TX Civ Stat § 1.02 (2021)
2021 Texas Statutes|Vernon's Civil Statutes|Title 109 - Pensions|Article 6243n-1. Police Officers Retirement System in Municipalities of 460,000 to 500,000|Article I.|Section 1.02. Definitions

Sec. 1.02. DEFINITIONS.  The following words and phrases have the meanings assigned by this section unless a different meaning is plainly required by the context:(1)  "Accumulated deposits" means the amount standing to the credit of a member derived from the deposits required to be made by the member to the police retirement system or to the predecessor system.  Accumulated deposits also include interest that is credited annually to the account of a vested member at a rate of five percent or the rate determined by the board and that is credited as of December 31 to amounts standing to the credit of the member on January 1 of the same calendar year.  Accumulated deposits also include interest credited to the account of a member before September 1, 2007, without regard to whether the member is vested at the time the interest is credited to the member's account.(1-a)  "Actuarial accrued liability" means the portion of the actuarial present value of projected benefits of the police retirement system attributed to past periods of member service based on the cost method used in the risk sharing valuation study prepared under Section 8.03 or 8.04 of this Act, as applicable.(2)  "Actuarial equivalent" means any benefit of equal present value to a standard benefit when computed as specified by this Act, based on the actuarial assumptions adopted by the police retirement board for that purpose.(2-a)  "Actuarial value of assets" means the value of the police retirement system's investments as calculated using the asset smoothing method used in the risk sharing valuation study prepared under Section 8.03 or 8.04 of this Act, as applicable.(3) "Actuary" means a technical advisor of the police retirement board regarding the operations which are based on mortality, service, and compensation experience who makes periodic valuations of the assets and liabilities of the funds and other evaluations as requested by the board.(3-a)  "Amortization period" means:(A)  the period necessary to fully pay a liability layer; or(B)  if referring to the amortization period of the police retirement system as a whole, the number of years incorporated in a weighted average amortization factor for the sum of the legacy liability and all liability layers as determined in each annual actuarial valuation of assets and liabilities of the system.(3-b)  "Amortization rate" means, for a given calendar year, the percentage rate determined by:(A)  adding the scheduled amortization payments required to pay off the then-existing liability layers;(B)  subtracting the city legacy contribution amount for the same calendar year, as determined in the risk sharing valuation study prepared under Section 8.03 or 8.04 of this Act, as applicable, from the sum under Paragraph (A); and(C)  dividing the sum under Paragraph (B) by the projected pensionable payroll for the same calendar year.(4)  "Average final compensation" means the monthly average of basic hourly earnings of a member during, as applicable:(A)  if the member has 120 months or more of service during which the member made contributions to the system or the predecessor system, the 36 months for a group A member or 60 months for a group B member which yielded the highest average during the last 120 months of membership service during which the member contributed to the system or the predecessor system;(B)  if the member has less than 120 months of membership service during which the member contributed to the system or the predecessor system, but has at least 36 months of membership service for a group A member or 60 months of membership service for a group B member during which the member made contributions to the system or the predecessor system, the average of the 36 months or 60 months, as applicable, which yielded the highest average; or(C)  if the member does not have 36 months of membership service for a group A member or 60 months of membership service for a group B member during which the member contributed to the system or the predecessor system, the average of the member's months of membership service during which the member made contributions to the system or the predecessor system.(5) "Basic hourly earnings" means the hourly rate of the sum of base pay plus longevity pay but does not include any other type of pay.(6) "Beneficiary" means any person, trust, or estate properly designated by a member or retired member to receive benefits from the system.(6-a)  "City contribution rate" means, for a given calendar year, a percentage rate equal to the sum of the employer normal cost rate and the amortization rate, as adjusted under Section 8.05 or 8.06 of this Act, if applicable.(6-b)  "City legacy contribution amount" means, for each calendar year, a predetermined payment amount expressed in dollars in accordance with a payment schedule amortizing the legacy liability for the calendar year ending December 31, 2020, that is included in the initial risk sharing valuation study under Section 8.03 of this Act.