CHAPTER 803. PROPORTIONATE RETIREMENT PROGRAM - Texas Statutes

GOVERNMENT CODE

TITLE 8. PUBLIC RETIREMENT SYSTEMS

SUBTITLE A. PROVISIONS GENERALLY APPLICABLE TO PUBLIC RETIREMENT

SYSTEMS

CHAPTER 803. PROPORTIONATE RETIREMENT PROGRAM

SUBCHAPTER A. GENERAL PROVISIONS

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(3) Repealed by Acts 1991, 72nd Leg., ch. 131, Sec. 9, eff.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

Sec. 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.

Sec. 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.

Sec. 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

Sec. 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.

Sec. 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.

Sec. 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

Sec. 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.

Sec. 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.

Sec. 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.

Sec. 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

Sec. 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.

Sec. 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

Sec. 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.

Sec. 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.