Texas Government Code 845.406 – Optional Group Term Life Program
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(a) In addition to other contributions to the retirement system required by this subtitle, each subdivision participating in the optional group term life program monthly shall pay to the optional group term life fund an amount equal to the rate of contribution computed in accordance with this section, multiplied by the total compensation for the month of the members employed by the subdivision.
(b) A limitation on subdivision contribution rates provided by this subtitle does not apply to the rate of the contribution to the optional group term life fund.
Terms Used In Texas Government Code 845.406
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- Month: means a calendar month. See Texas Government Code 312.011
- Year: means 12 consecutive months. See Texas Government Code 311.005
(c) At the time of each investigation of members’ mortality and service experience required by § 845.110, the actuary shall investigate the mortality experience of the members and eligible annuitants participating in the program. On the basis of the result of that investigation, the actuary shall recommend to the board of trustees rates and tables necessary to determine optional group term life program contribution rates. The rates and tables may provide for the anticipated mortality experience of the persons covered under the program and for a contingency reserve.
(d) Before a subdivision’s participation date in the program and before January 1 of each subsequent year, the actuary shall compute, on the basis of rates and tables adopted by the board of trustees, the contribution rate of a subdivision participating in the program. The rate must be expressed as a percentage of the compensation of members employed by the subdivision. When the rate is approved by the board of trustees, the rate is effective for the calendar year for which it was approved.
(e) The board of trustees, in the exercise of its discretion to manage the assets of the retirement system, may lend money to the optional group term life fund if the amount in the fund is insufficient to pay the benefits due. Any loan is an investment of the retirement system and must be repaid solely from future contributions to the fund and its share of trust earnings. The terms of the loan shall be set by the board of trustees, but the loan must bear a commercially reasonable interest rate. The board may adjust future contributions to the fund for purposes of repayment of the loan.
(f) To protect against adverse claim experience, the board of trustees may secure reinsurance from one or more stock insurance companies doing business in this state if the board determines that reinsurance is necessary. The retirement system shall pay the premiums for reinsurance from the optional group term life fund.