Bill Text: TX HB2934 | 2011-2012 | 82nd Legislature | Introduced

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Bill Title: Relating to optional annuity increases and annual supplemental payments for certain retirees and beneficiaries of the Texas Municipal Retirement System.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2011-03-17 - Referred to Pensions, Investments & Financial Services [HB2934 Detail]

Download: Texas-2011-HB2934-Introduced.html

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82R6458 KFF-F
By: Castro H.B. No. 2934

A BILL TO BE ENTITLED
AN ACT
relating to optional annuity increases and annual supplemental
payments for certain retirees and beneficiaries of the Texas
Municipal Retirement System.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 853.404(c), Government Code, is amended
to read as follows:
(c) The governing body of a participating municipality that
adopts an ordinance under Section 854.203 providing for increased
annuities effective January 1 of a designated year may further
provide in the ordinance that increases in annuities will be
credited effective January 1 of each year following the designated
year based on recomputations made as provided by Section 854.203(b)
[854.203(b)(1)] for each year following the initial computation,
and using the fraction specified in the ordinance as required under
Section 854.203(b) [854.203(b)(2)] in the recomputations.
SECTION 2. The heading to Section 854.203, Government Code,
is amended to read as follows:
Sec. 854.203. OPTIONAL ANNUITY INCREASE OR ANNUAL
SUPPLEMENTAL PAYMENTS [IN RETIREMENT ANNUITIES].
SECTION 3. Section 854.203, Government Code, is amended by
amending Subsections (a), (b), (f), and (g) and adding Subsections
(b-1), (b-2), (b-3), and (b-4) to read as follows:
(a) The governing body of a participating municipality by
ordinance, from time to time but not more frequently than once in
each 12-month period, may authorize and provide for an increased
annuity, a supplemental payment, or both [annuities] to be paid to
retirees and beneficiaries of deceased retirees of the
municipality. An annuity increased under this section replaces any
annuity or increased annuity previously granted to the same person.
(b) The amount of annuity increase under this section is
computed by one of the following methods:
(1) as the sum of the prior and current service
annuities on the effective date of retirement of the person on whose
service the annuities are based, multiplied by:
(A) [(1)] the percentage change in the Consumer
Price Index for All Urban Consumers, published by the Bureau of
Labor Statistics of the United States Department of Labor, from
December of the year immediately preceding the effective date of
the person's retirement to the December that is 13 months before the
effective date of the ordinance providing the annuity increase;
and
(B) [(2)] 30 percent, 50 percent, or 70 percent,
as specified by the governing body in the ordinance, except that if
the governing body has specified a different percentage in an
ordinance adopted under Section 853.404(c) and in effect on
December 31, 1999, the percentage used in computing annuity
increases for retirees of that municipality remains in effect until
changed or discontinued under Section 853.404; or
(2) as the sum of the prior and current service
annuities of the person on whose service the annuities are based on
the effective date of the annuity increase multiplied by the
percentage increase specified in the ordinance adopted by the
governing body, except that an adjustment to an annuity after the
annuity starting date for annuity increases under this subdivision
may not cause an annuitant's annuity to exceed the amount that the
annuitant would be entitled to had 100 percent of the amount
described by Subsection (b)(1)(A) been applied to the annuitant's
annuity on the effective date of retirement.
(b-1) An increase under Subsection (b)(2) applies to all
annuities for which the effective date of retirement of the person
on whose service the annuity is based is at least 12 months before
the effective date of the increase. Notwithstanding any other
provision of this subtitle, each distribution of a benefit under
this subtitle must be determined and made in accordance with
Section 401(a)(9), Internal Revenue Code of 1986. The board of
trustees may adopt rules it considers necessary to comply with the
distribution requirements.
(b-2) The amount of a supplemental payment under this
section is an amount equal to the sum of the prior and current
service annuities of the person on whose service the annuities are
based on the date that is the 30th day after the effective date of
the ordinance as described by Subsection (c) multiplied by the
percentage specified in the ordinance adopted by the governing
body. A supplemental payment under this section must be issued on:
(1) March 31, if the effective date of the ordinance
described by Subsection (c) is January 1; or
(2) the 60th day after the date on which the amount of
the payment is calculated under this subsection, if the effective
date of the ordinance is not January 1.
(b-3) If the effective date of retirement of the person on
whose service the annuity is based is less than 12 months before the
date on which the amount of the payment is calculated under
Subsection (b-2), the supplemental payment shall be prorated based
on the number of months the person is retired.
(b-4) A supplemental payment under this section is an
obligation of the municipality's account in the municipality
accumulation fund.
(f) An increase granted to an annuitant under Subsection
(b)(2), or the [The] amount by which an increase under Subsection
(b)(1) [this section] exceeds all previously granted increases to
an annuitant is:
(1) payable as a prior service annuity;
(2) [, is] an obligation of the municipality's account
in the municipality accumulation fund;[,] and
(3) [is] subject to reduction under Section
855.308(f).
(g) An ordinance under this section may not take effect
until it is approved by the board of trustees as meeting the
requirements of this section. The board may not approve an
ordinance unless the actuary first determines that all obligations
charged against the municipality's account in the municipality
accumulation fund, including the obligations proposed in the
ordinance, can be funded by the municipality within its maximum
contribution rate and within its amortization period as in effect
on the effective date of the annuity increases or supplemental
payments.
SECTION 4. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2011.