Bill Text: TX SB12 | 2019-2020 | 86th Legislature | Enrolled

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Bill Title: Relating to the contributions to and benefits under the Teacher Retirement System of Texas.

Sponsorship: Broadly Bipartisan Bill

Status: (Passed) 2019-06-10 - Effective immediately [SB12 Detail]

Download: Texas-2019-SB12-Enrolled.html

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S.B. No. 12

AN ACT
relating to the contributions to and benefits under the Teacher
Retirement System of Texas.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 825.402, Government Code, is amended to
read as follows:
Sec. 825.402. RATE OF MEMBER CONTRIBUTIONS. The rate of
contributions for each member of the retirement system is:
(1) five percent of the member's annual compensation
or $180, whichever is less, for service rendered after August 31,
1937, and before September 1, 1957;
(2) six percent of the first $8,400 of the member's
annual compensation for service rendered after August 31, 1957, and
before September 1, 1969;
(3) six percent of the member's annual compensation
for service rendered after August 31, 1969, and before the first day
of the 1977-78 school year;
(4) 6.65 percent of the member's annual compensation
for service rendered after the last day of the period described by
Subdivision (3) and before September 1, 1985;
(5) 6.4 percent of the member's annual compensation
for service rendered after August 31, 1985, and before September 1,
2014;
(6) 6.7 percent of the member's annual compensation
for service rendered after August 31, 2014, and before September 1,
2015;
(7) 7.2 percent of the member's annual compensation
for service rendered after August 31, 2015, and before September 1,
2016;
(8) 7.7 percent of the member's annual compensation
for service rendered after August 31, 2016, and before September 1,
2017; [and]
(9) for compensation paid [service rendered] on or
after September 1, 2017, and before September 1, 2019, the lesser
of:
(A) 7.7 percent of the member's annual
compensation; or
(B) a percentage of the member's annual
compensation equal to 7.7 percent reduced by one-tenth of one
percent for each one-tenth of one percent that the state
contribution rate for the fiscal year to which the compensation
[service] relates is less than the state contribution rate
established for the 2015 fiscal year;
(10) for compensation paid on or after September 1,
2019, and before September 1, 2021, the lesser of:
(A) 7.7 percent of the member's annual
compensation; or
(B) a percentage of the member's annual
compensation equal to 7.7 percent reduced by one-tenth of one
percent for each one-tenth of one percent that the state
contribution rate for the fiscal year to which the compensation
relates is less than the state contribution rate established for
that fiscal year under Section 825.404(a-2);
(11) for compensation paid on or after September 1,
2021, and before September 1, 2023, the lesser of:
(A) eight percent of the member's annual
compensation; or
(B) a percentage of the member's annual
compensation equal to eight percent reduced by one-tenth of one
percent for each one-tenth of one percent that the state
contribution rate for the fiscal year to which the compensation
relates is less than the state contribution rate established for
that fiscal year under Section 825.404(a-2); and
(12) for compensation paid on or after September 1,
2023, the lesser of:
(A) 8.25 percent of the member's annual
compensation; or
(B) a percentage of the member's annual
compensation equal to 8.25 percent reduced by one-tenth of one
percent for each one-tenth of one percent that the state
contribution rate for the fiscal year to which the compensation
relates is less than the state contribution rate established for
that fiscal year under Section 825.404(a-2).
SECTION 2. The heading to Section 825.4035, Government
Code, is amended to read as follows:
Sec. 825.4035. EMPLOYER CONTRIBUTIONS FOR CERTAIN EMPLOYED
MEMBERS [FOR WHOM THE EMPLOYER IS NOT MAKING CONTRIBUTIONS TO THE
FEDERAL OLD-AGE, SURVIVORS, AND DISABILITY INSURANCE PROGRAM].
SECTION 3. Section 825.4035, Government Code, is amended by
amending Subsections (a), (b), and (c) and adding Subsection (e) to
read as follows:
(a) This section:
(1) except as provided by Subdivision (2), applies
only to an employer that is a public school or regional education
service center that [who] reports to the retirement system under
Section 825.403 the employment of a member [for whom the employer is
not making contributions to the federal Old-Age, Survivors, and
Disability Insurance program]; and
(2) does not apply to an employer that is an
institution of higher education.
(b) Except as provided in Subsection (c), for each member
an [the] employer reports to the retirement system [and for whom the
employer is not making contributions to the federal Old-Age,
Survivors, and Disability Insurance program], the employer shall
contribute monthly to the retirement system for each such member:
(1) for the period beginning with the report month of
September 2014 and ending with the report month of August 2015, an
amount equal to 1.5 percent of the member's compensation; [and]
