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A BILL TO BE ENTITLED
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AN ACT
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relating to a deferred retirement option for certain members of the |
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Employees Retirement System of Texas. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 814, Government Code, is amended by |
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adding Subchapter H to read as follows: |
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SUBCHAPTER H. DEFERRED RETIREMENT OPTION PLAN |
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Sec. 814.701. DEFINITION. In this subchapter, "plan" means |
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the deferred retirement option plan provided by this subchapter. |
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Sec. 814.702. PARTICIPATION IN PLAN. (a) A contributing |
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member of the retirement system who is a commissioned peace officer |
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for the Department of Public Safety, the Texas Alcoholic Beverage |
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Commission, the Parks and Wildlife Department, or the office of the |
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inspector general of the Texas Department of Criminal Justice may |
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elect to participate in the plan if the member: |
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(1) is eligible to retire and receive a standard |
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service retirement annuity; |
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(2) meets one of the following requirements: |
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(A) has at least 25 years of service credit as a |
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commissioned peace officer; or |
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(B) is at least 55 years old with at least 20 |
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years of service credit as a commissioned peace officer; and |
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(3) remains in a position with the state. |
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(b) An election to participate in the plan must be on a form |
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prescribed by and filed with the retirement system. An election may |
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be made only once and must state the period that the member wishes |
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to participate in the plan. The maximum period a member may |
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participate in the plan is 60 consecutive months. An election under |
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this section is irrevocable after filing. |
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(c) The effective date of a member's participation in the |
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plan is the first day of the month after the month in which an |
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election is filed and approved by the retirement system. The |
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retirement system shall approve each election filed by a member who |
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is eligible to make the election. |
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(d) The filing of an election to participate in the plan is |
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not considered for any purpose an application for retirement and a |
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participant of the plan is not considered a retiree for any purpose. |
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Sec. 814.703. COMPUTATION OF PARTICIPANT'S SERVICE AND |
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ANNUITY. (a) A person participating in the plan remains a member of |
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the retirement system during the period of participation, unless |
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the member terminates membership under Section 812.005, but the |
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member may not, during participation, accrue additional service |
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credit in the retirement system. A member and the state continue to |
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make contributions for the member's service performed during the |
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member's participation in the plan, and those contributions are not |
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eligible for withdrawal by the participant. |
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(b) For purposes of the plan, the computation of the service |
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retirement annuity of a member participating in the plan is |
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determined as of the effective date of participation. |
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(c) Participation in the plan does not affect a member's |
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participation in the group benefits program under Chapter 1551, |
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Insurance Code. |
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(d) A participating member is not eligible to receive a |
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partial lump-sum distribution under Section 814.1082. |
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Sec. 814.704. BENEFITS UNDER PLAN. (a) On the effective |
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date of a member's participation in the plan, the retirement system |
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shall make the transfers required by Section 815.319(a) to the |
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retirement annuity reserve account as if the member had retired on |
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that date. The retirement system shall transfer monthly, during |
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the period of the member's participation in the plan, from the |
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retirement annuity reserve account to an account for the member in |
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the deferred retirement option account the amount the member would |
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have received that month if the member had retired on the effective |
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date of plan participation. |
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(b) When a member who is participating in or who has |
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participated in the plan leaves employment, including a member who |
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leaves employment due to a disability, the person is entitled to the |
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accumulated amount in the member's account in the deferred |
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retirement option account. The amount is payable in a lump sum or |
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in periodic installments at the option of the member. The board of |
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trustees by rule shall determine the number and frequency of |
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installment payments. |
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(c) If a member dies during participation in the plan or |
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after participation but before retirement, the decedent's |
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designated beneficiary is entitled to the accumulated amount in the |
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decedent's account in the deferred retirement option account as if |
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the decedent had retired immediately before dying. |
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(d) Payment of the benefit provided under the plan is in |
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addition to any annuity otherwise payable under this subtitle. |
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Sec. 814.705. INTEREST. Interest on money in a member's |
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account in the deferred retirement option account is earned monthly |
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and is computed at the rate of 2.5 percent a year on the mean balance |
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of the account. |
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Sec. 814.706. TERMINATION OF PARTICIPATION IN PLAN. A |
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member terminates participation in the plan by: |
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(1) termination of employment; |
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(2) death; or |
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(3) expiration of the period for which participation |
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was approved. |
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Sec. 814.707. ADMINISTRATIVE COSTS. Only to the extent |
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necessary to cover the costs associated with administering the |
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plan, the retirement system may require participating members to |
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pay a fee in an amount set by rule. A fee charged under this section |
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may be assessed against the participating member's contributions to |
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the plan. |
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Sec. 814.708. PLAN CONTINGENT ON CERTAIN TAX TREATMENT. |
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(a) This subchapter may take effect only on receipt by the |
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retirement system of a favorable private letter ruling from the |
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Internal Revenue Service regarding the federal tax consequences of |
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the creation and implementation of the plan on the qualified status |
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of the retirement system benefit plan. |
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(b) If the retirement system does not receive the favorable |
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private letter ruling described by Subsection (a), this subchapter |
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has no effect. |
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SECTION 2. Section 815.310(b), Government Code, is amended |
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to read as follows: |
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(b) All assets of the trust fund shall be credited, |
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according to the purpose for which they are held, to one of the |
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following accounts: |
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(1) employees saving account; |
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(2) state accumulation account; |
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(3) retirement annuity reserve account; |
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(4) interest account; [or] |
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(5) expense account; or |
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(6) deferred retirement option account. |
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SECTION 3. Subchapter D, Chapter 815, Government Code, is |
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amended by adding Section 815.316 to read as follows: |
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Sec. 815.316. DEFERRED RETIREMENT OPTION ACCOUNT. (a) The |
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retirement system shall deposit in the deferred retirement option |
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account the amounts required to be deposited in the account by |
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Section 814.704(a). |
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(b) The retirement system shall pay from the account all |
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benefits accrued during participation in the deferred retirement |
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option plan. |
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SECTION 4. (a) Not later than the 30th day after the |
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effective date of this Act, the Employees Retirement System of |
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Texas shall seek the private letter ruling described by Section |
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814.708(a), Government Code, as added by this Act. |
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(b) The Employees Retirement System of Texas shall |
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implement the deferred retirement option plan established under |
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Subchapter H, Chapter 814, Government Code, as added by this Act, |
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not later than the first day of the month following the receipt of a |
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favorable private letter ruling under Section 814.708(a), |
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Government Code, as added by this Act. If the Employees Retirement |
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System of Texas does not receive a favorable private letter ruling |
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under Section 814.708(a), Government Code, as added by this Act, |
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the Employees Retirement System shall notify the standing |
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committees of the legislature with primary jurisdiction over public |
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retirement systems that Subchapter H, Chapter 814, Government Code, |
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should be repealed or other legislative action taken. |
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SECTION 5. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2011. |