Bill Text: TX SB1458 | 2013-2014 | 83rd Legislature | Comm Sub
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relating to contributions to, benefits from, and the administration of systems and programs administered by the Teacher Retirement System of Texas.
Spectrum: Slight Partisan Bill (Republican 8-5)
Status: (Passed) 2013-06-14 - See remarks for effective date [SB1458 Detail]
Download: Texas-2013-SB1458-Comm_Sub.html
Bill Title: Relating to contributions to, benefits from, and the administration of systems and programs administered by the Teacher Retirement System of Texas.
Spectrum: Slight Partisan Bill (Republican 8-5)
Status: (Passed) 2013-06-14 - See remarks for effective date [SB1458 Detail]
Download: Texas-2013-SB1458-Comm_Sub.html
By: Duncan | S.B. No. 1458 | |
(In the Senate - Filed March 7, 2013; March 18, 2013, read | ||
first time and referred to Committee on State Affairs; | ||
April 24, 2013, reported adversely, with favorable Committee | ||
Substitute by the following vote: Yeas 6, Nays 3; April 24, 2013, | ||
sent to printer.) | ||
COMMITTEE SUBSTITUTE FOR S.B. No. 1458 | By: Duncan |
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relating to contributions to, benefits from, and the administration | ||||||||||||||
of systems and programs administered by the Teacher Retirement | ||||||||||||||
System of Texas. | ||||||||||||||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||||||||||||||
SECTION 1. Section 824.202, Government Code, is amended by | ||||||||||||||
amending Subsections (a), (b), (d), and (d-1) to read as follows: | ||||||||||||||
(a) A [ |
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eligible to retire and receive a standard service retirement | ||||||||||||||
annuity if: | ||||||||||||||
(1) the member is at least 65 years old and has at | ||||||||||||||
least five years of service credit in the retirement system; or | ||||||||||||||
(2) the member is at least 62 [ |
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least five [ |
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and[ |
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credit in the retirement system equals the number 80. | ||||||||||||||
(b) This subsection applies only to a person who is not | ||||||||||||||
subject to Subsection [ |
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to this subsection is at least 55 years old and has at least five | ||||||||||||||
years of service credit in the retirement system, the member is | ||||||||||||||
eligible to retire and receive a service retirement annuity reduced | ||||||||||||||
from the standard service retirement annuity available under | ||||||||||||||
Subsection (a)(1), to a percentage derived from the following | ||||||||||||||
table: | ||||||||||||||
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(d) This subsection applies only to a person who has at | ||||||||||||||
least five years of service credit in the retirement system on or | ||||||||||||||
before August 31, 2014, and who retires on or after September 1, | ||||||||||||||
2014 [ |
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member's age and amount of service credit in the retirement system | ||||||||||||||
equals the number 80, with at least five years of service credit, or | ||||||||||||||
if the [ |
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of service credit in the retirement system, the member is eligible | ||||||||||||||
to retire regardless of age and receive a service retirement | ||||||||||||||
annuity consisting of the standard service retirement annuity | ||||||||||||||
available under Subsection (a)(2) [ |
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for each year of age under 62 [ |
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(d-1) [ |
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If the sum of the member's age and amount of service credit in the | ||||||||||||||
retirement system equals the number 80, with at least five years of | ||||||||||||||
service credit, or if the member has at least 30 years of service | ||||||||||||||
credit in the retirement system, the member is eligible to retire | ||||||||||||||
regardless of age and receive a service retirement annuity | ||||||||||||||
consisting of[ |
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annuity available under Subsection (a)(2) decreased by five percent | ||||||||||||||
for each year of age under 62 years[ |
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SECTION 2. Subchapter H, Chapter 824, Government Code, is | ||||||||||||||
amended by adding Section 824.702 to read as follows: | ||||||||||||||
Sec. 824.702. COST-OF-LIVING ADJUSTMENT. (a) The | ||||||||||||||
retirement system shall make a one-time cost-of-living adjustment | ||||||||||||||
payable to annuitants receiving a monthly death or retirement | ||||||||||||||
benefit annuity, as provided by this section. | ||||||||||||||
