Houston Municipal Employees Pension System
1201 Louisiana, Ste. 900
Houston, TX 77002
713.595.0100
www.hmeps.org
Benefits Handbook (as of July 2017)
1201 Louisiana, Ste. 900
Houston, TX 77002
713.595.0100 | www.hmeps.org
i
Benets Handbook
DISCLAIMER
As much as possible, the Houston Municipal Employees Pension System (HMEPS) has written
this booklet in nontechnical terms, avoiding formal language of the pension laws and rules. This
booklet attempts to explain the major components of HMEPS benets, and is not intended as a legal
interpretation of the applicable laws. It is an overview and should not be construed as containing all
the provisions and limitations that might apply in every situation. It does not replace the provisions of
state statute, Article 6243h, Tex. Rev. Civ. Stats. Ann. (Statute), as may be amended or modied (Meet
and Confer Agreement), which governs the operation of HMEPS. If questions of interpretation
arise as a result of the attempt to make the pension provisions easier to understand, the Statute and
the rules promulgated by the HMEPS Board of Trustees are the nal authority.
The information provided in this booklet is based on the HMEPS laws and rules in existence on
July 1, 2017 and is subject to change or modication based on changes in the law. This handbook,
current publications, forms, updates and other pertinent information can also be accessed online at
www.hmeps.org.
Representatives and employees from the City of Houston are not agents of HMEPS. HMEPS is not
responsible for erroneous information provided by City representatives or employees.
Contents
DISCLAIMER.......................................................................................... i
INTRODUCTION...................................................................................1
MEMBERSHIP .......................................................................................2
Groups of Membership ...................................................................................................... 2
Group A .............................................................................................................................2
Group B .............................................................................................................................3
Group D.............................................................................................................................3
CONTRIBUTIONS .................................................................................4
Member Contributions ........................................................................................................ 4
Service Purchase Contributions ......................................................................................... 4
Employer Contributions ..................................................................................................... 5
Refund of Contributions..................................................................................................... 5
CREDITED SERVICE ...............................................................................6
Service .................................................................................................................................... 6
Credited Service.................................................................................................................... 6
Change in Group Participation .......................................................................................... 7
SERVICE PURCHASE..............................................................................8
Uniformed Military Service under USERRA................................................................... 9
ELIGIBILITY FOR RETIREMENT ...............................................................13
Group A and Group B ......................................................................................................13
Group D ..............................................................................................................................13
Terminating Employment Before Retirement ...............................................................13
Before you have 5 years of credited service................................................................... 13
After you have 5 years of credited service ..................................................................... 14
YOUR RETIREMENT BENEFIT ................................................................16
Retirement Benet Formula .............................................................................................16
Deferred Retirement ..........................................................................................................19
Early Retirement (Group D only).................................................................................... 20
Annuity Options.................................................................................................................21
Group D Trustee-to-Trustee Transfer to Purchase An Enhanced Benet............... 23
Cash Balance Hybrid Component ...................................................................................23
Termination .........................................................................................................................25
Effective Retirement Date.................................................................................................25
Lump Sum Payment of Benets......................................................................................25
Application for Benets .................................................................................................... 25
Proof of Age ......................................................................................................................26
DEFERRED RETIREMENT OPTION PLAN (DROP) (Group A & Group B Only)27
Eligibility ..............................................................................................................................27
Group Change and Service Purchase Obligations........................................................ 28
The DROP Application Process .....................................................................................28
DROP Operation and Reporting.....................................................................................29
DROP Credits.....................................................................................................................30
Surviving Spouse/Designated Beneciary DROP Election........................................ 30
DROP Termination............................................................................................................31
DROP Account Balance Distribution............................................................................. 32
Revocation of an Election to Participate in DROP...................................................... 32
Retirement Pension of a DROP Participant:................................................................. 32
DROP Participation after Re-employment.....................................................................33
Authorized Changes to the DROP..................................................................................33
LIMITATION OF BENEFITS ....................................................................34
DISABILITY RETIREMENT ...................................................................... 35
Ordinary Disability Benets ............................................................................................. 35
Service Disability Benets.................................................................................................35
Limitations on Disability Pensions ..................................................................................36
SURVIVOR BENEFIT............................................................................. 37
Calculation of Survivor Benet .......................................................................................38
Dependent Child(ren) only: .............................................................................................. 39
AFTER SEPARATION OR RETIREMENT ...................................................41
Cost-of-Living Increase .....................................................................................................41
Re-employment...................................................................................................................41
Employment by Another Employer:...............................................................................41
Employment by the City of Houston or HMEPS:....................................................... 41
Suspension of Pension upon Reemployment................................................................42
Calculation of Benet upon Subsequent Retirement ................................................... 42
CLAIMS PROCEDURES ........................................................................43
BOARD ACTIONS............................................................................... 45
TAX INFORMATION............................................................................46
REDUCTION OF BENEFITS/INCREASED CONTRIBUTION REQUIREMENTS47
CONFIDENTIALITY..............................................................................48
POWERS OF ATTORNEY .....................................................................48
COMPUTATION OF TIME .................................................................... 49
PROPORTIONATE RETIREMENT ............................................................ 49
OTHER IMPORTANT INFORMATION.....................................................50
GLOSSARY OF TERMS......................................................................... 52
Benets Handbook
INTRODUCTION
The Houston Municipal Employees Pension System (“HMEPS”) is a dened benet pension plan
that was created and is governed by the Statute. HMEPS is administered by the Board of Trustees
(“Board”) of HMEPS.
This Guide is a basic handbook about HMEPS and is intended to be a general reference for HMEPS
participants. It is supplemented by newsletters and other correspondence provided by HMEPS from
time to time.
Should you have specic questions or need additional information, you should write or call HMEPS.
When you write to HMEPS, include your full name, printed and signed, your Social Security number,
and your return address and daytime phone number. Address your correspondence to:
Houston Municipal Employees Pension System
1201 Louisiana, Suite 900
Houston, TX 77002
You can call HMEPS at (713) 595-0100 (or out of area at (800) 858-1450). You may also visit the
HMEPS ofce during regular business hours, Monday through Friday, 8:00 a.m. to 5:00 p.m. If you
wish to visit the HMEPS ofce to discuss a matter in person, you should make an appointment in
advance so that your meeting can proceed in a timely and efcient manner. A map of HMEPS’s
location appears below.
HMEPS
Dallas St.
Louisiana St.
Milam St.
Lamar St.
Smith St.
Polk St.
Travis St.
Clay St.
Houston Municipal Employees Pension System
MEMBERSHIP
You are a member
1
of HMEPS as a condition of employment if you
are an employee, which is (i) an eligible person who holds a municipal
position with the City of Houston (“City”), whose name appears on a
regular full-time payroll of the City and who is paid a regular salary (base
pay, longevity and shift differential, if any) for his or her services; (ii) any
elected City ofcial who becomes a member of HMEPS as permitted by the
Statute, provided that such an ofcial shall be considered an employee only during
his or her period of service as an elected City ofcial; or (iii) an eligible person who is employed
by the Board, on a full-time basis, to assist in administering HMEPS, and whose name appears on
a regular full-time payroll of HMEPS and who is paid a regular salary for his or her services. An
employee includes a person who is employed by any entity controlled directly or indirectly by the City
and who is not otherwise ineligible as determined by the Board’s External Affairs Committee.
You are not eligible for membership in HMEPS if you are:
(i) a person on a quasi-legislative, quasi-judicial or advisory board or commission;
(ii) a part-time employee, other than an elected City ofcial whose service is made part-time by
law or charter;
(iii) a seasonal employee;
(iv) a bona de independent contractor, including a consultant;
(v) an employee in a position covered by any other pension plan of the City to which the City
contributes, or an employee who is excluded from membership in another pension plan by
action of the board of trustees of that pension plan, except to the extent that you are covered
in another pension plan only as a beneciary; or
(vi) an employee who was in an HMEPS-covered position at the time such person elected (in-
cluding by default) to participate in the Phase Down Program or the Deferred Cash-Out
Option/Rollover Election, as authorized by “The 2004 Amendments to 2001 Meet & Confer
Agreement” between the Houston Police Ofcers’ Union and the City of Houston, Texas, or
a successor Meet & Confer Agreement between the Houston Police Ofcers’ Union and the
City of Houston, Texas with similar provisions as determined by HMEPS.
Groups of Membership
There are currently three (3) groups of membership in HMEPS: Group A, Group B and Group D.
2
Group A
Group A is a contributory group, in which members make periodic contributions to HMEPS.
1 Underlined terms are dened in the Glossary beginning on page 52.
2 HMEPS previously had a Group C for certain employees. Beginning January 1, 2005, Group C participation ceased.
Contact HMEPS if you are a former Group C member with questions about the provisions applicable to Group C
members prior to January 1, 2005.
(base
pay, longevity and shift differential, if any) for his or her services; (ii) any
elected City ofcial who becomes a member of HMEPS as permitted by the
(base
Benets Handbook
You are a member of Group A if you:
(i) became a member or resumed membership in HMEPS on or after September 1, 1999 and
before January 1, 2008;
(ii) were a member of HMEPS prior to September 1, 1981 and did not elect by December 1, 1981
to receive a refund of contributions and become a Group B member;
(iii) were a Group A member who terminated employment before May 3, 1991 with the minimum
service requirements for retirement, elected to leave your contributions in HMEPS, were re-
hired as an employee before September 1, 1999, and elected to continue as a Group A member;
(iv) became a member, or resumed membership, as an employee or elected ofcial after January 1,
1996 and before September 1, 1999, and elected to become a Group A member;
(v) were a Group B member and elected to become a Group A member;
(vi) were a Group C member and became a Group A member on January 1, 2005 pursuant to the
First Amendment to Meet and Confer Agreement; or
(vii) resumed membership in HMEPS on or after January 1, 2008 and you were a Group A or
Group C member at the time of your immediately preceding separation from service.
Group B
Group B is a contributory group, in which members make contributions to HMEPS.
3
You are a member of Group B if you:
(i) became a member or resumed membership in HMEPS on or after September 1, 1981 and
before September 1, 1999, and did not elect to become a Group A member;
(ii) were a Group A member and elected to receive a refund of contributions and become a
Group B member; or
(iii) resumed membership in HMEPS on or after January 1, 2008 and you were a Group B mem-
ber at the time of your immediately preceding separation from service.
Group D
Group D is a contributory group, in which members make contributions to HMEPS and also
participate in the cash balance hybrid component as described beginning on page 23.
4
Prior to July
1, 2017, Group D was non-contributory.
You are a member of Group D if you:
(i) became a member in HMEPS on or after January 1, 2008 and you were never previously a
HMEPS member; or
(ii) resumed membership in HMEPS on or after January 1, 2008, and you were a Group D mem-
ber at the time of your immediately preceding separation from service.
3 Prior to July 1, 2017, Group B was non-contributory.
4 The cash balance hybrid component rst became effective as of the rst full pay period in January 2018.
Houston Municipal Employees Pension System
CONTRIBUTIONS
Member Contributions
If you are a member of Group A, Group B or Group D, you are required to
make periodic contributions to HMEPS while an employee in an amount
expressed as a percentage of salary, and such other contributions as may be
required following an authoried absence.
The member contribution rate beginning with the rst full pay period on or after July 1, 2017 is:
For a Group A member: 7% of salary, increasing to a total of 8% of salary beginning with
the rst full pay period on or after July 1, 2018;
For a Group B member: 2% of salary, increasing to a total of 4% of salary beginning with
the rst full pay period on or after July 1, 2018;
For a Group D member: 2% of salary.
5
The City or HMEPS, as applicable, “picks up” your contributions and pays them from the same
source of funds that is used in paying your salary. The City or HMEPS picks up your contributions
by a deduction from your salary equal to the amount of the contribution. You do not have the option
of receiving the contributed amounts directly instead of having them paid by the City or HMEPS.
Service Purchase Contributions
If you elect to make service purchase contributions to purchase credited service (as described
beginning on page 8), you must elect to make those contributions by one of the following methods:
(i) by payment of a single lump sum contribution (the “lump sum method”); (ii) through payroll
deductions over a term of ve years or less (the “payroll deduction method”); or (iii) by a transfer
or rollover of eligible funds, with the remaining amount owed, if any, paid by either the lump sum
method or the payroll deduction method.
If you choose the lump sum method, you must pay your entire contribution amount, including any
required interest, to HMEPS on or before the 60th calendar day following the day you execute your
election form (service purchase obligation) to make the service purchase contributions. If you choose
to make these contributions through the payroll deduction method, the payments must be completed
on or before the earliest of the following dates: the date of your separation from service with the City
or HMEPS; the date of your retirement from the City or HMEPS; the date of your death; or the fth
anniversary of the date of your service purchase obligation.
If you have entered into a service purchase obligation and you, or, in the event of your death, your
spouse or your estate, fails to complete such contributions within the required time period, then: 1)
you or your spouse (or estate in the event there is no spouse) are eligible upon written request to
receive a refund of the service purchase contributions you paid to HMEPS pursuant to the terms
of such obligation, without interest, 2) the service covered by the service purchase obligation will be
canceled, and 3) you will be deemed to never have elected to make the service purchase contributions
5 Beginning with the rst full pay period on or after the later of January 1, 2018 or rst date of employment, each
Group D member contributes an additional 1% of salary, which is credited to a notional cash balance account in the
Group D member’s name. See page 23 for more information.
If you are a member of Group A, Group B or Group D, you are required to
make periodic contributions to HMEPS while an employee in an amount
If you are a member of Group A, Group B or Group D, you are required to
5
Benets Handbook
Employer Contributions
As contributions to fund benets under the pension plan, the City makes periodic payments to
HMEPS in an amount equal to a “city contribution rate” multiplied by the combined salaries paid to
all members, plus a “city contribution amount.” The city contribution rate is based on the results of
annual risk sharing valuation studies.
Refund of Contributions
If your employment with the City or HMEPS is terminated for reasons other than a service disability
before you have completed ve years of credited service with the City or HMEPS, you are not eligible
to receive a pension, and HMEPS will refund you, upon your written request, the amount paid by
you to HMEPS through salary reduction, payroll deduction, or other authorized method of payment,
without interest (“refund amount”),
6
in full satisfaction of your rights under HMEPS. In order to be
eligible to receive a refund, you cannot be employed in any full time capacity by the City or HMEPS.
If you are a member with at least ve years of credited service and die (other than a service-related
death for which there is no minimum credited service requirement) without leaving any eligible
survivor to receive a survivor’s benet, then your spouse, or if there is no spouse, your estate, will
receive the refund amount upon written request, in full satisfaction of your rights under HMEPS.
If you are a retiree and you die without leaving any eligible survivor to receive a survivor’s benet,
then your spouse, or if there is no spouse, your estate, is eligible to receive a lump-sum payment,
without interest, of the excess, if any, of your accumulated member contributions to the date of your
retirement (other than contributions attributable to the period of your DROP participation, if any)
over the aggregate monthly retirement benet payments received by you as a retiree. Such payment
will be made within a reasonable time after the Board has determined that the individual or estate
claiming the payment is eligible to receive the payment.
For example, suppose a retiree had previously paid contributions to HMEPS during employment in
the amount of $53,000. The retiree receives a monthly pension benet of $2,600 (for purposes of
this example we assume there are no COLAs). During the rst 12 months of retirement, the retiree
will receive a total of $31,200 ($2,600 x 12) in retirement benet payments. Therefore, if the retiree
dies one year after retirement, there would be a remaining amount of $21,800 ($53,000 - $31,200) that
can be paid to the eligible individual or estate. However, if the retiree in this example died twenty-
one months or more after retirement, there would be no remaining excess amount payable to any
individual or estate because the benets would have exceeded $53,000.
6 There is a different refund process for contributions to the cash balance hybrid component. See pages 23-24 for more
information.
Houston Municipal Employees Pension System
CREDITED SERVICE
Service
You begin earning service when you rst begin performing work and
services as a member in an eligible position for the City or HMEPS. Your
period of service terminates on the earliest of your:
(i) retirement;
(ii) death;
(iii) resignation;
(iv) discharge; or
(v) other cessation of actual performance of services for the City or for HMEPS, other than an
authorized absence.
In addition, if you participate in the Deferred Retirement Option Plan (DROP) (pages 27-33), you
will cease accruing service the day before your DROP entry date.
NOTE: Your service in HMEPS is determined under different laws than your City service (the
amount of time you have worked for the City), and therefore your HMEPS service might differ
from your City service. For example, the City might recognize unpaid time for non-pension related
purposes, such as determining longevity pay or leave benets, whereas your HMEPS service and
credited service will not include any time that you were on leave of absence without pay or suspended
from duty without pay. Also, HMEPS service and credited service do not include any time that you
do not meet the denition of an employee under the Statute, are a participant in DROP, are ineligible
under the Statute, are separated from service, or for which your service was forfeited and has not
been reinstated pursuant to the Statute (certain military time covered by USERRA may be eligible as
service. See page 9 for further information).
Credited Service
You will earn a day of credited service for each day of service and prior service for which:
(i) all required member contributions and employer contributions have been made to HMEPS
that were not subsequently refunded or withdrawn;
(ii) you purchased service credit or converted service credit from Group B to Group A (or Group
C)
7
by paying to HMEPS the required amounts and such amounts were not subsequently
refunded or withdrawn;
(iii) you reinstated eligible canceled Group B or Group D service through your reemployment
with the City or HMEPS within one year of your separation from service or pursuant to the
service reinstatement provisions of the Statute explained further on page 14; and/or
(iv) you previously made payments to HMEPS that, under then existing provisions of law, made
you eligible for credit for such service, and such amounts were not subsequently refunded or
withdrawn.
7 Participation in Group C ceased January 1, 2005. For information on former Group C participation, please contact
the HMEPS ofce.
when you rst begin performing work and
services as a member in an eligible position for the City or HMEPS. Your
Benets Handbook
You may also receive credited service for each day you have been voluntarily or involuntarily furloughed
by the City, provided that
(i) HMEPS receives all required City contributions and member contributions for the credited
service attributable to the furlough time for the pay period in which the furlough occurs, based
on the regular salary you would have received if you had worked the furlough time,
(ii) you may receive no more than 10 days of credited service in a scal year (July 1 – June 30) for
furlough time, and
(iii) credited service for furlough time cannot be used to meet the ve-year requirement for retire-
ment benet eligibility if you otherwise would not meet the ve-year requirement without the
furlough time.
Duplication of service or credited service in Group A, B, C or D or in HMEPS and any other dened
benet pension plan to which the City contributes is prohibited.
Change in Group Participation
A Group B member may elect, at a time and in a manner determined by the Board, to change
participation from Group B to Group A for future service only.
Contact HMEPS for information on changing your group participation. NOTE: On or before
December 31, 2005, a member could elect to convert previous Group B service to Group A, as
authorized by the Statute and the rules promulgated by the Board. After December 31, 005, a
member may not elect to convert previous Group B service to Group A.
Houston Municipal Employees Pension System
SERVICE PURCHASE
In addition to the credited service you earn for current work, as a member
you may purchase credited service for certain other types of service
or work in order to increase your pension benet and/or accelerate
your eligibility for retirement. ou will be reuired to pay additional
amounts, plus interest,
for the additional credited service. The interest
rate on any service purchase shall be the then current assumed rate of return, not
compounded. ou cannot purchase credited service after you have terminated employment.
The cost for additional credited service depends on the type of service you claim. You must complete
all forms and timely provide all information requested by HMEPS in order to purchase service.
Please contact HMEPS if you need additional information on claiming credit for any of the following
types of service.
(i) Service that was orfeited to Receive a Refund of Contributions or Service for hich
Contributions ere ot Made. If you have previous service for which credit is otherwise
allowable except that you either withdrew your contributions or paid no required contribu-
tions (does not include Group D cash balance contributions), you may be eligible to purchase
the service. To establish service for which you received a refund or for which you paid no con-
tributions, you must pay a sum computed by multiplying your salary during the service by the
member contribution rate that was in effect during the period of service, plus interest, from
the date the contributions would have been deducted, if made, or from the date contributions
were refunded, to the date of repayment of those contributions to HMEPS.
(ii) Group B members with refunded pre11 Group A service. If you are a Group B mem-
ber who was a Group A member before September 1, 1981, and you were eligible to purchase
credit for previous service, you may purchase the credited service in Group B by paying to
HMEPS an amount equal to the then-current assumed rate of return per year, not compound-
ed, on any contributions previously withdrawn for the period from the date of the withdrawal
to the date of purchase.
(iii) Service for which Credit was orfeited to Receive an Early ump Sum Distribution. If
you received an early lump sum distribution of the actuarial present value of a benet, and you
subsequently were reemployed by the City or HMEPS and have at least two years of continu-
ous credited service after reemployment, you are eligible to reinstate the service for which you
received the lump sum payment by paying to HMEPS the amount of the lump sum payment,
plus interest, from the date you received the lump sum payment until the date repayment is
made to HMEPS.
(iv) Military Service under USERRA. If you are a member who left covered employment to
join the military and you timely returned to covered employment after honorable discharge,
you may be entitled to coverage for military service under USERRA. You must make all
required contributions for the period covered by the military service in order to obtain cred-
ited service for the military service. The payment of the required contributions must be fully
completed within ve (5) years after your return to covered employment. HMEPS will need
8 Interest is not required for certain USERRA-qualifying military service purchases.
ou will be reuired to pay additional
The interest
rate on any service purchase shall be the then current assumed rate of return, not
Benets Handbook
a copy of your certicate of service (Form DD-214) showing your dates of entry into and
discharge from active duty. Contact HMEPS for additional information on what constitutes
USERRA-eligible service and how to obtain credited service for such service.
(v) Permissive Military Service. If you are a member, you may claim as service in Group A,
Group B or Group D (depending on the group in which you participate at the time the claim
is made) up to sixty (60) months of honorable m
ilitary service that is not otherwise eligible as
service under USERRA upon satisfying the following requirements:
a. you must have completed a minimum of ve (5) years of credited service;
b. the military service can be claimed as service only in Group A if you are in Group A at
the time the claim for service is made, in Group B if you are in Group B at the time the
claim for service is made; or in Group D if you are in Group D at the time the claim for
service is made.
c. you obtain, at your cost (if any), a report approved by the Board of the actuarially deter-
mined cost of the benet derived from the service you are claiming; and
d. you pay the actuarially determined cost of the benet derived from the service as approved
by the Board, plus all administrative costs, if any, associated with crediting the service, plus
interest at the rate of 6% per year, not compounded, from the due date of the amounts
until paymen
t is made in full to HMEPS.
HMEPS will need a copy of your certicate of service (Form DD-214) showing your dates of entry
into and discharge from active duty. Contact HMEPS for additional information on what constitutes
permissive military service and purchasing permissive military service.
Uniformed Military Service under USERRA
Many HMEPS members also serve in the National Guard or Reserve Forces of the United States,
and have been or may be called to active duty. This section provides an overview of the Uniformed
Services Employment and Reemployment Rights Act (USERRA) as it relates to pension benets for
HMEPS members who are called to active military duty. However, your specic situation may not
be addressed or may involve circumstances requiring a different response. All benet decisions are
subject to applicable laws and regulations. If you have further questions regarding military service,
contact the HMEPS ofce.
If you are called to active military duty:
Military service that is covered under USERRA
USERRA provides certain reemployment rights to persons who have been absent from a position
of employment because of “service in the uniformed services” (covered military service). “Service
in the uniformed services” means the performance of duty on a voluntary or involuntary basis in a
uniformed service, including:
Active duty
Active duty for training
Initial active duty for training
Inactive duty training
Full-time National Guard duty
Houston Municipal Employees Pension System
Absence from work for an examination to determine a person’s tness for any of the
above types of duty
Funeral honors duty performed by National Guard or reserve members
Duty performed by intermittent employees of the National Disaster Medical System
(NDMS),whichis partof theDepartment of Homeland Security – Emergency Preparedness
and Response Directorate (FEMA), when activated for a public health emergency, and
approved training to prepare for such service (added by Pub. L. 107-188, June 2002)
The “uniformed services” consist of:
U.S. Army, Air Force, Navy, Marine Corps, or Coast Guard, including the reserve units
Army National Guard and Air National Guard
The commissioned corps of the Public Health Service
Any other category of persons designated by the President in time of war or national
emergency
ength of time you can stay in the military and still receive service from HMEPS under
USERRA
Generally, your creditable military service in HMEPS is limited to a maximum of five
years.
If you become disabled while in covered military service
If you were on leave during your military service and you cannot return to work because
of your disability, your pension benets will be handled as if you separated from service
on your last day of credited service.
If you separated from service to enter active military duty, you are not eligible for disability
benets.
If you rejoin employment with the City and a disability develops from something that
happened while you were in the military, you will be eligible for the same benets that
would be payable to any other employee who became disabled from an off-duty cause.
If you are illed while in covered military service
Your covered survivor(s) will be eligible to receive a non-service-related survivor benefit
provided you had at least five (5) years of credited service and you were in Group A or B.
Survivor benefit(s) will be based on the HMEPS pension provisions in effect on your last day
of credited service. If you were in Group D with at least five years of credited service but
have not commenced retirement, you will be deemed to have made an election for a 50% joint
and survivor annuity and designated your Surviving Spouse (if any) as the optional annuitant.
If you have no surviving spouse, no survivor benefit or optional annuity is available.
How you obtain service credit for the time you served in the military
Immediately upon return to employment, you should apply in writing to HMEPS for a
calculation of the amount, if any, required to establish service credit for your covered military
service.
To obtain service credit for the period of covered military service, you must pay all required
contributions (other than Group D cash balance contributions) on your presumed salary
Benets Handbook
during that period (the salary you would have received if you had remained working in your
City position), less any contributions (other than Group D cash balance contributions) that
may have been paid during that period.
If you are a Group B or Group D member, you can obtain service credit for the period
of covered military service for which no contributions were required; however, you must
immediately notify HMEPS of your return so that the time can be prop
erly credited.
Your release from active duty status must have been under honorable conditions.
You must return to City employment within the following time limits:
Employees who served less than 31 days must report back to work at the beginning of
the next scheduled workday following their release from service and the expiration of 8
hours after a time for safe transportation back to the employee’s residence.
Employees who served m
ore than 30 days, but less than 181 days, must apply for re-
employment within 14 days of release by the military.
Employees who served more than 180 days have 90 days to apply for reemployment.
If you are required to pay contributions, you can purchase the service, without interest, by
making payment to HMEPS in a lump sum or equal installments through salary deduction,
but only if you do so within (a) ve years of the date of your return from covered military
service or (b) three times the length of your covered military service, whichever is shorter.
Payments may not be made after you retire, or, if you are not retiring, more than 60
calendar days after the date of your separation from service or death.
Status of your DROP account during military service if you are a DROP member when you
oin the military
If you are a DROP member and you timely return to City employment from covered
military service and pay the required c
ontributions on your presumed salary during the
period of covered military service, you will receive the DROP credits that would have
been credited to your DROP account as if you had remained working in your City position.
Payments for military service credit must be made within (a) ve years of the date of your
return from covered military service or (b) three times the length of your covered military
service, whichever is shorter. However, payments may not be made after yo
u retire, or
more than 60 calendar days after the date of your separation from City service or death,
and no DROP distribution will be made until full payment is received by HMEPS. If
required contributions are not paid, you will not receive any DROP credits for the period
of covered military service for which required contributions were not made.
If you are a Group B DROP member and you timely return to City employment from
covered military service, you will r
eceive the DROP credits that would have been credited
to your DROP account if you had remained working in your City position during your
period of covered military service to the extent that no contributions were required during
that period.
Because credited service ceases to accrue upon entry into the DROP, you will not receive
credited service for the period of your covered military service.
Status of your service purchase obligation during military
service
If you were in a service purchase obligation prior to entering active military duty, your obligation
Houston Municipal Employees Pension System
will be frozen while you are on unpaid leave or receiving less than your regular salary from the
City. Upon your timely return to City employment from covered military service, you will be
required to reactivate your obligation and your deductions will restart. When the obligation is
activated, remaining payments will be the same as when the obligation was frozen.
If you do not timely return to a position covered by HMEPS
If you do not timely return to a HMEPS-covered position, your benefits will be the same as if
you separated from service for any other reason on your last day of credited service, except as
expressly required otherwise under USERRA.
Benets Handbook
ELIGIBILITY FOR RETIREMENT
Eligibility for retirement means that you are eligible to receive
a retirement pension when you have attained the minimum
required age and years of credited service. After you complete
at least ve years of credited service, you are eligible to receive a
future benet when you leave covered employment and apply for your
pension benet.
Group A and Group B
If you are a Group A or Group B member, you are eligible to receive a normal retirement pension
beginning on your effective retirement date after you:
(i) Complete at least ve (5) years of credited service and attain 62 years of age; or
(ii) Complete at least ve (5) years of credited service and the combination of your years of age
and your years of credited service, including parts of years, is equal to or greater than the
number 75 and you are at least 50 years of age (“Rule of 75”).
If you are a former Group C member who became a Group A member as of January 1, 2005 (and
you are still a member), your eligibility requirements for a normal retirement pension are the same as
those for Group A. In addition, if you are a former member who terminated employment prior to
January 1, 2005 and you are eligible to receive a normal or deferred retirement pension as determined
by the Board, your retirement eligibility for your credited service earned prior to January 1, 2005 will
be governed by the retirement eligibility rules in effect at the time of such termination of employment.
If you are rehired on or after January 1, 2005, your retirement eligibility is governed by section (i) or
(ii) above, as applicable, for the period of credited service earned after January 1, 2005.
Group D
If you are a Group D member, you are eligible to receive a normal retirement pension beginning on
your effective retirement date after you complete at least ve (5) years of credited service and attain
62 years of age.
Terminating Employment Before Retirement
Whenever you separate from service before your retirement, you have some
decisions to make. Your available options will depend on whether you have at
least ve years of credited service upon separation from service.
Before you have 5 years of credited service
If you do not have 5 years of credited service at the time you separate from service, retirement is not
available to you.
9
9 In some circumstances, members and former members with credited service in the Houston Police Ofcers’ Pension
System (HPOPS) and/or the Houston Fireghters’ Relief and Retirement Fund (HFRRF) have been authorized to
combine their credited service in HPOPS and/or HFRRF with their HMEPS credited service solely for the purpose
of determining eligibility for a retirement pension. Call the HMEPS ofce for more information about proportionate
retirement.
at least ve years of credited service, you are eligible to receive a
future benet when you leave covered employment and apply for your
Houston Municipal Employees Pension System
Group A
If you are in Group A, the credited service you earned is forfeited at the time of separation, and you
will receive a refund, upon your written request, of your employee contributions, without interest.
If you later return to covered employment, you may repay the contributions refunded to you, plus
interest, and restore the credited service represented by the refund in accordance with the laws and
regulations then in effect.
Currently, a Group A member who received a r
efund of contributions and is reemployed by the City
or HMEPS, may reinstate the forfeited service by paying to HMEPS the amount of the refund plus
interest from the date of the refund to the date of payment. Notwithstanding the foregoing, if the
City involuntarily terminates your employment due to a reduction in workforce, as determined by
the Board, before you have ve years of credited service, you may make an irrevocable election to
leave your contributions with HMEPS u
ntil the rst anniversary of the date of termination. If you
are reemployed by the City during that one-year period, all of your rights and credited service will be
immediately restored. If reemployment does not occur within the one-year time period, HMEPS will
refund your employee contributions without interest upon your written request.
Group B or Group D
If you are a Group B or Group D member who has made required member contributions and you
separate from service before completing ve years of credited service, your service credit is canceled
at the time of separation and you are eligible to receive a refund, upon your written request, of
your employee contributions, without interest. If you are reemployed before the rst anniversary
of the date of separation, all credit for previous service for which no member contributions were
required is restored, along with credit for previous service for which you did not receive a re
fund of
contributions. If your service credit is canceled and you are reemployed after the rst anniversary of
the date of separation, you are eligible to reinstate the canceled credited service by paying the pension
system the refund amount, if any, plus interest from the date contributions were refunded to the
date of repayment of those contributions into the pension fund. Further, for any canceled service
for which contributions were not required, you receive one year o
f previous service credit in group
B if you are a group B member, or in group D if you are a group D member, for each full year of
subsequent service up to the amount of such previous service that was canceled.
After you have 5 years of credited service
If you have at least ve years of credited service when you separate from service, you could choose to
retire. If you elect to retire, depending on your age, you could take a normal retirement or, if you are
not yet eligible for immediate retirement, defer your retirement to a future day on or after you have
attained the minimum age and years of credited service for a retirement pension. Your retirement
benet will be based on all years of credited service that you have accrued and/or purchased.
If you contributed to HMEPS, you must decide what to do about your contributions.
10
When you
separate from service, you may choose to either:
(i) take a refund of your member contributions. If you elect to take a refund of your contribu-
tions, all service covered by the refund is canceled. If you later return to covered employment,
10 These contributions are subject to rules that are different from the rules applicable to contributions to the cash
balance hybrid component. See page 23 for more information.
5
Benets Handbook
you may repay the contributions refunded to you, plus interest, and restore the credited service
represented by the refund in accordance with the laws and regulations then in effect.
If you had a period of continuous service that included both contributory and
noncontributory credited service, any refund of contributions will forfeit all service,
including the noncontributory service. Contact the HMEPS ofce for options available
to you.
(ii) leave your co
ntributions with HMEPS and retain all the credited service represented by the
contributions.
Houston Municipal Employees Pension System
YOUR RETIREMENT BENEFIT
Retirement Benet Formula
Group A and Group B
The monthly benet payment you receive when you retire is based on
your years of credited service (rounded to the nearest one twelfth of a
year), the benet accrual rate(s) applicable to the group(s) in which you
participated, and your average monthly salary. However, your normal retirement
pension, exclusive of cost-of-living adjustments, cannot exceed 90% of your
average monthly salary. The following information applies only if you
were continuously employed in an HMEPS covered position and your last
day of credited service is on or after January 1, 005. If you have more
than one period of service or if your last day of credited service was prior
to January 1, 005, contact HMEPS for information about your retirement
benet.
If you were continuously employed in an HMEPS covered position and only participated in either
Group A or Group B during your employment, your monthly retirement benet is determined as
follows:
(i) Determine your benet percentage for your period of employment prior to January 1, 2005:
1. Multiply the number of years of credited service you have in your rst tier of service (years
1-10) by the applicable benet accrual rate for that tier (see Chart X on page 17 for tiers and
applicable benet accrual rates in effect prior to January 1, 2005).
2. Multiply the number of years of credited service you have in your second tier of service
(years 10+-20), if any, by the applicable benet accrual rate for that tier.
3. Multiply the number of years of credited service you have in your third tier of service
(years in excess of 20), if any, by the applicable benet accrual rate for that tier.
4. Add together the amounts from 1-3 above.
(ii) Determine your benet percentage for your period of employment on and after January 1,
2005:
1. Multiply the number of years of credited service you have in your rst tier of service (years
1-20 for Group A and years 1-10 for Group B) by the applicable benet accrual rate for
that tier (see Chart Y on page 17 for tiers and applicable benet accrual rates in effect on
and after January 1, 2005).
2. Multiply the number of years of credited service you have in your second tier of service
(years 20+ for Group A and years 10+-20 for Group B), if any, by the applicable benet
accrual rate for that tier.
3. Multiply the number of years of credited service you have in your third tier of service
(years in excess of 20 for Group B), if any, by the applicable benet accrual rate for that tier.
4. Add together the amounts from 1-3 above.
If you were continuously employed in an HMEPS covered position and participated in more than
The monthly benet payment you receive when you retire is based on
your years of credited service (rounded to the nearest one twelfth of a
s) applicable to the group(s) in which you
participated, and your average monthly salary. However, your normal retirement
The monthly benet payment you receive when you retire is based on
your years of credited service (rounded to the nearest one twelfth of a
s) applicable to the group(s) in which you
Benets Handbook
one Group (A, B or C) during your employment, your monthly retirement benet is determined using
the same calculation as above, but if you changed group participation during one or more of your
tiers of service, you must separately calculate the years of credited service times the applicable accrual
rate(s) for each of the groups in which you participated during those tiers. If you have more than
one period of service, the benet amounts for any period(s) in which you attained s
ufcient credited
service for retirement eligibility will be calculated separately, unless you met the requirements for the
two-year rule. See pages 41 and 42 for more information.
Benet Accrual Rate
Benefit Accrual Rate is the percentage applicable to each year of your credited service in
Group A, and/or Group B. The charts X and Y below show the benefit accrual rates for
Group A and Group B.
Benefit Accrual Rate Charts: The charts below show the benefit accru
al rate you will
receive for each year of credited service in Group A and/or Group B, as applicable, during
your years of service in HMEPS if you have been continuously employed in an HMEPS
covered position.
CHART X (CREDITED SERVICE PRIOR TO 1/1/05)
Years of Service (3 tiers) Group A Benet Accrual
Rate for Each Year of
Credited Service
Group B Benet Accrual
Rate for Each Year of
Credited Service
Tier 1: Up to and including
10 years
3.25% 1.75%
Tier 2: Greater than 10
years up to and including 20
years
3.5% 2.0%
Tier 3: Greater than 20
years
4.25% 2.75%
CHART Y (CREDITED SERVICE ON AND AFTER 1/1/05)
Years of Service (2 tiers for
Group A, 3 tiers for Group
B)
Group A Benet Accrual
Rate for Each Year of
Credited Service
Group B Benet Accrual
Rate for Each Year of
Credited Service
Tier 1: Group A - up to and
including 20 years; Group
B – up to and including 10
years
2.5% 1.75%
Tier 2: Group A - greater
than 20 years; Group B -
greater than 10 years up to
and including 20 years
3.25% 2.0%
Tier 3: Group B - greater
than 20 years
N/A 2.5%
Houston Municipal Employees Pension System
Average Monthly Salary
Average Monthly Salary (AMS) is the amount calculated by taking the sum of your 78 highest
bi-weekly salaries paid to you as an employee during your years of credited service and dividing
that sum by 36. If there are less than 78 bi-weekly salaries paid to you as an employee during
your period of credited service, your AMS is the amount calculated by multiplying the average
of all your bi-weekly salaries paid to you as an employee during your period of credited service
by 26 and dividing the product by 12. Your “salary” is your base pay, longevity pay, and shift-
differential pay (if any) paid to you as an employee and attributable to services rendered as an
employee. See “DROP Termination” beginning on page 31 for the AMS for retiring DROP
participants.
The following is an example of the monthly retirement benet for a hypothetical member who is
eligible to retire:
EXAMPLE: A member has 25 continuous years of credited service in Group A and
separates from service on December 31, 2020. The member has 20 years of credited
service in Group A at the Tier 1 benet accrual level, but 9 of those years will be at
the pre-1/1/05 benet accrual level (9 x 3.25% = 29.25%), years 10-20 will be at the
post-1/1/05 benet accrual level (11 x 2.5% = 27.5%), and the last 5 years will be at
the Group A post-1/1/05 Tier 2 benet accrual level (5 x 3.25% = 16.25%) for a total
accrued benet percentage of 73.0% (29.25% + 27.5% + 16.25%). The member’s
average monthly salary is $3,200. The member’s monthly retirement benet upon
retirement will be $2,336 ($3,200 x 73.0%).
The following is an example of the monthly retirement benet for a hypothetical member with
credited service in both Group B and Group A who is eligible to retire:
EXAMPLE: A member has 23 continuous years of credited service and separates
from service on December 31, 2020. The member was initially a Group B member,
then changed to Group A for future service only after 7 years. The member has 7 years
of credited service in Group B at the Tier 1 benet accrual level (7 x 1.75% = 12.25%),
and 13 years in Group A at the post-1/1/05 Tier 1 benet accrual level (13 x 2.5%
= 32.5%), plus 3 years in Group A at the post-1/1/05 Tier 2 benet accrual level (3
x 3.25% = 9.75%) for a total accrued benet percentage of 54.5% (12.25% + 32.5%
+ 9.75%). The member’s average monthly salary is $2,500. The member’s monthly
retirement benet upon retirement will be $1,362.50 ($2,500 x 54.5%).
You will receive your monthly retirement benet on or about the last day of each calendar month.
Your pension will cease on the last day of the month of your death.
Group D
The monthly benet payment you receive when you retire is based on your years
of credited service (rounded to the nearest one twelfth of a year), the applicable
benet accrual rate(s), and your average monthly salary. However, your
normal retirement pension, exclusive of cost-of-living adjustments, cannot exceed
90% of your average monthly salary.
Benets Handbook
Benet Accrual Rate
Benefit Accrual Rate is the percentage applicable to each year of your credited service in
Group D. The chart below shows the benefit accrual rate you will receive for each year
of credited service in Group D during your years of service in HMEPS if you have been
continuously employed in an HMEPS covered position.
Group D
Years of Service (2 tiers)
Group D Benet Accrual Rate for
Each Year of Credited Service
Tier 1: Up to and including 25 years 1.8%
Tier : Greater than 25 years 1.0%
Average Monthly Salary
Average Monthly Salary (AMS) is the amount calculated by taking the sum of your 78 highest
bi-weekly salaries paid to you as an employee during your years of credited service and dividing
that sum by 36. If there are less than 78 bi-weekly salaries paid to you as an employee during
your period of credited service, your AMS is the amount calculated by multiplying the average
of all your bi-weekly salaries paid to you as an employee during your period of credited service
by 26 and dividing the product by 12. Your “salary” is your base pay, longevity pay, and shift-
differential pay (if any) paid to you as an employee and attributable to services rendered as an
employee.
The following is an example of the monthly retirement benet for a hypothetical Group D member
who is eligible to retire:
EXAMPLE: A Group D member has 32 continuous years of credited service and
separates from service. The member will have 25 years of credited service in Group D
at the Tier 1 benet accrual level (25 x 1.8% = 45%), and 7 years in Group D at the Tier
2 benet accrual level (7 x 1.00% = 7%) for a total accrued benet percentage of 52%
(45% + 7% = 52%). The member’s average monthly salary is $4,500. The member’s
monthly retirement benet upon retirement will be $2,340 ($4,500 x 52%).
Deferred Retirement
A deferred retirement is a normal retirement that occurs at a future date. In order to be a deferred
participant eligible for a deferred retirement, you must:
(i) have separated from service for a reason other than death or receipt of a retirement or dis-
ability pension;
(ii) have at least ve years of credited service in HMEPS;
(iii) have not met the eligibility requirements for an immediate normal pension; and
(iv) have made an election, including a default election, in a manner determined by the Board, to
receive a deferred retirement pension.
The amount of the monthly benet for a deferred participant is computed in the same manner as
for a normal retirement pension, but based on average monthly salary and credited service as of your
last day of credited service and subject to the provisions, including the benet accrual rate(s), of the
Statute or Art. 6243g, as applicable, in effect on your last day of credited service.
Houston Municipal Employees Pension System
Early Retirement (Group D only)
If you are a Group D member who terminates employment, you may elect to receive an early
retirement pension payable as a reduced benet if you have attained:
(i) At least ten (10) years of credited service and age 55; or
(ii) at least ve years of credited service and a combination of years of age and years of credited
service, including partial years, the sum of which equals or is greater than the number 75.
The amount of the early retirement pension payable to you as a retired Group D member is equal
to the normal retirement pension reduced by 0.25% for each month you are less than age 62 at
retirement.
The following are examples of monthly retirement benets for hypothetical Group D members
eligible for early retirement:
EXAMPLE: A Group D member has 10 continuous years of credited service and
separates from service at age 45. The member has 10 years of credited service in
Group D at the Tier 1 benet accrual level (10 x 1.8% = 18%), and an average monthly
salary of $4,500, providing a monthly retirement benet upon normal retirement of
$810 ($4,500 x 18%). However, the former member elects to receive an early reduced
retirement pension at age 55, which is 7 years prior to normal retirement. Therefore,
the benet amount is reduced by 0.25% for each month of those 7 years:
(7 x 12 months) = 84 months x 0.25% = 21% reduction
$810 x .21 = $170.10
$810 - $170.10 = $639.90
The former member is eligible to receive an early retirement pension in the amount of
$639.90 a month beginning on his or her effective retirement date.
EXAMPLE: A Group D member has 23 continuous years of credited service and
separates from service at age 52. The member has 23 years of credited service in Group
D at the Tier 1 benet accrual level (23 x 1.8% = 41.4%), and an average monthly salary
of $4,500, providing a monthly retirement benet upon normal retirement of $1,863
($4,500 x 41.4%). However, the former member elects to receive an early reduced
retirement pension at age 52, which is 10 years prior to normal retirement. Therefore,
the benet amount must be reduced by 0.25% for each month of those 10 years:
(10 x 12 months) = 120 months x 0.25% = 30% reduction
$1,863 x .30 = $558.90
$1,863 - $558.90 = $1,304.10
The former member is eligible to receive an early retirement pension in the amount of
$1,304.10 a month beginning on his or her effective retirement date.
Benets Handbook
Benet Options (Applicable only to former Group D members, and in limited situations to
former Group A and Group B members)
If you are an Option-eligible Participant (see below) and you have the required credited service for
normal/deferred or early retirement, you must elect no earlier than 60 days before your retirement
and no later than 30 days before your benet commencement date whether to have your normal/
deferred retirement pension or early retirement pension p
aid as an actuarially equivalent amount
under one of three joint annuity options (J&S Annuity).
An ‘Option-eligible Participant’ means:
(i) former group A or group B member who terminates employment with the City or the pension
system on or after June 30, 2011, and who is eligible to receive a normal retirement pension,
provided the member was not married as of the date of the member’s termination of em-
ployment;
(ii) a former group B member who terminated employment with the city or the predecessor sys-
tem before September 1, 1997 and who is eligible to receive a normal retirement pension; or
(iii) a former group D member who terminated employment with the city or the pension system
and who is eligible to receive a normal retirement pension or an early retirement pension.
The Board has sole discretion to make determinations regarding an individual’s status as an Option-
eligible Participant.
The election may be revoked, in a manner and at a time established by the Board, not later than the
60th day before your benet commencement date.
Annuity Options
For each of the following three annuity options, you must designate a beneciary to receive benets
after your death (the joint annuitant). The following rules apply to all three annuity options:
(i) if you are married at the time of retirement, and you wish to name anyone other than your
spouse as joint annuitant, HMEPS may require that your spouse sign a consent or waiver of
benets in order for the option election to be valid;
(ii) if your joint annuitant predeceases you, no payments are due after your death;
(iii) if you predecease your joint annuitant, no payments are due after the death of your bene-
ciary;
(iv) if you are a deferred participant, you may change or revoke your option at any time until 60
days prior to the day your benet commences (on or after the 60th day prior to the com-
mencement of your pension benet, your option election is irrevocable); and
(v) if you are a deferred participant and you die prior to your benet commencement, your joint
annuitant ’s benets will commence on the day your benets would have otherwise begun
unless your joint annuitant elects for earlier payment, in a time and manner determined by the
Board, of the actuarial equivalent of such amount.
(vi) If you are a retiree and you die, your joint annuitant’s benet is effective on the rst day of the
month following the month of your death.
Houston Municipal Employees Pension System
50% Joint and Survivor Option (50% J&S Annuity)
If you elect this option, you will receive a lifetime monthly pension, and after your death, your
joint annuitant will receive a lifetime benefit equal to 50% of the amount you were receiving
at the time of your death. Your pension will be reduced from the normal retirement pension
amount by some amount depending upon your age and your beneficiary’s age at your date of
retirement. The 50% J&S Annuity ceases on the last day of the m
onth of the joint annuitant’s
death or on the last day of the month in which the joint annuitant otherwise ceases to be
eligible to receive the 50% J&S Annuity.
100% Joint and Survivor Option (100% J&S Annuity)
If you elect this option, you will receive a lifetime monthly pension, and after your death, your
joint annuitant will receive a lifetime benefit equal to the amount you were receiving at the time
of your death. Your pension will be reduced from the normal retirement pension amount by
some amount depending upon your age and your beneficiary’s age at your date of retirement.
The 100% J&S Annuity ceases on the last day of the month of the joint annuitant’s death or
on the last day of the month in which the joint annuitant otherwise ceases to be eligible to
receive the 100% J&S Annuity.
Ten ear Guarantee
This option provides you with a reduced monthly benefit for your lifetime. However, if you
die before you receive ten years of pen
sion payments (120 payments), your joint annuitant will
receive the balance of the 120 payments. If you die after receiving ten years of payments, all
payments will end when you die. Under this option, the amount of reduction of your monthly
benefit depends on your age at retirement.
No survivor benet or J&S Annuity is payable if:
(i) you are an Option-eligible Participant and you do not elect one of the J&S Annuity options
and you die before retirement has commenced, except that if you are an Option-eligible Par-
ticipant survived by a Surviving Spouse and you are not in the service of the city or the pen-
sion system at the time of your death, and you did not elect a J&S Annuity and die before
retirement has commenced, you shall be deemed to have elected a 50% J&S Annuity and
designated your Surviving Spouse as the joint annuitant.
(ii) you are an Option-eligible Participant and you elect a normal retirement pension or early re-
tirement pension and die before retirement has commenced.
(iii) You are an Option-eligible Participant and you die after retirement has commenced and you:
a. Elected a normal retirement pension or early retirement pension;
b. did not make a valid election; or
c. made an election that was void.
If you have no Surviving Spouse, then no survivor benet or J&S Annuity is payable. If a J&S
Annuity is paid, then no survivor benet is payable.
If you are an Option-eligible Participant who previously elected a J&S Annuity for a previous period
of service (Prior Election), no benets have been paid under that Prior Election, and you terminate
Benets Handbook
employment on or after January 1, 2012, then the Prior Election is void and you must elect, in a
manner and at a time determined by the Board, before your benet commencement date whether to
have your normal retirement pension or early retirement pension, as applicable, paid as a J&S Annuity.
The election you make will apply to all periods of service.
If you are a former Group B member with pre-September 1, 1997 service and you were rehired in a
covered position and converted the G
roup B service covered by a J&S Annuity to Group A service,
and you terminate employment on or after January 1, 2012 and are not an Option-eligible Participant
at the time of your subsequent termination, the Prior Election is void and survivor benets for an
Eligible Survivor, if any, will be payable as provided under the law, provided benets were not paid
under the Prior Election.
If you designate your spouse as a joint annuitant and before your retirement the marria
ge is dissolved
by divorce, annulment, or an ofcial declaration that the marriage is void, the designation is void
unless after the date the marriage was dissolved you name such former spouse as a joint annuitant for
the J&S Annuity.
Group D Trustee-to-Trustee Transfer to Purchase An Enhanced Benet
If you are a Group D participant, you may elect to make a trustee-to-trustee transfer from a qualifying
Code Section 457(b) plan to HMEPS to purchase an increased or enhanced benet in accordance
with the provisions of Code Sections 415(n) and 457(e)(17), and the rules and procedures adopted
by the Board. The amount transferred will be held by HMEPS and will not be separately accounted
for by HMEPS.
You must complete the purchase and transfer documents no earlier than 60 calendar days prior to
normal (immediate) retirement, with payment due in a lump sum no later than 60 calendar days after
HMEPS receives the transfer election.
The service purchase for benet enhancement is only for a normal (immediate) retirement benet,
not deferred, early or disability retirement.
Any optional annuity election is not factored into the actuarial calculation. If you choose an optional
J&S annuity, the xed monthly enhanced benet amount is reduced as provided for the selected
option.
Cash Balance Hybrid Component
In addition to your required Group D member contributions, you contribute 1% of your salary to
a cash balance hybrid component for each bi-weekly pay period during your service beginning with
your rst full biweekly pay period after the later of January 1, 2018 or your rst date of employment.
Your contributions are picked up (see page 46 for information regarding “picked up” contributions).
For each biweekly pay period of your service for which you make the required contribution, the
following amounts are credited to a notional account for you (cash balance account):
(i) your 1% of salary contribution for that biweekly pay period;
(ii) interest on the balance of your cash balance account determined by multiplying:
a. an annual rate that is one-half HMEPS’s ve-year investment return based on a rolling
Houston Municipal Employees Pension System
ve-scal-year basis and net of investment expenses, with a minimum annual rate of 2.5
percent and a maximum annual rate of 7.5 percent, and divided by 26; and
b. the amount credited to your cash balance account as of the end of the biweekly pay period.
The sole purpose of a cash balance account is to facilitate accounting for your cash balance credits on
an individual basis. There will be no physical separation of any specic HMEPS assets in association
with your notional cash balance account. After you separate from service, eligible amounts credited
to your cash balance account will be paid from HMEPS’s net assets held in trust for pension benets
according to the authorized disbursement option you elect.
On separation from service, if you have less than one year of service while contributing contributions
to the cash balance account, you are eligible to receive only a distribution of the contributions credited
to your c
ash balance account, without interest. If you have at least one year of contributions to the
cash balance account, you are eligible to receive a distribution of the contributions credited to your
cash balance account, including interest.
Contributions may not be made to your cash balance account for a period that occurs after the date
you terminate employment. However, the Board may authorize interest at a rate that is not greater
than the then-current rate being paid o
n active member cash balance accounts, as determined by the
Board, to be credited based on your undistributed cash balance account after the date you terminate
employment, provided you had at least one year of contributions to your cash balance account. If
you terminated employment with less than one year of cash balance contributions and were rehired
and completed a year of cash balance contributions, no interest will be paid on the cash balance
account for any period bet
ween your previous termination of employment and the beginning date of
contributions in the subsequent period of service.
Distribution options
Upon termination of employment, you are eligible to elect to receive your cash balance account
benet in a lump-sum payment, or you may instead defer a distribution election and your cash balance
account balance will remain in the pension fund and accrue interest provided you have met the one-
year requirement described above. If your cash balance account is more than an amount specied
by the Executive Director, you may elect to receive your cash balance account benet in a lump-
sum payment, in substantially equal periodic payments, in a partial lump-sum payment followed by
substantially equal periodic payments, or in partial payments from your cash balance account, in
a manner and form determined by the Board. All deferrals and payment options are subject to
applicable tax laws.
If you die before the full distribution of your cash balance account, HMEPS will pay your cash
balance account in a single lump-sum payment to:
(i) your surviving spouse;
(ii) if there is no surviving spouse, each designated beneciary designated by you in the manner
and on a form prescribed by the Board; or
(iii) if there is no designated beneciary, your estate.
The lump-sum payment shall be made within a reasonable time after the Board has determined that
the individual or estate is eligible for the distribution. No interest will accrue on the cash balance
account after the date of your death.
5
Benets Handbook
Termination
You must separate from service to be eligible to receive benets. You are considered separated
from service only after your employment relationship with the City or HMEPS ends. Upon the
Board’s approval of your retirement benet, you will be considered to have resigned and you will
be removed from the employment rolls of the City or HMEPS not later than the day before your
effective retirement date.
Effective Retirement Date
The effective retirement date is always the rst day of the month your retirement begins.
ormal Retirement: If HMEPS receives your application before you separate from service or
within 90 calendar days thereafter, your effective retirement date will be the rst day of the month
following the month in which you separate from service. If you do not apply within 90 calendar days
after your separation from service, your effective retirement date will be the rst day of the month
after HMEPS receives your application.
Deferred Retirement: If you separate from service with at least ve years of credited service (or
ve years of combined credited service under the proportionate retirement program) but without
having met the age requirement for a retirement pension, your effective retirement date is the later of:
(1) the rst day of the month following the month in which you satisfy the age and credited service
requirements for a retirement pension, or (2) the rst day of the month after HMEPS receives your
application for a retirement pension.
Disability Retirement: See “Disability Retirement” section beginning on page 35.
Lump Sum Payment of Benets
The Board, in its discretion, may pay to a deferred participant, eligible survivor, alternate payee, or
beneciary in a lump sum the present value of any benet payable to such person that is less than
$20,000 instead of paying any other benet. If the lump sum present value of the benet is at least
$1,000 but less than $20,000, the Board may make a lump-sum payment only on written request by
the deferred participant, eligible survivor, alternate payee or other beneciary. The actuarial present
value of a lump sum payment to a participant is determined as of the participant’s last day of credited
service or September 1, 1995, whichever is later. The actuarial present value of a lump sum payment
to an eligible survivor, alternate payee or other beneciary is determined as of the effective date of
the payment as approved by the Board.
A member who is reemployed by the City or HMEPS and who has at least two years of continuous
credited service after reemployment may reinstate service for which the member received a lump sum
payment by paying to HMEPS the amount of the lump sum payment, plus interest on that amount
at the then current assumed rate of return, not compounded, from the date the lump-sum payment
was made to the member until the date repayment is made to HMEPS.
Application for Benets
You must apply for retirement benets before you can begin receiving benet payments. To apply
for a normal or deferred retirement benet, complete the Retirement Request Form to initiate the
retirement process. The earliest you may apply for retirement is 6 months before your planned date
Houston Municipal Employees Pension System
of retirement. If eligible, you will be provided an Application for Normal or Deferred Retirement. In
addition to an application, you must submit proof of age as outlined below, a declaration of marital
status, and such other information and documents as requested by HMEPS. HMEPS will review
your application submission and advise you of anything else needed. If you are purchasing credited
service, HMEPS must receive your full payment before you can begin receiving benets (but not later
than 60 calendar days after your separation from service). Also, because you are not eligible to elect
to purchase credited service after you have separated from service, you should contact HMEPS prior
to your separation from service if you believe you have time or service that is available for purchase.
You may change any item on your application, or withdraw your application, at any time prior to the
Board meeting at which your application is presented to the Board for consideration, by submitting
to HMEPS a written request to change or withdraw. A withdrawal of your application will not extend
or waive any ling deadline under the Statute.
Proof of Age
When you apply for retirement, you must furnish proof of your age. HMEPS must receive the
required proof of age before you can begin receiving benets. We will accept a legible copy of one
of the following documents:
Birth certicate
Delayed birth certicate
Census report more than 30 years old
Certicate of Naturalization
Ofcial Passport/Passport Card
If you cannot furnish any one of the documents listed above, a legible copy of a document that
shows your age from two of the following categories will be required:
Birth certicate of your child
Baptismal certicate more than 30 years old
Hospital record of birth
School record at time you entered grammar school
Life insurance policy more than 30 years old
DD-214 record of military service (most recent)
Also, if your name is different from the name on any of the submitted documents, you must provide
HMEPS with ofcial record(s) documenting the name change(s).
Benets Handbook
DEFERRED RETIREMENT OPTION PLAN (DROP)
(Group A & Group B Only)
The Deferred Retirement Option Plan (DROP) is an optional
retirement method for Group A and Group B members who have
attained normal retirement eligibility (age and years of credited service) but do
not want to retire. It is an alternative method of accumulating and receiving a
pension benet from HMEPS. The decision to participate in the DROP is a
personal one that each member should make only after careful consideration of
his or her individual nancial needs and goals. The DROP is governed by the
Statute and the policies and procedures adopted by the Board. The following
information applies only for DROP participation on or after July 1, 2017. If
you have questions about periods of DROP participation prior to July 1, 2017,
contact HMEPS for information.
DROP Denitions:
DROP participant: A Group A or Group B member who is participating in the DROP and, unless
required otherwise by the context, a person who participated in DROP and is receiving a DROP
benet or is eligible to elect a distribution of a DROP benet.
DROP Entry Date: The date a member ceases to earn service credit and begins earning credit for
the member’s DROP account, which is the later of the date the member is rst eligible to participate
in the DROP or the DROP Entry Date requested by the member, as approved by the Board. The
DROP Entry Date must be the rst day of a month. A member cannot have a DROP Entry Date
that precedes his or her date of eligibility for membership in HMEPS or that occurs prior to the date
of HMEPS’s receipt of the member’s request to participate in DROP.
DROP Election Date: The date HMEPS receives a member’s completed and executed “DROP
Election.” The DROP Election can only be obtained from an authorized HMEPS representative
upon the member’s timely submission to HMEPS of a completed application and required documents
and information.
Monthly DROP Credit (MDC): An amount based on a DROP participant’s credited service and
average monthly salary as of the DROP Entry Date and the benet accrual rate(s) of the applicable
pension group in effect on the earlier of the member’s last day of credited service or DROP Election
Date. Any changes in the benet accrual rates after the member’s last day of credited service or
DROP Election Date will not apply to the DROP member’s monthly DROP credit or retirement
pension benet.
Eligibility
In order to be eligible to elect to participate in the DROP, you must meet or exceed the minimum
qualication requirements for normal retirement pursuant to the provisions of the applicable pension
group in effect on your DROP Entry Date, and be in active service with the City or HMEPS or have
been separated from service no more than thirty (30) calendar days, and not otherwise have been
approved for a pension benet. You must also meet all other requirements for DROP participation
of the Statute and policies and procedures adopted by the Board.
The Deferred Retirement Option Plan (DROP) is an optional
retirement method for Group A and Group B members who have
attained normal retirement eligibility (age and years of credited service) but do
not want to retire. It is an alternative method of accumulating and receiving a
attained normal retirement eligibility (age and years of credited service) but do
Houston Municipal Employees Pension System
You must meet one of the following age and credited service requirements as of the DROP Entry
Date:
(i) At least age 62 with at least 5 years of credited service, or
(ii) At least age 50 with at least 5 years of credited service provided the sum of your age and years
of credited service, including parts of years, equals 75 or more.
Group Change and Service Purchase Obligations
After you execute a DROP Election, you cannot enter into an obligation with HMEPS to:
(i) purchase previous service credit, other than service credit for missed contributions during the
DROP period as approved by the Board
(ii) purchase pension credit for military service, or
(iii) change pension group participation.
However, if you entered into an obligation described by (i) through (iii) above prior to executing
a DROP Election, and all terms and conditions of the obligation have not been met as of DROP
Election Date, you are eligible to participate in the DROP provided any service credit purchased
under such obligation is not used to meet minimum service requirements for eligibility to participate
in the DROP, and provided all other requirements for DROP participation are met. At least one
biweekly paycheck stub (advice) showing appropriate deductions must be presented as evidence that
such obligation was in effect at the time the DROP Election was executed. Your DROP benet will
be contingent upon your fullling all of the terms and conditions of any and all applicable obligations.
If all terms, conditions and requirements under such obligation(s) are not completed and fullled,
your DROP Benet will be determined as if such obligation(s) had never existed.
If all terms and conditions of a service purchase obligation and all requirements of DROP have been
met as of the DROP Election Date, you are eligible to participate in the DROP even if the service
purchased under such obligation is used to establish eligibility.
