TLG

Article XVI, Section 67 of the Texas Constitution

As amended November 6, 2001:

(a) General Provisions. (1) The legislature may enact general laws establishing systems and programs of retirement and related disability and death benefits for public employees and officers. Financing of benefits must be based on sound actuarial principles. The assets of a system are held in trust for the benefit of members and may not be diverted. (2) A person may not receive benefits from more than one system for the same service, but the legislature may provide by law that a person with service covered by more than one system or program is entitled to a fractional benefit from each system or program based on service rendered under each system or program calculated as to amount upon the benefit formula used in that system or program. Transfer of service credit between the Employees Retirement System of Texas and the Teacher Retirement System of Texas also may be authorized by law. (3) Each statewide benefit system must have a board of trustees to administer the system and to invest the funds of the system in such securities as the board may consider prudent investments. In making investments, a board shall exercise the judgment and care under the circumstances then prevailing that persons of ordinary prudence, discretion, and intelligence exercise in the management of their own affairs, not in regard to speculation, but in regard to the permanent disposition of their funds, considering the probable income therefrom as well as the probable safety of their capital. The legislature by law may further restrict the investment discretion of a board. (4) General laws establishing retirement systems and optional retirement programs for public employees and officers in effect at the time of the adoption of this section remain in effect, subject to the general powers of the legislature established in this subsection.

(b) State Retirement Systems. (1) The legislature shall establish by law a Teacher Retirement System of Texas to provide benefits for persons employed in the public schools, colleges, and universities supported wholly or partly by the state. Other employees may be included under the system by law. (2) The legislature shall establish by law an Employees Retirement System of Texas to provide benefits for officers and employees of the state and such state-compensated officers and employees of appellate courts and judicial districts as may be included under the system by law. (3) The amount contributed by a person participating in the Employees Retirement System of Texas or the Teacher Retirement System of Texas shall be established by the legislature but may not be less than six percent of current compensation. The amount contributed by the state may not be less than six percent nor more than 10 percent of the aggregate compensation paid to individuals participating in the system. In an emergency, as determined by the governor, the legislature may appropriate such additional sums as are actuarially determined to be required to fund benefits authorized by law.

(c) Local Retirement Systems. (1) The legislature shall provide by law for: (A) the creation by any city or county of a system of benefits for its officers and employees; (B) a statewide system of benefits for the officers and employees of counties or other political subdivisions of the state in which counties or other political subdivisions may voluntarily participate; and (C) a statewide system of benefits for officers and employees of cities in which cities may voluntarily participate. (2) Benefits under these systems must be reasonably related to participant tenure and contributions.

(d) Judicial Retirement System. (1) Notwithstanding any other provision of this section, the system of retirement, disability, and survivors' benefits heretofore established in the constitution or by law for justices, judges, and commissioners of the appellate courts and judges of the district and criminal district courts is continued in effect. Contributions required and benefits payable are to be as provided by law. (2) General administration of the Judicial Retirement System of Texas is by the Board of Trustees of the Employees Retirement System of Texas under such regulations as may be provided by law.

(e) Anticipatory Legislation. Legislation enacted in anticipation of this amendment is not void because it is anticipatory.

(f) Retirement Systems Not Belonging to a Statewide System. The board of trustees of a system or program that provides retirement and related disability and death benefits for public officers and employees and that does not participate in a statewide public retirement system shall: (1) administer the system or program of benefits; (2) hold the assets of the system or program for the exclusive purposes of providing benefits to participants and their beneficiaries and defraying reasonable expenses of administering the system or program; and (3) select legal counsel and an actuary and adopt sound actuarial assumptions to be used by the system or program.

(g) If the legislature provides for a fire fighters' pension commissioner, the term of office for that position is four years.

Editor Comments

This section was added in 1975. The new section had two major purposes: (1) to consolidate and simplify all but two of the constitutional provisions concerning state and local retirement systems; and (2) to raise the ceiling on state contributions to state systems to 10 percent. The ballot proposition that added this section repealed Sections 48-a, 48-b, 51-e and 51-f of Article III and Sections 62 and 63 of Article XVI. It affected neither Article V, Section 1-a(1) nor Article XVI, Section 66.

This section has been amended twice. The 1993 amendment added Subsection (f), which details the duties of the governing boards of the numerous large and small local retirement systems and programs that do not belong to a statewide system. The 2001 amendment added Subsection (g), which provides an exception to Article XVI, Section 30(a) for the designated officer. However, in 2013, the Legislature abolished the long-standing office of fire fighters' pension commissioner.

Note that this section must be read together with the current version of Article XVI, Section 66. That section, added in 2003, provides that certain benefits provided by certain local retirement systems cannot be reduced or otherwise impaired.

—Attorney Steve Smith

Recent Decisions

None.

Historic Decisions

  • City of Fort Worth v. Howerton, 236 S.W.2d 615, 618 (Tex. 1951) ("The system created under Article 6243i undertakes to affect the rights and obligations accrued under the system adopted by the City of Fort Worth under a constitutional provision. . . . We hold that certain rights, duties, and obligations have been created by the City of Fort Worth under the pension system adopted under the provisions of Section 51-e of Article 3 of the Constitution and involved here, and the Legislature is not authorized to change the plan, as is undertaken by Article 6243i, without the consent of the City of Fort Worth, and that that part of the law which undertakes to do so is inoperative as against the City of Fort Worth.")
  • Woods v. Reilly, 218 S.W.2d 437, 443 (Tex. 1949) ("The constitutional amendment does not expressly or by implication prohibit a teacher-member from accepting a reduced membership annuity throughout retired life with a provision that what he otherwise could have received while he lived . . . . Certainly the State would have no right under the Constitution to attempt to control the disposition of the unused proceeds or money derived from a lump-sum settlement at the time of a teacher's retirement, if the law authorized such a settlement, and for like reason the State should not be concerned with the disposition of earned and unpaid funds standing to the credit of a teacher-member at the time of his death.")
  • City of Dallas v. Trammell, 101 S.W.2d 1009, 1017 (Tex. 1937) ("Here is a direct holding that as to future installments of a pension the pensioner has no vested right, but same may . . . . This is as far as we need go in deciding the present case. The Legislature and the City of Dallas have manifestly sought to do no more than to meet the exigencies and necessities of the situation, and to readjust the basis of the monthly installments payable on pensions, to the end that the pension fund itself may be preserved, and that each and all entitled to receive benefits from same shall share upon an equitable basis. In our opinion, the power of the Legislature and of the City of Dallas to accomplish this is certain.")
  • Byrd v. City of Dallas, 6 S.W.2d 738, 741 (Tex. 1928) ("This does not expressly stipulate that the 20 years' service shall be subsequent to the statute, nor is such intention implied. . . . The contract for the pension after 20 years in the service may, and often will, result in inequality of compensation for similar service rendered after the contract. But this is wholly a matter of discretion for the employing municipality and does not render the contract or the legislation authorizing it void. The courts are not concerned with the policy or wisdom of legislation, but they can deal only with the power of the legislative body and leave to that body, where it properly belongs, the responsibility for the exercise of that power.")

Library Resources

Online Resources

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