(6-c)  "Corridor" means the range of city contribution rates that are:(A)  equal to or greater than the minimum city contribution rate; and(B)  equal to or less than the maximum city contribution rate.(6-d)  "Corridor margin" means five percentage points.(6-e)  "Corridor midpoint" means the projected city contribution rate specified for each calendar year for 30 years as provided by the initial risk sharing valuation study under Section 8.03 of this Act, rounded to the nearest hundredths decimal place.(7) "Creditable service" means the number of months during which a member pays into and keeps on deposit the amounts of money prescribed by this Act to be paid by the member into the system or into the predecessor system, including certain military service and certain probationary service in excess of six months for which a member has purchased creditable service in accordance with Article V of this Act, and excluding a month in which service amounted to fewer than 15 days.  The months beyond attained age 62 are included within the meaning of creditable service, regardless of payments into this system or into the predecessor system if the police officer is otherwise eligible for membership in the system, is a police officer employed by the city, and did not contribute for the months only if they occurred before September 1, 1995.(8) "Death benefit" means a single sum payable as a result of the death of a member or retired member.(9) "Deposits" means the amount required to be paid by members in accordance with the provisions of this Act.(10) "Disability retirement" means the employment termination of a member from service with a disability retirement benefit as provided under this Act.(10-a)  "Employer normal cost rate" means, for a given calendar year, the normal cost rate minus the applicable member contribution rate determined under Section 8.01 of this Act.(11) "Employment termination" means:(A) the voluntary termination of employment with the city or the system;  or(B) the involuntary termination of employment with the city or the system of a member who does not appeal the termination through arbitration or through the civil service commission or whose appeal has been denied by arbitration or by the civil service commission.(11-a)  "Estimated city contribution rate" means, for a given calendar year, the city contribution rate that would be required to maintain an amortization period for the retirement system as a whole of no more than 30 years as determined by the system's actuary in a risk sharing valuation study under Section 8.03 or 8.04 of this Act, as applicable, and before any adjustment to the rate under Section 8.05 or 8.06 of this Act, as applicable.(12) "Fund No. 1" means the part of the trust assets consisting of all accumulated deposits of members who have not withdrawn from the system.(13) "Fund No. 2" means the part of the trust assets consisting of all money contributed by the city, interest earned thereon, and all accumulations and earnings of the system except those of Fund No. 1.(13-a)  "Funded ratio" means the ratio of the actuarial value of assets divided by the actuarial accrued liability.(13-b)  "Group A member" means a member included in group A membership under Section 4.01(e-1) of this Act.(13-c)  "Group B member" means a member included in group B membership under Section 4.01(e-1) of this Act.(14) "Investment consultant" means a person who monitors the investment performance of the system and provides other services as requested by the board.(15) "Investment manager" means a person or persons who monitor and manage any portion of the investment portfolio for the system making specified investment decisions on behalf of the system.(15-a)  "Legacy liability" means the unfunded actuarial accrued liability determined as of December 31, 2020, and for each subsequent calendar year, adjusted as follows:(A)  reduced by the city legacy contribution amount for the calendar year allocated to the amortization of the legacy liability; and(B)  adjusted by the assumed rate of return adopted by the police retirement board for the calendar year.(15-b)  "Level percent of payroll method" means the amortization method that defines the amount of the liability layer recognized each calendar year as a level percent of pensionable payroll until the amount of the liability layer remaining is reduced to zero.(15-c)  "Liability gain layer" means a liability layer that decreases the unfunded actuarial accrued liability.(15-d)  "Liability layer" means:(A)  the legacy liability established in the initial risk sharing valuation study under Section 8.03 of this Act; or(B)  for calendar years after December 31, 2020, the amount that the police retirement system's unfunded actuarial accrued liability increases or decreases, as applicable, due to the unanticipated change for the calendar year as determined in each subsequent risk sharing valuation study prepared under Section 8.04 of this Act.(15-e)  "Liability loss layer" means a liability layer that increases the unfunded actuarial accrued liability. For purposes of this Act, the legacy liability is a liability loss layer.(16) "Life annuity," "retirement annuity," or "annuity" means a series of equal monthly payments, payable for life after retirement.(17) "Life annuity (modified cash refund)" means a series of equal monthly payments, payable for life after retirement.  