Part 11. OFFICE OF THE FIRE FIGHTERS' PENSION COMMISSIONER
Chapter 304. MEMBERSHIP IN THE TEXAS EMERGENCY SERVICES RETIREMENT SYSTEM
(Editor's note: The text of the following section proposed for repeal will not be published. The section may be examined in the Office of the Fire Fighters' Pension Commissioner or in the Texas Register office, Room 245, James Earl Rudder Building, 1019 Brazos Street, Austin.)
The State Board of Trustees of the Texas Emergency Services Retirement System proposes to repeal 34 Texas Administrative Code §304.2, relating to the probationary period for membership in the Texas Emergency Services Retirement System (System).
The rule on probationary period before membership is repealed because identical text will be in statute, Title 8, Government Code, Subtitle H. Texas Emergency Services Retirement System, §862.0021, created under House Bill 2400 which goes into effect September 1, 2007. As stated in statute, a participating department may impose a probationary period for a volunteer or auxiliary employee. If a department chooses to adopt a probationary period, the period must end not later than six months after the date the person begins service with the participating department; and the department is not required to pay contributions during the probationary period. The person's membership would begin the date that the department begins payment of contributions for that person, without regard to whether the person's service is subject to a probationary period for other purposes.
There is no actuarial impact on the System relating to repeal of this rule as determined by the firm of Rudd and Wisdom, Inc.
Kevin Deiters, Program Director, has determined that, for the first five years that the repeal is in effect, there would be limited to no cost to state or local governments. There is no anticipated economic impact to small businesses or individuals by the repeal of the rule.
Mr. Deiters has also determined that, for each year of the first five-year period during the repeal of the rule, the public benefit anticipated will be to provide potential members with a clear process through the enacted statute relating to the probationary period before membership. This will enable departments to recruit volunteer fire fighters and emergency services personnel to protect local communities.
Comments on the proposal may be submitted in writing to Lisa Ivie Miller, Commissioner, Office of the Fire Fighters' Pension Commissioner, P.O. Box 12577, Austin, Texas 78711-2577 no later than August 1, 2007. Comments may also be submitted electronically to rules@ffpc.state.tx.us or faxed to (512) 936-3480.
The repeal of this rule is proposed under the statutory authority of Government Code, §865.006, and it concerns §862.0021.
No other statutes, articles, or codes are affected by the proposed repeal.
§304.2.Probationary Period for Membership.
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 June 18, 2007.
TRD-200702513
Kevin Deiters
Policy Director
Office of the Firefighters' Pension Commissioner
Earliest possible date of adoption: July 29, 2007
For further information, please call: (512) 463-9935
The State Board of Trustees of the Texas Emergency Services Retirement System proposes to amend 34 Texas Administrative Code §306.1, regarding credit for certain prior service of members of the Texas Emergency Services Retirement System (System).
The proposed rule amendment will authorize participating departments to purchase pension credit for prior service of its members performed before the department joined the System. The System provides retirement, disability, and death benefits for volunteer fire fighters and EMS personnel in departments that participate in the System.
The proposed amended rule will simplify the administration of the pension system by limiting the options for and the time period in which a department may purchase prior service for participating members under this section. The proposal establishes 10 years as the maximum amount of qualified prior service credit in the System that a department may purchase for a member under this section. The proposal will allow a new department to purchase prior service credit within two years of joining the System.
If the proposed rule is adopted, it will eliminate the option for a participating department to purchase an accrued time benefit for prior service performed by a member prior to entry into the System. The proposed rule will eliminate the current prior service options known as "Accrued Time" or "Accrued Time with Buyback" to reduce the complexity of administration and to eliminate options that could provide inadequate benefits.
The Board was also concerned that the purchase of accrued time benefits by departments would result in fewer members vesting in the System and limit the ability of members to qualify for System pension benefits. Although the "accrued time" option allowed departments to provide equivalent benefits for prior service performed under the Texas Local Fire Fighters Retirement Act, the service purchased did not count toward System vesting or retirement benefits. All prior service purchased under the proposed rule will count as qualified service in the System and will allow participating members to vest sooner and receive higher benefits from the System.
