Law:Title 8. Public Retirement Systems. Subtitle A. Provisions Generally Applicable To Public Retirement Systems from Chapter 803. Proportionate Retirement Program (Texas)

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Subtitle A. Provisions Generally Applicable To Public Retirement Systems

Contents

Chapter 803. Proportionate Retirement Program

Subchapter A. General Provisions

Section  803.001.  Definitions.

In this chapter:

(1)  "Combined service credit" means the total of a person's service credit in only those retirement systems to which this chapter applies for which the total satisfies the length-of-service requirements for service retirement at the person's attained age, and does not include:

(A)  any service credit in a retirement system for which the total of a person's service credit does not satisfy the length-of-service requirements for service retirement at the person's attained age; or

(B)  service credit earned with or allowed by a subdivision or municipality not participating in the program provided by this chapter or, as applicable, a subdivision or municipality whose participation is limited as provided by Section 803.103.

(2)  "Service credit" means service that is in a person's account in a retirement system to which this chapter applies and that may be used to meet length-of-service requirements for service retirement in that system.

(3)  Repealed by Acts 1991, 72nd Leg., ch. 131, Sec. 9, eff. Sept. 1, 1991.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1, 1981. Amended by Acts 1985, 69th Leg., ch. 602, Sec. 3, eff. Sept. 1, 1985. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec. 13.001 by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 1991, 72nd Leg., ch. 131, Sec. 2, 9, eff. Sept. 1, 1991.



Section  803.002.  Purpose Of Chapter.

The purpose of this chapter is to implement the authority granted the legislature by Article XVI, Section 67, of the Texas Constitution to provide a program of proportionate benefits to qualified members of more than one retirement system to which this chapter applies. It is contrary to the purpose of this chapter for a person or class of persons to receive, because of service in more than one retirement system to which this chapter applies, proportionately greater benefits from a particular system than a person who has rendered faithful career service under that one system.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1, 1981. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec. 13.002 by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 1991, 72nd Leg., ch. 131, Sec. 3, eff. Sept. 1, 1991.



Section  803.0021.  Application Of Chapter.

This chapter applies only to:

(1)  a retirement system for general municipal employees in a municipality with a population of not less than 600,000 nor more than 700,000;

(2)  the Employees Retirement System of Texas, the Teacher Retirement System of Texas, the Judicial Retirement System of Texas Plan One, the Judicial Retirement System of Texas Plan Two, the Texas County and District Retirement System, and the Texas Municipal Retirement System; and

(3)  a retirement system that makes an election under Section 803.101(f).

Added by Acts 1991, 72nd Leg., ch. 131, Sec. 1, eff. Sept. 1, 1991. Amended by Acts 1997, 75th Leg., ch. 1190, Sec. 1, eff. Sept. 1, 1997; Acts 2001, 77th Leg., ch. 669, Sec. 21, eff. Sept. 1, 2001.



Section  803.003.  Construction Of Chapter.

(a) The provisions of this chapter are exceptions to the other laws governing retirement systems to which this chapter applies and prevail over those laws to the extent of explicit conflict, but this chapter must be construed strictly as against those laws.

(b)  Notwithstanding any other law, a person who is involuntarily transferred to a position included in the coverage of a retirement system governed by Chapter 101, Acts of the 43rd Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's Texas Civil Statutes), from a position included in a retirement system operated by a municipality that does not participate in a statewide retirement system governed by Chapter 101, Acts of the 43rd Legislature, 1st Called Session, 1933 (Article 6243b, Vernon's Texas Civil Statutes), may make an irrevocable election at the time of the transfer to continue membership in the municipal retirement system. An involuntary transfer is determined by the employment rules that apply to the person immediately before the time of the involuntary transfer.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1, 1981. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec. 13.003 by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 1991, 72nd Leg., ch. 131, Sec. 3, eff. Sept. 1, 1991; Acts 1999, 76th Leg., ch. 1296, Sec. 2, eff. Sept. 1, 1999.



Subchapter B. Participation And Membership

Section  803.101.  Participation By Retirement Systems.

(a) Except as provided by Subsections (b) and (f), each retirement system to which this chapter applies is required to participate in the program of proportionate retirement benefits provided by this chapter.

