HBA-SEB H.B. 3642 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3642 By: Turner, Bob Pensions and Investments 3/31/1999 Introduced BACKGROUND AND PURPOSE Currently, if a state employee who is a member of the Employees Retirement System of Texas (ERS) resigns before reaching retirement age and does not plan to return to work for the state, the employee is entitled to a refund of personal contributions made to ERS, plus interest that accumulates on a monthly basis. The Teacher Retirement System of Texas (TRS), however, credits interest to a member's account at the end of each fiscal year. A member of TRS who resigns before reaching retirement age and who receives a refund of contributions will lose accumulated interest on those contributions that were made from the beginning of that fiscal year. Additionally, a member of TRS must submit a waiver of benefits with a notary seal before receiving a refund of contributions. H.B. 3642 credits interest to a member's account on a monthly basis so that a member who resigns before retirement is able to receive a refund of all accumulated contributions plus up-to-date interest earnings. It also eliminates the requirement for a notary seal on a waiver of benefits issued by a resigning employee and requires TRS to track contribution withdrawals and to compile an annual statistical analysis of the withdrawals. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 822.005, Government Code, by adding Subsection (d), as follows: (d) Requires the Teacher Retirement System of Texas (TRS) to adopt procedures to track and compile information of all applications filed under this section (Withdrawal of Contributions) from the time an application is made until any warrant for the refund is issued by TRS. SECTION 2. Amends Section 824.004, Government Code, by adding Subsection (e), as follows: (e) Prohibits TRS from requiring a person to submit a sworn affidavit or to obtain a seal in order to receive the persons's accumulated contributions if the person is filing a waiver of retirement benefits. SECTION 3. Amends Section 825.307(a) and (b), as follows: (a) Makes a conforming change. (b) Requires TRS to credit interest on the last day of each month, rather than on August 31 of each year. SECTION 4. Amends Section 825.309(a), Government Code, to make a conforming change. SECTION 5. Amends Section 825.312(a), Government Code, to make a conforming change. SECTION 6. Amends Section 825.313, Government Code, to require TRS to transfer from the interest account to the member savings account an amount computed using the rate of five percent a year on the average balance in the account during the preceding fiscal year. Redesigntates Subsection (a)(3) to (a)(2). Makes conforming changes. SECTION 7. Amends Section 825.314(b), Government Code, to make a conforming change. SECTION 8. Amends Section 825.407(f), Government Code, to make a conforming change. SECTION 9. Amends Section 825.408(a), Government Code, to make a conforming change. SECTION 10. Amends Subchapter F, Chapter 825, Government Code, by adding Section 825.518, as follows: Sec. 825.518. ANNUAL REPORT. Requires TRS to submit a statistical analysis based on information under Section 822.005(d) to the governor, lieutenant governor, speaker of the house of representatives, executive director of the State Pension Review Board, the appropriate oversight committees of the house and senate, and the Legislative Budget Board. Requires TRS to submit the analysis not later than the 25th day of the month following the end of each fiscal year. SECTION 11. Amends Section 803.203(f), Government Code, to make a conforming change. SECTION 12. Effective date: September 1, 1999. Makes application of this Act prospective. SECTION 13. Emergency clause.