CHAPTER 815. ADMINISTRATION - Texas Statutes

GOVERNMENT CODE

TITLE 8. PUBLIC RETIREMENT SYSTEMS

SUBTITLE B. EMPLOYEES RETIREMENT SYSTEM OF TEXAS

CHAPTER 815. ADMINISTRATION

SUBCHAPTER A. BOARD OF TRUSTEES

Sec. 815.001. COMPOSITION OF BOARD OF TRUSTEES. The board of

trustees is composed of six members.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec.

25.001 by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept. 1,

1989.

Sec. 815.002. APPOINTED TRUSTEES. (a) Three members of the

board of trustees are appointed with the advice and consent of

the senate, one each by:

(1) the governor;

(2) the chief justice of the Supreme Court of Texas; and

(3) the speaker of the house of representatives.

(b) Appointed trustees hold office for staggered terms of six

years, with the term of one trustee expiring on August 31 of each

even-numbered year.

(c) Before the 11th day after the day on which an appointment is

made, the person appointed to the board shall subscribe to the

constitutional oath and the oath of office provided by Section

815.004.

(d) Appointments to the board shall be made without regard to

the race, color, disability, sex, religion, age, or national

origin of the appointees.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec.

25.002 and amended by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff.

Sept. 1, 1989. Amended by Acts 1993, 73rd Leg., ch. 791, Sec. 11,

eff. Sept. 1, 1993.

Sec. 815.003. ELECTED TRUSTEES. (a) Three members of the board

of trustees are nominated and elected by members of the

retirement system and retirees under rules adopted by the board.

(b) To be eligible to serve as an elected member of the board, a

person must be a member of the retirement system and must hold a

position that:

(1) is included in the employee class of membership; and

(2) is not with an agency or department with which another

trustee holds a position.

(c) Elected trustees hold office for staggered terms of six

years, with the term of one trustee expiring on August 31 of each

odd-numbered year.

(d) The board shall hold elections for the members and retirees

to nominate and elect a trustee before August 31 of each

odd-numbered year. The board shall make ballots available to

members of the retirement system and retirees and all votes must

be cast on those ballots.

(e) A person elected to the board of trustees must subscribe to

the constitutional oath and the oath of office provided by

Section 815.004 before beginning his or her term.

(f) The board shall fill vacancies of elected positions on the

board for the unexpired terms.

(g) A person elected to the board as provided by this section is

required to serve on the board.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec.

25.003 and amended by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff.

Sept. 1, 1989. Amended by Acts 1991, 72nd Leg., ch. 65, Sec. 1,

eff. Aug. 26, 1991; Acts 1997, 75th Leg., ch. 1048, Sec. 16, eff.

Sept. 1, 1997.

Sec. 815.0031. INELIGIBILITY FOR BOARD AND OF CERTAIN EMPLOYEES.

(a) A person is not eligible for appointment or election to the

board if the person or the person's spouse:

(1) is employed by or participates in the management of a

business entity or other organization receiving funds from the

retirement system; or

(2) owns or controls, directly or indirectly, more than a 10

percent interest in a business entity or other organization

receiving funds from the retirement system.

(b) A paid officer, employee, or consultant of a Texas trade

association in the field of insurance or investment may not be a

trustee or an employee of the retirement system who is exempt

from the state's position classification plan or is compensated

at or above the amount prescribed by the General Appropriations

Act for step 1, salary group 17, of the position classification

salary schedule.

(c) A person who is the spouse of a paid officer, manager, or

consultant of a Texas trade association in the field of insurance

or investment may not be a trustee and may not be an employee of

the retirement system who is exempt from the state's position

classification plan or is compensated at or above the amount

prescribed by the General Appropriations Act for step 1, salary

group 17, of the position classification salary schedule.

(d) For the purposes of this section, a Texas trade association

is a nonprofit, cooperative, and voluntarily joined association

of business or professional competitors in this state designed to

assist its members and its industry or profession in dealing with

mutual business or professional problems and in promoting their

common interest.

(e) A person may not serve as a trustee or act as the general

counsel to the board if the person is required to register as a

lobbyist under Chapter 305 because of the person's activities for

compensation on behalf of a business or an association related to

the operation of the board.

Added by Acts 1993, 73rd Leg., ch. 791, Sec. 12, eff. Sept. 1,

1993.

Sec. 815.004. OATH OF OFFICE. (a) Before taking office as a

member of the board of trustees, a person shall subscribe to the

following oath of office:

I do solemnly swear that I will, to the best of my ability,

discharge the duties of a trustee of the employees retirement

system, that I will diligently and honestly administer the

affairs of the board of trustees of the retirement system, and

that I will not knowingly violate or willingly permit to be

violated any of the laws applicable to the retirement system.

(b) A person may subscribe to the oath of office before any

officer qualified to administer oaths in the state and shall file

the subscribed oath in the office of the secretary of state.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec.

25.004 by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept. 1,

1989.

Sec. 815.006. COMPENSATION; EXPENSES. (a) Notwithstanding

Subchapter C of Chapter 659, trustees who are contributing

members of the retirement system serve without compensation but

are entitled to reimbursement for all actual and necessary

expenses that they incur in the performance of official board

duties.

(b) Notwithstanding Subchapter C of Chapter 659, subject to the

approval of the board of trustees, trustees who are not

contributing members of the retirement system may receive:

(1) compensation; and

(2) reimbursement for all actual and necessary expenses that

they incur in the performance of official board duties.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec.

25.006 by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept. 1,

1989. Amended by Acts 1995, 74th Leg., ch. 586, Sec. 25, eff.

Aug. 28, 1995.

Sec. 815.007. VOTING. (a) Each trustee is entitled to one

vote.

(b) At any meeting of the board, a majority of the members

present is necessary for a decision by the trustees.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec.

25.007 by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept. 1,

1989.

Sec. 815.008. GROUNDS FOR REMOVAL OF TRUSTEE. (a) It is a

ground for removal from the board if a trustee:

(1) violates a prohibition established by Section 815.0031;

(2) cannot discharge the person's duties for a substantial part

of the term for which the person is appointed or elected because

of illness or disability; or

(3) is absent from more than half of the regularly scheduled

board meetings that the person is eligible to attend during a

calendar year unless the absence is excused by majority vote of

the board.

(b) The validity of an action of the board is not affected by

the fact that it is taken when a ground for removal of a trustee

exists.

