HB4029 - Relating to retirement benefits for certain law enforcement officers who are members of the Teacher Retirement System of Texas, including the creation of a supplemental program retirement fund.

  89R5292 RDR-D     By: Guillen, Plesa, et al. H.B. No. 4029       A BILL TO BE ENTITLED   AN ACT   relating to retirement benefits for certain law enforcement   officers who are members of the Teacher Retirement System of Texas,   including the creation of a supplemental program retirement fund.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 821.001, Government Code, is amended by   adding Subdivisions (17-a), (17-b), and (17-c) to read as follows:                 (17-a)     "Supplemental program member" means a member of   the retirement system who has, is earning, or is eligible to earn   credit for supplemental program service under Subchapter G, Chapter   823.                 (17-b)     "Supplemental program service" means   membership service that qualifies as supplemental program service   under Section 823.551.                 (17-c)     "Supplemental program service credit" means   the amount of supplemental program service credited to a member   under Subchapter G, Chapter 823.          SECTION 2.  Section 822.005, Government Code, is amended by   adding Subsection (e) to read as follows:           (e)     For a supplemental program member, the withdrawal of   accumulated contributions under Subsection (a) includes all of the   member's contributions made under Section 825.403.          SECTION 3.  Chapter 823, Government Code, is amended by   adding Subchapter G to read as follows:   SUBCHAPTER G. SUPPLEMENTAL PROGRAM SERVICE CREDIT           Sec.   823.551.     SUPPLEMENTAL PROGRAM SERVICE:   QUALIFICATIONS. Membership service qualifies as supplemental   program service if:                 (1)     the membership service was provided in a position   with an employer that required the member to hold an officer license   issued by the Texas Commission on Law Enforcement under Chapter   1701, Occupations Code; and                 (2)     the primary duty of the position was the   enforcement of the criminal or juvenile laws of this state.           Sec.   823.552.     SUPPLEMENTAL PROGRAM SERVICE: BASIS OF   CREDIT.   Supplemental program service credit is creditable as   provided by rule of the board of trustees or on a month-to-month   basis, whichever is greater.          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   SUPPLEMENTAL PROGRAM MEMBERS. (a) Notwithstanding Sections   824.202 and 824.203, a member who has at least 25 years of   supplemental program service credit is eligible to retire   regardless of age and receive a service retirement annuity in an   amount and to be funded as provided by this section.           (b)     The service retirement annuity under this section is   payable in 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 service retirement annuity 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   supplemental program member 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 supplemental program member 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 supplemental program member whose service credit annuity amount   is based on the sum of the member's age and amount of supplemental   program 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   supplemental program retirement fund in a ratio determined by the   retirement system.           (e)     Optional retirement annuities provided by Section   824.204 are available to a supplemental program 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 supplemental program retirement   fund and the portion payable from appropriate accounts described by   Section 825.306.           (f)     The amount payable from the supplemental program   retirement fund is reducible by the amount paid from appropriate   accounts described by Section 825.306 for supplemental program   service. 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 service retirement annuity under this section may   not exceed 100 percent of the average compensation computed under   Subsection (b).          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   SUPPLEMENTAL PROGRAM MEMBERS. (a) An annuity payable for a   disability resulting from a risk to which supplemental program   members are exposed because of the nature of the members' 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 supplemental program   member'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 supplemental program member's average annual compensation   regardless of the amount of service credited to the member.           (d)     The portions of the annuity under this section payable   from the supplemental program 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 supplemental program service 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 member'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).           (g)     For purposes of this section, "average annual   compensation" means:                 (1)     a member's average annual compensation for the   three highest years of compensation; or                 (2)     a member's average annual compensation if a member   retires with less than three years of service.          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 SUPPLEMENTAL PROGRAM   MEMBER. If a supplemental program member who has at least 25 years   of supplemental program service credit dies, the amount of the   death benefit annuity payable for the member's supplemental program   service 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; [ and ]                (3)  the transaction of business of the board ; and                 (4)     the administration of supplemental benefits for   supplemental program members .          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 supplemental program 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   supplemental program 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 supplemental program   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 4001.068, 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.  Subject to Section 825.3013, an interest in a   title-holding entity that is wholly owned, organized, and   controlled by the retirement system is considered a secur [Text truncated for display. Full text available on Congress.gov.]