Bill Text: TX SB642 | 2011-2012 | 82nd Legislature | Engrossed

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

Spectrum: Partisan Bill (Republican 5-0)

Status: (Engrossed - Dead) 2011-05-13 - Committee report sent to Calendars [SB642 Detail]

Download: Texas-2011-SB642-Engrossed.html

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By: Seliger S.B. No. 642

A BILL TO BE ENTITLED
AN ACT
relating to optional annuity increases 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, Government Code, is amended by
amending Subsection (c) and adding Subsection (f) 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.
(f) If an ordinance described by Subsection (c) will cease
to be in effect for a future year, or if an increase in annuities
specified in an ordinance described by Subsection (c) will be
changed or discontinued as provided by this section, the governing
body of the participating municipality shall provide notice to
members and annuitants by regular mail not later than the 60th day
before the date on which the ordinance will cease to be in effect or
the increase will be changed or discontinued. For an annuitant who
receives a periodic check or advice of deposit from the retirement
system by regular mail, the notice required by this subsection must
be included with the annuitant's check or advice of deposit.
SECTION 2. Section 854.203, Government Code, is amended by
amending Subsections (b) and (f) and adding Subsection (b-1) to
read as follows:
(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 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 the maximum amount of the annuity
increase allowed under Subdivision (1) been applied to the
annuitant's annuity.
(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.
(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).
SECTION 3. 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.