Kevin Deiters, Program Director, has determined that the proposed rule amendment will reduce costs to those local municipal governments and emergency services districts purchasing prior service by reducing the minimum rate and by limiting the maximum period of prior service that a department may purchase for a member. The proposed rule will allow local municipal governments and emergency services districts to purchase prior service at any contribution rate or rates that equal or exceed the minimum contribution rate in effect for the period covered. The proposed amendment will reduce costs to the State by simplifying the process and reducing the amount of staff time needed to prepare and present financial estimates to the interested parties. The simplified approach will also reduce the cost to the agency for computer programming and actuarial testing.
In 2006, the State Board adopted rules increasing the minimum contribution rate by $4 per year until the minimum rate reaches $36 per member per month in 2011. Departments purchasing prior service credit for service performed before September 1, 2005 could purchase that service at the $12 minimum contribution rate that was in effect before September 1, 2005. The proposed amendment will also limit the amount of qualified service that a department may purchase to 10 years instead of 15 years. This reduction in the maximum number of years of service that a participating department may purchase is needed to make the purchase of prior service more affordable.
Kevin Deiters, Program Director, has determined that, for the first five years that the amended rule is in effect, departments purchasing prior service credit will have more flexibility in setting the rate and ultimate cost to purchase qualified prior service credit in the System for their members.
Mr. Deiters has also determined that, for the first five years that the proposed amended rule is in effect, the public benefit anticipated as a result of the adoption of the new rule will be to provide participating departments with improved benefits to recruit volunteer fire fighters and emergency services personnel to protect local communities. Small businesses and individuals will not be affected by the proposed amendment.
This agency hereby certifies that the proposed rule amendments have been reviewed by the System's retained actuaries. It is their opinion that since the proposed rule amendments would not change a department's responsibility for the financing of the purchase of prior service credit, the proposed rule amendments are cost neutral and will have no actuarial effect on the System.
Comments on the proposed amendment may be submitted in writing to Lisa Ivie Miller, Commissioner, Office of the Fire Fighters' Pension Commissioner, P.O. Box 12577, Austin Texas 78711-2577 no later than July 31, 2007. Comments may also be submitted electronically to rules@ffpc.state.tx.us or faxed to (512) 936-3480.
The amended rule is proposed under the statutory authority of Title 8, Government Code, Subtitle H, Texas Emergency Services Retirement System, Chapter 863, Creditable Service.
No other statutes, articles, or codes are affected by the proposed amendment.
§306.1.Prior Service Credit for Members of participating Departments.
(a)
A department that elects to participate in the pension
system may, before the second anniversary of the date the department begins
participation, make a one-time election to purchase service credit for qualified
service performed for the department before the effective date of departmental
participation by the persons who became members of the pension system on the
effective date of the departmental participation.
[
A department
that elects to participate in the pension system may, at the first meeting
of the local board, elect to purchase service credit for service performed
by the persons who became members on the effective date of departmental participation.
]
(b) The maximum amount of prior service credit a member may receive under this section is 10 years. A department may choose to purchase prior service credit for a maximum number of less than 10 years. The pension system shall grant prior service credit under this section if the department agrees in writing to finance the prior service credit by a lump-sum payment or within a period not to exceed 10 years from the effective date of the election to purchase the credit .
(c) The cost to finance the purchase of prior service credit is based on the actuarially assumed rate of investment return on fund assets at the time payment for the credit begins. A department may purchase prior service credit at any contribution rate at or above the minimum provided by statute or board rule for the period purchased .
(d)
To purchase prior service credit, a department must
provide the commissioner with a detailed, verified record of prior service
showing the amount of service performed by each member of the department.
The record for each member must include the member's date of birth and entry
date in the department.