(c) If the executive director has knowledge that a potential

ground for removal exists, the executive director shall notify

the presiding officer of the board of the ground. The presiding

officer shall then notify the appropriate appointing officer, if

any, that a potential ground for removal exists.

Added by Acts 1993, 73rd Leg., ch. 791, Sec. 13, eff. Sept. 1,

1993. Amended by Acts 2003, 78th Leg., ch. 1111, Sec. 22, eff.

Sept. 1, 2003.

SUBCHAPTER B. POWERS AND DUTIES OF BOARD OF TRUSTEES

Sec. 815.101. GENERAL ADMINISTRATION. The board of trustees is

responsible for the general administration and operation of the

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.

25.101 by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept. 1,

1989.

Sec. 815.102. RULEMAKING. (a) Subject to the limitations of

this subtitle, the board of trustees may adopt rules for:

(1) eligibility of membership;

(2) the administration of the funds of the retirement system;

(3) the program of supplemental benefits for law enforcement and

custodial officers;

(4) hearings on contested cases or disputed claims; and

(5) the transaction of any other business of the board.

(b) Rules adopted under this section related to a hearing on a

contested case or disputed claim control over rules adopted under

Section 2003.050.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec.

25.102 by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept. 1,

1989. Amended by Acts 2001, 77th Leg., ch. 1231, Sec. 19, eff.

Sept. 1, 2001.

Sec. 815.103. ADMINISTERING SYSTEM ASSETS. (a) The board of

trustees shall administer all assets of the retirement system.

The board is the trustee of the system's assets. The board of

trustees shall hold all retirement system assets in trust for the

exclusive benefit of the members and annuitants of the system and

administer all operations funded by trust assets for the same

purpose.

(b) The board of trustees may acquire, hold, manage, purchase,

sell, assign, trade, transfer, and dispose of any security,

evidence of debt, or other investment in which the retirement

system's assets may be invested.

(c) The board of trustees may authorize the executive director

to acquire, hold, manage, purchase, sell, assign, trade,

transfer, and dispose of any security, evidence of debt, or other

investment in which assets of the law enforcement and custodial

officer supplemental retirement fund may be invested.

(d) The board of trustees may accept on behalf of the retirement

system gifts of money or other property from any public or

private source.

(e) Subchapter C, Chapter 2260, does not apply to the retirement

system. The acceptance of benefits by the retirement system under

a contract does not waive immunity from suit or immunity from

liability.

(f) Chapter 412, Labor Code, does not apply to the retirement

system. The board of trustees may acquire services described by

that chapter in any manner or amount the board considers

reasonable.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec.

25.103 by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept. 1,

1989. Amended by Acts 1999, 76th Leg., ch. 1541, Sec. 20, eff.

Sept. 1, 1999; Acts 2001, 77th Leg., ch. 1231, Sec. 20, eff.

Sept. 1, 2001; Acts 2003, 78th Leg., ch. 1111, Sec. 23, eff.

Sept. 1, 2003; Acts 2003, 78th Leg., ch. 1310, Sec. 52, eff. June

20, 2003.

Amended by:

Acts 2005, 79th Leg., Ch.

347, Sec. 17, eff. September 1, 2005.

Sec. 815.104. DESIGNATION OF AUTHORITY TO SIGN VOUCHERS. The

board of trustees shall file with the comptroller of public

accounts a duly attested copy of a board resolution that

designates the authorized representatives, as provided by this

chapter, who have authority to sign vouchers for payment from the

funds administered by the board of trustees.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec.

25.104 by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept. 1,

1989.

Sec. 815.105. ADOPTING TABLES. The board of trustees shall

adopt mortality, service, and other tables the board considers

necessary for the retirement system after considering the results

of the actuary's investigation of the mortality, service, and

compensation experience of the system's members and

beneficiaries.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec.

25.105 by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept. 1,

1989.

Sec. 815.106. INFORMATION TO LEGISLATURE. (a) The retirement

system may not use any money under its control to influence the

outcome of an election or to support the passage or defeat of

legislation.

(b) This section does not prohibit the board of trustees, as

fiduciaries of the trust fund and as trustees of other programs

administered by the board, or the officers or employees of the

retirement system, as designees of the board, from making

recommendations to the legislature concerning the actuarial

soundness of a retirement system administered by the board, the

fiscal or legal implications of proposed legislation, or

statutory changes designed to more efficiently administer and

effectuate the purposes of a retirement system or other program

administered by the board. In addition, the board or an officer

or employee of the retirement system may provide to a member of

the legislature or a legislative committee, at the request of the

member or committee, any factual information that is not made

confidential by law.

Added by Acts 1997, 75th Leg., ch. 1048, Sec. 17, eff. Sept. 1,

1997.

Sec. 815.107. RECORDS OF BOARD OF TRUSTEES. The board shall

keep a record of all of its proceedings. Records of the board are

open to public inspection.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec.

25.107 by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept. 1,

1989.

Sec. 815.109. CORRECTION OF ERRORS. If an error in the records

of the retirement system results in a person receiving more or

less money than the person is entitled to receive under this

subtitle, the retirement system shall correct the error in

accordance with Section 802.1024 and so far as practicable shall

adjust future payments so that the actuarial equivalent of the

benefit to which the person is entitled is paid.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 1981, 67th Leg., 1st C.S., p. 201, ch. 18,

Sec. 17, eff. Nov. 10, 1981. Renumbered from Vernon's Ann.Civ.St.

Title 110B, Sec. 25.109 by Acts 1989, 71st Leg., ch. 179, Sec. 1,

eff. Sept. 1, 1989.

Amended by:

Acts 2005, 79th Leg., Ch.

347, Sec. 18, eff. September 1, 2005.

Sec. 815.110. AUDITS. (a) The legislative audit committee may

contract with an independent and internationally recognized

accounting firm with substantial experience in auditing

retirement or pension plans to conduct a managerial audit of the

retirement system.

(b) The state auditor shall pay the costs of each management

audit under this section from money appropriated to the state

auditor and approved for that purpose by the legislative audit

committee. Not later than the 30th day after the date the

retirement system receives a statement of audit costs paid by the

state auditor under this subsection, the retirement system shall

reimburse the state auditor for the costs from money in the

expense account.

