34 TAC §§301.1 - 301.3, 301.5, 301.6, 301.9, 301.12
The Board of Trustees for the Statewide Emergency Services
Retirement Fund adopts amendments to §§301.1-301.3, 301.5, 301.6,
301.9, 301.12, relating to duties and obligations to local board's of trustees,
members, and beneficiaries of local emergency services agencies that participate
in the Statewide Emergency Services Retirement Fund. Sections 301.1, 301.2,
301.5, 301.6, and 301.12 are adopted without changes to the proposed text
as published in the October 13, 2000, issue of the
Texas Register
(25 TexReg 10302). Sections 301.3 and 301.9 are adopted
with changes.
The amended sections are adopted, in part, to clarify existing rules, delete
language that merely restates statutory law, and to provide penalties for
failure of local boards to file annual reports in a timely fashion. No public
comments were received to the proposed rule notice. Changes in the adopted
amendments reflect non-substantive variations from the proposed amendments.
The Board's representative from the Office of the Attorney General has advised
that the changes affect no new persons, entities, or subjects other than those
given notice and that compliance with the adopted sections will be clearer
and less burdensome than under the proposed sections. Accordingly, republication
of the adopted sections as proposed amendments is not required.
Amended §301.1 adds and amends the following definitions: (2) "Commissioner",
(3) "Department" (4) "Dependent", and (5) "Disability", (6)(D) will lay out
the number of drill hours mandated, (7) clarifies that House Bill 358 is also
known as TLFFRA, (8) states that the pension system does not recognize leaves
of absence, (9) lays out the protocol for dealing with members who are called
to active duty in the military, (10) defines "monetary enumeration", (12)
defines "on duty death" and "on duty disability", (13) clarifies that Senate
Bill 411 is also known as TSESRA, (14) lays out different methods for handling
service time under prior pension systems, (15) defines "temporary disability",
(16) and (17) states that TLFFRA is also known as House Bill 258 and that
TSESRA is also known as Senate Bill 411. The definitions as proposed provide
a more accurate definition of terms and provide cross-references that will
clarify for the reader that several terms are interchangeable, such as "Senate
Bill 411" and "TSESRA."
Amendment to §301.2 defines the scope and the composition of "Emergency
Services Districts". Subsection (g)(6)-(7) clarifies dual benefits and the
required designation between retirement benefits and disability benefits.
Subsection (g)(8) allows members unable to obtain a certificate of physical
fitness to remain within the system. The old rule made unnecessary references
to "the law" and required clarification to distinguish between a legislative
bill and the system created by that bill, used unwieldy gender-specific terms,
contained a misspelling, and did not expressly state the logical and implied
outcome of the failure of local departments to submit dues to the Commissioner.
The amendment deletes unnecessary words and provides necessary clarification
by using gender-neutral terms, correcting misspellings, expressly stating
outcomes that otherwise are merely implied, and by repeating certain words
throughout the rule. In addition, the subsection (g)(8) has been moved from <*301.1>,
regarding Definitions, because the rule is really not a definition, but rather
is a rule that provides compliance criteria that belong in a separate rule
containing substantive requirements.
Amended §301.3 This rule rephrases the language of the rule that makes
the lump-sum on duty death benefit $60,000. The change is to provide clarification
and to delete unnecessary reference to the statute. The rule is adopted with
changes to subsection (e)(10) of the proposed rule to correct a misspelling
of the words "advice" and " legal counsel," and a change to subsection (e)(13)
to add a heading.
Amended §301.5(a) sets out how the governing body may be billed. Subsection
(b) sets out penalties for filing reports late. Some local boards of trustees
do not submit reports in a timely fashion. The local reports are required
by statute. The Commissioner relies on receiving the local reports timely
to prepare its own reports that are required by statute and by the Pension
Review Board to be submitted by a certain date every year. The penalties will
serve as a reasonable deterrent to the local boards from submitting late reports
and from refusing to submit the reports to the Commissioner at all. The penalty
increases for each subsequent violation. The penalty also increases with each
passing month that a late report is not submitted.
Amended §301.6 The rule rephrases the current rules regarding the
composition and terms of the local boards of trustees and adds a requirement
that the local boards of trustees conduct their meetings as open meetings
under the Texas Open Meetings Act. The rewording of subsections (a) to (c)
of the rule specifies the law to which the rule refers, making it easier for
the reader to determine the statutes that apply. Opinions of the Attorney
General have determined that local boards of trustees are subject to the Open
Meetings Act as local governing bodies. The State Board of Trustees has placed
the open meetings requirement in a rule to provide guidance to the local boards
of trustees, many of which may not be aware of the Attorney General opinions
and the case law that have determined they are subject to the Open Meetings
Act.