(2) beginning with the report month for September 2015
and ending with the report month of August 2019, an amount equal to
the lesser of:
(A) 1.5 percent of the member's compensation; or
(B) a percentage of the member's compensation
equal to 1.5 percent reduced by one-tenth of one percent for each
one-tenth of one percent that the state contribution rate for the
fiscal year to which the report month relates is less than the state
contribution rate established for the 2015 fiscal year; and
(3) beginning with the report month of September 2019
and for each subsequent report month, an amount equal to the lesser
of:
(A) a percentage of the member's compensation
equal to the rate of contribution provided for the applicable
fiscal year under Subsection (e); or
(B) a percentage of the member's compensation
equal to the percentage provided by Paragraph (A) reduced by
one-tenth of one percent for each one-tenth of one percent that the
state contribution rate for the fiscal year to which the report
month relates is less than the state contribution rate established
for that fiscal year under Section 825.404(a-2).
(c) If a member is entitled to the minimum salary for
certain school personnel under Section 21.402, Education Code, or
if a member would have been entitled to the minimum salary for
certain school personnel under former Section 16.056, Education
Code, as that section existed on January 1, 1995, the employer
shall, in addition to any contributions required under Section
825.405, contribute monthly to the retirement system for each such
member:
(1) for the period beginning with the report month of
September 2014 and ending with the report month of August 2015, an
amount equal to 1.5 percent of the statutory minimum salary
determined under Section 825.405(b); [and]
(2) beginning with the report month for September 2015
and ending with the report month of August 2019, an amount equal to
the lesser of:
(A) 1.5 percent of the statutory minimum salary
determined under Section 825.405(b); or
(B) a percentage of the statutory minimum salary
determined under Section 825.405(b) equal to 1.5 percent reduced by
one-tenth of one percent for each one-tenth of one percent that the
state contribution rate for the fiscal year to which the report
month relates is less than the state contribution rate established
for the 2015 fiscal year; and
(3) beginning with the report month of September 2019
and for each subsequent report month, an amount equal to the lesser
of:
(A) a percentage of the statutory minimum salary
determined under Section 825.405(b) equal to the rate of
contribution provided for the applicable fiscal year under
Subsection (e); or
(B) a percentage of the statutory minimum salary
determined under Section 825.405(b) equal to the percentage
provided by Paragraph (A) reduced by one-tenth of one percent for
each one-tenth of one percent that the state contribution rate for
the fiscal year to which the report month relates is less than the
state contribution rate established for that fiscal year under
Section 825.404(a-2).
(e) For purposes of Subsections (b)(3)(A) and (c)(3)(A),
the rate of contribution is:
(1) 1.5 percent beginning with the report month of
September 2019 and ending with the report month of August 2020;
(2) 1.6 percent beginning with the report month of
September 2020 and ending with the report month of August 2021;
(3) 1.7 percent beginning with the report month of
September 2021 and ending with the report month of August 2022;
(4) 1.8 percent beginning with the report month of
September 2022 and ending with the report month of August 2023;
(5) 1.9 percent beginning with the report month of
September 2023 and ending with the report month of August 2024; and
(6) two percent beginning with the report month of
September 2024 and for each subsequent report month.
SECTION 4. Section 825.404, Government Code, is amended by
amending Subsections (a) and (a-1) and adding Subsection (a-2) to
read as follows:
(a) Except as provided by Subsection (a-1) and subject to
Subsection (a-2), during each fiscal year, the state shall
contribute to the retirement system 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.
(a-1) In computing the amount owed by the state under this
section [Subsection (a)], the compensation of members who are
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).
(a-2) The state contribution required by Subsection (a) is:
(1) for the fiscal years beginning on September 1,
2019, and September 1, 2020, 7.5 percent of the aggregate annual
compensation of all members of the retirement system during the
applicable fiscal year;
(2) for the fiscal year beginning on September 1,
2021, 7.75 percent of the aggregate annual compensation of all
members of the retirement system during that fiscal year;
(3) for the fiscal year beginning on September 1,
2022, eight percent of the aggregate annual compensation of all
members of the retirement system during that fiscal year; and
(4) for the fiscal year beginning on September 1,
2023, and each subsequent fiscal year, 8.25 percent of the
aggregate annual compensation of all members of the retirement
system during that fiscal year.
SECTION 5. (a) The Teacher Retirement System of Texas