(c) The legislative audit committee may determine the frequency

of the audits authorized by this section and may determine the

programs and operations to be covered by the audits. The

accounting firm selected to conduct the audits shall report the

results of those audits directly to the committee.

(d) No later than 30 days after the legislative audit committee

receives an audit report, the committee shall file a copy of the

report with the retirement system, the governor, the lieutenant

governor, the speaker of the house of representatives, the State

Pension Review Board, the state auditor, and the secretary of

state for publication in the Texas Register.

(e) The board of trustees shall select an independent auditor to

perform an annual financial audit of the retirement system. The

selection shall be in accordance with the requirements of Chapter

2254 for obtaining the services of a certified public accountant.

Added by Acts 1991, 72nd Leg., ch. 16, Sec. 11.06(b), eff. Aug.

26, 1991. Amended by Acts 1995, 74th Leg., ch. 586, Sec. 26, 27,

eff. Aug. 28, 1995; Acts 1999, 76th Leg., ch. 1541, Sec. 21, eff.

Sept. 1, 1999.

Sec. 815.111. MISCELLANEOUS BOARD DUTIES. (a) The board shall

provide to its trustees and employees, as often as necessary,

information regarding their qualification for office or

employment under this chapter and their responsibilities under

applicable laws relating to standards of conduct for state

officers or employees.

(b) The board shall develop and implement policies that clearly

define the respective responsibilities of the board and the staff

of the retirement system.

(c) The board shall prepare information of interest to the

retirement system's members describing the functions of the

system and the system's procedures by which complaints are filed

with and resolved by the system. The system shall make the

information available to the system's members and appropriate

state agencies.

(d) The board by rule shall establish methods by which members

are notified of the name, mailing address, and telephone number

of the retirement system for the purpose of directing complaints

to the system.

(e) The board shall develop and implement policies that provide

the public with a reasonable opportunity to appear before the

board and to speak on any issue under the jurisdiction of the

board.

(f) The board shall prepare and maintain a written plan that

describes how a person who does not speak English can be provided

reasonable access to the board's programs. The board shall also

comply with federal and state laws for program and facility

accessibility.

Added by Acts 1993, 73rd Leg., ch. 791, Sec. 14, eff. Sept. 1,

1993.

SUBCHAPTER C. OFFICERS AND EMPLOYEES OF BOARD OF TRUSTEES

Sec. 815.201. PRESIDING OFFICER. The board of trustees shall

elect a presiding officer from the membership of the board.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec.

25.201 by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept. 1,

1989. Amended by Acts 2003, 78th Leg., ch. 1111, Sec. 24, eff.

Sept. 1, 2003.

Sec. 815.202. EXECUTIVE DIRECTOR. (a) The board of trustees,

by a majority vote of all members, shall appoint a person other

than a member of the board to serve at the board's will as

executive director.

(b) The executive director is not a member of the board of

trustees.

(c) To be eligible to serve as the executive director, a person

must:

(1) be a citizen of the United States and have been a resident

of the state for the three years immediately preceding the

person's appointment; and

(2) have executive ability and experience to carry out the

duties of the office.

(d) The executive director shall recommend to the board of

trustees actuarial and other services required to transact the

business of the retirement system.

(e) Annually, the executive director shall prepare an itemized

budget showing the amount required to pay the retirement system's

expenses for the following fiscal year and shall submit the

budget to the board of trustees for review and adoption.

(f) The board of trustees may specifically delegate any right,

power, or duty imposed or conferred on the executive director by

law to another employee of the retirement system. If not so

specifically delegated, the executive director may delegate to

another employee of the retirement system any right, power, or

duty assigned to the executive director.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 1989, 71st Leg., ch. 174, Sec. 1, eff. May

25, 1989. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec.

25.202 and amended by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff.

Sept. 1, 1989. Amended by Acts 1989, 71st Leg., ch. 1100, Sec.

4.05(a), eff. Sept. 1, 1989; Acts 1999, 76th Leg., ch. 1541, Sec.

22, eff. Sept. 1, 1999; Acts 2003, 78th Leg., ch. 1111, Sec. 25,

eff. Sept. 1, 2003.

Sec. 815.203. LEGAL ADVISER. The attorney general of the state

is the legal adviser of the board of trustees. The attorney

general shall represent the board in all litigation.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec.

25.203 by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept. 1,

1989.

Sec. 815.204. MEDICAL BOARD. (a) The board of trustees shall

designate a medical board composed of three physicians.

(b) To be eligible to serve as a member of the medical board, a

physician must be licensed to practice medicine in the state and

be of good standing in the medical profession. A physician who is

eligible to participate in the retirement system may not be a

member of the medical board.

(c) The medical board shall:

(1) review all medical examinations required by this subtitle;

(2) investigate essential statements and certificates made by or

on behalf of a member of the retirement system in connection with

an application for disability retirement; and

(3) report in writing to the executive director its conclusions

and recommendations on all matters referred to it.

(d) The medical board is not subject to subpoena regarding

findings it makes in assisting the executive director under this

section, and its members may not be held liable for any opinions,

conclusions, or recommendations made under this section.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec.

25.204 by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept. 1,

1989.

Amended by:

Acts 2005, 79th Leg., Ch.

347, Sec. 19, eff. September 1, 2005.

Sec. 815.205. OTHER PHYSICIANS. The board of trustees may

employ physicians in addition to the medical board to report on

special cases.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec.

25.205 by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept. 1,

1989.

Sec. 815.206. ACTUARY. (a) The board of trustees shall

designate an actuary.

(b) The actuary must be thoroughly qualified to be the technical

adviser of the board of trustees on matters concerning operation

of the funds of the retirement system.

(c) At least once every five years the actuary, under the

direction of the board of trustees, shall:

(1) make an actuarial investigation of the mortality, service,

and compensation experience of the members and beneficiaries of

the retirement system; and

(2) make a valuation of the assets and liabilities of the

retirement system's funds.

(d) On the basis of tables adopted by the board of trustees

under Section 815.105, the actuary shall make a valuation of the

assets and liabilities of the retirement system's funds annually.

(e) The actuary shall perform such other duties as are required

by the board of trustees.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec.

25.206 and amended by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff.

Sept. 1, 1989.

Sec. 815.207. COMPTROLLER. (a) Except as provided by Section

815.302 or 815.303, the comptroller is the custodian of the

securities, bonds, and funds of the retirement system.

