By: Williams	S.B. No. 350
	(Truitt)

	A BILL TO BE ENTITLED
	AN ACT
	relating to the restructuring of fund obligations and accounts of
	the Texas Municipal Retirement System and related actuarial and
	accounting procedures.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 851.001, Government Code, is amended by
	amending Subdivisions (1) and (16) and adding Subdivision (20) to
	read as follows:
	(1)  "Accumulated contributions" means the sum of all
	contributions made by a member and credited to the member's
	individual account [in the employees saving fund], plus interest
	allowed on the account as provided by this subtitle.
	(16)  "Member" means a person for whom an individual
	account has been established in the retirement system [employees
	saving fund] and whose membership has not terminated under Section
	852.104.
	(20)  "Individual account" means an individual account
	for a member in the benefit accumulation fund, as established under
	Section 855.306(a).
	SECTION 2.  Subsection (a), Section 852.103, Government
	Code, is amended to read as follows:
	(a)  A living person who is not an employee of a
	participating department and who has not retired may, after
	application, withdraw all of the accumulated contributions
	credited to the person's individual account [in the employees
	saving fund], and the retirement system shall close the account.
	SECTION 3.  Subsection (b), Section 852.105, Government
	Code, is amended to read as follows:
	(b)  A governing body may not adopt an ordinance under this
	section unless the actuary first determines, on the basis of
	mortality and other tables adopted by the board of trustees, that
	all obligations of the municipality to the benefit [municipality]
	accumulation fund, including obligations proposed under the
	ordinance, can be funded by the municipality within its maximum
	contribution rate and within its amortization period.
	SECTION 4.  Subsection (d), Section 852.108, Government
	Code, is amended to read as follows:
	(d)  Member contributions under Section 855.402 shall be
	made on all compensation paid to the employee by the reemploying
	municipality at the same rate as is required of other employees of
	the department. The retirement system shall credit [deposit] the
	contributions on receipt to the member's [in an] individual account
	[for the member in the employees saving fund] and shall credit the
	account with interest annually at the same rate and manner as the
	accounts of other members are credited. The compensation paid to
	the employee by the reemploying municipality shall be included in
	computing the monthly contributions the municipality makes to the
	benefit [municipality] accumulation fund.
	SECTION 5.  Subsections (b) and (d), Section 852.109,
	Government Code, are amended to read as follows:
	(b)  Member contributions under Section 855.402 shall be
	made on all compensation paid to the employee by the municipality at
	the same rate as is required of other employees of the department.
	The retirement system shall credit [deposit] the contributions on
	receipt to the member's [in an] individual account [for the member
	in the employees saving fund] and shall credit the account with
	interest at the same rate and in the same manner as the accounts of
	other members are credited. The compensation paid to the employee
	by the municipality shall be included in computing the monthly
	contributions the municipality makes to the benefit [municipality]
	accumulation fund.
	(d)  The additional service retirement benefit allowable to
	a person to whom this section applies is, at the option of that
	person, either:
	(1)  a refund of accumulated contributions made since
	reemployment plus any accrued interest on the accumulated
	contributions allowed by the retirement system; or
	(2)  a benefit consisting of:
	(A)  a basic annuity actuarially determined from
	the sum of the member's contributions [deposits] made and
	accumulated since the date the person last became a member together
	with interest accrued [accumulated] on that amount since the person
	last became a member and an amount from the benefit [municipality]
	accumulation fund equal to the amount of the member's contributions
	[deposits] credited to the member's individual account since the
	person last became a member together with interest accrued
	[accumulated] on that amount since the person last became a member;
	or
	(B)  a greater amount authorized by the
	municipality under Section 855.501.
	SECTION 6.  Subsection (e), Section 853.003, Government
	Code, is amended to read as follows:
	(e)  A governing body may not adopt an ordinance under
	Subsection (a) unless the actuary first determines that all
	obligations charged against the municipality's account in the
	benefit [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.
