HB3594

HB3594 updates the retiree health-care trust for San Antonio firefighters and police officers, rather than creating a statewide retirement benefit. Effective October 1, 2025, it changes contribution and service-credit rules, gives the board additional family-coverage choices, and clarifies administration and protection of fund assets. The underlying act applies to paid fire and police departments in a municipality with at least 1.4 million but fewer than 1.7 million people. Final law; underlying statute immediately before the change.

Contributions after retirement: The law measures service in full months instead of full years. Subject to the existing applicability rules, retirees with fewer than 360 months of service, or their surviving spouses, generally continue contributing until the earlier of Medicare eligibility or the remaining period needed to reach 360 months. Disability retirees retain a limit of 120 months of post-retirement contributions. Monthly payments start in the month after retirement and are due by month’s end. Late payments accrue interest at the fund’s actuarial assumed investment-return rate; the board may discontinue benefits for failure to pay on time. The law removes the former statutory direction to deduct these payments from pension checks, but does not prescribe a particular replacement payment method.

For members retiring on or after October 1, 2025, there is a lump-sum alternative. It uses the monthly contribution rate at retirement and the statutory remaining-month formula, comparing months until age 65 with months needed to reach 360 service months, or the special 120-month figure where the disability provision applies. This is not necessarily the same calculation as monthly payments ending at Medicare eligibility. The election must be written, made before payment and is irrevocable; full payment is due within 30 days after retirement and is nonrefundable. The act does not quote a universal dollar price or promise that this choice saves money.

Leave credit: Unpurchased uniformed-service and other unpaid-leave periods, as well as full months of unpaid leave imposed by the municipality, are excluded from the new service-month count. Military-service credit can be purchased within three times the service period, capped at five years after returning to active departmental status; the old separate 90-day notice-of-intent requirement is removed. For unpaid Family and Medical Leave Act leave, a member can purchase the entire leave period by paying within 30 days after returning. If the member does so, the city must pay its corresponding contribution within 60 days after the return. Missed member-payment deadlines mean no credit for that leave.

Family coverage and waivers: When two formally married spouses are both fund members, the first to retire may elect a conditional waiver within 30 days of retirement. Contributions stop after the fund accepts the election. If the marriage is dissolved, the retiree has 30 days to elect reinstatement, with required contributions resuming under the stated schedule. Separately, anyone entitled to benefits may execute an unconditional waiver that permanently ends entitlement. Those are different choices. The board may charge premiums for dependent children and may allow a surviving spouse to retain coverage after remarriage even if that change increases the fund’s unfunded liability. The latter authority applies to remarriages on or after October 1, 2025; it is permission for the board, not automatic coverage created by this bill.

Plan and fund administration: The statutory plan reference becomes the plan in effect October 1, 2025, instead of the old collective-bargaining and master-contract references. The law says benefits must be specifically provided by the act, and retiree health benefits are not divisible marital property. It clarifies that the two existing statutory mechanisms for deductible and out-of-pocket increases operate in addition to each other; it does not set a new universal deductible here. Fund assets receive additional protection from execution, forced sale and judgment liens. The board may authorize members or fund officers to execute professional-service contracts, while retaining exclusive authorization power, and may create an eligible real-estate holding organization before acquiring property. Municipal board representatives’ terms end when they leave city office; other board, payment and ethics provisions are clarified. Final law, Sections 1–16.