The DROP Application Process
The following procedure is applied to all member requests to participate in the DROP:
(i) You must submit a request for an application to participate in the DROP. (You should notify
HMEPS that you intend to make a DROP Election no earlier than sixty (60) calendar days
prior to the date you are eligible to participate in DROP). The request must be submitted in
a manner and on a form approved by HMEPS. A request may be faxed, mailed or delivered
to the HMEPS Ofce. (Fax number: (713) 650-1961). The request for information is not a
commitment to participate in the DROP, and therefore is not binding on you or HMEPS.
(ii) In response to a request, HMEPS will make a preliminary determination as to whether you are
eligible to participate in the DROP based on records available to HMEPS at that time. This
preliminary determination may change when certied employment and personnel records are
reviewed. If preliminary eligibility is determined, a DROP application packet will be provided
to you. A DROP application packet includes information about DROP participation, an ap-
plication to participate in the DROP, a listing of all documents you must submit to HMEPS
before executing a DROP Election, and instructions regarding how to complete an applica-
Benets Handbook
tion and meet other requirements for DROP participation. If eligibility cannot be determined
based on information available to HMEPS, you will be notied by HMEPS.
After eligibility has been preliminarily determined, HMEPS will review data required to
establish your eligibility to participate in the DROP and to determine the amount of the
monthly DROP credit you are eligible to receive.
(iii) When the DROP application and documents for which you are responsible for submitting
are received in the HMEPS Ofce, HMEPS will provide you with a DROP Election form,.
The completed application and documents must be received in the HMEPS ofce, and all
deciencies corrected before you can execute a DROP Election. Your DROP Election must
be executed in the presence of a notary public. The signature of an authorized HMEPS rep-
resentative, or the presence of a date/time stamp as normally afxed to HMEPS mail, will
evidence HMEPS’s recei
pt of your DROP Election. If you are retiring or otherwise termi
nating employment and wish to participate in the DROP, you must execute a DROP
Election no later than thirty (30) calendar days after your separation from service and
before any other application for pension benets has been approved by the Board, or
you will not be eligible to participate in the DROP.
If you do not provide the completed application and requested documents within a reasonable
period of time as determined by HMEPS, HMEPS may determine that your application is
deficient, and will notify you of the deficiency at your address of record. If the deficiency is
not cured within thirty (30) calendar days after the date of the notice, your DROP application
will be administratively withdrawn by HMEPS. No further action will be taken with respect
to the DROP application, and you will be required to resubmit a request to apply for DROP
under the rules then in effect in o
rder to re-initiate the DROP process. A deficiency notice
will not waive or extend required time periods.
(iv) When all information and completed documents for which the City or HMEPS is responsible
for submitting are received in the HMEPS Ofce, your eligibility to participate in the DROP
can be established and the monthly DROP credit can be determined. HMEPS will then
prepare your DROP Election for presentation to the Board for approval at a regularly sched-
uled m
onthly Board meeting. You may withdraw your DROP Election any time prior to the
Board meeting in which it is presented for approval. Withdrawal of a DROP Election does
not waive or alter the requirement that you must make a DROP Election no later than thirty
(30) calendar days after your separation from service in order to participate in DROP. Upon
approval by the Board, a DROP Election is irrevocable except as specically provided by the
Statute.
DROP Operation and Reporting
Upon approval of your DROP Election by the Board, a notional DROP account will be established
in your name. The sole purpose of a DROP account is to facilitate accounting for your DROP
credits on an individual basis. There will be no physical separation of any specic HMEPS assets in
association with your notional DROP account. After you separate from service, the DROP Benet
will be paid from HMEPS’s net assets held in trust for pension benets according to the authorized
disbursement option you elect.
Houston Municipal Employees Pension System
Information about your DROP balance and activity is available online by registering on AccessHMEPS.
If you do not have online access, contact the HMEPS ofce for assistance.
DROP Credits
For each month of the period from your DROP Entry Date to termination of employment, HMEPS
will credit the following amounts to your notional DROP account (including credit of certain prorated
amounts for partial months of service):
(i) Your Monthly DROP Credit (MDC): which is a monthly amount equal to what would have
been your monthly retirement benet if you had retired on your DROP Entry Date, except
that the benet accrual rate(s) in effect on the earlier of your last day of credited service or
DROP Election Date will be used to compute the monthly benet. Prior to January 1, 2018,
the MDC is adjusted each year in February for the applicable annual Cost of Living Adjust-
ment (COLA) paid by HMEPS on pension benets. Beginning February 2018, for future
credit only, an annual COLA that increases the amount of the MDC will be credited in Feb-
ruary of the year only if you are at least age 62 as of January 1 of that year. No COLA will be
credited if the applicable COLA amount that year is $0.
The MDC is credited to the DROP account at the end of the last day of each month, except
that prorated amounts are calculated and credited on the date used for prorating.
(ii) Interest on the DROP account: Beginning January 1, 2018, the DROP interest rate will be
equal to half of the percent return on HMEPS’s investments for the prior rolling ve scal
years net of investment expenses, with a minimum rate of 2.5% and a maximum rate of 7.5%,
currently compounding at daily intervals.
You must pay required employee contributions to HMEPS for all time in DROP that would otherwise
constitute service in order to receive allowable credits to your DROP account.
You cease to accrue credited service the day prior to your DROP Entry Date. Credits will not be made
to your DROP account for any period that would not constitute service (for example, your DROP
balance will be decreased for absences without pay during the DROP period, and/or if required
contributions have not been paid during the DROP period). Your participation in DROP ends upon
your termination of employment with the City or HMEPS.
Credits may not be made to a DROP participant’s DROP account for a period that occurs after the
date the DROP participant terminates employment, except that interest at a rate determined by the
pension board may be paid on the person’s undistributed DROP account balance after the date the
person terminates employment.
Surviving Spouse/Designated Beneciary DROP Election
If you made your current DROP Election on or after May 11, 2001, then in the event you die before
the full distribution of your DROP account balance, the undistributed DROP account balance will
be distributed to your surviving spouse, if any, in a lump-sum payment within a reasonable time after
the Board has determined that your surviving spouse is eligible for the distribution. If you leave no
surviving spouse, each designated beneciary, as designated in the manner and form established by the
Board, is eligible to receive your undistributed DROP account balance in a lump-sum payment within
a reasonable time after the Board has determined that the beneciary is eligible for the distribution.
Benets Handbook
If you made your current DROP Election prior to May 11, 2001, contact HMEPS for the beneciary
designation form for your undistributed DROP account balance, if any.
For all DROP participants, if no beneciary is designated, the undistributed DROP account balance
will be distributed to your estate. If HMEPS determines that a beneciary designation does not
comply with HMEPS’ requirements, the non-complying designation is void. If there is no complying
designation
, the undistributed DROP account balance, if any, will be distributed to your estate under
applicable law.
Please contact HMEPS regarding further information about DROP beneciary elections.
DROP Termination
Any termination of your employment with the City will simultaneously terminate your DROP
participation.
On termination of employment, and before any benet or DROP payment, if you are an Option-
eligible Participant, you must make the required election whether to have a normal benet or a J&S
Annuity, as described beginning on page 21. If you elect a J&S Annuity, your notional DROP account,
including all DROP credits, will be recalculated from your DROP Entry Date to your termination of
employment as if the J&S Annuity was selected to be effective as of the DROP Entry Date.
Prior to receiving a DROP benet, youmust contact the HMEPS ofce to request a DROP Distribution
Package (Distribution Package). The Distribution Package will include required notices and forms,
explanations of DROP benet payment options, and other related election and designation forms.
All required forms and documents must be submitted to, and accepted by, HMEPS before a DROP
benet distribution election can be presented to the Board for approval. You also may schedule and
attend a DROP exit meeting with a HMEPS representative for further explanation of the DROP
termination process.
If you die while participating in DROP, your surviving spouse, or all of your designated beneciary(ies),
as applicable, may elect to revoke your DROP election, and receive survivor’s benets, if eligible, as if
DROP participation had not occurred. Otherwise, such surviving spouse or designated beneciary(ies)
will receive a lump-sum payment in the amount of the undistributed balance of your DROP benet
less applicable taxes, if any, and survivor’s benets, if any, will be determined with consideration given
to your DROP participation. After you have retired, neither your surviving spouse or designated
beneciary(ies) may revoke your election to participate in the DROP.
Effective January 1, 2005, upon separation from service with the City, your average monthly salary for
purposes of your retirement pension benet is your average monthly salary as of the later of January
1, 2005 or DROP Entry Date. The average monthly salary times the benet percentage determined as
of the earlier of your last day of credited service or DROP Election Date will be your nal retirement
pension benet. Your initial retirement pension will be your nal retirement pension benet plus any
cost of living adjustments (COLAs) you received while participating in DROP. COLAs attributable
to periods after retirement will be based on your nal retirement pension benet.
If you die while employed and your DROP election is not revoked, the survivor benet payable to
your eligible survivor(s) will be computed as a percentage of the monthly ordinary disability pension
that you would have been eligible to receive had you become disabled the day before your DROP
Houston Municipal Employees Pension System
entry date, except that the ordinary disability pension is computed based on your credited service as
of the day before your DROP Entry Date, the benet accrual rate(s) applicable to the credited service
as of your DROP Election Date, and your average monthly salary as of the later of January 1, 2005
or DROP Entry Date. If you suffer a service-related death, your surviving spouse, if any, is ineligible
to receive a service-related survivor benet unless your DROP election is revo
ked.
DROP Account Balance Distribution
To the extent allowed by applicable law, you may make an irrevocable election to receive payment
of a DROP benet in a lump sum, in periodic payments, or in a combination of a lump sum and
the remainder of the DROP benet, after the lump sum, in periodic payments. Also, you may defer
making a distribution election until a future date; however, the DROP account is subject to IRS
Required Minimum Distributions if you have separated from the City and are age 70 ½ or older. All
payment options and amounts are subject to approval by the Board. The Board may require that
a DROP account balance be paid in a lump-sum disbursement based on criteria specied by the
Board and applied on a uniform and non-discriminatory basis. The Board, in its sole discretion, may
authorize a participant to elect to receive partial payments from the participant’s DROP account
in a manner and form determined by the Board. The Board may establish procedures concerning
partial payments, including limitations on the timing and frequency of such payments. A participant
who elects partial payments may elect to receive such participant’s entire remaining DROP account
balance in a single lump-sum payment. All distributions and changes in form of distribution must be
made in a manner and at a time that comply with Section 401(a)(9) of the Internal Revenue Code of
1986, as amended. You are advised to consult your personal tax advisor concerning the applicable tax
rules prior to electing a DROP distribution option.
Revocation of an Election to Participate in DROP
Except for the following specic provisions, your DROP Election is irrevocable.
(i) If you incur a service disability, you may apply for a service disability retirement; however, if
the Board approves a service disability for you, your election to participate in the DROP is
automatically revoked and you will receive a service disability benet as if your election to
participate in the DROP had not occurred. In event of such a revocation, the balance of your
DROP account will become zero ($0.00) and the DROP account will be rescinded. You are
not eligible to apply for an ordinary disability pension while participating in DROP.
(ii) If you die while participating in the DROP, your surviving spouse, or if none, your designated
beneciary may elect to revoke your DROP election. In the event of such a revocation, the
balance of your DROP account will become zero ($0.00), the DROP account will be rescind-
ed, and no distribution of DROP benets will be made, but instead any applicable survivor
benets will be determined as if your DROP participation had not occurred.
Retirement Pension of a DROP Participant:
Except as provided above for Option-eligible participants under “DROP Termination,” upon
termination of employment, you will receive a normal retirement pension on your effective retirement
date calculated as provided under the Statute for normal retirement pensions, with the following
exceptions:
Benets Handbook
(i) the number of years of credited service will be the credited service you accrued through the
day prior to your DROP Entry Date;
(ii) the benet accrual rate(s) will be the benet accrual rate(s) that applied at the earlier of your
last day of credited service or DROP Election Date; and
(iii) your average monthly salary will be the average monthly salary as of the later of January 1,
2005 or your DROP Entry Date.
In addition, your retirement pension will be increased by any cost of living adjustments applied during
your participation in the DROP. COLAs applied after retirement will be based on the retirement
pension calculated as described in (i), (ii), and (iii) above.
The following is an example of the monthly retirement benet for a hypothetical member who enters
DROP after 1/1/05 and retires after 1/1/05:
EXAMPLE: A member was originally hired in June 2007 and becomes eligible to
participate in DROP in June 2019. Th
e member makes a DROP Election in June
2019. At DROP entry, the member has 12 years of credited service in Group A and an
average monthly salary of $4,000. The member participates in DROP for 4 years. At
retirement, the monthly retirement pension is based on the credited service at DROP
Entry (12 years as of June 2019), the benet accrual rates in effect on DROP Election
Date (Group A accrual rates as of June 2019 are 2.50% in Tier 1), and the average
monthly salary (AMS) as of Ju
ne 1, 2019 ($4,000). Accordingly, the member’s monthly
retirement benet upon retirement is ((12 x 2.50%) x $4,000 = 30% x $4,000 = $1,200,
plus any applicable COLAs applied during the DROP period.
DROP Participation after Re-employment
If you are a former DROP participant who is subsequently rehired by the City or HMEPS, you are not
eligible to again participate in the DROP, even if you have a remaining balance in your DROP account
when rehired. In addition, you cannot receive any DROP distributions while you are employed.
If you are a deferred participant or retiree who is rehired into a covered position in Group A or
Group B and you did not previously participate in DROP, you are eligible to participate in the DROP,
provided you meet all of the requirements for DROP participation. Rehired members should contact
the HMEPS ofce for more information.
Authorized Changes to the DROP
If an unanticipated actuarial cost occurs in administering the DROP, the Board, on the advice of
HMEPS’s actuary, may take action necessary to mitigate the unanticipated cost, including refusal to
accept additional elections to participate in the DROP, but the Board will continue to administer the
DROP for the DROP participants participating in the DROP before the date of the mitigating action.
Houston Municipal Employees Pension System
LIMITATION OF BENEFITS
While most people are not affected, state and federal laws may limit the
amount of your annual benet as explained below:
HMEPS Maximum – Your HMEPS retirement benet, exclusive of any
cost-of-living adjustments, may not exceed 90% of your average monthly
salary.
Federal Maximums – Section 415 of the Internal Revenue Code limits the amount of annual retirement
benets you can receive. Governmental entities, however, can establish excess benet plans for
people who are adversely affected by the federal limit. As a result, the Texas Legislature amended
the HMEPS pension law to establish an excess benet plan to effectively eliminate the impact of the
federal limit on HMEPS retirees. The plan requires HMEPS to pay each affected retiree by separate
check an amount equal to any reduction in benets imposed by the federal limit. Therefore, any
participant affected by the federal limit will be “made whole” by the excess benet plan and will not
suffer a reduction in benets.
HMEPS Benet/Contributions are Primary – If you participate in any retirement plan (maintained
by your employer) in addition to HMEPS and Social Security, including a qualied pension plan,
a qualied employee annuity plan, or a 403(b) annuity, federal limits may apply to the amount of
benets and/or contributions payable under all plans except Social Security. If the combined amount
exceeds a federal limit, the benets and/or contributions payable under the other plan(s) must be
reduced rst to conform to the limit. HMEPS benets and/or contributions are considered primary
to any other plan.
5
Benets Handbook
DISABILITY RETIREMENT
You may be eligible for disability retirement if you terminate service because
of an ordinary disability or service disability, as determined by the Board.
“Disabled” or “disability” means the complete and permanent inability of
an employee to perform the usual and customary duties that the employee has been performing as
an employee, or any other full-time duties for which he or she is reasonably suited by training or
experience. The Board makes the determination in its sole discretion whether an employee has a
disability. The Board also requires medical examinations and such other evidence as the Board deems
necessary to establish disability.