(b)  A subdivision participating in the Texas County and District Retirement System or a municipality participating in the Texas Municipal Retirement System is not required to participate in the proportionate retirement program if the subdivision or municipality elected not to participate under the authority of former law and has not revoked the election under Subsection (c).

(c)  A subdivision or municipality that elected not to participate in the proportionate retirement program may revoke the election and elect to participate. An election to participate may be made by vote of the governing body of the subdivision or municipality in the manner required for official actions of the governing body. The governing body shall send notice of an election to participate to the board of trustees of the retirement system in which the subdivision or municipality participates.

(d)  The effective date of participation in the proportionate retirement program by a subdivision or municipality electing to participate under Subsection (c) is the first day of the month after the month in which the appropriate board of trustees receives notice of an election.

(e)  Participation in the proportionate retirement program includes all persons who are members of a retirement system to which this chapter applies and, in the case of members of the Texas County and District Retirement System or the Texas Municipal Retirement System, who are also employees or former employees of a subdivision or municipality participating in the proportionate retirement program.

(f)  The governing body of a public retirement system in this state for municipal employees that is a qualified plan under Section 401(a) of the Internal Revenue Code of 1986 (26 U.S.C. Section 401) may elect to participate in the proportionate retirement program by adopting a resolution to that effect. A resolution may not be adopted under this subsection without the approval of the governing body of the municipality that finances the retirement system. The governing body of the retirement system shall notify all other participating retirement systems of the election. The effective date of participation in the proportionate retirement program by a retirement system for which an election is made under this subsection is the first day of the third month after the month in which notice is given under this subsection. An election under this subsection does not require the approval of the participants in the public retirement system making the election.

(g)  The governing body of a municipality described by Section 803.0021(1) that finances a public retirement system for police officers or firefighters may not approve the retirement system's election under Subsection (f) to participate in the proportionate retirement program unless an actuary acting on behalf of the municipality reviews the initial cost to the municipality of making the election.

(h)  If the governing body of a public retirement system under Subsection (g) adopts a resolution to participate in the proportionate retirement program, the governing body of the municipality that finances the retirement system shall appropriate and pay to the retirement system, at the same time the municipality makes the municipality's monthly contribution to the retirement system, the additional amount necessary, as determined by the retirement system's actuary, to fund the additional liabilities incurred by the retirement system as a result of participating in the proportionate retirement program.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1, 1981. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec. 13.101 and amended by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 1991, 72nd Leg., ch. 131, Sec. 4, eff. Sept. 1, 1991; Acts 1997, 75th Leg., ch. 1190, Sec. 2, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 1296, Sec. 1, eff. Sept. 1, 1999.

Amended by:

Acts 2007, 80th Leg., R.S., Ch. 1427, Sec. 1, eff. June 15, 2007.



Section  803.102.  Retirement System Membership.

(a) Membership in a retirement system to which this chapter applies does not terminate because of absence from service covered by that system during a period for which the member earns service credit in another retirement system to which this chapter applies for service performed for an employer other than a subdivision or municipality not participating in the program provided by this chapter.

(b)  A person may continue membership in a retirement system to which this chapter applies while absent from service with all retirement systems to which this chapter applies if the person would be eligible, under the laws governing that system, to continue membership if the person's combined service credit had been earned in that system.

(c)  In this section, a person's absence from service begins on the day after the last day of service covered by any retirement system to which this chapter applies.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1, 1981. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec. 13.102 by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 1991, 72nd Leg., ch. 131, Sec. 5, eff. Sept. 1, 1991.



Section  803.103.  Limitation Of Participation By Retirement Systems.

(a) Participation in the proportionate retirement program by a subdivision participating in the Texas County and District Retirement System or a municipality participating in the Texas Municipal Retirement System does not include:

(1)  participation with a retirement system described by Section 803.0021(1) if the subdivision or municipality has elected to so limit its participation and has not revoked the election under Subsection (b); or

(2)  participation with a retirement system described by Section 803.0021(3).

(b)  A subdivision or municipality that has elected to limit its participation in the proportionate retirement program may revoke the election and remove the limitation on participation. An election under this subsection may be made by vote of the governing body of the subdivision or municipality in the manner required for official actions of the governing body. The governing body shall send notice of an election under this subsection to the board of trustees of the retirement system in which the subdivision or municipality participates.