(b) The comptroller shall pay money from the funds of the

retirement system on warrants drawn by the comptroller supported

only on vouchers signed by the executive director and the

presiding officer of the board of trustees or their authorized

representatives.

(c) The comptroller annually shall furnish to the board of

trustees a sworn statement of the amount of the retirement

system's assets in the comptroller's custody.

(d) The board of trustees may, in the exercise of its

constitutional discretion to manage the assets of the retirement

system, select one or more commercial banks, depository trust

companies, or other entities to serve as custodian of all or part

of the retirement system's assets.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 1987, 70th Leg., 2nd C.S., ch. 77, Sec. 2,

eff. Oct. 20, 1987. Renumbered from Vernon's Ann.Civ.St. Title

110B, Sec. 25.207 and amended by Acts 1989, 71st Leg., ch. 179,

Sec. 1, eff. Sept. 1, 1989. Amended by Acts 1989, 71st Leg., ch.

251, Sec. 1, eff. Aug. 28, 1989; Acts 1997, 75th Leg., ch. 1423,

Sec. 8.45, eff. Sept. 1, 1997; Acts 2003, 78th Leg., ch. 1111,

Sec. 26, eff. Sept. 1, 2003.

Sec. 815.208. COMPENSATION OF EMPLOYEES; PAYMENT OF EXPENSES.

(a) The board of trustees shall compensate all persons whom it

employs and shall pay all expenses necessary to operate the

retirement system at rates and in amounts approved by the board.

Those rates and amounts may not exceed those paid for the same or

similar service for the state.

(b) Except as provided by Subsection (c), the board of trustees

shall pay compensation and expenses required by Subsection (a)

from the expense account.

(c) The board of trustees shall make payments from the law

enforcement and custodial officer supplemental retirement fund

for services rendered by the actuary for that fund and approved

by the board.

(d) The board of trustees may compensate employees of the

retirement system, whether subject to or exempt from the overtime

provisions of the Fair Labor Standards Act of 1938 (29 U.S.C.

Section 201 et seq.), at the rate equal to the employees' regular

rate of pay for work performed on a legal holiday or for other

compensatory time accrued, when taking compensatory time off

would be disruptive to the system's normal business functions.

(e) The retirement system is exempt from Subchapter K, Chapter

659, and Chapter 660, to the extent the board of trustees

determines an exemption is necessary for the performance of

fiduciary duties.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 1985, 69th Leg., ch. 91, Sec. 13, eff.

Sept. 1, 1985. Renumbered from Vernon's Ann.Civ.St. Title 110B,

Sec. 25.208 and amended by Acts 1989, 71st Leg., ch. 179, Sec. 1,

eff. Sept. 1, 1989. Amended by Acts 1999, 76th Leg., ch. 1541,

Sec. 23, eff. Sept. 1, 1999.

Sec. 815.210. INTEREST IN INVESTMENT PROFITS PROHIBITED. Except

for an interest in retirement funds as a member of the retirement

system, a trustee or employee of the board of trustees may not

have a direct or indirect interest in the gains or profits of any

investment made by the board and may not receive any pay or

emolument for services other than the person's designated

compensation and authorized expenses.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec.

25.210 and amended by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff.

Sept. 1, 1989.

Sec. 815.212. EMPLOYMENT PRACTICES. (a) The executive director

or the executive director's designee shall develop an

intra-agency career ladder program. The program shall require

intra-agency posting of all non-entry-level positions

concurrently with any public posting.

(b) The executive director or the executive director's designee

shall develop a system of annual performance evaluations. All

merit pay for retirement system employees must be based on the

system established under this subsection.

(c) The executive director or the executive director's designee

shall prepare and maintain a written policy statement to assure

implementation of a program of equal employment opportunity under

which all personnel transactions are made without regard to race,

color, disability, sex, religion, age, or national origin. The

policy statement must include:

(1) personnel policies, including policies relating to

recruitment, evaluation, selection, appointment, training, and

promotion of personnel;

(2) a comprehensive analysis of the retirement system's work

force that meets federal and state guidelines;

(3) procedures by which a determination can be made of

significant underuse in the retirement system's work force of all

persons for whom federal or state guidelines encourage a more

equitable balance; and

(4) reasonable methods to appropriately address those areas of

significant underuse.

(d) A policy statement prepared under Subsection (c) must cover

an annual period, be updated at least annually, and be filed with

the governor's office.

(e) The governor's office shall deliver a biennial report to the

legislature based on the information received under Subsection

(d). The report may be made separately or as a part of other

biennial reports made to the legislature.

Added by Acts 1993, 73rd Leg., ch. 791, Sec. 15, eff. Sept. 1,

1993.

Sec. 815.213. ETHICS AND DISCLOSURE REQUIREMENTS. The board of

trustees shall adopt an investment policy that includes a code of

ethics. The code of ethics must contain standards of ethical

conduct and disclosure requirements applicable to the members of

the board of trustees and employees of the retirement system in

the administration of this subtitle.

Added by Acts 2001, 77th Leg., ch. 1231, Sec. 21, eff. Sept. 1,

2001.

Sec. 815.214. SUBPOENA. Notwithstanding any other law, the

retirement system may issue a subpoena that conforms to Rule 176,

Texas Rules of Civil Procedure, including a preappeal

investigative subpoena or any subpoena otherwise authorized by

the Texas Rules of Civil Procedure, that the retirement system

determines necessary to protect the interests of a program or

system administered by the retirement system.

Added by Acts 2009, 81st Leg., R.S., Ch.

1308, Sec. 19, eff. September 1, 2009.

SUBCHAPTER D. MANAGEMENT OF ASSETS

Sec. 815.301. INVESTMENT OF ASSETS. (a) The board of trustees

shall:

(1) invest the assets of the retirement system as a single fund

without distinction as to their source; and

(2) hold securities purchased with the assets described by

Subsection (a)(1) collectively for the proportionate benefit of:

(A) all accounts in the trust fund that are listed in Section

815.310(b); and

(B) the law enforcement and custodial officer supplemental

retirement fund.

(b) The board of trustees may delegate its authority under

Subsection (a) to the executive director. The board of trustees

or the executive director may, under the standard of care

provided by Section 815.307, invest and reinvest any of the

retirement system's assets and may commingle assets of the trust

fund and the law enforcement and custodial officer supplemental

retirement fund with the assets of the Judicial Retirement System

of Texas Plan Two for investment purposes, as long as

proportionate ownership records are maintained and credited.

