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.