TESRS State Board to Review Public
Comments on Proposed Rule Changes
The TESRS Board will review public comments about proposed administrative rule changes made necessary by the enactment of H.B. 3247 during the 86th Texas Legislature at their next meeting in December. The proposed rule changes include:
• increasing line-of-duty death benefit from $60,000 to $100,000;
• expanding disability benefits to include occupation as a homemaker or caregiver;
• moving the annual reporting deadline to the end of February;
• prohibiting the participating department head (Chief) from serving as Local Board Chair;
• extending the purchase of prior service window from two years to five years of joining TESRS and expanding the maximum number of years eligible for purchase from ten to fifteen years; and
• delaying the enrollment of paid employees of participating departments as members of TESRS until September 1, 2020;
The proposed rules were published in the Texas Register on October 25, 2019 and are available for viewing at the following link.
Here is a summary of the proposed changes:
Line-of-Duty-Death Benefits: The TESRS Board is proposing to increase the line-of-duty death benefit from $60,000 to $100,000.
Disability Benefits: TESRS Board is proposing to expand disability benefits to include the occupations of homemaker and caregiver. If the proposed rule change is adopted, a member's "regular occupation" may be determined within the sole discretion of the Local Board or Medical Board to mean any occupation the member held immediately prior to becoming disabled, whether or not the member received compensation in connection with such occupation, including, without limitation, an occupation as a homemaker or caregiver.
Annual Report Deadline Change: The TESRS Board is proposing to extend the deadline for required reports from 30 days to 60 days. If adopted, the annual report deadline will move from January 31st to the last day of February each year which will enable Local Boards to have a single meeting during February to review and approve the TESRS Annual Report and the semi-annual Membership Reconciliation Report (MRR) that is used for invoicing.
the Chief Serving as Local Board Chairman:
The TESRS Board is proposing to prohibit the participating
department head (Chief) from serving as the Local Board Chair due to the
potential conflict inherent in the Chief serving in both positions. H.B. 3247
made the participating department head (Chief) responsible for enrolling and
terminating members while the Local Board retained responsibility for confirming
the accuracy of the pension system roster. The proposed rule change will not prevent the participating department head (Chief) from serving on the Local Board.
Period for New Departments: The TESRS Board is extending the deadline
for departments to purchase prior service from two years to five years after
joining TESRS. The proposal also increases the maximum amount of prior service
that can be purchased for a member from 10 years to 15 years.
New state legislation has made significant improvements to
the local administration of TESRS membership and benefits. From retirement
system enrollment to applying for and receiving a well-earned monthly
retirement check, processes have been streamlined and unnecessary administrative
requirements have been eliminated.
Chief’s Responsibility – TESRS Member Enrollment and Termination
Effective September 1, 2019, the Local Board will no longer be involved in the enrollment of department members into the retirement system. This will allow the department to collect TESRS membership forms at the same time they are collecting other department membership and insurance forms.
The Chief will accept the department member’s certification of physical fitness and enroll the member into TESRS. Also, the Chief can quickly remove from TESRS membership those who are no longer with the department, removing the monthly contribution charges for those who are no longer members of the department.
- Form 502 (Personnel Record) – TESRS Enrollment Form (includes beneficiary designation)
- Form 504 (Termination Record) – Termination of TESRS Membership
Completed forms can be faxed to (512) 936-3480-or mailed to P.O. BOX 12577 AUSTIN TEXAS 78711-2577. On-line access is also available.
TESRS encourages all participating departments to
immediately enroll members into TESRS and ensure each active department member
is covered by TESRS death and disability benefits. Keep in mind that the department
has the option to delay the TESRS enrollment of new members for a period not to
exceed six-months from the date they joined the department.
Each department member needs to complete and sign Form 502. It is important that TESRS receives the completed, signed form. This form provides TESRS with the member’s contact information and designated beneficiaries for payment of death benefits provided by TESRS. A spouse’s signature is required if the member is married and designates someone other than their spouse as a beneficiary.