[
The commissioner shall furnish to each
participating department that agrees to purchase prior service credit a record
of member prior service to be completed and returned to the commissioner showing
the amount of prior service performed by each member of the department. The
record must be signed by the chair and secretary of the local board and the
administrative head of the department and be accompanied by a copy of the
minutes of the local board showing approval of the amounts of prior service
credit given the members.
]
(e) The maximum amount of prior service credit provided by this rule applies only to prior service credit purchased, or under a written agreement to be financed that is instituted, on or after September 1, 2007. Prior service credit purchased, or under a written agreement to be financed, under a procedure administered by the pension system before September 1, 2007, is subject to the maximum amount of credit and the terms and value in effect under system procedures at the time of purchase or written agreement to purchase.
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 June 18, 2007.
TRD-200702514
Kevin Deiters
Policy Director
Office of the Fire Fighters' Pension Commissioner
Earliest possible date of adoption: July 29, 2007
For further information, please call: (512) 463-9935
The State Board of Trustees of the Texas Emergency Services Retirement System proposes to amend 34 Texas Administrative Code §308.3, relating to disability retirement benefits in the Texas Emergency Services Retirement System (System).
The proposed amendment to the rule on disability retirement annuities will provide for the amounts paid to a recipient of a disability annuity and the portions awarded based on the departmental contribution rates. System members under the statutory authority of amendments to Government Code, §864.004 and §864.005 which were enacted by House Bill 2400, 80th Regular Legislative Session and which go into effect September 1, 2007 provides for a clear process for the implementation of both temporary and permanent disability for any person injured during the service of performing emergency services duties. This statutory change sets the parameters for eligibility for disability retirement benefits and the process for certification and continuance of disability benefits. The rule amendment deletes reference to the previous process of applying to the Social Security Administration for certification as permanently disabled by the second anniversary of the disability, in conformity with the amended statute.
As determined by the firm of Rudd and Wisdom, Inc. the changes in §864.004 and §864.005 of the Government Code would have the potential to slightly reduce the actuarial liability for on-duty disability benefits. However, in the August 31, 2006 actuarial valuation of the System, only 0.7% (12 of 1,766) of the System's retirees and beneficiaries were on-duty disability retirees, and the present value of their future benefits was only 2.1% of the present value of future benefits for all the inactive members. For the active members, only 1% of the present value of future benefits was for future on-duty disability benefits. So a small reduction in the present value of future on-duty disability benefits would be a very small reduction in the total present value of future benefits of the System. The firm does not recommend a change in the actuarial assumption for on-duty disability incidence rates, but will monitor future experience and make a change in these rates if warranted by the experience. In the firm's opinion, the changes that §4 of House Bill 2400 makes to §864.004 and §864.005 will have a very small positive effect on the actuarial condition of the System in the future. However the changes are considered immaterial.
Kevin Deiters, Program Director, has determined that for the first five years that the amended rule is in effect, there would be limited to no cost to state or local governments. There is no anticipated economic impact to small businesses or individuals by the amendment of the rule.
Mr. Deiters has also determined that for each year of the first five year period the amendments are in effect the anticipated public benefit will be to protect the current members of the retirement system while improving the ability of the pension system to pay disability benefits. The members will not be required to apply through the Social Security Administration and due to the statutory changes, will be able to receive disability benefits in a timely manner.
Comments on the proposal may be submitted in writing to Lisa Ivie Miller, Commissioner, Office of the Fire Fighters' Pension Commissioner, P.O. Box 12577, Austin, Texas 78711-2577 no later than August 1, 2007. Comments may also be submitted electronically to rules@ffpc.state.tx.us or faxed to (512) 936-3480.
The rule amendment is proposed under the statutory authority of Government Code, §865.006(b) and concerns §864.004 and §864.005.
No other statutes, articles or codes are affected by the proposed amendment.
§308.3.Disability Retirement Benefits.
(a) Except as otherwise provided by §864.004 and
§864.005
[
§865.006
],
Government Code,
and this section, a member whose disability results
from performing emergency service duties is entitled to a monthly annuity
during the period of the disability in an amount equal to $300 plus $50 for
every $12 increase in contributions above $12 by the governing body for which
the person was performing emergency service duties at the time of the disability.
