83rd LEGISLATIVE SESSION: BILLS THAT AFFECT THE TEXAS MUNICIPAL RETIREMENT SYSTEM ACT and TEXAS PUBLIC PENSION PLANS Updated 1/30/2013

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1 s Affecting the TMRS Act 626 Harper- Brown Filed 1/23/ would increase the hours required for an employee to be considered eligible to participate in TMRS. Presently, any employee working over 1,000 hours per year must be enrolled in TMRS. This bill would increase this threshold to 1,500 for all existing and new employees. Relating to the number of hours certain employees must work to be eligible to participate in the Texas Municipal Retirement System. R&= Capriglione Filed 1/23/ would provide TMRS municipalities with the option to increase the hours required for an employee to be considered eligible to participate in TMRS. Presently, any employee working over 1,000 hours per year must be enrolled in TMRS. This bill would allow municipalities the option to adopt a threshold of 1,500 hours or retain the current 1,000 hour threshold. This would apply only to new employees hired after the adoption of the increased threshold. Smithee Filed 1/25/ would allow a city participating in TMRS to adopt a non-retroactive flat rate COLA. To comply with federal law applicable to qualified plans, any increased payment to an annuitant resulting from such a COLA adopted by a city would be limited to the cumulative increase the annuitant would have been entitled to receive if the 70% of CPI limit under TMRS existing law had been applied to the annuitant s annuity. The bill also requires that if a city adopts an ordinance to either discontinue an annually repeating COLA or to reduce an annually repeating COLA, then the city must give written notice to members and annuitants at least 60 days prior to the effective date of the change adopted in the ordinance. Relating to the number of hours certain employees must work to be eligible to participate in the Texas Municipal Retirement System. R&=651 Relating to optional annuity increases for certain retirees and beneficiaries of the Texas Municipal Retirement System R&=718 Texas Municipal Retirement System Page 1 of 5

2 s Affecting Texas Public Pension Plans Perry Filed 11/12/ would establish a state contribution rate to the Teacher Retirement System that is equal to the federal Old Age, Survivors, and Disability Insurance (OASDI) tax rate whenever the OASDI tax rate is at least 6 and not more than 10 percent. Gonzales Filed 11/12/ would allow for a one-time supplemental payment between September 1, 2013 and August 31, 2015 to annuitants of the Teacher Retirement System. The supplemental payment would be conditioned on the fund having a funded ratio of at least 80 percent, the fund having a return on investment of at least 8 percent as provided by the valuation for the August 31 st of the year of the payment, and that returns above the 8 percent return amount be sufficient to pay for the supplemental payment. Larson Filed 11/12/ would allow Bexar County and the City of San Antonio to adopt a charter to provide integrated county government for portions of Bexar County. The charter would be required to provide for the continuation of the pension fund or retirement system contributions by both the integrated county government and the employees of the integrated county government that would have been made by the former county government, integrated municipalities and other districts or subdivisions before adoption of the charter. The bill would also require that the integrated county services charter not diminish the rights of any employees to organize, meet and confer, or collectively bargain with the officials of the integrated county government over wages, hours of work, and other terms of employment as provided by state law. Martinez Filed 11/12/ would require the Board of Trustees of the Teacher Retirement System, each which is used to provide a cost of living increase for Social Security recipients. The Board would not be allowed to pay an increase unless the retirement system is actuarially sound. The Board would have the authority to reduce the benefit increase depending upon the amount of money available while maintaining the actuarial soundness of the system. Relating to the state contributions to the Teacher Retirement System of Texas. &=99 Relating to a supplemental payment for retirees of the Teacher Retirement System of Texas and the unfunded actuarial liabilities allowed under that system. &=103 Relating to the adoption of a county charter by Bexar County. &=151 &=175 Texas Municipal Retirement System Page 2 of 5

