Bill Text: TX SB1751 | 2017-2018 | 85th Legislature | Introduced


Bill Title: Relating to authorizing the Employees Retirement System of Texas and the Teacher Retirement System of Texas to establish defined contribution plans or hybrid retirement plans to provide retirement benefits to certain employees.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2017-03-23 - Referred to State Affairs [SB1751 Detail]

Download: Texas-2017-SB1751-Introduced.html
  85R5591 KFF-D
 
  By: Bettencourt S.B. No. 1751
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to authorizing the Employees Retirement System of Texas
  and the Teacher Retirement System of Texas to establish defined
  contribution plans or hybrid retirement plans to provide retirement
  benefits to certain employees.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 802.002, Government Code, is amended by
  adding Subsection (e) to read as follows:
         (e)  Notwithstanding any other law, including Subsection
  (a), an alternative retirement plan established under Chapter 809
  is exempt from Sections 802.101, 802.1012, 802.1014, 802.103,
  802.104, and 802.202(d).  This subsection may not be construed to
  exempt any plan from Section 802.105 or 802.106(h).
         SECTION 2.  Subtitle A, Title 8, Government Code, is amended
  by adding Chapter 809 to read as follows:
  CHAPTER 809.  AUTHORITY TO ESTABLISH ALTERNATIVE RETIREMENT PLANS
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 809.001.  DEFINITIONS. In this chapter:
               (1)  "Alternative retirement plan" means a defined
  contribution plan or a hybrid retirement plan.
               (2)  "Board of trustees" means the board of trustees of
  a retirement system.
               (3)  "Defined benefit plan" means, as appropriate, the
  plan that provides benefits to:
                     (A)  members of the employee class of the
  Employees Retirement System of Texas under Subtitle B, Title 8; or
                     (B)  members of the Teacher Retirement System of
  Texas under Subtitle C, Title 8.
               (4)  "Defined contribution plan" has the meaning
  assigned by Section 802.001.
               (5)  "Hybrid retirement plan" means a retirement plan
  that combines elements of a defined benefit plan, a defined
  contribution plan, or an individual retirement savings account.
               (6)  "Qualified plan" means an employee benefit plan
  qualified under Section 401(a), Internal Revenue Code of 1986 (26
  U.S.C. Section 401).
               (7)  "Retirement system" means the Employees
  Retirement System of Texas or the Teacher Retirement System of
  Texas, as appropriate.
         Sec. 809.002.  APPLICABILITY. This chapter applies only to:
               (1)  the Employees Retirement System of Texas; and 
               (2)  the Teacher Retirement System of Texas.
         Sec. 809.003.  CONFLICT OF LAW. To the extent of a conflict
  between this chapter, including a rule adopted by a retirement
  system under authority of this chapter, and any other law, this
  chapter prevails.
  SUBCHAPTER B.  AUTHORITY TO CREATE ALTERNATIVE PLANS
         Sec. 809.051.  CREATION OF ALTERNATIVE PLAN.
  Notwithstanding any other law, including Subtitles B and C, Title
  8, and subject to the requirements of Subchapter C, the board of
  trustees may by rule establish and administer an alternative
  retirement plan to provide benefits to newly hired employees under
  that plan instead of under a defined benefit plan.
         Sec. 809.052.  CERTAIN REFERENCES IN LAW TO RETIREMENT
  SYSTEM MEMBERS. If a retirement system establishes an alternative
  retirement plan under this chapter, a reference in law to a member
  of the retirement system includes a participant in the alternative
  retirement plan unless the reference is expressly defined
  otherwise.
  SUBCHAPTER C.  ALTERNATIVE PLAN MINIMUM REQUIREMENTS
         Sec. 809.101.  MINIMUM REQUIREMENTS. In establishing an
  alternative retirement plan under this chapter, a retirement system
  shall ensure the plan meets the requirements of this subchapter.
         Sec. 809.102.  QUALIFIED PLAN. An alternative retirement
  plan created under this section must be a qualified plan.
         Sec. 809.103.  PARTICIPATION IN ALTERNATIVE PLAN;
  RESUMPTION OF SERVICE.  (a)  In adopting rules to establish an
  alternative retirement plan under this chapter, the board of
  trustees shall designate the date by which all newly hired
  employees shall begin participation in the plan.
         (b)  A person who resumes employment with an employer and who
  is already a member of the retirement system eligible to
  participate in a defined benefit plan remains eligible to
  participate in the defined benefit plan and is not considered a new
  employee for purposes of required participation in an alternative
  retirement plan established under this chapter.
         (c)  Notwithstanding any other law, an employee who
