who is at least | ||
55 years old and who has at least 10 years of service credit as a | ||
peace officer engaged in law enforcement activities by a school | ||
district or institution of higher education is eligible to retire | ||
and receive a service retirement annuity. | ||
SECTION 4. Subchapter C, Chapter 824, Government Code, is | ||
amended by adding Section 824.2035 to read as follows: | ||
Sec. 824.2035. SERVICE RETIREMENT BENEFITS FOR CERTAIN | ||
PEACE OFFICERS. (a) A member who has at least 20 years of service | ||
credit as a peace officer is eligible to retire regardless of age | ||
and receive a standard service retirement annuity in an amount and | ||
to be funded as provided by this section. | ||
(b) The standard service retirement annuity payable for at | ||
least 20 years of service credit as a peace officer is an amount | ||
computed on the basis of the member's average annual compensation | ||
for the five years of service, whether or not consecutive, in which | ||
the member received the highest annual compensation, times the sum | ||
of the percentage factor used in the computation of a standard | ||
service retirement annuity under Section 824.203 plus 0.5 percent. | ||
(c) The standard combined service retirement annuity that | ||
is payable under this section is based on retirement on or after the | ||
attainment of the normal retirement age, which for purposes of this | ||
section is the earlier of either the age of 57 or the age at which | ||
the sum of the member's age and amount of service credit equals the | ||
number 80. The annuity of a peace officer who retires before | ||
reaching the age of 57 under any eligibility criteria is | ||
actuarially reduced by five percent for each year of difference | ||
between the member's age at retirement and 57. The actuarial | ||
reduction described by this section is in addition to any other | ||
actuarial reduction required by law. | ||
(d) A peace officer who retires before attaining the age of | ||
50 is entitled only to an annuity that is actuarially reduced from | ||
the annuity available at the age of 50 to the peace officer whose | ||
service credit annuity amount is based on the sum of the member's | ||
age and amount of peace officer service credit and other service | ||
credit, and is not entitled to have the annuity recalculated at | ||
normal retirement age. The standard or reduced annuity under this | ||
section is payable from appropriate accounts described by Section | ||
825.306 and the peace officer supplemental retirement fund in a | ||
ratio determined by the retirement system. | ||
(e) Optional retirement annuities provided by Section | ||
824.204 are available to a member eligible to receive a service | ||
retirement annuity under this section, but the same optional plan | ||
and beneficiary must be selected for the portion of the annuity | ||
payable from the peace officer supplemental retirement fund and the | ||
portion payable from appropriate accounts described by Section | ||
825.306. | ||
(f) The amount payable from the peace officer supplemental | ||
retirement fund is reducible by the amount paid from appropriate | ||
accounts described by Section 825.306 for service as a peace | ||
officer. The total combined amount of an annuity under this section | ||
may not be less than the authorized benefit under Subsection (b) | ||
subtracted by any amount necessary because of selection of an | ||
optional annuity, because of retirement before the normal | ||
retirement age, or as provided by Subsection (g). | ||
(g) The standard combined service retirement annuity | ||
payable for at least 20 years of service credit as a peace officer | ||
may not exceed 100 percent of the average compensation computed | ||
under Subsection (b). | ||
(h) For purposes of this section, service as a peace officer | ||
is creditable as provided by rule of the board of trustees or on a | ||
month-to-month basis, whichever is greater. | ||
SECTION 5. Subchapter D, Chapter 824, Government Code, is | ||
amended by adding Section 824.3045 to read as follows: | ||
Sec. 824.3045. DISABILITY RETIREMENT BENEFITS FOR CERTAIN | ||
PEACE OFFICERS. (a) An annuity payable for a disability resulting | ||
from a risk to which peace officers are exposed because of the | ||
nature of the officers' duties is payable under the same terms and | ||
conditions that apply to other disability retirement annuities | ||
under this subtitle, except that the source and amount of the | ||
annuity are as provided by this section. | ||
