HBA-TBM S.B. 790 77(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 790 By: Barrientos Pensions & Investments 5/1/2001 Engrossed 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. Senate Bill 790 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 Senate Bill 790 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.