shall make a one-time supplemental payment of a retirement or death
benefit, as provided by this section.
(b) Subject to Subsection (i) of this section, the
supplemental payment is payable not later than September 2020 and,
to the extent practicable, on a date or dates that coincide with the
regular annuity payment payable to each eligible annuitant.
(c) The amount of the supplemental payment is equal to the
lesser of:
(1) the gross amount of the regular annuity payment to
which the eligible annuitant is otherwise entitled for the calendar
month immediately prior to the calendar month in which the Teacher
Retirement System of Texas issues the one-time supplemental payment
in accordance with Subsection (b) of this section; or
(2) $2,000.
(d) The supplemental payment is payable without regard to
any forfeiture of benefits under Section 824.601, Government Code.
The Teacher Retirement System of Texas shall make applicable tax
withholding and other legally required deductions before
disbursing the supplemental payment. A supplemental payment under
this section is in addition to and not in lieu of the regular
monthly annuity payment to which the eligible annuitant is
otherwise entitled.
(e) Subject to Subsection (f) of this section, to be
eligible for the supplemental payment, a person must be, for the
calendar month immediately prior to the calendar month in which the
Teacher Retirement System of Texas issues the one-time supplemental
payment in accordance with Subsection (b) of this section, and
disregarding any forfeiture of benefits under Section 824.601,
Government Code, an annuitant eligible to receive:
(1) a standard retirement annuity payment;
(2) an optional retirement annuity payment as either a
retiree or beneficiary;
(3) a life annuity payment under Section
824.402(a)(4), Government Code;
(4) an annuity for a guaranteed period of 60 months
under Section 824.402(a)(3), Government Code; or
(5) an alternate payee annuity payment under Section
804.005, Government Code.
(f) If the annuitant is a retiree or a beneficiary under an
optional retirement payment plan, to be eligible for the
supplemental payment, the effective date of the retirement of the
member of the Teacher Retirement System of Texas must have been on
or before December 31, 2018. If the annuitant is a beneficiary
under Section 824.402(a)(3) or (4), Government Code, to be eligible
for the supplemental payment, the date of death of the member of the
retirement system must have been on or before December 31, 2018.
The supplemental payment shall be made to an alternate payee who is
an annuitant under Section 804.005, Government Code, only if the
annuity payment to the alternate payee commenced on or before
December 31, 2018. The supplemental payment is in addition to the
guaranteed number of payments under Section 824.204(c)(3) or (4),
Section 824.308(c)(3) or (4), or Section 824.402(a)(3), Government
Code, and may not be counted as one of the guaranteed monthly
payments.
(g) The supplemental payment does not apply to payments
under:
(1) Section 824.304(a), Government Code, relating to
disability retirees with less than 10 years of service credit;
(2) Section 824.804(b), Government Code, relating to
participants in the deferred retirement option plan with regard to
payments from their deferred retirement option plan accounts;
(3) Section 824.501(a), Government Code, relating to
retiree survivor beneficiaries who receive a survivor annuity in an
amount fixed by statute; or
(4) Section 824.404(a), Government Code, relating to
active member survivor beneficiaries who receive a survivor annuity
in an amount fixed by statute.
(h) The board of trustees of the Teacher Retirement System
of Texas shall determine the eligibility for and the amount and
timing of a supplemental payment and the manner in which the payment
is made.
(i) The state shall appropriate to the Teacher Retirement
System of Texas an amount equal to the cost of the one-time
supplemental payment required by this section. This amount is in
addition to the amount the state is required to contribute to the
Teacher Retirement System of Texas under Section 825.404,
Government Code. If the state does not transfer the appropriated
amount described by this subsection, the Teacher Retirement System
of Texas shall not issue the one-time supplemental payment required
by this section.
SECTION 6. 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, 2019.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 12 passed the Senate on
March 25, 2019, by the following vote: Yeas 31, Nays 0;
May 10, 2019, Senate refused to concur in House amendment and
requested appointment of Conference Committee; May 14, 2019, House
granted request of the Senate; May 26, 2019, Senate adopted
Conference Committee Report by the following vote: Yeas 31,
Nays 0.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 12 passed the House, with
amendment, on April 25, 2019, by the following vote: Yeas 145,
Nays 1, one present not voting; May 14, 2019, House granted request
of the Senate for appointment of Conference Committee;
May 26, 2019, House adopted Conference Committee Report by the
following vote: Yeas 145, Nays 1.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor