Bill Text: TX HB600 | 2023-2024 | 88th Legislature | Comm Sub


Bill Title: Relating to contributions to, benefits from, and the administration of systems and programs administered by the Teacher Retirement System of Texas.

Spectrum: Strong Partisan Bill (Republican 30-2)

Status: (Introduced - Dead) 2023-05-08 - Considered in Calendars [HB600 Detail]

Download: Texas-2023-HB600-Comm_Sub.html
  88R19531 JCG-F
 
  By: Bonnen, Burns, Capriglione, et al. H.B. No. 600
 
  Substitute the following for H.B. No. 600:
 
  By:  Capriglione C.S.H.B. No. 600
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to contributions to, benefits from, and the administration
  of systems and programs administered by the Teacher Retirement
  System of Texas.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subchapter A, Chapter 821, Government Code, is
  amended by adding Section 821.0065 to read as follows:
         Sec. 821.0065.  ACTUARIAL SOUNDNESS FOR BENEFIT
  ENHANCEMENTS. For purposes of Section 67-a, Article XVI, Texas
  Constitution, the retirement system is actuarially sound if, based
  on the most recent actuarial valuation of the system, the amount of
  contributions and actuarially determined payments to the system are
  sufficient to cover the normal cost of the system and to amortize
  the unfunded actuarial accrued liability of the system within 30
  years.
         SECTION 2.  Subchapter H, Chapter 824, Government Code, is
  amended by adding Sections 824.703 and 824.704 to read as follows:
         Sec. 824.703.  GAIN SHARING COST-OF-LIVING ADJUSTMENT.  (a)  
  For each fiscal year that begins on or after September 1, 2028, the
  retirement system shall make a cost-of-living adjustment payable to
  eligible annuitants receiving a retirement or death benefit annuity
  payment only if the retirement system's average rate of return on
  the investment of the system's assets during the preceding five
  fiscal years, expressed as a percentage rate, is equal to or exceeds
  seven percent.
         (b)  Subject to Subsection (c), the amount of the
  cost-of-living adjustment provided by Subsection (a) is an amount
  equal to the annuitant's monthly annuity payment for the month the
  adjustment is effective multiplied by a percentage rate that is
  computed by:
               (1)  determining the average rate of return on the
  investment of the system's assets during the preceding five fiscal
  years, expressed as a percentage rate;
               (2)  subtracting five percentage points from the
  percentage rate determined under Subdivision (1);
               (3)  multiplying the resulting difference under
  Subdivision (2) by 50 percent; and
               (4)  rounding down to the nearest one-tenth of a
  percent.
         (c)  The amount of the cost-of-living adjustment provided by
  Subsection (a) may not exceed two percent of an annuitant's monthly
  annuity payment.
         (d)  Except as provided by Subsection (f), a person is
  eligible to receive a cost-of-living adjustment under this section
  if the person is, on the effective date of the adjustment and
  disregarding any forfeiture of benefits under Section 824.601, an
  annuitant that:
               (1)  is eligible to receive:
                     (A)  a standard service or disability retirement
  annuity payment;
                     (B)  an optional service or disability retirement
  annuity payment as either a retiree or beneficiary;
                     (C)  an annuity payment under Section
  824.402(a)(3) or (4);
                     (D)  an annuity payment under Section 824.502; or
                     (E)  an alternate payee annuity payment under
  Section 804.005;
               (2)  became eligible to receive the annuity payment
  described by Subdivision (1) at least three years before the first
  day of the fiscal year in which the adjustment is made; and
               (3)  is living on the effective date of the adjustment.
         (e)  Notwithstanding Subsection (d)(2), a beneficiary
  eligible to receive an optional service or disability retirement
  annuity payment on the effective date of a cost-of-living
  adjustment under this section is eligible to receive the adjustment
  if:
               (1)  the beneficiary meets the requirements of
  Subsections (d)(1) and (d)(3); and
               (2)  either the beneficiary or the retiree who selected
  the optional service or disability retirement annuity payment
  became eligible to receive the annuity payment at least three years
  before the first day of the fiscal year in which the adjustment is
  made.
         (f)  An adjustment made under this section does not apply to
  payments under:
               (1)  Section 824.203(d), relating to retirees who
  receive a standard service retirement annuity in an amount fixed by
  statute;
               (2)  Section 824.304(a), relating to disability
  retirees with less than 10 years of service credit;
               (3)  Section 824.304(b)(2), relating to disability