	SECTION 7.  Subsection (c), Section 853.402, Government
	Code, is amended to read as follows:
	(c)  The base updated service credit of a member is an amount
	computed as the number 1.03, times the difference by which the
	amount computed under Subdivision (1) exceeds the amount computed
	under Subdivision (2), where:
	(1)  "(1)" is an amount equal to the accumulation at
	three percent interest of a series of monthly amounts for the number
	of months of credited service on the date prescribed by Subsection
	(e), each amount of which equals the member's average updated
	service compensation, times the sum of:
	(A)  the rate of contributions required of the
	member for current service; plus
	(B)  the member's contribution rate, times the
	municipal current service ratio in effect on the effective date of
	the ordinance adopted under Section 853.401; and where
	(2)  "(2)" is an amount equal to the sum of:
	(A)  the amount credited to the member's
	individual account [in the employees saving fund] on the date
	prescribed by Subsection (e), subject to a 1 to 1 matching ratio,
	times 2; plus
	(B)  the amount credited to the member's
	individual account, subject to a 1.5 to 1 matching ratio, times 2.5;
	plus
	(C)  the amount credited to the member's
	individual account, subject to a 2 to 1 matching ratio, times 3.
	SECTION 8.  Subsection (a), Section 853.403, Government
	Code, is amended to read as follows:
	(a)  An ordinance adopted under Section 853.401 may not take
	effect unless the board of trustees approves the ordinance as
	meeting the requirements of this section. The board may not approve
	an ordinance unless the actuary first determines, and the board
	concurs in the determination, that all obligations charged against
	the municipality's account in the benefit [municipality]
	accumulation fund, including obligations proposed in the
	ordinance, can be funded by the municipality within its maximum
	total contribution rate and within its amortization period as in
	effect on the date the updated service credits take effect.
	SECTION 9.  Subsection (d), Section 853.404, Government
	Code, is amended to read as follows:
	(d)  Except as provided by Subsection (e), an ordinance under
	this section continues in effect for each year that the actuary
	determines that all obligations charged against the municipality's
	account in the benefit [municipality] accumulation fund, including
	the obligations to become effective the next January 1, can be
	funded by the municipality within its maximum contribution rate and
	within its amortization period as in effect on the next January 1.
	An ordinance under this section will cease to be in effect for
	future years if the actuary cannot make that determination, but
	shall again take effect for future years beginning January 1 of the
	first year after the actuary can make that determination.
	SECTION 10.  Subsection (c), Section 853.505, Government
	Code, is amended to read as follows:
	(c)  When a person who has military service credit under
	Section 853.502 retires and has paid for military service credit
	under former law, the retirement system shall compute an amount
	equal to the sum of any [transfer to the current service annuity
	reserve fund the] accumulated amount paid by the person for the
	military service credit under former law, plus [Section 853.504(b)
	and] an equal amount multiplied by [from the municipality account
	in the municipality accumulation fund equal to the accumulated
	amount paid by the person times] the municipality's current service
	matching percent in effect on the date the member applied [applies]
	for the military service credit [under Section 853.504(b)]. The
	retirement system shall use the sum derived from that computation
	[amounts] to make annuity payments to the person that are computed
	in the same manner as is the person's current service annuity, but
	the military service credit and the sum [amounts] may not be used in
	other computations, including computations of updated service
	credits or prior service credits.
