By: Hughes S.B. No. 1954     A BILL TO BE ENTITLED   AN ACT   relating to participation in and contributions to the optional   retirement program for certain employees of institutions of higher   education.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 830.102, Government Code, is amended by   amending Subsection (c) and adding Subsections (c-1) and (c-2) to   read as follows:          (c)  Except as provided by Subsections (c-1) and (c-2), a [A]   person who becomes eligible to participate in the optional   retirement program after the date the program becomes available at   the person's place of employment must elect to participate before   the 91st day after becoming eligible.          (c-1)  A person who becomes eligible to participate in the   optional retirement program and is notified by the person's   employer of the opportunity to participate in the program after the   first day and before the 91st day after the date the person becomes   eligible must elect to participate in the program before the later   of:                (1)  the 91st day after the date the person becomes   eligible; or                (2)  the 31st day after the date the person receives   notice of the opportunity to participate in the program.           (c-2)  A person who becomes eligible to participate in the   optional retirement program and is notified by the person's   employer of the opportunity to participate in the program on or   after the 91st day after the date the person becomes eligible must   be notified by the employer before the 151st day after the date the   person becomes eligible.  The person must elect to participate in   the program before the later of:                (1)  the 151st day after the date the person becomes   eligible; or                (2)  the 31st day after the date the person receives   notice of the opportunity to participate in the program.          SECTION 2.  Subchapter B, Chapter 830, Government Code, is   amended by adding Section 830.108 to read as follows:          Sec. 830.108.  CORRECTION OF CERTAIN REPORTING ERRORS.   (a)  For purposes of this section, an employer submits a member   contribution to the retirement system on behalf of a person in error   if the person:                (1)  previously elected to participate in the optional   retirement program;                (2)  participated in the program for at least one year;   and                 (3)  is or was employed by an institution of higher   education in a position normally covered by the retirement system   and is or was at the time of that employment not eligible for   membership in the retirement system under Section 830.106.          (b)  If an employer commits an error described by Subsection   (a) and the person on whose behalf the member contribution is   erroneously made is a participant in the optional retirement   program:                (1)  the person's participation in the program shall be   immediately restored; and                (2)  in accordance with this section and as soon as   practicable, funds shall be deposited in the person's participant   account in the program or otherwise remitted to the person.          (c)  Subject to Subsection (d), on discovery of an error   described by this section, the retirement system shall, on   certification by an employer that the employer committed the error:                (1)  make a direct trustee-to-trustee transfer to the   trustee of the optional retirement program for deposit in the   person's participant account in an amount equal to the participant   contribution that would have been paid for the benefit of the person   to the program under Section 830.201 during the period in which   member contributions were submitted to the retirement system in   error, plus an amount representing earnings on the member   contribution at the assumed rate of return provided by Subsection   (g);                (2)  credit the employer through the retirement   system's employer reporting system an amount equal to the amount of   any employer contributions made under Section 825.4041, 825.406,   825.407, or 825.4071 in error on compensation paid to the person;   and                (3)  remit to the person:                      (A)  the amount of any member contribution made to   the retirement system in error that exceeds the amount of the   participant contribution that would have been paid for the benefit   of the person to the program during the period in which member   contributions were submitted to the retirement system in error;                      (B)  the amount of any member contribution made to   the retirement system in error that was made on an after-tax basis   and that the retirement system could not transfer via a direct   trustee-to-trustee transfer under applicable provisions of the   Internal Revenue Code, including regulations adopted under the   Internal Revenue Code, or under the terms of the program   established by the employer; and                      (C)  any amount paid by the person to the   retirement system to purchase or reinstate service credit during   the period the person was not eligible for membership in the   retirement system, including any administrative, reinstatement,   and installment fees paid in connection with the purchase.          (d)  A transfer described by Subsection (c) may not include   the amount of any member contribution made to the retirement system   in error that:                (1)  exceeds the amount of the participant contribution   that would have been paid for the benefit of the person to the   optional retirement program under Section 830.201; or                (2)  was made on an after-tax basis unless the plan   document for each employer program:                      (A)  permits the employer program to receive   direct trustee-to-trustee transfers of after-tax amounts; and                      (B)  provides that the trustee of the employer   program agrees to separately account for amounts transferred and   earnings on amounts transferred, including accounting for the   portion of the distribution that is includable in gross income and   the portion of the distribution that is not includable in gross   income.          (e)  On certification by an employer that the employer   committed an error described by this section, the comptroller shall   transfer to or credit the employer an amount equal to the state   contribution that would have been paid for the benefit of the person   under Section 830.201 plus an amount representing earnings on the   state contribution at the assumed rate of return provided by   Subsection (g).          (f)  An employer that commits an error described by this   section shall deposit in the person's participant account in the   program:                (1)  in accordance with Subsection (c), the amount of   the employer contribution that would have been paid for the benefit   of the person as a participant under Section 830.201 and under any   other law, rule, or employer policy;                (2)  an amount representing earnings on the employer   contribution at the assumed rate of return determined by the   employer in accordance with applicable Internal Revenue Code   correction requirements; and                (3)  an amount equal to the state contribution that   would have been paid for the benefit of the person under Section   830.201 plus the amount representing earnings credited to the   employer under Subsection (e).          (g)  The assumed rate of return is earned monthly and   computed at the rate of four percent per year. Except as provided by   this subsection, the amount of earnings based on the assumed rate of   return is credited annually at the end of each 12-month period.  The   first 12-month period begins with the month the first deposit was   submitted in error.  The amount of assumed earnings is prorated to   the month of payment.          (h)  Amounts paid, transferred, or credited under this   section are reduced by any amount required to be withheld by law or   court order.          SECTION 3.  Section 830.108, Government Code, as added by   this Act, applies to a member contribution submitted in error as   provided by that section and maintained by a retirement system,   regardless of whether the contribution was submitted before, on, or   after the effective date of this Act.          SECTION 4.  This Act takes effect September 1, 2017.