(c)  The effective date of a removal of a limitation on participation in the proportionate retirement program by a subdivision or municipality electing under Subsection (b) is the first day of the month after the month in which the appropriate board of trustees receives notice of the election.

Added by Acts 1991, 72nd Leg., ch. 131, Sec. 6, eff. Jan. 1, 1992. Amended by Acts 1997, 75th Leg., ch. 1190, Sec. 3, eff. Sept. 1, 1997.



Subchapter C. Creditable Service

Section  803.201.  Retirement Eligibility Based On Combined Service Credit.

(a) A person who has membership in two or more retirement systems to which this chapter applies is subject to the laws governing each of those systems for determination of the person's eligibility for service retirement benefits from each system, except that, for the purpose of determining whether a person meets the length-of-service requirements for service retirement of a system, the person's combined service credit must be considered as if it were all credited in each system.

(b)  A person's combined service credit is useable only in determining eligibility for service retirement benefits and may not be used in determining:

(1)  eligibility for disability retirement benefits, death benefits, or any type of benefit other than service retirement benefits; nor

(2)  the amount of any type of benefit.

(c)  A person receiving service retirement or lifetime disability retirement benefits from one or more retirement systems to which this chapter applies may use the program provided by this chapter to qualify for subsequent service retirement under another retirement system to which this chapter applies in which the person has service credit, if the person was not eligible to retire under the latter system at the time of previous service retirement, or qualification for lifetime disability retirement benefits from a retirement system to which this chapter applies, or if the person's previous retirement was not based on combined service credit.

(d)  Service credit earned with or allowed by more than one retirement system to which this chapter applies for the same service may be counted only once in determining the amount of a person's combined service credit.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1, 1981. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec. 13.201 and amended by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 1989, 71st Leg., ch. 616, Sec. 2, eff. June 14, 1989; Acts 1991, 72nd Leg., ch. 131, Sec. 7, eff. Sept. 1, 1991.



Section  803.202.  Service In Certain Retirement Systems.

(a) The board of trustees of the Employees Retirement System of Texas by rule may:

(1)  consider the classes of service in the Employees Retirement System of Texas as if they were, for purposes of this chapter, classes in separate statewide retirement systems; or

(2)  permit a person who is retiring exclusively from retirement systems administered by the board to use the shortest length-of-service requirement provided for retirement in any class in which the person has service credit.

(b)  A member of a retirement system administered by the board of trustees of the Employees Retirement System of Texas may reestablish service credit previously canceled in another retirement system administered by the board if the member holds a position included in the system of which the person is a member and has held the position for at least 12 months. The method of reestablishment and the amount to be deposited are as provided by the applicable law providing for reestablishment of service credit generally in the particular retirement system.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1, 1981. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec. 13.202 by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 1993, 73rd Leg., ch. 791, Sec. 1, eff. Sept. 1, 1993.



Section  803.203.  Reestablishment Of Service Credit By Former Member.

(a) Except as provided by Subsection (g), a person who is a member of a retirement system participating in the program provided by this chapter may reestablish service credit, including prior service credit if applicable, previously canceled in another retirement system that is participating in the program provided by this chapter if the person:

(1)  is not a current member of the system under which the service was performed;

(2)  in the case of the Texas County and District Retirement System, does not have an open account with the subdivision for which the person performed the service for which the credit is sought; or

(3)  in the case of an employee to whom Section 803.204 applies, does not have an open account with the employing hospital district, charitable organization, or administrative agency, as applicable, for which the person performed the service for which the credit is sought.

(b)  A person may apply to reestablish service credit under this section by filing an application with the retirement system in which the service was originally credited and a certification that the applicant is currently a member of the certifying system.