	SECTION 11.  Subsection (a), Section 853.601, Government
	Code, is amended to read as follows:
	(a)  The governing body of a participating municipality in
	ordinances authorizing updated service credits under Section
	853.401 on or after January 1, 1984, may provide that those members
	who are eligible for such credits on the basis of service with the
	granting municipality, who have unforfeited credit for prior
	service or current service with another participating municipality
	or municipalities by reason of previous employment, and who are
	contributing members on the date prescribed by Section 853.402(e),
	shall be credited in the retirement system with updated service
	credit calculated in the manner prescribed by Sections 853.401 and
	853.402, except that in determining the base updated service credit
	of the member under Section 853.402(c)(1), all unforfeited credited
	service performed by the member by reason of previous employment in
	other participating municipalities prior to the date prescribed by
	Section 853.402(e) shall be treated as if performed in the service
	of the municipality adopting the ordinance, and that amount shall
	be reduced by an amount equal to the sum of:
	(1)  2 times the amount credited to the member's
	individual account [accounts in the employees saving fund] on the
	date prescribed in Section 853.402(e), which any participating
	municipality has undertaken to match on a 1 to 1 ratio; plus
	(2)  2.5 times the amount credited to the member's
	individual account [accounts], subject to a 1.5 to 1 matching ratio
	by any participating municipality; plus
	(3)  3 times the amount credited to the member's
	individual account [accounts], subject to a 2 to 1 matching ratio by
	any participating municipality; and plus
	(4)  the sum of all updated service credits, prior
	service credits, special prior service credits, and antecedent
	service credits allowed to the member by any other participating
	municipality by which the member was previously employed and to
	which the member is entitled.
	SECTION 12.  Subsections (c) and (d), Section 854.002,
	Government Code, are amended to read as follows:
	(c)  A current service annuity is actuarially determined on
	the date of a member's retirement from the sum of:
	(1)  the amount credited to the member's individual
	account [in the employees saving fund]; and
	(2)  an additional [the] amount from the benefit
	[municipality] accumulation fund equal to the amount in the
	member's individual account or a greater amount authorized by a
	participating municipality under Section 855.501.
	(d)  Notwithstanding any other provision of this subtitle,
	instead of an annuity, a person will receive from the retirement
	system a single payment equal to the sum of the following if on the
	date of that person's retirement that sum is $10,000 or less:
	(1)  any updated service credit or any prior service,
	special prior service, or antecedent service credit for that person
	on the date of retirement, plus accumulated interest;
	(2)  the amount credited to the person's individual
	account [in the employees saving fund]; and
	(3)  an additional  [the] amount from the benefit
	[municipality] accumulation fund equal to the amount in the
	member's individual account or a greater amount authorized by a
	participating municipality under Section 855.501.
	SECTION 13.  Subsection (b), Section 854.008, Government
	Code, is amended to read as follows:
	(b)  The amount of a lump-sum distribution under this section
	may not exceed three-fourths of the total contributions and
	accumulated interest in the member's individual account [in the
	employees saving fund] at the time of the member's retirement.
	SECTION 14.  Subsection (c), Section 854.201, Government
	Code, is amended to read as follows:
	(c)  A governing body may not adopt an ordinance under this
	section unless the actuary first determines that all obligations
	charged against the municipality's account in the benefit
	[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.
	SECTION 15.  Subsection (d), Section 854.202, Government
	Code, is amended to read as follows:
	(d)  An ordinance adopted under this section must also
	include the provisions specified in Section 852.105. A governing
	body may not adopt an ordinance under this section unless the
	actuary first determines, on the basis of mortality and other
	tables adopted by the board of trustees, that all obligations of the
	municipality to the benefit [municipality] accumulation fund,
	including obligations proposed under the ordinance, can be funded
	by the municipality within its maximum contribution rate and within
	its amortization period.
	SECTION 16.  Subsections (f) and (g), Section 854.203,
	Government Code, are amended to read as follows:
	(f)  The amount by which an increase under this section
	exceeds all previously granted increases to an annuitant is payable
	as a prior service annuity, is an obligation of the municipality's
	account in the benefit [municipality] accumulation fund, and 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 benefit
	[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 increases.
	SECTION 17.  Subsections (a) and (c), Section 854.309,
	Government Code, are amended to read as follows:
	(a)  Except as provided by Subsection (b), if a disability
	retirement annuity is discontinued under Section 854.307 or the
	right to an annuity revoked under Section 854.306(b) [854.306(c)],
	the retiree is entitled to a lump-sum payment in an amount, if any,
	by which the amount in the retiree's individual account [in the
	employees saving fund] at the time of disability retirement exceeds
	the amount of current service annuity payments made before the date
	the annuity was discontinued or the right to an annuity revoked.