The Chief terminates a member’s TESRS enrollment by completing and signing a Form 504 indicating the member’s TESRS termination date and qualified service for the calendar year.
TESRS will keep the Local Board in the loop about the TESRS enrollment
activities of the Chief by emailing periodic TESRS roster updates to the Local
City Council or ESD – Designating an Alternate
The governing body of a participating department may formally designate someone other than the Chief to enroll and terminate members in TESRS by completing and submitting a Form 610 – Designation of Alternative Participating Department Head.
TESRS Reduced Unnecessary Meetings of Local Board
TESRS Local Boards no longer need to meet and consider routine matters, such as new TESRS membership enrollment and approval of retirement applications that are not contested by the applicant.
The Local Board will retain responsibility for making sure the department enrolls eligible members into TESRS and for the annual reporting of qualified service. Most importantly, the Local Board will continue to review and approve claims for line-of-duty death benefits, off-duty death benefits, temporary disability benefits, and contested retirement applications.
Local Boards are required to meet only twice each year (each February and August) to complete the review and certification of the Membership Reconciliation Report (MRR). During the February meeting, the Local Board will review and award qualified service (Annual Report), elect officers, review TESRS Confidentiality Policy and approve at least two people to have access to the TESRS Online System (TOL).
Streamlined Retirement Application Process
Local Boards no longer need to meet and approve uncontested retirement
applications with an effective retirement date after September 1, 2019.
Members will continue to apply for retirement by
submitting a retirement application to TESRS in Austin. TESRS will prepare and
send a Service Retirement Certificate (SRC) to the applicant which details the
member’s qualified service and retirement benefit amount. If the member accepts
and signs the SRC, the Executive Director will approve and process the
TESRS retirement applicants seeking to protest their
qualified service or benefit amount must submit a written statement to the
Executive Director explaining their concerns.
The Executive Director will review TESRS’s records. If the
applicant’s concern was the result of incorrect data entry, TESRS will send a
corrected SRC to the applicant. Otherwise, the Executive Director will forward the
protest to the Local Board Chair.
To correct simple administrative errors, the Local Board
Chair must submit a Form 200-D (Correction of Errors) to the Executive Director
and correct the member’s qualified service history. Upon receipt and acceptance
of the Form 200-D, the Executive Director will process the change and send a
corrected SRC to the applicant for approval.
If the protest cannot be resolved administratively, the Local Board must hold a public meeting and consider the complaint of the applicant. The applicant has the opportunity to appeal the Local Board’s decision to the TESRS State Board.
Government Code 861.008 extends state sovereign immunity to
Local Board members and participating department heads. This provides the same
legal protections to Local Board members and participating department heads as
provided to the TESRS State Board and staff.
Annual Report Deadline Moved to February 28th
Local Boards are responsible for the annual reporting of qualified service for TESRS members. The deadline for submitting the TESRS Annual Report has been moved to February 28th. (Local Boards will review and approve the TESRS Annual Report and the MRR during their February meeting.)
Enrollment of Paid Employees into TESRS – Delayed Until September 1, 2020
The TESRS State Board intends to adopt rules related to the participation of employees of participating departments in TESRS on or before September 1, 2020, to the extent such participation is consistent with TESRS’s plan qualification requirements under Section 401(a) of the Internal Revenue Code.
Any employee of a participating department who is enrolled as a member of TESRS before September 1, 2019 shall continue to be a member of TESRS until otherwise provided.
Withdrawal of Departments
During the first quarter of 2020, after the completion of an actuarial analysis and legal review of the impact of the proposed rules, the TESRS State Board will consider and propose rules to allow participating departments to withdraw from TESRS participation. Any rules adopted by the TESRS State Board allowing a department to revoke participation must maintain the actuarial soundness of the retirement system and not violate TESRS’s plan qualification under Section 401(a) of the Internal Revenue Code.