  participates in an alternative retirement plan established under
  this chapter is not eligible to, and may not participate in, the
  defined benefit plan administered by the retirement system.
         Sec. 809.104.  EFFECT OF EMPLOYMENT CHANGES. A person
  participating in an alternative retirement plan continues to
  participate in the plan when the person changes employment to
  another position included in the coverage of the retirement system.
         Sec. 809.105.  VESTING OF BENEFITS; TERMINATION OF
  PARTICIPATION.  (a) Benefits in an alternative retirement plan
  vest in a participant not later than the fifth anniversary of the
  date the person begins to participate in the plan.
         (b)  A person terminates participation in an alternative
  retirement plan, without losing any vested benefits, by:
               (1)  death;
               (2)  retirement; or
               (3)  termination of employment in all positions
  included in the coverage of the retirement system.
         (c)  The benefits of a product purchased under an alternative
  retirement plan become available under the terms of the annuity but
  not before the earlier of the date:
               (1)  the member terminates participation as provided by
  Subsection (b); or
               (2)  the member's age and years of service in a position
  covered by the plan equal 80.
         Sec. 809.106.  CREDITABLE SERVICE. A person may not
  establish in the defined benefit plan administered by the
  retirement system credit for service performed during a period the
  person was participating in an alternative retirement plan.
         Sec. 809.107.  CONTRIBUTIONS. (a)  A participant in an
  alternative retirement plan shall make contributions to the plan at
  the same rate that a member of the retirement system participating
  in a defined benefit plan is required to make for current service,
  and the state and employers otherwise required to make
  contributions to a defined benefit plan shall make contributions to
  the alternative retirement plan for each participant at the same
  rate as the state and employers are required to contribute for
  contributing members of the defined benefit plan. Contributions
  required under this subsection shall be credited to the benefit of
  the participant.
         (b)  A participant in an alternative retirement plan and the
  participant's employer shall execute an agreement under which the
  salary of the participant is reduced by the amount of the
  contribution required by this section. An agreement under this
  subsection is irrevocable until the participant terminates
  participation in the plan under Section 809.105.
         (c)  Participant contributions shall be made in the manner
  provided by Subchapter F, Chapter 815, or Subchapter E, Chapter
  825, as applicable.
         Sec. 809.108.  HEALTH BENEFITS AND OTHER COVERAGES. A
  person who participates or who is eligible to participate in an
  alternative retirement plan established under this chapter is
  eligible for health benefits and other coverages under Subtitle H,
  Title 8, Insurance Code, and Subchapter D, Chapter 22, Education
  Code, if applicable, to the same extent as a person who is a member
  or who is eligible to be a member of the retirement system.
         SECTION 3.  Section 830.002(b), Government Code, is amended
  to read as follows:
         (b)  Participation in the optional retirement program is an
  alternative to active membership in the retirement system or
  participation in an alternative retirement plan under Chapter 809,
  as appropriate.
         SECTION 4.  Sections 830.102(a) and (d), Government Code,
  are amended to read as follows:
         (a)  A person included in the coverage [member] of the
  retirement system who is eligible [to participate in the optional
  retirement program] may elect to [continue as a member of the
  retirement system or to] participate in the optional retirement
  program.
         (d)  An eligible person who does not elect to participate in
  the optional retirement program is considered to have chosen to
  continue membership in the retirement system or to participate in
  an alternative retirement plan established under Chapter 809, as
  applicable.
         SECTION 5.  Section 830.106, Government Code, is amended to
  read as follows:
         Sec. 830.106.  ELIGIBILITY FOR RESUMPTION OF MEMBERSHIP. A
  participant in the optional retirement program is not eligible for
  participation [membership] in the retirement system unless the
  person:
               (1)  terminates employment covered by the optional
  retirement program; and
               (2)  becomes employed in the public school system or
  with a state agency in a position that is not eligible for
  participation in the optional retirement program.
         SECTION 6.  This Act takes effect September 1, 2017.
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