3 s Affecting Texas Public Pension Plans Isaac Filed 11/30/ would suspend the annuity payments for retirees of the Employees Retirement System if the retirees returned to work in the same class (employee class or elected class) from which they retired. The annuity payments would resume once the retirees no longer held that position. Turner Filed 1/9/ would not allow a member of the elected class of the Employees Retirement System to retire and receive a service annuity based on service credit transferred to the employee class from the elected class until the member no longer holds the elected position. Allen Filed 1/11/ would provide a 10 percent adjustment to the new and existing service retirement benefits, disability retirement benefits, or death benefits to persons retired from the Teachers Retirement System. The bill also proposes a four percent annual cost of living adjustment. The bill also provides for a one-time supplemental payment equal to the greater of $2,000 or the gross amount of the annuity payment to which the eligible annuitant is otherwise entitled to for the month of December Relating to suspending Employees Retirement System of Texas annuity payments for employees who return to work for the state. &=231 Relating to the retirement benefits for elected state officials. R&=413 Relating to benefits paid by the Teacher Retirement System of Texas R&= Hernandez Luna Filed 1/14/ would require the Board of Trustees of the Teacher Retirement System, each which is used to provide a cost of living increase for Social Security recipients. The Board would not be allowed to pay an increase unless the retirement system is actuarially sound. The Board would have the authority to reduce the benefit increase depending upon the amount of money available while maintaining the actuarial soundness of the system. (Identical to 175, as filed) R&=498 Texas Municipal Retirement System Page 3 of 5

4 s Affecting Texas Public Pension Plans Capriglione Filed 1/15/ would eliminate certain existing statutory provisions that were designed to protect the confidentiality of pension system member and annuitant records. The bill also proposes to eliminate existing language designed to reduce the administrative burden for withholding this information. Lozano Filed 1/15/ would require the Board of Trustees of the Teacher Retirement System, each which is used to provide a cost of living increase for Social Security recipients. The bill only allows benefit payment increases to occur after January 1, Lozano Filed 1/22/ would increase the number of trustees appointed to the Board of Trustees of the Teacher Retirement System from seven to nine. One new member would represent higher education and the other public education. Huberty Filed 1/22/ would clarify that the definition of employee for purposes of membership in the Houston Municipal Retirement System does not include a full-time employee of a local government corporation or other entity created to act on behalf of the municipality if the entity has not agreed to participate in the System. Lozano Filed 1/29/ would not allow the Teacher Retirement System to provide a salary increase or bonus of any type to the executive director of the retirement system, the chief investment officer, an investment manager in the investment management division of the retirement system, or a private professional investment manager to who the retirement system has delegated or may delegate authority under Section to Relating to the confidentiality of information held by a public retirement system. R&=526 R&=531 Relating to the Composition of the board of trustees of the Teacher Retirement System of Texas R&=602 Relating to the eligibility of certain persons to participate in the retirement systems of certain municipalities. R&=609 Relating to a moratorium on increases paid to certain employees of and investment managers for the Teacher Retirement System of Texas. Texas Municipal Retirement System Page 4 of 5

5 s Affecting Texas Public Pension Plans invest and manage assets of the retirement system. In addition, it would not allow TRS to renew or enter into a contact with a private professional investment manager if the contract provides for a bonus or other pay increase based on the performance of the investments managed by that person. HJR 30 Larson Filed 11/12/2012 HJR 30 is the proposed constitutional amendment associated with 151. If adopted, the provisions for shared city / county services would be put before the voters for approval / disapproval at an election to be held on November 5, This election only applies to voters of counties with a population of more than and of certain adjacent counties. Proposing a constitutional amendment to allow the voters of certain counties to adopt a charter that restructures and empowers the county government and that may allow the integration of the county government with certain other political subdivisions located wholly or partly in the county. R&=HJR30 Note: This document intends to provide only a very brief synopsis of recent progress and an interpretive summary of certain pension related provisions of each listed bill. TMRS suggests the reader access more detailed information for each of the bills via the link that is provided. Texas Municipal Retirement System Page 5 of 5