Investments may include home office facilities, including land,

equipment, and office building, used in administering the

retirement system.

(c) The board of trustees may contract with private professional

investment managers to assist the board in investing the assets

of the retirement system.

(d) The board of trustees shall employ one or more

well-recognized performance measurement services to evaluate and

analyze the investment results of those assets of the retirement

system. Each service shall compare investment results with the

written investment objectives developed by the board, and shall

also compare the investment of the assets of the retirement

system with the investment of other public and private funds.

(e) The board of trustees shall develop written investment

objectives concerning the investment of assets of the retirement

system. The objectives may address desired rates of return, risks

involved, investment time frames, and any other relevant

considerations.

(f) For purposes of the investment authority of the board of

trustees under Section 67, Article XVI, Texas Constitution,

"securities" means any investment instrument within the meaning

of the term as defined by Section 4, The Securities Act (Article

581-4, Vernon's Texas Civil Statutes), 15 U.S.C. Section

77b(a)(1), or 15 U.S.C. Section 78c(a)(10).

(g) In awarding contracts to private professional investment

managers under Subsection (c) or otherwise acquiring private

financial services, the board of trustees shall make a good faith

effort to award contracts to or acquire services from qualified

emerging fund managers.

(h) For purposes of Subsection (g):

(1) "Emerging fund manager" means a private professional

investment manager that manages assets of not more than $2

billion.

(2) "Private financial services" includes pension fund

management, consulting, investment advising, brokerage services,

hedge fund management, private equity fund management, and real

estate investment.

(i) The retirement system shall report to the board of trustees

on the methods and results of the system's efforts to hire

emerging fund managers, including data disaggregated by race,

ethnicity, gender, and fund size.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 1983, 68th Leg., p. 5098, ch. 925, Sec. 3,

eff. Aug. 29, 1983; Acts 1983, 68th Leg., p. 5100, ch. 926, Sec.

3, eff. Aug. 29, 1983; Acts 1985, 69th Leg., ch. 91, Sec. 15,

eff. Sept. 1, 1985; Acts 1985, 69th Leg., ch. 542, Sec. 5, eff.

Aug. 26, 1985; Acts 1987, 70th Leg., ch. 167, Sec. 5.01(a)(63),

eff. Sept. 1, 1987; Acts 1989, 71st Leg., ch. 138, Sec. 1, eff.

May 25, 1989. Renumbered from Vernon's Ann.Civ.St. Title 110B,

Sec. 25.301 and amended by Acts 1989, 71st Leg., ch. 179, Sec. 1,

eff. Sept. 1, 1989. Amended by Acts 1989, 71st Leg., ch. 1100,

Sec. 4.06(a), eff. Sept. 1, 1989; Acts 1993, 73rd Leg., ch. 791,

Sec. 16, eff. Sept. 1, 1993; Acts 1995, 74th Leg., ch. 586, Sec.

28, eff. Aug. 28, 1995; Acts 1999, 76th Leg., ch. 1541, Sec. 24,

eff. Sept. 1, 1999.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

1308, Sec. 20, eff. September 1, 2009.

Sec. 815.302. CUSTODY AND INVESTMENT OF ASSETS PENDING

TRANSACTIONS. The retirement system may, in the exercise of its

constitutional discretion to manage the assets of the retirement

system, select one or more commercial banks, depository trust

companies, or other entities to serve as custodian or custodians

of the system's cash or securities pending completion of an

investment transaction and may authorize such custodian to invest

the cash so held in such short-term securities as the board of

trustees determines, subject only to the provisions of Section

815.301.

Added by Acts 1987, 70th Leg., 2nd C.S., ch. 77, Sec. 3, eff.

Oct. 20, 1987. Renumbered from Vernon's Ann.Civ.St. Title 110B,

Sec. 25.3011 and amended by Acts 1989, 71st Leg., ch. 179, Sec.

1, eff. Sept. 1, 1989. Amended by Acts 1989, 71st Leg., ch. 251,

Sec. 2, eff. Aug. 28, 1989.

Sec. 815.303. SECURITIES LENDING. (a) The retirement system

may, in the exercise of its constitutional discretion to manage

the assets of the retirement system, select one or more

commercial banks, depository trust companies, or other entities

to serve as custodian or custodians of the system's securities

and to lend the securities under rules adopted by the board of

trustees and as required by this section.

(b) To be eligible to lend securities under this section, a bank

or brokerage firm must:

(1) be experienced in the operation of a fully secured

securities loan program;

(2) maintain adequate capital in the prudent judgment of the

retirement system to assure the safety of the securities;

(3) execute an indemnification agreement satisfactory in form

and content to the retirement system fully indemnifying the

retirement system against loss resulting from borrower default in

its operation of a securities loan program for the system's

securities; and

(4) require any securities broker or dealer to whom it lends

securities belonging to the retirement system to deliver to and

maintain with the custodian collateral in the form of cash or

United States government securities in an amount equal to not

less than 100 percent of the market value, from time to time, of

the loaned securities.

Added by Acts 1987, 70th Leg., 2nd C.S., ch. 77, Sec. 3, eff.

Oct. 20, 1987. Renumbered from Vernon's Ann.Civ.St. Title 110B,

Sec. 25.3012 by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept.

1, 1989. Amended by Acts 1989, 71st Leg., ch. 251, Sec. 3, eff.

Aug. 28, 1989; Acts 1997, 75th Leg., ch. 1048, Sec. 18, eff.

Sept. 1, 1997.

Sec. 815.304. NOMINEE TO HOLD SECURITIES. (a) The assets of

the retirement system may be held in the name of agents,

nominees, depository trust companies, or other entities

designated by the board of trustees.

(b) The records and all relevant reports or accounts of the

retirement system must show the ownership interest of the

retirement system in these assets and the facts regarding the

system's holdings.

(c) A trustee or employee of the retirement system shall have no

personal economic interest in any entity listed in Subsection

(a), but shall undertake such action and duties with respect to

these entities as the board of trustees determines to be in the

interest of the retirement system. This subsection does not

prohibit:

(1) an interest in the assets as a member of the retirement

system;

(2) the right to receive expense reimbursements at the same rate

that the board member or employee would have received as a board

member or employee; and

(3) such indemnification as is authorized by the board of

trustees.

