bill giving retired state employees a 10 percent bump

The text as introduced · 1,167 words

89R13013 RDR-D

By: Allen
H.B. No. 3870

A BILL TO BE ENTITLED

AN ACT

relating to certain benefits paid by the Employees Retirement

System of Texas.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Subchapter G, Chapter 814, Government Code, is

amended by adding Sections 814.605 and 814.606 to read as follows:

Sec. 814.605. ONE-TIME ADJUSTMENT TO BENEFITS. (a) The

amount of a service retirement, disability retirement, death, or

other monthly benefit paid under this chapter or Chapter 804 to an

annuitant based on service credited in the employee class is

increased to include a one-time 10 percent adjustment payable each

month of each calendar year beginning with the 2026 calendar year in

accordance with this section.

(b) The board of trustees shall recompute the amount of a

benefit paid monthly under this chapter or Chapter 804 by applying

the 10 percent adjustment to the monthly amount otherwise required

to be paid as determined in accordance with those chapters.

Sec. 814.606. ANNUAL COST-OF-LIVING ADJUSTMENT. (a)

Notwithstanding Section 814.604 or 814.605, the amount of a service

retirement, disability retirement, death, or other monthly benefit

paid under this chapter or Chapter 804 to an annuitant based on

service credited in the employee class is increased in accordance

with this section as necessary to reflect inflation.

(b) Each year, during the last seven days of October, the

board of trustees shall set the rate of the adjustment for the next

calendar year to equal the annual percentage increase, if any, in

the Consumer Price Index for Urban Wage Earners and Clerical

Workers (CPI-W) published by the Bureau of Labor Statistics of the

United States Department of Labor as determined by the commissioner

of social security under 42 U.S.C. Section 415(i) for purposes of

providing an annual cost-of-living increase to social security

benefit payments payable in the next calendar year.

(c) Subject to Subsection (d), the board of trustees shall

increase the amount of a benefit payable under this chapter by

applying the adjustment rate set by the board of trustees under

Subsection (b) to the amount otherwise required to be paid as

determined in accordance with the other applicable provisions of

this chapter or Chapter 804.

(d) The board of trustees may not pay a benefit increase

under this section in any calendar year unless the board finds that

the retirement system is actuarially sound and has money available

to pay increased benefits in that year. If the board of trustees

finds that the retirement system is actuarially sound, but that the

amount of money available is not sufficient to pay the full amount

of the adjustment under Subsection (b), the board shall compute the

largest rate of adjustment possible for the amount of money

available while maintaining the actuarial soundness of the system

and shall use that rate in increasing benefits under Subsection (c)

for that calendar year.

SECTION 2. (a) Subject to Subsection (i) of this section

and Section 811.006, Government Code, the Employees Retirement

System of Texas shall make a one-time supplemental payment of a

service retirement, disability retirement, death, or other monthly

benefit, as provided by this section.

(b) The supplemental payment is payable in January 2026 and,

to the extent practicable, on a date or dates that coincide with the

regular annuity payment payable to each eligible annuitant.

(c) The amount of the supplemental payment is equal to the

lesser of:

(1) $2,000; or

(2) the gross amount of the regular annuity payment to

which the eligible annuitant is otherwise entitled for the month of

December 2025.

(d) The Employees Retirement System of Texas shall make

applicable tax withholding and other legally required deductions

before disbursing the supplemental payment. A supplemental payment

under this section is in addition to the regular monthly annuity

payment to which the eligible annuitant is otherwise entitled.

(e) Subject to Subsection (f) of this section, to be

eligible for the supplemental payment, a person must be, for the

month of December 2025, an annuitant eligible to receive based on

service credited in the employee class:

(1) a standard retirement annuity payment;

(2) an optional service retirement annuity payment as

either a retiree or beneficiary under Section 814.108, Government

Code;

(3) a standard or occupational disability retirement

annuity payment;

(4) a death benefit annuity payment under Section

814.305, Government Code; or

(5) an alternate payee annuity payment under Section

804.005, Government Code.

(f) If the annuitant is a retiree or a beneficiary under an

optional retirement payment plan, to be eligible for the

supplemental payment, the effective date of the retirement of the

member of the Employees Retirement System of Texas must have been on

or before September 1, 2024. The supplemental payment shall be made

to an alternate payee who is an annuitant under Section 804.005,

Government Code, only if the annuity payment to the alternate payee

commenced on or before September 1, 2024. The supplemental payment

is in addition to the guaranteed number of payments under Section

814.108, Government Code, and may not be counted as one of the

guaranteed monthly payments.

(g) The supplemental payment does not apply to payments

based on service credited in the elected class, including payments

under:

(1) Section 814.103, 814.205, 820.053(a)(3), or

820.054, Government Code, relating to retirees or disability

retirees from the elected class of membership;

(2) a subtitle other than Subtitle B, Title 8,

Government Code, except as provided by Subsection (e)(5) of this

section; or

(3) Section 814.304 or 820.054, Government Code,

relating to retiree survivor beneficiaries who receive a survivor

annuity as the surviving spouse of a member of the elected class.

(h) Except as provided by this section, the board of

trustees of the Employees Retirement System of Texas shall

determine the eligibility for and the amount and timing of a

supplemental payment and the manner in which the payment is made.

(i) The Employees Retirement System of Texas is required to

make a one-time supplemental payment of benefits under this section

only if the board of trustees of the Employees Retirement System of

Texas finds that the legislature appropriated money to the

retirement system in an amount sufficient to provide the payment

without increasing the unfunded actuarial liabilities of the

retirement system. The amount appropriated by the legislature to

provide the payment must be in addition to any amounts the state is

required to contribute to the retirement system under Subchapter E,

Chapter 815, Government Code. If the board of trustees of the

Employees Retirement System of Texas finds that the legislature did

not appropriate money in an amount sufficient to provide a one-time

supplemental payment of benefits under this section without

increasing the unfunded actuarial liabilities of the retirement

system, the retirement system may not make the payment.

SECTION 3. Sections 814.605 and 814.606, Government Code,

as added by this Act, apply only to a monthly benefit payment made

by the Employees Retirement System of Texas on or after January 1,

2026.

SECTION 4. This Act takes effect September 1, 2025.