	(c)  The benefit provided by this section is payable from the
	benefit accumulation [current service annuity reserve] fund.
	SECTION 18.  Subsection (b), Section 854.405, Government
	Code, is amended to read as follows:
	(b)  A governing body may not adopt an ordinance under this
	section unless the actuary first determines, on the basis of
	mortality and other tables adopted by the board of trustees, that
	all obligations of the municipality to the benefit [municipality]
	accumulation fund, including obligations proposed under the
	ordinance, can be funded by the municipality within its maximum
	contribution rate and within its amortization period.
	SECTION 19.  Subsection (a), Section 854.501, Government
	Code, is amended to read as follows:
	(a)  Except as provided by Subsection (c), if a member dies
	before retirement, a lump-sum death benefit is payable from the
	benefit accumulation [employees saving] fund in the amount of:
	(1)  the amount credited to the member's individual
	account [in the fund]; plus
	(2)  interest computed from the beginning of the year
	in which death occurs through the end of the month immediately
	preceding the month in which death occurs at the rate allowed on
	member contributions during the preceding year.
	SECTION 20.  Section 854.502, Government Code, is amended to
	read as follows:
	Sec. 854.502.  REFUND OF UNRECOVERED CONTRIBUTIONS. (a)  If
	monthly payments of any standard service retirement annuity under
	Section 854.103, optional service retirement annuity under Section
	854.104, standard disability retirement annuity under Section
	854.304, optional disability retirement annuity under Section
	854.305, standard occupational disability retirement annuity under
	Section 854.408, or optional occupational disability retirement
	annuity under Section 854.410 cease before the sum of all payments
	of the annuity equals or exceeds the amount of accumulated
	contributions credited to [in] the member's individual account [in
	the employees saving fund] at the time of retirement of the member
	on whose service the annuity was based, a lump-sum benefit equal to
	the amount by which the amount of the accumulated contributions
	exceeds the sum of all payments made by reason of the annuity is
	payable:
	(1)  to the designated beneficiary, if living, or if
	not living, to the estate of the designated beneficiary, if the
	designated beneficiary survived the retiree; or
	(2)  to the estate of the retiree, if the designated
	beneficiary predeceased the retiree.
	(b)  The benefit provided by this section is payable from the
	benefit [current service annuity reserve fund and the municipality]
	accumulation fund [in the ratio that the part of the annuity that
	was payable from each of those funds bears to the entire benefit
	determined on the effective date of retirement].
	SECTION 21.  Subsection (c), Section 855.305, Government
	Code, is amended to read as follows:
	(c)  All assets of the retirement system shall be credited,
	according to the purpose for which they are held, to one of the
	following funds:
	(1)  benefit [employees saving fund;
	[(2)  municipality] accumulation fund;
	[(3) current service annuity reserve fund;]
	(2) [(4)]  interest fund;
	(3) [(5)]  endowment fund;
	(4) [(6)]  expense fund;
	(5) [(7)]  supplemental disability benefits fund; or
	(6) [(8)]  supplemental death benefits fund.
	SECTION 22.  The heading to Section 855.306, Government
	Code, is amended to read as follows:
	Sec. 855.306.  MEMBER'S INDIVIDUAL ACCOUNT  [EMPLOYEES
	SAVING FUND].
	SECTION 23.  Section 855.306, Government Code, is amended by
	amending Subsection (a) and adding Subsection (d) to read as
	follows:
	(a)  The retirement system shall establish in the
	participating municipality's account in the benefit accumulation
	fund an individual account for each person who is a member of the
	system through employment in that municipality. The retirement
	system shall credit to [deposit in] a member's individual account
	[in the employees saving fund]:
	(1)  the amount of contributions to the retirement
	system deducted from the member's compensation;
	(2)  interest allowed on amounts credited to [money in]
	the account in accordance with this subtitle; and
	(3)  the portion of a deposit required by Section
	853.003 to reinstate credited service previously canceled that
	represents the amount withdrawn.