(d) The records of an agent, nominee, or other entity that are

maintained by the retirement system are subject to audit by the

state auditor.

Added by Acts 1987, 70th Leg., 2nd C.S., ch. 77, Sec. 3, eff.

Oct. 20, 1987. Renumbered from Vernon's Ann.Civ.St. Title 110B,

Sec. 25.3013 by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept.

1, 1989. Amended by Acts 1989, 71st Leg., ch. 251, Sec. 4, eff.

Aug. 28, 1989.

Sec. 815.307. DUTY OF CARE. The assets of the retirement system

shall be invested and reinvested without distinction as to their

source in accordance with Section 67, Article XVI, Texas

Constitution. A determination of whether the board of trustees

has exercised prudence with respect to an investment decision

must be made taking into consideration the investment of all

assets of the trust or all assets of the collective investment

vehicle, as applicable, over which the board has management and

control, rather than considering the prudence of a single

investment of the trust or the collective investment vehicle, as

applicable.

Added by Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff.

Sept. 1, 1981. Renumbered from Vernon's Ann.Civ.St. Title 110B,

Sec. 25.304 by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept.

1, 1989. Amended by Acts 1997, 75th Leg., ch. 1048, Sec. 19, eff.

Sept. 1, 1997; Acts 2003, 78th Leg., ch. 1111, Sec. 27, eff.

Sept. 1, 2003.

Added by Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff.

Sept. 1, 1981. Renumbered from Vernon's Ann.Civ.St. Title 110B,

Sec. 25.304 by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept.

1, 1989. Amended by Acts 1997, 75th Leg., ch. 1048, Sec. 19, eff.

Sept. 1, 1997; Acts 2003, 78th Leg., ch. 1103, Sec. 10, eff. Jan.

1, 2004.

Reenacted by Acts 2009, 81st Leg., R.S., Ch.

1308, Sec. 21, eff. September 1, 2009.

Sec. 815.308. CASH ON HAND. (a) The board of trustees shall

keep a sufficient amount of cash on hand to make payments as they

become due each year under the retirement system.

(b) The amount of cash on hand may not exceed 10 percent of the

total amount in the funds of the retirement system on deposit

with the comptroller, excluding the assets of the law enforcement

and custodial officer supplemental retirement fund.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec.

25.305 by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept. 1,

1989. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 8.47, eff.

Sept. 1, 1997.

Sec. 815.309. CREDITING SYSTEM ASSETS. All assets of the

retirement system, except assets of the law enforcement and

custodial officer supplemental retirement fund, shall be credited

to the trust fund established by Section 815.310.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 1985, 69th Leg., ch. 91, Sec. 1, eff. Sept.

1, 1985. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec.

25.306 and amended by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff.

Sept. 1, 1989.

Sec. 815.310. TRUST FUND. (a) A trust fund for the Employees

Retirement System of Texas is established with the comptroller.

(b) All assets of the trust fund shall be credited, according to

the purpose for which they are held, to one of the following

accounts:

(1) employees saving account;

(2) state accumulation account;

(3) retirement annuity reserve account;

(4) interest account; or

(5) expense account.

Added by Acts 1985, 69th Leg., ch. 91, Sec. 2, eff. Sept. 1,

1985. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec.

25.3061 by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept. 1,

1989. Amended by Acts 1993, 73rd Leg., ch. 791, Sec. 17, eff.

Sept. 1, 1993; Acts 1997, 75th Leg., ch. 1423, Sec. 8.48, eff.

Sept. 1, 1997.

Sec. 815.311. EMPLOYEES SAVING ACCOUNT. (a) The retirement

system shall deposit in a member's individual account in the

employees saving account the following amounts:

(1) the amount of contributions to the retirement system that is

deducted from the member's compensation;

(2) the portion of a deposit required to reinstate service

credit previously canceled that represents only the amount

withdrawn;

(3) the portion of a deposit required to establish service

credit not previously established that represents only the

required contribution; and

(4) the portion of a deposit required to establish military

service credit that represents only the member's contribution for

that credit.

(b) Interest on money in an individual account in the employees

saving account is earned monthly and is computed at the rate of

five percent a year on the mean balance of the member's account

for the fiscal year.

(c) Unless an account is closed before the last day of the

fiscal year, interest is computed for the fiscal year and is

credited to the member's account as of the last day of the fiscal

year.

(d) If a member's account is closed before the last day of the

fiscal year, interest is computed for the following period:

(1) if the account is closed because of death, from the first

day of the fiscal year through the last day of the month that

preceded the month in which the member's death occurred;

(2) if the account is closed by withdrawal of contributions,

from the first day of the fiscal year through the last day of the

month that precedes the month in which the withdrawal request is

validated by the retirement system; or

(3) if the account is closed because of retirement, from the

first day of the fiscal year through the effective date of

retirement.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 1985, 69th Leg., ch. 91, Sec. 16, eff.

Sept. 1, 1985. Renumbered from Vernon's Ann.Civ.St. Title 110B,

Sec. 25.307 by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept.

1, 1989.

Sec. 815.312. STATE ACCUMULATION ACCOUNT. (a) The retirement

system shall deposit in the state accumulation account all

contributions for retirement made by the state to the retirement

system and transfer to the account the amounts required by

Section 815.318 or 815.502.

(b) The retirement system also shall deposit in the state

accumulation account the interest portion of the following

deposits made by members:

(1) deposits required to reinstate service previously canceled;

(2) deposits required to establish service credit not previously

established; and

(3) deposits required to establish military service credit.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 1985, 69th Leg., ch. 91, Sec. 16, eff.

Sept. 1, 1985. Renumbered from Vernon's Ann.Civ.St. Title 110B,

Sec. 25.308 and amended by Acts 1989, 71st Leg., ch. 179, Sec. 1,

eff. Sept. 1, 1989.

Sec. 815.313. RETIREMENT ANNUITY RESERVE ACCOUNT. (a) The

retirement system shall transfer to the retirement annuity

reserve account money as required by Section 815.318, 815.319, or

815.321.

(b) The retirement system shall use the money in the account to

pay annuities as provided by this subtitle.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 1983, 68th Leg., p. 1111, ch. 252, Sec. 6,

eff. Aug. 29, 1983; Acts 1985, 69th Leg., ch. 91, Sec. 16, eff.

