HBA-TBM H.B. 1958 77(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 1958
By: Naishtat
Pensions & Investments
2/28/2001
Introduced



BACKGROUND AND PURPOSE 

Last session, legislation was passed regarding the firefighters relief and
retirement fund (fund) in cities with populations of more than 450,000 and
less than 500,000.  The legislation amended the fund's deferred retirement
option plans, extended benefits to surviving spouses and dependent
children, and created a permanent cost-of-living allowance fund.  The fund
has recommended additional amendments to enhance the benefits of
firefighters.  House Bill 1958 sets forth amendments to improve the
benefits available to firefighters.   

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that rulemaking
authority is expressly delegated to the board of trustees of the
firefighters relief and retirement fund in SECTION 10 (Section 9.10,
Article 6243e.1, V.T.C.S.) of this bill.   

ANALYSIS

House Bill 1958 amends law to modify provisions of the firefighters relief
and retirement fund (fund) in municipalities having a population of more
than 450,000 and less than 500,000.   

The bill authorizes the board of trustees of the fund (board) to accept for
the use and benefit of the fund a gift, grant, or bequest of money or
securities from any source (Sec. 2.15).  The bill modifies provisions
regarding the retirement benefit payable on retirement to a member to
provide that it is a normal service retirement benefit computed on the
basis of the formula in effect at the time of the member's retirement,
rather than the member's date of termination (Sec. 5.06).  The bill adds
that if a deceased member leaves no surviving designated beneficiary in
addition to no surviving spouse or children, the retirement system is
authorized to make benefit payments to a dependent parent (Sec. 7.06).   

The bill provides that a benefit is payable upon the death of a member or
of a member who is eligible to retire but has not retired to the member's
designated beneficiary if the benefit is not otherwise payable to a
surviving spouse or child of the member.  The bill sets forth provisions
regarding the amount of the payable benefit (Sec 7.09).  The bill increases
the length of time a member is authorized to participate in the deferred
retirement option plan from five years to seven years (Secs. 8.02 and
8.06).   

The bill modifies the limitations on the payment of benefits to comply with
the federal Internal Revenue Code of 1986 (Sec. 9.03).  The bill increases
the annual cost-of-living adjustment a member is authorized to receive from
one half of one percent of the member's benefit to one percent of the
member's benefit (Sec. 9.04).   

The bill authorizes a member who retires to elect to receive, for the
length of the retiree's life, an optional retirement annuity that is
actuarially equivalent to the normal service retirement benefit and the
survivor's benefits provided for a member instead of retirement and
survivor's benefits.  The bill also authorizes the board to provide, by
rule, that an optional retirement annuity is payable after a member's death
throughout the life of the member's designated beneficiary, or if a retiree
dies before a fixed number of annuity  payments are made, the remaining
number of payments are payable to the retiree's designated beneficiary or
estate.  The bill sets forth provisions regarding the election and payment
of an optional retirement annuity to a member's spouse that is less than 75
percent of the annuity that is payable during the joint lives of the member
and the member's spouse (Sec. 9.10).   

EFFECTIVE DATE

September 1, 2001.