CHAPTER 865. ADMINISTRATION
GOVERNMENT CODE
TITLE 8. PUBLIC RETIREMENT SYSTEMS
SUBTITLE H. TEXAS EMERGENCY SERVICES RETIREMENT SYSTEM
CHAPTER 865. ADMINISTRATION
Sec. 865.001. COMPOSITION OF STATE BOARD. (a) The state board
of the pension system is composed of nine members appointed by
the governor for staggered terms of six years, with the terms of
three trustees expiring on September 1 of each odd-numbered year.
(b) Six trustees must be active members of the pension system,
one of whom must represent emergency medical services personnel.
(c) Repealed by Acts 2009, 81st Leg., R.S., Ch. 697, Sec. 9,
eff. September 1, 2009.
(d) Three trustees must be persons who have experience in the
fields of finance, securities investment, or pension
administration.
(e) Appointments to the state board shall be made without regard
to the race, color, disability, sex, religion, age, or national
origin of the appointee.
Added by Acts 2005, 79th Leg., Ch.
803, Sec. 1, eff. September 1, 2005.
Amended by:
Acts 2009, 81st Leg., R.S., Ch.
697, Sec. 9, eff. September 1, 2009.
Sec. 865.002. INELIGIBILITY OF CERTAIN EMPLOYEES FOR STATE
BOARD. (a) A person is not eligible for appointment to the
state board if the person or the person's spouse is employed by
or participates in the management of a business entity or other
organization regulated by or receiving funds from the state board
or the fund.
(b) A person may not serve as a trustee of the state board or
act as the general counsel to the state board if the person is
required to register as a lobbyist under Chapter 305 because of
the person's activities for compensation on behalf of a business
or an association related to the operation of the state board.
Added by Acts 2005, 79th Leg., Ch.
803, Sec. 1, eff. September 1, 2005.
Sec. 865.003. COMPENSATION; EXPENSES. Trustees of the state
board serve without compensation but may be reimbursed for actual
and necessary expenses incurred in performing state board
functions.
Added by Acts 2005, 79th Leg., Ch.
803, Sec. 1, eff. September 1, 2005.
Sec. 865.004. VOTING. (a) Each trustee of the state board is
entitled to one vote. Except as provided by Subsection (b), at
any meeting of the state board, a vote by a majority of the
trustees present is necessary for a decision by the trustees.
(b) The concurrence of a majority of the members of the state
board is required for a vote regarding:
(1) eligibility for service retirement described by Section
864.001;
(2) the computation of a service retirement annuity described by
Section 864.002;
(3) a cost-of-living increase described by Section 864.013; or
(4) a lump-sum payment adopted under Section 864.014.
Added by Acts 2005, 79th Leg., Ch.
803, Sec. 1, eff. September 1, 2005.
Sec. 865.005. GROUNDS FOR REMOVAL OF TRUSTEES. (a) It is a
ground for removal from the state board that a trustee:
(1) does not have at the time of appointment the qualifications
required by Section 865.001;
(2) does not maintain during service on the state board the
qualifications required by Section 865.001;
(3) violates a prohibition established by Section 865.002;
(4) cannot discharge the person's duties for a substantial part
of the term for which the person is appointed because of illness
or disability; or
(5) is absent from more than half of the regularly scheduled
state board meetings that the trustee is eligible to attend
during a calendar year unless the absence is excused by a
majority vote of the state board.
(b) The validity of an action of the state board is not affected
by the fact that it is taken when a ground for removal of a
trustee exists.
(c) If the commissioner has knowledge that a potential ground
for removal exists, the commissioner shall notify the presiding
officer of the state board of the ground. The presiding officer
shall then notify the governor that a potential ground for
removal exists.
Added by Acts 2005, 79th Leg., Ch.
803, Sec. 1, eff. September 1, 2005.