(b) Subject to Subsections (c) and (d), to be eligible for | ||||||||||||||
the adjustment, a person must be, on the effective date of the | ||||||||||||||
adjustment and disregarding any forfeiture of benefits under | ||||||||||||||
Section 824.601, an annuitant eligible to receive: | ||||||||||||||
(1) a standard service or disability retirement | ||||||||||||||
annuity payment; | ||||||||||||||
(2) an optional service or disability retirement | ||||||||||||||
annuity payment as either a retiree or beneficiary; | ||||||||||||||
(3) an annuity payment under Section 824.402(a)(3) or | ||||||||||||||
(4); | ||||||||||||||
(4) an annuity payment under Section 824.502; or | ||||||||||||||
(5) an alternate payee annuity payment under Section | ||||||||||||||
804.005. | ||||||||||||||
(c) If the annuitant: | ||||||||||||||
(1) is a retiree, or is a beneficiary under an optional | ||||||||||||||
retirement payment plan, to be eligible for the adjustment under | ||||||||||||||
this section: | ||||||||||||||
(A) the annuitant must be living on the effective | ||||||||||||||
date of the adjustment; and | ||||||||||||||
(B) the effective date of the retirement of the | ||||||||||||||
member of the Teacher Retirement System of Texas must have been on | ||||||||||||||
or before August 31, 1994; | ||||||||||||||
(2) is a beneficiary under Section 824.402(a)(3) or | ||||||||||||||
(4) or 824.502, to be eligible for the adjustment: | ||||||||||||||
(A) the annuitant must be living on the effective | ||||||||||||||
date of the adjustment; and | ||||||||||||||
(B) the date of death of the member of the | ||||||||||||||
retirement system must have been on or before August 31, 1994; | ||||||||||||||
(3) is an alternate payee under Section 804.005, the | ||||||||||||||
annuitant is eligible for the adjustment only if the effective date | ||||||||||||||
of the election to receive the annuity payment was on or before | ||||||||||||||
August 31, 1994. | ||||||||||||||
(d) An adjustment made under this section does not apply to | ||||||||||||||
payments under: | ||||||||||||||
(1) Section 824.203(d), relating to retirees who | ||||||||||||||
receive a standard service retirement annuity in an amount fixed by | ||||||||||||||
statute; | ||||||||||||||
(2) Section 824.304(a), relating to disability | ||||||||||||||
retirees with less than 10 years of service credit; | ||||||||||||||
(3) Section 824.304(b)(2), relating to disability | ||||||||||||||
retirees who receive a disability annuity in an amount fixed by | ||||||||||||||
statute; | ||||||||||||||
(4) Section 824.404(a), relating to active member | ||||||||||||||
survivor beneficiaries who receive a survivor annuity in an amount | ||||||||||||||
fixed by statute; | ||||||||||||||
(5) Section 824.501(a), relating to retiree survivor | ||||||||||||||
beneficiaries who receive a survivor annuity in an amount fixed by | ||||||||||||||
statute; or | ||||||||||||||
(6) Section 824.804(b), relating to participants in | ||||||||||||||
the deferred retirement option plan with regard to payments from | ||||||||||||||
their deferred retirement option plan accounts. | ||||||||||||||
(e) An adjustment under this section: | ||||||||||||||
(1) must be made beginning with an annuity payable for | ||||||||||||||
the month of September 2013; and | ||||||||||||||
(2) is limited to the lesser of: | ||||||||||||||
(A) an amount equal to three percent of the | ||||||||||||||
monthly benefit subject to the increase; or | ||||||||||||||
(B) $100 a month. | ||||||||||||||
(f) The board of trustees shall determine the eligibility | ||||||||||||||
for and the amount of any adjustment in monthly annuities in | ||||||||||||||
accordance with this section. | ||||||||||||||
SECTION 3. Section 824.807, Government Code, is amended to | ||||||||||||||
read as follows: | ||||||||||||||
Sec. 824.807. INTEREST. Interest is creditable to a | ||||||||||||||
member's account in the deferred retirement option account at an | ||||||||||||||
annual, prorated rate equal to two [ |
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of participation in the plan and until all benefits are | ||||||||||||||
distributed. | ||||||||||||||
SECTION 4. Subsection (b), Section 825.307, Government | ||||||||||||||
Code, is amended to read as follows: | ||||||||||||||
(b) Interest on a member's contribution is earned monthly | ||||||||||||||
and computed at the rate of two [ |
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provided by Subsection (c), interest is computed based on the mean | ||||||||||||||
balance in the member's account during that fiscal year and shall be | ||||||||||||||
credited on August 31 of each year. | ||||||||||||||
SECTION 5. Section 825.402, Government Code, is amended to | ||||||||||||||
read as follows: | ||||||||||||||
Sec. 825.402. RATE OF MEMBER CONTRIBUTIONS. [ |
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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[ |
