Sec. 25.  OTHER EXPENSES.  (a)  Except as provided by Subsection (b) of this section, a board of trustees established under this Act may pay from assets of the fund all costs reasonably and lawfully incurred by the retirement system and the costs of actual expenses incurred by board members in the performance of their duties on the board.  A member of the board may not receive compensation for service on the board.
(b)  The annual amount of payments from a fund under this section, excluding legal and medical fees, may not exceed:
(1)  1 percent of the market value of the assets of the fund for the first $1 million in market value; and
(2)  1/4 of 1 percent of the market value of the assets of the fund that exceeds $1 million.
Sec. 26.  GIFTS ACCEPTED FROM ANY SOURCE.  The board of trustees of a retirement system established under this Act is authorized to accept and receive for the use and benefit of the fund, in addition to member contributions and contributions of the municipality or other political subdivision, gifts of money from any source.
Sec. 27.  INVESTMENT OF ASSETS.  (a)  A board of trustees established under this Act shall keep a sufficient amount of cash on hand to make payments as they become due under the retirement system.  If a board determines that the fund of its retirement system contains an amount in excess of the amount needed to make payments as they become due, the board may invest any portion of the excess.
(b)  In making investments for a retirement system, its board of trustees shall exercise the judgment and care, under the circumstances prevailing at the time of the investment, that persons of ordinary prudence, discretion, and intelligence exercise in the management of their own affairs, not in speculation but when making a permanent disposition of their funds, considering the probable income from the disposition and the probable safety of their capital.
(c)  A board of trustees established under this Act may not invest in the stock or bonds of one corporation more than five percent of the book value of the assets of a fund.  A retirement system may not own more than five percent of the voting stock of one corporation.
(d)  A board of trustees established under this Act shall adopt formal investment policies that emphasize safety and diversity as well as liquidity for benefit payments.  In developing those policies, the board of trustees shall give special consideration to the preferred investment practices of the Government Financial Officers Association. 
Sec. 28.  INVESTMENT MANAGER AND COUNSELING SERVICE.  (a)  The board of trustees of a retirement system established under this Act may appoint investment managers for the system by contracting for professional investment management services with one or more organizations, which may include a bank if it has a trust department, that are in the business of managing investments.
(b)  To be eligible for appointment under Subsection (a) of this section, an investment manager must be:
(1)  registered under the Investment Advisors Act of 1940 (15 U.S.C. Section 80b-1 et seq.);
(2)  a bank as defined by that Act; or
(3)  an insurance company qualified to perform investment services under the laws of more than one state.
(c)  In a contract made under this section, the board of trustees shall specify policies, requirements, and restrictions, including criteria for determining the quality of investments and for the use of standard rating services, that the board of trustees adopts for investments of the system.
(d)  In choosing and contracting for professional investment management services and in continuing the use of an investment manager, the board of trustees must act prudently and in the interest of the participants and beneficiaries of the retirement system.
(e)  A trustee is not liable for the acts or omissions of an investment manager appointed under this section, nor is a trustee obligated to invest or otherwise manage any asset of the system subject to management by the investment manager.
(f)  A board of trustees established under this Act may employ professional investment counselors to assist and advise the board in the investment of the assets of the fund or to evaluate the performance of an investment manager appointed under this section.  The investment counseling service must be provided by an organization whose business functions include performing continuous investment advisory service to public retirement systems.
(g)  The cost of investment managing or counseling services may be paid by the municipality or other political subdivision or from the assets of the fund.
(h)  A retirement system established under this Act is exempt from Subchapter C, Chapter 802, Government Code, except Sections 802.2011, 802.2015, 802.202, 802.205, and 802.207.
Sec. 29.  CONTRIBUTIONS.  (a)  Each person who is a member of a retirement system as a current fire department employee shall make contributions to the system.  Except as provided by Subsection (d) of this section, a contribution required under this subsection is computed on the employee's periodic compensation at a rate determined by majority vote of the employees of the department who are members, at an election by secret ballot at which at least 50 percent of those employees vote.  Except as provided by Section 30 of this Act, the payroll officer of the municipality or other political subdivision shall deduct the contributions required under this subsection each payroll period and submit them to the retirement system.
