Texas Vernon’s Civil Statutes
Sec. § 5.01
Membership in Combined Pension Plan


(a)

Except as provided by Subsection (a-1) of this section, the membership of the combined pension plan is composed of the following persons:

(1)

Group A members:

(A)

police officers or fire fighters who are on active service and who as of February 28, 1973, had filed a written statement with the pension system of their desire to participate in either the old plan or Plan A;

(B)

police officers and fire fighters who are on active service and who were employed and receiving compensation from the city as a police officer or a fire fighter before March 1, 1973, and who made contributions to either the old plan or Plan A attributable to any period of employment before March 1, 1973; and

(C)

except as provided by Subsection (b) of this section, persons who elect to become Group A members under that subsection; and

(2)

Group B members:

(A)

police officers and fire fighters who are on active service and who were formerly members of either the old plan or Plan A and who, as of April 30, 1973, had filed a written statement with the pension system of their desire to participate in Plan B;

(B)

police officers and fire fighters who are on active service and who on or after March 1, 1973, and before January 1, 1993, became members of Plan B;

(C)

as a condition of employment, any police officer or fire fighter who is initially employed as a police officer or a fire fighter by the city on or after January 1, 1993;

(D)

as a condition of return to active service and except as provided by Subsection (b) of this section, former members of the old plan or Plan A who left active service before March 1, 1973;

(E)

as a condition of return to active service and except as provided by Subsection (c) of this section, former Group B members who are no longer on active service, whether or not the persons were ever a member of the old plan, Plan A, or the combined pension plan;

(F)

Group A members who are on active service and meet the requirements and make an election under Subsection (d) of this section; and

(G)

persons who are on active service and make an election under Subsection (e) of this section.

(a-1)

Group A or Group B members do not include any employee of the city who is:

(1)

required by ordinance or who elects, in accordance with an ordinance, to participate in an alternative benefit plan established under Section 3.01(j-1)(2) of this article based on an evaluation under Section 3.01(j-5)(2) of this article; or

(2)

required by ordinance to participate in an alternative benefit plan established under Section 810.002, Government Code.

(b)

A person who has received an old plan, Plan A, or combined pension plan retirement or disability pension on or after March 1, 1973, may, if the person returns to active service, elect to participate as a Group A or Group B member by filing a written application for membership with the executive director not later than 60 days after the date of return to active service. If the person described by this subsection does not elect to become a Group A or Group B member, the person shall on leaving active service receive a retirement pension in an amount that is unadjusted for the period of return to active service if the person meets all of the requirements of Group A membership.

(c)

A Group B pensioner who was never a member of the old plan, Plan A, or the combined pension plan before January 1, 1993, may, if the person returns to active service, elect to become a Group B member by filing a written application for membership with the executive director not later than 60 days after the date of return to active service. If the person described by this subsection does not elect to again become a Group B member, on leaving active service, if the person meets all applicable requirements of this article, the person shall receive benefits in an amount equal to the amount the person was receiving as of the day before the day the person returned to active service, and the persons base pension shall be the same as the base pension originally computed before the return to active service.

(d)

A person who is on active service and is a Group A member may, before the person participates in DROP, irrevocably elect to become a Group B member by filing a written application with the executive director. On and after the filing of the application, the Group A member shall make contributions to the fund at the rate applicable to Group B members. However, the contributions do not, by themselves, establish Group B membership. Group B membership is contingent on the satisfaction of the following conditions:

(1)

the person must, before the person elects to participate in DROP, pay an amount to the fund equal to the difference between the contributions the person would have made to the fund had the person been a Group B member for the entire period the person could otherwise have been a Group B member before making application for membership and the contributions the person actually made during that period, plus interest calculated in accordance with procedures adopted by the board from time to time; and

(2)

the payments described by this subsection must be completed before the earlier of the date on which the person begins participation in DROP or leaves active service in accordance with procedures adopted by the board from time to time.

(d-1)

If the fund does not receive payment under Subsection (d)(1) of this section by the date prescribed by Subsection (d)(2) of this section, all payments made under Subsection (d)(1) of this section, as well as those contribution amounts paid by the person after the persons application for Group B membership that are in excess of the Group A member contribution rate, shall be returned without accrued interest to the person, or in the event of the persons death to the persons designee, as applicable.

(e)

A person who is on active service and has never been a member of any plan within the pension system may elect to become a Group B member on a prospective basis by filing a written application for membership with the executive director.

(1)

has attained the age of 50 years and has at least 10 years of service credit in the fund; or

(2)

has at least 25 years of service credit, regardless of age.