	(d)  If a retiree resumes employment under Section 854.308,
	the retirement system shall reestablish an individual account for
	the member in the participating municipality's account in the
	benefit accumulation fund and credit to that account the portion of
	the balance of the person's retirement reserve that is attributable
	to the person's prior accumulated contributions.
	SECTION 24.  Section 855.307, Government Code, is amended to
	read as follows:
	Sec. 855.307.  BENEFIT  [MUNICIPALITY] ACCUMULATION FUND:
	CURRENT SERVICE. (a)  The retirement system shall credit or charge
	to the account of a participating municipality in the benefit
	[municipality] accumulation fund:
	(1)  all current service contributions made by the
	municipality to the retirement system;
	(2)  net investment income or loss allocated to the
	fund under Section 855.317; and
	(3)  the withdrawal charge for reinstatement of
	credited service as provided by Section 853.003.
	(b)  The retirement system shall pay from the account of a
	participating municipality in the benefit [municipality]
	accumulation fund:
	(1)  all payments under annuities arising from current
	service credits  [money to the current service annuity reserve fund
	in accordance with Section 855.318]; and
	(2)  refunds to certain municipalities in accordance
	with Section 855.319.
	(c)  If credited service previously canceled is reinstated
	in accordance with Section 853.003, the retirement system shall
	charge the municipality's account in the benefit [municipality]
	accumulation fund with the necessary reserves to fund the credits
	based on current service that are restored to the member.
	(d)  The annuities payable as provided by this section are
	liabilities and obligations of the participating municipality for
	which the service was performed on which the annuities are based and
	are payable from the municipality's account in the benefit
	accumulation fund.
	SECTION 25.  The heading to Section 855.308, Government
	Code, is amended to read as follows:
	Sec. 855.308.  BENEFIT [MUNICIPALITY] ACCUMULATION FUND:
	PRIOR SERVICE.
	SECTION 26.  Section 855.308, Government Code, is amended by
	amending Subsections (a), (b), (d), and (f) and adding Subsection
	(g) to read as follows:
	(a)  In addition to amounts credited or charged as provided
	by Section 855.307, the retirement system shall credit to the
	account of a participating municipality in the benefit
	[municipality] accumulation fund all prior service contributions
	made by the municipality to the retirement system.
	(b)  In addition to amounts paid as provided by Section
	855.307, the retirement system shall pay from the account of a
	participating municipality in the benefit [municipality]
	accumulation fund:
	(1)  all payments under annuities arising from prior
	service credits, special prior service credits, antecedent service
	credits, or updated service credits authorized by a participating
	municipality; and
	(2)  optional increased payments authorized by a
	participating municipality under Section 854.203.
	(d)  If credited service previously canceled is reinstated
	in accordance with Section 853.003, the retirement system shall
	charge the municipality's account in the benefit [municipality]
	accumulation fund with the necessary reserves to fund credits based
	on prior service that are restored to the member.
	(f)  The board of trustees may proportionately reduce all
	payments under annuities payable under this section, at any time
	and for a period necessary, to prevent those payments for a year
	from exceeding the amount available in the participating
	municipality's account for prior service.
	(g)  The annuities payable as provided by this section are
	liabilities and obligations of the participating municipality for
	which the service was performed, or granted as the result of
	reinstated service previously canceled, on which the annuities are
	based and are payable from the municipality's account in the
	benefit accumulation fund.
	SECTION 27.  Subsection (e), Section 855.311, Government
	Code, is amended to read as follows:
	(e)  If the board of trustees determines that the amount
	credited to the distributive benefits account on December 31 of any
	year is sufficient to do so, the board by resolution may:
	(1)  authorize the distribution and payment of all or
	part of the money credited to the account to persons who were
	annuitants on that day in the ratio of the rate of the monthly
	benefit of each annuitant to the total of all annuity payments made
	by the system for the final month of the year; or
	(2)  authorize the distribution of all or part of the
	amount credited to the account to each member's individual account
	[in the employees saving fund] as supplemental interest in the
	ratio of the amount of interest paid on the individual's account to
	the interest paid to all individual accounts for the year.