(b)  A municipality or other political subdivision that has employees who are participating members of a retirement system shall make contributions to the system each payroll period.  Except as provided by Subsection (d) of this section, contributions required under this subsection are computed on the total compensation paid to the employees who are participating members of the system.  A municipality or other political subdivision is required to make contributions under this subsection at the same rate paid by employees or 12 percent, whichever is the smaller rate. The governing body of a municipality or other political subdivision by ordinance may adopt a rate of employer contributions that is greater than the rate required by this subsection.
(c)  Contributions by a municipality or other political subdivision determined under Subsection (b) or (d) of this section are payable each payroll period to the retirement system.
(d)  Contributions required under Subsections (a) and (b) of this section are computed on the average compensation of all employees of the department for the preceding year, if this method of computation is adopted by majority vote of the employees of the department who are members, at an election by secret ballot at which at least 50 percent of the participating members vote, and is also adopted by ordinance of the governing body of the municipality or other political subdivision.  The average compensation of department employees shall be computed for each 12-month period as determined by the board of trustees.
(e)  Each person who is a member of a retirement system as a current fire department volunteer shall contribute to the system an annual amount determined by majority vote by secret ballot of the volunteers of the department who are participating members of the retirement system.  A municipality may at any time make the member contributions required under this subsection on behalf of its volunteers and any other contributions the municipality chooses to make to the retirement system.
(f)  Payment of member contributions required under this Act are conditions of employment and participation in the retirement system to which the contributions are due.
(g)  Except as otherwise provided under Section 7 of this Act, a member of a retirement system may withdraw all of the member's accumulated contributions to the system if the member terminates service for the fire department included within the coverage of the system for a reason other than service or disability retirement.  The estate of a deceased member may withdraw all of the deceased member's accumulated contributions if a survivor or alternative monthly benefit is not payable as a result of the death.  A withdrawal of contributions cancels a person's membership and credit in the retirement system.
Sec. 30.  PICK UP OF EMPLOYEE CONTRIBUTIONS.  (a)  A municipality or other political subdivision may pick up the employee contributions required by Subsection (a) of Section 29 of this Act for all compensation that is earned by participating members of the retirement system on or after the effective date of the pick up.  Employee contributions picked up as provided by this section are in lieu of deductions of employee contributions from paychecks or warrants and shall be paid by the municipality or other political subdivision to the retirement system from the same source of funds that is used in paying compensation to the members.  A pick up of employee contributions shall be accompanied by a reduction in the compensation of members, an offset against a future increase in member compensation, or a combination of compensation reduction and offset against a compensation increase.  Unless otherwise determined by the governing body of the municipality or other political subdivision and approved by majority vote of the participating members at an election by secret ballot, a pick up of contributions results in a corresponding reduction in compensation.
(b)  Contributions picked up as provided by this section shall be treated as employer contributions in determining tax treatment of the amounts under the Internal Revenue Code of 1986.  Employee contributions picked up as provided by this section shall be deposited to the credit of the individual account of each affected member and shall be treated for all other purposes of this Act as if the contributions had been deducted from the compensation of members.  Picked up contributions are not includable in a computation of contribution rates of the municipality or other political subdivision.
(c)  A pick up of employee contributions takes effect in a municipality or other political subdivision on January 1 of the year following the year in which:
(1)  the governing body of the municipality or other political subdivision by ordinance has adopted the pick up; and
(2)  the pick up has been approved by majority vote of the participating members of the retirement system at an election by secret ballot at which at least 50 percent of the participating members vote.
(d)  A pick up of employee contributions is terminated in a municipality or other political subdivision on January 1 of the year following the year in which:
(1)  the termination has been approved by a two-thirds vote of the participating members of the retirement system at an election by secret ballot at which at least 50 percent of the participating members vote; and
(2)  the governing body of the municipality or other political subdivision has repealed the ordinance that adopted the pick up of employee contributions.
Sec. 31.  TERMINATION OF PARTICIPATION IN ACT.  (a)  A retirement system for a fire department not consisting exclusively of volunteers may not be terminated or merged into another retirement system without the approval of the board of trustees of the retirement system and the approval of the participating members of the system in the manner described by Subdivision (2) of Subsection (b) of Section 7 of this Act provided 51 percent of the volunteers first petition the board for such change.