Sec. 865.006. GENERAL DUTIES OF STATE BOARD. (a) The state
board shall employ a certified public accountant, an actuary, and
an investment consultant for the fund and may acquire computer,
custodial, or investment management services for the fund. The
costs of accounting, actuarial, investment consulting, computer,
custodial, or investment management services and other
administrative expenses may be paid from income earned by
investment of the fund. No portion of the corpus or income of
the fund may be used for purposes other than the benefit of
members, retired emergency services personnel, and their
beneficiaries.
(b) The state board shall adopt rules necessary for the
administration of the fund. The state board shall adopt rules to
provide a proration of the requirements for qualified service for
a member who performs service for only a portion of a calendar
year and may provide by rule for the manner in which member
attendance or training hours are to be computed.
Added by Acts 2005, 79th Leg., Ch.
803, Sec. 1, eff. September 1, 2005.
Sec. 865.007. ADMINISTERING SYSTEM ASSETS. (a) The state board
shall administer all assets of the pension system. The state
board is the trustee of the pension system's assets.
(b) The state board may acquire, hold, manage, purchase, sell,
assign, trade, transfer, and dispose of any security, evidence of
debt, or other investment in which the pension system's assets
may be invested.
(c) The state board or the commissioner may accept on behalf of
the pension system gifts of money or other property from any
public or private source.
Added by Acts 2005, 79th Leg., Ch.
803, Sec. 1, eff. September 1, 2005.
Sec. 865.008. INVESTMENT OF ASSETS. (a) If a surplus exists in
the fund over the amount necessary to pay benefits due for a
reasonable period of time, the state board shall invest the
surplus.
(b) The assets of the pension system shall be invested and
reinvested in accordance with Section 67, Article XVI, Texas
Constitution. A determination of whether the state board has
exercised prudence with respect to an investment decision must be
made, taking into consideration the investment of all assets of
the trust over which the state board has management and control
rather than considering the prudence of a single investment.
Added by Acts 2005, 79th Leg., Ch.
803, Sec. 1, eff. September 1, 2005.
Sec. 865.009. TRUST FUND. The Texas emergency services
retirement fund is a trust fund established with the comptroller.
Added by Acts 2005, 79th Leg., Ch.
803, Sec. 1, eff. September 1, 2005.
Sec. 865.010. COMMISSIONER'S DUTIES. (a) The commissioner
shall oversee the distribution of all benefits.
(b) The commissioner shall collect the revenues for the fund
from the governing bodies of participating departments.
(c) The commissioner may request and administer state funds
appropriated by the legislature in addition to those required by
this subtitle.
(d) The commissioner is responsible for recovering any
fraudulently acquired benefits. If it appears that fraud has
occurred, the commissioner shall notify the appropriate local
board and the claimant and hold a hearing. If after the hearing
the commissioner determines that benefits have been or are being
fraudulently acquired, the commissioner shall seek action in a
court.
Added by Acts 2005, 79th Leg., Ch.
803, Sec. 1, eff. September 1, 2005.
Amended by:
Acts 2007, 80th Leg., R.S., Ch.
321, Sec. 9, eff. September 1, 2007.
Sec. 865.011. RECORDS AND REPORTS. (a) The commissioner may at
any reasonable time examine the records and accounts of local
boards.
(b) The commissioner shall require in a timely manner periodic
reports from the local boards and shall prepare necessary forms
for use by local boards.
(c) The commissioner shall prepare an annual report on the
activity and status of the fund and submit the report to the
governor, the lieutenant governor, and the speaker of the house
of representatives.
Added by Acts 2005, 79th Leg., Ch.
803, Sec. 1, eff. September 1, 2005.
Sec. 865.012. LOCAL BOARD. (a) A local board is composed of:
(1) one trustee selected by the governing body of the political
subdivision of which a participating department is a part;
(2) three trustees who are active members representing a
participating department chosen by a majority of the emergency
services personnel in the department who are eligible to
participate in the pension system; and
(3) two trustees who are representatives of the political
subdivision who are chosen by the other members of the local
board.