Sept. 1, 1985. Renumbered from Vernon's Ann.Civ.St. Title 110B,

Sec. 25.309 and amended by Acts 1989, 71st Leg., ch. 179, Sec. 1,

eff. Sept. 1, 1989. Amended by Acts 1993, 73rd Leg., ch. 791,

Sec. 18, eff. Sept. 1, 1993.

Sec. 815.314. INTEREST ACCOUNT. Except as provided by Section

815.317, the retirement system shall deposit in the interest

account all income, interest, and dividends from deposits and

investments of assets of the retirement system.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 1985, 69th Leg., ch. 91, Sec. 16, eff.

Sept. 1, 1985. Renumbered from Vernon's Ann.Civ.St. Title 110B,

Sec. 25.310 and amended by Acts 1989, 71st Leg., ch. 179, Sec. 1,

eff. Sept. 1, 1989.

Sec. 815.315. EXPENSE ACCOUNT. (a) The retirement system shall

deposit in the expense account membership fees, money required to

be transferred to the account under Section 815.318, and any

appropriations made by the legislature to the account.

(b) The retirement system shall pay from the expense account

administration and maintenance expenses of the retirement system

except those expenses the payment of which is provided for by

Section 815.208(c) or 815.317(b).

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 1985, 69th Leg., ch. 91, Sec. 16, eff.

Sept. 1, 1985. Renumbered from Vernon's Ann.Civ.St. Title 110B,

Sec. 25.311 and amended by Acts 1989, 71st Leg., ch. 179, Sec. 1,

eff. Sept. 1, 1989.

Sec. 815.317. LAW ENFORCEMENT AND CUSTODIAL OFFICER SUPPLEMENTAL

RETIREMENT FUND. (a) The retirement system shall deposit in the

law enforcement and custodial officer supplemental retirement

fund state contributions and other appropriations made by the

legislature to the fund and proceeds from investment of the fund.

(b) The retirement system may use money from the fund only to

pay supplemental retirement and death benefits to law enforcement

and custodial officers as provided by this subtitle and to pay

for the administration of the fund.

(c) Money appropriated to pay benefits from the fund as provided

by this subtitle may not be diverted or used to pay any other

benefits.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 1983, 68th Leg., p. 1977, ch. 360, Sec. 2,

eff. Sept. 1, 1983. Renumbered from Vernon's Ann.Civ.St. Title

110B, Sec. 25.313 and amended by Acts 1989, 71st Leg., ch. 179,

Sec. 1, eff. Sept. 1, 1989. Amended by Acts 1991, 72nd Leg., ch.

797, Sec. 4, eff. June 16, 1991; Acts 1993, 73rd Leg., ch. 791,

Sec. 19, eff. Sept. 1, 1993.

Sec. 815.318. TRANSFER OF ASSETS FROM INTEREST ACCOUNT. (a)

The retirement system shall transfer from the interest account to

the employees saving account amounts of interest computed under

Section 815.311 at the following times:

(1) as required during the fiscal year for a member's account in

the retirement system that is closed before the last day of the

fiscal year; and

(2) as of the last day of the fiscal year for a member's account

that is not closed before the last day of the fiscal year.

(b) As required during the year, the retirement system shall

transfer from the interest account to the expense account amounts

it determines necessary for the payment of the retirement

system's expenses that exceed the amount of money available for

those expenses.

(c) As of the last day of each fiscal year, the retirement

system shall transfer from the interest account to the retirement

annuity reserve account an amount equal to:

(1) five percent of the mean amount in the retirement annuity

reserve account for that fiscal year; or

(2) an amount computed at a greater rate if the actuary

recommends the greater rate to finance adequately the annuities

payable from the retirement annuity reserve account.

(d) After making the transfers required by this section, the

retirement system, as of the last day of each fiscal year, shall

transfer the amount remaining in the interest account to the

state accumulation account.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 1985, 69th Leg., ch. 91, Sec. 16, eff.

Sept. 1, 1985; Acts 1987, 70th Leg., ch. 3, Sec. 1, eff. March

12, 1987. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec.

25.314 and amended by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff.

Sept. 1, 1989. Amended by Acts 1993, 73rd Leg., ch. 791, Sec. 20,

eff. Sept. 1, 1993; Acts 2001, 77th Leg., ch. 1231, Sec. 22, eff.

Sept. 1, 2001.

Sec. 815.319. TRANSFER OF ASSETS ON RETIREMENT AND RESTORATION

TO ACTIVE SERVICE. (a) When a member retires, the retirement

system shall transfer:

(1) from the employees saving account to the retirement annuity

reserve account, an amount equal to the member's accumulated

contributions; and

(2) from the state accumulation account to the retirement

annuity reserve account, an amount equal to the difference

between the total reserve at present worth reserve value of the

member's retirement annuity and the amount credited to the

member's individual account as of the day of retirement.

(b) If a person who receives disability benefits has those

benefits terminated under Section 814.210, the retirement system

shall transfer the balance of the person's retirement reserve

from the retirement annuity reserve account to the employees

saving account and to the state accumulation account in

proportion to the original amount transferred to the retirement

annuity reserve account from those accounts.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 1985, 69th Leg., ch. 91, Sec. 16, eff.

Sept. 1, 1985. Renumbered from Vernon's Ann.Civ.St. Title 110B,

Sec. 25.315 and amended by Acts 1989, 71st Leg., ch. 179, Sec. 1,

eff. Sept. 1, 1989.

Sec. 815.321. TRANSFER OF ASSETS FOR DEATH BENEFIT ANNUITIES.

(a) When a member dies who selected or was eligible to select a

death benefit plan, or whose beneficiary is eligible to receive

an annuity under Section 814.302(b) or 814.304, the retirement

system shall transfer:

(1) from the employees saving account to the retirement annuity

reserve account, an amount equal to the member's accumulated

contributions; and

(2) from the state accumulation account to the retirement

annuity reserve account, an amount equal to the difference

between the total reserve, at present worth reserve value, of the

death benefit annuity and the amount credited to the member's

individual account as of the day of the member's death.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 1985, 69th Leg., ch. 91, Sec. 16, eff.

Sept. 1, 1985. Renumbered from Vernon's Ann.Civ.St. Title 110B,

Sec. 25.317 and amended by Acts 1989, 71st Leg., ch. 179, Sec. 1,

eff. Sept. 1, 1989.