(b) Except as provided by Subsection (c), a disability | ||
retirement annuity under this section is an amount, but not more | ||
than 100 percent, computed on the basis of the officer's average | ||
annual compensation, times a percentage derived by application of | ||
Section 824.2035(b). | ||
(c) A disability retirement annuity under this section is | ||
not reducible because of age and may not be less than 50 percent of | ||
the officer's average annual compensation regardless of the amount | ||
of service credited to the officer. | ||
(d) The portions of the annuity under this section payable | ||
from the peace officer supplemental retirement fund are the amount | ||
remaining after deduction of any amount payable under Section | ||
824.304, except the portion of an amount that exceeds the minimum | ||
payments provided by Section 824.304 and that is made for service | ||
other than as a peace officer and any amount by which an annuity is | ||
increased under Subsection (e). | ||
(e) If a retiring member or retiree under this section | ||
presents evidence satisfactory to the retirement system that the | ||
person's disability makes the person incapable of substantial | ||
gainful activity solely because of the disability and is considered | ||
a total disability under federal social security law, the | ||
retirement system shall increase the person's disability | ||
retirement annuity to 100 percent of the officer's average annual | ||
compensation. | ||
(f) An annuity increase under Subsection (e) is not payable | ||
before the first month following the month in which the | ||
satisfactory evidence is received by the retirement system under | ||
Subsection (e). | ||
SECTION 6. Subchapter E, Chapter 824, Government Code, is | ||
amended by adding Section 824.4025 to read as follows: | ||
Sec. 824.4025. ANNUITY FOR SURVIVOR OF PEACE OFFICER. If a | ||
member who has at least 20 years of service credit as a peace | ||
officer dies, the amount of the death benefit annuity payable for | ||
the member's service as a peace officer is an amount computed and | ||
funded as provided by Section 824.2035, including any applicable | ||
reduction factors. | ||
SECTION 7. Section 825.102, Government Code, is amended to | ||
read as follows: | ||
Sec. 825.102. RULEMAKING. Subject to the limitations of | ||
this subtitle, the board of trustees may adopt rules for: | ||
(1) eligibility for membership; | ||
(2) the administration of the funds of the retirement | ||
system; [ |
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(3) the transaction of business of the board; and | ||
(4) the program of supplemental benefits for peace | ||
officers. | ||
SECTION 8. Section 825.103, Government Code, is amended by | ||
adding Subsection (b-1) to read as follows: | ||
(b-1) The board of trustees may authorize the executive | ||
director to acquire, hold, manage, purchase, sell, assign, trade, | ||
transfer, and dispose of any security, evidence of debt, or other | ||
investment in which assets of the peace officer supplemental | ||
retirement fund may be invested. | ||
SECTION 9. Section 825.208, Government Code, is amended by | ||
adding Subsection (d) to read as follows: | ||
(d) The board of trustees shall make payments from the peace | ||
officer supplemental retirement fund for services rendered by the | ||
actuary for that fund and approved by the board. | ||
SECTION 10. Section 825.301(a), Government Code, is amended | ||
to read as follows: | ||
(a) The board of trustees shall invest and reinvest assets | ||
of the retirement system without distinction as to their source in | ||
accordance with Section 67, Article XVI, Texas Constitution, and | ||
hold securities purchased with the assets described by this | ||
subsection collectively for the proportionate benefit of all | ||
accounts listed under Section 825.306 and the peace officer | ||
supplemental retirement fund. For purposes of the investment | ||
authority of the board of trustees under Section 67, Article XVI, | ||
Texas Constitution, "securities" includes any investment | ||
instrument within the meaning of the term as defined by Section 4, | ||
The Securities Act (Article 581-4, Vernon's Texas Civil Statutes), | ||
15 U.S.C. Section 77b(a)(1), or 15 U.S.C. Section 78c(a)(10), any | ||
derivative instrument, and any other instrument commonly used by | ||
institutional investors to manage institutional investment | ||
portfolios. An interest in a limited partnership or investment | ||