In the event of death of the retired member before that member has received monthly payments equal to the amount of that member's accumulated deposits at the date of retirement, the excess, if any, of such accumulated deposits over the monthly payments shall be refunded in one sum to the member's beneficiary.(17-a)  "Maximum city contribution rate" means, for a given calendar year, the rate equal to the corridor midpoint plus the corridor margin.(18) "Member" means any police officer or employee of the police retirement system included in the system under this Act and approved for membership by the police retirement board.  In any case of doubt regarding the eligibility of an employee to become or remain a member of the system, the decision of the police retirement board shall be final.(18-a)  "Minimum city contribution rate" means, for a given calendar year, the rate equal to the corridor midpoint minus the corridor margin.(18-b)  "Normal cost rate" means, for a given calendar year, the salary weighted average of the individual normal cost rates determined for the current active member population, plus the assumed administrative expenses determined in the most recent actuarial experience study.(19) "Normal retirement date" means the last day of the earliest month in which the member has satisfied the eligibility requirements of Section 6.02 of this Act.(19-a)  "Payoff year" means the year a liability layer is fully amortized under the amortization period. A payoff year may not be extended or accelerated for a period that is less than one month.(19-b)  "Pensionable payroll" means the aggregate basic hourly earnings of all members in active service for a calendar year or pay period, as applicable.(20) "Predecessor system" means the retirement system for police officers in effect before January 1, 1980.(21) "Police officer" means any full-time commissioned police officer employed by the police department of the city pursuant to Chapter 143, Local Government Code.(22) "Police retirement board" or "board" means the board of trustees of the police retirement system created by Section 3.01 of this Act for the purpose of administering the system.(23) "Police retirement system" or " system" means a retirement and pensioning system for police officers of certain cities and for employees of the system established by Section 2.01 of this Act.(23-a)  "Projected pensionable payroll" means the estimated pensionable payroll for the calendar year beginning 12 months after the date of the risk sharing valuation study prepared under Section 8.03 or 8.04 of this Act, at the time of calculation by:(A)  projecting the prior calendar year's pensionable payroll forward two years using the current payroll growth rate assumption adopted by the police retirement board; and(B)  adjusting, if necessary, for changes in population or other known factors, provided those factors would have a material impact on the calculation, as determined by the board.(24) "Retired member" means a member who is receiving a service or disability retirement benefit.(25) "Retirement" means employment termination in order to receive an annuity in accordance with the provisions of the police retirement system under this Act.(26) "Retirement date" means the last day of the month of the retirement of the member.(27) "Service" or "active service" means service as a police officer of the city paid for by the city or service as a member of the police retirement system's administrative staff paid for by the system.(28) "Spouse" means a spouse as recognized under the laws of this state.(29) "Survivor benefit" means a series of equal monthly payments payable as a result of the death of a member after becoming eligible for service retirement but before retirement and computed as if the member had retired on the last day of the month of death.(29-a)  "Unanticipated change" means, with respect to the unfunded actuarial accrued liability in each subsequent risk sharing valuation study prepared under Section 8.04 of this Act, the difference between:(A)  the remaining balance of all then-existing liability layers as of the date of the risk sharing valuation study; and(B)  the actual unfunded actuarial accrued liability as of the date of the risk sharing valuation study.(29-b)  "Unfunded actuarial accrued liability" means the difference between the actuarial accrued liability and the actuarial value of assets.(30) "Vested" means a member has a right to leave the member's accumulated deposits standing to the member's credit with the system and receive a service retirement benefit on attaining the age at which service retirement benefits become payable.  A member is vested on attaining 10 years of creditable service.(31) "Vested interest" means the amount of benefit to which a member has a nonforfeitable right in accordance with the provisions of this Act.(32) "Withdrawal" means employment termination for any cause whatsoever prior to retirement date and the subsequent receipt or direct rollover of the accumulated deposits standing to the member's credit in the police retirement system.(33) "Withdrawal benefit" means the accumulated deposits of a member on withdrawal which have been made in one lump sum unless specifically provided otherwise in this Act.