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(5) 6.4 percent of the member's annual compensation | ||||||||||||||
for service rendered after August 31, 1985, and before September 1, | ||||||||||||||
2014; and | ||||||||||||||
(6) for service rendered on or after September 1, | ||||||||||||||
2014, the greater of: | ||||||||||||||
(A) 6.4 percent of the member's annual | ||||||||||||||
compensation; or | ||||||||||||||
(B) a percentage of the member's annual | ||||||||||||||
compensation equal to the state contribution rate, except that the | ||||||||||||||
member contribution may not exceed 6.9 percent [ |
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SECTION 6. Subsection (a), Section 825.403, Government | ||||||||||||||
Code, is amended to read as follows: | ||||||||||||||
(a) Each payroll period, each employer shall deduct from the | ||||||||||||||
compensation of each member employed by the employer the [ |
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amount required by Section 825.402 [ |
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SECTION 7. Subchapter E, Chapter 825, Government Code, is | ||||||||||||||
amended by adding Section 825.4035 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. | ||||||||||||||
(a) This section: | ||||||||||||||
(1) applies to an employer 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 | ||||||||||||||
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 an | ||||||||||||||
amount equal to one percent of the member's compensation. | ||||||||||||||
(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 an amount equal to one percent of the statutory minimum | ||||||||||||||
salary determined under Section 825.405(b). | ||||||||||||||
(d) Contributions under this section: | ||||||||||||||
(1) are subject to the requirements of Section | ||||||||||||||
825.408; and | ||||||||||||||
(2) must be used to fund the normal cost of the | ||||||||||||||
retirement system. | ||||||||||||||
SECTION 8. Subsection (a), Section 1575.158, Insurance | ||||||||||||||
Code, is amended to read as follows: | ||||||||||||||
(a) Subject to Section 1575.1581, the [ |
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addition to providing a basic plan, contract for and make available | ||||||||||||||
an optional group health benefit plan for retirees, dependents, | ||||||||||||||
surviving spouses, or surviving dependent children. | ||||||||||||||
SECTION 9. Subchapter D, Chapter 1575, Insurance Code, is | ||||||||||||||
amended by adding Section 1575.1581 to read as follows: | ||||||||||||||
Sec. 1575.1581. LIMITATION ON ENROLLMENT IN OPTIONAL GROUP | ||||||||||||||
HEALTH BENEFIT PLAN. (a) A service retiree and any dependent of a | ||||||||||||||
service retiree are not eligible to participate in an optional | ||||||||||||||
group health benefit plan made available under Section 1575.158, | ||||||||||||||
unless the retiree: | ||||||||||||||
(1) is at least 62 years of age or older; and | ||||||||||||||
(2) meets the definition of retiree under Section | ||||||||||||||
1575.004(a)(1). | ||||||||||||||
(b) A retiree subject to Subsection (a) may, on the date the | ||||||||||||||
retiree reaches 62 years of age, under rules adopted by the trustee: | ||||||||||||||
(1) enroll in any coverage tier under the group | ||||||||||||||
program; and | ||||||||||||||
(2) enroll, in the same coverage tier, the retiree's | ||||||||||||||
dependents who are enrolled in the group program as of the date the | ||||||||||||||
retiree reaches 62 years of age. | ||||||||||||||
SECTION 10. The following provisions are repealed: | ||||||||||||||
(a) Subsections (a-1) and (b-1), Section 824.202, | ||||||||||||||
Government Code; and | ||||||||||||||
(b) Section 1579.103, Insurance Code. | ||||||||||||||
SECTION 11. (a) Except as provided in this section, the | ||||||||||||||
changes in law made by this Act to Section 824.202, Government Code, | ||||||||||||||
do not apply to, and the former law is continued in effect for, a | ||||||||||||||
person who retires under the Teacher Retirement System of Texas on | ||||||||||||||
or after September 1, 2014, and who meets one or more of the | ||||||||||||||
following requirements on or before August 31, 2014: | ||||||||||||||
(1) the person has attained age 50; | ||||||||||||||
(2) the sum of the person's age and amount of service | ||||||||||||||
credit in the retirement system equals 70 or greater; or | ||||||||||||||
(3) the person has at least 25 years of service credit | ||||||||||||||
in the retirement system. | ||||||||||||||
(b) Only service actually credited in the Teacher | ||||||||||||||
Retirement System of Texas, the Employees Retirement System of | ||||||||||||||
Texas, or a retirement system participating in the proportionate | ||||||||||||||
retirement program under Chapter 803, Government Code, on or before | ||||||||||||||
