34 TAC §301.5, §301.6
The Fire Fighters' Pension Commission (FFPC) proposes amendments
to §301.5 and §301.6, concerning Rules of the Texas Statewide Emergency
Services Retirement Fund.
Some of the changes made to the rules adopted arise from the rule review
process required by the Appropriations Act of 1997, House Bill 1, Article
IX, Section 167. Other rules arise from deletions in language that is merely
historical in nature or language that merely restates statutory requirements.
Other rules were adopted to implement or interpret 1999 legislation. Other
rules correct typographical errors and inconsistencies that existed in the
Commission's original rules. Some deletions and additions merely reflect the
renumbering of a rule section or transfer of language from one rule section
to another.
In §301.5, subsection (a)(4) and subsection (a)(5) are being deleted
because there is no statutory authority to deny payment of benefits to a member
on the basis of a failure of the department or the local governing body to
make the required payments to the fund.
In the subsection renumbered as (a)(4) the reference to "commission" is
changed to "commissioner" to more accurately identify the state entity responsible
for the activities of this subsection. Art. 6243e.3 does not refer to the
Office of the Fire Fighters Pension Commissioner as a "commission" or as being
governed by a "commission." Art. 6243e.3 created the office of the Commissioner
and the State Board of Trustees, but did not create a "commission." This rule
provides local boards a 60-day grace period from the due date of the annual
report to submit the reports before they are deemed to be late. Sixty days
after the due date of the annual report, the failure to receive the annual
report causes a hardship on the Office of the Commissioner. It is at this
point that administrative penalties and delays in the payment of benefits
may be invoked by the Commissioner.
The first sentence of subsection (b)(5) is deleted because its substance
has been reworded and moved to new subsection (b)(8). The remainder of subsection
(b)(5) is deleted because the statute does not authorize interruption of pensions
already being paid as a result of late annual reports. The statute only prohibits
the beginning of payments of benefits as a result of late annual reports.
New subsection (b)(5) provides administrative penalties for late annual
reports, because the annual reports contain the information the Commissioner
needs to have proof of the living members, payees, and retirees, and the amount
of service. This information is required to figure the pension, death, and
disability benefits and to be able to determine the correct amount to bill
the local department. These functions are central to the activities of the
Commissioner. Without this information, the pension system will not be able
to function in its statutory role of providing accurately-determined benefits
to members of the system. In addition, pensioners and other individuals otherwise
eligible to receive benefits cannot begin receiving their due benefits as
long as the annual report from those members' local boards are not submitted.
The Board has adopted a progressive approach to imposing administrative penalties
to act as a deterrent to continued and future violations. Every month that
an annual report is late, additional burden is placed on the Commissioner.
A history of previous violations or habitual violations result in an increased
penalty because of the compounding detrimental effect on members and on the
Commissioner, such as added state expense to attempt collection of the late
reports, as well as the loss to the eligible members that would be denied
their monthly benefits until the report is filed. To recognize a local board's
efforts to correct a violation and to submit the annual report, the local
boards are given 60 days after the annual report is due to submit the annual
report before being assessed any penalty.
New subsection (b) (7) is added because some departments have retirees
that refuse to submit necessary documentation to verify they are still eligible
to receive benefits. The law does not permit the Commissioner to pay benefits
to ineligible persons. Article 6243e.3, §23B authorizes the board to
interrupt pension payments for uncooperative pensioners. Interruption of a
retiree's pension would act as a deterrent to a retiree to ignore or refuse
to comply with requests for information to verify eligibility.
Subsection(b)(8) was reworded and moved from subsection(b)(5). Article
6243e.3, §23B prohibits the Commissioner from beginning benefits payments
when a local board is not current in submitting an annual report. The information
in the annual report is required to figure the amount of pension, death, and
disability benefits for which members are eligible, and is required to determine
the correct amount to bill the local department.
Section 301.6 is amended to clarify that the term limitations for members
of local boards of trustees do not apply to the representative appointed by
the governing body. Reference to the "pension fund law" is clarified by citing
the applicable statutes. The rule clarifies that the Commissioner issues an
informational booklet to assist local boards in following the rules and the
statutes. The rule clarifies that local boards will be responsible for errors
caused at the local level that result in non-payment of benefits. This rule
requires the local boards of trustees to conduct their meetings as open meetings
under the Texas Open Meetings Act. The local boards are required to conduct
meetings open to the Commissioner, the State Board, and to the public, because
the functions and decisions of the Office of the Commissioner and of the State
Board of Trustees, both state entities, are affected by deliberations and
decisions made at the local board level, and because the local deliberations
and actions affect state business relating to Article 6243e.3, in general.
Morris Sandefer, Commissioner, Fire Fighters' Pension Commission, has determined
that for the first five-year period the sections are in effect there will
be no fiscal implications for state or local government as a result of enforcing
or administering the sections.