Amended §301.9 states the benefits spouses may receive. Subsection
(b) deals with the payment of benefits after the merger of pension systems.
Subsection (c) deals with administrative costs. Subsection (d) explains how
a local board may continue paying benefits to the spouse of a deceased fire
fighter. Subsection (e) explains the duties of a local board. Subsection (g)
clarifies the effect of pension benefits on social security benefits. It was
not clear who "we," and "the agency's" referred to. The amendment to the rule
clarifies those terms. The Board wants to make sure local departments understand
that they are mandated, and not merely recommended, to maintain on file retirement
and disability forms for their members. The forms are necessary to determine
eligibility and the benefits due to a member or the member's beneficiaries.
The rule is adopted with changes to subsection (f) to delete a redundant sentence.
Amended §301.12(a)-(d) defines "disability" and clarifies how disability
benefits are paid. The amendments to this rule include the dollar amounts
written in words and not just in numbers for clarification and to avoid confusion.
Language is added to clarify that the months referred to in subsection (d)
are those months during which a person is disabled.
No comments were received regarding adoption of the amendments.
The amended sections are adopted under the Texas Revised Civil
Statutes, Article 6243e.3, §19i and §21b, which provide the TSESRA
Fund Board of Trustees with the authority to adopt rules necessary for the
administration of the pension fund.
§301.3.Determination of Costs.
(a)
Prior Service.
(1)
Prior service includes service performed by every active
member of the department who is at least 18 years old. The department does
not have to include prior service with other departments or time that the
TLFFRA law would deem forfeited. This is a local decision.
(2)
A public agency may have up to three years to pay prior
service costs without incurring interest charges.
(3)
In preparing a cost study, the assumed retirement age and
interest rate paid for 10 or 20 year payouts will be set by the board based
on the recommendations of the actuary.
(4)
Prior service costs may be paid off early without penalty.
(5)
Departments do not have to purchase prior service for those
members who reenter the department, but were not active at the time the department
entered the pension system. If the department decides to purchase prior service
on members who were not active at the time the department entered the system,
the department must pay the additional service in a lump sum payment. Interest
is charged back to the date of the department's entrance into the system if
it has been more than three years since the department's entrance in the system.
The rate is set by the state board based on recommendations of the actuary.
(6)
In preparing cost studies, anyone entering the department
before age 18 will have their entry date adjusted to their 18th birthday on
the study.
(7)
Governing entities are not charged for any non-qualifying
years of service by their participants.
(8)
Cost studies for departments interested in entering Senate
Bill 411 must be revised every 6 months.
(b)
Increase/Decrease of Dues Paid.
(1)
Since a governing entity has the right to increase the
dues it pays on its members, it also has the right to lower dues paid as long
as it is not below the minimum set by law. In either case, retirements are
figured on the average paid. Changes must be for at least $1.00, (one dollar)
and they must be effective the first day of any month.
(2)
Departments which need to purchase dues for a member and
those dues (contributions) cover a period of three or more years will have
interest based on actuarial assumptions added to the amount owed. The payment
must be made in a lump-sum amount. If the amount owed is offset by a credit
to the department from the termination of active members, the interest may
be waived by the commissioner.
(c)
Transfer of Funds. Upon a public agency's merging into
this retirement fund, it must transfer its local pension fund to the Senate
Bill 411 system. These funds will be applied to the public agency's prior
service costs and/or the cost of TLFFRA (House Bill 258) retirees and surviving
spouses, if any. After the payment of these costs, any balance remaining will
be applied, until spent, to the monthly contributions for the members of the
former local pension fund of that public agency. The amount applied to the
public agency's account consists of cash, investments, and any interest earned
as of the date of merger. Monies earned on the transfer after the date of
merger, are credited to the Senate Bill 411 fund as a whole.
(d)
Vesting.
(1)
A member who is not vested in this pension fund, but who
has a total of 20 or more creditable years of service, may retire under the
TLFFRA fund amount used in the cost study for that department if accrued time
was purchased. If the member was on the cost study, the member will be carried
as a Senate Bill 411 fund retiree with only TLFFRA service (accrued time);
and the public agency will not be charged as it is for TLFFRA fund retirees.
(2)
Members terminating on or after January 1, 1998, must have
served a total of 59 months 28 days (60 months-five years) to vest. After
vesting, each month served from 60 through 120 (five years-ten years) increases
a member's pension .4167% a month and for months 120 to 180 (10 years to 15
years) it increases a member's pension .8333% a month. Because a monthly increase
of .4167% results in an increase of the pension by more than 5% over 12 months,
and a monthly increase of .8333% results in an increase of the pension by
less than 10% vesting over 12 months, the computer will adjust and correct
the percentage at the end of every 12 months of qualified service to reflect
the 5% and 10% increase respectively. Credit is given for portions of months
of qualified service.