August 31, 2014, may be used to determine eligibility under | ||||||||||||||
Subsection (a)(2) and (3) of this section. Purchased service | ||||||||||||||
credit in the retirement system is: | ||||||||||||||
(1) not considered actually credited in the retirement | ||||||||||||||
system for purposes of Subsection (a)(2) or (3) of this section, as | ||||||||||||||
applicable, if the service credit is established only after | ||||||||||||||
completion of an installment payment plan under which any | ||||||||||||||
installment payment is required to be made after August 31, 2014; | ||||||||||||||
and | ||||||||||||||
(2) considered actually credited in the retirement | ||||||||||||||
system for purposes of Subsection (a)(2) or (3) of this section, as | ||||||||||||||
applicable, if: | ||||||||||||||
(A) payment in full for the purchase of service | ||||||||||||||
credit is made by a direct rollover or otherwise on or before August | ||||||||||||||
31, 2014; or | ||||||||||||||
(B) payment in full by direct rollover or | ||||||||||||||
otherwise is made after August 31, 2014, if: | ||||||||||||||
(i) the member's request to purchase | ||||||||||||||
service credit occurred on or before August 31, 2014; and | ||||||||||||||
(ii) payment to purchase the service credit | ||||||||||||||
is made in accordance with uniform administrative requirements, | ||||||||||||||
including payment deadlines, established by the retirement system. | ||||||||||||||
(c) For members who meet the eligibility requirements of | ||||||||||||||
Subsection (a) of this section and who otherwise would be subject to | ||||||||||||||
Subsection (d-1), Section 824.202, as it formerly existed before | ||||||||||||||
being amended by this Act, instead of the five percent reduction for | ||||||||||||||
each year the member is less than age 60, the reduction will be two | ||||||||||||||
percent for each year the member is less than age 60. | ||||||||||||||
SECTION 12. Section 824.807 and Subsection (b), Section | ||||||||||||||
825.307, Government Code, as amended by this Act, apply only to | ||||||||||||||
interest accrued on or after the effective date of this Act. | ||||||||||||||
Interest accrued before the effective date of this Act is governed | ||||||||||||||
by the law in effect on the date the interest accrued, and that law | ||||||||||||||
is continued in effect for that purpose. | ||||||||||||||
SECTION 13. (a) The change in law made by this Act to | ||||||||||||||
Chapter 1575, Insurance Code, does not apply to, and the former law | ||||||||||||||
is continued in effect for, a person who takes a service retirement | ||||||||||||||
under the Teacher Retirement System of Texas on or after September | ||||||||||||||
1, 2014, and who meets one or more of the following requirements on | ||||||||||||||
or before August 31, 2014: | ||||||||||||||
(1) the sum of the person's age and amount of service | ||||||||||||||
credit in the retirement system equals 70 or greater; or | ||||||||||||||
(2) the person has at least 25 years of service credit | ||||||||||||||
in the retirement system. | ||||||||||||||
(b) Only service actually credited in the Teacher | ||||||||||||||
Retirement System of Texas or the Employees Retirement System of | ||||||||||||||
Texas on or before August 31, 2014, may be used to determine | ||||||||||||||
eligibility under this section. Purchased service credit in the | ||||||||||||||
retirement system is: | ||||||||||||||
(1) not considered actually credited in the retirement | ||||||||||||||
system for purposes of this section if the service credit is | ||||||||||||||
established only after completion of an installment payment plan | ||||||||||||||
under which any installment payment is required to be made after | ||||||||||||||
August 31, 2014; and | ||||||||||||||
(2) considered actually credited in the retirement | ||||||||||||||
system for purposes of this section if: | ||||||||||||||
(A) payment in full for the purchase of service | ||||||||||||||
credit is made by a direct rollover or otherwise on or before August | ||||||||||||||
31, 2014; or | ||||||||||||||
(B) payment in full by direct rollover or | ||||||||||||||
otherwise is made after August 31, 2014, if: | ||||||||||||||
(i) the member's request to purchase | ||||||||||||||
service credit occurred on or before August 31, 2014; and | ||||||||||||||
(ii) payment to purchase the service credit | ||||||||||||||
is made in accordance with uniform administrative requirements, | ||||||||||||||
including payment deadlines, established by the retirement system. | ||||||||||||||
SECTION 14. (a) Except as provided by Subsection (b) of | ||||||||||||||
this section, this Act takes effect September 1, 2014. | ||||||||||||||
(b) Section 824.702, Government Code, as added by this Act, | ||||||||||||||
and the repeal by this Act of Section 1579.103, Insurance Code, take | ||||||||||||||
effect September 1, 2013. | ||||||||||||||
* * * * * |