Mr. Sandefer also has determined that for each year of the first five years
the sections are in effect the public benefit anticipated as a result of enforcing
the sections will be current and updated regulations. There will be no effect
on small businesses. There are no anticipated economic costs to persons who
are required to comply with the sections as proposed.
Comments on the proposal may be submitted to Morris Sandefer, Commissioner,
Fire Fighters' Pension Commission, P.O. Box 12577, Austin, Texas 78711-2577.
The amendments are proposed under Texas Civil Statutes, Article
6243e3, (Senate Bill 411) 65th Legislature (1977), revised in the 72nd Legislature
(1991), and revised in the 75th Legislature (1997), which provide the Fire
Fighters' Pension Commission with the authority to promulgate rules necessary
for the administration of the pension fund.
No other statutes, articles, or codes are affected by the proposed amendments.
§301.5.Billings and Annual Reports.
(a)
Billings.
(1)
The law states that each governing body shall contribute
the funds for the department's participation in the system.
(2)
Although the department and governing body may have
an agreement between themselves that the department will pay for participation
in the system, if the department is unable to pay, the governing body is held
liable for the payment.
(3)
The governing body may choose yearly or twice yearly
billings. They may also choose to have billings based on their fiscal year
instead of a calendar year.
[
(4)
The system cannot accept new payees
or pay lump-sum death benefits to departments whose governing body is not
current on their bills to the pension system.
]
[
(5)
The commissioner may elect to withhold
pension payments to payees of departments which do not pay their bills in
a timely manner. This measure will be used as a last resort for departments
which have ignored repeated requests for payment. Payees will be notified
by letter on the first day of the month in which payment of pensions is to
be withheld.
]
(4)
[
(6)
] Billings cannot be altered
by the department or governing body without prior approval by the
commissioner
[
commission
].
Payments are deemed late if they are
not received by the FFPC within 60 days from the mailing date as indicated
on the bill. Late payments accrue interest at the most recent assumed actuarial
rate of return on investments of the fund (currently 8%).
(b)
Annual Reports.
(1)
Annual report forms are mailed by the commission in December
of each year.
(2)
Annual reports are based on a calendar year in all
cases.
(3)
The reports are due in the Fire Fighters' Pension
Commission office by January 31.
(4)
The guidelines accompanying the report forms should
be followed by the local pension board.
(5)
Administrative Penalties
for late departmental annual report. An annual report is deemed late if the
complete report is not in the office of the FFPC within 60 days after January
31.
(A)
The penalty is $500 for the first violation
with a $100 increase for every 30 days the report is late.
(B)
Departments which habitually submit late reports
will have an initial penalty of $1000.00 the second year with a $100 monthly
increase. The third year in a row will start with a 1,500 penalty.
[
(5)
The commission cannot accept
new payees or pay lump-sum benefits to departments whose annual reports are
not up to date. Also, pensioners of departments which do not have their annual
reports submitted by March 31 (a two-month grace period) will, effective April
1, not receive their warrants until the report is received and accepted by
this agency. All pensioners of the non-reporting departments will be notified
by letter on April 1 explaining why the checks are being held.
]
(6)
The Commissioner may, with the approval
of the state board, waive penalties when a local board demonstrates that the
delay in submission was beyond its control.
(7)
The Commissioner with the approval
of the state board may withhold an individual's pension payments when a local
board cannot verify a recipient's eligibility to receive payments due to the
recipient's failure to cooperate or provide information to the local board.
The chairman of the local board must make the request to the Commissioner
in writing out lining the attempts the board has made to obtain this information.
The commissioner will notify the recipient in writing of his decision.
(8)
The Commissioner can not accept new
payees in departments whose annual reports are not up to date.
§301.6.Local Boards of Trustees.
(a)
Composition and terms of the local board are contained
in Section 22, Local Board of Trustees, of the pension fund law. The governing
entity "representative" is not a "trustee" as it relates to term limitations;
and the governing body has the authority to select its representative to serve
on the board in a manner that the local governing body chooses.
(b)
Duties of the local board are contained in Section 23,
Additional Duties of the Local Board of Trustees, and throughout the pension
fund law. These duties are
also
summarized in
this information
book
[
a handout available upon request from the agency
].
The local board members are expected to be aware of the duties imposed on
them by the law and these rules and regulations, and are legally responsible
for errors and omissions resulting in non-payment of benefits.
(c)
By signing and notarizing Form LPB-411 of their department's
annual report, the board members are certifying that, to the best of their
knowledge, the report is correct.
This agency hereby certifies that the proposal has been reviewed
by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of
the Secretary of State, on April 10, 2000.
TRD-200002562
Morris E. Sandefer
Commissioner
Fire Fighters' Pension Commission
Earliest possible date of adoption: May 21, 2000
For further information, please call: (512) 936-3372