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


Office of House Bill AnalysisC.S.H.B. 1958
By: Naishtat
Pensions & Investments
3/25/2001
Committee Report (Substituted)



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

C.S.H.B. 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. 2.12).  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.  

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.B. 1958 differs from the original by replacing the numbering of
Section 2.15, Article 6243a.1, V.T.C.S. regarding gifts, grants, or bequest
with Section 2.12, Article 6243a.1, V.T.C.S.