(b)

Each of the following groups of participating members shall elect one vested, participating member from their respective group to serve as a member of the board of trustees:

(1)

police officers; and

(2)

firefighters.

(c)

The group of participating members who are general employees of the municipality and who are not employed as police officers or firefighters shall elect two vested, participating members from the group to serve as members of the board of trustees.

(d)

Each of the following groups of participating retirees shall elect one participating retiree from their respective group to serve as a member of the board of trustees:

(1)

retired police officers;

(2)

retired firefighters; and

(3)

other retired general employees of the municipality who did not retire from service as a police officer or firefighter.

(e)

The mayor shall nominate and the governing body shall confirm, by majority vote, five residents of the municipality to serve as members of the board of trustees. A person appointed under this subsection may not be a member of the governing body.

(f)

The governing body shall designate the chief financial officer of the municipality to serve as a member of the board of trustees.

(g)

Members of the board of trustees hold office for terms of two years.

(b)

No credit shall be allowed as service for any period exceeding one month during which a member was absent continuously without pay, except as provided in Subsection (f) of Section 4.01 of this Act, with respect to uniformed service leave of absence; as provided in Section 5.02 of this Act, with respect to military service performed prior to system membership; or as provided in Section 5.03 of this Act, with respect to probationary service in excess of six months.

(c)

The board shall verify the records for service claims filed by the members of the police retirement system, in accordance with such administrative rules and regulations as the board may from time to time adopt.

(b)

The board shall compute the retirement annuity of a member who retires after September 30, 1991, but before October 1, 1995, on the basis of the average of the members total salary for the highest three years of the last five years, computed from the date of retirement, of the members pay at the rate of two percent for each of the first 20 years served, plus 3-1/2 percent for each of the next 10 years served, plus one percent for each of the next five years served, with fractional years prorated based on full months served as a contributing member, but the annuity may not exceed, as of the date of retirement, 80 percent of the average so determined.

(c)

The board shall compute the retirement annuity of a member who retires after September 30, 1995, but before October 1, 1997, on the basis of the average of the members total salary for the highest three years of the last five years, computed from the date of retirement, of the members pay at the rate of two percent for each of the first 20 years served, plus four percent for each of the next five years served, plus 3-1/2 percent for each of the next five years served, plus one percent for each of the next five years served, with fractional years prorated based on full months served as a contributing member. In making the computation for a year, the year is considered to begin on the first day a contribution is made. An annuity under this subsection may not exceed, as of the date of retirement, 82.5 percent of the average determined under this subsection.

(d)

The board shall compute the retirement annuity of a member who retires after September 30, 1997, but before October 1, 1999, at the rate of two percent of the members average total salary for each of the first 20 years of service, plus four percent of average total salary for each of the next 10 years of service, plus one percent of average total salary for each of the next five years of service, with fractional years of service prorated based on full months served as a contributing member. In making the computation for a year, the year is considered to begin on the first day a contribution is made. A retirement annuity under this subsection may not exceed, as of the date of retirement, 85 percent of the members average total salary.

(e)

The board shall compute the retirement annuity of a member who retires after September 30, 1999, but before October 1, 2001, at the rate of 2-1/8 percent of the members average total salary for each of the first 20 years of service, plus four percent of the members average total salary for each of the next 10 years of service, plus one percent of the members average total salary for each of the next five years of service, with fractional years of service prorated based on full months served as a contributing member. In making the computation for a year, the year is considered to begin on the first day a contribution is made. A retirement annuity under this subsection may not exceed, as of the date of retirement, 87-1/2 percent of the members average total salary.

(f)

The board shall compute the retirement annuity of a member who retires after September 30, 2001, but before October 1, 2007, at the rate of 2-1/4 percent of the members average total salary for each of the first 20 years of service, plus 4-1/2 percent of the members average total salary for each of the next seven years of service, plus three percent of the members average total salary for each of the next three years of service, plus one-half percent of the members average total salary for each of the next four years of service, with fractional years of service prorated based on full months served as a contributing member. In making the computation for a year, the year is considered to begin on the first day a contribution is made. A retirement annuity under this subsection may not exceed, as of the date of retirement, 87-1/2 percent of the members average total salary.

(f-1)

The board shall compute the retirement annuity of a member who retires after September 30, 2007, at the rate of 2-1/4 percent of the members average total salary for each of the first 20 years of service, plus five percent of the members average total salary for each of the next seven years of service, plus two percent of the members average total salary for each of the next three years of service, plus one-half percent of the members average total salary for each of the next three years of service, with fractional years of service prorated based on full months served as a contributing member. In making the computation for a year, the year is considered to begin on the first day a contribution is made. A retirement annuity under this subsection may not exceed, as of the date of retirement, 87-1/2 percent of the members average total salary.