There are two types of disability benets: ordinary (off-duty) and service (on-duty). To apply for
an ordinary or service disability pension, you must be an HMEPS member or have separated from
service less than 30 calendar days before HMEPS receives your request to apply for a disability
retirement as a result of a disability that arose during your employment. However, you may not
apply for a disability retirement later than six months following your last day of credited
service. If you are granted a disability pension, you are considered to have resigned and shall be
removed from the employment rolls of the City or HMEPS not later than the last day of the month
in which the disability pension is approved.
Ordinary Disability Benets
To be eligible to apply for an ordinary disability retirement, you must complete at least 5 years of credited
service. If approved, you will receive a monthly benet beginning on your effective retirement date
and continuing for as long as your disability continues, subject to certain limitations on disability
pensions described below. The effective retirement date for a service or ordinary disability retirement
is the later of the day following your last day of credited service or the date HMEPS receives your
request to apply for disability retirement. The monthly benet will be determined as of your last day
of credited service and calculated in the same manner as a normal retirement pension. If you are in
DROP, you are not eligible for ordinary disability benets.
Service Disability Benets
You are covered for service disability beginning on your rst day of covered employment. For a
service disability, your disability must be the result of a personal injury that you suffer at a denite
time and a denite place while performing your job with the City or HMEPS, without serious or
willful misconduct on your part, as determined by the Board. If approved, you will receive a monthly
benet beginning on your effective retirement date and continuing for as long as your disability
continues, subject to certain limitations on disability pensions described below. The benet will be
an amount equal to the greater of (a) an amount determined as of your last day of credited service
and calculated in the same manner as a normal retirement pension or (b) 20% of your monthly salary
at that date (plus if you are a Group A member on the date of such service disability, 1% of such
monthly salary for each full year of credited service in Group A for which you paid contributions,
the sum of which shall not exceed 40% of such monthly salary). For purposes of the 1% per year
increase, a partial year of credited service remaining after all years, months and days of credited
service have been combined will be considered a full year of credited service if the partial year is six
months or more.
an employee to perform the usual and customary duties that the employee has been performing as
an employee to perform the usual and customary duties that the employee has been performing as
an employee to perform the usual and customary duties that the employee has been performing as
Houston Municipal Employees Pension System
Limitations on Disability Pensions
If you are receiving a disability pension, you are required to submit on or before April 1st of each year
a sworn afdavit stating your employment activities and earnings, if any, for the previous calendar
year. (See below to determine if you qualify for an exemption from this requirement.) If the total
amount of your earnings and your disability pension exceed the monthly salary you earned at the time
of your separation from service (as adjusted annually by the applicable cost-of-living adjustments, or
the percentage change in the Consumer Price Index), the Board is authorized to reduce the amount
of your disability pension, including a reduction to $0, for a period determined by the Board. If you
fail to timely submit an afdavit of employment activities and earnings or if you submit a materially
false or misleading afdavit, as determined by the Board, the Board is authorized to suspend and/or
discontinue your disability pension.
Exemption from reporting reuirement. You are not required to submit an employment activities
and earnings statement if any of the following situations applies to you:
(i) you have reached 65 years of age;
(ii) you have ve years of credited service in HMEPS and have reached 62 years of age; or
(iii) you have ve years of credited service in HMEPS and your combined age and years of cred-
ited service in HMEPS equals 75 or more, and you are at least 50 years of age.
If you receive a disability pension, you are subject at all times to investigation and verication by the
Board of your continued eligibility for a disability pension, including by means of covert surveillance,
and reexamination by the Board. You are required to submit to such further examination as the Board
may require, including medical examination, or an examination by the Board of medical, nancial
or earnings reports, or any other information as the Board may reasonably request. If you refuse
to submit to any such examination, the Board may, within its sole discretion, order your disability
pension payments suspended, up to and including discontinuation of the disability pension.
If you have begun to receive a disability pension and the Board determines that you have recovered
so that you are able to perform the usual and customary duties formerly handled by you or other full-
time duties that you could perform, the Board shall suspend or discontinue your disability pension.
If you are receiving a disability pension, you may not receive a retirement pension at the same time.
However, in the event the Board determines you are no longer disabled or eligible for a disability
pension and discontinues your disability pension, you may apply for an immediate or deferred
retirement pension as applicable. If you are eligible for an immediate or deferred retirement pension,
such pension will be calculated and payable in accordance with the laws and rules in effect at the time
of your last day of credited service, and will be based on your credited service up to the time of your
disability.
Benets Handbook
SURVIVOR BENEFIT
NOTE: The survivor benets explained below apply to persons who qualify
as a surviving spouse or dependent child of a member, deferred participant
or retiree who left employment or died on or after July 1, 2017. Please contact
HMEPS if you have questions about the provisions applicable in your situation.
Your surviving spouse and/or dependent child(ren) will each be eligible to receive a survivor benet
if you die:
a. from any cause on or after you have ve (5) years of credited service with the City or
HMEPS and you are a Group A or Group B member or deferred participant;
b. while you are in the service of the City or HMEPS, from any cause directly resulting from
a specic incident in the performance of your duties for the City or HMEPS (“service-re-
lated death”)
c. after the date you retire on a Pension received due to your length of service or due to a
disability, and you were a Group A or Group B member at the time of your separation
from service with the City or HMEPS; or
d. from any cause on or after you have ve (5) years of credited service with the City or
HMEPS while still in service with the City or HMEPS, and you were a Group D member
at the time of your death.
To be eligible for a survivor benet, your surviving spouse must have been legally married to you
continuously (i) as of the date of your separation from service with the City or HMEPS and (ii) at
the time of your death. A dependent child is eligible for a survivor’s benet if the dependent child
is your natural or adopted son or daughter who is unmarried and was supported by you before your
termination of employment, and is (i) younger than 21 years of age; or (ii) as determined by the
Board, totally and permanently disabled from performing any full-time employment because of an
injury or illness, serious mental illness, intellectual disability, or pervasive developmental disorder, that
began before the child became 18 years of age and before your termination of employment.
Survivor benets will be payable monthly to a surviving spouse for life and to the guardian of each
dependent child on behalf of the child until the earlier of the date: (1) the child marries; (2) the child
is no longer under the age specied in the Statute for a dependent child; (3) or otherwise is no longer
eligible. For this purpose, a child’s “guardian” is the person who has primary responsibility for the
child’s care and support, such as the surviving spouse of the participant or the child’s legal guardian,
managing conservator or any other person with a similar legal relationship to the child. However, the
Board may approve payment of a survivor benet directly to a child who is at least 18 years of age
instead of to the guardian or any other person.
A dependent child who is receiving a survivor benet on the basis of disability is subject to the same
reporting requirements as are applicable to disability benet recipients as explained under “Limitations
on Disability Pensions” beginning on page 36.
NOTE: The survivor benets explained below apply to persons who qualify
of a member, deferred participant
or retiree who left employment or died on or after July 1, 2017. Please contact
HMEPS if you have questions about the provisions applicable in your situation.
Houston Municipal Employees Pension System
Calculation of Survivor Benet
Except as provided below for a service-related death and death in retirement, your eligible survivor(s)
will receive a monthly amount calculated as a percentage of the retirement benets you would have
been eligible to receive had you been totally disabled with an ordinary disability on your last day of
credited service. The survivor benet is calculated and payable as follows:
Surviving spouse only (your surviving spouse is the only eligible survivor)
(i) If you were actively employed at the time of your death, your surviving spouse will receive a
survivor benet in an amount equal to the following applicable percentage (spousal survivor
benet) as follows:
a. if a non-service-related death, the spousal survivor benet is 80% if you and your surviv-
ing spouse were married for at least one continuous year as of your date of death, except
that the spousal survivor benet may not be less than $100 a month.
b. if a non-service-related death, the spousal survivor benet is 50% if you and your surviv-
ing spouse were married for less than one continuous year as of your date of death.
c. if a service-related death, the spousal survivor benet is 80% of your nal average salary.
However, if you suffer a service-related death while participating in the DROP, your sur-
viving spouse is ineligible to receive a service-related survivor benet unless your DROP
election is revoked. See page 31,“DROP Termination” for more information.
(ii) If you were a former Group A or Group B member and you die after terminating employment
but before retirement with at least ve years of credited service leaving a surviving spouse,
your surviving spouse is eligible for a spousal survivor benet equal to 50% of your normal
accrued pension at the time of your last day of credited service. The spousal survivor benet
rst becomes payable on the date you would have become eligible to begin receiving a pen-
sion, except that your surviving spouse may elect for earlier payment, in a time and manner
determined by the Board, to receive the actuarial equivalent of such amount payable at such
earlier date.
(iii) If you are a former Group D member and you die after terminating employment but before
retirement with at least ve years of credited service leaving a surviving spouse, and you did
not make the election to receive your benet as a normal benet or under an optional annuity,
you shall be deemed to have made an election for a 50% Joint & Survivor Annuity and desig-
nated your surviving spouse as the joint annuitant. Such amount will be payable at that earliest
retirement date, except that your surviving spouse may elect for earlier payment, in a time and
manner determined by the Board, to receive the actuarial equivalent of such amount payable
at such earlier date. If you have no surviving spouse, no survivor benet or J&S Annuity is
payable. If a J&S Annuity is paid, no other survivor benet is payable.
(iv) If you were a retired Group A or Group B member at the time of your death, your surviving
spouse will receive a spousal survivor benet equal to the applicable percentage of the retire-
ment pension you were receiving at the time of your death, with any cost-of-living adjustment
in the survivor benet computed based on your unadjusted normal retirement pension:
a. 80% if your death occurs on or after July 1, 2017 and you separated from service prior to
July 1, 2017;
Benets Handbook
b. 80% if both your separation from service and your death occur on or after July 1, 2017,
provided you were married to your surviving spouse at the time of your death and for at
least one continuous year as of the date of your separation from service; or
c. 50% if both your separation from service and death occur on or after July 1, 2017 and
you were married to your surviving spouse at the time of your death and for less than one
continuous year as of the date of your
separation from service.
NOTE: If you are a Group D retiree, you must have selected either a normal retirement benet, for
which there is no survivor benet, or an optional annuity, under which only a joint annuitant may be
eligible to receive benets after your death. Also, the information provided under “Surviving spouse
and dependent child(ren)” and “Dependent child(ren) only” below are not applicable in the case of
a Group D retiree or a former member of Group D who was eligible to elect a normal retirement
benet or optional annuity.
Surviving spouse and dependent child(ren):
If you are survived by a surviving spouse and dependent child(ren), each dependent child is eligible for
a survivor benet in the amount of 10% of the disability pension, nal average salary or retirement
pension, as applicable from (i), (ii) or (iii) above, subject to maximum benets of 20% in the aggregate
for all children, divided equally among all the dependen
t children. The spousal survivor benet
payable to the surviving spouse will be reduced so that the total amount of survivor benets paid is
not greater than 80% of the applicable disability pension, nal average salary or retirement pension.
The reduction will continue until the total amount payable to the surviving spouse and dependent
child(ren), if any, is not greater than 80% of the applicable disability pension, nal average salary or
retirement pension.
Dependent Child(ren) only:
If you are survived by dependent child(ren) but are not survived by a surviving spouse, each
dependent child is eligible for a survivor benet in the amount of 50% of an 80% spousal survivor
benet, subject to maximum benets of 100% of the spousal survivor benet in the aggregate for all
dependent children, divided equally among all the dependent children.
When a dependent child marries or attains age 21, if his or her survivor benet was calculated as an
equal share of a percentage of a disability pension, nal average salary, or retirement pension, his
or her share will be divided equally among the remaining dependent children unless all remaining
dependent children are already receiving a full 10% or 50%, as described above, depending upon
whether you were also survived by a surviving spouse.
No survivor benet or J&S Annuity is payable if:
A. an Option-eligible Participant does not elect a joint & survivor annuity, except as provided
in subsection (iii) of the “Surviving spouse only” section above.
B. an Option-eligible Participant elects a normal retirement pension or early retirement pension
and dies before retirement has commenced.
C. an Option-eligible Participant dies after retirement has commenced and such Option-
eligible Participant:
Houston Municipal Employees Pension System
(i) elected a normal retirement pension or early retirement pension;
(ii) did not make a valid election for a joint & survivor annuity; or
(iii) made an election that was void.
If a former Group A or Group B member was an Option-eligible Participant but did not elect
an optional annuity and subsequently died, any Dependent Child of the deceased Option-eligible
Participant is eligible to receive survivor benets as provided in Section 14 of the Statute; provided,
however, that HMEPS will not pay both a J&S Annuity and a survivor benet under Section 14 with
respect to any Option-eligible Participant.
If you die and leave no eligible survivor, then your spouse, if any, or if you left no spouse, then your
estate, will be eligible to receive payment in a lump sum, without interest, of the excess, if any, of
your accumulated member contributions to the date of your retirement (other than contributions
attrib
utable to your period of DROP participation, if any), over the aggregate monthly retirement
benet payments you received. Payment will be made within a reasonable time after the Board
determines that the individual or estate claiming the payment is eligible to receive the payment.
A survivor benet payable to an eligible survivor of a deceased retiree is effective on the rst day
of the month following the retiree’s death and ceases on the earlier of the last day of the month of
the eligible survivor’s death or on the last day of the month in which the survivor, if he or she is a
dependent child, ceases to be eligible to receive a survivor’s benet.
NOTE: You should take every effort to obtain and organize ofcial documents that establish your
marriage to your spouse and the identity of your natural or adopted children. For marriages, HMEPS
requires a marriage certicate that is recorded in the records of the county clerk’s ofce in the county
in which the marriage ceremony was performed. If the marriage was performed outside the United
States, HMEPS requires an ofcial document establishing the marriage and may require additional
information, including a translation by a reputable third-party, as determined by HMEPS, or ofcial
attestation of the document.
For an informal marriage (common-law marriage), HMEPS requires a valid marriage declaration
executed by the couple and recorded in the records of the county clerk’s ofce in the county in which
the couple resides. For participants who separate from service after June 29, 2002, if the declaration
of common-law marriage is signed and notarized after that date, the declaration will not be valid for
the period prior to the date it was signed, notarized and recorded.
For example, suppose a deferred participant and his spouse in common law sign a marriage declaration
in the presence of a notary publi
c on October 19, 2013. The declaration states that they met the
requirements for common law marriage beginning May 4, 2000. If all other requirements are met, as
determined by the Board, HMEPS will recognize the marriage as having begun October 19, 2013. If
the deferred participant terminated employment prior to October 19, 2013, the spouse is not eligible
for survivor benets in the event of the deferred participant’s death, because survivor benets are
only available to a surviving spouse who was married to an eligible participant continuously prior to
separation from service and at the time of death.
To document the status of your dependent child(ren), HMEPS requires the birth certicate (with
your name as the parent) of each dependent child, or the ofcial adoption papers.
Benets Handbook
AFTER SEPARATION OR RETIREMENT
Cost-of-Living Increase
The “cost-of-living adjustment” (COLA) is the HMEPS ve-year investment return, based on a
rolling ve-year basis and net of investment expenses, minus 5%, and then multiplied by 50%, but
the COLA will not be less than 0% or greater than 2%.
For example:
If the ve-year average investment return of the pension fund is 7%, then for the year
starting the following February, your monthly benet would increase by 1% of your
original benet amount;
If the ve-year average investment return of the pension fund is 10%, then for the year
starting the following February, your monthly benet would increase by 2% of your
original benet amount;
If the ve-year average investment return of the pension fund is 4%, then for the year
starting the following February, your monthly benet would not increase.
Pension and survivor benets for all eligible participants are increased annually by the COLA (unless
the COLA is 0%), not compounded, for all persons receiving a pension or survivor benet as
of January 1 of the year in which the increase is made. For purposes of the COLA, an “eligible
participant” is:
a Group A retiree or an eligible survivor of a Group A former member or retiree;
a Group B retiree or an eligible survivor of a Group B former member or retiree;
a Group D retiree who had at least ve years of credited service and made employee
contributions and terminated employment after July 1, 2017, or an eligible survivor of a
Group D former member or retiree who had at least ve years of credited service and who
made employee contributions and terminated employment after July 1, 2017.