	SECTION 28.  Subsection (d), Section 855.313, Government
	Code, is amended to read as follows:
	(d)  [As soon as practicable after December 31, 1988, the
	actuary shall calculate the amount of reserves required to pay all
	annuities that are obligations of the supplemental disability
	benefits fund. If the board of trustees determines, on the basis of
	the calculations made by the actuary, that the money to the credit
	of the fund is materially in excess of the amount of reserves needed
	to assure payment of all annuities that are obligations of the fund,
	the board may direct that a portion of the excess shall be
	transferred from the supplemental disability benefits fund to the
	municipality accumulation fund and credited to the respective
	accounts of the participating municipalities in such proportions as
	the board of trustees determines to be the ratio of their respective
	contributions to the total of all contributions to the supplemental
	disability benefits fund.] When all annuities payable from the
	supplemental disability benefits fund have been finally paid and
	discharged, the board of trustees shall direct that the money
	remaining in the supplemental disability benefits fund shall be
	transferred and credited to the accounts of the respective
	participating municipalities in the benefit [municipality]
	accumulation fund in proportion to the same ratios of their
	contributions to the total of all contributions to the supplemental
	disability benefits fund.
	SECTION 29.  Section 855.316, Government Code, is amended to
	read as follows:
	Sec. 855.316.  INTEREST RATES AND CREDITING.  (a)  Unless
	this subtitle expressly specifies another rate of interest, for
	periods after December 31, 2008, the rate of interest is five
	percent compounded annually, plus any other amounts the board of
	trustees is expressly authorized to provide.  Notwithstanding any
	other provision in this chapter, the interest credited to a
	member's individual account [the employees saving fund] in a
	calendar year may not be less than five percent [as allocated under
	Section 855.317(a)].
	(b)  Effective as of December 31 of each year, the board of
	trustees shall credit interest on the accumulated contributions in
	a member's individual account as of January 1 of that year in
	accordance with Subsection (a) and Section 855.306.
	SECTION 30.  Subsections (a) and (b), Section 855.317,
	Government Code, are amended to read as follows:
	(a)  Effective as of December 31 of each year, the board of
	trustees shall make the following allocations from the interest
	fund that in the aggregate equal the net investment income or loss
	for the year:
	(1)  [to the current service annuity reserve fund,
	interest on the mean amount in the current service annuity reserve
	fund during that year;
	[(2)]  to the supplemental disability benefits fund,
	interest on the mean amount in the supplemental disability benefits
	fund during that year;
	(2) [(3)]  to the supplemental death benefits fund,
	interest on the mean amount in the supplemental death benefits fund
	during that year;
	(3) [(4)]  to the accounts in the benefit
	[municipality] accumulation fund, an amount derived by applying a
	positive or negative rate, as determined by the board of trustees in
	its sole discretion to the January 1 balances of that year for each
	of those accounts; and
	(4) [(5)]  to the interest reserve account of the
	endowment fund, a positive or negative amount as determined by the
	board of trustees in its sole discretion[; and
	[(6)     to the employees saving fund, interest on the sum
	of the accumulated contributions in the employees saving fund
	credited on January 1 of that year to all persons who are members on
	December 31 of that year before any transfers for retirement
	effective December 31 of that year are made].
