HBA-MSH S.B. 593 77(R) BILL ANALYSIS Office of House Bill AnalysisS.B. 593 By: Barrientos Pensions & Investments 5/2/2001 Engrossed BACKGROUND AND PURPOSE Many police departments in Texas are understaffed, increasing the danger to public safety. Police departments may have a difficult time recruiting new officers with the current retirement benefits offered. Senate Bill 593 decreases the number of years police officers in certain counties are required to serve before retiring with benefits and allows retirees greater flexibility in receiving cash retirement benefits. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS Senate Bill 593 amends law to provide that a member of a police officer retirement system in a municipality with a population between 460,000 and 500,000 is eligible for service retirement if the member has completed 23 rather than 25 years of creditable service excluding any military service. The bill authorizes the change of age and length of service requirements for service retirement if the change meets specified criteria (SECTION 2). The bill makes available the retroactive deferred retirement option plan (RETRO DROP) to a member eligible for service retirement based on 23 rather than 25 years of creditable service. The bill authorizes the change of the number of years of creditable services required for RETRO DROP if the change meets specified criteria. Rather than a single lump-sum payment, the bill authorizes a member to elect to receive partial payments from the member's RETRO DROP account for each calendar year in an amount elected by the member. The bill authorizes a member who elects partial payments to elect at any time to receive the member's entire remaining RETRO DROP account balance in a single lump-sum payment, with the payment to be made under rules adopted by the board of trustees of the police retirement system (board). If a member elects partial payments, the member's RETRO DROP account is required to be credited with earnings and losses of the police retirement system for periods after the member's retirement date and before the member's RETRO DROP account is completely distributed. The bill requires the member's RETRO DROP account to be credited with earnings or losses at an established annual rate as adopted by rule by the board. The board is authorizes to change the annual rate from time to time by amending the rule (SECTION 3). If the amount of any benefit payment would exceed the federal limitations on benefits and contribution under qualified plans, the bill requires the police retirement system to reduce the amount of the benefit as required to comply with those limits (SECTION 4). EFFECTIVE DATE September 1, 2001.