(3)
Retirement benefits vest as outlined in §6, Vesting
of Benefits, of TSESRA. A member must have 15 years of creditable service
(180 months) in Senate Bill 411 before the Senate Bill 411 portion of the
monthly retirement is affected by the 7.0% compounding factor.
(4)
A member who was considered to be Active-Retired prior
to September 1, 1989, may continue in that status. If an active retiree terminates
as an active member, the retiree cannot return to the Active-Retired status
at a later date.
(5)
The Fire Fighters' Pension Commission cannot pay benefits
at a greater rate than specified in TSESRA §3, Retirement Benefits, paragraph
(b).
(6)
In departments where the contribution rate has changed,
if a member terminates service before the end of a month the average is figured
on the fraction of the month served.
(7)
Retirement forms can be backdated to the member's 55 birthday
or termination date, whichever occurs later. The first check will be prorated
back to the effective date of retirement, disability, etc.
(8)
All payees whose pensions are not effective the first day
of the month will have their first checks prorated.
(9)
In the event of a pensioner's death (and there are no beneficiaries),
if this office is not notified and retirement checks continue to be mailed,
and the over-payment is not returned to the Commissioner within 30 days after
the Commissioner requests repayment, then the commissioner shall charge the
over-payment to the governing entity.
(10)
The commission does not and shall not comply with requests
to withhold IRS taxes from pension checks. A letter and postcard are mailed
with the first pension check to every payee giving them this information.
The payee must sign and return the postcard to the commission office. This
card states that the payee requests that no tax be withheld. Failure to return
the postcard shall not obligate the Commissioner to withhold IRS taxes.
(11)
Pension checks for the month are due at the end of the
month. Checks are mailed from the commission office between the 24th and 28th
of every month except December when they are mailed to arrive at the payee's
residence or bank before Christmas.
(12)
All first checks to payees are accompanied by notification
that cashing or depositing the first check indicates that the payee is retired
and agrees with the pension amount.
(e)
Death.
(1)
Beneficiaries. It is the responsibility of the member and
the local board to update the member's record with the commission. This record
should name any beneficiaries for lump-sum death benefits. Lump sum death
benefits are paid to the beneficiary(ies) listed on the most recent, original,
notarized personnel form (502) or beneficiary change form (503).
(2)
Monthly Pension if Decedent Was on Active Status (On-Duty
Death). The member is automatically vested with at least 15 years in the fund
for on-duty deaths.
(3)
Monthly Pension if Decedent Was on Active Status (Off-Duty
Death). Dependents are not eligible for a monthly pension for off-duty deaths.
Spouses will receive a monthly pension if the member was vested in the system
and at least 55 years of age. The monthly pension will be based on two-thirds
of the retirement due the member based on six times the average dues paid
for qualified service.
(4)
Benefits if Decedent Was on Inactive Status. Spouses of
terminated-vested members, who die before age 55, are eligible to receive,
on the effective date of the member's 55th birthday, a monthly pension that
is two-thirds of the monthly pension which would have been due the member.
(5)
Monthly Pension if Decedent Was on Disability Status. TSESRA §5(d),
Death Benefits, states that if a member dies after retirement, the surviving
spouse shall receive two-thirds of the monthly pension the decedent was receiving
at the time of death. This includes spouses of deceased members who were on
disability at the time of their death.
(6)
Lump sum death benefits are based on months served in the
SB 411 system (including buyback and future service months) and the dues amount
paid. They are not based on the dollar amount paid for prior service. They
are payable as noted in paragraph (1) of this subsection.
(7)
Lump-Sum Payment for Off-Duty Death After Service of less
than 15 Years. The off-duty lump-sum death payment will consist of all contributions
to the fund made on the decedent's behalf. If the deceased member has fewer
than 15 creditable years in the Senate Bill 411 fund, enough months are added
at the final rate to make 180 months of service. The minimum off-duty lump
sum death benefit is $2160.00.
(8)
Lump-Sum Payment for Off-Duty Death After 15 Years of service
or more. For members having served more than 15 creditable years in the retirement
fund, the beneficiaries will receive an off-duty lump-sum payment consisting
of the total contribution amount paid during the member's service in this
program (buy back rate and future service). Portions of creditable months
are prorated and counted.
(9)
Lump-Sum Death Benefits for On-Duty Deaths. TSESRA Section
5(b) states that the beneficiary is guaranteed a lump-sum benefit of at least
$5,000 for an on-duty death. If the sum contributed by the public agency to
the fund on the decedent's behalf is more than $5,000, then the beneficiary
receives this greater amount. For an on duty death occurring on or after September
1, 1999, the lump sum death benefit is $60,000.00.
(10)
Determination of Beneficiaries.
