Bill Text: TX HB1437 | 2021-2022 | 87th Legislature | Introduced

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Bill Title: Relating to requiring the Employees Retirement System of Texas to establish a hybrid retirement plan to provide retirement benefits to certain employees.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2021-03-05 - Referred to Pensions, Investments & Financial Services [HB1437 Detail]

Download: Texas-2021-HB1437-Introduced.html

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87R3521 KFF-F
By: Gates H.B. No. 1437

A BILL TO BE ENTITLED
AN ACT
relating to requiring the Employees Retirement System of Texas to
establish a hybrid retirement plan 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), a hybrid retirement plan established under Chapter 820 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 B, Title 8, Government Code, is amended
by adding Chapter 820 to read as follows:
CHAPTER 820. HYBRID RETIREMENT PLAN
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 820.001. DEFINITIONS. In this chapter:
(1) "Defined benefit plan" means, as appropriate, the
plan that provides benefits to members of the employee class of the
retirement system under Chapters 811 through 815.
(2) "Defined contribution plan" has the meaning
assigned by Section 802.001.
(3) "Employee" means an employee or appointed officer
described by Section 812.003(a).
(4) "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
established under this chapter.
(5) "Qualified plan" means an employee benefit plan
qualified under Section 401(a), Internal Revenue Code of 1986 (26
U.S.C. Section 401).
Sec. 820.002. CONFLICT OF LAW. To the extent of a conflict
between this chapter, including a rule adopted by the retirement
system under authority of this chapter, and any other law, this
chapter prevails.
Sec. 820.003. CERTAIN REFERENCES IN LAW TO RETIREMENT
SYSTEM MEMBERS. A reference in law outside this subtitle to a
member of or membership in the retirement system includes a
participant of or participation in, as appropriate, a hybrid
retirement plan unless the reference is expressly defined
otherwise.
SUBCHAPTER B. CREATION OF HYBRID RETIREMENT PLAN
Sec. 820.051. DUTY TO CREATE PLAN. Notwithstanding any
other law and subject to the requirements of Subchapter C, the board
of trustees shall by rule establish and administer a hybrid
retirement plan to provide benefits to newly hired employees under
that plan instead of under a defined benefit plan.
SUBCHAPTER C. PLAN MINIMUM REQUIREMENTS
Sec. 820.101. MINIMUM REQUIREMENTS. In establishing a
hybrid retirement plan, the board of trustees of the retirement
system shall ensure the plan meets the requirements of this
subchapter.
Sec. 820.102. QUALIFIED PLAN. A hybrid retirement plan
created under this chapter must be a qualified plan.
Sec. 820.103. PARTICIPATION IN PLAN; RESUMPTION OF SERVICE.
(a) In adopting rules to establish a hybrid retirement plan, the
board of trustees shall designate the date by which all newly hired
employees shall begin participation in the plan, provided that date
is not later than January 1, 2023.
(b) A person who resumes employment with an employer on or
after the date designated by the board of trustees under Subsection
(a) 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
newly hired employee for purposes of this section.
(c) Notwithstanding any other law, including Section
812.003, an employee who participates in a hybrid retirement plan
established under this chapter is not eligible for membership in
the retirement system and may not participate in the defined
benefit plan administered by the retirement system.
Sec. 820.104. EFFECT OF EMPLOYMENT CHANGES. A person
participating in a hybrid 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. 820.105. VESTING OF BENEFITS; TERMINATION OF
PARTICIPATION. (a) Benefits in a hybrid 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 a hybrid
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 a hybrid
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 sum of the member's age and years of service in
a position covered by the plan is equal to 80.
Sec. 820.106. 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 a hybrid retirement plan.
Sec. 820.107. CONTRIBUTIONS. (a) A participant in a hybrid
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 hybrid
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 a hybrid 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 820.105.
(c) Participant, state, and employer contributions, as
applicable, shall be made in the manner provided by Subchapter E,
Chapter 815.
SECTION 3. This Act takes effect September 1, 2021.