By: Flynn, et al. (Senate Sponsor - West) H.B. No. 3158          (In the Senate - Received from the House May 5, 2017;   May 9, 2017, read first time and referred to Committee on State   Affairs; May 19, 2017, reported adversely, with favorable   Committee Substitute by the following vote:  Yeas 9, Nays 0;   May 19, 2017, sent to printer.)Click here to see the committee vote     COMMITTEE SUBSTITUTE FOR H.B. No. 3158 By:  Birdwell     A BILL TO BE ENTITLED   AN ACT     relating to the retirement systems for and the provision of other   benefits to police and fire fighters in certain municipalities;   creating a criminal offense.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:   ARTICLE 1. CONTINGENT PROVISIONS:   EFFECTIVE SEPTEMBER 1, 2017          SECTION 1.01.  Section 1.01, Article 6243a-1, Revised   Statutes, is amended to read as follows:          Sec. 1.01.  AMENDMENT, RESTATEMENT, AND CONSOLIDATION. (a)   The purpose of this article is to restate and amend the provisions   of a former law governing the pension funds for police officers and   fire fighters in certain municipalities (Chapter 4, Acts of the   43rd Legislature, 1st Called Session, 1933, also known as Article   6243a) having previously been amended and restated to permit the   consolidation of the terms of certain pension plans created under   Sections 1, 11A, and 11B of that Act for the purpose of simply and   accurately reflecting the joint administration of the plans.          (b)  [The provisions of this article are entirely consistent   with all terms and conditions relating to benefits and benefit   entitlement previously contained in the plans.] This article does   not [intend to] take away or reduce any accrued benefit contained in   the plans created under former Article 6243a or under this article   as it existed on or before August 31, 2017.          SECTION 1.02.  Section 2.01, Article 6243a-1, Revised   Statutes, is amended to read as follows:          Sec. 2.01.  DEFINITIONS. In this article:                (1)  "415 compensation" means a member's wages, salary,   and other amounts received for personal services rendered in the   course of employment with the city during a limitation year and   permitted to be treated as compensation for purposes of Section   415(c) of the code, including differential wage payments described   in Section 414(u)(12) of the code. The term does not include   amounts picked up under Section 4.03(i) of this article.                (2)  "Active service" means any period that a member   receives compensation as a police officer or fire fighter from   either department for services rendered.                (3) [(2)]  "Actuarial equivalent" means a form of   benefit differing in time, duration, or manner of payment from a   standard benefit payable under this article but having the same   value when computed using the assumptions set forth in this   article.                [(3)     "Administrator" means the person designated by   the board to supervise the affairs of the pension system.]                (4)  "Alternate payee" has the meaning given the term   by Section 414(p) [414] of the code or any successor provision.                (5)  "Alternative investment" means an investment in an   asset other than a traditional asset. The term includes an   investment in private equity funds, private real estate   transactions, hedge funds, and infrastructure.                (6) [(5)]  "Annual additions" means the sum of the   following amounts credited to a member's account under any defined   contribution plan maintained by the city for the limitation year:                      (A)  city contributions;                      (B)  member contributions, other than rollover   contributions from a plan maintained by any employer other than the   city;                      (C)  forfeitures; and                      (D)  amounts allocated after March 31, 1984, to an   individual medical benefit account, as defined in Section 415(l)(2)   [415(1)(2)] of the code, that is part of a pension or annuity plan   maintained by the city.          [The term does not include amounts described in Paragraph (D)   of this subdivision for the purpose of computing the percentage   limitation described in Section 415(c)(1)(B) of the code.] For any   limitation year beginning before January 1, 1987, only that portion   of member contributions equal to the lesser of member contributions   in excess of six percent of 415 compensation or one-half of member   contributions to the combined pension plan or any qualified defined   contribution plan maintained by the city is treated as annual   additions.                (7) [(6)]  "Annual benefit" means the aggregate   benefit attributable to city and member contributions payable   annually under the combined pension plan, or any plan maintained by   the city, exclusive of any benefit not required to be considered for   purposes of applying the limitations of Section 415 of the code to   the combined pension plan, payable in the form of a straight life   annuity beginning at age 62 with no ancillary benefits. Solely for   purposes of computing the limitations under the combined pension   plan, benefits actually payable to a pensioner are adjusted to the   actuarial equivalent of a straight life annuity pursuant to Section   415(b) [8.01] of the code [this article] even though no member may   actually receive a benefit in the form of a straight life annuity.                (8) [(7)]  "Article 6243a" means Chapter 4, Acts of the   43rd Legislature, 1st Called Session, 1933 (former Article 6243a,   Vernon's Texas Civil Statutes), pertaining to a pension system for   police officers, fire fighters, and fire alarm operators in certain   cities.                (9) [(8)]  "Assignment pay" means monthly pay, in   addition to salary, granted to a Group B member and authorized by   the city council for the performance of certain enumerated duty   assignments.                (10) [(9)]  "Base pay" means the maximum monthly civil   service pay from time to time established by the city for a person   who holds the rank of "police officer" in the city's police   department or the rank of "fire and rescue officer" in the city's   fire department [a police officer or fire fighter], exclusive of   any other form of compensation. The term does not include   compensation paid by the city to a person for prior periods of   service or compensation that otherwise constitutes back pay unless   the compensation is eligible back pay. The board may adopt rules   and procedures necessary to include eligible back pay as base pay   for purposes of this definition, including rules regarding how   increases in benefits will be determined and administered.                (11) [(10)]  "Base pension" means the amount of   retirement, death, or disability benefits as determined [computed   under this article] at the earliest of the time a Group B member   and, solely for the purposes of Section 6.12 of this article, a   Group A member:                      (A)  begins participation in DROP;                      (B)  leaves or left active service;                      (C)  [leaves active service,] dies; [,] or                      (D)  becomes entitled to a disability pension   under the combined pension plan [disabled].          Solely for purposes of this definition, when a member becomes   entitled to a disability pension, the base pension shall be   determined as of the date on which the disability pension begins.                (12) [(11)]  "Board" means the board of trustees   created under Section 3.01 of this article for the purpose of   administering the pension system.                (13) [(12)]  "Child" means a [an unmarried] person   [under the age of 19] whose [natural or adoptive] parent, as   recognized under the laws of this state, is a primary party.                (14) [(13)]  "City" means each municipality having a   population of more than 1.18 million and located predominantly in a   county that has a total area of less than 1,000 square miles.                (15)  "City attorney" means the chief legal officer of   a city.                (16) [(14)]  "City council" means the governing body of   the city.                (17)  "City manager" means the city manager of a city or   the city manager's designee and includes, to the extent of any   designation, an interim or acting city manager, chief financial   officer, budget director, or assistant city manager. If a city does   not have an individual serving in a position otherwise described by   this subdivision, "city manager" means the mayor of that city.                (18) [(15)]  "City service incentive pay" means annual   incentive pay, adjusted by the city from time to time, in addition   to the salary of a member granted to the member under the authority   of the city charter and received by the member during active   service.                (19) [(16)]  "Code" means the United States Internal   Revenue Code of 1986, as amended.                (20) [(17)]  "Combined pension plan" means any pension   plan created pursuant to this article before September 1, 2017.                (21) [(18)]  "Computation pay" shall be used in   determining the amount of the city's contribution under Section   4.02(d) of this article and a Group B member's contribution under   Section 4.03(d) of this article and in determining the base pension   [of any benefits] to be paid to a Group B member or the benefits to   be paid to the member's qualified survivors and means the sum of the   following:                      (A)  the biweekly [monthly] rate of pay of a   [Group B] member for the highest civil service rank the person   holds, from time to time, as a result of a competitive examination;   plus                      (B)  the [monthly rate of pay of a Group B member   as] educational incentive pay of a member, computed on a biweekly   basis; plus                      (C)  the longevity [monthly rate of] pay of a   [Group B] member [as longevity pay], as authorized by the   legislature, computed on a biweekly basis; plus                      (D)  the city service incentive pay, computed on a   biweekly [monthly] basis, of a [Group B] member.          The term includes only amounts actually paid in salary or   payments made instead of salary to the member and member   contributions picked up by the city, and does not include any   imputed pay. Furthermore, any [Any] compensation received by a   [Group B] member, other than that noted in Paragraphs (A)-(D) of   this subdivision (for example, compensation for overtime work,   certification pay, and the [monthly rate of] pay a member would   receive from the city in the form of assignment pay), will not be   considered in determining the computation pay of a [Group B]   member. Any lump-sum payments for compensatory time, unused sick   leave, unused vacation time, or city service incentive pay payable   after a [Group B] member leaves active service, dies [death],   becomes disabled [disability], or resigns [resignation], or after    any other type of termination may not be considered in determining   the computation pay of any [Group B] member. Computation pay for a   [Group B] member for any given period [month] is determined on the   biweekly [monthly] rates of pay due the [Group B] member for the   entire period [month]. The term does not include compensation paid   by the city to a person for prior periods of service or compensation   that otherwise constitutes back pay unless the compensation is   eligible back pay. The board may adopt rules and procedures   necessary to include eligible back pay as computation pay for   purposes of this definition, including rules regarding how   increases in benefits will be determined and administered. [If a   Group B member works less than the member's assigned schedule for   any given month, the computation pay for the Group B member shall be   prorated for the portion of the month that the Group B member   worked.                [(19)     "Educational incentive pay" means incentive pay   designed to reward completion of certain hours of college credit,   adjusted by the city from time to time, that is paid to a member in   addition to the member's salary.]                (22) [(20)]  "Department" means either the police   department of the city, the fire department of the city, or both the   police and fire departments of the city together.                (23) [(21)]  "Dependent parent" means a natural parent   or parent who adopted a primary party and who immediately before the   death of a primary party received over half of the parent's   financial support from the primary party.                (24) [(22)]  "Disability retirement" means any period   that a pensioner receives periodic disability compensation or a   disability pension.                (25)  "DROP" means the deferred retirement option plan   established in accordance with Section 6.14 of this article.                (26)  "Educational incentive pay" means incentive pay   designed to reward completion of certain hours of college credit,   adjusted by the city from time to time, that is paid to a member in   addition to the member's salary.                (27)  "Eligible back pay," except as otherwise provided   by this definition, means additional compensation paid by the city   to a member or pensioner:                      (A)  that constitutes back pay to the member's or   pensioner's prior period of service and is otherwise considered   taxable wages paid by the city to the member or pensioner for   federal income tax purposes; and                      (B)  for which the pension system receives:                            (i)  an amount equal to the aggregate member   and city contributions that the pension system would have collected   with respect to the compensation for all time periods relating to   the back pay compensation; and                            (ii)  interest, calculated using the pension   system's actuarial rate of return assumptions in effect for the   periods relating to the back pay, compounded annually, on the   contribution amounts for the period from the date that the   contributions would have been received if the back pay compensation   had been paid during the relevant periods of prior service through   the date the amount relating to the contributions for back pay is   actually received by the pension system.          The term does not include any additional compensation paid by   the city to a member or pensioner wholly or partly or directly or   indirectly as the result of litigation instituted to recover back   pay.          The pension system is not obligated to collect the additional   contributions or interest described in Paragraph (B) of this   subdivision from the member, pensioner, or city. The pension system   may not recognize back pay as eligible back pay until the   contributions and interest described in Paragraph (B) of this   subdivision have been received.                (28)  "Executive director" means the person designated   by the board to supervise the operation of the pension system.                (29) [(23)     "415 compensation" means a member's wages,   salary, and other amounts received for personal services rendered   in the course of employment with the city during a limitation year,   but does not include:                      [(A)     contributions made by the city to a plan of   deferred compensation, or a simplified employee pension plan, to   the extent such contributions are excludable from the member's   gross income;                      [(B)     any distributions from a plan of deferred   compensation, or a simplified employee pension plan, to the extent   the distributions are excludable from the member's gross income;                      [(C)     other amounts that received special tax   benefits, such as premiums for group term life insurance, to the   extent that the premiums are not includable in the gross income of   the member, or contributions made by the city, including   contributions toward the purchase of an annuity described by   Section 403(b) of the code, whether or not contributed pursuant to a   salary reduction agreement and whether or not the amounts are   actually excludable from the gross income of the member; and                      [(D)     for any limitation year beginning after   December 31, 1988, compensation in excess of $200,000, adjusted in   a manner permitted under Section 415(d) of the code.                [(24)]  "Fund" means all funds and property held to   provide benefits to [for the benefit of] all persons who are or who   may become entitled to any benefits under any plan within the   pension system, together with all income, profits, or other   increments.                (30) [(25)]  "Group A member" means any police officer   or fire fighter included in Group A membership under [described by]   Section 5.01(a)(1) of this article.                (31) [(26)]  "Group B member" means any police officer   or fire fighter included in Group B membership under [described by]   Section 5.01(a)(2) of this article.                (32) [(27)]  "Health director" means any qualified   physician designated from time to time by the board.                (33) [(28)]  "Limitation year" means the plan year of   the combined pension plan and any defined benefit plan or defined   contribution plan of the city in which a member participates.                (34) [(29)]  "Longevity pay" means pay in addition to   the salary of a member granted under Section 141.032, Local   Government Code, for each year of active service completed by a   member in either department.                (35) [(30)]  "Member" means both Group A and Group B   members.                (36) [(31)]  "Member's account" means an account   established and maintained for a member with respect to the   member's total interest in one or more defined contribution plans   under this article or maintained by the city resulting in annual   additions.                (37)  "Nominations committee" means the nominations   committee established under Section 3.011 of this article.                (38) [(32)]  "Old plan" means any pension plan created   pursuant to Section 1 of Article 6243a.                (39) [(33)]  "Pensioner," "Group A pensioner," or   "Group B pensioner" means a former member of the pension system who   is on either a service or disability retirement.                (40) [(34)]  "Pension service" means the time, in   years, and prorated for fractional years, that a member has   contributed to the fund under the terms of the combined pension plan   or any plan within the pension system, reduced to reflect refunds   that have been received and not fully repaid.                (41) [(35)]  "Pension system" means the fund and any   plans created pursuant to this article or Article 6243a and that are   intended to be qualified under Section 401(a) of the code.                (42) [(36)]  "Plan A" means any plan created pursuant   to Section 11A of Article 6243a.                (43) [(37)]  "Plan B" means any plan created pursuant   to Section 11B of Article 6243a.                (44) [(38)]  "Police officer" or "fire fighter" means,   as appropriate, a police officer, fire fighter, fire and rescue   officer, fire alarm operator, fire inspector, apprentice police   officer, apprentice fire fighter, or similar employee of either   department as defined in the classifications of the human resources   [personnel] department of the city.                (45) [(39)]  "Primary party," "Group B primary party,"   or "Group A primary party" means a member[, former member,] or   pensioner.                (46) [(40)]  "Qualified actuary" means either:                      (A)  an individual who is a Fellow of the Society   of Actuaries, a Fellow of the Conference of Consulting Actuaries   [in Public Practice], or a member of the American Academy of   Actuaries; or                      (B)  a firm that employs one or more persons who   are Fellows of the Society of Actuaries, Fellows of the Conference   of Consulting Actuaries [in Public Practice], or members of the   American Academy of Actuaries and are providing services to the   pension system.                (47) [(41)]  "Qualified domestic relations order" has   the meaning provided by Section 414(p) [414] of the code.                (48) [(42)]  "Qualified survivor" means a person who is   eligible to receive death [survivor] benefits after the death of a   primary party and includes only:                      (A)  a surviving spouse, if the spouse was   continuously married to the primary party from [both at] the date   when the primary party either voluntarily or involuntarily left   active service as a member through [and at] the date of the primary   party's death;                      (B)  all surviving, unmarried[, legitimate, and   legally adopted] children who are either under 19 years of age or   have a disability, as determined by the board under Section   6.06(o-2) of this article, and who were:                            (i)  born or adopted before the primary   party [as a member] either voluntarily or involuntarily left active   service; or                            (ii) [who were] born after the primary party   [a member] left active service if the mother was pregnant with the   child before the primary party [member] left active service; and                      (C)  a surviving dependent parent of a primary   party if the primary party is not survived by a spouse or child   eligible for benefits.                (49) [(43)]  "Service retirement" means any period   that a pensioner receives a retirement pension but does not include   any period of disability retirement.                (50) [(44)]  "Spouse" means the person to whom [husband   or wife of] a primary party is legally married [recognized] under   the laws of this state or any other state.                (51)  "Traditional asset" includes stocks, bonds, and   cash [(45) "Total wages and salaries" means all pay received by a   member of any plan within the pension system from the city,   excluding any lump-sum payments for unused sick time or unused   vacation time accrued by any member and payable as the result of the   member's death, disability, resignation, or any other reason for   leaving active service].                (52) [(46)]  "Trustee" means a member of the board.          SECTION 1.03.  Sections 2.02(a) and (b), Article 6243a-1,   Revised Statutes, are amended to read as follows:          (a)  If the amount of any benefit or contribution is to be   determined on the basis of actuarial assumptions that are not   otherwise specifically set forth for that purpose in this article,   the actuarial assumptions to be used are those earnings and   mortality assumptions being used on the date of the determination   by the pension system's qualified actuary and approved by the   board.          (b)  The actuarial assumptions being used at any particular   time shall be attached by the executive director [administrator] as   an addendum to this article and treated for all purposes as a part   of any plan created by this article. The executive director shall   promptly update any addendum to conform to any changed actuarial   assumptions approved by the board.          SECTION 1.04.  Part 2, Article 6243a-1, Revised Statutes, is   amended by adding Sections 2.025 and 2.03 to read as follows:          Sec. 2.025.  INDEPENDENT ACTUARIAL ANALYSIS AND LEGISLATIVE   RECOMMENDATIONS. (a) Before July 1, 2024, the State Pension Review   Board shall select an independent actuary who the board shall hire   to perform an actuarial analysis of the most recently completed   actuarial valuation of the pension system. The independent actuary   shall submit the analysis to the State Pension Review Board and the   board not later than October 1, 2024. The analysis must include the   independent actuary's:                (1)  conclusion regarding whether the pension system is   actuarially sound, as defined by rule by the State Pension Review   Board; and                 (2)  recommendations regarding changes to benefits or   to member or city contribution rates.          (b)  Subject to Subsection (d) of this section, the board may   by rule adopt the independent actuary's recommendations under   Subsection (a)(2) of this section.          (c)  Not later than December 1, 2024, the State Pension   Review Board shall submit a report to the legislature regarding   actions taken under this section. The report required under this   section must include a copy of the analysis prepared under   Subsection (a) of this section and a summary of rules adopted by the   board under Subsection (b) of this section.          (d)  Notwithstanding any other provision of this article, a   rule adopted by the board under Subsection (b) of this section that   conflicts with a provision of this article remains in effect until   August 31, 2025, unless a law is enacted by the 89th Legislature   that authorizes the content of the rule. If a law is enacted that   authorizes the content of the rule, the rule continues in effect   until amended in accordance with this article.          (e)  This section expires September 1, 2025.          Sec. 2.03.  REFERENCES TO CERTAIN LAW. A reference to a   statute made in this article includes a reference to any   regulation, rule, order, or notice made by a governmental entity   with the authority under law to adopt the regulation, rule, order,   or notice, and on which the governmental entity intends persons to   rely, as appropriate.          SECTION 1.05.  Section 3.01, Article 6243a-1, Revised   Statutes, is amended by amending Subsections (a), (b), (d), (e),   (f), (h), (i), (j), (n), and (o) and adding Subsections (b-1),   (b-2), (b-3), (b-4), (j-1), (j-2), (j-3), (j-4), (j-5), (j-6),   (j-7), (j-8), (j-9), (j-10), (o-1), (p), (q), (r), and (s) to read   as follows:          (a)  The pension system shall be administered by the board.   The board shall execute its fiduciary duty to hold and administer   the assets of the fund for the exclusive benefit of members and   their beneficiaries under Section 802.203, Government Code,   Section 67(f), Article XVI, Texas Constitution, and any other   applicable law, in a manner that ensures the sustainability of the   pension system for purposes of providing current and future   benefits to members and their beneficiaries.          (b)  Subject to Subsections (b-1) and (b-2) of this section,   the [The] board consists of 11 [seven] trustees who shall be   selected and shall serve as follows:                (1)  six trustees appointed by the mayor;                (2)  three trustees appointed by the nominations   committee;                (3)  subject to Subsection (b-3) of this section, one   trustee who is a current or former police officer of the city   nominated and elected by members of the pension system under rules   adopted by the board; and                (4)  subject to Subsection (b-3) of this section, one   trustee who is a current or former fire fighter of the city   nominated and elected by members of the pension system under rules   adopted by the board.          (b-1)  To be appointed or elected a trustee under this   section, a person:                (1)  must have demonstrated financial, accounting,   business, investment, budgeting, real estate, or actuarial   expertise; and                (2)  may not be an elected official of the city.          (b-2)  To be appointed a trustee under Subsection (b)(1) or   (2) of this section a person may not be an active member or   pensioner.          (b-3)  If the board determines that it is not possible to   nominate or elect a trustee under Subsection (b)(3) or (4) of this   section who meets the requirements of Subsection (b-1) of this   section, the board shall notify the nominations committee and the   nominations committee shall appoint a trustee who meets the   requirements of Subsection (b-1) of this section to represent the   interests of police officers or fire fighters, as appropriate, of   the city on the board.  An appointment under this subsection may be   made without regard to whether the trustee is qualified under   Subsection (b)(3) or (4), as applicable, of this section.          (b-4)  A trustee is not required to reside in a particular   city or county of this state. [The city council shall name from   among its members three council members who shall serve as trustees   of the board. The council member trustees shall be named as soon as   possible after the first Monday in May of each odd-numbered year and   shall serve for the term of office to which they were elected as   council members. If there is a vacancy in any of the council member   trustees' seats on the board, the city council shall name another   council member to serve out the remainder of the unexpired term.                [(2)     The police and fire department members of the   pension plans within the pension system shall separately, by   department and not by plan, elect from among their respective   memberships two active police officer and two active fire fighter   members. On their election, each of the trustees under this   subdivision shall execute a written affirmation of the person's   undertaking to faithfully perform duties to the pension system.   The police and fire department trustees shall serve terms of four   years each, the terms being staggered so that one term, but not both   from the same department, shall expire on June 1 of each   odd-numbered year. If a vacancy occurs among the police and fire   department trustees, the vacancy shall be filled in accordance with   the provisions of Subsection (d) of this section. The police and   fire department trustees will continue to serve beyond the   expiration of their terms, if their successors have not been   elected and affirmed in writing their undertaking to faithfully   perform their duties to the pension system, until their successors   are elected and have affirmed in writing their undertaking to   faithfully perform their duties to the pension system.]          (d)  A [If a] vacancy on the board in a trustee position under   Subsection (b)(1) or (2) of this section shall be filled in the same   manner as the original appointment. The board by rule shall   determine the manner by which a vacancy in a trustee position under   Subsection (b)(3) or (4) of this section is filled [occurs among the   police or fire department alternate trustees, for reasons other   than the failure to elect a successor alternate trustee or the   occurrence of a vacancy among the regular trustees of either   department, the board shall appoint a new alternate trustee   representing the department from which the vacancy occurs to serve   as the alternate trustee for the remainder of the alternate   trustee's term]. [A candidate is not eligible for election to an   alternate trustee position and to a regular trustee position during   the same election.]          (e)  The mayor shall determine whether all trustees   appointed under Subsection (b)(1) of this section hold office for   staggered two-year terms or staggered three-year terms. The   nominations committee shall determine whether all trustees   appointed or elected under Subsection (b)(2), (3), or (4) of this   section hold office for staggered two-year terms or staggered   three-year terms. An appointed trustee may not serve for more than   six consecutive years on the board [If a vacancy occurs among the   police or fire department regular trustees, the alternate trustee   representing the department from which the vacancy occurs shall   serve as the regular trustee for the remainder of the unexpired   regular trustee's term]. [Thereafter, the board shall appoint a   new alternate trustee from the same department to serve for a period   ending on the earlier of the expiration of the regular trustee's   term or the original alternate trustee's term. If the original   alternate trustee's term has not expired after serving in place of   the regular trustee, then that person shall serve out the remainder   of the unexpired term. After a new regular trustee has been   elected, the original alternate trustee shall return to serve as an   alternate trustee until the regular trustee's term has expired.   However, if the original alternate trustee, while an alternate   trustee, is elected to a full term as a regular trustee before the   expiration of the term as an alternate trustee, the term of the new   alternate trustee extends until the expiration of the original   alternate trustee's term.]          (f)  The nomination and election of the trustees under   Subsection (b)(3) or (4) of this section [representing the police   and fire departments] shall be held under the supervision of the   board, and the board shall adopt such rules [and regulations]   governing the election procedure as it considers appropriate, as   long as the rules [and regulations] are consistent with generally   accepted principles of secret ballot and majority rule. The rules   [and regulations] adopted by the board shall be recorded in the   minutes of the board and made available to the members of any   pension plan within the pension system.          (h)  The executive director [administrator], or in the   executive director's [administrator's] absence a member of the   administrative staff designated by the board, shall serve as the   secretary of the board.          (i)  The board shall serve without separate compensation   from the fund, but a trustee is entitled to reimbursement for travel   expenses and, if applicable, [with entitlement] to any appropriate   compensation from the city as if the trustee [board members] were   performing the trustee's [their] regular functions for the police   or fire department or for the city. The board shall meet not less   than once each month and may meet at any time on the call of its   chairman.          (j)  The board has full power to make rules [and regulations]   pertaining to the conduct of its meetings and to the operation of   the pension system as long as its rules are not, subject to   Subsections (j-1) and (j-2) of this section, inconsistent with the   terms of this article, any pension plan within the pension system,   or the laws of this state or the United States to the extent   applicable. A board meeting may be held by telephone conference   call or by videoconference call in accordance with Sections 551.125   and 551.127, Government Code, except that Section 551.125(b),   Government Code, does not apply.          (j-1)  Subject to Subsection (o)(2) of this section, the   board may adopt a rule that conflicts with this article:                (1)  to ensure compliance with the code, including   Section 415 of the code, and other applicable federal law;                (2)  subject to Subsections (j-5) through (j-8) of this   section, to amortize the unfunded actuarial accrued liability of   the pension system within a period that does not exceed 35 years, if   the board determines the rule is appropriate based on the   evaluations required under Subsection (j-5) of this section; or                (3)  subject to Subsections (j-6) and (j-7) of this   section and notwithstanding any other law, to increase the benefits   provided under this article in any manner the board determines   appropriate if the increase will not cause the amortization period   of the unfunded actuarial accrued liability of the pension system   to exceed 25 years, after taking into account the impact of the   increase.          (j-2)  Except as provided by Subsection (j-1) of this section   or Section 4.02(b) of this article, a provision of any plan provided   by the pension system may only be amended if approved by the board.   An amendment described by this subsection:                (1)  may not cause the amortization period of the   unfunded actuarial accrued liability of the pension system to   exceed 35 years, after taking into account the impact of the   amendment, as determined by the board and reviewed by the State   Pension Review Board; and                (2)  is not required to be ratified by the legislature.          (j-3)  The board may correct any defect, supply any omission,   and reconcile any inconsistency that may appear in this article in a   manner and to the extent that the board believes would:                (1)  be expedient for the administration of the pension   system;                (2)  be for the greatest benefit of all members,   pensioners, and qualified survivors; and                (3)  not adversely affect the benefits of a member,   pensioner, or qualified survivor.          (j-4)  The board has full discretion and authority to   construe and interpret the combined pension plan and to do all acts   necessary to carry out the purpose of the combined pension plan. A   decision of the board is final and binding on all affected parties.          (j-5)  Not later than January 1, 2018, the board shall   conduct an evaluation of:                (1)  how benefits are computed under this article to   identify potential means of abusing the computation of benefits to   inflate pension benefits received by pensioners; and                (2)  the impact, including the impact on the combined   pension plan, of establishing one or more alternative benefit   plans, including a defined contribution plan or a hybrid retirement   plan that combines elements of both a defined benefit plan and a   defined contribution plan, for newly hired employees of the city   and for members who voluntarily elect to transfer to an alternative   benefit plan.          (j-6)  The board may not adopt a rule under Subsection   (j-1)(2) or (3) of this section unless the rule has first been   reviewed by the State Pension Review Board and the State Pension   Review Board finds that implementation of a rule under:                (1)  Subsection (j-1)(2) of this section complies with   the amortization period prescribed by that subdivision and   Subsection (j-8) of this section; or                (2)  Subsection (j-1)(3) of this section complies with   the amortization period prescribed by that subdivision.          (j-7)  The board shall provide the State Pension Review Board   with a copy of a proposed rule for purposes of Subsection (j-6) of   this section at least 90 days before the date the board intends to   implement the rule.          (j-8)  The board may not adopt a rule under Subsection   (j-1)(2) of this section based on an evaluation under Subsection   (j-5)(2) of this section if the board determines implementation of   the rule would cause the amortization period of the unfunded   actuarial accrued liability of the combined pension plan or any   plan established under this article by the pension system to exceed   35 years, after taking into account implementation of the rule.          (j-9)  At least twice each year, the board shall have a   meeting to receive public input regarding the pension system and to   inform the public about the health and performance of the pension   system. The State Pension Review Board is entitled to all documents   and other information provided to the public or that are the basis   for information provided to the public, as determined by the State   Pension Review Board, for purposes of this subsection and shall   independently review the information to ensure its validity.          (j-10)  An employee or other agent acting on behalf of the   pension system commits an offense if the person knowingly provides   false information to the State Pension Review Board under   Subsection (j-9) of this section. An offense under this subsection   is a Class B misdemeanor.          (n)  Six [Four] trustees of the board constitute a quorum at   any [called] meeting[, except that a trustee from the police   department and a trustee from the fire department must be present to   conduct business].          (o)  No action may be taken by the board except at a meeting.   Except as otherwise specifically provided by this article or other   law:                (1)  [, and] no action shall be taken during a board   meeting without the approval of a majority of the trustees of the   board; and                (2)  no action otherwise authorized by this article or   other law may be taken that establishes an alternative benefit   plan, reduces the city contribution rate, increases the member   contribution rate, or reduces benefits, including accrued   benefits, without the approval of two-thirds of the trustees of the   board [present].          (o-1)  Only actions of the board taken or approved of during   a meeting are binding on the board, and no other written or oral   statement or representation made by any person is binding on the   board or the pension system.          (p)  The board may file suit on behalf of the pension system   in a court of competent jurisdiction regardless of the court's   location. The board has sole authority to litigate matters on   behalf of the pension system. Notwithstanding Chapter 15, Civil   Practice and Remedies Code, or any other law, an action against the   pension system or the board shall be brought in a court of competent   jurisdiction located in the city or county in which the pension   system is located.          (q)  The board may purchase from one or more insurers one or   more insurance policies that provide for the reimbursement of a   trustee or employee of the pension system for liability imposed as   damages caused by, and for costs and expenses incurred by the   individual in defense of, an alleged act, error, or omission   committed by the individual in the individual's capacity as a   fiduciary or employee of the pension system. The board may not   purchase an insurance policy that provides for the reimbursement of   a trustee or employee of the pension system due to the trustee's or   employee's dishonesty, fraudulent breach of trust, lack of good   faith, intentional fraud or deception, or intentional failure to   act prudently.          (r)  The board shall adopt a code or codes of ethics   consistent with Section 825.212, Government Code. In adopting or   amending a code or codes of ethics, the board may consider comments   on the policy from the city attorney of the city. The board shall:                (1)  review the code or codes of ethics on an annual   basis and amend the code or codes as the board considers necessary;                (2)  file a copy of the code or codes of ethics adopted   or amended in accordance with this subsection with the State   Pension Review Board; and                (3)  provide a copy of the code or codes of ethics   adopted or amended in accordance with this subsection to the city   attorney.          (s)  The board shall develop an Internet website designed to   give active members and pensioners access to the information   concerning the pension system and the individual's participation in   the pension system required by Section 802.106, Government Code, as   well as information concerning the financial health of the pension   system.          SECTION 1.06.  Part 3, Article 6243a-1, Revised Statutes, is   amended by adding Sections 3.011, 3.012, and 3.013 to read as   follows:          Sec. 3.011.  NOMINATIONS COMMITTEE. (a) Subject to   Subsection (b) of this section, the nominations committee consists   of:                (1)  the executive director, who is a nonvoting member;   and                (2)  the president, chair, or other executive head of   the following organizations or their successor organizations, or   that person's designee:                      (A)  the Dallas Black Firefighters Association;                      (B)  the Black Police Association of Greater   Dallas;                      (C)  the National Latino Law Enforcement   Organization;                       (D)  the Dallas Fraternal Order Police Lodge 588;                      (E)  the Dallas Police Association;                       (F)  the Dallas Fire Fighters Association,   International Association of Fire Fighters Local No. 58;                      (G)  the Dallas Hispanic Firefighters   Association, Inc.;                      (H)  the Dallas Police Retired Officers   Association;                      (I)  the Dallas Retired Firefighters Association;                      (J)  the Retired Black Firefighters Association   of Dallas; and                      (K)  the Dallas Hispanic Retired Fire Fighters   Association.          (b)  If an organization described by Subsection (a)(2) of   this section elects not to participate on the nominations   committee, is prohibited from participating on the nominations   committee under Subsection (g) of this section, or ceases to exist,   the nominations committee members appointed under that subsection   consist only of representatives of the remaining organizations, if   any.          (c)  The executive director shall serve as presiding officer   of the nominations committee.          (d)  The nominations committee shall meet at the call of the   presiding officer.          (e)  The nominations committee shall appoint trustees to the   board in accordance with Sections 3.01(b)(2) and (b-3) of this   article.          (f)  A person serving on the nominations committee under   Subsection (a)(2) of this section serves without compensation and   may not be reimbursed for travel or other expenses incurred while   conducting the business of the nominations committee. The   executive director may not receive additional compensation for   service on the nominations committee.          (g)  An organization described by Subsection (a)(2) of this   section may not participate on the nominations committee unless the   organization is in good standing with the secretary of state, if   applicable.          (h)  Chapter 2110, Government Code, does not apply to the   nominations committee.          (i)  The nominations committee may establish policies and   procedures governing its operations.          Sec. 3.012.  REMOVAL OF TRUSTEES. (a) In accordance with   procedures adopted by board rule, a trustee:                (1)  appointed under Section 3.01(b)(1) of this article   may be removed by the mayor for cause; and                (2)  appointed or elected under Section 3.01(b)(2),   (3), or (4) of this article may be removed by the nominations   committee for cause.          (b)  It is a cause for removal of a trustee from the board   that the trustee:                (1)  does not have at the time of taking office the   qualifications required by Section 3.01(b) or (b-1)(1) of this   article, subject to Subsection (b-3) of that section;                (2)  does not maintain during service on the board the   qualifications required by Section 3.01(b) or (b-1)(1) of this   article, subject to Subsection (b-3) of that section;                (3)  is ineligible for membership under Section   3.01(b-1)(2) or (b-2) of this article; or                (4)  is absent from more than 40 percent of the meetings   that the trustee is eligible to attend during a calendar year   without an excuse approved by a majority vote of the board.          (c)  The validity of an action of the board is not affected by   the fact that it is taken when a cause for removal of a trustee   exists.          (d)  If the executive director has knowledge that a potential   cause for removal exists, the executive director shall notify the   chairman of the board of the potential cause. The chairman shall   then notify the appointing or nominating official or body, as   appropriate, that a potential cause for removal exists. If the   potential cause for removal involves the chairman, the executive   director shall notify the vice chairman or next highest ranking   officer of the board, who shall then notify the appointing or   nominating official or body, as appropriate, that a potential cause   for removal exists.          Sec. 3.013.  TRUSTEE TRAINING. (a) A person who is   appointed or elected to the board and qualifies for office as a   trustee shall complete a training program that complies with this   section.          (b)  The training program must provide the person with   information regarding:                (1)  the law governing the pension system's operations;                (2)  the programs, functions, rules, and budget of the   pension system;                (3)  the scope of and limitations on the rulemaking   authority of the board;                (4)  the results of the most recent formal audit of the   pension system;                (5)  the requirements of:                      (A)  laws relating to open meetings, public   information, administrative procedure, and disclosing conflicts of   interest; and                      (B)  other laws applicable to a trustee in   performing the trustee's duties, including the board's fiduciary   duties described under Section 3.01(a) of this article;                (6)  the code or codes of ethics adopted under Section   3.01(r) of this article and any applicable ethics policies adopted   by the Texas Ethics Commission; and                (7)  financial training regarding the risks of   investing in alternative investments.          (c)  The executive director shall create a training manual   that includes the information required by Subsection (b) of this   section. The executive director shall distribute a copy of the   training manual annually to each trustee. On receipt of the   training manual, each trustee shall sign and submit to the   executive director a statement acknowledging receipt of the   training manual.          SECTION 1.07.  Section 3.02, Article 6243a-1, Revised   Statutes, is amended to read as follows:          Sec. 3.02.  PROFESSIONAL CONSULTANTS. In addition to the   authority of the board to employ the services of certain   consultants set forth in this article, the board has the authority   to employ the services of any professional consultant recommended   by the executive director, including investment advisors and   investment managers, whenever the services of the consultants   [consultant] are considered necessary or desirable and in the best   interests of the pension system, as determined by the board in   consultation with the executive director. A professional   consultant shall receive such compensation as may be determined by   the board in accordance with Section 4.01 of this article.          SECTION 1.08.  Part 3, Article 6243a-1, Revised Statutes, is   amended by adding Section 3.025 to read as follows:          Sec. 3.025.  CHIEF INVESTMENT OFFICER. The executive   director may hire a chief investment officer, subject to   confirmation by the board, to assist the pension system regarding   the investment of assets of the fund. Compensation for a chief   investment officer hired under this section shall be made in   accordance with Section 4.01 of this article.          SECTION 1.09.  Section 3.03, Article 6243a-1, Revised   Statutes, is amended by amending Subsections (b) and (c) and adding   Subsection (b-1) to read as follows:          (b)  Subject to Subsection (b-1) of this section, the [The]   city attorney or an assistant city attorney may [shall] attend   board [all] meetings [of the board] and may advise the board on any   matter on which the pension system [board] requests a legal opinion   from the city attorney.          (b-1)  The city attorney or an assistant city attorney is not   required to provide an opinion under Subsection (b) of this section   unless the opinion is requested by the city council on behalf of the   pension system. The city attorney or assistant city attorney may   decline to provide the opinion if the subject matter of the request   is too dependent on disputed facts to permit a generalized opinion,   as determined by the city attorney or assistant city attorney.          (c)  The board may retain other attorneys to serve as legal   advisors to [represent] the board [or to give advice]. The   executive director may hire a chief legal officer, subject to   confirmation by the board, or other attorneys if necessary to carry   out the business of the pension system. Compensation for a chief   legal officer or other attorneys hired under this subsection shall   be made in accordance with Section 4.01 of this article.          SECTION 1.10.  Section 3.04, Article 6243a-1, Revised   Statutes, is amended to read as follows:          Sec. 3.04.  APPOINTMENT OF EXECUTIVE DIRECTOR   [ADMINISTRATOR]. (a) The board has the authority to appoint an   executive director [administrator] to assist [carry out the   business of] the board with administering the pension system and   ensure that records are kept [to keep a record] of the proceedings   of the board. Subject to Subsection (a-1) of this section, a person   appointed executive director under this section:                (1)  must have, to the extent possible, relevant   experience in managing a similarly situated business entity; and                (2)  may not be a current or former trustee [The   administrator, in carrying out the business of the board within the   scope of the administrator's responsibility, may not be considered   a fiduciary with respect to the pension system].          (a-1)  During any period in which the most recent actuarial   valuation of the pension system indicates that the period needed to   amortize the unfunded actuarial accrued liability of the pension   system exceeds 35 years, the board shall, to the extent lapsed   investments are a significant portion of the pension system's   assets, ensure that the executive director appointed under   Subsection (a) of this section has, or hires staff that has,   appropriate experience in managing a business entity with lapsed   investments in a manner that resulted in the improved liquidity or   profitability of the business entity.          (b)  Subject to Subsections (b-1) and (b-3) of this section    [the approval of the board], the executive director [administrator]   may select any number of persons the executive director determines   appropriate to assist the executive director in carrying out the   executive director's duties under this section.  Subject to Section   4.01 of this article, the titles and salaries of persons selected to   assist the executive director shall be determined by the executive   director.          (b-1)  The executive director may not select a person to   assist the executive director who is an active, former, or retired   police officer or fire fighter of the city [administrator].          (b-2)  The executive director shall establish the   organizational structure of pension system employees to optimize   administration of the pension system.          (b-3)  A former or retired employee of the city may not   before the third anniversary of the first day of the month following   the date the person terminated employment with the city serve the   pension system in any capacity other than as a trustee. Except as   specifically provided by this article or other law, an employee of   the city may not serve the pension system in any capacity other than   as a trustee.          (c)  The executive director [Both the administrator] and   those persons selected to assist the executive director   [administrator] may be considered employees of the city. Unless   otherwise delegated to the executive director [administrator], the   board shall have the ultimate authority to retain, discipline, or   terminate the engagement of the executive director.          (d)  The executive director owes a fiduciary duty to the   pension system and shall ensure the sustainability of the pension   system for the purpose of providing current and future benefits to   members of the pension system and their beneficiaries [any persons   selected under this subsection].          SECTION 1.11.  Sections 4.01(a), (c), and (d), Article   6243a-1, Revised Statutes, are amended to read as follows:          (a)  The board shall pay for all costs of administration out   of the income from the fund when in the judgment of the board the   costs are necessary, including the cost of:                (1)  salaries and benefits for the executive director   [of the administrator, assistant administrator,] and   administrative staff;                (2) [,]  office expenses;                (3)  expenses associated with securing[,] adequate   office space and associated utilities;                (4)  compensation for [, and] professional   consultants, professional investment managers, or other persons   providing professional services; and                (5)  any other expenses approved by the board[, out of   income from the fund when it is actuarially determined that the   payments will not have an adverse effect on the payment of benefits   from any of the plans within the pension system and when in the   judgment of the board the costs are necessary]. [The city shall   provide for costs of administration if the board determines that   payment of the costs by the fund will have an adverse effect on the   payment of benefits from any plan within the pension system.]          (c)  No expenditure for the costs of administration,   including the [or] payment of any fee for professional consultants,   professional investment management services, or any other person   providing professional services, may be made from the fund without   the approval of the board.          (d)  After the board has developed an annual budget for the   pension system, the budget shall be presented to the city manager   [city's budget office] for comment. The city manager [city's budget   office] may request the board to reconsider the appropriation for   any expenditure at a board meeting, but the board shall make the   final determination concerning any appropriation.          SECTION 1.12.  Sections 4.02(b), (d), and (e), Article   6243a-1, Revised Statutes, are amended to read as follows:          (b)  Funds contributed by the city as its share of the amount   required to finance the payment of benefits under the pension   system may be used for no other purpose. The city is not   responsible for the payment of any administrative or professional   service fees of the pension system.  Any change to the [The]   contributions required to be made to the pension system by the city   [shall be annually appropriated by the city council and   periodically paid on the basis of a percentage of the total wages   and salaries of the members of the police and fire departments who   are members of each of the plans within the pension system. The   amount of this percentage and any change in it] may [be determined]   only be made:                (1)  by the legislature; [or]                (2)  by a majority vote of the voters of the city; or                (3)  in accordance with a written agreement entered   into between the pension system, by a two-thirds vote of all   trustees of the board, and the city, provided that a change made in   accordance with this subdivision may not increase the period   required to amortize the unfunded actuarial accrued liability of   the fund.          (d)  Subject to Section 4.025 of this article, the city shall   make contributions to the pension system biweekly in an amount   equal to the sum of:                (1)  the greater of:                      (A)  34.5 percent of the aggregate computation pay   paid to members during the period for which the contribution is   made; or                      (B)  except as provided by Section 4.021(b)(1) of   this article, the applicable amount set forth below:                            (i)  $5,173,000 for the biweekly pay periods   beginning with the first biweekly pay period that begins after   September 1, 2017, and ends on the last day of the first biweekly   pay period that ends after December 31, 2017;                            (ii)  $5,344,000 for the 26 biweekly pay   periods immediately following the last biweekly pay period   described by Subparagraph (i) of this paragraph;                            (iii)  $5,571,000 for the 26 biweekly pay   periods immediately following the last biweekly pay period   described by Subparagraph (ii) of this paragraph;                            (iv)  $5,724,203 for the 26 biweekly pay   periods immediately following the last biweekly pay period   described by Subparagraph (iii) of this paragraph;                            (v)  $5,882,000 for the 26 biweekly pay   periods immediately following the last biweekly pay period   described by Subparagraph (iv) of this paragraph;                            (vi)  $6,043,000 for the 26 biweekly pay   periods immediately following the last biweekly pay period   described by Subparagraph (v) of this paragraph;                            (vii)  $5,812,000 for the 26 biweekly pay   periods immediately following the last biweekly pay period   described by Subparagraph (vi) of this paragraph;                             (viii)  $6,024,000 for the 26 biweekly pay   periods immediately following the last biweekly pay period   described by Subparagraph (vii) of this paragraph through the   biweekly pay period that ends after December 31, 2024; and                            (ix)  $0 for each subsequent biweekly pay   period beginning with the first biweekly pay period following the   last biweekly pay period described by Subparagraph (viii) of this   paragraph; and                (2)  except as provided by Subsection (e) of this   section or Section 4.021(b)(2) of this article, an amount equal to   1/26th of $11 million. [The percentage of required contributions   from the city shall be in accordance with the following schedule and   any increase or decrease in city contributions shall occur   automatically on any increases or decreases in the members'   contribution percentage:   [City Contributions Member Contributions   28-1/2% 9%   27-1/2% 8-1/2%   26% 8%   24-1/2% 7-1/2%   23% 7%   21-1/2% 6-1/2%]          (e)  The city is required to pay the contribution amount   described by Subsection (d)(2) of this section only through the   last biweekly pay period that ends after December 31, 2024 [may   elect to contribute more than that required in the schedule   provided by Subsection (d) of this section, except that the city's   contribution percentage may not exceed 28-1/2 percent unless   approved as provided by Subsection (b) of this section. Further, in   no event may the city's contribution be less than 21-1/2 percent   unless approved as provided by Subsection (b)].          SECTION 1.13.  Part 4, Article 6243a-1, Revised Statutes, is   amended by adding Sections 4.021 and 4.025 to read as follows:          Sec. 4.021.  ALTERNATIVE CONTRIBUTION ON PASSAGE AND   IMPLEMENTATION OF CERTAIN LEGISLATION. (a) This section applies   only if:                (1)  S.B. 2 or similar legislation of the 85th   Legislature, Regular Session, 2017, that has the effect of lowering   the rollback tax rate of the city as calculated under Chapter 26,   Tax Code, is enacted and becomes law; and                (2)  for the applicable tax year, the city:                      (A)  adopts an ad valorem tax rate for the   purposes of funding the city's contribution under Section   4.02(d)(1) of this article that:                            (i)  exceeds the city's rollback tax rate as   calculated under Chapter 26, Tax Code; but                            (ii)  does not exceed the city's rollback tax   rate as that rate would have been calculated under that chapter as   it existed immediately before the effective date of the legislation   described by Subdivision (1) of this subsection; and                      (B)  is required to hold an election for either of   the following purposes:                            (i)  to determine whether to reduce the tax   rate adopted for the applicable tax year to the rollback tax rate   calculated as provided by Chapter 26, Tax Code; or                            (ii)  to determine whether to approve the   tax rate adopted for the applicable tax year.          (b)  For purposes of Section 4.02 of this article, if a   majority of the votes cast at an election described by Subsection   (a)(2)(B)(i) of this section favor reducing the tax rate adopted   for the applicable tax year to the rollback tax rate calculated as   provided by Chapter 26, Tax Code, or a majority of the votes cast at   an election described by Subsection (a)(2)(B)(ii) of this section   do not favor the approval of the tax rate adopted for the applicable   tax year, as applicable:                (1)  the amounts prescribed by Section 4.02(d)(1)(B) of   this article do not apply, and the applicable amounts under that   paragraph for the 26 biweekly pay periods that begin after the date   the official election result is determined are instead as set forth   below:                      (A)  $4,936,000 for each biweekly pay period that   begins in the 2017 calendar year;                      (B)  $4,830,000 for each biweekly pay period that   begins in the 2018 calendar year;                      (C)  $5,082,000 for each biweekly pay period that   begins in the 2019 calendar year;                      (D)  $5,255,000 for each biweekly pay period that   begins in the 2020 calendar year;                      (E)  $5,414,000 for each biweekly pay period that   begins in the 2021 calendar year;                      (F)  $5,600,000 for each biweekly pay period that   begins in the 2022 calendar year;                      (G)  $5,812,000 for each biweekly pay period that   begins in the 2023 calendar year;                      (H)  $6,024,000 for each biweekly pay period that   begins in the 2024 calendar year; and                      (I)  $0 for each subsequent biweekly pay period   beginning with the biweekly pay period that begins in the 2025   calendar year; and                (2)  the amount prescribed by Section 4.02(d)(2) of   this article is, except as provided by Section 4.02(e) of this   article, $5 million instead of $11 million.          (c)  After making contributions for 26 biweekly pay periods   using the amounts prescribed by Subsection (b) of this section, the   city shall make contributions using the amounts prescribed by   Section 4.02(d) of this article unless Subsection (b) of this   section again applies.          Sec. 4.025.  CITY OR MEMBER CONTRIBUTIONS IF NO UNFUNDED   ACTUARIAL LIABILITIES. Notwithstanding Section 4.02 or 4.03 of   this article, if the pension system has no unfunded actuarial   liability according to the most recent actuarial valuation, the   annual normal costs must be equally divided between the city and the   members unless equally dividing the costs would increase the member   contribution rates beyond the rates prescribed by Section 4.03 of   this article. The board shall adjust the city contribution rates   under Section 4.02 of this article and the member contribution   rates under Section 4.03 of this article accordingly, and certify   the adjusted rates.  After the completion of a subsequent actuarial   valuation showing unfunded actuarial liabilities, the contribution   rates applicable under Sections 4.02 and 4.03 of this article   apply.          SECTION 1.14.  Section 4.03, Article 6243a-1, Revised   Statutes, is amended by amending Subsections (a), (b), (c), (d),   and (g) and adding Subsections (a-1), (d-1), (d-2), and (i) to read   as follows:          (a)  Subject to Subsection (a-1) of this section and except   as provided by Section 4.025 of this article, each [Each] Group A   member of the combined pension plan shall have 13.5 [6.5] percent of   base pay deducted from the member's wages on a biweekly basis [each   month], and the contributions shall be promptly remitted to the   fund by the city.          (a-1)  If a Group A member is assigned, for any period, to a   job-sharing program or any similar work schedule that is considered   by the member's department to be less than a full-time work   schedule, the member's contributions are determined by multiplying   the applicable contribution rate by a fraction, the numerator of   which is the number of hours the member actually worked during the   period and the denominator of which is the number of hours the   member would have worked during the period if the member had been   working a full-time work schedule.          (b)  Each member shall [continue to] contribute to the fund   under the applicable terms of this article [section] until the   member leaves active service with either department. If a member   leaves active service with a department, [or until the beginning of   the member's 33rd year of pension service, at which time] the member   shall cease making contributions.          (c)  Each Group B member shall authorize the city to deduct   from the member's salary a percentage of the member's computation   pay. The authorization shall be in writing and filed with the   executive director [administrator].          (d)  Subject to Subsection (d-1) of this section and except   as provided by Section 4.025 of this article, for pay periods   starting on or after September 1, 2017, each [Each] Group B member   shall have 13.5 [8.5] percent of the member's computation pay   deducted from the member's wages on a biweekly basis [each month,]   and the contributions shall be promptly remitted to the fund by the   city.          (d-1)  If a Group B member is assigned, for any period, to a   job-sharing program or any similar work schedule that is considered   by the member's department to be less than a full-time work   schedule, the member's contributions are determined by multiplying   the applicable contribution rate by a fraction, the numerator of   which is the number of hours the member actually worked during the   period and the denominator of which is the number of hours the   member would have worked during the period if the member had been   working a full-time work schedule.          (d-2)  For purposes of Subsection (d) of this section,   "computation pay" includes computation pay paid to a Group B member   during any period the member is receiving workers' compensation.          (g)  The percentage of base pay contributed by Group A   members or computation pay contributed by Group B members may not be   altered except by an adjustment under Section 4.025 [amendment   pursuant to the terms of Section 4.02] of this article.          (i)  Member contributions under this article or any payments   a member is entitled to make under this article to receive   additional pension service may be picked up by the city under the   terms of an appropriate resolution of the city council.          SECTION 1.15.  Section 4.04, Article 6243a-1, Revised   Statutes, is amended by amending Subsections (a), (c), (d), (e),   (f), (g), (h), (j), and (k) and adding Subsections (f-1) and (h-1)   to read as follows:          (a)  Except as provided by Subsection (d) or (e) of this   section, a [A] Group B member who, either voluntarily or   involuntarily, leaves active service is entitled to a refund from   the fund of the total amount of the member's Plan B and Group B   contributions, without interest, that were paid beginning with the   effective date of the member's Group B membership or membership in   Plan B. A refund under this subsection results in a total   cancellation of pension service credit and the member and any   person who would otherwise take by, through, or under the member is   not entitled to any benefits from the pension system [an   appropriate reduction of pension service].          (c)  A [former] Group B member who desires [desiring] a   refund of the Plan B or Group B contributions under Subsection (a)   of this section [the person made to the fund] must make written   application for the refund with the executive director   [administrator]. In no case may any refund be made to a [any   former] Group B member before the expiration of 30 days after the   date the person leaves active service.          (d)  Subject to Subsection (k) of this section, if a Group B   member with less than five years of pension service either   voluntarily or involuntarily leaves active service and fails to   make written application for a refund of contributions within three   years after the date of the notice described by Subsection (j) of   this section [is] made by the board, the person forfeits the right   to withdraw any portion of the contribution, and the total amount of   Plan B and Group B contributions the person made will remain in the   fund. If the Group B member described by this subsection dies after   leaving active service, the [person's heirs or, if there are no   heirs, the] deceased member's designee [estate] may apply for the   refund of the person's contributions, resulting in an appropriate   loss of pension service if the application is filed with the   executive director [administrator] within three years after the   date of the notice described by Subsection (j) of this section [is]   made by the board. Subject to Subsection (k) of this section, if a   Group B member's designee [heirs or estate] fails to apply for a   refund of the Group B member's contributions within the three-year   period described by this subsection, the designee forfeits [heirs   and the estate forfeit] any right to the contributions, and the   total amount of the Plan B and Group B contributions made by the   Group B member will remain in the fund.          (e)  Subject to Subsection (k) of this section, if a Group B   member with five or more years of pension service either   voluntarily or involuntarily leaves active service and fails to   make written application for a refund of the person's Plan B and   Group B contributions within three years after the date of the   notice described by Subsection (j) of this section [is] made by the   board, the person forfeits the right to withdraw any portion of the   contributions, and the total amount of the contributions will   remain in the fund. A Group B member described by this subsection   may, however, apply for a Group B retirement pension [benefits]   under Section 6.02 of this article or, if the Group B member dies   before the member is eligible to apply for a Group B retirement   pension, the member's qualified survivors [benefits, the person's   heirs or, if there are no heirs, the deceased member's estate] may   apply for Group B death benefits under Sections 6.06, 6.061, 6.062,   and 6.063 of this article. If the Group B member dies before the   member is eligible to apply for a Group B retirement pension and the   member has no qualified survivors, the Group B member's designee   [in accordance with the provisions of this article, or the heirs or   the estate] may apply for a refund of the Group B member's Plan B and   Group B contributions, resulting in a total cancellation [an   appropriate loss] of pension service. Subject to Subsection (k) of   this section, if a Group B member's designee [heirs or estate] fails   to apply for a refund of the Group B and Plan B member's   contributions within the three-year period described by this   subsection, the designee forfeits [heirs and the estate forfeit]   any right to the contributions, and the total amount of the Plan B   and Group B contributions made by the Group B member will remain in   the fund.          (f)  Subject to Subsections (g) and (h) of this section, [If]   a Group B member, other than a Group B member who elects or has   elected to receive a Group A benefit or a benefit determined under   the old plan or Plan A, who [with five or more years of pension   service] either voluntarily or involuntarily leaves active service   with five or more years of pension service [, the person] is   entitled to:                (1)  subject to Subsection (f-1) of this section, have   the total amount of the person's Plan B and Group B contributions to   the fund refunded in accordance with Subsection (a) of this   section, which results in a loss of all of the person's accrued   pension service; or                (2)  if the Group B member first entered active service   before January 1, 1999, elect to take a refund of less than the   total amount of the person's Plan B and Group B contributions while   leaving a sufficient amount to retain pension service amounting to   five or more years.          (f-1)  A Group B member who elects to receive a refund under   Subsection (f)(1) of this section and any person who would   otherwise take by, through, or under the member is not entitled to   any benefits from the pension system.          (g)  If a Group B member elects a refund of a portion of the   person's contributions under Subsection (f)(2) of this section, the   amount of the refund shall equal the total amount of the person's   Plan B and Group B annual contributions, without interest, for each   full year of pension service canceled [cancelled], computed based   on the earliest contributions made.          (h)  A [former] Group B member who first entered active   service on or after January 1, 1999, is entitled to have the total   amount of the person's Group B contributions refunded under   Subsection (a) of this section in accordance with Subsection (f)(1)   of this section, but may not receive a refund of less than the total   amount in accordance with Subsection (f)(2) of this section.          (h-1)  A Group B member who leaves active service and later   returns to active service is permitted to repay to the fund any   previously withdrawn employee contributions and receive pension   service in accordance with Section 5.07(d) of this article as a   Group B member to the extent that [if,] before again leaving active   service, the Group B member repays [completely] to the fund the   previously withdrawn contributions with interest, calculated at   the interest rate from time to time used in the pension system's   actuarial rate of return assumptions, compounded annually, on the   previously withdrawn contributions [for the period from the date   the contributions were withdrawn until the date the principal and   accrued interest are repaid in full].          (j)  On the 58th [50th] anniversary of the birth of a Group B   member described by Subsection (d) or (e) of this section, or on the   board's receipt of notice of the death of the Group B member, the   board shall, by registered or certified mail, return receipt   requested, attempt to notify the Group B member or designee [the   member's heirs or estate], as applicable, of the status of the   person's [their] entitlement to a refund of contributions from the   fund.          (k)  A Group B member or designee described by Subsection (d)   or (e) of this section [or the heirs or estate of the Group B member]   shall have the person's [their] right, title, interest, or claim to   a refund of the Group B member's contributions reinstated only on   the board's grant of their written request for a reinstatement and   refund. The board's decision shall be based on a uniform and   nondiscriminatory basis [policy that it shall, from time to time,   adopt].          SECTION 1.16.  Section 4.06(c), Article 6243a-1, Revised   Statutes, is amended to read as follows:          (c)  The authority of the board to make a custody account or   master trust agreement is supplementary to its authority to make an   investment management contract. Allocation of assets to a custody   account or master trust shall be coordinated by the executive   director [administrator], as authorized by the board, and the bank   designated as custodian or master trustee for the assets.          SECTION 1.17.  Section 4.07, Article 6243a-1, Revised   Statutes, is amended by amending Subsections (a), (d), and (g) and   adding Subsection (h) to read as follows:          (a)  Subject to Section 4.071 of this article, if [If] the   board determines that there is in the fund a surplus exceeding a   reasonably safe amount to take care of current demands on the   pension system, the board may invest or direct the investment of the   surplus for the sole benefit of the pension system.          (d)  The board also has the authority to contract for   professional investment management services. Any contract that the   board makes with an investment manager shall set forth the board's   investment policies and guidelines [of the board for the use of   standard rating services and shall include specific criteria for   determining the quality of investments]. A professional investment   management service shall receive such compensation as may be   determined by the board in accordance with Section 4.01 of this   article.          (g)  A [No investment manager, other than a] bank or trust   company that has custody and trustee powers and a contract with the   board to provide assistance in making investments[,] shall be the   custodian or master trustee of any of the securities or other assets   of the fund. Pursuant to Section 4.06 of this article, the board   may designate a bank to serve as custodian or master trustee, or   subcustodian or submaster trustee, to perform the customary duty of   safekeeping as well as duties incident to the execution of   transactions. As the demands of the pension system require, the   board shall withdraw from the custodian or master trustee money   previously considered surplus in excess of current cash and   proceeds from the sale of investments. The money may without   distinction be used for the payment of benefits pursuant to each of   the plans within the pension system and for other uses authorized by   this article and approved by the board.          (h)  The board through policy shall establish an investment   advisory committee composed of trustees and outside investment   professionals to review investment related matters as prescribed by   the board and make recommendations to the board.  A majority of the   members of the committee established under this subsection must be   outside investment professionals.          SECTION 1.18.  Part 4, Article 6243a-1, Revised Statutes, is   amended by adding Section 4.071 to read as follows:          Sec. 4.071.  BOARD APPROVAL OF CERTAIN ALTERNATIVE   INVESTMENTS. (a) The executive director, an investment manager, a   provider of professional investment management services or   professional advisory services, or any other person delegated   authority to invest or reinvest pension system assets under this   article may not invest pension system assets in a single   alternative investment unless the board votes to approve the   investment by a two-thirds vote of all the trustees.          (b)  The board may adopt rules necessary to implement this   section.          SECTION 1.19.  Section 4.08, Article 6243a-1, Revised   Statutes, is amended by adding Subsection (c) to read as follows:          (c)  On written request by the city, the executive director   shall make available to the city's actuary or auditor the   information and documents provided to or used by the pension   system's actuary or auditor in conducting an actuarial valuation   under this article or preparing any other document prepared under   this article.          SECTION 1.20.  Section 4.09, Article 6243a-1, Revised   Statutes, is amended to read as follows:          Sec. 4.09.  REWARDS, DONATIONS, AND CONTRIBUTIONS. Any   reward, donation, or contribution given to any member as payment or   gratuity for service performed in the line of duty shall be turned   over to the chief of the member's department, who shall, in turn,   forward the reward, donation, or contribution to the executive   director [administrator] of the pension system for deposit in the   fund.          SECTION 1.21.  Section 5.01, Article 6243a-1, Revised   Statutes, is amended to read as follows:          Sec. 5.01.  MEMBERSHIP IN COMBINED PENSION PLAN. (a) Except   as provided by Subsection (a-1) of this section, the [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 [office] 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 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.          (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   [administrator] not later than 60 days after the date of return to   active service. [As a condition of either Group A or Group B   membership, the board may require the person to undergo a physical   examination and be certified by the health director as being   capable of performing the duties to which the person will be   assigned.] 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 [administrator] not later than 60 days after   the date of return to active service. [As a condition of Group B   membership, the board may require the pensioner to undergo a   physical examination and be certified by the health director as   being capable of performing the duties to which the person will be   assigned.] 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 person's 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 [administrator]. 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 [constitute] Group B   membership. Group B membership is contingent on the satisfaction   of the following conditions:                (1)  the [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 [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 [that] date prescribed by Subsection   (d)(2) of this section, all payments made under Subsection (d)(1)   of this section [of this type], as well as those contribution   amounts paid by the person after the person's 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 person's death to the person's designee   [surviving spouse, children, or estate], 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   [administrator].          SECTION 1.22.  Sections 5.02(a), (d), (e), (h), and (i),   Article 6243a-1, Revised Statutes, are amended to read as follows:          (a)  The effective date of Group B membership for a person   who becomes a Group B member under [persons described by] Section   5.01(a)(2)(A) or (B) of this article is the date the Group B member   first became a member of Plan B [January 1, 1993].          (d)  The effective date of Group B membership for a person   [former Group B member] who again becomes a Group B member and is   described by Section 5.01(a)(2)(E) of this article is the person's   original effective date of Group B membership, adjusted for any   period for which [that] the person was not on active service or [,   if the person] has [not] withdrawn some, but not all, contributions   to the fund pursuant to Section 4.04 of this article. If, however,   the person withdraws [former Group B member has withdrawn] all   contributions to the fund in accordance with Section 4.04 of this   article, and the person does not replace the previously withdrawn   contributions together with interest as provided by Section   4.04(h-1) [4.04(h)] of this article, the effective date of the   person's membership is the date of return to active service.          (e)  The effective date of membership for a person who   becomes a Group B member pursuant to Section 5.01(b) of this article   is the date on which written application for the membership is filed   with the executive director [administrator]. The effective date of   membership for a person who becomes a Group A member pursuant to   Section 5.01(b) of this article is the person's original effective   date of membership in the old plan, Plan A, or the combined pension   plan, whichever is applicable.          (h)  A person described by Subsection (a), (c), (d), (e),   (f), or (g) of this section shall be given full pension service for   the time the person was a contributing member of the old plan, Plan   A, the combined pension plan, and Plan B, and the pension service   shall be counted as if it had been earned while a Group B member.   Neither the length of time persons described by Subsection (a),   (c), (d), (e), (f), or (g) of this section received a retirement or   disability pension, whether under the old plan, Plan A, the   combined pension plan or Plan B, nor the amount of any benefits paid   to the person shall have any effect on the pension service earned by   the person. No pension service may be earned while on service   retirement or disability retirement, or when the person was not on   active service. Except as provided by Sections 5.08 [5.02] and 5.09   of this article, a person described by Subsection (a), (c), (d),   (e), (f), or (g) of this section may not be allowed to contribute to   the fund in order to receive pension service for the time the person   was not on active service, regardless of whether the person was   actually receiving a pension.          (i)  The effective date of Group B membership for a person   who becomes a Group B member pursuant to Section 5.01(e) of this   article is the date on which written application for Group B   membership is filed with the executive director [administrator].          SECTION 1.23.  Section 5.03, Article 6243a-1, Revised   Statutes, is amended by amending Subsections (c) and (d) and adding   Subsection (c-1) to read as follows:          (c)  A Group B member who is on active service and [or former   Group B member who also] was a former contributing member of either   the old plan or Plan A may elect, when applying for either a   retirement or disability pension if applicable, to terminate   membership and receive a Group A retirement or disability pension   under the applicable provisions of this article, if the Group B   member's application for retirement or disability pension is   granted by the board.          (c-1)  A Group B member who is not on active service and was a   former contributing member of either the old plan or Plan A may   elect, when applying for a retirement pension, to terminate   membership and receive a Group A retirement pension under the   applicable provisions of this article, if the Group B member's   application for retirement pension is granted by the board.          (d)  If a Group B member [or former Group B member] described   by Subsection (c) or (c-1) of this section has elected and been   granted a Group A retirement or disability pension under the   applicable provisions of this article, the person is entitled to a   reimbursement from the fund. The reimbursement shall be equal to   that portion of the person's contributions to the fund, without   interest, from the person's effective date of Group B membership   until the time the person left active service[,] that is in excess   of the total amount the person would have contributed as a Group A   member or as a member of the old plan or Plan A for the same period.   A Group B member [or former Group B member] desiring a refund of   excess contributions must make written application for the refund   with the executive director [administrator] within three years   after the date the person's Group A retirement or disability   pension, whichever is applicable, begins, otherwise, the person   will [or] lose all right, title, interest, or claim to the refund   until such time as the board grants the refund in response to the   person's written request. The refund shall be made as soon as   practicable after written application is filed with the executive   director [administrator].          SECTION 1.24.  Section 5.04, Article 6243a-1, Revised   Statutes, is amended to read as follows:          Sec. 5.04.  GROUP B MEMBERSHIP MAY BE DECLARED INACTIVE. (a)   Except as provided by Subsection (d)(1) of this section, if [If] a   Group B member with less than five years of pension service either   voluntarily or involuntarily leaves active service, the person's   Group B membership remains active as long as the person has not   withdrawn the person's contributions pursuant to Section 4.04 of   this article.          (b)  Except as provided by Subsection (d)(2) of this section,   if [If] a Group B member with five or more years of pension service   either voluntarily or involuntarily leaves active service, the   person's Group B membership remains active as long as the person has   not withdrawn the person's entire contributions pursuant to Section   4.04 of this article.          (c)  Except as provided by Subsection (d)(3) of this section,   if [If] the board receives valid information that a Group B primary   party has died, [leaving one or more heirs,] the board shall, by   registered or certified mail, return receipt requested, attempt to   notify:                (1)  the qualified survivors [heirs] of the primary   party of the procedures for applying and qualifying for death   [survivor] benefits under Section 6.06, 6.061, 6.062, or 6.063 of   this article; or                (2)  if the primary party does not have any qualified   survivors, the primary party's designee of the procedures for   applying for [or] a refund of the [Group B] primary party's   contributions, if applicable, in accordance with Section 4.04 of   this article.          (d)(1)  Subject to the provisions of Subdivision (5)(A) of   this subsection, the membership of a Group B member described by   Subsection (a) of this section shall be declared inactive and all of   the person's accrued pension service voided if the person does not   return to active service within three years after the date of   [receiving] the notice described by Subdivision (4) of this   subsection.                (2)  Subject to the provisions of Subdivision (5)(B) of   this subsection, the membership of a Group B member described by   Subsection (b) of this section shall be declared inactive and all of   the person's accrued pension service voided if the person does not   file an application for a Group B retirement pension with the board   within three years after the date of [receiving] the notice   described by Subdivision (4) of this subsection.                (3)  Subject to the provisions of Subdivision (5)(C) of   this subsection, if a primary party described by Subsection (c) of   this section:                      (A)  does not have any qualified survivors, the   designee has [, the heirs or estate of a deceased primary party   described by Subsection (c) of this section have] no right, title,   interest, or claim for [benefits or] a refund of the primary party's   contributions to the fund[,] if the designee does not file an   application for the primary party's contributions within three   years after the date of the notice described in Subsection (c) of   this section; or                      (B)  has qualified survivors, the qualified   survivors have no right, title, interest, or claim to [heirs or the   estate, whichever is applicable, fails to file an application for]   the primary party's death benefits if the qualified survivor does   not file an application for the benefits [or contributions] within   three years after the date of [receiving] the notice described in   Subsection (c) [by Subdivision (4)] of this section [subsection].                (4)  On the 58th [50th] anniversary of the birth of a   Group B member described by Subsection (a) or (b) of this section   [or on the board's receipt of notice of the death of a primary party   described by Subsection (c) of this section], the board shall, by   registered or certified mail, return receipt requested, attempt to   notify:                      (A)  the [Group B] member [or the heirs or estate   of a primary party, whichever is applicable,] of the status of the   member's [their] entitlement to benefits or contributions from the   fund; or                      (B)  if the board receives valid information that   the member has died, the qualified survivors of the deceased person   or, if none exists, the designee of the deceased person.                (5)(A)  A Group B member described by Subdivision (1)   of this subsection shall have the person's Group B membership and   pension service reinstated on the person's return to active   service.                      (B)  A Group B member described by Subdivision (2)   of this subsection shall have the person's Group B membership and   pension service reinstated on the person's return to active service   or on the grant of the person's written request to the board of the   person's desire to apply for a Group B [service] retirement pension   under Section 6.02 of this article [benefit].                      (C)  A primary party's qualified survivors or   designee, as appropriate, [The heirs or estate of a primary party]   described by Subdivision (3) of this subsection shall have their   right, title, interest, or claim to the primary party's refund of   the party's contributions reinstated on the board's grant of their   written request [for the reinstatement and refund]. [The board's   decision shall be based on a uniform and nondiscriminatory policy   that it shall, from time to time, adopt.]          SECTION 1.25.  Section 5.05, Article 6243a-1, Revised   Statutes, is amended to read as follows:          Sec. 5.05.  PENSION SERVICE. (a) Subject to Subsection (d)   of this section and except as provided by Subsection (e) of this   section, a [A] member shall receive pension service for the time,   computed in years and fractional years for months and days,   completed as a member of the combined pension plan, the old plan,   Plan A, or Plan B.          (b)  A member who elects to pay contributions for time spent   on military leave, authorized non-uniformed leave of absence, or   for an apprenticeship or probationary period, or for any other   reason provided for by this article may [not] receive [any] pension   service for [any part of] the time for which the member is   contributing only to the extent provided under Section 5.07(d),   5.08, or 5.09 of this article [until the entire amount due the fund   for the entire period involved has been paid as if the service were   performed as a member].          (c)  If a member, either voluntarily or involuntarily,   leaves active service and later returns to active service, the   person shall receive full pension service for the period of the   person's original membership, if the person did not withdraw the   person's contributions pursuant to Section 4.04 of this article.   If, however, the member had withdrawn the person's contributions   and did [does] not replace the previously withdrawn contributions   [with interest] as required by Section 4.04 of this article, the   member [person] forfeits any pension service attributable to any   period of time for which the respective contributions were not   repaid [accrued while a member before the date of the person's   return to active service].          (d)  If a member is assigned, for any period, to a   job-sharing program or any similar work schedule that is considered   by the member's department to be less than a full-time work   schedule, the member's pension service is determined by multiplying   the pension service that could have been earned for full-time work   during the period by a fraction, the numerator of which is the   number of hours the member actually worked during the period and the   denominator of which is the number of hours the member would have   worked during the period if the member had been working a full-time   work schedule. This proration may not affect the computation of   pension service for a member during any period the member is on   leave:                (1)  because of an illness or injury; or                (2)  receiving periodic payments of workers'   compensation.          (e)  Notwithstanding any other provision in this section, a   member may not receive pension service attributable to nonqualified   service to the extent the pension service would result in either   more than five years of permissive service attributable to   nonqualified service being taken into account, or any permissive   service being taken into account before the member has completed at   least five years of active service. In this subsection,   "permissive service" and "nonqualified service" have the meanings   described by Section 415(n)(3) of the code.          SECTION 1.26.  Sections 5.06, 5.07, 5.08, and 5.09, Article   6243a-1, Revised Statutes, are amended to read as follows:          Sec. 5.06.  VESTED RIGHTS OF GROUP B MEMBERS. (a) If a Group   B member accrues five years of pension service, whether the pension   service is accrued while a Group B member or while a member of the   old plan, Plan B, Plan A, the combined pension plan, or a   combination of the plans, the Group B member has vested rights and   is eligible to apply for a retirement pension in accordance with   Section 6.02 of this article.          (b)  If a Group B member has vested rights as determined   under Subsection (a) of this section, and the Group B member either   voluntarily or involuntarily leaves active service before becoming   eligible to receive any benefits under Section 6.02 of this   article, the person shall be provided with a letter approved by the   board and signed by the executive director [administrator] that,   barring unrepaid refunds, clerical error, miscalculation, or other   error, is incontestable and shall state:                (1)  the total amount of pension service the Group B   member had accrued until the date the person left active service;                (2)  the total amount of contributions the Group B   member made under the terms of Plan B and the combined pension plan;   and                (3)  the monthly retirement pension due the Group B   member at age 58 [50].          Sec. 5.07.  PURCHASE OF PENSION SERVICE BY GROUP B MEMBERS.   (a) A Group B member who is on active service and has previously   elected not to become a contributing member of the old plan or [and]   Plan A may purchase pension service from the fund for that period   during which the member performed active service with either   department until the effective date of the member's Group B   membership. No pension service may be given to the Group B member   except to the extent that [until] payment is made for the [entire   period described by this subsection, and no] pension service in   accordance with Subsection (d) of this section [may be purchased   for any period that is of greater or lesser length].          (b)  Payment for the purchase of pension service under   Subsection (a) of this section shall be equal to the amount of   contributions the Group B member would have made to the old plan and   Plan A had the member been a contributing member of either of the   plans during the period for which the pension service is being   purchased [described by Subsection (a) of this section], plus   interest calculated in accordance with procedures adopted by the   board from time to time.          (c)  Subject to Subsection (d) of this section, a [A] Group B   member who is on active service may repay the fund all or a portion   of the employee contributions withdrawn by an alternate payee   pursuant to the terms of a qualified domestic relations order [and   receive pension service as a Group B member attributable to the   contributions, if the Group B member repays completely to the fund   the withdrawn contributions] with interest, calculated at the   interest rate from time to time used in the pension system's   actuarial rate of return assumptions, compounded annually, on the   contributions for the period from the date the contributions were   withdrawn until the date the principal and accrued interest are   repaid, and receive pension service as a Group B member, in   accordance with Subsection (d) of this section, for the period for   which the contributions and interest were paid [in full].          (d)  [No pension service may be given to a Group B member   under Subsection (b) or (c) of this section until the entire amount   described by Subsection (b) or (c) has been paid to the fund.] If   payment of the entire amount of pension service a member is entitled   to under Subsection (a) or (c) of this section or under Section   4.04(h-1) of this article is not completed by the earlier of the   date the Group B member begins participation in DROP or the date the   member [is not completed by the date the Group B member] leaves   active service, pension service will be provided only for the   number of full years of pension service that the contributions and   interest paid under those provisions will purchase, computed based   on the most recent years for which the member was entitled to   purchase pension service. Except for pension service that is   picked up by the city under the authority of Section 414(h)(2) of   the code, a fractional year of pension service may be purchased only   if less than a full year of pension service is available for   purchase.          (e)  The amounts paid but insufficient to purchase one or   more whole years of pension service that remain available for   purchase, including any interest paid by the Group B member, must be   returned to the Group B member or, if the Group B member has died, to   the Group B member's designee, without any accrued interest on the   returned money.          (f)  Notwithstanding any other provision of this section,   any amounts that have been picked up and paid by the city may not be   paid to a member or designee, and the member shall be given credit   for all years, and fractions of years, of pension service that can   be purchased with the picked-up contributions [all partial payments   shall be returned to the Group B member or, if the Group B member has   died, to the member's heirs or estate, whichever is applicable].          Sec. 5.08.  MEMBERS IN UNIFORMED [ARMED] SERVICES. (a)  In   this section, "service in the uniformed services" has the meaning   assigned by the federal Uniformed Services Employment and   Reemployment Rights Act of 1994 (38 U.S.C. Section 4301 et seq.), as   amended.          (a-1)  A member who is reemployed by the city after an   absence due to service in the uniformed services shall receive   contributions, benefits, and pension service that are no less   favorable than those required by Section 414(u) of the code in   accordance with the procedure described by Subsection (c) of this   section [may receive pension service for time spent away from   either department while on active duty in any of the military   services of the United States, including service in any state or   National Guard or any reserve component of any military service in   accordance with the military leave provided by this section].          (b)  To the extent a provision of this section that was in   effect before November 25, 1996, would provide a member who was on   active service with the pension system before November 25, 1996,   with greater rights, the prior provision of this section applies   [Any member inducted into the armed forces as a draftee must reapply   for reinstatement with the member's prior department within 90 days   after the date of honorable discharge or separation from military   service. On such reinstatement, the member may elect to repay the   member's contributions at any time under the procedure described by   Subsection (h) of this section].          (c)  Payment for credit for pension service under this   section [Any member enlisting in the armed forces, other than as a   reservist, whose military service between June 24, 1948, and August   1, 1961, did not exceed four years, or whose military service began   after August 1, 1961, and did not exceed five years if the fifth   year is at the request and convenience of the federal government,   and who was honorably discharged or separated from service is   guaranteed, under the provisions of coverage described by this   subsection, the right to restore pension service under the   procedure described by Subsection (h) of this section. The four-   and five-year leaves permitted by this subsection apply to all of a   member's employment with the city. An enlistment plus any number of   reenlistments may not exceed the four- or five-year limitations   stated above.          [(d)     Any member ordered to an initial period of active duty   for training in a reserve component of not less than 12 consecutive   weeks is entitled to restore pension service for the period absent   from the member's department, if the member returns to the member's   department within 31 days after the date of honorable discharge or   separation from duty in the reserve unit.          [(e)     Any member serving in a reserve component, voluntarily   or involuntarily, may remain on military leave for four years,   which may be extended for periods when the President of the United   States calls the reserve unit into active duty. The service   extension for members joining a reserve unit voluntarily is   available only when the additional service is at the request and for   the convenience of the federal government. Any member returning to   the member's department under this provision must report back to   work within the time specified to the member by the department,   giving due regard for travel time and hospitalization, if required.   Any inquiry into the validity of orders extending terms of   reservist active duty for training will be referred to the   Department of Labor's Office of Veterans' Employment and Training.          [(f)     Any member on military leave for short periods of   authorized training, such as two-week encampments, are treated as   on leave with pay for up to 15 working days in any one calendar year,   during which time pension service automatically accrues. Leave in   excess of 15 days will be treated as described by Subsection (e) of   this section.          [(g)     With the exception of those circumstances described by   Subsection (f) of this section, the city is not required to match   contributions made by members under the terms of this section.          [(h)  Repayment] shall be made in accordance with Section   5.07 of this article and a [the procedure set forth in any] uniform   and nondiscriminatory [military leave and payment] procedure   adopted by the board [and in effect from time to time].          Sec. 5.09.  NON-UNIFORMED [NONMILITARY] LEAVE OF ABSENCE.   (a) An "authorized non-uniformed leave of absence" means any leave   of absence that meets one of the following requirements   [conditions]:                (1)  the leave of absence was unpaid and granted by the   member's department in accordance with the federal Family and   Medical Leave Act of 1993 (29 U.S.C. Section 2601 et seq.); or                (2)  the leave of absence was unpaid and was [must be]   an official leave authorized and certified by the chief of the   member's [either] department as being beneficial to[; and                [(2) the leave of absence must be for the purpose of   benefitting] the department.          (b)  Subject to the requirements of this section and any   procedures adopted by the board, a [A] member may receive pension   service for time spent away from the member's [either] department   on an authorized non-uniformed [nonmilitary] leave of absence. To   receive pension service under this section [for a nonmilitary leave   of absence, the following conditions must be met:                [(1) before the date the member's leave of absence is to   begin], the member must file with the executive director   [administrator] a written application to pay to the fund both:                (1)  the member contributions the member would have   made to the fund had the member remained on active service and had   there been no change in the member's position or hours of work   during the period of the authorized non-uniformed leave of absence;   and                (2)  the contributions the city would have made to the   fund on the member's behalf [any contributions that will accrue   during the member's leave as set forth in Subdivisions (2) and (3)   of this subsection;                [(2) the member must agree to pay into the fund the   amount the member would have contributed had the member remained on   active service, the amount to be based on the computation pay the   member would have normally received had there been no change in the   member's position during the period of leave;                [(3) the member must agree to pay into the fund an   amount equal to the amount the city would have contributed computed   on the basis of total wages and salary the member would normally   have received] had the member remained on active service and had   there been no change in the member's position or hours of work   during the period of the authorized non-uniformed leave of absence.          (b-1)  Contributions made under Subsection (b)(2) of this   section may not be refunded to the member.          (b-2)  The written application described by Subsection (b)   of this section must be filed before the member's authorized   non-uniformed leave of absence begins, unless the pension system   determines that it would not be reasonable to expect the member to   file the application before the authorized non-uniformed leave of   absence begins, in which case the application must be filed as soon   as circumstances permit, as determined by the pension system.    [leave, the payment to represent the total amount that would have   been contributed by the city on the member's behalf had the member   remained on active service and paid in addition to the amount the   member must contribute as set forth in Subdivision (2) of this   subsection;]          (b-3)  To receive pension service under this section, the   following additional conditions must also be met:                (1) [(4)]  if the member's contribution rate, the   city's contribution rate, or both the member's and city's   contribution rates change before the end of the member's authorized   non-uniformed leave of absence [changes as provided by Section 4.02   of this article], the percentage [of total wages and salary]   required to be paid by the member also changes, so that the amount   paid by the member in accordance with this section always equals the   amount that would have been contributed by the member, and by the   city on the member's behalf had the member remained on active   service[, and in no event is the city required to pay into the fund   any contributions that would have been made on behalf of a member   had the member remained on active service during the period of an   authorized leave of absence];                (2) [(5)]  payment of contributions as set forth in   Subsection (b) of this section [Subdivisions (3) and (4) of this   subsection] shall begin coincident with the beginning of the   applicable authorized non-uniformed leave of absence and shall be   made monthly to the executive director [administrator] for deposit   in the fund, unless the board authorizes the deferment of the   payments, in which case the payments must include interest   calculated in accordance with Subsection (b-4) of this section   [until the member has returned to active service];                (3)  no pension service will be granted to the member   until the member returns to active service, and if the member does   not return to active service, the contributions paid, including any   interest paid, will be returned to the member except as provided by   Subsection (c) of this section;                (4)  if the board authorizes the deferment of the   payments under Subdivision (2) of this subsection, the payment must   [may] be made either by authorizing the deduction of pro rata   portions of the total amount due from the member's salary over a   one-year period, or by cash payment made to the executive director   [administrator] within one year after the date of the member's   return to active service, except that the board may approve a longer   period for making the payment if it finds that the one-year limit   would work a financial hardship on the member;                (5) [(6)]  the member must return to active service   within 90 days after the date the member's authorized non-uniformed    leave of absence expires, or if the member's authorized   non-uniformed leave of absence does not have a fixed expiration   date, within a reasonable time to be determined by the board, or the   member forfeits the right to pay for the leave time; and                (6) [(7)]  no member may ever be allowed to pay leave of   absence contributions under this section for any time in excess of   the time actually spent on an authorized non-uniformed leave of   absence.          (b-4)  For purposes of Subsection (b-3)(2) of this section,   interest is calculated from the date the member's payment was first   due, at the interest rate from time to time used in the pension   system's actuarial rate of return assumptions, compounded annually   until the date the principal and accrued interest are repaid in   full.          (c)(1)  If a member of the combined pension plan is disabled   or dies while on an authorized non-uniformed leave of absence, the   member or the member's designee is [heirs are] entitled to [either]   a refund of contributions pursuant to Section 4.04 of this article   or the member or the member's qualified survivors are entitled to   benefits under the provisions of this article, to the extent   applicable.                (2)  A member who is disabled or dies while on an   authorized non-uniformed leave of absence pursuant to this section   may receive no pension service for any portion of the period of the   leave,[;] except that if the member had, before the member's   disability or death, paid for contributions while on an authorized   non-uniformed leave of absence in accordance with [Subsection (a)   of] this section, the member shall receive pension service for the   leave time actually paid for at the time of the member's disability   or death. The [, but the] member may receive no pension service for   any portion of the period of leave for which contributions were   [have] not [been] paid to the executive director [administrator]   for deposit in the fund.          