(A)
If a member on active status in the pension system dies
before the 502 (Personnel Form) is filled out and notarized, the member's
public agency's governing body should submit to the Fire Fighters' Pension
Commission office, a notarized letter signed by its chief or department head,
and local board and a death certificate. The letter should state the decedent's
entrance date and that the member was on active status at the time of death.
The letter should also list the member's nearest relatives (spouse, children,
parents, siblings, etc.) and if the member had a will. After receiving the
above information, the Commissioner shall determine the beneficiaries after
receiving the advice of legal counsel.
(B)
After determination, the local pension board shall send
the Commission the Senate Bill 411 Survivor's Form. The letter shall be considered
as proof of the member's participation in the pension system. The commission
shall bill the public agency for any contributions owed on the member's time
at the next billing.
(C)
If the decedent has a Personnel Form 502 on file in the
pension office, the beneficiaries are paid as listed on that form or the most
recent Beneficiary Change Form 503 on file.
(11)
Listing of Beneficiaries on Forms.
(A)
Under Senate Bill 411, a member can list anyone (including
his/her estate) as a beneficiary for his/her lump-sum death benefit.
(B)
A person may list as many people as he/she wants as beneficiaries
of this lump-sum benefit, but the benefit will be divided equally between
them unless the member designates a proportional division.
(C)
The spouse and/or dependents will receive any monthly pension
due them even if they are not listed as beneficiaries of the lump-sum death
benefit.
(12)
Guardianship and Determination of Dependents.
(A)
See §301.1 of this title (relating to Definitions)
for determination of dependency.
(B)
The following forms must be submitted:
(i)
Obligations of Guardians.
(ii)
Certified copies of Letter of Guardianship of the estates
of all children. If no guardian is to be named, an Application for Payments
Due Minor Child (form 411-G).
(iii)
A copy of the Birth Certificate; or if an adopted child,
a copy of the Adoption Decree.
(C)
Warrants to dependents who are minor children are written:
To the order of __________ (guardian's name) Trustee, for the use and benefit
of __________. (child's name)
(D)
If the dependent was placed in the system prior to September
1, 1991, the guardian of all dependents, age 19 and older, must provide us
with certified documentation of dependency yearly. This may be in the form
of a copy of the 1040 or a certified statement from the IRS. The certified
statement can be obtained from the IRS by the guardian and is more acceptable
than a copy of the income tax return. The agency will notify the guardian
when a minor dependent becomes 19 as to the proper procedure to continue pension
payments. The guardian must notify us as soon as the dependent is no longer
eligible to receive benefits.
(E)
If the dependent was placed in the system after September
1, 1991, benefits cease at age 18 unless the agency receives a certification
of school attendance, in which case benefits stop at age 19.
(F)
Certification of dependency forms are mailed to all guardians
yearly in April.
(13)
Pensioner with no beneficiaries. A pensioner with no beneficiaries,
who dies prior to the 14th day of any month, is not eligible to receive a
retirement check for that month.
§301.9.General.
(a)
TLFFRA (formerly House Bill 258) states that spouses of
retirees will receive two-thirds of the retiree's monthly benefit. Senate
Bill 411 fund pays spouses $200.04/year (two hundred dollars and four cents)
$16.67 a month (sixteen dollars and sixty-seven cents).
(b)
Senate Bill 411 states that any benefits being paid by
the current pension system (TLFFRA) at the date of merger will be paid by
the Senate Bill 411 pension system following the merger. A governing entity
may decide to pay its TLFFRA retirees and spouses an amount over the minimum
set by TLFFRA. The Commissioner will bill the governing body this exact cost.
(c)
Governing entities are not billed for administrative costs
associated with the Fire Fighters Pension Commissioner payment of TLFFRA pensions.
(d)
Individual departments, with the approval of governing
entities, may agree to continue paying pensions to spouses of deceased TLFFRA
system retirees if the spouse remarries, and pay pensions to spouses regardless
of when the spouse married the TLFFRA system retiree. This is a local decision.
(e)
Death Certificates are required for TLFFRA system payees
as well as Senate Bill 411 system payees before benefits can be paid to spouses.
(f)
The department and/or governing entity shall keep copies
of all forms (502, 503, retirement, disability, survivors) on file. The department
or government body shall file the originals of the forms with The Commissioner.
(g)
Social Security Benefits. Regarding volunteer fire fighters
who serve without monetary remuneration. Because the pension payment is not
based on remuneration for services rendered, the pension payment is NOT subject
to the Windfall Elimination Provision and as a result the pension will have
NO effect on the person's social security benefit.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on December 22, 2000.
TRD-200009014
Morris E. Sandefer
Commissioner
Fire Fighter's Pension Commission
Effective date: January 11, 2001
Proposal publication date: October 13, 2000
For further information, please call: (512) 936-3372