bill giving retired state employees a cost-of-living raise

The text as introduced · 1,658 words

89R9325 RDR-D

By: Menéndez
S.B. No. 2472

A BILL TO BE ENTITLED

AN ACT

relating to providing a one-time supplemental payment and a

cost-of-living adjustment applicable 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 Section 814.605 to read as follows:

Sec. 814.605. COST-OF-LIVING ADJUSTMENT: JANUARY 2026. (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 cost-of-living adjustment in accordance with

this section.

(b) Subject to Subsections (c) and (d), to be eligible for

the adjustment, a person must be, for the month of December 2025, an

annuitant eligible to receive:

(1) a standard retirement annuity payment;

(2) an optional service retirement annuity payment as

either a retiree or beneficiary under Section 814.108;

(3) a standard or occupational disability retirement

annuity payment;

(4) a death benefit annuity payment under Section

814.301, 814.302, or 814.305; or

(5) an alternate payee annuity payment under Section

804.005.

(c) The adjustment does not apply to benefit payments:

(1) based on service credited in the elected class; or

(2) under a subtitle other than this subtitle except

as provided by Subsection (b)(5).

(d) If the annuitant:

(1) is a retiree, or is a beneficiary under an optional

service or disability retirement payment plan, to be eligible for

the adjustment under this section:

(A) the annuitant must be living on the effective

date of the adjustment; and

(B) the effective date of the retirement of the

member of the retirement system on whose service the annuity is

based must have been before September 1, 2024;

(2) is a person eligible to receive a death benefit

annuity described by Subsection (b)(4), to be eligible for the

adjustment:

(A) the annuitant must be living on the effective

date of the adjustment; and

(B) the date of death of the member of the

retirement system on whose service the annuity is based must have

been before September 1, 2025; or

(3) is an alternate payee under Section 804.005, to be

eligible for the adjustment:

(A) the annuitant must be living on the effective

date of the adjustment; and

(B) the effective date of the annuitant's

election to receive the annuity payment must have been before

September 1, 2025.

(e) An adjustment under this section must be made beginning

with an annuity payable for the month of January 2026.

(f) The amount of the adjustment provided under this section

is calculated by multiplying the amount of the monthly benefit

subject to the adjustment by the following percentage rate, as

applicable:

(1) for annuitants described by Subsection (d)(1):

(A) if the effective date of retirement of the

member of the retirement system on whose service the annuity is

based was before January 1, 2007, eight percent;

(B) if the effective date of retirement of the

member of the retirement system on whose service the annuity is

based was on or after January 1, 2007, but before January 1, 2019,

six percent;

(C) if the effective date of retirement of the

member of the retirement system on whose service the annuity is

based was on or after January 1, 2019, but before January 1, 2024,

four percent; and

(D) if the effective date of retirement of the

member of the retirement system on whose service the annuity is

based was on or after January 1, 2024, two percent;

(2) for annuitants described by Subsection (d)(2):

(A) if the date of the death of the member of the

retirement system on whose service the annuity is based was before

January 1, 2007, eight percent;

(B) if the date of the death of the member of the

retirement system on whose service the annuity is based was on or

after January 1, 2007, but before January 1, 2019, six percent;

(C) if the date of the death of the member of the

retirement system on whose service the annuity is based was on or

after January 1, 2019, but before January 1, 2024, four percent; and

(D) if the date of the death of the member of the

retirement system on whose service the annuity is based was on or

after January 1, 2024, two percent; and

(3) for annuitants described by Subsection (d)(3):

(A) if the effective date of the annuitant's

election was before January 1, 2007, eight percent;

(B) if the effective date of the annuitant's

election was on or after January 1, 2007, but before January 1,

2019, six percent;

(C) if the effective date of the annuitant's

election was on or after January 1, 2019, but before January 1,

2024, four percent; and

(D) if the effective date of the annuitant's

election was on or after January 1, 2024, two percent.

(g) The board of trustees shall recompute the amount of an

annuity paid monthly under this chapter or Chapter 804, as

applicable, by applying the adjustment required under Subsection

(f) to the monthly amount otherwise required to be paid under the

applicable chapter. The adjustment under this section is in

addition to the adjustment, if any, granted under Section 814.604

or any other law.

(h) The board of trustees shall determine the eligibility

for and the amount of any adjustment in monthly annuities in

accordance with this section.

SECTION 2. (a) Subject to 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:

(1) $10,000, if the effective date of retirement of

the member of the retirement system on whose service the annuity is

based was before January 1, 2007;

(2) $7,500, if the effective date of retirement of the

member of the retirement system on whose service the annuity is

based was on or after January 1, 2007, but before January 1, 2019;

(3) $5,000, if the effective date of retirement of the

member of the retirement system on whose service the annuity is

based was on or after January 1, 2019, but before January 1, 2024;

and

(4) $2,500, if the effective date of retirement of the

member of the retirement system on whose service the annuity is

based was on or after January 1, 2024.

(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:

(1) based on service credited in the elected class; or

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

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

section.

(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.

SECTION 3. Section 814.605, Government Code, as added by

this Act, applies only to a monthly benefit payment made by the

Employees Retirement System of Texas on or after January 1, 2026.

SECTION 4. The Employees Retirement System of Texas is

required to make a cost-of-living adjustment under Section 814.605,

Government Code, as added by this Act, or a one-time supplemental

payment of benefits under Section 2 of this Act 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 adjustment or payment without

increasing the unfunded actuarial liabilities of the retirement

system. The amount appropriated by the legislature to provide the

adjustment or 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 the

cost-of-living adjustment or one-time supplemental payment without

increasing the unfunded actuarial liabilities of the retirement

system, the retirement system may not make the adjustment or

payment.

SECTION 5. This Act takes effect September 1, 2025.