For DROP participants, effective January 1, 2018, a COLA (other than a 0% COLA), not compounded,
will be credited to a DROP participant’s DROP account each year provided the DROP participant
was at least 62 years of age as of January 1 of that year.
Re-employment
If you are considering returning to work after retirement, it is important that you know how your
return to work may affect your retirement benet. The following applies if you have retired with a
normal (or deferred) retirement benet. Additional rules apply if you have retired with a disability
retirement benet; contact HMEPS if you were retired for a disability and have questions about
working.
Employment by Another Employer:
If you retire with a normal (or deferred) retirement benet, your benet is not affected if you work
for an employer other than the City or HMEPS.
Employment by the City of Houston or HMEPS:
If you retire with a normal (or deferred) or early retirement benet and you are subsequently
reemployed in a covered position by the City or HMEPS, your retirement pension ceases the day
Houston Municipal Employees Pension System
preceding the date you are reemployed. It is your responsibility to contact HMEPS prior to your
reemployment in a covered position. Reemployment in a covered position means you are eligible
to be a member of HMEPS.
If you are reemployed in a covered position, you will accrue credited service during your period of
reemployment, subject to the maximum benet limit (currently 90% of your average monthly salary).
Suspension of Pension upon Reemployment
Notwithstanding anything to the contrary, if you are receiving a retirement or disability pension and
are subsequently reemployed by the City or HMEPS, your retirement or disability pension shall cease
the day preceding the date you are reemployed. Payment of your pension shall be suspended during
the period of reemployment, and shall not recommence until the month following the month in
which you subsequently terminate service, subject to your eligibility and timely application. If you
receive any retirement or disability pension that was required to be suspended (disallowed pension),
you are required to return all of the disallowed pension payments you receive to HMEPS within thirty
(30) calendar days of receipt or such amount shall be subject to claims of HMEPS, and/or the Board
will offset the disallowed pension not returned, plus interest on the disallowed pension at the assumed
rate of return per year, not compounded, from the date you received the disallowed pension to the
date of the offset on the disallowed pension. The offset may be against the payment of any future
pension or benet payment(s), and/or against any DROP balance. If you are a deferred participant,
these same provisions also shall apply to any deferred pension that would otherwise become payable
to you during your period of reemployment with the City or HMEPS.
Calculation of Benet upon Subsequent Retirement
If you are a deferred participant and you are subsequently reemployed by the City or HMEPS before
reaching the age that you would be eligible to receive your deferred pension, or if you are receiving a
retirement pension and you are subsequently reemployed by the City or HMEPS, your pension will
be calculated as follows upon your subsequent retirement:
(i) The portion of your pension attributable to your period of credited service accrued prior to
reemployment will be calculated on the basis of the schedule of benets for retiring members
that was in effect at the time of your previous termination of employment.
NOTE: If you have had more than one period of credited service, the benefit for any period in
which you attained sufficient credited service for retirement eligibility under the requirements
in effect at the time of separation from service for such period will be calculated based on
the schedule of benefits for retiring members that was in effect at each such termination of
employment.
(ii) The portion of your pension attributable to your period of credited service accrued after your
reemployment will be calculated on the basis of the schedule of benets for retiring members
that is in effect at the time of your subsequent retirement.
Notwithstanding anything to the contrary, there shall be no retroactive payment of any benets or
other amounts to any member, retiree, deferred participant, beneciary, eligible survivor, estate, or
other person or entity.
Benets Handbook
CLAIMS PROCEDURES
A. Claims Procedure for Retirement Benets (for Disability
Benets, see (B) below)
(i) Applying for Retirement Benets
To apply for benefits, you must obtain the proper application form. Upon HMEPS’s receipt
of the completed application form, along with any other supportive information required,
HMEPS has 90 days in which to decide if any benefits are due. If special circumstances
require an extension, HMEPS will notify you before the end of the initial 90-day period,
and in no event will the period of such extension exceed an additional 90 days beyond the
first 90-day period (or a total of 180 days from the date you filed the application). HMEPS
reserves the right to require you to produce evidence substantiating your date of birth and
your spouse’s or beneficiary’s date of birth, depending upon the form of benefit payable,
and any other information required for the administration of HMEPS.
(ii) Denial of Claim for Retirement Benets
If your claim is fully or partially denied, you will be notified of this in writing within 90
days (or 180 days, if special circumstances exist).
If you receive no response on your claim within the 90-day (or 180-day) time limit, you
should consider the claim denied, and proceed to the appeal and review procedure, if you
wish.
(iii) Appeal and Review Procedure for Retirement Benets
If you wish to appeal a denial and have it reviewed, you must make such appeal, in writing,
within 60 calendar days of the date you receive notice of denial.
This appeal should be directed to the Board. The Board has sole discretion and decision-
making authority with respect to retirement benefits. You may also request a hearing
before the Executive Director as a part of your appeal. The Executive Director has 60
days in which to give you a written decision on your appeal unless additional time is needed.
A decision will be rendered as soon as possible, but not later than 120 days after receipt of
a request for review. If you receive no response to your appeal within the 60 days (or 120
days, if a special case), you should consider the appeal denied on review.
B. Claims Procedures for Disability Benets
(i) Applying for Disability Benets
To apply for a disability pension, you must obtain a “Request to Apply for Disability
Retirement” form from HMEPS or your departmental payroll representative, complete
the employee’s portion of the Request and submit the Request directly to HMEPS.
HMEPS will make an initial determination of your eligibility to apply for a disability
pension. In order to be eligible, you must meet the following requirements:
a. you must be an HMEPS member or former member who separated from service not
more than 30 calendar days prior to the date HMEPS receives your Request (and your
(i) Applying for Retirement Benets
(i) Applying for Disability Benets
Houston Municipal Employees Pension System
disability must have arisen during your employment), except that you may not apply
for a disability pension after six months following your last day of credited service; and,
b. if you are applying for an ordinary disability pension, you must have at least ve (5)
years of credited service.
Your eligibility will be determined as of the date HMEPS receives your Request. If you are
eligible, HMEPS will provide you with the necessary forms and documents to complete,
and the information that must be provided by your medical provider(s) in order for you to
apply for a disability pension.
Your completed application and medical information will be submitted to the Board for its
consideration. The Board, in its sole discretion, will render a decision with regard to your
application within ninety (90) days after receipt of the completed application and medical
information (or 180 days, if special circumstances exist). Such decision-making may i
nclude,
but is not limited to, approving or denying an ordinary or service disability pension, tabling
the application for further discussion, review, receipt of additional information, rejecting
the application for failure to meet required criteria, or any other action deemed appropriate
by the Board in its sole discretion. If the Board approves your application, you are deemed
to have retired or terminated service for reason of disability no later than the last day o
f
the month in which the Board approved your disability pension.
If your claim is fully or partially denied, you will be notified of this in writing within 90
days (or 180 days, if special circumstances exist). This notification will tell you: (a) that
the Board has denied the claim in whole or in part; and (b) provide an explanation of the
claims review procedure set forth below.
If you receive no response on your claim within the 90-day (or 180-day) time limit, you
should consider the claim denied, and proceed to the appeal and review procedure, if you
wish.
(ii) Denial of Application for Disability Benets, Appeal and Review
If you wish to appeal a denial and have it reviewed, you must make such appeal in writing
within 60 calendar days of the date you receive notice of denial. This appeal must be
directed to the Board and must contain new and updated medical information not previously
submitted and any additional information reasonably requested by HMEPS. The Board
has sole discretion and decision-making authority with respect to disability benefits. The
Executive Director has 60 days in which to give you a written decision on your appeal
unless additional time is needed. A decision will be rendered as soon as possible, but not
later than 120 days after receipt of a request for review. If you receive no response to your
appeal within the 60 days (or 120 days, if a special case), you should consider the a
ppeal
denied on review. The Board’s decision on appeal is final and binding. If an appeal is not
timely filed or is withdrawn, the Board’s original decision is final and binding.
(ii) Denial of Application for Disability Benets, Appeal and Review
5
Benets Handbook
BOARD ACTIONS
The Board is responsible for the administration of HMEPS. The determination
of any fact by the Board, and the Board’s interpretation of the Statute, are nal
and binding on any interested party, including members, deferred participants, retirees,
eligible survivors, beneciaries, and the City.
The Board may obtain from any member, deferred participant, retiree, eligible survivor, alternate
payee, or beneciary any information the Board considers necessary for the proper administration
of HMEPS. The Board may require any member, survivor, or other person or entity to furnish
information the Board requires for the determination of benets under the Statute. If a person or
entity does not cooperate in the furnishing or obtaining of information, the Board may withhold
payment of the pension or other benets until the Board receives the information. Any pension or
benet withheld during the delay in providing information shall be lost unless the Board determines,
in its sole discretion, that all or a portion of the withheld pension or benet shall be paid to the
person or entity.
The Board may offset amounts received wrongly or in error by a member, deferred participant, retiree,
eligible survivor, alternate payee, or beneciary from future pension or benet payments payable to
the person or the person’s beneciaries.
If a retiree or eligible survivor has a benet check from HMEPS that has not been presented for
payment by the retiree or eligible survivor, the Board may authorize HMEPS, upon written request of
the retiree or eligible survivor, to reissue the check to the retiree or eligible survivor, provided that the
check was issued within two (2) years prior to the date of the written request. All checks issued more
than two years prior to the date of the written request are void and any and all amounts represented
by the checks are not payable by HMEPS to any person or entity.
In the event a retiree has a benet check from HMEPS that has not been presented for payment by
the retiree and the retiree dies, the Board may authorize HMEPS to reissue the check payable to the
surviving spouse, or if there is no surviving spouse, to the estate of the retiree, provided that the
check was issued within the 90 calendar day period prior to the retiree’s death. All checks issued more
than 90 calendar days prior to the death of the retiree are void and any and all amounts represented
by the checks are not payable by HMEPS to any person or entity.
You are required to keep HMEPS informed of your address. If HMEPS receives returned mail from
your address of record, HMEPS may take action, including suspension of payments to you, until you
provide HMEPS with your correct address and any other relevant information HMEPS requires.
The Board is responsible for the administration of HMEPS. The determination
of any fact by the Board, and the Board’s interpretation of the Statute, are nal
and binding on any interested party, including members, deferred participants, retirees,
and binding on any interested party, including members, deferred participants, retirees,
Houston Municipal Employees Pension System
TAX INFORMATION
HMEPS is designed to operate as a qualied pension plan and also to comply with the rules under
the Internal Revenue Code (the “Code”) for employer pick-up contributions. Qualication of the
pension plan means that participants will not have to pay income tax on the City’s contributions to
HMEPS, including “pick-up” contributions, or on the investment income on such contributions, until
distribution, and that some distributions from HMEPS may qualify as roll-over distributions under
the Code.
The Board may by resolution make the implementation of a provision of the Statute contingent on
receipt of a favorable private letter ruling or favorable determination letter from the Internal Revenue
Service if the Board determines that the action is in the best interest of HMEPS.
The following paragraphs contain reference to tax andor tax rates for operational purposes
only. This summary is not intended to cover aspects of HMEPS participation from a tax
perspective. Participants are urged to consult with a tax advisor concerning specic tax
conseuences regarding participation in HMEPS.
A. Contributions
Amounts picked up by the City and contributed to HMEPS are deferred from federal income
tax until you receive the contributions in the form of a refund or pension benefit. Federal
income tax is currently paid on after-tax contributions, if any, contributed to HMEPS. Both
after-tax and pick-up contributions will be subject to Social Security and Medicare (FICA) tax
when made.
B. ump Sum Distributions
If you receive a refund of your contributions to HMEPS upon termination or if you receive
your pension in a lump sum, generally all or part of the distribution (except a distribution
of after-tax contributions) is subject to federal income tax at ordinary income tax rates and,
if received prior to your reaching age 59½, may be subject to a 10% penalty tax on early
distributions. However, if you transfer all or a portion of the taxable amount distributed
from HMEPS to an IRA or a qualified pension plan, such transfer (rollover) may postpone
the payment of federal income tax on the distribution. The transfer must comply with the
rollover rules described below.
You may have all or any portion of the payment either paid as a “rollover” or paid to you.
If the distribution is delivered directly to you, then that part of the distribution eligible for
rollover treatment will be subject to mandatory federal income tax withholding at a 20% rate (a
different rate may apply for out-of-country distributions) even if you ultimately decide to roll
over the entire distribution. To avoid the withholding of this 20% tax, you can elect to have
your distribution transferred directly to an IRA or qualified pension plan that accepts rollovers.
Such direct transfer will postpone the payment of federal income tax on the distribution. If
you want to elect a direct transfer of your distribution, obtain the appropriate forms from the
HMEPS Office.
If you do not elect the direct transfer option, the 20% tax will be withheld (a different rate
may apply for out-of-country distributions). To avoid a federal tax liability in the year of the
Benets Handbook
distribution, within 60 days you may roll over the distribution received plus an additional
amount equal to the 20% tax that was withheld. Then you would apply the withheld amount
to your tax bill or claim a tax refund on your federal tax return. If you do not roll over the 20%
federal tax payment, that amount will become taxable income to you in the year of distribution.
The above rules also apply to distributions made to the surviving spouse of a participant. A
surviving spouse, however, may make a direct rollover only to an IRA. If the total of the
distribution is less than $200.00, it is not eligible for rollover; therefore, the 20% withholding
rules do not apply. If a participant elects to have a portion of the distribution paid directly
to him or her, and a portion of the distribution is rolled over, the rollover portion cannot be
less than $500.00.
REDUCTION OF BENEFITS/INCREASED CONTRIBUTION REQUIREMENTS
The Corridor
Effective July 1, 2017, funding for the HMEPS plan from City contributions is subject to a control.
This control, called a “Corridor,” limits how high and how low the city contribution rate can go. For
each subsequent year, the Corridor has a Corridor Midpoint, a Maximum Rate and a Minimum Rate,
as described below.
Based on initial studies performed by the HMEPS actuary and the City actuary, there is
a projected city contribution rate for each scal year of a 31-year period beginning with
FY 2018 (scal year beginning July 1, 2017). The projected city contribution rate for each
scal year will be that year’s Corridor Midpoint, and the Maximum Rate is set 5 percentage
points higher than the Corridor Midpoint and the Minimum Rate is set 5 percentage points
lower than the Corridor Midpoint.
Each subsequent year, the HMEPS actuary and the City actuary will perform studies
to project the city contribution rate for the next scal year. If the nal calculated city
contribution rate for the next scal year is above the applicable Corridor Midpoint but
less than or equal to the Maximum Rate, the City pays the calculated city contribution rate.
If the calculated city contribution rate for the next scal year is less than the applicable
Corridor Midpoint, then depending on the funded status of the plan, the City pays the
Corridor Midpoint or a rate between the Minimum Rate and the Corridor Midpoint.
If the calculated rate is more than the Maximum Rate, then benet reductions and/or
increased employee contributions are implemented until the city contribution rate is halfway
between the Corridor Midpoint and the Maximum Rate. The halfway rate will remain for
3 scal years to provide an opportunity for investment experience to lower the rate to the
Corridor Midpoint. If the rate has not reached the Corridor Midpoint after 3 scal years,
then benet reductions and/or increased employee contributions are implemented until
the rate equals the Corridor Midpoint for the following scal year.
In the event the pension fund becomes seriously depleted in the opinion of the Board, the Board
reserves the right to proportionately and temporarily reduce the benets of all retirees, eligible
survivors, alternate payees and beneciaries. However, such reductions will be removed as and when
the pension fund is, in the opinion of the Board, sufciently reestablished to do so.