  retirees who receive a disability annuity in an amount fixed by
  statute;
               (4)  Section 824.404(a), relating to active member
  survivor beneficiaries who receive a survivor annuity in an amount
  fixed by statute;
               (5)  Section 824.501(a), relating to retiree survivor
  beneficiaries who receive a survivor annuity in an amount fixed by
  statute; or
               (6)  Section 824.804(b), relating to participants in
  the deferred retirement option plan with regard to payments from
  their deferred retirement option plan accounts.
         Sec. 824.704.  COST-OF-LIVING ADJUSTMENT: JANUARY 2024. (a)  
  The retirement system shall make an additional one-time
  cost-of-living adjustment payable to annuitants receiving a
  monthly death or retirement benefit annuity, as provided by this
  section.
         (b)  Subject to Subsection (c) and except as provided by
  Subsection (d), to be eligible for the adjustment, a person must be,
  on the effective date of the adjustment and disregarding any
  forfeiture of benefits under Section 824.601, an annuitant eligible
  to receive:
               (1)  a standard service or disability retirement
  annuity payment;
               (2)  an optional service or disability retirement
  annuity payment as either a retiree or beneficiary;
               (3)  an annuity payment under Section 824.402(a)(3) or
  (4);
               (4)  an annuity payment under Section 824.502; or
               (5)  an alternate payee annuity payment under Section
  804.005.
         (c)  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 on or before December 31, 2020;
               (2)  is a beneficiary under Section 824.402(a)(3) or
  (4) or 824.502, 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 on or before December 31, 2020; or
               (3)  is an alternate payee under Section 804.005, the
  annuitant is eligible for the adjustment only if the effective date
  of the election to receive the annuity payment was on or before
  December 31, 2020.
         (d)  An adjustment made under this section does not apply to
  payments under:
               (1)  Section 824.203(d), relating to retirees who
  receive a standard service retirement annuity in an amount fixed by
  statute;
               (2)  Section 824.304(a), relating to disability
  retirees with less than 10 years of service credit;
               (3)  Section 824.304(b)(2), relating to disability
  retirees who receive a disability annuity in an amount fixed by
  statute;
               (4)  Section 824.404(a), relating to active member
  survivor beneficiaries who receive a survivor annuity in an amount
  fixed by statute;
               (5)  Section 824.501(a), relating to retiree survivor
  beneficiaries who receive a survivor annuity in an amount fixed by
  statute; or
               (6)  Section 824.804(b), relating to participants in
  the deferred retirement option plan with regard to payments from
  their deferred retirement option plan accounts.
         (e)  An adjustment under this section must be made beginning
  with an annuity payable for the month of January 2024.
         (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 (c)(1):
                     (A)  if the retiree's effective date of retirement
  was before January 1, 2004, six percent;
                     (B)  if the retiree's effective date of retirement
  was on or after January 1, 2004, but before January 1, 2014, four
  percent; and
                     (C)  if the retiree's effective date of retirement
  was on or after January 1, 2014, but before January 1, 2021, two
  percent;
               (2)  for annuitants described by Subsection (c)(2):
                     (A)  if the member's date of death was before
  January 1, 2004, six percent;
                     (B)  if the member's date of death was on or after
  January 1, 2004, but before January 1, 2014, four percent; and
                     (C)  if the member's date of death was on or after
  January 1, 2014, but before January 1, 2021, two percent; and
               (3)  for annuitants described by Subsection (c)(3):
                     (A)  if the annuitant's date of election was
  before January 1, 2004, six percent;
                     (B)  if the annuitant's date of election was on or
  after January 1, 2004, but before January 1, 2014, four percent; and
                     (C)  if the annuitant's date of election was on or
  after January 1, 2014, but before January 1, 2021, two percent.
         (g)  The board of trustees shall determine the eligibility
  for and the amount of any adjustment in monthly annuities in
  accordance with this section.
         SECTION 3.  Section 825.402, Government Code, is amended to
  read as follows:
         Sec. 825.402.  RATE OF MEMBER CONTRIBUTIONS. The rate of
  contributions for each member of the retirement system is:
               (1)  five percent of the member's annual compensation
  or $180, whichever is less, for service rendered after August 31,