(b) Trustees of a local board serve staggered two-year terms.
At the first meeting of a local board, the trustees shall draw
lots to determine the length of the term to be served, with the
terms of two trustees to be two years and the terms of two
trustees to be one year. The first appointments of trustees
appointed by other members of the local board are to be one
trustee for a two-year term and one trustee for a one-year term.
(c) A local board shall hold not fewer than four meetings a year
under Chapter 551.
(d) A vacancy on a local board is filled for the remainder of
the unexpired term by the procedure by which the position was
originally filled.
(e) A local board shall elect a presiding officer from the
trustees at its first meeting.
(f) At any meeting of a local board, a vote by a majority of the
trustees present is necessary for a decision by the trustees.
(g) A trustee of a local board may not receive compensation for
service as a trustee but may be reimbursed by the governing body
of a participating department for actual and necessary expenses
incurred in performing local board functions.
Added by Acts 2005, 79th Leg., Ch.
803, Sec. 1, eff. September 1, 2005.
Sec. 865.013. MONITORING OF CONTRIBUTION SUBMISSION. A local
board shall monitor the timely submission of required
contributions to the commissioner.
Added by Acts 2005, 79th Leg., Ch.
803, Sec. 1, eff. September 1, 2005.
Sec. 865.014. LOCAL CONTRIBUTIONS. (a) Each governing body of
a political subdivision of which a participating department is a
part shall contribute for each member for each month of service
beginning on the date that the member enters the pension system
at a rate determined in accordance with Subsection (b) and may
make additional contributions as determined by the political
subdivision. If the participating department is located in more
than one political subdivision, the governing bodies of the
political subdivisions shall contribute equally for each member
for each month of service.
(b) The state board by rule shall determine the minimum, and may
determine a maximum, contribution for each member of a
participating department for each month of qualified service at a
rate the state board determines necessary, after consultation
with the actuary, to make the pension system actuarially sound.
(c) Contributions required as provided by this section shall be
paid at the times and in the manner that the state board
prescribes by rule. Contributions required by this section shall
be submitted by electronic funds transfer unless the commissioner
grants an exception based on the difficulty of a participating
department's use of that payment method. Contributions that are
not paid within the time required by the state board accrue
interest at the most recent assumed actuarial rate of return on
investments of the fund.
(d) The state board may by rule require a monthly contribution
from political subdivisions that do not participate in the
pension system but whose employees or former employees are
members or retirees of the pension system in an amount necessary
to pay the expenses of administering benefits for those persons.
(e) The attorney general may file suit to collect unpaid accrued
interest. Interest recovered shall be deposited in the fund.
Added by Acts 2005, 79th Leg., Ch.
803, Sec. 1, eff. September 1, 2005.
Sec. 865.015. STATE CONTRIBUTIONS. The state shall contribute
the amount necessary to make the pension system actuarially sound
each year, except that the state's contribution may not exceed
one-third of the total of all contributions by governing bodies
in a particular year.
Added by Acts 2005, 79th Leg., Ch.
803, Sec. 1, eff. September 1, 2005.
Sec. 865.016. ADMINISTRATIVE PENALTY. (a) The state board may
impose an administrative penalty on a local board that fails to
file a required report in a timely manner.
(b) The amount of the penalty may not exceed $5,000. The amount
shall be based on:
(1) the seriousness of the violation, including the nature,
circumstances, extent, and gravity of the violation;
(2) the history of previous violations;
(3) the amount necessary to deter a future violation;
(4) efforts to correct the violation; and
(5) any other matter that justice may require.
(c) The state board may adopt rules for determining the amount
of a penalty.
(d) The enforcement of the penalty may be stayed during the time
the order is under judicial review if the person pays the penalty
to the clerk of the court or files a supersedeas bond with the
court in the amount of the penalty. A person who cannot afford
to pay the penalty or file the bond may stay the enforcement by
filing an affidavit in the manner required by the Texas Rules of
Civil Procedure for a party who cannot afford to file security
for costs, subject to the right of the state board to contest the
affidavit as provided by those rules.