contract is considered a security without regard to the number of | ||
investors or the control, access to information, or rights granted | ||
to or retained by the retirement system. Any instrument or contract | ||
intended to manage transaction or currency exchange risk in | ||
purchasing, selling, or holding securities is considered to be a | ||
security. Investment decisions are subject to the standard | ||
provided in the Texas Trust Code by Section 117.004(b), Property | ||
Code. | ||
SECTION 11. Section 825.305, Government Code, is amended to | ||
read as follows: | ||
Sec. 825.305. AVAILABLE CASH. The board of trustees may | ||
keep on deposit with the comptroller available cash not exceeding | ||
10 percent of the total assets of the retirement system, to pay | ||
annuity and other disbursements, excluding the assets of the peace | ||
officer supplemental retirement fund. | ||
SECTION 12. Section 825.306(a), Government Code, is amended | ||
to read as follows: | ||
(a) The assets of the retirement system, except assets of | ||
the peace officer supplemental retirement fund, shall be maintained | ||
and reported in a manner that reflects the source of the assets or | ||
the purpose for which the assets are held, using appropriate | ||
ledgers and subledgers, in accordance with generally accepted | ||
accounting principles prescribed by the Governmental Accounting | ||
Standards Board or its successor. In addition, the maintenance and | ||
reporting of the assets must be in compliance with applicable tax | ||
law and consistent with any fiduciary duty owed with respect to the | ||
trust. In the alternative, the assets may be credited, according | ||
to the purpose for which they are held, to one of the following | ||
accounts: | ||
(1) member savings account; | ||
(2) state contribution account; | ||
(3) retired reserve account; | ||
(4) interest account; | ||
(5) expense account; or | ||
(6) deferred retirement option account. | ||
SECTION 13. Subchapter D, Chapter 825, Government Code, is | ||
amended by adding Section 825.316 to read as follows: | ||
Sec. 825.316. PEACE OFFICER SUPPLEMENTAL RETIREMENT FUND. | ||
(a) The retirement system shall deposit in the peace officer | ||
supplemental retirement fund state contributions and other | ||
appropriations made by the legislature to the fund and proceeds | ||
from investment of the fund. | ||
(b) The retirement system may use money from the fund only | ||
to pay supplemental retirement, disability, and death benefits to | ||
peace officers as provided by this subtitle and to pay for the | ||
administration of the fund. | ||
(c) Money appropriated to pay benefits from the fund as | ||
provided by this subtitle may not be diverted or used to pay any | ||
other benefits. | ||
(d) Member contributions to the fund deducted under Section | ||
825.403(a-1): | ||
(1) earn interest at the same rate as money in an | ||
individual account in the member savings account under Section | ||
825.307; and | ||
(2) are subject to the same computations and | ||
limitations that apply to member contributions under Section | ||
825.307. | ||
SECTION 14. Section 825.403, Government Code, is amended by | ||
adding Subsection (a-1) to read as follows: | ||
(a-1) In addition to the contribution under Subsection (a), | ||
each employer of a peace officer shall deduct an additional 0.5 | ||
percent contribution from that member's compensation, to be | ||
deposited in the peace officer supplemental retirement fund, | ||
provided that, if the state contribution to the peace officer | ||
supplemental retirement fund is computed using a percentage less | ||
than 0.5 percent, the member's contribution is computed using a | ||
percentage equal to the percentage used to compute the state | ||
contribution. | ||
SECTION 15. Sections 825.404(a), (a-1), (b), and (b-1), | ||
Government Code, are amended to read as follows: | ||
(a) Except as provided by Subsection (a-1), during each | ||
fiscal year, the state shall contribute to the retirement system: | ||
(1) an amount equal to at least six and not more than | ||
10 percent of the aggregate annual compensation of all members of | ||
the retirement system during that fiscal year; | ||
(2) an amount for the peace officer supplemental | ||
retirement fund equal to 2.13 percent of the aggregate state | ||
compensation of all peace officers for that fiscal year; and | ||
(3) money necessary for the administration of the | ||
peace officer supplemental retirement fund. | ||
(a-1) In computing the amount owed by the state under | ||