	(b)  In making allocations under this section, the board of
	trustees shall, without regard to the amount of net investment
	income or loss for the calendar year, first allocate interest as
	specified in Section 855.316(a) [855.316] to those funds or
	accounts referenced in Subsections (a)(1) and[,] (2) of this
	section[, (3), and (6)].  The board shall then allocate the
	remaining net investment income or loss between the funds or
	accounts referenced in Subsections (a)(3) and (4) of this section
	[(a)(4) and (5)] in rates or amounts determined by the board in its
	sole discretion.  The board of trustees shall accumulate the amount
	of assets in the interest reserve account of the endowment fund that
	the board in its sole discretion determines is necessary:
	(1)  to provide adequate reserves to:
	(A)  mitigate the effects of future investment
	return volatility and insufficient net investment income; and
	(B)  provide reasonable rate stabilization for
	participating municipalities;
	(2)  to provide adequate reserves against special and
	contingency requirements of other funds of the system; and
	(3)  to provide the amount required for the
	administration expenses of the system for the following year.
	SECTION 31.  Section 855.319, Government Code, is amended to
	read as follows:
	Sec. 855.319.  PAYMENT TO FORMERLY PARTICIPATING
	MUNICIPALITY. If a participating municipality has no employees who
	are members of the retirement system and has no present or potential
	liabilities resulting from the participation of former employees,
	the municipality's participation in the system stops and the system
	shall repay to the municipality on application any amount in the
	benefit [municipality] accumulation fund that is credited to the
	municipality.
	SECTION 32.  Subsection (g), Section 855.402, Government
	Code, is amended to read as follows:
	(g)  After the deductions for member contributions are paid,
	the board of trustees shall:
	(1)  record all receipts; and
	(2)  deposit the receipts in the benefit accumulation
	fund and credit the appropriate amounts to the members' individual
	accounts [credit of the employees saving fund].
	SECTION 33.  Sections 855.405 and 855.406, Government Code,
	are amended to read as follows:
	Sec. 855.405.  MUNICIPALITY NORMAL CONTRIBUTION. Each
	participating municipality shall pay to the benefit [municipality]
	accumulation fund, as its normal contribution, an amount equal to a
	percentage of the compensation of members employed by the
	municipality for that month. The rate of contribution is the normal
	contribution rate determined annually by the actuary and approved
	by the board of trustees.
	Sec. 855.406.  MUNICIPALITY PRIOR SERVICE CONTRIBUTION.
	(a)  Each participating municipality shall pay to the benefit
	[municipality] accumulation fund, as its prior service
	contribution, an amount equal to a percentage of the compensation
	of members employed by the municipality for that month.
	(b)  The rate of contribution is the rate determined annually
	by the actuary and approved by the board of trustees as being the
	rate required to fund all obligations charged against the
	municipality's account in the benefit [municipality] accumulation
	fund within the municipality's amortization period without
	resulting in a probable future depletion of that account.
	SECTION 34.  Subsection (a), Section 855.4065, Government
	Code, is amended to read as follows:
	(a)  In addition to the contributions a participating
	municipality is required to make under this subtitle, the board of
	trustees, after consultation with the actuary, by rule may
	authorize a participating municipality to make lump-sum or periodic
	employer contributions to the retirement system to be deposited in
	the municipality's account in the benefit [municipality]
	accumulation fund.
	SECTION 35.  Subsections (d), (f), and (g), Section 855.407,
	Government Code, are amended to read as follows:
	(d)  If the dates of participation of each department of a
	municipality are not the same, the governing body of the
	municipality may request that, to determine the municipality normal
	contribution rate and prior service contribution rate and to
	determine the period during which the municipality must fund the
	obligations charged against its account in the benefit
	[municipality] accumulation fund, all of its departments have a
	single composite participation date. The actuary shall determine
	the composite participation date by computing an average weighted
	according to the number of members entering the retirement system
	on the actual dates of participation of the departments involved.
	(f)  The governing body of a municipality that is determined
	by the actuary to be unable to finance all obligations charged
	against its account in the benefit [municipality] accumulation fund
	within 25 years after its most recent actuarial valuation date may
	elect to have the municipality contribute to its account in the
	benefit [municipality] accumulation fund at a rate that does not
	exceed in any year the sum of two percent and the maximum
	contribution rate specified by Subsection (a) and by Section
	855.501, if applicable, and that the actuary annually may determine
	as necessary to finance the existing levels of benefits before the
	expiration of 25 years after the most recent actuarial valuation
	date.