(b)  The board of trustees of a retirement system for a fire department consisting partly of employees and partly of volunteers may transfer assets actuarially attributable to the volunteers from the retirement system under this Act to the statewide program provided by the Texas Statewide Volunteer Fire Fighters Retirement Act (Article 6243e.3, Vernon's Texas Civil Statutes), if the board obtains approval as provided by Section 7 of this Act provided 51 percent of the volunteers first petition the board for such change.
(c)  Repealed by Acts 2013, 83rd Leg., R.S., Ch. 1316, Sec. 4.01(7), eff. June 14, 2013.
 
For contingent expiration of this section, see Subsection (g).

 
Sec. 31A.  AUTHORITY OF CERTAIN RETIREMENT SYSTEMS TO EXCLUDE CERTAIN PERSONS FROM COVERAGE.  (a)  In this section, "closure effective date" means the first day of the second month after the month in which the Texas Municipal Retirement System receives retirement system plan documents under Subsection (f)(2) of this section.
(b)  This section applies only to a municipality:
(1)  with a population of less than 200,000;
(2)  that is located in a county with a population of not less than 2.5 million and not more than 4 million;
(3)  that has a regularly organized fire department for which a retirement system and fund have been established under Section 4 of this Act; and
(4)  that before January 1, 2017, has one or more departments participating in the Texas Municipal Retirement System.
(c)  Subject to the requirements of this section, the governing body of a municipality subject to this section may adopt one or more ordinances to exclude from participation in the retirement system employees of the fire department first hired on or after the closure effective date.
(d)  If the governing body of a municipality adopts an ordinance under Subsection (c) of this section, the governing body shall concurrently adopt an ordinance to allow the employees described by the ordinance to participate in the Texas Municipal Retirement System.
(e)  Not later than the 60th day after the date an ordinance is adopted under Subsection (c) of this section, the municipality shall submit the ordinance to an election of the participating members of the retirement system established in the municipality. To be approved at the election, a majority of the participating members must vote in favor of the ordinance.
(f)  If the voting members approve an ordinance under Subsection (e) of this section, as soon as practicable after the date of the election:
(1)  the board of trustees of the retirement system shall amend the retirement system plan documents as necessary to be consistent with the approved ordinance; and
(2)  the municipality shall give written notice of the results of the election to the Texas Municipal Retirement System and include copies of the relevant ordinances and any amended retirement system plan documents.
(g)  If a municipality adopts ordinances under Subsections (c) and (d) of this section, all subsequent actions authorized or required by this section must be completed before October 1, 2018.  If all subsequent actions are not completed before October 1, 2018:
(1)  as soon as practicable after that date, the Texas Municipal Retirement System shall publish notice to that effect in the Texas Register; and
(2)  Section 851.0011, Government Code, this section, and the ordinances adopted under Subsections (c) and (d) of this section expire on October 1, 2018.
Sec. 32.  CONFIDENTIALITY OF INFORMATION ABOUT MEMBERS, RETIREES, ANNUITANTS, OR BENEFICIARIES.  (a)  Information contained in records that are in the custody of a retirement system established under this Act concerning an individual member, retiree, annuitant, or beneficiary is confidential under Section 3(a)(1), Chapter 424, Acts of the 63rd Legislature, Regular Session, 1973 (Article 6252-17a, Vernon's Texas Civil Statutes), and may not be disclosed in a form identifiable with a specific individual unless:
(1)  the information is disclosed to:
(A)  the individual;
(B)  the individual's attorney, guardian, executor, administrator, conservator, or other person who the board of trustees of the retirement system determines is acting in the interest of the individual or the individual's estate;
(C)  a spouse or former spouse of the individual if the board of trustees determines that the information is relevant to the spouse's or former spouse's interest in member accounts, benefits, or other amounts payable by the retirement system; or
(D)  a person authorized by the individual in writing to receive the information; or
(2)  the information is disclosed under an authorization of the board of trustees that specifies the reason for the disclosure.
(b)  This section does not prevent the disclosure of the status or identity of an individual as a member, former member, retiree, deceased member or retiree, or beneficiary of the retirement system.
(c)  A determination and disclosure under Subsection (a) of this section may be made without notice to the individual member, retiree, annuitant, or beneficiary.