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TX HB3987
Bill
Status
3/6/2025
Primary Sponsor
Yvonne Davis
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AI Summary
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Allows police and firefighter pension system participants receiving annuities from DROP (Deferred Retirement Option Plan) accounts to request either partial or full lump-sum distributions in cases of unforeseeable financial hardship
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Prohibits the pension board from denying requests for lump-sum or partial lump-sum distributions made under financial hardship provisions
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Requires the pension board to adopt rules defining what constitutes a financial hardship and to provide flexibility to persons requesting distributions
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Permits assignment of DROP account distributions to third parties, contingent on receiving a favorable IRS private letter ruling that such assignment won't affect the pension system's qualified plan status
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Effective date is September 1, 2025
Legislative Description
Relating to certain distributions from deferred retirement option plans established under public retirement systems for police and firefighters in certain municipalities.
Retirement Systems
Last Action
Referred to Pensions, Investments & Financial Services
3/27/2025