HBA-MSH S.B. 593 77(R)    BILL ANALYSIS


Office of House Bill AnalysisS.B. 593
By: Barrientos
Pensions & Investments
5/2/2001
Engrossed



BACKGROUND AND PURPOSE 

Many police departments in Texas are understaffed, increasing the danger to
public safety.  Police departments may have a difficult time recruiting new
officers with the current retirement benefits offered. Senate Bill 593
decreases the number of years police officers in certain counties are
required to serve before retiring with benefits and allows retirees greater
flexibility in receiving cash retirement benefits. 

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. 

ANALYSIS

Senate Bill 593 amends law to provide that a member of a police officer
retirement system in a municipality with a population between 460,000 and
500,000 is eligible for service retirement if the member has completed 23
rather than 25 years of creditable service excluding any military service.
The bill authorizes the change of age and length of service requirements
for service retirement if the change meets specified criteria (SECTION 2).
The bill makes available the retroactive deferred retirement option plan
(RETRO DROP) to a member eligible for service retirement  based on 23
rather than 25 years of creditable service. The bill authorizes the change
of the number of years of creditable services required for RETRO DROP if
the change meets specified criteria.  Rather than a single lump-sum
payment, the bill authorizes a member to elect to receive partial payments
from the member's RETRO DROP account for each calendar year in an amount
elected by the member. The bill authorizes a member who elects partial
payments to elect at any time to receive the member's entire remaining
RETRO DROP account balance in a single lump-sum payment, with the payment
to be made under rules adopted by the board of trustees of the police
retirement system (board).  If a member elects partial payments, the
member's RETRO DROP account is required to be credited with earnings and
losses of the police retirement system for periods after the member's
retirement date and before the member's RETRO DROP account is completely
distributed.  The bill requires the member's RETRO DROP account to be
credited with earnings or losses at an established annual rate as adopted
by rule by the board.  The board is authorizes to change the annual rate
from time to time by amending the rule (SECTION 3).  If the amount of any
benefit payment would exceed the federal limitations on benefits and
contribution under qualified plans, the bill requires the police retirement
system to reduce the amount of the benefit as required to comply with those
limits (SECTION 4). 

EFFECTIVE DATE

September 1, 2001.