	(g)  A municipality that begins participation in the
	retirement system on or after December 31, 1999, and any
	municipality already participating in the retirement system on that
	date whose governing body elects to have the municipality do so
	shall contribute to its account in the benefit [municipality]
	accumulation fund at the combined rate of total compensation paid
	to its employees as the actuary determines is necessary to fund all
	obligations chargeable to its account in the fund within the
	municipality's amortization period, regardless of other provisions
	of this subtitle.
	SECTION 36.  Subsection (a), Section 855.410, Government
	Code, is amended to read as follows:
	(a)  A participating municipality that fails to remit before
	the 16th day of the month all contributions required by this
	subchapter to be made and remitted to the retirement system by that
	date shall pay to the retirement system, in addition to the
	contributions, interest on the past-due amounts at an annual rate
	that is the total of the system's investment return assumption
	[rates of interest credited by the retirement system to accounts in
	the municipality accumulation fund] for the preceding calendar
	year, plus two percent. The retirement system shall notify
	participating municipalities of the rate of interest that will be
	due on late payments.
	SECTION 37.  Subsection (b), Section 855.501, Government
	Code, is amended to read as follows:
	(b)  The governing body of a municipality electing to provide
	for increased reserves by ordinance shall provide that for each
	month of current service rendered by a participating employee of
	the municipality after the date of its election the municipality
	will provide a contribution [as provided by Subsection (c)] equal
	to 150 or 200 percent of the member's accumulated contribution to
	the retirement system for that month.
	SECTION 38.  Subsection (c), Section 855.608, Government
	Code, is amended to read as follows:
	(c)  Money for the payment of benefits to a participant under
	this section shall be paid to the separate fund created by this
	section from the contributions that otherwise would be deposited in
	the benefit [municipality] accumulation fund account of the
	municipality that employed the member. If the benefit is payable as
	a result of service with more than one participating municipality,
	there shall be paid from the contributions that otherwise would be
	deposited in the benefit [municipality] accumulation fund account
	of each affected municipality the amount chargeable to that
	municipality for the member. When feasible, the monthly amount to
	pay benefits under this section shall be paid not later than the
	15th day before the date of a monthly payment to a person receiving
	annuity benefits under this section.
	SECTION 39.  The following provisions of the Government Code
	are repealed:
	(1)  Section 855.309;
	(2)  Section 855.318; and
	(3)  Subsections (c) and (d), Section 855.501.
	SECTION 40.  (a) The Texas Municipal Retirement System
	shall:
	(1)  transfer the assets and liabilities of each
	participating municipality's members' individual accounts in the
	employees saving fund to the appropriate municipality's accounts in
	the benefit accumulation fund and dissolve the employees saving
	fund; and
	(2)  transfer the assets and, if appropriate,
	liabilities of the current service annuity reserve fund to the
	interest reserve account in the endowment fund and the benefit
	accumulation fund, as determined by the board of trustees in
	consultation with the actuary, and dissolve the current service
	annuity reserve fund.
	(b)  For purposes of clarification, as of the effective date
	of this Act, the municipality accumulation fund is renamed the
	benefit accumulation fund, and the Texas Municipal Retirement
	System shall transfer the assets and liabilities of the employees
	saving fund and the current service annuity reserve fund to the
	benefit accumulation fund as described by Subsection (a) of this
	section.
	(c)  In implementing Subtitle G, Title 8, Government Code, as
	amended by this Act, including without limitation crediting
	interest and conducting the actuarial valuation required by that
	subtitle, the Texas Municipal Retirement System shall make all
	necessary computations based on an accounting record adjusted to
	reflect the transfers of assets and liabilities required by
	Subsection (a) of this section as though the transfers had taken
	place on December 31, 2010.
	SECTION 41.  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.