  1937, and before September 1, 1957;
               (2)  six percent of the first $8,400 of the member's
  annual compensation for service rendered after August 31, 1957, and
  before September 1, 1969;
               (3)  six percent of the member's annual compensation
  for service rendered after August 31, 1969, and before the first day
  of the 1977-78 school year;
               (4)  6.65 percent of the member's annual compensation
  for service rendered after the last day of the period described by
  Subdivision (3) and before September 1, 1985;
               (5)  6.4 percent of the member's annual compensation
  for service rendered after August 31, 1985, and before September 1,
  2014;
               (6)  6.7 percent of the member's annual compensation
  for service rendered after August 31, 2014, and before September 1,
  2015;
               (7)  7.2 percent of the member's annual compensation
  for service rendered after August 31, 2015, and before September 1,
  2016;
               (8)  7.7 percent of the member's annual compensation
  for service rendered after August 31, 2016, and before September 1,
  2017;
               (9)  for compensation paid on or after September 1,
  2017, and before September 1, 2019, the lesser of:
                     (A)  7.7 percent of the member's annual
  compensation; or
                     (B)  a percentage of the member's annual
  compensation equal to 7.7 percent reduced by one-tenth of one
  percent for each one-tenth of one percent that the state
  contribution rate for the fiscal year to which the compensation
  relates is less than the state contribution rate established for
  the 2015 fiscal year;
               (10)  for compensation paid on or after September 1,
  2019, and before September 1, 2021, the lesser of:
                     (A)  7.7 percent of the member's annual
  compensation; or
                     (B)  a percentage of the member's annual
  compensation equal to 7.7 percent reduced by one-tenth of one
  percent for each one-tenth of one percent that the state
  contribution rate for the fiscal year to which the compensation
  relates is less than the state contribution rate established for
  that fiscal year under Section 825.404(a-2);
               (11)  for compensation paid on or after September 1,
  2021, and before January [September] 1, 2024 [2023], the lesser of:
                     (A)  eight percent of the member's annual
  compensation; or
                     (B)  a percentage of the member's annual
  compensation equal to eight percent reduced by one-tenth of one
  percent for each one-tenth of one percent that the state
  contribution rate for the fiscal year to which the compensation
  relates is less than the state contribution rate established for
  that fiscal year under Section 825.404(a-2); and
               (12)  for compensation paid on or after January  
  [September] 1, 2024 [2023], the lesser of:
                     (A)  nine [8.25] percent of the member's annual
  compensation; or
                     (B)  a percentage of the member's annual
  compensation equal to nine [8.25] percent reduced by one-tenth of
  one percent for each one-tenth of one percent that the state
  contribution rate for the fiscal year to which the compensation
  relates is less than the state contribution rate established for
  that fiscal year under Section 825.404(a-2).
         SECTION 4.  Section 825.404(a-2), Government Code, is
  amended to read as follows:
         (a-2)  The state contribution required by Subsection (a) is:
               (1)  for the fiscal years beginning on September 1,
  2019, and September 1, 2020, 7.5 percent of the aggregate annual
  compensation of all members of the retirement system during the
  applicable fiscal year;
               (2)  for the fiscal year beginning on September 1,
  2021, 7.75 percent of the aggregate annual compensation of all
  members of the retirement system during that fiscal year;
               (3)  for the fiscal year beginning on September 1,
  2022, eight percent of the aggregate annual compensation of all
  members of the retirement system during that fiscal year; and
               (4)  for the fiscal year beginning on September 1,
  2023, and each subsequent fiscal year, nine [8.25] percent of the
  aggregate annual compensation of all members of the retirement
  system during that fiscal year.
         SECTION 5.  Subchapter E, Chapter 825, Government Code, is
  amended by adding Section 825.4042 to read as follows:
         Sec. 825.4042.  ACTUARIALLY DETERMINED PAYMENTS. (a) In
  addition to the state contributions required by this subtitle, each
  fiscal year the state shall make an actuarially determined payment
  in the amount necessary to amortize the system's unfunded actuarial
  liabilities by not later than the fiscal year ending August 31,
  2054.
         (b)  Before each regular legislative session, the retirement
  system shall provide the Legislative Budget Board with the amount
