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TEXAS <br /> <br />512o2)1-7400 <br /> <br />October 30, 2003 <br /> <br />MEMORAaNDUM <br /> <br /> NOV 0 1 200~ <br />CITY A'£ iORNI~ <br /> <br />TO: <br /> <br />FROM: <br /> <br />SUBJECT: <br /> <br />TML Member Cities that Sponsor Non-Statewide Retirement Systems <br />Frank Sturzl, TML Executive Director <br /> <br />H.J.R_ 54 <br /> <br />CITIES HAVE ONLY ONE OPPORTUNITY TO OPT OUT <br /> OF RETIRMENT SYSTEM MANDATE <br /> <br />The Texas Legislature recently passed H..LR. 54, a proposed amendment to the Texas <br />Constitution that protects certain benefits under certain public retirement systems. The <br />amendment was approved by Texas voters at the September constitutional election and <br />took effect shortly thereal~er. The following is a summary &the impact of H.J.R. 54, as <br />well as an explanation of the procedure that allows a city to exempt itself from the <br />amendment's application. <br /> <br />H.J.R_ 54 is now codified as Article XVI, Section 66, of'the Texas Constitution. It <br />provides that once certain benefits are granted to retirees or other annuitants, those <br />benefits may not be subsequently reduced. It also requires political subdivisions and the <br />retirement systems that finance the benefits to be jointly responsible for ensuring these <br />benefits are not reduced. The new Article XVI, Section 66, applies only to public, non- <br />statewide retirement systems that.provide service and disability retirement benefits and <br />death benefits to public employees. We have reason to believe that your city has a <br />retirement system that is affected by this new constitutional amendment. Whether your <br />city is affected is an important question that you will need to consult with your city <br />attorney about. (Note: TMRS cities are part of a statewide retirement system, and are <br />therefore not affected by the amendment.) The amendment does not apply to health or <br />life insurance benefits or certain other disability benefits. <br /> <br />It is important to note that an employee need not currently be receiving benefits under a <br />retkement plan for those benefits to be protected. Once the individual becomes eligible <br />to receive benefits, even if employment continues, those benefits may not be reduced <br />from their current level of eligibility by a subsequent change of policy. <br /> <br />An affected city may choose to exempt itself from the provisions of Article XVI, Section <br /> <br /> <br />