By: Bonnen 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 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)  
  Beginning with the fiscal year that begins on September 1, 2028 and
  for each subsequent fiscal year, the retirement system shall make a
  cost-of-living adjustment payable to eligible annuitants receiving
  a retirement or death benefit annuity payment under this section
  only if the retirement system's average return on the investment of
  system's cash and securities 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 that the retirement system shall provide
  to an annuitant during a fiscal year if required to provide an
  adjustment under Subsection (a) is an amount equal to the
  annuitant's monthly annuity payment the month the adjustment is
  effective multiplied by a percentage equal to:
               (1)  Five subtracted from the average rate of return on
  investment during the preceding five fiscal years as described by
  subsection (a); and
               (2)  the difference determined in subdivision (1)
  multiplied by 50 percent and rounded 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
  benefit.
         (d)  Subject to Subsections (e) and (f), a person is eligible
  to receive a cost-of-living adjustment under this section if the
  person is, in the month in which the adjustment is effective 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;
                     (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;
               (2)  became entitled to receive annuity payments at
  least three years prior to the beginning of the fiscal year in which
  the cost-of-living adjustment is to be made; and
               (3)  is alive in the month in which the cost-of-living
  adjustment is effective.
         (e)  A beneficiary receiving an optional service or
  disability retirement annuity payment is eligible to receive a
  cost-of-living adjustment under Subsection (a) if the beneficiary
  meets the requirements of Subsections (d)(1) and (d)(3) and either
  the beneficiary or the retiree who selected to optional service or
  disability retirement plan became entitled to receive annuity
  payments at least three years prior to the beginning of the fiscal
  year in which the cost-of-living adjustment is to be 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.  (a)  The
  retirement system shall make a 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 Subsections (c) and (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
  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 Teacher Retirement System of Texas 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 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 first monthly
  benefit subject to the adjustment by a percentage determined as
  follows:
               (1)  For annuitants described by Subsection (c)(1):
                     (A)  If the retiree's effective date of retirement
  was before January 1, 2004, an adjustment of six percent;
                     (B)  If the retiree's effective date of retirement
  was on or after January 1, 2004, but before January 1, 2014, an
  adjustment of four percent; and
                     (C)  If the retiree's effective date of retirement
  was on or after January 1, 2014, but before January 1, 2021, an
  adjustment of two percent;
               (2)  For annuitants described by Subsection (c)(2):
                     (A)  If the member's date of death was before
  January 1, 2004, an adjustment of six percent;
                     (B)  If the member's date of death was on or after
  January 1, 2004, but before January 1, 2014, an adjustment of four
  percent; and
                     (C)  If the member's date of death was on or after
  January 1, 2014, but before January 1, 2021, an adjustment of two
  percent; and
               (3)  For annuitants described by Subsection (c)(3):
                     (A)  If the annuitant's date of election was
  before January 1, 2004, an adjustment of six percent;
                     (B)  If the annuitant's date of election was on or
  after January 1, 2004, but before January 1, 2014, an adjustment of
  four percent; and
                     (C)  If the annuitant's date of election was on or
  after January 1, 2014, but before January 1, 2021, an adjustment of
  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 2.  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 September 1, 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 September 1,
  2023, the lesser of:
                     (A)  9.00 [8.25] percent of the member's annual
  compensation; or
                     (B)  a percentage of the member's annual
  compensation equal to 9.00 [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 3.  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, 9.00 [8.25] percent of the
  aggregate annual compensation of all members of the retirement
  system during that fiscal year.
         SECTION 4.  Subchapter E, Chapter 825, Government Code, is
  amended by adding Section 825.4041 to read as follows:
         Sec. 825.4041.  LEGACY 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 subsection expires September 1, 2055.
         SECTION 5.  (a)  Subject to Subsection (i) of this section
  and Section 821.006, Government Code, 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 $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)  Subject to Subsection (f) of this section, 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, and
  disregarding any forfeiture of benefits under Section 824.601,
  Government Code, an annuitant who is at least 70 years of age and
  eligible to receive:
               (1)  a standard retirement annuity payment;
               (2)  an optional retirement annuity payment as either a
  retiree or beneficiary;
               (3)  a life annuity payment under Section
  824.402(a)(4), Government Code;
               (4)  an annuity for a guaranteed period of 60 months
  under Section 824.402(a)(3), Government Code; or
               (5)  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 payment.  
  The amount appropriated by the legislature to provide the payment
  must be in addition to the amount the state is required to
  contribute to the retirement system under Section 825.404,
  Government Code.  If the board of trustees of the Teacher Retirement
  System of Texas finds that the retirement system did not receive the
  full amount appropriated by the legislature to provide a one-time
  supplemental payment of benefits under this section, the retirement
  system may not make the payment.
         (j)  If the board of trustees of the Teacher Retirement
  System determines that the appropriation provided by the
  legislature for the one-time supplemental payment of benefits is
  different from the amount required to issue the one-time
  supplemental payment of benefits under this section, 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 one-time supplemental payment
  of benefits.  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.
         SECTION 7.  Section 824.702, Government Code, is repealed.
         SECTION 8.  This Act takes effect September 1, 2023, but only
  if the constitutional amendment proposed by the 88th Legislature,
  Regular Session, 2023, authorizing the legislature to provide
  one-time or ongoing benefit enhancements to eligible annuitants of
  the Teacher Retirement System of Texas, including a one-time
  transfer of funds for that purpose, is approved by the voters.  If
  that proposed constitutional amendment is not approved by the
  voters, this Act has no effect.