(c)  Except as provided by Subsection (f), the retirement system in which the service credit was originally credited shall grant the service credit after receiving an application and a certification required by Subsection (b) and:

(1)  to reestablish service credit other than in the Texas County and District Retirement System, the Texas Municipal Retirement System, or the retirement system in which a hospital district, charitable organization, or administrative agency described by Section 803.204 participates, a contribution in the amount generally required to reestablish service credit in the system, including any applicable interest and membership fees;

(2)  to reestablish service credit in the Texas County and District Retirement System, the Texas Municipal Retirement System, or the retirement system in which a hospital district, charitable organization, or administrative agency described by Section 803.204 participates, a statement that the applicant does not wish to make a contribution for the service credit; or

(3)  at the applicant's option, to reestablish current service credit in the Texas County and District Retirement System, the actuarial present value of the additional standard service benefits that would be attributable to the credit based on rates and tables recommended by the actuary and adopted by the board of trustees of the system.

(d)  A subdivision participating in the Texas County and District Retirement System under Subchapter H, Chapter 844, or a municipality participating in the Texas Municipal Retirement System may make a one-time election to authorize the reestablishment of service credit under this section by payment by an applicant of a contribution in the amount provided by Section 843.003 or 853.003, as applicable, for reestablishment of service credit generally in the particular system. If a subdivision or municipality makes an election under this subsection, the applicant has the choice of reestablishing service credit under Subsection (c)(2), (c)(3), if applicable, or this subsection.

(e)  Service credit in the Texas County and District Retirement System, the Texas Municipal Retirement System, or the retirement system in which a hospital district, charitable organization, or administrative agency described by Section 803.204 participates that is reestablished under Subsection (c)(2) may be used only to meet eligibility requirements for benefits.  Service credit reestablished in the Texas County and District Retirement System or the Texas Municipal Retirement System under Subsection (c)(3) or (d) has the same value as service credit performed for the particular subdivision or municipality at the time of deposit.  The credit is creditable to the member's and employer's accounts in each subdivision or municipality for which the service was performed.

(f)  To reestablish service credit in a public retirement system for municipal employees that has elected under Section 803.101(f) to participate in the program provided by this chapter, a person must pay the actuarial present value, as determined by the appropriate system, of the additional standard service retirement benefits that would be attributable to the credit. A person who is a member only of a system that has made an election under Section 803.101(f) must pay the actuarial present value, as determined by the appropriate system, of the additional standard service retirement benefits that would be attributable to the service credit to be reestablished in any other public retirement system participating in the program provided by this chapter.

(g)  Service credit may not be reestablished under this section:

(1)  if it is subject to Section 805.002(e); or

(2)  in a subdivision participating in the Texas County and District Retirement System or a municipality participating in the Texas Municipal Retirement System if the person who seeks to reestablish the credit is a member only of a retirement system that the subdivision or municipality excludes from participation in the proportionate retirement program under Section 803.103.

(h)  This section applies to an employee described by Section 803.204 on the date the federal government establishes as the effective date of the transfer of federally qualified health center status from a municipality described by Section 803.0021(1) to a hospital district, charitable organization, or administrative agency described by Section 803.204.

Added by Acts 2001, 77th Leg., ch. 501, Sec. 1, eff. Jan. 1, 2002, Acts 2001, 77th Leg., ch. 1240, Sec. 1, eff. Jan. 1, 2002.

Amended by:

Acts 2009, 81st Leg., R.S., Ch. 217, Sec. 1, eff. May 27, 2009.



Section 803.204.  Combined Service Credit In Certain Systems.

(a) This section applies only to an employee who:

(1)  is a member of a municipal retirement system described by Section 803.0021(1);

(2)  is employed by a hospital district, a charitable organization supervised, overseen, and effectively controlled by the hospital district, or an administrative agency created under Section 791.013, either before or after being employed by the employing municipality located in the same county as the hospital district, charitable organization, or administrative agency; and

(3)  participates in a public retirement system:

(A)  that is determined to be a qualified plan under Section 401(a), Internal Revenue Code of 1986 (26 U.S.C. Section 401(a)), of a hospital district, charitable organization, or administrative agency that is determined to be a governmental unit, or an agency or an instrumentality of a governmental unit; and

(B)  that records and reports service credit as defined by Section 803.001.

(b)  Any service credit earned by an employee described by Subsection (a) with a retirement system established by the hospital district, charitable organization, or administrative agency will be combined under Section 803.201 to determine whether the employee meets the length-of-service requirements for service retirement under the municipal retirement system.