  necessary to make the actuarially determined payment required under
  Subsection (a). The director of the Legislative Budget Board,
  under the direction of the Legislative Budget Board, shall include
  that payment in the general appropriations bill prepared for
  introduction at each regular legislative session under Section
  322.008. This section expires September 1, 2055.
         SECTION 6.  (a) Subject to Subsections (e) and (i) of this
  section and Section 821.006, Government Code, and except as
  provided by Subsection (g) of this section, the Teacher Retirement
  System of Texas shall make a one-time supplemental payment of a
  retirement or death benefit, as provided by this section.
         (b)  The supplemental payment is payable not later than
  February 2024 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
  $5,000.
         (d)  The supplemental payment is payable without regard to
  any forfeiture of benefits under Section 824.601, Government Code.
  The Teacher 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 and not in lieu of the regular
  monthly annuity payment to which the eligible annuitant is
  otherwise entitled.
         (e)  To be eligible for the supplemental payment, a person
  must be, for the calendar month immediately prior to the calendar
  month in which the Teacher Retirement System of Texas issues the
  one-time supplemental payment in accordance with Subsection (b) of
  this section, an annuitant who is:
               (1)  at least 70 years of age; and
               (2)  eligible to receive:
                     (A)  a standard retirement annuity payment;
                     (B)  an optional retirement annuity payment as
  either a retiree or beneficiary;
                     (C)  a life annuity payment under Section
  824.402(a)(4), Government Code;
                     (D)  an annuity for a guaranteed period of 60
  months under Section 824.402(a)(3), Government Code; or
                     (E)  an alternate payee annuity payment under
  Section 804.005, Government Code.
         (f)  The supplemental payment is in addition to the
  guaranteed number of payments under Section 824.204(c)(3) or (4),
  Section 824.308(c)(3) or (4), or Section 824.402(a)(3), Government
  Code, and may not be counted as one of the guaranteed monthly
  payments.
         (g)  The supplemental payment does not apply to payments
  under:
               (1)  Section 824.304(a), Government Code, relating to
  disability retirees with less than 10 years of service credit;
               (2)  Section 824.804(b), Government Code, relating to
  participants in the deferred retirement option plan with regard to
  payments from their deferred retirement option plan accounts;
               (3)  Section 824.501(a), Government Code, relating to
  retiree survivor beneficiaries who receive a survivor annuity in an
  amount fixed by statute; or
               (4)  Section 824.404(a), Government Code, relating to
  active member survivor beneficiaries who receive a survivor annuity
  in an amount fixed by statute.
         (h)  The board of trustees of the Teacher 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 Teacher 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 Teacher Retirement System of
  Texas finds that the legislature appropriated money to the
  retirement system in an amount sufficient to provide the
  supplemental payment. The amount appropriated by the legislature
  to provide the supplemental payment must be in addition to the
  amount the state is required to contribute to the retirement system
  under Section 825.404, Government Code, as amended by this Act.
         (j)  If the board of trustees of the Teacher Retirement
  System of Texas determines that the appropriation provided by the
  legislature for the one-time supplemental payment of benefits under
  this section is different from the amount required to issue the
  supplemental payment, the comptroller, after the end of the fiscal
  year, shall make adjustments in the teacher retirement fund and the
  general revenue fund so that the total transfers during the year
  equal the total amount of the funds required for the supplemental
  payment. This transfer of funds is in addition to and separate from
  the amount the state is required to contribute to the retirement
  system under Section 825.404, Government Code, as amended by this
  Act.
         SECTION 7.  This Act takes effect January 1, 2024, but only
  if the constitutional amendment proposed by the 88th Legislature,
  Regular Session, 2023, authorizing the legislature to provide
  cost-of-living adjustments or other benefit enhancements to
  eligible annuitants of the Teacher Retirement System of Texas and
  providing a one-time transfer of funds for contributions,
  actuarially determined payments, and benefit enhancements is
  approved by the voters.  If that proposed constitutional amendment
  is not approved by the voters, this Act has no effect.
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