SECTION 1.27.  Section 6.01, Article 6243a-1, Revised   Statutes, is amended by amending Subsections (a), (b), (d), (e),   (f), (g), and (h) and adding Subsections (a-1) and (a-2) to read as   follows:          (a)  A Group A member [or former Group A member] must have 20   years of pension service to be eligible for a Group A retirement   pension under this section. A member's benefit election   [application] under this section, once approved [made], is   irrevocable.          (a-1)  If a Group A pensioner returns to active service as a   police officer or fire fighter with the city, the person's Group A   retirement pension ceases until [the time] that [the] person again   leaves active service with the city.          (a-2)  If a Group A pensioner resumes employment with the   city in a capacity other than as a police officer or fire fighter,   the pensioner's Group A retirement pension continues during the   period of employment, except the pensioner may not accrue   additional credit for pension service during this period.   Additional credit for pension service does not accrue during any   period in which a Group A pensioner becomes employed by the city   unless the additional credit is attributable to active service as a   police officer or fire fighter with the city.          (b)  At age 50 a Group A member [or former Group A member] is   eligible to begin drawing a monthly Group A retirement pension. A   monthly Group A retirement pension equals 50 percent of the base pay   per month, plus 50 percent of any longevity pay the Group A member   was receiving at the time the member left active service. Although   the number of years used in the computation of longevity pay remains   fixed at the earlier of the time a Group A member [or former Group A   member] leaves active service or begins participation in DROP, the   monthly rate of longevity pay used in this computation is subject to   change in the event of an amendment to the state law governing   longevity pay. The monthly Group A retirement pension benefits of   Group A pensioners shall be adjusted from time to time in a like   manner.          (d)  The element of annual retirement pension computed under   Subsection (c)(1) of this section is subject to the following   limitations:                (1)  it shall be prorated for the year in which the   pensioner begins receiving a retirement pension;                (2)  it shall be payable only to those Group A   pensioners who, as [a] Group A members [member] on active service,   received city service incentive pay and who receive a monthly Group   A retirement pension as determined under Subsection (b) of this   section on the last day of September of each year; and                (3)  it shall be paid to Group A pensioners as long as   the city continues to pay city service incentive pay to Group A   members on active service.                (4)  Notwithstanding Subsections (b) and (c) of this   section, a Group A member with a minimum of 20 years of pension   service may apply for an actuarially reduced retirement pension to   begin no earlier than when the member attains age 45 but before the   member attains age 50. The Group A member [or a former Group A   member] who has made an application may receive a retirement   pension calculated under Subsections (b) and (c) of this section   reduced by two-thirds of one percent per month for each whole   calendar month the benefit is payable before the month in which the   Group A member [or former Group A member] attains age 50.          (e)  At age 55 a Group A member [or former Group A member] is   eligible to begin drawing a monthly retirement pension computed as   follows:                (1)(A)  at the rate of three percent of base pay for   each year, prorated for fractional years, of pension service, with   a maximum of 32 years of pension service, or 96 percent of base pay;   or                      (B)  if the Group A member [or former Group A   member] had 34 or more years of pension service as of April 30,   1990, then the member's retirement pension is calculated at the   rate calculated under the terms of the combined pension plan in   effect on April 30, 1990, if the resulting amount would be greater   than the amount calculated under Paragraph (A) of this subdivision;   plus                (2)  one-half of the longevity pay the Group A member   [or former Group A member] was receiving at the time the person left   active service; plus                (3)  1/24th, without subsequent adjustment, of the   annualized amount of the city service incentive pay the Group A   member [or former Group A member] received at the time the person   left active service.          (f)  [Notwithstanding Subsection (e) of this section, Group   A pensioners payments under Subsection (e)(3) of this section are   contingent on the city's continuing payment of city service   incentive pay to Group A members on active service.] For purposes   of Subsection (e) of this section, base pay and longevity pay are   the amounts in effect on the earlier of the date the member begins   participation in DROP or the date benefits are to begin, without   subsequent adjustment.          (g)  Notwithstanding Subsection (e) of this section, a Group   A member [or former Group A member] with 20 or more years of pension   service may apply for an actuarially reduced Group A retirement   pension beginning on or after the date the Group A member [or former   Group A member] attains age 50 but before the person attains age 55.   The Group A member [or former Group A member] may receive a   retirement pension calculated under Subsection (e) of this section   reduced by two-thirds of one percent per month for each whole   calendar month the benefit is payable before the month in which the   Group A member [or former Group A member] attains age 55.          (h)  Entitlement to the Group A retirement pension described   by this section is subject to the following conditions:                (1)  a written application must be filed with the   executive director [administrator];                (2)  the grant of a Group A retirement pension by the   board must be made at a meeting of the board held during the month   the [Group A] retirement pension is to become effective, or as soon   after that as administratively possible; and                (3)  the Group A member must no longer be on active   service.          SECTION 1.28.  Section 6.02, Article 6243a-1, Revised   Statutes, is amended to read as follows:          Sec. 6.02.  GROUP B RETIREMENT PENSION.  (a) If a [A] Group B   member [or former Group B member who] has accrued five or more years   of pension service, is no longer on active service with the   department, has not withdrawn the member's contributions, and   otherwise meets the age and pension service requirements under the   applicable provision of this section, the member may apply [may   make application] for a Group B retirement pension under this   section. A member's benefit election application under a provision   of this section, once approved, is irrevocable.          (a-1)  If a Group B pensioner returns to active service as a   police officer or fire fighter with the city, the person's [on   reaching 50 years of age, or for an actuarially reduced] Group B   retirement pension ceases until that person again leaves active   service with the city.          (a-2)  If a Group B pensioner resumes employment with the   city in a capacity other than as a police officer or fire fighter,   the pensioner's Group B retirement pension continues during the   period of employment except the pensioner may not accrue additional   credit for pension service during this period. Additional credit   for pension service does not accrue during any period in which a   Group B pensioner becomes employed by the city unless the   additional credit is attributable to active service as a police   officer or fire fighter with the city [on reaching 45 years of age].          (b)  A [former] Group B member who began active service   before March 1, 2011, and who has attained at least 50 years of age,   or who began active service on or after March 1, 2011, and has   attained at least 58 years of age, and who otherwise meets the   requirements of Subsection (a) of this section may elect to receive   a Group B retirement pension that shall be calculated as follows:                (1)  for a member who began active service before March   1, 2011, the member's retirement pension shall be the sum of:                      (A)  the number of years of pension service before   September 1, 2017, prorated for fractional years, times three   percent of the average computation pay determined over the 36   consecutive months of pension service in which the Group B member   received the highest computation pay; plus                      (B)  the number of years of pension service on or   after September 1, 2017, prorated for fractional years, times the   applicable percentage prescribed by Subsection (b-1) of this   section of the average computation pay determined over the 60   consecutive months of pension service in which the Group B member   received the highest computation pay; or                (2)  for a member who began active service on or after   March 1, 2011, the member's retirement pension shall be the number   of years of pension service, prorated for fractional years, times   2.5 percent of the average computation pay determined over the 60   consecutive months of pension service in which the member received   the highest computation pay.          (b-1)  For purposes of Subsection (b)(1)(B) of this section,   the applicable percentage is based on the age of the Group B member   when the member's retirement pension begins as set forth below:   Age of Member When Retirement Pension Begins Percent   58 and older 2.5%   57 2.4%   56 2.3%   55 2.2%   54 2.1%   53 and younger 2.0%          (b-2)  Days during which the member earned no pension service   due to a termination of active service or otherwise must be   disregarded in determining the 36 or 60 consecutive months of   highest computation pay under Subsection (b)(1) or (2) of this   section, as appropriate. The pension benefit calculated under   Subsection (b) of this section may not exceed the greater of:                (1)  90 percent of the member's average computation pay   determined under the applicable subsection; or                (2)  the vested and accrued benefit of a member as   determined on August 31, 2017. [or Group B pensioner who withdrew   any of the person's Plan B or Group B contributions and who on again   becoming a Group B member does not replace such previously   withdrawn contributions with interest thereon as provided by   Section 4.04 of this article must earn at least five years of   pension service after the time the person returns to active service   to be eligible for a Group B retirement pension.]          (c)  Except as provided by Subsection (c-2) of this section,   [Entitlement to] a Group B member who has either attained at least   45 years of age on September 1, 2017, or who attains at least 53   years of age after September 1, 2017, and who otherwise meets the   requirements of Subsection (a) of this section may elect to receive   an actuarially reduced Group B retirement pension calculated in   accordance with Subsection (c-1) of this section:                (1)  not earlier than the member's 45th or 53rd   birthday, as applicable; and                (2)  not later than the member's 50th or 58th birthday,   as applicable.          (c-1)  Except as provided by Subsection (c-2) of this section   and subject to Section 6.021 of this article, a Group B member who   applies for an actuarially reduced Group B retirement pension under   Subsection (c) of this section shall receive a pension calculated   under Subsection (b) of this section, reduced by two-thirds of one   percent per month, for each whole calendar month the benefit is   payable before the month in which the member attains:                (1)  for members who attained at least 45 years of age   on September 1, 2017, 50 years of age; or                (2)  for members not described by Subdivision (1) of   this subsection who attain at least 53 years of age after September   1, 2017, 58 years of age.          (c-2)  If, for purposes of Subsection (c-1) of this section,   a Group B member's pension benefit calculated under Subsection (b)   of this section is equal to 90 percent of the member's average   computation pay, the member is entitled to a Group B retirement   pension under Subsection (c) of this section at 45 or 53 years of   age, as applicable, that is not actuarially reduced as provided   under Subsection (c-1) of this section [retirement pension as   described by Subsection (a) or (b) of this section is subject to the   following conditions:                [(1)     written application must be filed with the   administrator;                [(2)     the grant of the Group B retirement pension by the   board must be made at a meeting of the board held during the month   the Group B retirement pension is to become effective, or as soon   after that as possible; and                [(3)     the Group B member may no longer be on active   service].          (d)  Except as provided by Subsection (d-2) of this section,   a [A] Group B member who has accrued 20 or more years of pension   service and has been on active service at any time on or after   January 1, 1999, may elect to apply for a Group B retirement pension   beginning at any time after the Group B member leaves active   service, regardless of age. A Group B member may elect a Group B   retirement pension under this subsection as follows:                (1)  if the member accrued 20 or more years of pension   service on or before September 1, 2017, the member may elect a   pension under this subsection that is computed in the same manner as   the Group B retirement pension under Subsection (b)(1) of this   section except that the percentage set forth below must be used   instead of the three percent multiplier prescribed by Subsection   (b)(1)(A) of this section:   Age of Member When Retirement Pension Begins Percent   48 and 49 2.75%   47 2.5%   46 2.25%   45 and younger 2%; and                (2)  except as provided by Subsection (d-2) of this   section and subject to Section 6.021 of this article, if the member   accrued 20 or more years of pension service after September 1, 2017,   the member may elect a pension under this subsection computed in the   same manner as the Group B retirement pension under Subsection   (b)(2) of this section except that the percentage set forth below   must be used instead of the 2.5 percent multiplier prescribed by   Subsection (b)(2) of this section:   Age of Member When Retirement Pension Begins Percent   57 2.4%   56 2.3%   55 2.2%   54 2.1%   53 and younger 2.0%          (d-1)  A member who elects a pension under Subsection (d) of   this section is not entitled to:                (1)  minimum benefits under either Section 6.10A or   6.11 of this article; or                (2)  benefits under Subsection (g) of this section.          (d-2)  If, for purposes of Subsection (d) of this section, a   Group B member's pension benefit calculated under Subsection (b) of   this section is equal to 90 percent of the member's average   computation pay, the member is entitled to a Group B retirement   pension under Subsection (d) of this section that is not reduced as   provided under Subsection (d)(1) or (2) of this section [retirement   pension shall be computed at the rate of three percent of the   average computation pay determined over the 60 consecutive months   in which the Group B member received the highest computation pay,   multiplied by the number of years, prorated for fractional years,   of pension service to a maximum of 32 years of pension service or 96   percent of the computation pay as determined under this   subsection].          (e)  A [However, a] Group B member or former Group B member   with 34 or more years of pension service as of April 30, 1990, is   entitled to [shall] receive the greater of a Group B retirement   pension calculated under the terms of Plan B as in effect on that   date or a Group B retirement pension calculated pursuant to   Subsection (b) [(d)] of this section.          [(f)     A Group B member, or any former Group B member who was a   Group B member as of any date after April 30, 1990, may apply for an   actuarially reduced Group B retirement pension beginning no earlier   than the person's 45th birthday but before the person's 50th   birthday. A Group B member or former Group B member who applies for   an actuarially reduced Group B retirement pension beginning on or   after the person's 45th birthday shall receive a pension calculated   under Subsection (d) of this section, reduced by two-thirds of one   percent per month for each whole calendar month the pension would be   payable before the month in which the Group B member or former Group   B member attains age 50.]          (g)  In no event may any Group B member [or former Group B   member] who was at any time a Group A member or a contributing   member of the old plan or Plan A, and who satisfied the applicable   age and length-of-service requirements of the applicable plan at   the time the person left active service, receive a retirement   pension in an amount less than the amount the person would be   entitled to receive as a Group A member.          (h)  Notwithstanding any other provision of this section, a   [A former] Group B member who was not a Group B member on or after   January 1, 1993 [May 1, 1990], shall receive a retirement pension   calculated under the applicable provisions of Plan B [this plan] as   that plan existed [in effect] on the date the member terminated   [person left] active service.          (i)  Entitlement to a Group B retirement pension under   Subsection (b), (c), (d), or (e) of this section is subject to the   following conditions:                (1)  a written application must be filed with the   executive director;                (2)  the grant of the Group B retirement pension by the   board must be made at a meeting of the board held during the month   the retirement pension is to become effective, or as soon after as   administratively possible; and                (3)  the Group B member may no longer be on active   service [A former Group B member who was not a Group B member after   April 30, 1990, may request an actuarially reduced retirement   pension beginning no earlier than the person's 45th birthday but   before the person's 50th birthday]. [A former Group B member   described by this subsection shall receive a retirement pension   under the applicable provisions of Plan B as in effect on the date   the person left active service, reduced by two-thirds of one   percent per month for each whole calendar month the pension would be   payable before the month in which the former Group B member attains   age 50.]          SECTION 1.29.  Part 6, Article 6243a-1, Revised Statutes, is   amended by adding Sections 6.021 and 6.022 to read as follows:          Sec. 6.021.  AUTHORITY TO ADOPT ALTERNATIVE MULTIPLIERS FOR   COMPUTATION OF CERTAIN GROUP B BENEFITS. (a)  For purposes of   Section 6.02(c-1) or (d)(2) of this article, the board by rule may   adopt alternative multipliers, including an alternative table   prescribing actuarially appropriate multipliers. In adopting   rules under this subsection, the board shall designate the date on   which the alternative multiplier shall take effect.          (b)  Copies of any alternative multipliers adopted under   this section must be maintained at the principal office of the   pension system and published on the pension system's publicly   available Internet website.          Sec. 6.022.  AUTHORITY TO REDUCE RETIREMENT AGE.   Notwithstanding any other law, the board may reduce the age at which   a Group B member is eligible to begin receiving a retirement   pension, including an actuarially reduced retirement pension,   under Section 6.02 of this article if the board determines that the   reduction will not cause the amortization period of the unfunded   actuarial accrued liability of the pension system to exceed 25   years, after taking into account the impact of the reduction.  A   board action under this section may not take effect until the State   Pension Review Board reviews the board's determination described by   this section.          SECTION 1.30.  Section 6.03, Article 6243a-1, Revised   Statutes, is amended by amending Subsections (a), (d), (f), and (g)   and adding Subsections (k) and (l) to read as follows:          (a)  If a member who is on active service, other than a member   participating in DROP, becomes disabled to the extent that the   member cannot perform the member's duties with the member's   department, the member may apply for a disability pension, subject   to [in accordance with] any uniform and nondiscriminatory   disability application procedure and recall and review procedure   adopted by the board and in effect from time to time.          (d)  No disability pension may be paid to a member for any   disability if the disability was a result of an intentionally   self-inflicted injury or a chronic illness resulting from an   addiction by the member through a protracted course of [noncoerced]   indulgence in alcohol, narcotics, or other substance abuse that was   not coerced.          (f)  No disability pension may be paid if the chief of the   member's department is able to provide the member with duties that   are within the member's physical or mental capabilities, [as long   as the board agrees that the duties are within the member's   capabilities,] even though the duties are different from the duties   the member performed before the disability.          (g)  Written application for a disability pension must be   filed with the executive director not later than the 180th day after   the date the member leaves active service [administrator]. The   application must be accompanied by a recommendation from the health   director. This recommendation shall contain a statement indicating   whether the member became disabled while the member was on duty or   off duty and whether the disability was service-connected or was   not service-connected [nonservice-connected].          (k)  For purposes of Sections 6.04 and 6.05 of this article   and this section:                (1)  longevity pay and incentive pay are the amounts in   effect on the date the benefits are to begin, without subsequent   adjustment; and                (2)  except as provided by Section 6.05(b-1) of this   article, base pay is the amount in effect on the date benefits are   to begin, without subsequent adjustment.          (l)  Notwithstanding any other law, Subchapter B, Chapter   607, Government Code, applies to all members without regard to the   employing department or job assignment.          SECTION 1.31.  Part 6, Article 6243a-1, Revised Statutes, is   amended by adding Section 6.035 to read as follows:          Sec. 6.035.  DISABILITY BENEFITS FOR CERTAIN PERSONS IN   UNIFORMED SERVICES. (a)  In this section, "uniformed services" has   the meaning assigned by the federal Uniformed Services Employment   and Reemployment Rights Act of 1994 (38 U.S.C. Section 4301 et   seq.).          (b)  This section applies to a person who was released from   the uniformed services after December 17, 2001, under conditions   that would have made the person eligible for benefits under Section   414(u) of the code if the person could have returned to active   service.          (c)  If a person subject to this section was unable to return   to active service by reason of disability incurred while on a leave   of absence due to service in the uniformed services, that person is   entitled to a regular disability pension in accordance with Section   6.03 of this article, calculated in accordance with Section 6.04 of   this article.          (d)  Notwithstanding Section 6.03(g) of this article, a   written application for a disability pension must be filed not   later than the 180th day after the date of the person's release from   the uniformed services.          (e)  A person subject to this section is entitled to receive   pension service for the period of service with the uniformed   services only to the extent that contributions are made for that   period in accordance with this article.          SECTION 1.32.  Section 6.04, Article 6243a-1, Revised   Statutes, is amended to read as follows:          Sec. 6.04.  CALCULATION OF REGULAR [GROUP A] DISABILITY   BENEFITS [PENSION]. (a) Subject to Subsection (g) of this section,   if [If] a Group A member's application for a Group A disability   pension has been approved by the board pursuant to Section 6.03 of   this article, including any procedures adopted under that section,   the Group A member may elect to receive a Group A disability pension   calculated:                (1)  in the same manner as the benefit under Sections   6.01(b) and (c) of this article; or                (2)  under Subsection (c) [(b)] of this section.          (b)  An election under Subsection (a) of this section, once   approved by the board [made], is irrevocable.          [(b)     When a Group A member elects to accept a Group A   disability pension under this section, it shall be calculated as   provided by Subsections (c), (d), and (e) of this section.]          (c)  Subject to Subsection (g) of this section, [If] a Group   A [member's disability results during the performance of duties   with either department, the] member who elects to have benefits   determined under this subsection is entitled to a monthly   disability pension calculated as follows:                (1)  at a rate of three percent of base pay for each   year, prorated for fractional years, of pension service, with a   [minimum of 20 years of pension service being deemed credited and a]   maximum of 32 years of pension service being credited, or 96 percent   of base pay [or], except that if the Group A member had 34 or more   years of pension service as of April 30, 1990 [May 1, 1990], the   member is entitled to [shall] receive the greater of a disability   pension calculated under the terms of the combined pension plan in   effect on that date or as calculated under this subdivision; plus                (2)  one-half of the longevity pay the Group A member   was receiving at the time the member left active service; plus                (3)  subject to Subsection (d) of this section,   1/24th[, without subsequent adjustment,] of the annualized amount   of city service incentive pay the Group A member received at the   time the member left active service.          (c-1)  The disability pension calculated under Subsection   (c) of this section may not exceed the greater of:                (1)  90 percent of the member's average base pay   determined under the applicable subsection; or                (2)  the vested and accrued disability pension of the   member as determined on August 31, 2017.          (d)  Payments of the amounts described by [Notwithstanding   Subsection (c) of this section, the amount of a disability   retirement benefit of a Group A pensioner who is on disability   retirement under] Subsection (c)(3) of this section are [is]   contingent on the city's continuing payment of city service   incentive pay to Group A members on active service. [For purposes   of this subsection, base pay and longevity pay are the amounts in   effect on the date the benefits are to begin, without subsequent   adjustment.]          (e)  If a Group B [A] member's application for a Group B   disability pension has been approved by the board under Section   6.03 of this article, including any procedures adopted under that   section, the Group B member may elect to receive a Group B   disability pension calculated in the manner described by Subsection   (f) or (f-1) of this section, subject to Subsection (g) of this   section [disability does not result during the performance of the   member's duties with either department, the member is entitled to a   monthly disability pension calculated:                [(1)     at a rate of three percent of base pay for each   year, prorated for fractional years, of pension service, with a   maximum of 32 years of pension service, or 96 percent of base pay,   except that if the Group A member had 34 or more years of pension   service as of April 30, 1990, the member shall receive the greater   of a disability pension calculated under the combined pension plan   in effect on that date or as calculated under this subdivision; plus                [(2)     one-half of the longevity pay the Group A member   was receiving at the time the member left active service; plus                [(3)     1/24th of the annualized amount of city service   incentive pay the Group A member received at the time the member   left active service, without regard to any subsequent adjustment].          (f)  Subject to Subsections (f-1), (f-3), and (g) of this   section, the disability pension of a Group B member shall be   calculated as follows:                (1)  for a member who began active service before March   1, 2011, the member's disability pension shall be the sum of:                      (A)  the member's number of years of pension   service earned before September 1, 2017, prorated for fractional   years, times three percent of the average computation pay   determined over the 36 consecutive months of pension service in   which the member received the highest computation pay; plus                      (B)  the number of years of pension service,   including pension service credit imputed under Section 6.05(c) of   this article, earned on or after September 1, 2017, prorated for   fractional years, times the applicable percentage prescribed by   Section 6.02(b-1) of this article of the average computation pay   determined over the 60 consecutive months of pension service in   which the member received the highest computation pay; or                (2)  for a member who began active service on or after   March 1, 2011, the member's disability pension shall be the number   of years of pension service, including pension service credit   imputed under Section 6.05(c) of this article, prorated for   fractional years, times 2.5 percent of the average computation pay   determined over the 60 consecutive months of pension service in   which the member received the highest computation pay.          (f-1)  Notwithstanding Subsection (f) of this section, for a   Group B member who had 34 or more years of pension service as of   April 30, 1990, the member is entitled to receive the greater of a   disability pension calculated under the terms of Plan B in effect on   April 30, 1990, or calculated under Subsection (f) of this section.          (f-2)  For purposes of Subsections (f) and (f-1) of this   section:                (1)  any partial year of pension service for a Group B   member's first 20 years of pension service is counted as a full year   of pension service, if the member was considered by the member's   department to have worked a normal full-time schedule at the time of   the disability;                (2)  if the member has less than 36 or 60 consecutive   months of pension service, as applicable, the member's average   computation pay will be computed based on the member's entire   pension service; and                (3)  days during which the member earned no pension   service due to a termination of active service or otherwise must be   disregarded in determining the 36 or 60 consecutive months of   highest computation pay.          (f-3)  The disability pension calculated under Subsection   (f) or (f-1) of this section may not exceed the greater of:                (1)  90 percent of the member's average computation pay   determined under the applicable subsection; or                 (2)  the vested and accrued disability pension of the   member as determined on August 31, 2017 [Payments of the amounts   described by Subsection (e)(3) of this section are contingent on   the city's continuing payment of city service incentive pay to   Group A members on active service].          (g)  The disability pension calculated in accordance with   this section, including both a Group A benefit described by   Subsection (a) of this section and a Group B benefit described by   Subsection (f) of this section, shall be reduced dollar-for-dollar   by any monthly disability compensation benefit received under   Section 6.05 of this article. If the monthly disability   compensation benefit provided to a member under Section 6.05 of   this article equals or exceeds any benefit the member is entitled to   under this section or Section 6.01(b) or (c) of this article, the   member may not receive the benefit under this section [For purposes   of Subsection (e)(3) of this section, base pay and longevity pay are   the amounts in effect on the date the benefits are to begin, without   subsequent adjustment].          SECTION 1.33.  The heading to Section 6.05, Article 6243a-1,   Revised Statutes, is amended to read as follows:          Sec. 6.05.  COMPENSATION BENEFITS FOR SERVICE-CONNECTED    [CALCULATION OF GROUP B] DISABILITY [BENEFITS].          SECTION 1.34.  Section 6.05, Article 6243a-1, Revised   Statutes, is amended by amending Subsections (a), (b), and (c) and   adding Subsection (b-1) to read as follows:          (a)  If a member leaves active service at any time due to   disability and the board determines that the member with the   disability became unable to perform the member's duties with the   member's department due to an injury or sickness incurred in the   performance of the member's duties, the member is entitled to   periodic disability compensation benefits in accordance with this   section [Group B member's application for a Group B disability   pension has been approved by the board pursuant to Section 6.03 of   this article, including any procedures adopted under that section,   the Group B member may, depending on the circumstances, elect to   receive a Group B disability pension calculated in the manner   described by Subsection (b) or (c) of this section].          (b)  Subject to Subsection (b-1), [If] a Group A [B] member   whose disability, as determined by the board, was caused by an   injury or sickness incurred in the performance of the member's duty   shall receive a monthly benefit equal to 60 percent of the member's   base pay. For purposes of this subsection, "base pay" is the amount   in effect on the date compensation benefits under this section are   to begin, without subsequent adjustment.          (b-1)  Instead of receiving a periodic disability   compensation benefit under Subsection (b) of this section, a Group   A member who is entitled to periodic disability compensation   benefits under this section may elect, before the benefits begin,   to receive those benefits as a monthly benefit equal to 50 percent   of the member's base pay adjusted from time to time to reflect   changes in base pay that occur after the member began receiving a   monthly compensation benefit under this section [becomes disabled   during the performance of the member's duties with either   department, the member is entitled to a monthly disability pension   calculated at a rate of three percent of the average computation pay   determined over the 60 consecutive months in which the Group B   member received the member's highest computation pay multiplied by   the number of years, prorated for fractional years, of the member's   pension service with a minimum of 20 years of pension service being   deemed credited, or 60 percent of average computation pay   determined over the 60 consecutive months in which the Group B   member received the member's highest computation pay, except that   if the Group B member has less than five years of pension service,   the Group B member's average computation pay will be computed based   on the member's entire pension service. If a Group B member had 34   or more years of pension service as of April 30, 1990, the Group B   member is entitled to receive the greater of a Group B disability   pension calculated under the terms of Plan B in effect on that date   or calculated pursuant to this subsection].          (c)  A [The Group B disability pension for any] Group B   member whose disability, as determined by the board, was caused by   an injury or sickness incurred in the performance of the member's   duty shall receive a monthly benefit equal to the disability   pension under Sections 6.04(f), (f-1), (f-2), and (f-3) of this   article except that if the member:                (1)  does not have 20 years of pension service, the   member is considered to have 20 years of pension service for the   purposes of calculating the disability pension under that section;   and                (2)  has less than 36 or 60 consecutive months, as   applicable, of employment with the department, the member's average   computation pay will be computed based on all the member's   computation pay, and days during which the member earned no pension   service due to a termination of active service or otherwise must be   disregarded in determining either the 36 or 60 consecutive months   of highest computation pay [does not result during the performance   of the member's duties with either department shall be computed at a   rate of three percent of the average computation pay determined   over the 60 consecutive months in which the Group B member received   the member's highest computation pay multiplied by the number of   years, prorated for fractional years, of the member's pension   service, except that any partial year of pension service for the   first 20 years of pension service shall be counted as a full year of   pension service. If the Group B member has less than five years of   pension service, the Group B member's average computation pay will   be computed based on the member's entire pension service, and if a   Group B member had 34 or more years of pension service as of April   30, 1990, the Group B member is entitled to receive the greater of a   disability pension calculated under the terms of Plan B in effect on   that date or calculated pursuant to this subsection].          SECTION 1.35.  Section 6.05(d), Article 6243a-1, Revised   Statutes, is redesignated as Section 6.055, Article 6243a-1,   Revised Statutes, and amended to read as follows:          Sec. 6.055.  REDUCTION IN DISABILITY OR COMPENSATION   BENEFITS FOR CERTAIN PERSONS. (a) In this section, "earned income"   means income earned by a Group B pensioner in the form of wages,   salaries, commissions, fees, tips, unemployment benefits, and   other amounts received by virtue of employment or self-employment   but paid before any deduction for taxes or insurance. In addition,   earned income also includes those amounts contributed on a   before-tax basis to any retirement plan or employee health and   welfare benefit plan.          (b) [(d)]  The board shall require any Group B pensioner who   became a member of Plan B or the combined pension plan on or after   May 1, 1990, and who is receiving a Group B disability pension under   Section 6.04 of this article or a periodic disability compensation   under Section 6.05 of this article [in accordance with Subsection   (b) or (c) of this section] to provide the board annually, on or   before July 1 [May 1] of each year, with a true and complete copy of   those portions of the person's federal and, if applicable, state   tax return, including appropriate schedules, for the previous   calendar year that indicate the person's occupations, if any, and   earned income for the previous calendar year. If the pensioner did   not file a tax return for the previous calendar year, the board may   require other documentation reflecting the pensioner's occupation   or earned income that the board determines appropriate.          (c)  The pension system [However, the board] may waive the   July 1 [May 1] date under Subsection (b) of this section in lieu of   one later in the same calendar year if the Group B pensioner   provides the board with a true and complete copy of a grant of an   extension of time for the filing of the person's tax return from the   appropriate governmental agency or a true and complete copy of an   extension request that results in any automatic extension.          (d)  If, after evaluating the information received under   Subsection (b) of this section, the board finds the Group B   pensioner is or has been receiving earned income from one or more   employments, including self-employment, during the preceding year,   the board shall reduce future disability retirement [pension]   payments to the Group B pensioner in accordance with the following   formula: $1 for each $1 that the sum of "a" + "b" is greater than   "c," where "a" is the earned income of the Group B pensioner   attributable to the previous calendar year from the person's   employments, "b" is the total amount of Group B disability   retirement payments [pension] received by the Group B pensioner the   previous calendar year, and "c" is the annualized amount of the   average computation pay the Group B pensioner received as of the   date the person left active service.          (e)  For purposes of the [this] computation under Subsection   (d) of this section, the average computation pay shall be deemed   increased at a rate of 2.75 percent [of four percent simple   interest], without compounding during the year, as of each January   1 that the Group B pensioner receives a Group B disability   retirement payment [pension].          SECTION 1.36.  Section 6.06, Article 6243a-1, Revised   Statutes, is amended by amending Subsections (b), (e), (f), (g),   (h), (j), (k), (l), (m), (n), (o), (p), (q), (r), and (t) and adding   Subsections (e-1), (e-2), (j-1), (o-1), (o-2), (u), and (v) to read   as follows:          (b)  A written application for benefits must be filed with   the executive director [administrator].          (e)  If [the qualified] surviving children of a primary party   are not qualified survivors entitled to death benefits, the   [qualified surviving] spouse of the primary party who is a   qualified survivor is entitled only to receive a share of the death   benefits in the amount calculated under Section 6.07(a) [or (b)] or   Section 6.08(b)(1), (c)(1), (d)(1), or (e)(1) of this article,   whichever is applicable, and is not entitled to what otherwise   would be the [qualified] surviving children's share.          (e-1)  If a primary party had [there is] no [qualifying]   surviving spouse, any [qualified] surviving child who is a   qualified survivor [children] shall receive only the amount   calculated under Section 6.07(a) [or (b)] or Section 6.08(b)(2),   (c)(2), (d)(2), or (e)(2) of this article, whichever is applicable,   and is [are] not entitled to what otherwise would be the [qualified]   surviving spouse's share.          (e-2)  If a primary party does not have a [there is no   qualified surviving] spouse or [qualified surviving] children who   are qualified survivors, any [qualified] dependent parent of the   primary party who is a qualified survivor shall receive only the   amount calculated under Section 6.07(c) or Section 6.08(b)(3),   (d)(3), or (e)(3) of this article, whichever is applicable, and is   not entitled to what otherwise would be the [qualified] surviving   spouse's or [qualified] surviving children's share.          (f)  The total monthly death benefits [benefit] received by   the qualified survivors of a primary party under this article,   including the primary party's [surviving] spouse, [qualified   surviving] children, or [qualified] dependent parents, [parent]   may not exceed the pension to which the deceased primary party was   entitled per month.          (g)  If there is no surviving spouse or legal guardian for   the [qualified] surviving children of a primary party who are   qualified survivors and if the board determines that the   [qualified] surviving children lack the discretion to handle money,   or in other appropriate circumstances, notwithstanding any other   provision of this section, the board may request a court of   competent jurisdiction to appoint a suitable person to receive and   administer the [qualified] surviving children's money or in those   circumstances described in Subsection (n) of this section, appoint   a new trustee to administer the [qualified] surviving children's   [support] trust.          (h)  With the exception of a [support] trust described in   Subsection (n) of this section, no death benefits awarded to   [qualified] surviving children may be used for any purpose other   than to benefit the [qualified] surviving children. [The board may   withhold payment of benefits if it has reason to believe the   benefits are not being properly applied.]          (j)  With the exception of those circumstances described in   Subsection (n) of this section, death benefits payable [paid] to   [qualified] surviving children [living with a person other than the   surviving spouse] shall be delivered to the legal guardian of the   estate of the surviving children if one has been appointed and the   pension system has been provided proof of the appointment. If no   legal guardian has been appointed, death benefits shall be   delivered to one of the following persons, provided there is   evidence that the person is [person with whom the qualified   surviving children are living, if the board has designated the   person as being] a suitable person to receive and administer the   benefits:                (1)  the surviving spouse with whom the child resides;   or                (2)  the adult head of the household with whom the child   resides, if the child does not reside with the surviving spouse.          (j-1)  In accordance with Subsection (h) of this section, the   recipient of a surviving child's death benefits under Subsection   (j) of this section must use the death benefits to benefit the   child. The board may[, however,] withhold payment of benefits to   anyone, if presented with evidence that the death benefits are not   being used to benefit the surviving child [but the legal guardian of   the qualified surviving children and may require proof that a   person has been appointed legal guardian of the qualified surviving   children before authorizing any benefits to be delivered to that   person].          (k)  Dependent [The qualified surviving dependent] parents   of a primary party [member] who are entitled to receive death [any   survivor] benefits provided by this article may only receive the   benefits for the remainder of the dependent parents' [their] lives.          (l)  The pension system [board] may require all qualified   survivors [persons] receiving death benefits[, including qualified   surviving spouses, qualified surviving children or their   guardians, and qualified surviving dependent parents,] to file   [with the administrator, at least once every two years,] a sworn   statement with the executive director concerning the qualified   survivor's [their] eligibility to continue to receive death   benefits at least once every two years, or at any other time the   executive director considers a sworn statement to be appropriate to   evidence the continued eligibility of the qualified survivor. [The   board may also require a sworn statement from any person receiving   death benefits at any time.] The board may withhold death benefits   from any person who fails or refuses to file a statement when   requested to do so.          (m)  When the last qualified survivor of any primary party   becomes ineligible to continue to receive death benefits, [that   survivor shall be paid in a lump sum] an amount equal to the excess   [difference], if any, of [between] the total amount of all   contributions made to the fund by the primary party while a member   over [, and] the sum of all benefits paid to the primary party and   all of the primary party's [his] qualified survivors shall be paid   in a lump sum to the last person to receive benefits as a qualified   survivor or, if none exists, to the member's designee.  The total   amount to be paid in benefits to the primary party and all qualified   survivors shall never be less than the total amount of   contributions the primary party made to the fund while a member.          (n)  Notwithstanding any other provision of this section:                (1)  [,] death benefits awarded to an unmarried child   who is a qualified survivor [surviving child of a primary party] who   is determined by the board to be disabled [handicapped] under the   terms of Subsection (o-2) [(o)] of this section may be paid to the   trustee of a management trust, supplemental needs or special needs   trust, or comparable trust [support trust] established for the   benefit of the child, if the trust meets the requirements set forth   in a procedure adopted from time to time by the board [qualified   surviving child if:                [(1)     an opinion of counsel of the trustee of the   support trust is furnished to the board indicating that payments   made to the support trust will not, under existing law, be   considered a resource of the qualified surviving child under Title   42, Section 1396(a)(17), of the United States Code or any successor   statute, as well as applicable state law or regulations governing   the situation]; and                (2)  as soon as practicable after the pension system   has knowledge of an event listed in this subdivision, the pension   system shall terminate payment of death benefits to a [coincident   with the furnishing of the opinion of counsel, the board is provided   with an executed original of the support trust document for the   records of the pension system;                [(3) the terms of the trust provide that the board will   receive an annual accounting of the support trust from its trustee,   although the board has no legal responsibility to oversee the   support trust; and                [(4) the support] trust described by Subdivision (1) of   this subsection effective [will terminate as soon as practicable]   on the earlier occurrence of the following events:                      (A)  the date as of [on] which the [qualified   surviving] child is determined by the board to no longer be disabled   [handicapped] under the terms of this section;                      (B)  the date on which the [qualified surviving]   child is lawfully married;                      (C)  the date on which the [qualified surviving]   child is deceased;                      (D)  the date on which the pension system becomes   aware that the assets of the [support] trust are deemed to be the   resources of the child under applicable federal or state laws or   regulations; or                      (E)  if [unless otherwise excused by the board,]   the trustee of the child's [support] trust fails to provide a court   of competent jurisdiction [the board] with an annual accounting of   the child's trust, the date occurring [within] six months after the   date of the close of the [support] trust's fiscal year.          (o)  When a child who, as a qualified survivor, [surviving   child who] is entitled to receive death benefits under this article   reaches the age of 19, the [qualified surviving] child may no longer   participate in the division of the benefits, but the same   undiminished [qualified surviving] child's share as determined by   this section shall be paid to any remaining [qualified surviving]   children who are qualified survivors who remain eligible to   continue to receive death benefits.          (o-1)  If benefits are no longer payable to the trust   described in Subsection (n)(1) of this section in accordance with   Subsection (n)(2) of this section, the benefits are divisible and   payable to any remaining children who are qualified survivors who   remain eligible to receive death benefits.          (o-2)  If an unmarried child [under 19 years of age.   However, a handicapped qualified surviving child may not be removed   from participation in the division of benefits on reaching the age   of 19 nor may the child be barred from original participation at any   time after reaching the age of 19, and the payments shall continue   for the duration of the handicap. If a qualified surviving child is   not married and], after cessation of entitlement to death benefits   [(]because of attainment of age 19[) but before age 23], becomes   disabled before age 23 [handicapped], the child is entitled to   participate in the division of death benefits under this article.   Notwithstanding the preceding, all death benefits granted under   this subsection are conditioned on the board finding that:                (1)  the [qualified surviving] child is so physically   or mentally disabled [handicapped], either congenitally or through   injury suffered or disease contracted, as to be unable to be   self-supporting or to secure and hold gainful employment or pursue   an occupation;                (2)  the [qualified surviving] child is not married;                (3)  the disability [handicap] was not the result of an   occupational injury for which the [qualified surviving] child   received compensation equal to or greater than that provided under   this article;                (4)  the disability [handicap] was not the result of an   intentional self-inflicted injury or a chronic illness itself   resulting from an addiction of the [qualified surviving] child   through a protracted course of [noncoerced] indulgence in alcohol,   narcotics, or other substance abuse that was not coerced; and                (5)  the disability [handicap] did not occur as a   result of the [qualified surviving] child's participation in the   commission of a felony.          (p)  If a [handicapped qualified surviving] child with a   disability received or is receiving workers' compensation   resulting from an occupational injury equal to an amount less than   the death benefit to be provided under this section, the difference   shall be paid out of the assets of the fund in the form otherwise   payable as monthly benefits. For purposes of Subsections   [Subsection] (o), (o-1), and (o-2) of this section, if a lump sum is   awarded for an injury, the fund's actuary may compute a   corresponding monthly equivalent. A finding relating to a   [qualified surviving] child's disability [handicap] is subject to   periodic review and modification by the board.          (q)  On the death or marriage of a [qualified surviving]   child granted death benefits under this article, the death benefits   shall cease being paid to that child; however, the same   undiminished [qualified surviving] child's share as determined by   this section shall be uniformly distributed among any remaining   unmarried [qualified surviving] children who are:                (1)  under 19 years of age; or                (2)  disabled [and any unmarried qualified surviving   children who are handicapped] as described by Subsection (o-2)   [(o)] of this section and entitled to death benefits as qualified   survivors.          (r)  A spouse of a primary party who married the primary   party [resulting from any marriage to a former member or pensioner]   after the date the primary party terminated [member or pensioner   leaves] active service is not a qualified survivor [surviving   spouse] and is [not] entitled only to those death benefits, if   applicable, provided under Section 6.063 of this article.          (t)  A [qualified] surviving spouse who first remarried on or   after April 21, 1988, is eligible to receive death benefits for the   remainder of the [qualified surviving] spouse's life provided the   surviving spouse is a qualified survivor. This subsection may not   be applied retroactively.          (u)  The eligibility of a surviving spouse who first   remarried before April 21, 1988, is governed by Section 6.061 of   this article.          (v)  The qualified survivors of a member who dies while   performing qualified military service are entitled to any   additional benefits, other than benefits relating to the qualified   military service, that qualified survivors would have received if   the member had returned from qualified military service the day   before death, resumed employment, and then died.          SECTION 1.37.  Part 6, Article 6243a-1, Revised Statutes, is   amended by adding Sections 6.061, 6.062, 6.063, and 6.064 to read as   follows:          Sec. 6.061.  PROSPECTIVE REINSTATEMENT OF CERTAIN DEATH   BENEFITS. (a)  Subject to Subsection (c) of this section, the   surviving spouse of a primary party who was a member of the old   plan, Plan A, or Plan B whose death benefits, also referred to as   "survivor benefits" or "widow benefits," terminated because of a   remarriage of the surviving spouse that occurred before April 21,   1988, is entitled to receive death benefits, on a prospective basis   only, as of the first day of the month following the month in which   the executive director receives the application.          (b)  The board shall make reasonable efforts to notify all   known living surviving spouses who may be entitled to a   reinstatement of benefits under this section.          (c)  A surviving spouse's properly completed, board-approved   application for reinstatement of death benefits under this section   must be received by the executive director not later than the 180th   day after the date the board completes, as determined by the board,   the reasonable efforts required by Subsection (b) of this section.          (d)  A surviving spouse's application for reinstatement of   death benefits under this section constitutes the spouse's waiver   of any claims against the pension system, the board, the executive   director, or any other employee of the board or the pension system   arising out of any claim for death benefits.           (e)  This section may not be applied retroactively. A   surviving spouse may not receive death benefits attributable to   periods before the executive director's receipt of a properly   completed and board-approved application, and any benefit provided   to a surviving spouse described in this section must be calculated   as if the benefits had not terminated on the surviving spouse's   remarriage notwithstanding the fact the reinstatement of benefits   is not retroactive.          Sec. 6.062.  LUMP-SUM PAYMENT ON DEATH OF CERTAIN MEMBERS.   (a) If an unmarried member dies while on active service and before   beginning participation in DROP, the last person to receive   benefits as the member's qualified survivor or, if the member does   not have a qualified survivor living, the member's designee, shall   be paid a lump-sum payment determined in accordance with this   section if, at the time of the member's death, the member:                (1)  had no qualified survivors; or                (2)  only had qualified survivors who are children who   become ineligible to receive death benefits before the benefits   were paid for at least 120 consecutive months.          (b)  The amount of the lump-sum payment under this section is   the greater of:                (1)  the payment that could have been provided under   Section 6.06(m) of this article; or                (2)  an amount equal to the actuarial equivalent of the   remainder of the monthly benefits that would have been paid for the   period from the last monthly benefit payment to the end of the 120   months, starting with the date of the first monthly benefit   payment, if any.          (c)  If no death benefit payments have been made with respect   to the member, the amount of a monthly death benefit payment shall   be considered to be the monthly death benefit that would have been   paid if the member had died leaving only one dependent parent who   was a qualified survivor.          (d)  If a qualified survivor or designee is entitled to   payment under both this section and Section 6.06(m) of this   article, payments shall be made only under this section.          (e)  The payment required under this section shall be made as   soon as practicable after the later of the date:                (1)  of the death of the member; or                (2)  the last qualified survivor becomes ineligible to   receive monthly death benefit payments.          Sec. 6.063.  AUTHORITY TO ELECT CERTAIN ACTUARIALLY REDUCED   BENEFITS. (a) The board shall adopt policies under which a member   who is leaving active service or a pensioner may elect to accept   actuarially reduced benefits to provide the following optional   benefits:                (1)  a 100 percent joint and survivor annuity with the   member's or pensioner's spouse;                (2)  a 50 percent joint and survivor annuity with a   spouse who is not a qualified survivor because the marriage to the   pensioner occurred after the pensioner terminated active service,   provided the election is made not later than one year after the date   of the marriage; or                (3)  a death benefit for a child who is not a qualified   survivor because the child was born or adopted after the member left   active service, but only if the child:                      (A)  is a dependent of the pensioner, within the   meaning of Section 152(a)(1) of the code; and                      (B)  has not attained 18 years of age at the time   of the election.          (b)  An election under this section may not be revoked by the   member or pensioner after it is filed with the pension system.          (c)  Notwithstanding any other provision of this article, an   election under this section shall result in benefits being paid as   prescribed by this section instead of as prescribed by Section   6.01, 6.02, 6.04, 6.05, 6.07, or 6.08 of this article, as   applicable.          (d)  A pensioner who desires to make an election under   Subsection (a)(1) of this section after having made an election   under Subsection (a)(2) of this section shall incur a second   actuarial reduction in benefits to pay for the increased survivor   annuity.          (e)  Except as provided by Subsection (f) of this section, a   person is not entitled to the payment of benefits under this section   with respect to a pensioner who makes an election after termination   of active service and dies within one year after making the   election, except the amount by which the pensioner's benefits were   reduced are paid to the person who is entitled to receive payments   under Section 6.064 of this article.          (f)  Subsection (e) of this section does not apply to a   person who makes an election under Subsection (a)(1) of this   section to receive a 100 percent joint and survivor annuity with a   spouse who is a qualified survivor at the time:                (1)  the board grants a retirement pension; or                (2)  a retirement pension would have been granted but   for the fact that the person elected to participate in DROP after   retirement.          (g)  The actuarially reduced benefits being paid to the   pensioner under this section will not be increased if the spouse   dies before the pensioner, or if the child attains 19 years of age   before the pensioner dies.          (h)  The joint and survivor annuity or the pensioner's   pension and child's death benefit payable under this section is the   actuarial equivalent of the pension and death benefits, if any,   that would have been payable, at the time of the election, if the   election had not been made. On the death of the pensioner:                (1)  the surviving spouse of a pensioner who made an   election under Subsection (a)(1) of this section receives a pension   that is equal to the reduced pension being received by the pensioner   at the time of death; and                (2)  a surviving spouse who is not a qualified survivor   of a pensioner who made an election under Subsection (a)(2) of this   section receives a pension that is 50 percent of the reduced pension   being received by the pensioner at the time of death.          (i)  A pensioner and surviving spouse receiving a death   benefit payable under this section are eligible for adjustments   under Sections 6.12 and 6.13 of this article, if the pensioner or   surviving spouse, as applicable, is otherwise entitled to those   adjustments, except that in each case the adjustment shall be   calculated so that the total pension or death benefit paid is   reduced by the same percentage the pensioner's pension is otherwise   reduced under this section.          (j)  A pensioner and surviving spouse receiving a death   benefit payable under this section are not entitled to the minimum   benefits provided under Section 6.10A, 6.10B, or 6.11 of this   article.          (k)  A surviving spouse receiving a death benefit payable   under this section is not entitled to the special death benefit   provided under Section 6.09 of this article.          (l)  During a period in which there are two or more qualified   survivors of a member who has made a joint and survivor annuity   election under this section, the spousal benefit will be divided   among the eligible survivors under Section 6.07 or 6.08 of this   article, as applicable.          (m)  A child's death benefit elected under Subsection (a)(3)   of this section is treated the same way as a death benefit to a child   who is a qualified survivor, except that it is based on the   actuarially reduced pension.          Sec. 6.064.  DESIGNEES. (a) A member, pensioner, or   qualified survivor may at any time designate, in writing, one or   more persons as a designee to receive any lump-sum payment due from   the pension system on the death of the member, pensioner, or   qualified survivor, as applicable.          (b)  A designation under this section of a person other than   the spouse of the member, pensioner, or qualified survivor, as   appropriate, must be made with the written consent of the spouse, if   the individual has a spouse.          (c)  A designation made under this section:                (1)  may be revoked or changed at any time; and                (2)  is void if the person designated dies or goes out   of existence before the payment is made.          (d)  If a member, pensioner, or qualified survivor   designates a spouse to receive a payment and the parties are later   divorced, the designation is void at the time of the divorce unless   ratified in writing at the time of the divorce or after that time.          (e)  A designation by a member under this section is void at   the time the member becomes a pensioner unless ratified in writing   at the time the member becomes a pensioner or after that time.          (f)  If a member, pensioner, or qualified survivor does not   have a valid designee on file with the pension system at the time of   death, the designee is:                (1)  the spouse;                (2)  the qualified survivors, if any, if there is no   spouse;                (3)  the estate of the person, if there is no spouse or   qualified survivors; or                (4)  the heirs of the person, if there is no spouse,   qualified survivors, or estate.          SECTION 1.38.  Sections 6.07, 6.08, 6.09, and 6.10A, Article   6243a-1, Revised Statutes, are amended to read as follows:          Sec. 6.07.  GROUP A DEATH BENEFITS. (a)(1) If a Group A   member dies before leaving active service [retirement] and before   the Group A member had [has] 20 years of pension service, the Group   A member's [leaving both a qualified surviving] spouse and   [qualified surviving] children who are [, the] qualified [surviving   spouse shall make an election for all] survivors shall, in the   aggregate, [to] receive a Group A death benefit [consisting in the   aggregate of an amount] equal to a Group A retirement pension   computed under the terms of Section 6.01 of this article as if the   Group A member had completed 20 years of pension service. [An   election under this subdivision, once made, is irrevocable. This   Group A death benefit shall be divided one-half to the qualified   surviving spouse and one-half to the qualified surviving children.]                (2)  If a Group A [pensioner dies during disability   retirement and before the Group A pensioner had 20 years of pension   service, leaving both a qualified surviving spouse and qualified   children, the survivors in the aggregate shall receive a Group A   death benefit calculated either under Sections 6.01(b) and (c) of   this article if the Group A pensioner's Group A disability pension   was calculated under Section 6.04(a) of this article, or under   Section 6.01(e) of this article if the Group A pensioner's Group A   disability pension was calculated under Section 6.04(b) of this   article. This Group A death benefit shall be divided one-half to   the qualified surviving spouse and one-half to the qualified   surviving children.          [(b)(1)  If a Group A member or former Group A] member dies   before service retirement and after the Group A member has [or   former Group A member has] 20 years of pension service, the Group A   member's [leaving both a qualified surviving] spouse and [qualified   surviving] children[,] who are [the] qualified [surviving spouse   shall make an election for all] survivors shall, in the aggregate,   [to] receive a Group A death benefit calculated under Section 6.01   of this article as if the Group A member [of an amount equal to a   Group A retirement pension the Group A member or former Group A   member would have received] had [the person] left active service on   the date of the [death, computed under the terms of Section 6.01 of   this article. An election under this subdivision, once made, is   irrevocable. This] Group A member's death [benefit shall be   divided one-half to the qualified surviving spouse and one-half to   the qualified surviving children].                (3)  If a Group A pensioner dies during service   retirement, the Group A pensioner's spouse and children who are   qualified survivors shall, in the aggregate, receive a Group A   death benefit in an amount equal to the Group A retirement pension   being received by the Group A pensioner on the date of the   pensioner's death.                (4)  If a Group A pensioner dies after November 25,   1996, while receiving periodic disability compensation under   Section 6.05 of this article or a disability pension under Section   6.04 of this article, and before the Group A pensioner has 20 years   of pension service, the Group A pensioner's spouse and children who   are qualified survivors shall, in the aggregate, receive a Group A   death benefit calculated under Section 6.04 or 6.05 of this   article, as applicable, in the same manner as the Group A   pensioner's periodic disability compensation or disability   pension, but as if the Group A pensioner had completed 20 years of   pension service.                (5)  [(2)(A)] If a Group A pensioner who has 20 or more   years of pension service dies during disability retirement, the   Group A pensioner's spouse and children who are qualified survivors   shall, in the aggregate, [dies leaving both a qualified surviving   spouse and qualified surviving children, the qualified surviving   spouse shall make an election for all survivors to] receive a Group   A death benefit in an [the] amount equal to [of] the Group A   disability [retirement] pension being received by the Group A   pensioner on the date of the pensioner's death.          (b)  [before the person's death. This] Group A death   benefits under Subsection (a) of this section [benefit] shall:                (1)  be divided one-half to the [qualified surviving]   spouse and one-half to the [qualified surviving] children who are   qualified survivors; and [.]                (2)  subject to [(B) With] the terms of Sections   [exception of those circumstances described by Section] 6.06(n),   (o), (o-1), and (o-2) of this article, be distributed in an equal   and uniform manner to the children described by Subdivision (1) of   this subsection [the Group A death benefits awarded to the   qualified survivors under this subsection shall be paid entirely to   the qualified surviving spouse and the qualified surviving   children. The qualified surviving children's one-half share shall   be equally and uniformly distributed by the qualified surviving   spouse to them].          (c) [(c)(1)]  If a Group A member or pensioner [former Group   A member] dies leaving no [qualified surviving] spouse or   [qualified surviving] children who are qualified survivors, the   [but leaves surviving one or both qualified surviving dependent   parents, the qualified surviving] dependent parents who are   qualified survivors shall [may elect to] receive a Group A death   benefit equal to the death benefit otherwise payable under   Subsection (a) of this section. The death benefit payable to the   dependent parents under this subsection shall be divided equally   between the parents regardless of whether the parents are married   or living at the same residence. [Group A retirement pension the   Group A member or former Group A member would have been entitled to   under Section 6.01 of this article after leaving active service. If   there are two qualified dependent parents, the election must be   mutual. An election under this subdivision, once made, is   irrevocable. The qualified surviving dependent parents of a Group   A pensioner shall receive a Group A death benefit equal to the   amount of the actual Group A retirement pension being received at   the time of the pensioner's death, divided equally between the   qualified surviving dependent parents.                [(2) If a Group A pensioner dies during disability   retirement and before the Group A pensioner had 20 years of pension   service, leaving no qualified surviving spouse or qualified   surviving children, but leaves surviving one or both qualified   surviving dependent parents, the qualified surviving dependent   parents may elect to receive a Group A death benefit calculated   either: under Sections 6.01(b) and (c) of this article if the Group   A pensioner's Group A disability pension was calculated under   Section 6.04(a) of this article, or under Section 6.01(e) of this   article if the Group A pensioner's Group A disability pension was   calculated under Section 6.04(b) of this article. An election   under this subdivision, once made, is irrevocable.          [(d)]  If there is only one [qualified surviving] dependent   parent, that [the] parent is entitled to one-half of the death   benefit described in [amount determined under Subsection (c)(1) or   (c)(2) of] this subsection [section].          Sec. 6.08.  GROUP B DEATH BENEFITS. (a) If a Group B member   dies while on active service, a [former] Group B member who left   active service and is vested under Section 5.06 of this article   dies, or a Group B pensioner dies while receiving [on] service or   disability retirement or while receiving periodic disability   compensation under Section 6.05 of this article, the person's   qualified survivors, or the person described in Section 6.06(g) or   (j) of this article as the recipient of the children's benefits   [guardian of the qualified surviving children if no qualified   surviving spouse exists], may make application for Group B death   benefits. If the deceased [The qualified surviving spouse of a   Group B member or former Group B member described by this   subsection, the guardian of the qualified surviving children of the   person if no qualified surviving spouse exists, or the qualified   dependent parents if no qualified surviving spouse or qualified   surviving children exist, have the option to select whether Group A   or Group B death benefits are received, if the Group B member or   former] Group B member was previously eligible to elect whether to   receive either a Group A or Group B retirement pension, the option   to elect whether Group A or Group B death benefits are received   shall be exercised by one of the following:                (1)  a qualified survivor who is the spouse of the   deceased Group B member described by this subsection;                (2)  the person described in Section 6.06(g) or (j) of   this article as the recipient of benefits on behalf of the deceased   member's children who are qualified survivors, if no spouse is a   qualified survivor; or                (3)  the qualified survivors who are dependent parents   of the deceased member, if there is neither a spouse nor children   who are qualified survivors.          (a-1)  A qualified survivor who receives Group A death   benefits under Subsection (a) of this section [subsection] is   entitled to a ratable portion of a reimbursement from the fund in   the same amount and manner determined under Section 5.03(d) of this   article. A qualified survivor or guardian desiring a refund of   excess contributions must make application for the refund with the   executive director [administrator] within three years after the   date the qualified survivor or guardian makes application for Group   A death benefits. The option contained in this subsection is not   available to qualified survivors of a Group B member [or former   Group B member] who had, at the time of death, already applied for a   retirement pension and selected a Group A retirement pension as   provided by Section 5.03(c) or (c-1) of this article, but the   qualified survivors are entitled to receive a Group A death   benefit.          (b)  Subject to Subsection (b-2) of this section, death   [Death] benefits shall be computed as follows for the qualified   survivors of Group B members who die while on active service:                (1)  the [A qualified surviving spouse's Group B] death   benefit of a qualified survivor who is the spouse of a member who   began active service:                      (A)  before March 1, 2011, shall be the sum of:                            (i)  the number of years of pension service   earned before September 1, 2017, prorated for fractional years,   times 1.5 percent of the [computed at the rate of 1.5 percent of the   Group B member's] average computation pay determined over the 36   [60] consecutive months of pension service in which the Group B   member received the highest computation pay; plus                            (ii)  the number of [, for each year, and   prorated for fractional years, of pension service with a minimum of   20] years of pension service, including pension service credit   imputed under Section 6.05(c) of this article, after September 1,   2017, prorated for fractional years, times the applicable   percentage rate set forth below [assumed, or 30 percent] of the   average computation pay determined over the 60 consecutive months   of pension service in which the Group B member received the highest   computation pay:   Age of Member When Retirement Pension Begins Percent   58 and older 1.25%   57 1.2%   56 1.15%   55 1.10%   54 1.05%   53 and younger 1.0%; or                      (B)  on or after March 1, 2011, shall be the number   of years of pension service, including pension service imputed   under Section 6.05(c) of this article, prorated for fractional   years, times 1.25 percent of the average computation pay determined   over the 60 consecutive months of pension service in which the Group   B member received the highest computation pay;                (2)  the death benefit of qualified survivors who are a   member's children shall be computed in the same manner as a spouse's   benefit is computed under Subdivision (1)(A) or (B) of this   subsection, as applicable, and shall be divided equally among all   of the children who are qualified survivors; and                (3)  the death benefit of each qualified survivor who   is a member's dependent parent shall be computed in the same manner   as a spouse's Group B benefit is computed under Subdivision (1)(A)   or (B) of this subsection, as applicable.          (b-1)  Pension service for purposes of the calculation under   Subsection (b) of this section may not be less than 20 years. Any   partial year of pension service for the first 20 years of pension   service is counted as a full year of pension service, if the member   was considered by the member's department to have worked a normal   full-time schedule at the time of the member's death.          (b-2)  The death benefit calculated under Subsection (b) of   this section may not exceed the greater of:                (1)  45 [a computation for 32 years of pension service,   or 48] percent of the member's average computation pay determined   over the 36 or 60 consecutive months, as applicable, in which the   Group B member received the highest computation pay; or                 (2)  the vested and accrued death benefit as determined   on August 31, 2017.          (b-3)  For purposes of Subsections (b) through (b-2) of this   section:                (1)  if [If] the Group B member had less than 36 or 60   consecutive months, as applicable, [five years] of pension service,   the average computation pay will be computed based on the person's   entire pension service; and                (2)  days during which the member earned no pension   service due to a termination of active service or otherwise must be   disregarded in determining the 36 or 60 consecutive months of   highest computation pay.                [(2)     A qualified surviving child's Group B death   benefit shall be computed in the same manner as a qualified   surviving spouse's benefit is computed under Subdivision (1) of   this subsection and shall be divided equally among all of the   qualified surviving children.                [(3)     Each qualified surviving dependent parent's Group   B death benefit shall be computed in the same manner as a qualified   surviving spouse's Group B benefit is computed under Subdivision   (1) of this subsection.]          (c)  Group B death benefits shall be computed as follows for   the qualified survivors of any [former] Group B member who died   after leaving active service and who had vested rights under   Section 5.06 of this article but who had not received [Group B]   retirement benefits [under Section 6.02 of this article] at the   time of death:                (1)  the death benefit of a [The] qualified survivor   who is the member's [surviving] spouse [of the former Group B   member] is [entitled to a Group B death benefit] equal to 50 percent   of any [Group B] retirement pension the [former Group B] member   would have been entitled to [under Section 6.02 of this article] as   of the date the [former Group B] member left active service;[.]                (2)  the death benefits of [The] qualified survivors   who are the member's [surviving] children [of the former Group B   member] are [entitled to a Group B benefit] calculated in the same   manner as the spouse's benefit is computed under Subdivision (1) of   this subsection [Group B death benefit of a qualified surviving   spouse], to be divided equally between the [qualified surviving]   children; and[.]                (3)  the death benefit of each [Each of the] qualified   survivor who is the member's [surviving] dependent parent [parents   of the former Group B member] is [entitled to a Group B death   benefit] equal to 50 percent of any [Group B] retirement pension the   [former Group B] member would have been entitled to [under the   provisions of Section 6.02 of this article] as of the date the   [former Group B] member left active service.          (d)  Group B death benefits shall be computed as follows for   the qualified survivors of any Group B pensioner [of this plan] who   dies while receiving service [a Group B] retirement [pension]:                (1)  the death benefit of a [The] qualified [surviving]   survivor who is the pensioner's spouse [of a Group B pensioner] is   [entitled to Group B death benefits] equal to 50 percent of any   retirement pension the Group B pensioner was receiving at the time   of death;[.]                (2)  the death benefits of qualified survivors who are   the pensioner's [The qualified surviving] children [of a Group B   pensioner] are [entitled to a Group B death benefit] calculated in   the same manner as the spouse's benefit is computed under   Subdivision (1) of this subsection [Group B death benefit of a   qualified surviving spouse], to be divided equally between the   [qualified surviving] children; and[.]                (3)  the death benefit of each [Each of the] qualified   survivor who is the pensioner's [surviving] dependent parent   [parents of a Group B pensioner] is [entitled to a Group B death   benefit] equal to 50 percent of any retirement pension the Group B   pensioner was receiving at the time of death.          (e)  Group B death benefits shall be computed as follows for   the qualified survivors of any Group B pensioner who dies while   receiving disability retirement or while receiving periodic [a   Group B] disability compensation under Section 6.05 of this article   [pension due to either a service-connected or nonservice-connected   disability]:                (1)  the death benefit of a [The] qualified survivor   who is the pensioner's [surviving] spouse [of the Group B   pensioner] is [entitled to the greater of a Group B death benefit]   equal to 50 percent of any Group B periodic disability compensation   or disability pension the Group B pensioner would have been   entitled to [under Section 6.05 of this article] as of the date the   Group B pensioner left active service because of disability, or a   Group B death benefit equal to 50 percent of any periodic disability   compensation or [Group B] disability pension the Group B pensioner   was receiving at the time of death;[.]                (2)  the death benefits of [The] qualified survivors   who are the pensioner's [surviving] children [of the Group B   pensioner] are [entitled to a Group B death benefit] calculated in   the same manner as the spouse's [Group B death] benefit is computed   under Subdivision (1) of this subsection [of a qualified surviving   spouse], to be divided equally between the [qualified surviving]   children; and[.]                (3)  the death benefit of each [Each of the] qualified   survivor who is the pensioner's [surviving] dependent parent   [parents of the Group B pensioner] is [entitled to the greater of a   Group B death benefit] equal to 50 percent of any periodic   disability compensation or disability pension the Group B pensioner   would have been entitled to [under Section 6.05 of this article] as   of the date the Group B pensioner left active service because of   disability, or a Group B death benefit equal to 50 percent of any   periodic disability compensation or [Group B] disability pension   the Group B pensioner was receiving at the time of death.          Sec. 6.09.  QUALIFIED SURVIVING SPOUSE SPECIAL DEATH   BENEFIT. (a) A person who is the [Notwithstanding Sections 6.06   and 6.07 of this article, the qualified surviving] spouse of a Group   A primary party, who is a qualified survivor, and who is entitled to   death benefits under Sections 6.06, 6.061, 6.062, 6.063, and 6.07   of this article is also entitled to a special death benefit under   this section if:                (1)  the Group A primary party:                      (A)  [elected to receive a Group A retirement   pension and later died, was receiving a disability or retirement   pension either under the terms of Plan A before the original   enactment of this article or elected to receive a Group A retirement   pension under Sections 6.01(e), (f), and (g) of this article and   later died, or was receiving a Group A disability pension under   Section 6.04(c) of this article and later died;                [(2) the Group A primary party (i)] had at least 20   years of pension service, [and] left active service after October   1, 1985, and was at least 55 years of age on the earlier of the date   the primary party:                            (i)  left active service; or                            (ii)  began participation in DROP [or   older]; or                      (B)  had [(ii) on or after May 1, 1990, the Group A   primary party, after accruing] at least 20 years of pension   service, left active service on or after May 31, 2000, and on the   earlier of the date the primary party left active service or began   participation in DROP, [and] had a total of at least 78 [80]   credits, with each year of pension service, prorated for fractional   years, equal to one credit and with each year of age, prorated for   fractional years, equal to one credit; or [and]                (2)  the [(3) the qualified surviving] spouse has   attained 55 years of age and there are no [qualified surviving]   children who are qualified survivors eligible for death benefits.          (b)  Until the requirements of Subsection (a) of this section   are satisfied, a qualified survivor who is the spouse of a Group A   primary party [surviving spouse] shall receive a Group A death   benefit in accordance with Section 6.07 of this article.          (c)  The special Group A death benefit under Subsection (a)   of this section is calculated based on the following formula:   (P x P x A) + (P x C) + D, where          A = base pay at the time the Group A primary party began   participation in DROP, begins service retirement, dies, or becomes   disabled, plus longevity pay, plus one-twelfth of last-received   city service incentive pay;          B = Group A primary party's benefit calculated at the time the   Group A primary party began participation in DROP, begins service   retirement, dies, or becomes disabled;          P = B/A (expressed as a percentage or a decimal);          C = the number of adjustments made to a Group A primary   party's [Group A] retirement pension, disability pension, or   periodic [Group A] disability compensation, [pension under Section   6.04 of this article] multiplied by the amount of the adjustments;   and          D = the number of adjustments made under this article to the   [a qualified surviving spouse's] Group A death benefit of a spouse   who is a qualified survivor under Section 6.07 of this article,   multiplied by the amount of the adjustments.          (d)  A person who is the [Notwithstanding Sections 6.03 and   6.05 of this article, a qualified surviving] spouse of a Group B   primary party, who is a qualified survivor, and who is entitled to   any death benefits under Sections 6.06, 6.061, 6.062, 6.063, and   [or] 6.08 of this article is also entitled to a special benefit   under this section if:                (1)  the Group B primary party [elected to receive a   Group B retirement pension and later died, or was receiving a Group   B disability or retirement pension under this article and died;                [(2) the Group B primary party]:                      (A)  had at least 20 years of pension service,   left active service after October 1, 1985, and was at least 55 years   of age at the earlier of the date the primary party left [time of   leaving] active service or began participation in DROP; or                      (B)  on or after May 31, 2000 [1, 1990], [the Group   B primary party] left active service or began participation in   DROP, whichever was earlier, having a total of at least 78 [80]   credits, with each year of pension service, prorated for fractional   years, equal to one credit and with each year of age, determined at   the time the Group B primary party left active service or began   participation in DROP, prorated for fractional years, equal to one   credit; or [and]                (2) [(3)]  the [qualified surviving] spouse has   attained 55 years of age, and there are no [qualified surviving]   children of the primary party who are qualified survivors.          (d-1)  Until the requirements of Subsection (d) [(c)] of this   section are satisfied, a spouse who is a qualified survivor   [surviving spouse] may only receive a Group B death benefit in   accordance with Sections 6.06, 6.061, 6.062, 6.063, [6.03] and 6.08   [6.05] of this article.          (e)  The [This] special Group B death [survivor] benefit   under Subsection (d) of this section is calculated based on the   following formula:   (P x P x A) + (P x C) + D, where          A = average monthly computation pay at the time the Group B   primary party begins service retirement, dies, [or] becomes   disabled, or begins participation in DROP;          B = the Group B primary party's benefit [Group B retirement or   Group B disability pension] calculated at the time the Group B   primary party begins participation in DROP, begins to receive   service [or disability] retirement, [or] dies, or becomes disabled;          P = B/A (expressed as a percentage or a decimal);          C = the number of post-retirement [postretirement]   adjustments made to a Group B primary party's [Group B] retirement   pension, disability pension, or periodic [Group B] disability   compensation [pension under Section 6.05 of this article]   multiplied by the amount of the adjustments; and          D = the number of adjustments made to the [a qualified   surviving spouse's] Group B death benefit of a qualified survivor   who is the primary party's spouse under Section 6.08 of this article   multiplied by the amount of the adjustments.          Sec. 6.10A.  MINIMUM BENEFITS TO CERTAIN GROUP A PRIMARY   PARTIES WHO WERE GROUP A, OLD PLAN, OR COMBINED PENSION PLAN MEMBERS   [ELECT TO RECEIVE RETIREMENT PENSION UNDER SECTIONS 6.01(B) AND   (C)] AND THEIR QUALIFIED SURVIVORS. (a) Except as provided by   Section 6.063 of this article or Subsections (b) and (h) of this   section and notwithstanding any benefit computation and   determination to the contrary contained in this article, the   minimum Group A benefits provided by this section shall be paid to   any Group A primary party who elects to receive a Group A retirement   pension under Sections 6.01(b) and (c) of this article, the old   plan, or former Section 14(a) of this article, or to the primary   party's qualified survivors [. The benefits under this section   shall be distributed in accordance with Sections 6.01(b) and (c),   6.04(a), or 6.07 of this article, as applicable], except that a   Group A primary party who elects to receive an actuarially reduced   [Group A retirement pension because of the primary party's request   to receive a Group A] retirement pension before 50 years of age and   the primary party's qualified survivors are not entitled to the   [Group A] minimum benefits specified under this section. An   alternate payee is not entitled to the Group A minimum benefits   specified in this section.          (b)  A Group A primary party who elects to receive a Group A   retirement pension under Sections 6.01(b) and (c) of this article,   the old plan, or former Section 14(a) of this article and who left   active service with 20 or more years of pension service is entitled   to receive a minimum Group A retirement pension of $2,200 [$1,500] a   month. [If the Group A primary party's Group A retirement pension   is subject to a qualified domestic relations order and the sum of   the actuarial equivalents of the monthly benefits payable to the   Group A primary party and the alternate payee is less than the   actuarial equivalent of the minimum monthly Group A retirement   pension described by this subsection, the Group A primary party's   monthly Group A retirement pension will be increased so that the sum   of the actuarial equivalents of the alternate payee's and the Group   A primary party's monthly Group A retirement pension equals the   actuarial equivalent of the minimum monthly Group A retirement   pension calculated under this subsection.]          (c)  In the absence of children who are [A] qualified   survivors, a [surviving] spouse who is a qualified survivor of a   Group A primary party who elected to receive a Group A retirement   pension under Sections 6.01(b) and (c) of this article, the old   plan, or former Section 14(a) of this article will receive a minimum   monthly Group A death benefit of $1,200 [$750].          (d)  A spouse who is a qualified survivor [surviving spouse]   of a Group A primary party who elected to receive a Group A   retirement pension under Sections 6.01(b) and (c) of this article,   the old plan, or former Section 14(a) of this article will receive,   if there are children who are qualified survivors [surviving   children], a minimum Group A death benefit of $1,100 [$750] a month.   [The qualified surviving children, as a group, will receive a   minimum Group A death benefit of $750 a month, to be divided equally   among them.]          (e)  In the absence of a spouse who is a qualified survivor   [surviving spouse] of a Group A primary party who elected to receive   a Group A retirement pension under Section [Sections] 6.01(b),   [and] (c), or (e) of this article, the old plan, or former Section   14(a) of this article, the primary party's children who are   qualified survivors [surviving children], as a group, will receive   a minimum Group A death benefit of $1,100 [$750] a month, to be   divided equally among them.          (f)  If there is neither a [In the absence of both a qualified   surviving] spouse nor a child who is a [and] qualified survivor   [surviving children] of a Group A primary party who elected to   receive a Group A retirement pension under Sections 6.01(b) and (c)   of this article, the old plan, or former Section 14(a) of this   article, each [qualified surviving] dependent parent who is a   qualified survivor will receive a minimum Group A death benefit of   $1,100 [$750] a month. If only one of them is surviving, that [the   qualified surviving] dependent parent will receive a minimum Group   A death benefit equal to $1,100 [$750] a month.          (g)  Notwithstanding the minimum monthly benefit described   in other subsections of this section, a Group A primary party who   receives periodic disability compensation under Section 6.05(b) of   this article or a Group A disability pension under Section 6.04(a)   of this article, the old plan, or former Section 17(a) of this   article, [calculated in the same manner as a Group A retirement   pension under Sections 6.01(b) and (c) of this article,] shall   receive a minimum Group A disability pension equal to $2,200   [$1,500] a month.          (h)  If a Group A pensioner who received a monthly benefit   under Section 6.05(b-1) of this article or a disability pension   under Section 6.04(a) of this article, calculated in the same   manner as a Group A retirement pension under Sections 6.01(b) and   (c) of this article, the old plan, or former Section 17(a) of this   article [primary party's disability pension is subject to a   qualified domestic relations order and the sum of the actuarial   equivalents of the monthly benefits payable to the Group A primary   party and the alternate payee is less than the actuarial equivalent   of the minimum monthly Group A disability pension determined under   Subsection (g) of this section, the Group A primary party's minimum   monthly Group A disability pension will be increased so that the sum   of the actuarial equivalents of the alternate payee's and the Group   A primary party's minimum monthly Group A disability pension equals   the amount determined under Subsection (g) of this section.          [(i)     If a Group A pensioner who received a disability under   Section 6.04(a) of this article, calculated in the same manner as a   Group A retirement pension under Sections 6.01(b) and (c) of this   article] before the completion of 20 years of pension service dies,   the qualified survivors will receive a minimum Group A death   benefit as provided under Subsection (c), (d), (e), or (f) of this   section, as applicable, whichever is greatest.          SECTION 1.39.  The heading to Section 6.10B, Article   6243a-1, Revised Statutes, is amended to read as follows:          Sec. 6.10B.  MINIMUM BENEFITS TO CERTAIN GROUP A PRIMARY   PARTIES WHO WERE GROUP A, PLAN A, OR COMBINED PLAN MEMBERS [ELECT TO   RECEIVE RETIREMENT PENSION UNDER SECTION 6.01(E)] AND THEIR   QUALIFIED SURVIVORS.          SECTION 1.40.  Sections 6.10B(a), (b), (c), (d), (e), (f),   (g), and (i), Article 6243a-1, Revised Statutes, are amended to   read as follows:          (a)  Except as provided by Section 6.063 of this article and   Subsection [Subsections] (b) [and (h)] of this section and   notwithstanding any benefit computation and determination to the   contrary contained in this article, the minimum Group A benefits   provided by this section shall be paid to any Group A primary party   who elects to receive a Group A retirement pension under Section   6.01(e) of this article, Plan A, or former Section 14(b) of this   article or to the primary party's qualified survivors[. The   benefits under this section shall be distributed in accordance with   Section 6.01(e), 6.04(b), or 6.07 of this article, as applicable],   except that a Group A primary party who elects to receive an   actuarially reduced Group A retirement pension [because of the   primary party's request to receive a Group A retirement pension]   before 55 years of age and the primary party's qualified survivors   are not entitled to the [Group A] minimum benefits specified in   [under] this section. An alternate payee is not entitled to the   Group A minimum benefits specified in this section.          (b)  A Group A primary party who elects [elected] to receive   a Group A retirement pension under Section 6.01(e) of this article,   Plan A, or former Section 14(b) of this article and who left active   service with 20 or more years of pension service is entitled to   receive a minimum [Group A] retirement pension equal to the greater   of $2,200 [(i) $1,500] a month or [(ii)] $1,000 a month adjusted, if   applicable, in the manner described by Section 6.12 [6.12(a)] of   this article. [If the Group A primary party's Group A retirement   pension is subject to a qualified domestic relations order and the   sum of the actuarial equivalents of the monthly benefits payable to   the Group A primary party and the alternate payee is less than the   actuarial equivalent of the minimum monthly Group A retirement   pension described by this subsection, the Group A primary party's   monthly Group A retirement pension will be increased so that the sum   of the actuarial equivalents of the alternate payee's and the Group   A primary party's monthly Group A retirement pension equals the   actuarial equivalent of the minimum monthly Group A retirement   pension calculated under this subsection.]          (c)  In the absence of children who are [A] qualified   survivors, a [surviving] spouse who is a qualified survivor of a   Group A primary party who elects [elected] to receive a Group A   retirement pension under Section 6.01(e) of this article, Plan A,   or former Section 14(b) of this article will receive a minimum   monthly [Group A] death benefit equal to the greater of $1,200    [(i)  $750] a month or [(ii)] $500 a month adjusted, if applicable,   in the manner described by Section 6.12 [6.12(a)] of this article.          (d)  A spouse who is a qualified survivor [surviving spouse]   of a Group A primary party who elects to receive a Group A   retirement pension under Section 6.01(e) of this article, Plan A,   or former Section 14(b) of this article will receive, if there are   children who are qualified survivors [surviving children], a   minimum Group A death benefit equal to the greater of $1,100 [(i)   $750] a month or [(ii)] $500 a month adjusted, if applicable, in the   manner described by Section 6.12 [6.12(a)] of this article. The   children who are qualified survivors [surviving children], as a   group, will receive a minimum [Group A] death benefit equal to the   greater of $1,100 [(iii) $750] a month or [(iv)] $500 a month   adjusted, if applicable, in the manner described by Section 6.12    [6.12(a)] of this article, to be divided equally among them.          (e)  In the absence of a spouse who is a qualified survivor   [surviving spouse] of a Group A primary party who elected to receive   a Group A retirement pension under Section 6.01(e) of this article,   Plan A, or former Section 14(b) of this article, the [the qualified   surviving children of a Group A] primary party's children who are   qualified survivors [party], as a group, will receive a minimum   Group A death benefit equal to the greater of $1,100 [(i) $750] a   month or [(ii)] $500 a month adjusted, if applicable, in the manner   described by Section 6.12 [6.12(a)] of this article, to be divided   equally among them.          (f)  If there is neither a [In the absence of both a qualified   surviving] spouse nor child who is a [and] qualified survivor   [surviving children] of a Group A primary party who elected to   receive a Group A retirement pension under Section 6.01(e) of this   article, Plan A, or the former Section 14(b) of this article, each   [qualified surviving] dependent parent who is a qualified survivor   will receive a minimum Group A death benefit equal to the greater of   $1,100 [(i) $750] a month or [(ii)] $500 a month adjusted, if   applicable, in the manner described by Section 6.12 [6.12(a)] of   this article. If only one of them is surviving, that [the qualified   surviving] dependent parent will receive a minimum Group A death   benefit equal to the greater of $1,100 [(iii) $750] a month or   [(iv)] $500 a month adjusted, if applicable, in the manner   described by Section 6.12 [6.12(a)] of this article.          (g)  Notwithstanding the minimum monthly benefit as   described in other subsections of this section, a Group A primary   party who leaves active service on a non-service-connected   [nonservice-connected] disability under Section 6.04(a)   [6.04(b)(2)] of this article, Plan A, or former Section 17(b)(2) of   this article with less than 20 years of pension service shall   receive a minimum monthly Group A disability pension equal to the   greater of $110 [(i) $75] multiplied by the number of years of the   primary party's pension service or [(ii)] $50 multiplied by the   number of years of the primary party's pension service, the product   adjusted, if applicable, in the manner described by Section 6.12    [6.12(a)] of this article.          (i)  If a Group A pensioner who received a   non-service-connected [nonservice-connected] disability pension    under Section 6.04(a) [6.04(b)(2)] of this article, Plan A, or   former Section 17(b)(2) of this article before the completion of 20   years of pension service dies, the qualified survivors will each   receive the amount specified in Section 6.07 of this article or the   minimum [monthly] Group A death benefit as provided under   Subsection (c), (d), (e), or (f) of this section, as applicable,   whichever is greatest.          SECTION 1.41.  Sections 6.11, 6.12, and 6.13,   Article 6243a-1, Revised Statutes, are amended to read as follows:          Sec. 6.11.  MINIMUM BENEFITS TO GROUP B PRIMARY PARTIES AND   THEIR QUALIFIED SURVIVORS. (a) Except as provided by Section 6.063   of this article or Subsections (b), (c), and (h) of this section and   notwithstanding any benefit computation and determination to the   contrary contained in this article, the minimum Group B benefits   provided by this section shall be paid to any Group B primary party   or the primary party's qualified survivors, except further that a   Group B primary party who elects to receive an actuarially reduced   [Group B] retirement pension, including a request for a benefit   under Sections 6.02(c) and (d) of this article, [because of the   primary party's request to receive the pension at or after age 45,   but before age 50] and the primary party's qualified survivors[,]   or [an] alternate payee [of the primary party], are not entitled to   the Group B minimum benefits specified by this section.          (b)  If a Group B primary party leaves active service with 20   or more years of pension service, the Group B primary party is   entitled to receive a Group B minimum retirement pension equal to   the greater of $2,200 [(i) $1,500] a month or [(ii)] $925 a month,   which sum may (A) increase at the rate of $5 a month for each year of   pension service beyond 20 years, but the increase may not exceed $75   and (B) be adjusted, if applicable, in the manner described by   Section 6.12 [6.12(a)] of this article. [If a Group B primary   party's Group B retirement pension is or becomes subject to a   qualified domestic relations order and the sum of the actuarial   equivalents of the monthly Group B retirement pension payable to   the Group B primary party and the alternate payee is less than the   actuarial equivalent of the minimum monthly Group B retirement   pension as calculated under this subsection, the Group B primary   party's monthly Group B retirement pension will be increased so   that the sum of the actuarial equivalents of both the alternate   payee's and the Group B primary party's Group B retirement pensions   equals the actuarial equivalent of the minimum monthly Group B   retirement pension as calculated under this subsection.]          (c)  If a Group B primary party leaves active service with   less than 20 years of pension service, the primary party is entitled   to receive a minimum monthly Group B retirement pension equal to the   greater of:                (1)  $2,200 [(i) $1,500] a month divided by 20 and   multiplied by the Group B primary party's number of years of pension   service; or                (2) [(ii)]  $925 a month divided by 20 and multiplied   by the Group B primary party's number of years of pension service,   which amount is then adjusted, if applicable, in the manner   described by Section 6.12 [6.12(a)] of this article. [If a Group B   primary party's retirement pension is or becomes subject to a   qualified domestic relations order and the sum of the actuarial   equivalents of the monthly Group B retirement pension payable to   the Group B primary party and the alternate payee is less than the   actuarial equivalent of the monthly retirement pension as   calculated under this subsection, the Group B primary party's   monthly Group B retirement pension will be increased so that the sum   of the actuarial equivalents of the alternate payee's and the Group   B primary party's monthly Group B retirement pensions equals the   actuarial equivalent of the minimum monthly Group B retirement   pension as calculated under this subsection.]          (d)  In the absence of children who are qualified survivors,   a spouse who is a [surviving children, the] qualified survivor   [surviving spouse] of a Group B primary party will receive a minimum   Group B death benefit equal to the greater of:                (1)  $1,200 [(i) $750] a month; or                (2) [(ii)]  $600 a month adjusted, if applicable, in   the manner described by Section 6.12 [6.12(a)] of this article.          (e)  A spouse who is a qualified survivor [surviving spouse]   of a Group B primary party [will receive], if there are children who   are qualified survivors [surviving children], will receive [the   greater of a minimum Group B death benefit of 50 percent of the   primary party's minimum monthly Group B retirement pension   described by Subsection (b) or (c) of this section, whichever is   applicable. The qualified surviving children, as a group, will   receive the greater of] a minimum [monthly] Group B death benefit of   $1,100 a month [50 percent of the minimum monthly Group B retirement   pension described by Subsection (b) or (c) of this section,   whichever is applicable, to be divided equally among them].          (f)  The [In the absence of a qualified surviving spouse, the   qualified surviving] children who are qualified survivors of a   Group B primary party, as a group, will receive a minimum Group B   death benefit equal to the greater of $1,100 [(i) $750] a month or   [(ii)] $600 a month adjusted, if applicable, in the manner   described by Section 6.12 [6.12(a)] of this article, to be divided   equally between them.          (g)  If there is neither a [In the absence of either a   qualified surviving] spouse nor a child who is a [or] qualified   survivor [surviving children], each [qualified surviving]   dependent parent who is a qualified survivor of the deceased Group B   primary party will receive a minimum death benefit of $1,100 a month   [Group B minimum death benefit equal to the greater of 50 percent of   the Group B primary party's minimum monthly Group B retirement   pension described by Subsection (b) or (c) of this section,   whichever is applicable. If only one qualified surviving dependent   parent is surviving, the parent will receive a Group B minimum death   benefit of 50 percent of the minimum monthly Group B retirement   pension described by Subsection (b) or (c) of this section,   whichever is applicable].          (h)  Notwithstanding the minimum monthly [Group B]   retirement pension otherwise described by this section, a Group B   primary party who left active service on a non-service-connected   [nonservice-connected] disability with less than 20 years of   pension service will receive a minimum monthly [Group B] disability   pension equal to the greater of $110 [(i) $75] multiplied by the   number of years of the primary party's pension service or [(ii)]   $46.25 multiplied by the number of years of the primary party's   pension service, the product adjusted in the manner, if applicable,   described by Section 6.12 [6.12(a)] of this article. [If the Group   B primary party's Group B disability pension is or becomes subject   to a qualified domestic relations order and the sum of the actuarial   equivalents of the monthly Group B disability pension payable to   the Group B primary party and the alternate payee is less than the   actuarial equivalent of the monthly disability pension as   calculated under this subsection, the Group B primary party's   monthly Group B disability pension will be increased so that the sum   of the actuarial equivalents of the alternate payee's and the Group   B primary party's monthly Group B disability pensions equals the   actuarial equivalents of the minimum monthly Group B disability   pension as calculated under this subsection.] If a Group B primary   party who was receiving a non-service-connected   [nonservice-connected Group B] disability pension before the   completion of 20 years pension service dies, the qualified   survivors will receive the amount specified in Section 6.08 of this   article, or the [Group B] minimum monthly death benefits granted to   qualified survivors as provided by Subsections (d), (e), (f), and   (g) of this section, as applicable, whichever is greater.          Sec. 6.12.  ADJUSTMENTS TO RETIREMENT AND DISABILITY PENSION   BENEFITS. (a) This section applies to the following benefits   provided under this article:                (1)  [Annually on the first day of October,] a   retirement pension calculated under Section 6.01(e) [Section 6.01]   or 6.02 of this article;                (2) [,]  a disability pension calculated under Section   6.04 of this article, other than under Section 6.04(a) of this   article;                (3)  periodic disability compensation benefit under   Section [or] 6.05 of this article, other than Section 6.05(b-1) of   this article; [,] or                (4)  a death benefit calculated under:                      (A)  Section 6.07 of this article, if calculated   in the manner of a retirement pension under Section 6.01(e) of this   article or in the manner of a disability compensation benefit under   Section 6.05(b) of this article; or                      (B)  Section 6.08 of this article currently in pay   status, or pending board approval on the last day of September [,   will be increased by an amount equal to four percent, not   compounded, of the original amount of the retirement or disability   pension or death benefit].          (b)  Except as provided by Subsection (d) of this section,   annually on the first day of October, the pension system shall   increase the base pension of a benefit described by Subsection (a)   of this section by a percentage equal to the average annual rate of   actual investment return of the pension system for the five-year   period ending on the December 31 preceding the effective date of the   adjustment less five percent.          (c)  An adjustment under this section may not be less than   zero percent or exceed four percent of the applicable base pension   benefit.          (d)  The pension system may only make an adjustment to   benefits under this section if the ratio of the amount of the   pension system's market value of assets divided by the amount of the   pension system's actuarial accrued liabilities, after giving   effect to the adjustment, is not less than .70.          (e)  For purposes of Subsection (d) of this section, the   amount of the pension system's market value of assets and the amount   of the pension system's actuarial accrued liabilities shall be   based on and determined as of the date of the most recently   completed actuarial valuation.          (f)  The following persons may not receive an adjustment   under this section:                (1)  a member on active service, including a DROP   participant;                (2)  a pensioner until the first October 1 occurring   after both the pensioner's retirement and the earlier of:                      (A)  the date the pensioner reaches 62 years of   age; or                      (B)  the third anniversary of the date the   pensioner retired; or                (3)  a qualified survivor until the first October 1   occurring after the earlier of:                      (A)  the date the qualified survivor reaches 62   years of age;                      (B)  the third anniversary of the date the primary   party retired; or                      (C)  the third anniversary of the date of the   member's or pensioner's death.          (g) [(b)]  A [Group B] retirement or [Group B] disability   pension or periodic disability compensation paid to any Group B   pensioner may not be less than the Group B pensioner's base pension.          (h)  The death benefit of the qualified survivors who are the   [a Group B qualified surviving] spouse, [Group B qualified   surviving] dependent parent, or child of a Group B pensioner   [parents, as a group, or Group B qualified surviving children], as a   group, may not be less than 50 percent of the [a Group B]   pensioner's base pension.          Sec. 6.13.  SUPPLEMENT TO CERTAIN RECIPIENTS 55 YEARS OF AGE   OR OLDER.  (a)  Except as provided by Subsection (b) of this   section, if [If] a pensioner had at least 20 years of pension   service under any plan adopted pursuant to Article 6243a or this   article, or if a pensioner is receiving the periodic [a   service-connected] disability compensation benefit under Section   6.05 of this article [pension], the pensioner, the pensioner's   [qualified surviving] spouse who is a qualified survivor eligible   to receive benefits under this article, or the pensioner's   [qualified surviving] children who are qualified survivors, as a   group, under Section 6.06 [6.06(o)] of this article are entitled to   receive, when the pensioner or spouse who is a qualified survivor   [surviving spouse] attains 55 years of age, provided the pensioner   or spouse attains 55 years of age before September 1, 2017, [the   greater of] a monthly supplement equal to the greater of $50 or   three percent of their total monthly benefit[,] and for months    [years] beginning on and after January 1, 1991, a [the] monthly   supplement [will be] equal to the greater of $75 or three percent of   their total monthly benefit. For purposes only of calculating this   supplement, the phrase "their total monthly benefit" means the   amount payable to a pensioner or qualified survivors under the   terms of the plans described by this section under which the   pensioner or qualified survivor elected to receive benefits but   does not include the supplement authorized by this section or any   adjustments under Section 6.12 of this article made after September   1, 2017.          (b)  A person described by Subsection (a) of this section   who, on September 1, 2017, is not receiving or has not received a   supplemental benefit under this section is not entitled to receive   a supplemental benefit under this section.          SECTION 1.42.  Section 6.14, Article 6243a-1, Revised   Statutes, is amended by amending Subsections (a), (b), (c), (d),   (e), (f), (g), (h), and (j) and adding Subsections (e-1), (e-2),   (e-3), (e-4), (f-1), (g-1), (l), (m), (n), and (o) to read as   follows:          (a)  A [In lieu of either leaving active service and   commencing a retirement pension as provided for under Section 6.01   or 6.02 of this article, whichever is applicable, or remaining in   active service and continuing to accrue additional pension benefits   as provided under Section 6.01 or 6.02, a] member who remains on   active service after becoming [is] eligible to receive a [an   unreduced] retirement pension under either Section 6.01 or 6.02 of   this article may [remain in active service,] become a participant   in the deferred retirement option plan [Deferred Retirement Option   Plan ("DROP")] in accordance with Subsections (b) and (c) of this   section, and defer the beginning of the person's retirement   pension. Once an election to participate in the DROP has been made,   the election continues in effect at least as long as the member   remains in active service. On leaving active service, the member   may:                (1)  apply for a retirement pension under Sections   6.01(b) and (c), Section 6.01(e), or Section 6.02(b), (c), (d), or   (e) [Section 6.02] of this article, whichever is applicable,   together with any DROP benefit provided under this section; or                 (2)  continue to participate in DROP except the member   is ineligible for disability benefits described by Subsection (g-1)   of this section.          (b)  The election to participate in the DROP shall be made in   accordance with procedures set forth in any uniform and   nondiscriminatory election form adopted by the board and in effect   from time to time. To determine the proper amount to be credited to   a member's DROP account, the election shall indicate whether the   member desires to receive a retirement pension under Sections   6.01(b) and (c), Section 6.01(e), or Section 6.02(b), (c), (d), or   (e) [6.02] of this article, whichever is applicable. The election   may be made at any time on or after the date the member becomes   eligible for a [an unreduced] retirement pension as provided by   this subsection.  The election [under Sections 6.01(b) and (c),   Section 6.01(e), or Section 6.02 of this article, whichever is   applicable, and] becomes effective on the first day of the first   month on or after the date on which the member makes the election,   except that an election that would otherwise have been effective on   October 1, 1993, and every October 1 after that date, is considered,   for purposes of this section and Section 6.12 of this article, to be   effective on September 30 of the year in which it would otherwise   have been effective. On and after the effective date of the   election, the member will no longer be eligible for any refund of   [make member] contributions [to the fund, notwithstanding Section   4.03(b) or (f) of this article, whichever is applicable]. The   election by one or more members to participate in the DROP has no   effect on the amount of city contributions to the fund under Section   4.02 of this article.          (c)  Each month after a member has made an election to   participate in the DROP and indicated a desire to receive a   retirement pension under Sections 6.01(b) and (c), Section 6.01(e),   or Section 6.02(b), (c), (d), or (e) [Section 6.02] of this article,   whichever is applicable, and through the month before the month in   which [until] the member leaves active service, an amount equal to   the retirement pension the member would have received under the   [Sections 6.01(b) and (c), Section 6.01(e), or Section 6.02,   whichever is] applicable subsection[,] for that month if the member   had left active service and been granted a retirement pension by the   board on the effective date of DROP participation shall be credited   [transferred] to a separate DROP account maintained within the fund   for the benefit of the member. Amounts held in the DROP account of a   member [member's DROP account] shall be credited at the end of each   calendar month [with interest at a rate that will approximately   equal one-twelfth of the annual rate assumed by the pension   system's qualified actuary and approved by the board as the assumed   actuarial rate of return for the fund]. Notwithstanding this   section, effective January 1, 2018, a member on active service who   has 10 years or more of participation in DROP shall no longer have   the amount of the member's retirement pension credited to the   member's DROP account while the member is on active service.          (d)  A [On leaving active service and on the board's grant of   a retirement pension, a] member may not [who participates in DROP   shall begin to] receive a [the balance in the person's DROP account   under one of the following methods of] distribution from the   member's DROP account while the member is on active service   [elected by the member:                [(1)     a single-sum distribution made at a time selected   by the member but not later than April 1 of the year after the member   attains 70-1/2 years of age;                [(2)     an annuity to be paid in equal monthly payments   for the life of the member, or for the life of the member and a   designated beneficiary in the same manner as a retirement pension   computed under Sections 6.01(b) and (c), Section 6.01(e), or   Section 6.02 of this article, whichever is applicable, determined   as of the date the member leaves active service based on the   person's account balance and age and the age of the designated   beneficiary, if applicable, on that date and using the mortality   and earnings assumptions being used on that date by the pension   system's qualified actuary and approved by the board as the assumed   actuarial rate of return for the fund; or                [(3)     substantially equal monthly or annual payments of   the person's account balance beginning at a time selected by the   member that is on or before April 1st of the year after the member   attains 70-1/2 years of age and extending over a fixed period that   does not exceed the life expectancy of the member, or the life   expectancy of the member and the member's designated beneficiary,   if applicable].          (e)  Except as provided by Subsections (e-1) and (l) of this   section, the balance in the [The] DROP account [balance] of a member   who terminated from active service on or before September 1, 2017,   or who terminates from active service shall be distributed to the   member in the form of an annuity, payable either monthly or annually   at the election of the member, by annuitizing the amount credited to   the DROP account over the life expectancy of the member as of the   date of the annuitization using mortality tables recommended by the   pension system's qualified actuary. The annuity shall be   distributed beginning as promptly as administratively feasible   after the later of, as applicable:                (1)  the date the member retires and is granted a   retirement pension; or                (2)  September 1, 2017 [elects the method of   distribution described by Subsection (d)(3) of this section shall   be credited with interest on the unpaid balance at the end of each   calendar month in the same manner as is prescribed by Subsection (c)   of this section].          (e-1)  The board may adopt a shorter period for annuitizing   DROP account balances under Subsection (e) of this section if the   pension system's qualified actuary determines that the shorter   period will not cause the pension system's amortization period to   exceed 25 years [A member may change a distribution election at any   time before the member attains 70-1/2 years of age to receive one or   more additional payments or to accelerate or delay any payment not   then due, if the change is communicated to the plan administrator,   in accordance with procedures then in effect, not less than 30 days   before the day it is to take effect and if the change does not result   in a failure of the distributions to satisfy the requirements of   Section 401(a)(9) of the code].          (e-2)  The annuitization of a DROP account under Subsection   (e) of this section must reflect the accrual of interest on the   amount in the DROP account as of September 1, 2017, over the   annuitization period applied to the account under this section.     The interest rate applied under this subsection must be a rate as   reasonably equivalent as practicable to the interest rate on a note   issued by the United States Department of the Treasury or other   federal treasury note with a duration that is reasonably comparable   to the annuitization period applied to the account, as determined   by the board.  The portion of an annuity attributable to amounts   credited to a member's DROP account on or after September 1, 2017,   may not reflect the accrual of this interest on annuitization.          (e-3)  The board may by rule allow a DROP participant who has   terminated active service and who is eligible for a retirement   pension to:                (1)  assign the distribution from the participant's   annuitized DROP account to a third party provided the pension   system receives a favorable private letter ruling from the Internal   Revenue Service ruling that such an assignment will not negatively   impact the pension system's qualified plan status; and                (2)  subject to Subsection (e-4) of this section, in   the event of a financial hardship that was not reasonably   foreseeable obtain a lump-sum distribution from the participant's   DROP account resulting in a corresponding reduction in the total   number or in the amount of annuity payments.          (e-4)  The board shall adopt rules necessary to implement   Subsection (e-3)(2) of this section, including rules regarding what   constitutes a financial hardship for purposes of that subdivision.   In adopting the rules, the board shall provide flexibility to   members.          (f)  The board may adopt rules and policies relating to the   administration of Subsections (e), (e-1), and (e-2) of this section   if the rules and policies are:                (1)  consistent with the qualification of the plan   under Section 401 of the code; and                (2)  in the best interest of the pension system [Any   election made in accordance with Subsection (d) of this section may   be changed at any time before leaving active service to any other   election permitted by that subsection, subject to the requirements   for spousal consent, in Section 6.14(d)(1), if applicable].          (f-1)  The DROP account of a member who begins participating   in DROP on or after September 1, 2017, does not accrue interest.          (g)  The provisions of Sections 6.06, 6.061, 6.062, 6.063,    6.07, and 6.08 of this article pertaining to death benefits of a   qualified survivor do not apply to amounts held in a member's or   pensioner's DROP account [, and the class of persons eligible to   become qualified survivors of a member closes on the effective date   of the member's participation in DROP]. Instead, a member or   pensioner who participates in DROP may designate a beneficiary to   receive the annuity payments under this section over the remaining   annuitization period [balance of the member's DROP account] in the   event of the member's or pensioner's death subject to any rights   provided under Subsection (e-3) of this section and in the   [following] manner allowed by Section 401(a)(9) of the code and any   policy adopted by the board. A member or pensioner who is or   becomes married is considered to have designated the member's or   pensioner's spouse as the member's or pensioner's beneficiary,   notwithstanding any prior beneficiary designation, unless the   member or pensioner has made a different designation in accordance   with a policy adopted by the board. If a member or pensioner does   not have a spouse or the spouse predeceases the member or pensioner,   the member's or pensioner's, as applicable, DROP account will be   distributed to the member's or pensioner's, as applicable,   designee. Notwithstanding anything in this section to the   contrary, if a member or pensioner has previously designated the   member's or pensioner's spouse as the beneficiary or co-beneficiary   of the DROP account and the member or pensioner and spouse are   subsequently divorced, the divorce automatically results in the   invalidation of the designation of the spouse as a beneficiary and,   if there is no additional beneficiary designated, the member's or   pensioner's DROP account shall be distributed as provided by   Subsection (e) of this section. If there are beneficiaries who   survive the deceased member or pensioner, the surviving   beneficiaries share equally in that portion that would have   otherwise been payable to the former spouse. [:                [(1)     The beneficiary designation must be made on an   election form adopted by the board and in effect from time to time   and in accordance with the conditions on the form, except that if   the member is married, the designation of a beneficiary other than   the member's spouse is valid only if the spouse consents to the   designation at the time, in the manner, and on the consent form as   is adopted by the board and in effect from time to time.                [(2)     If a member who participates in DROP dies while in   active service or before the beginning of the member's DROP   account, distributions will begin no more than one year after the   date of the member's death under a method described by Subsection   (d) of this section and shall be completed within the life, or life   expectancy, of the designated beneficiary.                [(3)     If a member who participates in DROP dies after   having begun to receive distributions in accordance with Subsection   (d) of this section, the balance in the member's DROP account shall   continue to be distributed to the member's designated beneficiary   or other person described by Subdivision (4) of this subsection in   accordance with any elections that had been made under Subsection   (d) of this section.                [(4)     If the deceased member has not designated a   beneficiary or has designated a beneficiary but not a method of   distribution, the member's DROP account shall be distributed in a   single-sum payment as soon as administratively feasible after the   member's death to the beneficiary if one was designated and   otherwise to the spouse if the member was married at the time of   death or, if the member was not married, to the member's estate.]          (g-1) [(5)]  A member who [participates in DROP] becomes a   DROP participant is ineligible for any disability benefits   described by Section [Sections] 6.03, 6.04, or [and] 6.05 of this   article, but is entitled to [instead, on the board's acknowledgment   of a disability that would otherwise qualify the member for   disability benefits, the board shall grant] a retirement pension in   accordance with Sections 6.01(b) and (c), Section 6.01(e), or   Section 6.02 of this article, whichever is applicable, on   termination from active service, and [the member] is also entitled   to receive annuity payments [both a retirement pension and a   distribution of the DROP account] in accordance with Subsection (e)   [(d)] of this section.          (h)  The base pay or computation pay, whichever is   applicable, in effect as of the effective date of a [Group A]   member's participation in DROP shall be used in calculating the   member's [Group A] retirement pension under Section 6.01 or 6.02 of   this article. A [Group A] member who elects to participate in DROP   does not accrue additional pension service for purposes of   computing a [the Group A] retirement pension [provided under   Section 6.01(e) of this article] for any period after the effective   date of the election.          (j)  Except as provided by Subsection (l) of this section, if    [If] a pensioner who has been a [participated in] DROP participant   returns to active service, the person must [once again] become a   participant in DROP under the terms and conditions in effect at the   time of [the person's] return to active service.          (l)  Notwithstanding any other provision of this section and   except as provided by Subsection (o) of this section, a member who   has entered DROP before June 1, 2017, may revoke the DROP election   at any time on or after September 1, 2017, and before the earlier   of:                (1)  February 28, 2018; or                 (2)  the member's termination of active service.          (m)  If a member revokes participation in DROP under   Subsection (l) of this section:                (1)  the member's DROP account balance is eliminated;   and                (2)  the member shall receive pension service credited   for all or a portion of the period of the revoked DROP participation   on payment of the required contributions for the period of the   revoked DROP participation in accordance with a uniform and   nondiscriminatory procedure adopted by the board that results in   the payment of the amount of member contributions that would have   been made if the member had never participated in DROP.          (n)  A member who revokes the member's DROP election under   Subsection (l) of this section is entitled to only a monthly pension   computed on the basis of the member's pension service, including   pension service purchased under Subsection (m) of this section:                (1)  that is based on the member's average computation   pay at the time of leaving active service, if the member is a Group B   member; or                (2)  as provided by Section 6.01(b) of this article, if   the member is a Group A member.          (o)  A member may not revoke DROP participation under   Subsection (l) of this section if any money has been transferred out   of the member's DROP account.          SECTION 1.43.  Part 6, Article 6243a-1, Revised Statutes, is   amended by adding Section 6.141 to read as follows:          Sec. 6.141.  DEFERRED ANNUITIZATION OF CERTAIN DROP   ACCOUNTS. (a) This section applies only to a pensioner who:                (1)  before attaining 50 years of age:                      (A)  left active service; and                       (B)  was granted a service retirement pension   under Section 6.01 or 6.02 of this article;                (2)  since the pensioner's retirement has continued to   receive substantially equal periodic payments, as determined under   Section 72(t) of the code; and                (3)  on September 1, 2017:                      (A)  is a DROP participant; and                      (B)  has not attained 59-1/2 years of age.          (b)  Notwithstanding Section 6.14 of this article and solely   to avoid the possibility of an early distribution tax penalty under   Section 72(t)(4) of the code:                (1)  a pensioner subject to this section may until the   pensioner attains 59-1/2 years of age:                      (A)  subject to Subsection (c) of this section,   continue to participate in DROP;                      (B)  have the same amount of the pensioner's   service retirement pension credited to the pensioner's DROP account   as has been credited since the pensioner's service retirement   pension was initially granted; and                      (C)  defer annuitization of the pensioner's DROP   account under Section 6.14(e) of this article; and                (2)  once a pensioner subject to this section attains   59-1/2 years of age:                      (A)  the pensioner may not have any portion of the   pensioner's service retirement pension credited to the pensioner's   DROP account; and                      (B)  as soon as administratively feasible, the   balance in the pensioner's DROP account shall be annuitized and   distributed to the pensioner in accordance with Section 6.14(e) of   this article.          (c)  The DROP account of a pensioner who continues   participation in DROP under Subsection (b)(1)(A) of this section   does not accrue interest on and after September 1, 2017.          SECTION 1.44.  Sections 6.15(a), (b), and (e), Article   6243a-1, Revised Statutes, are amended to read as follows:          (a)  The board may require the following pensioners   receiving a disability pension or a periodic disability   compensation benefit to appear and undergo a medical examination by   the health director or, if the health director approves, by any   licensed medical practitioner, to determine if the pensioner's   disability continues or has been removed to the extent that the   pensioner is able to resume duties with the department:                (1)  any Group A pensioner who has served less than 20   years;                (2)  any Group A pensioner who elected a Group A [B]   disability pension under Section 6.04 [6.04(e)] of this article,   periodic disability compensation under Section 6.05 of this   article, or a non-service-connected disability pension under Plan A   or former Section 17(b)(2) of this article, and who had [has served]   more than 20 years of pension service, but is less than 55 years of   age; and                (3)  any Group B pensioner who was granted [elected] a   Group B disability pension under Section 6.04 of this article or   periodic disability compensation under Section 6.05 of this article   or a disability pension under the terms of Plan B and is less than 50   years of age.          (b)  Any medical examination under this section is subject to   the following conditions:                (1)  Except as otherwise provided by this section, the   board has complete discretion to require a pensioner to appear and   undergo a medical examination as well as the time that may pass   between examinations. When it becomes clear to the board from   reliable medical evidence that the disability is unequivocally   permanent and is not expected to diminish, the board may waive [not   require] subsequent examinations.                (2)  A pensioner may not be required to undergo a   medical examination more often than once in a six-month period,   except that the board may order the pensioner to undergo an   examination at any time if the board has reason to believe the   pensioner's disability has been removed and that the pensioner may   be able to resume duties with the pensioner's former department or   if the pensioner requests to be allowed to return to duty.                (3)  If a pensioner fails to undergo an examination   after being notified by the board that the examination is required,   the board may discontinue disability benefits until the pensioner   has undergone the examination and the results of the examination   have been sent to the board.                (4)  If the pensioner is examined by an approved   outside medical practitioner other than the health director, the   reasonable and customary cost of the examination, if any, is   payable from the assets of the fund.          (e)  Pursuant to its authority under Section 6.06(o-2)   [6.06(o)] of this article to review and modify any funding relating   to the disability of a child who is a qualified survivor [surviving   child's handicap], the board may require the [a handicapped]   qualified survivor with a disability [surviving child] receiving   death benefits to appear and undergo medical examination by the   health director or, if the health director approves, by any   licensed medical practitioner, to determine if the disability   [handicap] continues or if the disability [handicap] has been   removed.          SECTION 1.45.  Sections 6.16, 6.18, and 6.19, Article   6243a-1, Revised Statutes, are amended to read as follows:          Sec. 6.16.  WAIVER OF BENEFITS. (a) A primary party   [pensioner who is on either service or disability retirement], [a]   qualified survivor [surviving spouse, a handicapped qualified   surviving child, a member who may be a participant in DROP], or [a]   beneficiary of a member's [deceased former] DROP account   [participant, or a qualified surviving dependent parent] may, on a   form prescribed by the board and filed with the executive director   [administrator], [irrevocably] waive all or a portion of the   benefits[,] to which the person [who waives the benefit] is or may   be entitled. The waiver may state whether it is revocable or   irrevocable, and is irrevocable unless the waiver clearly states it   is revocable.          (b)  The [irrevocable] waiver described by Subsection (a) of   this section applies only to [retirement, disability, or DROP   survivor] benefits that become payable on or after the date the   waiver is filed.          (b-1)  Benefits waived by a revocable waiver are forfeited   and the person making the waiver has no right, title, claim, or   interest in the benefits.          (c)  If two or more persons are or may be entitled to benefits   under this article [there are two qualified surviving dependent   parents receiving death benefits], the waiver described by   Subsection (a) of this section must be executed by each person to   become effective. The living parent or parents or legal guardian or   guardians of a child must sign the waiver described by Subsection   (a) of this section on behalf of the child [both of the parents].          Sec. 6.18.  INVESTIGATION. (a) The board shall consider all   applications for retirement and disability pensions [of members],   all applications for death benefits [by qualified survivors], and   all elections to participate [for participation by a member] in   DROP. The board shall give notice to [those] persons applying for   benefits, advising them of their right to appear before the board   and offer such sworn evidence as they may desire. Any [primary   party, survivor, or other] person claiming retirement, disability,   or DROP benefits may appear before the board [in person] and offer   testimony that is relevant to a contested application for a   retirement pension, a disability pension, death benefits   [benefit], or DROP benefits [benefit]. The chairman of the board   may issue process for witnesses, administer oaths to witnesses, and   examine any witness as to any matter affecting benefits under any   plan within the pension system. Process for witnesses shall be   served by any [member of the police or fire department or by any   other] method of serving process [or person] permitted by the state   law in any civil judicial proceeding. A witness who fails or   refuses to attend and testify may be compelled to attend and   testify, as in any judicial proceeding. The board may seek   assistance from any court of competent jurisdiction to further   compel or sanction a witness who fails or refuses to attend and   testify.          (b)  Any [primary party, spouse, child, dependent parent, or   other] person [claiming DROP benefits] who is aggrieved by a   determination of the board regarding [on the person's application   for or continuation of] a retirement pension, a disability pension,   [or] death benefits [benefit], or [an election for] DROP benefits   may appeal the board determination to a state district court in the   city [county] where the pension system is located by giving written   notice of appeal. The notice shall contain a statement of the   grounds and reasons why the party feels aggrieved. The notice shall   be served personally on the executive director [secretary of the   board] within 20 days after the date of the board's determination.   After service of the notice, the party appealing shall file with the   state district court a copy of the notice of intention to appeal,   together with an affidavit of the party making service showing how,   when, and on whom the notice was served.          (c)  Within 30 days after the date of service of the notice of   appeal on the board, the executive director [secretary of the   board] shall make up and file with the state district court a   transcript of all nonprivileged papers and proceedings in the case   before the board. When the copy of the notice of appeal and the   transcript has been filed with the court, the appeal is perfected,   and the court shall docket the appeal, assign the appeal a number,   fix a date for hearing the appeal, and notify both the appellant and   the board of the date fixed for the hearing.          (d)  At any time before the rendering of its decision on   [the] appeal, the court may require further or additional proof or   information, either documentary or under oath. On rendition of a   decision on appeal, the court shall give to each party to the appeal   a copy of the decision of the case. The decision [or order] of the   court is appealable in the same manner as are civil cases generally.          (e)  As provided by Section 4.01 of this article, the [The]   board shall approve all money used for investigations [as provided   under Section 4.01 of this article]. The board may request the   investigative services of either the police or fire departments in   connection with any matter arising under this section.          Sec. 6.19.  CERTIFICATE OF MEMBER PENSION BENEFIT   ELIGIBILITY [RETIREMENT].  When a member has earned five [20] years   of pension service, the member shall be issued an [a certificate of   retirement that, barring administrative error, miscalculation, or   other error, after issuance is] incontestable five-year   certificate indicating that the member is entitled to pension   benefits subject to the effect of any withdrawals as permitted   under Article 6243a or this article. The certificate shall state   that the calculation of the retirement pension to which the member   is entitled, or any disability benefits to which the member may   become entitled, shall be determined solely under the actual terms   of the combined pension plan as in effect at the time the member   leaves active service. The certificate shall further state that in   the case of the member's death, the member's qualified survivors, if   any, may become [shall be] entitled to death [survivor] benefits as   determined solely under the actual terms of the combined pension   plan as in effect at the time of the member's death. The   certificate shall bear a seal and be signed by the executive   director [mayor, or the mayor pro tem, or the city manager] and [by   the] chairman of the board [and attested under the seal of the city   by the city secretary].          SECTION 1.46.  Part 6, Article 6243a-1, Revised Statutes, is   amended by adding Section 6.20 to read as follows:          Sec. 6.20.  ERRONEOUS PAYMENTS OR OVERPAYMENTS. (a) If the   pension system pays money to any person not entitled to the payment,   whether by reason of an error of the pension system as to   entitlement to or the amount of a benefit or otherwise, or an act or   error of some other person, including the recipient of the payment,   the recipient of the payment holds the funds to which the recipient   was not entitled in constructive trust for the pension system and   those funds are subject to demand by the pension system at any time.          (b)  The recipient of an erroneous payment from the pension   system shall repay to the pension system all funds associated with   the erroneous payment.          (c)  Subject to Subsection (e) of this section, the board may   by rule adopt a procedure to enable the pension system to offset the   future benefit or other payments of a recipient described by this   section. In addition, the board may take any additional action,   including the bringing of a lawsuit, the board considers necessary   to recover an erroneous payment the pension system is entitled to   under this section.          (d)  If the pension system determines that a person is   entitled to additional benefits as a result of an error made by the   pension system, the pension system shall promptly pay the   additional benefits owed.          (e)  The board's correction procedures must comply with the   Internal Revenue Service's Employee Plans Compliance Resolution   System and Revenue Procedure 2016-51, including subsequent   guidance.          SECTION 1.47.  Article 6243a-1, Revised Statutes, is amended   by adding Part 6A to read as follows:   PART 6A. EQUITABLE ADJUSTMENTS          Sec. 6A.01.  EQUITABLE ADJUSTMENTS TO BENEFITS. (a)     Subject to this section and notwithstanding any other provision of   this article, the board by a two-thirds vote of all trustees may   consider and adopt rules requiring the equitable return of funds   paid to or credited to the benefit of a member or pensioner under   this article before September 1, 2017, to the extent the funds   exceeded reasonable amounts that should be paid or credited given   the circumstances of the pension system at the time the payment or   credit was made, including the return of excessive interest   credited to a member's DROP account and excessive adjustments made   under Section 6.12 of this article.          (b)  For purposes of Subsection (a) of this section,   "reasonable amounts" includes the amounts that would have been paid   or credited:                (1)  if the interest rate applied in determining a   benefit, including the interest rate applied to a DROP account,   equaled the actual, audited rate of return of the plan at the time   the interest was credited to the account; or                (2)  if the percentage increase applied under Section   6.12 of this article equaled the percentage increase, if any, in the   Consumer Price Index for Urban Wage Earners and Clerical Workers   (CPI-W) most recently published by the Bureau of Labor Statistics   of the United States Department of Labor and used by the United   States Social Security Administration to provide a cost-of-living   adjustment for social security benefit payments payable beginning   in January of the next year.          Sec. 6A.02.  ADJUDICATION OF CERTAIN CHALLENGES.  (a)  The   Texas Supreme Court has exclusive and original jurisdiction over a   challenge to the constitutionality under the Texas Constitution of   Section 6A.01 of this article. An action under this section is   authorized to the full extent permitted by Section 3, Article V,   Texas Constitution.  The Texas Supreme Court may issue any   injunctive, declaratory, or equitable relief the court deems   appropriate or necessary to effectuate the court's mandamus   jurisdiction in connection with a challenge under this section.          (b)  Any action brought under this section must be filed not   later than the 90th day after the date the board adopts a rule under   Section 6A.01 of this article.          (c)  If an action brought under this section is timely filed,   the board may not enforce or otherwise administer any rules adopted   pursuant to Section 6A.01 of this article during the pendency of the   action.          SECTION 1.48.  Section 8.01, Article 6243a-1, Revised   Statutes, is amended to read as follows:          Sec. 8.01.  QUALIFICATION UNDER FEDERAL TAX LAW. (a) The   plans within the pension system and the assets of the fund are   intended to qualify as a governmental plan under Sections [Section]   401 and 414(d) of the code, be exempt from federal income taxes   under Section 501(a) of the code, and conform at all times to   applicable requirements of law, regulations, and orders of duly   constituted federal governmental authorities. Accordingly, if any   provision of this article is subject to more than one construction,   one of which will permit the qualification of a plan that is within   the pension system, that construction that will permit the plan to   qualify and conform will prevail.          (b)  The plans within the pension system as well as the   assets of the fund shall be maintained for the exclusive benefit of   members and their beneficiaries. At no time before the termination   of all the plans within the pension system and the satisfaction of   all liabilities with respect to members and their beneficiaries   under all plans shall any part of the principal or interest from the   assets of the fund be used for or diverted to purposes other than   the exclusive benefit of the members and beneficiaries.          (c)  Notwithstanding any other provisions of this article,   the annual benefit [pension] provided with respect to any member   [may not exceed an annual benefit computed in accordance with the   limitations prescribed by this subsection.                [(1)  The maximum annual benefit payable] in any   limitation year [to a member] may not exceed the amount permitted by   Section 415(b) of the code for the limitation year, and the sum of   the member contributions and all other annual additions for any   limitation year may not exceed the amount permitted under Section   415(c) of the code for the limitation year. If the aggregated   annual benefit or aggregated annual additions under [lesser of:                      [(A)  $90,000; or                      [(B)     100 percent of a member's 415 compensation   averaged over the three consecutive limitation years, or the actual   number of limitation years for a member whose total pension service   is less than three consecutive limitation years, during which the   member had the greatest aggregate 415 compensation from the city.                [(2)     Benefits provided to a member under this article   and under any defined benefit plan or plans maintained by the city   shall be aggregated for purposes of determining whether the   limitations in Subdivision (1) of this subsection are met. If the   aggregate benefits otherwise payable from] any qualified plans   created under this article and any other defined benefit plan or   plans maintained by the city would otherwise exceed the limitations   of Section 415 of the code [Subdivision (1) of this subsection], the   required reductions in benefits or contributions shall first be   made to the extent possible from the other plan or plans. The   limitations referenced in this subsection shall be adjusted   annually in accordance with Section 415(d) of the code and any   adjustment to benefits applies to the benefits of active and   terminated members and applies without regard to whether a   terminated member is a pensioner.                [(3)  The adjustments on retirement are the following:                      [(A)     If the annual benefit begins before a member   attains age 62, the $90,000 limitation, as adjusted, shall be   reduced in a manner prescribed by the secretary of the treasury.   However, that adjustment may not reduce the member's annual benefit   below $75,000, if the member's benefit begins after age 55, or the   actuarial equivalent of $75,000 beginning at age 55 if benefits   begin before age 55. Furthermore, except as provided by Paragraph   (C) of this subdivision, an adjustment may not reduce the member's   annual benefit below $50,000, regardless of the age at which the   benefit begins.                      [(B)     If the annual benefit begins after a member   attains age 65, the $90,000 limitation, as adjusted, will be   increased so that it is the actuarial equivalent of the $90,000   limitation at age 65.                      [(C)     If a member's benefits begin before the   member has at least 15 years of pension service as a full-time   employee of the police or fire department, or both, including   credit for full-time service in the armed forces of the United   States, Paragraphs (A) and (B) of this subdivision shall be applied   by substituting "social security retirement age" for "age 62" and   for "age 65," and the last two sentences of Paragraph (A) of this   subdivision do not apply in computing the benefit limitation for   that member.                      [(D)     The portion of a member's benefit that is   attributable to the member's own contributions is not part of the   annual benefit subject to the limitations of Subdivision (1) of   this subsection. Instead, the amount of those contributions is   treated as an annual addition to a qualified defined contribution   plan maintained by the city.                [(4)(A)     The dollar limitation on annual benefits   provided by Subdivision (1) of this subsection, and the $50,000   limitation provided by Subdivision (3) of this subsection, but not   the $75,000 limitation provided by that subsection, shall be   adjusted annually as provided by Section 415(d) of the code and the   regulations prescribed by the secretary of the treasury. The   adjusted limitation is effective as of January 1 of each calendar   year and is applicable to limitation years ending with or within   that calendar year.                      [(B)     The limitation provided by this paragraph   for a member who has separated from service with a vested right to a   pension shall be adjusted annually as provided by Section 415(d) of   the code and the regulations prescribed by the secretary of the   treasury.                [(5)     The following interest rate assumptions shall be   used in computing the limitations under this section:                      [(A)     For the purpose of determining the portion   of the annual benefit that is purchased with member contributions,   the interest rate assumption is 8.5 percent, compounded annually,   for plan years beginning before 1988 and 120 percent of the federal   mid-term rate, as in effect under Section 1274 of the code,   compounded annually, for plan years beginning after 1987.                      [(B)     For the purpose of adjusting the annual   benefit to a straight life annuity, the interest rate assumption is   five percent, unless a different rate is required by the secretary   of the treasury.                      [(C)     For the purpose of adjusting the $90,000   limitation after a member attains age 65, the interest rate   assumption is five percent, unless a different rate is required by   the secretary of the treasury, and the mortality decrement shall be   ignored to the extent that a forfeiture does not occur at death.                [(6)     For purposes of Subdivisions (1) and (3) of this   subsection, an adjustment under Section 415(d) of the code may not   be taken into account before the limitation year for which that   adjustment first takes effect. For purposes of Subdivisions (1)   and (5) of this subsection, an adjustment is not required for the   value of qualified joint and survivor annuity benefits,   preretirement death benefits, postretirement medical benefits, or   postretirement cost-of-living increases made in accordance with   Section 415(d) of the code and Section 1.415-3(c) of the Income Tax   Regulations.                [(7)     This plan may pay an annual benefit to any member   in excess of the member's maximum annual benefit otherwise allowed   if:                      [(A)     the annual benefit derived from the city's   contributions under any qualified plans within this article and all   defined benefit plans maintained by the city does not in the   aggregate exceed $10,000 for the limitation year or for any prior   limitation year; and                      [(B)     the member has not at any time participated   in a defined contribution plan maintained by the city.          [For purposes of this subdivision, member contributions to   the plan are not considered a separate defined contribution plan   maintained by the city.                [(8)     If a member has less than 10 years of pension   service in the plan at the time the member begins to receive   benefits under the plan, the $90,000 limitation, as adjusted, shall   be reduced by multiplying the limitation by a fraction in which the   numerator is the number of years of pension service and the   denominator is 10; provided, however, that the fraction may not be   less than one-tenth. The 100 percent limitation of Subdivision   (1)(B) of this subsection, and the $10,000 limitation of   Subdivision (7) of this subsection shall be reduced in the same   manner as provided by this subdivision, except the numerator shall   be the number of years of employment with the city rather than years   of pension service.                [(9)     If a member is or has been a participant in one or   more defined benefit plans and one or more defined contribution   plans maintained by the city, the following provisions shall apply:                      [(A)     The sum of the defined benefit plan fraction   and the defined contribution plan fraction for any limitation year   may not exceed 1.0.                      [(B)     The defined benefit plan fraction for any   limitation year is a fraction in which:                            [(I)     the numerator is the projected annual   benefit of a member, determined as of the close of the limitation   year pursuant to Section 1.415-7(b)(3) of the Income Tax   Regulations; and                            [(II)  the denominator is the lesser of:                            [(i)     the product of 1.25 and the maximum   dollar limitation provided by Subdivision (1)(A) of this   subsection, as adjusted, for the limitation year; or                            [(ii) the product of 1.4 and the amount that   may be taken into account under Subdivision (1)(B) of this   subsection for the limitation year.                      [(C)     The defined contribution plan fraction for   any limitation year is a fraction in which:                            [(I)     the numerator is the sum of the annual   additions to the member's account as of the close of the limitation   year; and                            [(II)     the denominator is the sum of the   lesser of the following amounts determined for the limitation year   and each prior year of service with the city:                            [(i)     the product of 1.25 and the dollar   limitation in effect under Section 415(c)(1)(A) of the code for the   limitation year, determined without regard to Section 415(c)(6) of   the code; or                            [(ii)     the product of 1.4 and the amount that   may be taken into account under Section 415(c)(1)(B) of the code for   the limitation year beginning before January 1, 1987; the annual   additions may not be recomputed to treat all member contributions   as an annual addition.                      [(D)     If the sum of the defined benefit plan   fraction and the defined contribution plan fraction exceeds 1.0 in   any limitation year for any member of any plan within the pension   system, the administrator shall limit, to the extent necessary, the   annual additions to the member's account for that limitation year.   If after limiting to the extent possible the annual additions to the   member's account for the limitation year, the sum of the defined   benefit plan fraction and the defined contribution plan fraction   still exceeds 1.0, the administrator shall adjust the benefits   under the defined benefit plan fraction so that the sum of both   fractions shall not exceed 1.0 in any limitation year for the   member.                [(10)     For purposes of determining the limits provided   by this section, all qualified defined benefit plans, whether   terminated or not, ever maintained by or contributed to by the city,   shall be treated as one defined benefit plan, and all qualified   defined contribution plans, whether terminated or not, ever   maintained by or contributed to by the city, shall be treated as one   defined contribution plan.]          (c-1) [(11)]  Notwithstanding anything contained in this   section to the contrary, the limitations, adjustments, and other   requirements prescribed by this section shall at all times be   computed in the manner most favorable to the affected members, to   the extent permitted by guidelines issued by the Internal Revenue   Service [comply with the requirements of Section 415 of the code and   all regulations promulgated under the code]. If any provision of   Section 415 of the code is repealed or is not enforced by the   Internal Revenue Service, that provision may not reduce the   benefits of any member after the effective date of the repeal of the   provision or during the period in which the provision is not   enforced.          (c-2)  Any benefit reductions that are required to be made   under this section shall be applied to reduce the monthly benefit   that would otherwise have been payable to the member, unless the   value of the member's DROP account accrued under Section 6.14 of   this article exceeds the amount that may be paid under this section.   If the value of the DROP account exceeds the value of the payments   that may be made under this section, the member shall receive a   lump-sum payment from the account of the maximum amount that may be   paid under this section and the payment shall permanently reduce   the benefits the member would otherwise have been entitled to   receive under the combined pension plan.          (d)  A member's retirement pension may not begin later than   April 1 of the year after the later of the year in which the member   leaves active service or the year in which the member attains age   70-1/2 and must at all times comply with the requirements of Section   401(a)(9) of the code. [Benefits to a qualified beneficiary may not   begin later than one year after the date of the member's death].          (e)  Any person [member or beneficiary] who receives any   distribution from any plan within the pension system that is an   eligible rollover distribution as defined by Section 402(f)(2)(A)   of the code is entitled to have that distribution transferred   directly to another eligible retirement plan as defined by Section   402(c)(8)(B) of the code of the person's [member's or beneficiary's]   choice on providing direction regarding that transfer to the   executive director [administrator] in accordance with procedures   established by the executive director [administrator].          (e-1)  If an eligible rollover distribution described by   Subsection (e) of this section is to a designated beneficiary who is   not the spouse or former spouse of the member, the transfer may only   be to an individual retirement account or an individual retirement   annuity.          (f)  For the 2017 calendar year, the [The] annual   compensation taken into account for any purpose under the combined   pension plan [this article] may not exceed $400,000 for an eligible   participant or $270,000 for an ineligible participant [$200,000 for   any calendar year]. For a Group A member the term "annual   compensation" means the aggregate of the member's base pay. For a   Group B member the term "annual compensation" means the aggregate   of the member's computation pay for any given plan year. These   dollar limits [The $200,000 limit] shall be adjusted from [on   January 1 of each year at the same] time to time [and] in accordance   with guidelines [the same manner as] provided by the secretary of   the treasury. For [Section 415(d) of the code. In determining the   compensation of a member for] purposes of this subsection, an:                (1)  "eligible participant" means any person who first   became a member of the pension system before January 1, 1996; and                 (2)  "ineligible participant" means any member who is   not an eligible participant [limitation, the family aggregation   rules of Section 414(q)(6) of the code apply, except that the term   "family member" includes only the spouse of the member and any   lineal descendants of the member who have not attained age 19 at the   end of the plan year. If as a result of this family aggregation   requirement, the $200,000 limit is exceeded, the limitation shall   be prorated among the affected individuals in proportion to each   individual's compensation as determined before application of the   limit].          (g)  For purposes of Subsection (h) of this section, "normal   retirement age" means the earlier of:                (1)  the attainment of 50 years of age on or before   September 1, 2017, and completion of at least five years of pension   service;                (2)  the attainment of 58 years of age after September   1, 2017, and completion of at least five years of pension service;   or                (3)  completion of 20 years of pension service.           (h)  The retirement benefit earned by a member is   nonforfeitable:                (1)  on attainment of normal retirement age, if not   already nonforfeitable; or                (2)  to the extent the benefit is funded, if not already   nonforfeitable, on the termination or partial termination of the   combined pension plan or the complete discontinuance of city   contributions to the fund.          (i)  In accordance with Section 401(a)(8) of the code,   forfeitures arising under the combined pension plan may not be used   to increase the benefits any member would otherwise receive under   the terms of the plan. Forfeitures may be used first to reduce   administrative expenses, then to reduce required city   contributions.          (j)  Subject to procedures adopted by the board, the pension   system shall accept an eligible rollover distribution from another   eligible retirement plan as defined by Section 402(f)(2)(B) of the   code as payment of all or a portion of any payment a member is   permitted to make to the pension system for past pension service   credit. The pension system shall separately account for any   after-tax contributions transferred from any plan under this   subsection.          SECTION 1.49.  Section 8.02, Article 6243a-1, Revised   Statutes, is amended to read as follows:          Sec. 8.02.  EXCESS BENEFIT PLAN FOR POLICE OFFICERS AND FIRE   FIGHTERS. The board may by rule establish and administer [On the   enactment of federal legislation enabling public retirement   systems to establish excess benefit plans for the benefit of   employees for whom additional benefits from retirement plans   qualified under Section 401 of the code would exceed the   limitations of Section 415 of the code, there is created outside the   pension system] a separate[,] qualified governmental   [nonqualified] excess benefit arrangement and associated trust for   the arrangement in accordance with Section 415(m) of the code.   [plan containing the following terms and provisions:          [(a)(1)     All definitions prescribed by Section 2.01 of this   article are applicable to the plan created pursuant to this section   except:                      [(A)     if a different definition is set forth in   this subsection; or                      [(B)     the context in which a term is used in this   section indicates a different meaning is clearly intended than that   prescribed by Section 2.01 of this article.                [(2)     "Excess benefit plan" means this separate,   nonqualified, unfunded excess benefit plan as created by this   section for the benefit of eligible members, as amended or restated   from time to time.                [(3)     "Qualified plan" means any plan maintained within   the pension system or maintained by the city outside the pension   system for the exclusive benefit of some or all of the employees of   the city if the plan has been found by the Internal Revenue Service   to be qualified or has been treated by the city as a qualified plan   under Section 401 of the code.                [(4)     "Maximum benefit" means the retirement benefit a   member or, the spouse, any child, or any dependent parent of a   member if those persons are entitled, is entitled to receive from   all qualified plans in any month after giving effect to Section 8.01   of this article and any similar provisions of any other qualified   plans designed to conform to Section 415 of the code.                [(5)     "Excess benefit participant" means any member   whose retirement benefits as determined on the basis of all   qualified plans without regard to the limitations of Section 8.01   of this article and comparable provisions of other qualified plans   would exceed the maximum benefit permitted under Section 415 of the   code.                [(6)     "Unrestricted benefit" means the monthly   retirement benefit a member, or the spouse or any child of a member,   would have received under the terms of all qualified plans except   for the restrictions of Section 8.01 of this article and any similar   provisions of any other qualified plans designed to conform to   Section 415 of the code.          [(b)(1)     An excess benefit participant who is receiving   benefits from an applicable qualified plan is entitled to a monthly   benefit under this excess benefit plan in an amount equal to the   lesser of:                      [(A)     the member's unrestricted benefit less the   maximum benefit; or                      [(B)     the amount by which the member's monthly   benefit from the qualified plan or plans approved by the members has   been reduced due to the limitations of Section 415 of the code.                [(2)     In the case of the death of an excess benefit   participant whose spouse or child is entitled to preretirement or   postretirement death benefits under a qualified plan, the excess   benefit participant's surviving spouse or child is entitled to a   monthly benefit under the excess benefit plan equal to the benefit   determined in accordance with the qualified plans without regard to   the limitations under Section 8.01 of this article or Section 415 of   the code, less the maximum benefit.                [(3)     Unless the excess benefit participant makes a   timely election to the contrary, a retirement benefit payable under   this excess benefit plan shall be paid in the form and at the time it   would have been paid under the applicable qualified plan except for   the limitations under Section 415 of the code. However, retirement   benefits payable under this excess benefit plan shall be paid at the   time and in the form, including a single-sum distribution, as the   excess benefit participant elects from among the benefit payment   forms made available under the election form as approved by the   board. An excess benefit participant makes an election under this   subdivision by sending written notice to the administrator on the   election form approved by the board. Each optional benefit form   permitted under this excess benefit plan shall be the actuarial   equivalent of each other permitted benefit form. On or after an   excess benefit participant's leaving active service with an   entitlement to a retirement benefit under any qualified plan   approved by the members, a benefit under this subdivision may be   elected to be paid.          [(c)(1)     This plan shall be administered by the board, and   the administrator shall also carry out the business of the board   with respect to this excess benefit plan. Except as provided to the   contrary by this subsection, the rights, duties, and   responsibilities of the board and administrator shall be the same   for this excess benefit plan as for the qualified pension plans   within the pension system.                [(2)     The qualified actuary employed pursuant to   Section 4.08 of this article is responsible for determining the   amount of benefits that may not be provided under the qualified   plans solely by reason of the limitations of Section 415 of the code   and thus the amount of city contributions that will be made to this   excess benefit plan rather than to a qualified plan.                [(3)     The legal advisors described by Section 3.03 of   this article shall also provide advice to the board for this excess   benefit plan.          [(d)     Contributions may not be accumulated under this excess   benefit plan to pay future retirement benefits. Instead, each   payment of city contributions that would otherwise be made to the   fund pursuant to Section 4.02 of this article or comparable   provisions of other qualified plans approved by the members shall   be reduced by the amount determined by the administrator as   necessary to meet the requirements for retirement benefits under   this excess benefit plan until the next payment of city   contributions is expected to be made to the fund by the city. The   city shall then pay to this excess benefit plan, out of the withheld   city contributions no earlier than the 14th day before the date of   each distribution of monthly retirement benefits is required to be   made from this excess benefit plan, the amount necessary to satisfy   the obligation to pay this excess benefit plan monthly retirement   benefits. The administrator shall satisfy the obligation of this   excess benefit plan to pay retirement benefits out of the city   contributions so transferred for that month. The city   contributions otherwise required to the pension system pursuant to   Section 4.02 of this article and any other qualified plan approved   by the members shall be divided into those contributions required   to pay retirement benefits pursuant to this section and those   contributions paid into and accumulated to pay the maximum benefits   required under the qualified plans. City contributions made to   provide retirement benefits pursuant to this section may not be   commingled with the monies of the fund or any other qualified plan.          [(e)     Amendments to this excess benefit plan shall be made in   the same manner provided by Section 7.01 of this article.]          SECTION 1.50.  Section 8.03, Article 6243a-1, Revised   Statutes, is amended to read as follows:          Sec. 8.03.  EXEMPTION OF BENEFITS FROM JUDICIAL PROCESS OR   ALIENATION. (a) A portion of the fund or benefit or amount awarded   to any primary party, qualified survivor, [or] beneficiary of a   member's DROP account, excess benefit participant, or survivor of   an excess benefit participant under this article may not be held,   seized, taken, subjected to, or detained or levied on by virtue of   any execution, attachment, garnishment, injunction, or other writ,   order, or decree, or any process or proceedings issued from or by   any court for the payment or satisfaction, in whole or in part, of   any debt, damage, claim, demands, or judgment against any person   entitled to benefits from any plan within the pension system or from   the excess benefit plan. The fund and the excess benefit plan or   any claim against the fund or the excess benefit plan may not be   directly or indirectly assigned or transferred, and any attempt to   transfer or assign the fund or the excess benefit plan or a claim   against the fund or the excess benefit plan is void.          (b)  A benefit under any plan created or existing pursuant to   this article or Article 6243a is subject to division pursuant to the   terms of a qualified domestic relations order. The executive   director [administrator] shall determine the qualifications of a   domestic relations order according to a uniform, consistent   procedure approved by the board. The total benefit payable to a   primary party or to an alternate payee under a qualified domestic   relations order may not actuarially exceed the benefits to which a   primary party would be entitled in the absence of the qualified   domestic relations order. In calculating the alternate payee's   benefits under a qualified domestic relations order, the interest   rate is the rate used by the pension system's actuary in the   actuarial evaluation for that year, except that the minimum   interest rate for this purpose is the minimum required by Section   414 of the code.          (c)  This section does not preclude:                (1)  the payment of death benefits to a [support] trust   for certain [surviving] children of a primary party pursuant to   Section 6.06(n) of this article;                (2)  the withholding of federal taxes from pension   benefits;                (3)  the recovery by the board of overpayments of   benefits previously made to any person;                (4)  the direct deposit of benefit payments to an   account in a bank, savings and loan association, credit union, or   other financial institution, provided the arrangement is not an   alienation;                (5)  under any policy adopted by the board and   uniformly applied to voluntary arrangements entered into by a   primary party or qualified survivor, any voluntary and revocable   arrangement entered into by a pensioner or a qualified survivor   that permits the withholding and direct payment of health care or   life insurance premiums or similar payments from the monthly   benefit payments; or                (6)  an assignment of the distribution from an   annuitized DROP account to a third party under Section 6.14(e-3)(1)   of this article.          (d)  For purposes of Subsection (c) of this section, an   attachment, garnishment, levy, execution, or other legal process is   not considered a voluntary arrangement.          SECTION 1.51.  The following provisions of Article 6243a-1,   Revised Statutes, are repealed:                (1)  Section 3.01(c);                (2)  Section 4.01(b);                (3)  Section 4.02(f);                (4)  Sections 6.06(i) and (s);                (5)  Section 6.10B(h);                (6)  Sections 6.14(i) and (k); and                (7)  Part 7.          SECTION 1.52.  (a)  In this section, "board," "city,"   "nominations committee," "pension system," and "trustee" have the   meanings assigned by Section 2.01, Article 6243a-1, Revised   Statutes, as amended by this article.          (b)  The terms of the current trustees expire on the   effective date of this article. Subject to Subsection (e) of this   section, on that date or as soon as possible after that date:                (1)  the mayor and nominations committee, as   applicable, shall appoint new trustees to the board in accordance   with the requirements of Sections 3.01(b)(1) and (2), Article   6243a-1, Revised Statutes, as added by this article; and                (2)  notwithstanding the requirements of Sections   3.01(b)(3) and (4) and (f), Article 6243a-1, Revised Statutes, as   added or amended by this article, that the board adopt rules   governing the nomination and election of trustees appointed under   Sections 3.01(b)(3) and (4), Article 6243a-1, Revised Statutes, as   added by this article, the nominations committee shall adopt   procedures for nominating and electing the initial trustees   nominated and elected under Sections 3.01(b)(3) and (4), Article   6243a-1, Revised Statutes, as added by this article.          (c)  Notwithstanding Section 3.01(o), Article 6243a-1,   Revised Statutes, as amended by this article, and except as   provided by Subsections (d) and (g) of this section, the board may   not take any action authorized by Article 6243a-1, Revised   Statutes, until at least 10 initial trustees have been appointed or   elected, except that the board may take such an action, other than   an action described by Section 3.01(o)(2), Article 6243a-1, Revised   Statutes, as added by this article, before at least 10 initial   trustees have been appointed or elected if the action is in the   ordinary course of business of the board and is required for the   continued administration of the pension system.          (d)  Once all trustees have been appointed to the board under   this section, the board shall by majority vote adopt rules   establishing a process for nominating and electing trustees under   Sections 3.01(b)(3) and (4), Article 6243a-1, Revised Statutes, as   added by this article.          (e)  As soon as possible after the effective date of this   article, the mayor and the nominations committee shall:                (1)  make a determination under Section 3.01(e),   Article 6243a-1, Revised Statutes, as amended by this article,   regarding the term limits of the board established under that   section; and                (2)  notwithstanding Section 3.01(e), Article 6243a-1,   Revised Statutes, as amended by this article, determine the terms   of initial trustees to ensure the appropriate staggering of trustee   terms.          (f)  Notwithstanding Section 3.01(g), Article 6243a-1,   Revised Statutes, the board shall elect from among its trustees an   initial chairman, vice chairman, and deputy vice chairman as soon   as possible after all trustees have been appointed or elected in   accordance with this article and, if the board elects to do so, an   initial second deputy vice chairman.          (g)  Not later than the 90th day after the date all trustees   under Section 3.01, Article 6243a-1, Revised Statutes, as amended   by this article, have been appointed or elected, the board shall   vote on and, if the board determines it is appropriate, amend the   existing rules relating to the governance and conduct of the board.          SECTION 1.53.  (a)  Not later than January 1, 2018, the board   of trustees of the pension system established under Article   6243a-1, Revised Statutes, shall:                (1)  establish the ethics policy required by Section   3.01(r), Article 6243a-1, Revised Statutes, as added by this   article; and                (2)  appoint an executive director under Section 3.04,   Article 6243a-1, Revised Statutes, as amended by this article.          (b)  As soon as possible after the executive director is   appointed under Subsection (a) of this section, the executive   director may hire, subject to confirmation by the board of trustees   of the pension system established under Article 6243a-1, Revised   Statutes, a chief investment officer as authorized under Section   3.025, Article 6243a-1, Revised Statutes, as added by this article,   and a chief legal officer as authorized under Section 3.03(c),   Article 6243a-1, Revised Statutes, as amended by this article.          SECTION 1.54.  (a) In this section, "executive director,"   "nominations committee," and "pensioner" have the meanings   assigned by Section 2.01, Article 6243a-1, Revised Statutes, as   amended by this article.          (b)  As soon as possible after the effective date of this   article but not later than the 30th day after the effective date of   this article, the president, chair, or other executive head of an   organization described by Section 3.011(a)(2), Article 6243a-1,   Revised Statutes, as added by this article, that is eligible to and   intends to participate on the nominations committee shall notify   the executive director of:                (1)  the organization's intent to participate on the   nominations committee; and                (2)  whether the president, chair, or other executive   head, as appropriate, or that person's designee will serve on the   committee.          SECTION 1.55.  Section 4.025, Article 6243a-1, Revised   Statutes, as added by this article, applies only to a contribution   made on or after the date of the most recently completed actuarial   valuation following the effective date of this article.          SECTION 1.56.  The board of trustees of the pension system   established under Article 6243a-1, Revised Statutes, shall review   all investments held on the effective date of this article under   Section 4.071, Article 6243a-1, Revised Statutes, as added by this   article.          SECTION 1.57.  Changes in law to Part 5, Article 6243a-1,   Revised Statutes, as amended by this article, apply to membership   in a pension system established under Article 6243a-1, Revised   Statutes, on or after the effective date of this article.          SECTION 1.58.  A rollover distribution to a plan   administered by the pension system established under Article   6243a-1, Revised Statutes, that was made on or after January 1,   2002, is validated as of the date the distribution occurred. A   distribution described by this section may not be held invalid   because the distribution was not performed in accordance with   Section 8.01(j), Article 6243a-1, Revised Statutes, as added by   this article, or other applicable law.   ARTICLE 2. IMMEDIATE PROHIBITION ON CERTAIN LUMP-SUM DISTRIBUTIONS          SECTION 2.01.  Part 6, Article 6243a-1, Revised Statutes, is   amended by adding Section 6.142 to read as follows:          Sec. 6.142.  PROHIBITION ON CERTAIN LUMP-SUM DISTRIBUTIONS.   (a) Notwithstanding Section 6.14 of this article, including   Section 6.14(d)(1) of this article, the board may not distribute or   allow the distribution of the balance of a DROP participant's DROP   account under a single-sum or other lump-sum distribution to a DROP   participant or a participant's designated beneficiary, except:                (1)  in the event of an unforeseeable emergency, as   described in Section 6 of the DROP addendum policy adopted by the   board that took effect on January 12, 2017;                (2)  as permitted by the board under Section 8e of the   DROP addendum policy adopted by the board that took effect on   January 12, 2017, in order to avoid the possibility of an early   distribution tax penalty under Section 72(t) of the code; or                (3)  in compliance with a court order.          (b)  This section expires September 1, 2017.   ARTICLE 3. SEVERABILITY AND EFFECTIVE DATE          SECTION 3.01.  If any provision of this Act or its   application to any person or circumstance is held invalid, the   invalidity does not affect other provisions or applications of this   Act that can be given effect without the invalid provision or   application, and to this end the provisions of this Act are declared   to be severable.          SECTION 3.02.  (a) Except as provided by Subsections (b),   (d), and (e) of this section, this Act takes effect immediately if   it receives a vote of two-thirds of all the members elected to each   house, as provided by Section 39, Article III, Texas Constitution.   If this Act does not receive the vote necessary for immediate   effect, this Act takes effect on the 91st day after the last day of   the legislative session.          (b)  Except as provided by Subsection (e) of this section,   Article 1 of this Act takes effect on September 1, 2017, unless the   board of trustees of the pension system established under Article   6243a-1, Revised Statutes, violates Section 6.142, Article   6243a-1, Revised Statutes, as added by this Act, on or before August   31, 2017, as determined by the State Pension Review Board.          (c)  If the State Pension Review Board determines that the   pension system violated Section 6.142, Article 6243a-1, Revised   Statutes, as added by this Act, the State Pension Review Board   shall:                (1)  not later than August 31, 2017:                      (A)  notify the board of trustees of the pension   system and the mayor and city council of a city subject to Article   6243a-1, Revised Statutes, of its determination under this section;   and                      (B)  publish notice of its determination under   this section on the State Pension Review Board's Internet website;   and                (2)  as soon as practicable after August 31, 2017,   publish notice of its determination under this section in the Texas   Register.          (d)  If, not later than August 31, 2017, the State Pension   Review Board makes the determination described by Subsection (c) of   this section, Article 1 of this Act has no effect.          (e)  Section 4.021, Article 6243a-1, Revised Statutes, as   added by Article 1 of this Act, does not take effect if S.B. 2 or   similar legislation of the 85th Legislature, Regular Session, 2017,   that has the effect of lowering the rollback tax rate of a city as   calculated under Chapter 26, Tax Code, does not become law.     * * * * *