Bill Text: TX SB1752 | 2017-2018 | 85th Legislature | Introduced


Bill Title: Relating to authorizing certain municipalities to establish defined contribution plans to provide retirement benefits to certain employees.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2017-04-24 - Left pending in committee [SB1752 Detail]

Download: Texas-2017-SB1752-Introduced.html
  85R4770 KFF-D
 
  By: Bettencourt S.B. No. 1752
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to authorizing certain municipalities to establish
  defined contribution plans to provide retirement benefits to
  certain employees.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subtitle A, Title 8, Government Code, is amended
  by adding Chapter 808 to read as follows:
  CHAPTER 808.  AUTHORITY OF CERTAIN MUNICIPALITIES TO ESTABLISH
  DEFINED CONTRIBUTION PLANS
  SUBCHAPTER A. GENERAL PROVISIONS
         Sec. 808.001.  DEFINITIONS. In this chapter:
               (1)  "Defined benefit plan" means a plan provided by a
  public retirement system that provides participants specified
  benefit payments calculated in accordance with a formula that is
  based on factors such as a participant's earnings history, age, and
  years of service.
               (2)  "Defined contribution plan" and "public
  retirement system" have the meanings assigned by Section 802.001.
               (3)  "Qualified plan" means an employee benefit plan
  qualified under Section 401(a), Internal Revenue Code of 1986 (26
  U.S.C. Section 401).
         Sec. 808.002.  APPLICABILITY. This chapter applies only to:
               (1)  a public retirement system that provides benefits
  to municipal employees under a defined benefit plan; and
               (2)  a home-rule municipality that is the sponsoring
  authority of a public retirement system described by Subdivision
  (1).
         Sec. 808.003.  CONFLICT OF LAW. To the extent of a conflict
  between this chapter, including an ordinance adopted by a
  municipality or a rule adopted by a public retirement system under
  authority of this chapter, and any other law, this chapter
  prevails.
  SUBCHAPTER B. AUTHORITY TO CREATE DEFINED CONTRIBUTION PLAN
         Sec. 808.051.  ELECTION TO ESTABLISH DEFINED CONTRIBUTION
  PLAN. (a)  On receipt of a petition requesting the election signed
  by a number of registered voters of the municipality equal to at
  least 10 percent of the number of voters who voted in the most
  recent election of the municipality, the governing body of a
  municipality shall order an election to authorize the creation of a
  defined contribution plan for newly hired municipal employees or a
  category of newly hired municipal employees in accordance with this
  section.
         (b)  An election ordered under this section must be held as
  part of the next regularly scheduled general election for municipal
  officials that is held after the date the governing body of the
  municipality orders the election and that allows sufficient time to
  prepare the ballot in compliance with other requirements of law.
         (c)  The ballot for an election ordered under this section
  shall be printed to permit voting for or against the proposition:
  "Authorizing           (name of municipality) to establish by
  ordinance a defined contribution plan for (insert "employees" or
  the category of employees to receive benefits under the plan)
  initially hired by the municipality on or after (insert date) as
  provided by state law."
         (d)  An election ordered under this section must be held and
  the returns prepared and canvassed in conformity with the Election
  Code.
         (e)  If an election authorized under this section is held,
  the municipality may implement the other provisions of this chapter
  only if a majority of the votes cast at the election favor the
  proposition.
         Sec. 808.052.  CREATION OF DEFINED CONTRIBUTION PLAN.
  Notwithstanding any other law, including Title 109, Revised
  Statutes, and subject to the requirements of Subchapter C, if
  authorized by an election under Section 808.051, the governing body
  of a municipality that is the sponsoring authority of a public
  retirement system shall establish by ordinance a defined
  contribution plan to be administered by the public retirement
  system to provide benefits to newly hired municipal employees or a
  category of newly hired municipal employees, as applicable, under
  the plan instead of under a defined benefit plan.
  SUBCHAPTER C.  MINIMUM REQUIREMENTS FOR DEFINED CONTRIBUTION PLAN
         Sec. 808.101.  MINIMUM REQUIREMENTS. In establishing a
  defined contribution plan under this chapter, the governing body of
  a municipality shall ensure the plan meets the requirements of this
  subchapter.
         Sec. 808.102.  QUALIFIED PLAN. A defined contribution plan
  created under this section must be a qualified plan.
         Sec. 808.103.  PARTICIPATION IN DEFINED CONTRIBUTION PLAN;
  RESUMPTION OF SERVICE.  (a)  In the ordinance establishing a defined
  contribution plan under this chapter, the governing body of a
  municipality shall designate the date by which all newly hired
  municipal employees shall begin participation in the plan.
         (b)  A person who resumes employment with a municipality and
  who is already eligible to participate in a defined benefit plan
  administered by a public retirement system because of the person's
  prior employment remains eligible to participate in the defined
  benefit plan and is not considered a new employee for purposes of
  required participation in a defined contribution plan established
  under this chapter.
         (c)  Notwithstanding any other law, an employee who
  participates in a defined contribution plan established under this
  chapter is not eligible to, and may not participate in, the defined
  benefit plan administered by a public retirement system.
         Sec. 808.104.  EFFECT OF EMPLOYMENT CHANGES. A person
  participating in a defined contribution plan continues to
  participate in the plan when the person changes employment to
  another position included in the coverage of the public retirement
  system.
         Sec. 808.105.  VESTING OF BENEFITS; TERMINATION OF
  PARTICIPATION.  (a) Benefits in a defined contribution 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 a defined
  contribution 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 public retirement system.
         (c)  The benefits of a product purchased under a defined
  contribution 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. 808.106.  CREDITABLE SERVICE. A person may not
  establish in the defined benefit plan administered by a public
  retirement system credit for service performed during a period the
  person was participating in a defined contribution plan.
         Sec. 808.107.  CONTRIBUTIONS. (a)  A participant in a
  defined contribution plan shall make contributions to the plan at
  the same rate that a participant in a defined benefit plan
  administered by the same public retirement system is required to
  make for current service, and the municipality shall make
  contributions to the defined contribution plan for each participant
  in the defined contribution plan at the same rate as the
  municipality is required to contribute for contributing
  participants in the defined benefit plan administered by the same
  public retirement system. Contributions required under this
  subsection shall be credited to the benefit of the participant in
  the defined contribution plan.
         (b)  A participant in a defined contribution plan and the
  municipality 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 808.105.
         Sec. 808.108.  HEALTH BENEFITS AND OTHER COVERAGES.
  Notwithstanding any other law, a person who participates or who is
  eligible to participate in a defined contribution plan established
  under this chapter is eligible for health benefits and other
  coverages to the same extent as a person who participates in a
  defined benefit plan administered by the same public retirement
  system.
         SECTION 2.  This Act takes effect September 1, 2017.
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