(g)

A member may not receive an award from the fund for service retirement until the member has at least 20 years of service in the fire or police department and has also contributed the required amount of money for at least 20 years. In determining the number of years of service in a department, the member shall be given full credit for the period the member was an active member plus the time the member was actively engaged in service with any uniformed service in accordance with Section 4.03 of this Act and for absences taken under the Family and Medical Leave Act of 1993 (29 U.S.C. Section 2601 et seq.), in accordance with Section 4.02 of this Act. Disciplinary suspensions of 15 days or less may not be subtracted from a members service credit under this Act if the member has paid into the fund, within 30 days after the later of the termination date of each suspension or the exhaustion of any appeal with respect to the suspension, a sum of money equal to the amount of money that would have been deducted from that persons salary during that period of suspension if it had not been for that suspension. A municipality to which this Act applies shall double-match a payment made under this subsection. Members of the fund at the time of their retirement shall also receive service credit for all unused sick leave accumulated by them under Chapter 143, Local Government Code, but only to the extent the unused sick leave exceeds 90 days. Service credit for unused sick leave shall be prorated based on each full month of sick leave. A members service credit under this section includes any service credit purchased in accordance with Subsections (k)-(m) of this section.

(h)

All monthly pensions being paid by the fund to retirees who retired before October 1, 1989, are increased, effective with the first monthly payment due on or after October 1, 1999. The amount of the increase depends on the fiscal year ending September 30 in which the retiree retired and is a percentage of the pension payment that would have been payable on October 1, 1999, except for this increase. The amount of the percentage increase is:

(i)

Beginning with the first monthly benefit payable by the fund after October 1, 2007:

(1)

the monthly benefit payable by the fund to a retiree or a beneficiary of a deceased retiree or active member as a result of a service retirement, disability retirement, or death of an active member that occurred before October 1, 1989, increases by $200; and

(2)

a monthly benefit that is divided and payable to more than one beneficiary in accordance with Section 6.02 of this Act increases by a total amount of $200.

(j)

Beginning with the first monthly benefit payable by the fund after October 1, 2007:

(1)

a monthly benefit payable by the fund to a retiree or a beneficiary of a deceased retiree or active member that is less than $1,850 per month, after taking into account the increase provided for in Subsection (i) of this section, increases to $1,850 per month; and

(2)

a monthly benefit that is divided and payable to more than one beneficiary in accordance with Section 6.02 of this Act increases to a total amount of $1,850.

(k)

A member employed for a probationary period by a municipality to which this Act applies may elect to purchase one month of service credit for each full month in the members probationary period, up to a maximum of 10 months. For each month of service credit the member elects to purchase, the member shall pay to the fund, on or before September 30, 2010, an amount equal to the sum of:

(1)

the member buyback contribution amount for the member; and

(2)

interest on the amount determined under Subdivision (1) of this subsection at the rate of eight percent per annum, compounded annually, calculated for the period beginning on the first day after the class graduation date for the members class and ending on the earlier of December 31, 2009, or the date the fund receives the payment required under this subsection.

(l)

A member may not elect to purchase a partial month of service credit under Subsection (k) of this section. A member is not required to elect to purchase more than one month of service credit under Subsection (k) of this section. A member may make the payment required under Subsection (k) of this section only with qualified funds. A member must make an election under Subsection (k) of this section on or before December 31, 2009, in accordance with policies and procedures adopted by the board.

(m)

An election under Subsection (k) of this section is void unless the member makes the full required payment before the earlier of the date of the members retirement or the date of the members death. If a member makes only partial payment before the earlier of the date of the members retirement or the date of the members death, the fund shall refund all payments received, without interest, to the member, if the member is alive, or to the members estate, if the member is dead. The fund shall refund payment under this subsection not later than the 60th day after the date of the members retirement or the date of the members death, as applicable.
Sec. 5.015. BACKWARD DEFERRED RETIREMENT OPTION PLAN (BACK DROP). (a) At the time a member applies for retirement benefits under Section 5.01 of this Act, the member may elect a Backward Deferred Retirement Option Plan (Back DROP) with a lump-sum payment and a reduced annuity benefit as provided by this section.

(b)

The Back DROP election:

(1)

results in a lump-sum payment for a number of full months of service elected by the member that does not exceed the lesser of the number of months of service credit the member has in excess of 20 years or 60 months;

(2)

is available only to a member who takes a service retirement; and

(3)

must be made at the time of application for retirement.