(b) An increase in contributions by a governing body after the payment of a monthly annuity begins does not increase the amount of the annuity.
(c) Disability benefits are prorated for portions of months during which a person is disabled.
(d) A local board shall report to the commissioner, in a manner provided by the pension system, a determination of temporary disability not later than the 45th day after the date the disability begins.
[(e) A person receiving temporary disability benefits who does not apply to the Social Security Administration for certification as permanently disabled before the second anniversary of the date of determination of temporary disability or, if the person does not participate in the social security program, to a medical board selected by the state board for alternative certification is subject to termination of disability benefit payments if the person is not certified by the Social Security Administration or the medical board within the period provided by §864.004, Government Code. ]
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 June 18, 2007.
TRD-200702515
Kevin Deiters
Policy Director
Office of the Fire Fighters' Pension Commissioner
Earliest possible date of adoption: July 29, 2007
For further information, please call: (512) 463-9935
The State Board of Trustees of the Texas Emergency Services Retirement System proposes to amend 34 Texas Administrative Code §308.4, relating to death benefit payments for surviving spouses of deceased members of the Texas Emergency Services Retirement System (System).
The proposed amendment expands the rule relating to death benefits for the surviving spouse of a deceased member who dies as an active member of a participating department before retirement but after meeting the minimum age and service requirements for service retirement. The rule amendment provides for entitlement to two-thirds of the monthly annuity that the decedent would have received if the decedent had retired on the date of death. The rule amendment replaces what was in prior statute with language that is consistent with changes to the statute made in 2007. The amendment provides that a surviving spouse of a deceased member who dies after terminating service with all participating departments and after meeting a service retirement requirement under Government Code, §864.001 and related board rules, but before attaining the age of 55 is entitled to a death benefit annuity, beginning as provided by that section, equal to two-thirds of the monthly annuity to which the decedent would have been entitled to if the decedent had retired on the date of death. Amendments to Government Code, §864.007 and §864.008 which were enacted by House Bill 2400, 80th Regular Legislative Session, and which go into effect September 1, 2007, provide for clear distribution of benefits through the rulemaking process rather than through statute to allow the State Board of Trustees the ability to make additions or changes relating to distribution.
There is no actuarial impact on the System relating to this rule amendment as determined by the firm of Rudd and Wisdom, Inc.
Kevin Deiters, Program Director, has determined that for the first five years that the amended rule is in effect, there would be limited to no cost to state or local governments. There is no anticipated economic impact to small businesses or individuals by the amendment of the rule.
Mr. Deiters has also determined that for each year of the first five year period the amendments are in effect the anticipated public benefit as a result of the adoption of the amendments will be to provide participating departments with improved benefits to recruit volunteer fire fighters and emergency services personnel to protect local communities.
Comments on the proposal may be submitted in writing to Lisa Ivie Miller, Commissioner, Office of the Fire Fighters' Pension Commissioner, P.O. Box 12577, Austin, Texas 78711-2577 no later than August 1, 2007. Comments may also be submitted electronically to rules@ffpc.state.tx.us or faxed to (512) 936-3480.
The rule amendment is proposed under the statutory authority of Government Code, §865.006(b) and concerns §864.007 and §864.008.
No other statutes, articles or codes are affected by the proposed rule amendment.
§308.4.Death Benefits.
(a) The beneficiary of a member who dies as a result of performing emergency service duties is entitled to a lump-sum benefit of $60,000.
(b) The beneficiary of a deceased member whose death did not result from the performance of emergency service duties, including a member whose death resulted from the performance of active military duty, is entitled to the greater of:
(1) the amount contributed to the fund on the decedent's behalf; or
(2) the sum that would have been contributed on the decedent's behalf from whatever source at the end of the period required for full service retirement benefits.