(c)  On retirement, an employee described by Subsection (a) will receive a benefit from the municipal retirement system as determined by Subchapter D, and if the hospital district or administrative agency has established or participates in a retirement program or the charitable organization has a retirement plan, will receive a benefit from the hospital district, administrative agency, or charitable organization as determined by the terms of the district's, agency's, or organization's retirement plan.

(d)  For purposes of this section, a charitable organization supervised, overseen, and effectively controlled by a hospital district or an administrative agency created under Section 791.013 is an agency or instrumentality of a governmental unit.

Added by Acts 2007, 80th Leg., R.S., Ch. 164, Sec. 1, eff. September 1, 2007.

Amended by:

Acts 2009, 81st Leg., R.S., Ch. 217, Sec. 2, eff. May 27, 2009.



Subchapter D. Benefits

Section  803.301.  Computation Of Benefits Generally.

The amount of a benefit payable by a retirement system to which this chapter applies is determined according to and in the manner prescribed by laws governing that system and is based solely on a person's service credit in that system.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1, 1981. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec. 13.301 by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 1991, 72nd Leg., ch. 131, Sec. 8, eff. Sept. 1, 1991.



Section  803.302.  Computation Of Certain Benefits.

(a) If payable to or on behalf of a person who has used combined service credit to qualify for benefits from at least one retirement system to which this chapter applies, each of the following types of benefits must be computed as provided by Subsection (b):

(1)  a base retirement annuity that does not vary in amount directly with the amount of a person's service credit;

(2)  a fixed lump-sum death benefit payable on the death of a retiree;

(3)  any death benefit payable on the death of a retiree who received service retirement benefits; and

(4)  a survivor benefit payable to a beneficiary of a deceased retiree of the Teacher Retirement System of Texas.

(b)  The amount of a benefit payable under Subsection (a) by a retirement system to which this chapter applies is a percentage, but not more than 100 percent, of the benefit that would be or would have been payable if the person retired or had retired on the basis of only the service that is credited in that system. The percentage applied is equal to the amount of service credit in that system, divided by the amount of service credit that would be or would have been required for the benefit if the person retired or had retired on the basis of only the service that is credited in that system.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1, 1981. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec. 13.302 and amended by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 1991, 72nd Leg., ch. 131, Sec. 8, eff. Sept. 1, 1991.



Subchapter E. Administration

Section  803.401.  Administration Of Program.

(a) The board of trustees of each retirement system to which this chapter applies may adopt rules it finds necessary to implement the proportionate retirement program provided by this chapter.

(b)  Each retirement system to which this chapter applies, under this chapter and other laws governing the particular system, is responsible for determining:

(1)  the eligibility of its members for benefits, including whether sufficient combined service credit exists to qualify members for proportionate retirement benefits from that system; and

(2)  the amount and duration of proportionate retirement benefits payable by that system.

(c)  Each retirement system to which this chapter applies shall cooperate with the other retirement systems to which this chapter applies in the implementation of the proportionate retirement program.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1, 1981. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec. 13.401 by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 1991, 72nd Leg., ch. 131, Sec. 8, eff. Sept. 1, 1991.



Section  803.402.  Records.

Except as provided by other law, records of members and beneficiaries of a retirement system to which this chapter applies that are in the custody of any retirement system to which this chapter applies are confidential and not subject to disclosure and are exempt from the public access provisions of Chapter 552. The records or information in the records may be transferred between retirement systems to which this chapter applies to the extent necessary to administer the proportionate retirement program provided by this chapter.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1, 1981. Amended by Acts 1989, 71st Leg., ch. 835, Sec. 11, eff. Sept. 1, 1989. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec. 13.402 by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept. 1, 1989. Amended by Acts 1991, 72nd Leg., ch. 16, Sec. 11.05(k), eff. Aug. 26, 1991; Acts 1991, 72nd Leg., ch. 131, Sec. 8, eff. Sept. 1, 1991; Acts 1995, 74th Leg., ch. 76, Sec. 5.95(96), eff. Sept. 1, 1995; Acts 1999, 76th Leg., ch. 1541, Sec. 1, eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 1229, Sec. 1, eff. Sept. 1, 2001.


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