(e) The attorney general may file suit to collect the penalty.
Penalties recovered will be deposited in the fund.
(f) A proceeding to impose the penalty is considered to be a
contested case under Chapter 2001.
Added by Acts 2005, 79th Leg., Ch.
803, Sec. 1, eff. September 1, 2005.
Sec. 865.017. INTERRUPTION OF PAYMENTS. (a) The pension system
shall withhold payment of a monthly retirement annuity if a
participating department attempts to provide information to the
commissioner relating to continued eligibility to receive the
payments and the recipient fails to cooperate or provide the
requested information. The state board may adopt rules to
enforce this subsection.
(b) The pension system may not begin service or disability
retirement annuity or death benefit payments based on the service
of a person whose local board is not current in its filing of a
required periodic report.
Added by Acts 2005, 79th Leg., Ch.
803, Sec. 1, eff. September 1, 2005.
Sec. 865.018. CERTIFICATION OF FUND. (a) In this section,
"qualified actuary" means a fellow of the Society of Actuaries or
a member of the American Academy of Actuaries who has at least
five years of experience with public retirement systems.
(b) The commissioner and the state board shall certify the
actuarial and financial soundness of the fund every two years
with the assistance of a qualified actuary.
Added by Acts 2005, 79th Leg., Ch.
803, Sec. 1, eff. September 1, 2005.
Sec. 865.019. CONFIDENTIALITY OF INFORMATION ABOUT MEMBERS,
ANNUITANTS, AND BENEFICIARIES. (a) Information contained in
records that are in the custody of the pension system concerning
an individual member, annuitant, or beneficiary is confidential
under Section 552.101 and may not be disclosed in a form
identifiable with a specific individual unless:
(1) the information is disclosed to:
(A) the individual or the individual's attorney, guardian,
executor, administrator, conservator, or other person who the
commissioner determines is acting in the interest of the
individual or the individual's estate;
(B) a spouse or former spouse of the individual after the
commissioner determines that the information is relevant to the
spouse's or former spouse's interest in member accounts,
benefits, or other amounts payable by the pension system;
(C) a governmental official or employee after the commissioner
determines that disclosure of the information requested is
reasonably necessary to the performance of the duties of the
official or employee; or
(D) a person authorized by the individual in writing to receive
the information; or
(2) the information is disclosed under a subpoena and the
commissioner determines that the individual will have a
reasonable opportunity to contest the subpoena.
(b) This section does not prevent the disclosure of the status
or identity of an individual as a member, former member, retiree,
deceased member or retiree, or beneficiary of the pension system.
(c) The commissioner may designate other employees of the
pension system to make the necessary determinations under
Subsection (a).
(d) A determination and disclosure under Subsection (a) may be
made without notice to the individual member, annuitant, or
beneficiary.
Added by Acts 2005, 79th Leg., Ch.
803, Sec. 1, eff. September 1, 2005.
Sec. 865.020. MEDICAL BOARD. (a) The state board shall
designate a medical board composed of three physicians.
(b) To be eligible to serve as a member of the medical board, a
physician must be licensed to practice medicine in the state and
be of good standing in the medical profession. A physician who
is eligible to participate in the pension system may not be a
member of the medical board.
(c) The medical board shall:
(1) investigate essential statements and certificates made by or
on behalf of a member of the pension system in connection with an
application for disability retirement or, as requested by the
commissioner, with an application for an on-duty death benefit;
and
(2) report in writing to the commissioner its conclusions and
recommendations on all matters referred to it.
(d) The medical board is not subject to subpoena regarding
findings it makes in assisting the commissioner under this
section, and its members may not be held liable for any opinions,
conclusions, or recommendations made under this section.
Added by Acts 2009, 81st Leg., R.S., Ch.
697, Sec. 8, eff. September 1, 2009.