Houston Municipal Employees Pension System
A retiree or eligible survivor who is receiving a retirement pension or survivor benet may, at his or
her option, receive a smaller retirement pension or survivor benet by making a written request to
HMEPS in a manner determined by the Board. If you choose this option, you are not eligible for
payment of any amount of the reduction at any time.
CONFIDENTIALITY
Information contained in records that are in the custody of HMEPS concerning an individual member,
deferred participant, retiree, eligible survivor, beneciary, or alternate payee is condential and may
not be disclosed in a form identiable with a specic individual except under limited circumstances.
However, the condentiality of records does not prevent the disclosure of the status or identity
of an individual as a member, former member, deferred participant, retiree, deceased participant,
eligible survivor, beneciary, or alternate payee of the pension system. Further, if information is
subject to disclosure, such disclosure may be made without notice to the individual member, deferred
participant, retiree, eligible survivor, beneciary, or alternate payee.
Please contact HMEPS if you have questions about information requests.
POWERS OF ATTORNEY
HMEPS will recognize an agent or attorney-in-fact (“agent”) under a power of attorney only if
HMEPS determines that the power of attorney is a valid Statutory Durable Power of Attorney as set
forth in Section 490, Texas Probate Code, Chapters 751 and 752, Texas Estates Code, as applicable,
or any successor statute or re-designation thereto. A durable power of attorney contains a “durability
clause,” which is a provision that permits your designated agent to act on your behalf in the event you
are unable to handle your affairs.
Because of the broad power granted by a durable power of attorney, we recommend that you consult
an attorney before signing the power of attorney.
The individual appointed under a durable power of attorney assumes the duciary and other legal
responsibility of an agent by accepting or acting under the appointment. Therefore, you should
inform your designated agent of the high standards of accountability and fair dealings associated with
the duciary relationship and the severe penalties associated with any breach of duty arising from acts
of self dealing or acts which exceed the scope of the agent’s authority.
If you change your mind about your power of attorney, you must properly revoke the power of
attorney or complete a new power of attorney that contains the changes you desire and that properly
revokes the old power of attorney. Keep in mind that revocation does not terminate the agency as
to the agent or other person who, without actual knowledge of the termination of the power by
revocation, continues to act in good faith or reliance under the power. Therefore, you must inform
those who are acting under the power that the power has been revoked. If HMEPS recognizes a
power of attorney that is later revoked, HMEPS is not liable for any payments made or actions taken
at the request of the agent that occur prior to the date HMEPS receives written notice that the power
of attorney has been revoked.
Benets Handbook
Chapter 752 of the Texas Estates Code contains a durable power of attorney form. You may also
obtain a sample form from HMEPS. When requesting a form, please notify HMEPS if the power of
attorney will be signed with a mark (“x”) so that the appropriate sample form can be sent. HMEPS
will recognize a power of attorney signed with a mark only if it is properly witnessed and notarized.
If you have further questions about a power of attorney, you should consult an attorney
COMPUTATION OF TIME
For purposes of time periods set forth in this handbook:
(i) If the last day of any period is a Saturday, Sunday, or HMEPS-observed holiday (other than a
oating holiday), the period is extended to include the next HMEPS business day that is not a
Saturday, Sunday, or HMEPS-observed holiday (other than a oating holiday).
(ii) If a number of months is to be computed by counting the months from a particular day, the
period ends on the same numerical day in the concluding month as the day of the month from
which the computation is begun, unless there are not that many days in the concluding month,
in which case the period ends on the last day of that month.
PROPORTIONATE RETIREMENT
The Board previously established a program of proportionate retirement benets to allow members
or former members the ability to combine their credited service in the Houston Police Ofcers’
Pension System (HPOPS) and/or the Houston Fireghters’ Relief and Retirement Fund (HFRRF)
with HMEPS credited service solely for the purpose of determining eligibility for a normal retirement
pension, as provided in the Statute. The Board terminated the proportionate retirement program
effective May 1, 2018, but continues the program for eligible participants actively employed on May
1, 2018 for the period they remain actively employed. Contact HMEPS for more information about
the proportionate retirement program.
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Houston Municipal Employees Pension System
OTHER IMPORTANT INFORMATION
Administration. HMEPS is governed by the Statute and is maintained by the HMEPS Board. The
Executive Director assists the Board in the administration of HMEPS. Any questions regarding
HMEPS should be directed to the Houston Municipal Employees Pension System, 1201 Louisiana,
Suite 900, Houston, Texas 77002.
Mandatory Commencement. The payment of pension benets to a participant must commence
no later than the rst day of April of the year following the calendar year in which the participant has
either (a) attained age 70½, or (b) terminated service, whichever occurs later.
o Duplication of Plans. The Statute provides that there will be no duplication of pensions
payable under HMEPS and pensions or other retirement benets payable under any other dened
benet pension plan to which the City contributes.
Plan ear. HMEPS is operated on a plan-year basis that begins on July 1 and ends on June 30.
Plan Identication. The employer identication number assigned to HMEPS is 74-6036550.
egal Process. HMEPS’s agent for service of legal process is the Executive Director.
Custodian. HMEPS’s assets are held by a custodian as required under Chapter 802 of the Texas
Government Code. The custodian’s address is State Street Corporation, 801 Pennsylvania, Kansas
City, MO 64105.
Assignment of Benets. HMEPS is intended to pay benets only to you and your eligible survivors
and beneciaries. You cannot assign your benet in any way, except as provided in the Statute, or use
your benet as collateral for loans. However, your benet may be divided by a “qualied domestic
relations order.”
Qualied Domestic Relations Order. A “qualied domestic relations order” is a legal judgment or
decree which recognizes the rights of another person under HMEPS, with respect to alimony, marital
property rights or support for a child or other dependent. A domestic relations order must satisfy
the requirements of Chapter 804 of the Texas Government Code to be “qualied,” and it must be
recognized by HMEPS’s plan administrator. For an order issued after May 1, 2014, such order must
comply with the “Model Order for Domestic Relations Order” adopted by HMEPS as authorized
under Chapter 804 of the Texas Government Code A llable form of the HMEPS Model QDRO
is available on the HMEPS website at www.hmeps.org/resources.html. In addition, there are specic
procedures regarding the amount and timing of any payments made under an order. You may receive
more information from the HMEPS Ofce.
Maximum Benets. The Internal Revenue Service (“IRS”) imposes certain limitations concerning
the maximum benet employees may receive from HMEPS. You may receive more information on
limits from the HMEPS Ofce.
Payments to Guardians. If any person who is entitled to receive a benet from this plan is a minor
or legally incompetent, the Board may choose to have payments made to the person’s guardian or as
provided by an order from an appropriate court. The Board is not required to ensure that proper
application of such benet payments is made.
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Benets Handbook
Information Reuests. The Board may obtain from any member, deferred participant, retiree,
eligible survivor, alternate payee, or beneciary any information the Board considers necessary for
the proper administration of HMEPS. The Board may require any member, survivor, or other person
or entity to furnish information the Board requires for the determination of benets. If a person
or entity does not cooperate in the furnishing or obtaining of information, the Board m
ay withhold
payment of the pension or other benets until the Board receives the information.
Unclaimed Benets. If you should become eligible for a benet from HMEPS, the Executive
Director may mail by registered or certied mail to you at your last known address a written demand
for your then address or for satisfactory evidence that you are living, or both. If you fail to provide
such information to the Executive Director within two months from the mailing of the demand, and
i
f other reasonable efforts of HMEPS to locate you have been unsuccessful as determined by the
Board, your benet will be suspended, and the Board may, in its sole discretion, determine that you
have forfeited your right to such benet and may declare such benet (or any unpaid portion thereof)
terminated; provided, however, that any forfeited benet shall be reinstated if you make a claim for
such benet at any time within two years from the date of the mailing of th
e initial demand.
Controlling aw. HMEPS is governed by the laws of the State of Texas.
Ofcial Text. This summary describes the highlights of HMEPS. It does not change or take the
place of the Statute and the rules adopted by the Board, which govern all rights and benets.
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Houston Municipal Employees Pension System
GLOSSARY OF TERMS
1. “Article 6243g” means Chapter 358, Acts of the 48th Legislature, Regular Session, 1943 (former Article
6243g, Vernon’s Texas Civil Statutes), as amended.
2. “Authorized absence” means (a) each day an employee is absent due to an approved holiday, vacation,
accident or sickness, as long as the employee is continued on the employment rolls of the City or
HMEPS, receives his or her regular salary from the City or HMEPS for each day of absence and remains
eligible to work upon recovery or return, or (b) any period that a person is on military leave of absence
covered by USERRA, provided the person complies with the requirements of USERRA and the Statute.
3. “Average monthly salary” means the amount calculated by dividing the sum of the 78 highest bi-weekly
salaries paid to an employee during years of credited service by 36, or, if there are less than 78 bi-weekly
salaries paid to an employee during the employee’s period of credited service, the amount calculated
by multiplying the average of all bi-weekly salaries paid to the employee during his or her period of
credited service by 26 and dividing such product by 12.
4. “Benet accrual rate(s)” means the percentage(s) for each year of a member’s credited service for
purposes of calculating a pension or other benet.
5. “City” means the City of Houston, Texas.
6. “Code” means the United States Internal Revenue Code of 1986, as amended.
7. “Credited Service” means each day of service and prior service of a member for which:
a. the City and the member have made required contributions to HMEPS that were not subsequently
withdrawn;
b. the member has purchased service credit or converted service credit from Group B to Group A
by paying to HMEPS the required amounts and such amounts were not subsequently withdrawn;
c. the member has reinstated service under the service purchase provisions of Section 7 of the
Statute; and
d. the member has previously made payments to HMEPS that, under then existing provisions of
law, entitled the member to credit for such service, and such amounts were not subsequently with-
drawn.
8. “Deferred Participant” means a person who has separated from service and has at least ve (5) years of
credited service in HMEPS but has not met the eligibility requirements for a normal retirement pension
under the Statute, and who has made a written election to receive a deferred retirement benet that has
been approved by the Board.
9. “Dependent Child” means the unmarried natural or legally adopted son or daughter of a member,
deferred participant, or retiree, who was supported by the member, deferred participant or retiree, and
who is either under 21 years of age or is totally and permanently disabled from performing any full-time
employment because of an injury or illness, serious mental illness, intellectual disability, or pervasive
developmental disorder, that began before the child became 18 years of age and before the termination
of employment of the member, deferred participant, or retiree.
10. “Disability” or “Disabled” means the complete and permanent inability of a member to perform the
usual and customary duties that the member has been performing as an employee, or any other full-time
duties for which the member is reasonably suited by training or experience, as determined by the Board
in its sole discretion on the basis of medical examination and any other evidence the Board determines
is necessary.
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Benets Handbook
11. “Effective Retirement Date” means the rst day of the month retirement begins for a member or
deferred participant who is eligible for retirement. If HMEPS receives a member’s application for
normal retirement before the member’s separation from service or not later than the 90th calendar
day after the date of the member’s separation from service, the effective retirement date is the later of
the rst day of the month following the month of separation or the date specied o
n the application.
If HMEPS does not receive the application within 90 calendar days after the date of the member’s
separation from service, the effective retirement date is the later of the rst day of the month after
HMEPS receives the application, or the date specied on the application. The effective retirement date
for a member who qualies for a service or ordinary disability retirement is the later of the day following
the member’s last day of credited service or the d
ate HMEPS receives his or her authorized request to
apply for disability retirement.
12. “Eligible Survivor” means a “surviving spouse” or “dependent child” as dened herein.
13. “Employee” means and includes any person eligible under the Statute in a municipal position whose
name appears on a regular full time payroll of the City and who is paid a regular salary for his services;
provided, that any elected ofcial who becomes a member of HMEPS as permitted by the S
tatute
shall be considered to be and to have been an employee during the period of any service as an elected
ofcial. The term also includes any person eligible under the Statute whose name appears on a regular
full time payroll of HMEPS and who is paid a regular salary for his services, or, unless the External
Affairs Committee expressly determines otherwise, who is an employee of any entity controlled, directly
or indirectly, by the City.
14. “Marriage” or “married” means a marriage in which:
a. a marriage certicate is recorded in the records of the county clerk’s ofce in the county in which
the marriage ceremony was performed; or
b. in the case of a common-law marriage, a marriage declaration is executed by the couple and re-
corded in the records of the county clerk’s ofce in the county in which the couple resides. For
separations from service after June 29, 2002, a marriage that is evidenced by a declaration of
common-law marriage signed before a notary public after June 30, 2002, may not be treated as
effective before the date it was signed before the notary public.
15. “Member” means each active employee included in HMEPS provided for herein and becoming a member
thereof, except an employee who is ineligible under the Statute.
16. “Military Service” of any member means honorable active service in the armed forces of the United
States or wartime service in the armed forces o
f the United States or in the Allied Forces, if credit
for military service has not been granted under any other federal or state system or used in any other
retirement system, except as expressly required under federal law.
17. “Option-Eligible Participant” means, as determined by the Board in its sole discretion:
a. A former Group A Member or Group B Member who terminates employment with the City or
the Pension System on or after June 30, 2011, and wh
o is eligible to receive a Normal Retirement
Pension, but only if the former Group A Member or Group B Member was not married as of the
date of his termination of employment;
b. A former Group B member who terminated employment with the City or the Predecessor System
before September 1, 1997 and who is eligible to receive a Normal Retirement Pension; or
c. A former Group D Member who terminated employment with the City or the Pension System
and who is eligible to receive a Normal Retirement Pension or an Early Retirement Pension.
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Houston Municipal Employees Pension System
18. “Participant” means a former Member, including a Deferred Vested Participant, a Retiree, or a former
DROP Member.
19. “Pension” means a benet payable to a retired member by HMEPS based on a disability or service
retirement.
20. “Pension Fund” or “fund” means assets consisting of the contributions made by the City, contributions
made by any member, and any income, prots or other increments derived from investments made from
those contributions, which are held in trust f
or the sole benet of the members and retirees of HMEPS
and their eligible survivors.
21. “Previous Service” means all services and work as an employee, other than “prior service” as herein
dened, which preceded a member’s current period of employment.
22. “Prior Service” means all services and work performed as an employee prior to September 1, 1943.
23. “Retiree” means a former member of HMEPS who has separated from service, has met the eligi
bility
requirements for a deferred or normal retirement or disability pension under the Statute, and is receiving
a deferred or normal retirement or disability pension under the Statute based on service that was credited
to the person.
24. “Salary” means base pay, plus longevity pay, plus shift-differential pay, if any, paid to an employee and
attributable to services rendered by the employee regardless of how actually paid.
25. “Separate from Service” or “separation from service” means cessation of work for the City or HMEPS
in an eligible position covered by the Statute, whether caused by death, discharge, resignation, retirement
or any reason involving the person’s removal from the employment rolls of the City or HMEPS, the
effective date of which shall be certied by the City or HMEPS. The term includes termination of
employment.
26. “Service” means each day of services and work performed by an “employee” as that term is dened
herein, including an “authorized absence” as that term is dened herein. The term does not include any
period in which a person is a DROP participant, suspended from duty without pay, on leave of absence
without pay, ineligible for membership, or separated from service. Service does not include time spent
in the re or police academy.
27. “Surviving spouse” means a spouse by marriage of a member, deferred participant or retiree both at
the time of death of the member, d
eferred participant or retiree, and as of the date of separation from
service of the member, deferred participant or retiree.
28. “USERRA” means the Uniformed Services Employment and Reemployment Rights Act, 38 U.S.C. 4301
et seq.
Houston Municipal Employees Pension System
1201 Louisiana, Ste. 900
Houston, TX 77002
713.595.0100
www.hmeps.org
Benefits Handbook (as of July 2017)
1201 Louisiana, Ste. 900
Houston, TX 77002
713.595.0100 | www.hmeps.org