Subsection (a)(1) [ |
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employed by public junior colleges or public junior college | ||
districts shall be included in the aggregate annual compensation as | ||
follows: | ||
(1) 50 percent of the eligible creditable compensation | ||
of employees who: | ||
(A) otherwise are eligible for membership in the | ||
retirement system; and | ||
(B) are instructional or administrative | ||
employees whose salaries may be fully paid from funds appropriated | ||
under the General Appropriations Act, regardless of whether such | ||
salaries are actually paid from appropriated funds; and | ||
(2) none of the eligible creditable compensation of | ||
all other employees who: | ||
(A) do not meet the requirements of Subdivision | ||
(1)(B) but are otherwise eligible for membership in the retirement | ||
system; or | ||
(B) cannot be included as a qualifying employee | ||
under Subdivision (1) by application of Subsection (b-1). | ||
(b) Before November 2 of each even-numbered year, the board | ||
of trustees, in coordination with the Legislative Budget Board, | ||
shall certify to the comptroller of public accounts for review and | ||
adoption an estimate of the amount necessary to pay the state's | ||
contributions to the retirement system for the following biennium | ||
and, as a separate item, an estimate of the amount required to | ||
administer the peace officer supplemental retirement fund for the | ||
following biennium. For qualifying employees under Subsection | ||
(a-1)(1), the board of trustees shall include only the amount | ||
payable by the state under Subsection (a-1)(1) in determining the | ||
amount to be certified. | ||
(b-1) In determining the amount necessary to pay the state's | ||
contribution under [ |
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amount required to administer the peace officer supplemental | ||
retirement fund, the number of qualifying employees under | ||
Subsection (a-1)(1) whose compensation may be included for each | ||
public junior college or public junior college district in each | ||
biennium may not be adjusted in a proportion greater than the change | ||
in student enrollment at each college during the reporting period | ||
except that a college that experiences a decline in student | ||
enrollment may petition the Legislative Budget Board to maintain | ||
the number of eligible employees up to 98 percent of the level of | ||
the prior biennium. | ||
SECTION 16. Subchapter F, Chapter 825, Government Code, is | ||
amended by adding Section 825.5155 to read as follows: | ||
Sec. 825.5155. CERTIFICATION OF NAMES OF PEACE OFFICERS. | ||
Not later than the 12th day of the month following the month in | ||
which a person begins or ceases employment as a peace officer, the | ||
employer shall certify to the retirement system, in the manner | ||
prescribed by the system, the name of the employee and such other | ||
information as the system determines is necessary for the crediting | ||
of service and financing of benefits under this subtitle. | ||
SECTION 17. (a) Except as provided by Subsection (b) of | ||
this section, employers participating in the Teacher Retirement | ||
System of Texas shall begin making deductions and collecting the | ||
contributions for the peace officer supplemental retirement fund as | ||
provided by Section 825.403(a-1), Government Code, as added by this | ||
Act, based on service that is performed on or after December 31, | ||
2019. | ||
(b) The board of trustees of the Teacher Retirement System | ||
of Texas shall adopt rules as soon as possible after the effective | ||
date of this Act to implement the changes in law made by this Act, | ||
including rules governing the treatment of a member of the Teacher | ||
Retirement System of Texas whose employment as a peace officer | ||
began before December 31, 2019. Rules adopted under this section | ||
relating to a member whose employment as a peace officer began | ||
before December 31, 2019, must include rules that: | ||
(1) notwithstanding any provision of this Act, allow | ||
the member to opt out of participating in the peace officer | ||
supplemental retirement fund provided by Section 825.403(a-1), | ||
Government Code, as added by this Act; and | ||
(2) ensure that any benefit paid to the member from the | ||
peace officer supplemental retirement fund is reasonably related to | ||
the member's contribution to the fund. | ||
SECTION 18. This Act takes effect September 1, 2019. |