(c) The surviving spouse of a deceased member who dies as an active member of a participating department before retirement but after meeting the minimum age and service requirements for service retirement is entitled to two-thirds of the monthly annuity that the decedent would have received if the decedent had retired on the date of death.
(d) The surviving spouse of a deceased member who dies after terminating service with all participating departments and after meeting a service requirement under §864.001, Government Code, but before attaining the age of 55, is entitled to a death benefit annuity, beginning on the date on which the decedent would have turned 55, equal to two-thirds of the monthly annuity to which the decedent would have been entitled on that date.
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 June 18, 2007.
TRD-200702517
Kevin Deiters
Policy Director
Office of the Fire Fighters' Pension Commissioner
Earliest possible date of adoption: July 29, 2007
For further information, please call: (512) 463-9935
The State Board of Trustees of the Texas Emergency Services Retirement System proposes to amend 34 Texas Administrative Code by adding §310.10, relating to voluntary payments by member departments in the Texas Emergency Services Retirement System (System).
The proposed new rule authorizes and provides the conditions necessary for participating departments to provide supplemental payments to annuitants of the department. The department may provide for a permanent increase or a one time increase in the annuity, but the increase must apply to all of the annuitants in the same classification and may be based on persons who qualified for an annuity under a previously lower contribution rate.
Government Code, §864.0135 as enacted by House Bill 2400, 80th Legislature, Regular Session, 2007 allows the board, by rule, to authorize a participating department to make either one or more supplemental payments, such as a 13th payment in a 12 month period, or to increase monthly benefits payable to retirees and beneficiaries. The statute requires the electing participating department to fund these additional benefits. The method used by the department would be described in a contractual agreement between the Office of the Fire Fighters' Pension Commissioner, the participating department, and the governing entity.
There is no actuarial impact on the System relating to this new rule as determined by the firm of Rudd and Wisdom, Inc.
Kevin Deiters, Program Director, has determined that for the first five years that the new rule is in effect, there would be limited costs to state or local governments because the rule is permissive. There is no anticipated economic impact to small businesses. Individuals who are annuitants of the system whose department chooses to make these additional payments could see a personal positive economic impact by the adoption of the new rule.
Mr. Deiters has also determined that for each year of the first five year period the rule is in effect the anticipated public benefit as a result of the adoption of the new rule will be to provide improved benefits for the annuitants of the participating departments.
Comments on the proposal may be submitted in writing to Lisa Ivie Miller, Commissioner, Office of the Fire Fighters' Pension Commissioner, P.O. Box 12577, Austin, Texas 78711-2577 no later than August 1, 2007. Comments may also be submitted electronically to rules@ffpc.state.tx.us or faxed to (512) 936-3480.
The new rule is proposed under the statutory authority of Government Code, §865.006(b) and concerns §864.0135.
No other statutes, articles or codes are affected by the proposed new rule.
§310.10.Voluntary Payments by Departments.
(a) A participating department may make one or more supplemental payments to retirees and other beneficiaries of the pension system, or may provide an increase in the amount of annuities paid to retirees and other beneficiaries of the system, contingent upon the following conditions of this section.
(b) A participating department must meet the following conditions before a supplemental payment or increase in annuity to retirees or beneficiaries is implemented:
(1) A participating department shall make payments to the system that are necessary to finance one or more supplemental payments to retirees or beneficiaries of the department.
(2) A participating department shall make payments to the system to finance an increase in annuities paid to annuitants of the department. The increase must apply to all annuitants in the same classification but may be based on persons who qualified for an annuity under a previously lower contribution rate.
(3) Payments to the system may not be made under this section unless the system's actuary first determines that the payments to the system will be sufficient to finance the anticipated additional benefits.
(4) The department must enter into a contractual agreement as prescribed by the Office of the Firefighters' Pension Commissioner.
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 June 18, 2007.
TRD-200702518
Kevin Deiters
Policy Director
Office of the Fire Fighters' Pension Commissioner
Earliest possible date of adoption: July 29, 2007
For further information, please call: (512) 463-9935