Sec. 815.322. TRANSFER OF ASSETS TO ADJUST AMOUNT IN RETIREMENT

ANNUITY RESERVE ACCOUNT. After making the transfers required by

Section 815.318, the executive director shall make a transfer to

make the amount in the retirement annuity reserve account equal,

as of the last day of each fiscal year, to the actuarial present

value of the annuities for which a transfer of assets has been

made as required by Section 815.319. The transfer shall be:

(1) a transfer from the retirement annuity reserve account to

the state accumulation account of the amount by which the amount

in the retirement annuity reserve account exceeds the actuarial

present value of the annuities; or

(2) a transfer from the state accumulation account to the

retirement annuity reserve account of the amount by which the

actuarial present value of the annuities exceeds the amount in

the retirement annuity reserve account.

Added by Acts 1987, 70th Leg., ch. 3, Sec. 2, eff. March 12,

1987. Renumbered from Vernon's Ann.Civ.St. Title 110B, Sec.

25.318 and amended by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff.

Sept. 1, 1989. Amended by Acts 1999, 76th Leg., ch. 1541, Sec.

25, eff. Sept. 1, 1999.

SUBCHAPTER E. COLLECTION OF MEMBERSHIP FEES AND CONTRIBUTIONS

Sec. 815.401. COLLECTION OF MEMBERSHIP FEES. (a) Each member

annually shall pay a membership fee of $2. A contributing member

shall pay the fee with the member's first contribution to the

retirement system in each fiscal year in the manner provided by

Section 815.402 for payment of the member's contribution to the

retirement system.

(b) If the membership fee is not paid with the member's first

contribution of the year to the retirement system, the board of

trustees may deduct the amount of the fee from that contribution

or from any benefit to which the member becomes entitled.

(c) If the legislature appropriates, on behalf of each

contributing member for any fiscal year, a membership fee to be

deposited in the expense account in an amount equal to or greater

than the membership fee required by Subsection (a), the members

are not required to pay the membership fee for that year. The

retirement system may apply the membership fee to the

administration of any program administered by the board of

trustees.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 1985, 69th Leg., ch. 91, Sec. 17, eff.

Sept. 1, 1985. Renumbered from Vernon's Ann.Civ.St. Title 110B,

Sec. 25.401 and amended by Acts 1989, 71st Leg., ch. 179, Sec. 1,

eff. Sept. 1, 1989. Amended by Acts 1993, 73rd Leg., ch. 791,

Sec. 21, eff. Sept. 1, 1993.

Sec. 815.402. COLLECTION OF MEMBER CONTRIBUTIONS. (a) Except

as provided by Section 813.201, each payroll period, each

department or agency of the state shall cause to be deducted from

each member's compensation a contribution of:

(1) 6.5 percent of the compensation if the member is not a

member of the legislature, provided that if the state

contribution to the retirement system is computed using a

percentage less than 6.5 percent, the member's contribution is

computed using a percentage equal to the percentage used to

compute the state contribution, which may not be less than six

percent; or

(2) eight percent of the compensation if the member is a member

of the legislature.

(b) To facilitate the making of deductions, the board of

trustees may modify a member's required deductions by an amount

that does not exceed one-tenth of one percent of the annual

compensation on which the deduction is made.

(c) Each department or agency head shall certify to the board of

trustees and to the disbursing officer of the department or

agency on each payroll, or in another manner prescribed by the

board, the amounts to be deducted from each member's

compensation.

(d) The disbursing officer of each department or agency on

authority from the department or agency head shall:

(1) make deductions from each member's compensation for

contributions to the retirement system;

(2) transmit monthly, or at the time designated by the board of

trustees, a certified copy of the payroll or report to the

retirement system; and

(3) pay the amount deducted to the retirement system for deposit

in the employees saving account.

(e) The retirement system shall record all receipts of member

contributions and shall deliver the receipts to the comptroller.

The comptroller shall credit the receipts to the employees saving

account.

(f) The deductions required by this section shall be made even

if the member's compensation is reduced below the amount equal to

the minimum compensation provided by law.

(g) By becoming a member of the retirement system, a member

consents to the deductions required by this section. The payment

of compensation less those deductions is a complete release of

all claims, except benefits provided by this subtitle, for

services rendered by the member during the payment period.

(h) In addition to the contribution under Subsection (a)(1),

each department or agency of the state that employs a law

enforcement or custodial officer shall deduct an additional 0.5

percent contribution from that member's compensation, to be

deposited in the law enforcement and custodial officer

supplemental retirement fund, provided that, if the state

contribution to the law enforcement and custodial officer

supplemental retirement fund is computed using a percentage less

than 0.5 percent, the member's contribution is computed using a

percentage equal to the percentage used to compute the state

contribution.

Acts 1981, 67th Leg., p. 1876, ch. 453, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 1985, 69th Leg., ch. 91, Sec. 18, eff.

Sept. 1, 1985. Renumbered from Vernon's Ann.Civ.St. Title 110B,

Sec. 25.402 by Acts 1989, 71st Leg., ch. 179, Sec. 1, eff. Sept.

1, 1989. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 8.49,

eff. Sept. 1, 1997; Acts 2001, 77th Leg., ch. 1231, Sec. 23, eff.

Sept. 1, 2001.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

1308, Sec. 22, eff. September 1, 2009.

Sec. 815.403. COLLECTION OF STATE CONTRIBUTIONS. (a) During

each fiscal year, the state shall contribute to the retirement

system:

(1) an amount equal to 7.4 percent of the total compensation of

all members of the retirement system for that year;

(2) money to pay lump-sum death benefits for retirees under

Section 814.501;

(3) an amount for the law enforcement and custodial officer

supplemental retirement fund equal to 2.13 percent of the

aggregate state compensation of all custodial and law enforcement

officers for that year;

(4) money necessary for the administration of the law

enforcement and custodial officer supplemental retirement fund;

and

(5) money for service credit not previously established, as

provided by Section 813.202(c) or 813.302(d).

(b) Before November 2 of each even-numbered year, the retirement

system shall certify to the Legislative Budget Board and to the

budget division of the governor's office for review:

(1) an estimate of the amount necessary to pay the state's

contribution under Subsections (a)(1), (a)(2), (a)(3), and (a)(5)

for the following biennium; and

(2) as a separate item, an estimate of the amount required to

administer the law enforcement and custodial off