(c)

To be eligible to make a Back DROP election under this section, a member of the fund must have at least 20 years and 1 month of service in the fire or police department.

(d)

The amount of a lump-sum payment to which a member making a Back DROP election is entitled shall be computed in the manner provided by this subsection and Subsection (d-1) of this section. The members retirement annuity shall be computed in the manner provided by Section 5.01 of this Act, except that the amount of service credit and average total salary used in making that computation shall be determined in accordance with this subsection. For purposes of this subsection, the members average total salary shall be computed based on the members Back DROP retirement date, which is the members actual retirement date less the amount of time the member elects under Subsection (b)(1) of this section. For purposes of this subsection, the members service credit shall be the members service credit determined in accordance with Section 5.01(g) of this Act less the amount of time for:

(1)

any service credit in excess of 34 years of service, other than service credit for sick leave unused on the date of actual retirement;

(2)

any service credit given for sick leave unused on the date of actual retirement; and

(3)

any service credit in excess of 20 years but not in excess of the amount permitted under Subsection (b)(1) of this section that the member elects for computing the amount of the lump-sum payment.

(d-1)

The members retirement annuity as computed under Subsection (d) of this section shall be divided by 12 to compute the members monthly pension to be used to compute the lump-sum payment. The members monthly pension multiplied by the number of full months elected by the member under Subsection (b)(1) of this section is the amount of the lump-sum payment to which the member is entitled.

(e)

For purposes of computing the monthly pension of a member making a Back DROP election, the members retirement annuity shall be computed in the manner provided by Section 5.01 of this Act, except that:

(1)

the amount of service credit used in making that computation shall be the members service credit determined in accordance with Section 5.01(g) of this Act less:

(A)

the amount of time the member elects under Subsection (b)(1) of this section; and

(B)

any service credit in excess of 34 years of service excluding any service credit for sick leave unused on the date of actual retirement; and

(2)

the members average total salary shall be computed as if the members retirement date were the members actual retirement date less the amount of time the member elects under Subsection (b)(1) of this section.

(e-1)

The annuity computed under Subsection (e) of this section may not exceed the applicable limitations provided by Section 5.01 of this Act. The members retirement annuity shall be divided by 12 to compute the members monthly pension.

(f)

A member may defer receiving the lump-sum payment under this section for a period of not longer than 12 months after the members retirement date. Interest may not be paid on the deferred amount at the time of distribution.

(g)

Repealed by Acts 1997, 75th Leg., ch. 35, Sec. 37, eff. Oct. 1, 1997.

(b)

Health and medical benefits shall be provided by the fund to persons who are eligible to receive them under Subsection (a) of this section, in accordance with the provisions of the retiree health plan in effect, except as otherwise provided by this Act.

(c)

The expiration of the terms, or the termination, of the collective bargaining agreements or the master contract document has no effect on the retiree health plan or the benefits provided under this Act.

(d)

The board as it considers appropriate may modify the retiree health plan if the modifications adopted at any regular or special meeting of the board do not, in the aggregate, increase the funds total actuarial unfunded liability, as determined by the actuary. The board has exclusive authority to modify the retiree health plan.

(e)

The board may discontinue benefits under this section for any person who does not make the contributions required by Section 4.02 of this Act.

(f)

On January 1, 2008, the maximum deductible for each individual in a calendar year as set out in the retiree health plan increases from $100 or $200, as applicable, to $500, and the maximum deductible for each family in a calendar year as set out in the retiree health plan increases from $200 or $400, as applicable, to $1,000.

(g)

The maximum out-of-pocket, including deductible, payment for each individual for each of the following calendar years as set out in the retiree health plan increases as follows:

(1)

on January 1, 2008, from $600 or $700, as applicable, to $1,500;

(2)

on January 1, 2009, from $1,500 to $1,600;

(3)

on January 1, 2010, from $1,600 to $1,700;

(4)

on January 1, 2011, from $1,700 to $1,800; and

(5)

on January 1, 2012, from $1,800 to $1,900.

(h)

Commencing January 1, 2013, on January 1 of each year the board shall increase the amount of the maximum deductible and out-of-pocket payments established under Subsections (f) and (g) of this section by a percentage equal to the then most recently published annual percentage increase in health care costs as set out in a published index selected by the actuary that reflects annual changes in health care costs. The annual percentage increase provided for by this subsection may not exceed eight percent.
Sec. 6.01. Repealed by Acts 2007, 80th Leg., R.S., Ch. 1415, Sec. 19, eff. October 1, 2007.

(b)

The fiscal year may not be changed more than once in a 24-month period.
Source
Last accessed
Oct. 18, 2019