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Senate Bill 1691 |
Senate Author: Duncan |
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Effective: See below |
House Sponsor: Eiland |
Senate Bill 1691 amends provisions of the Education, Government, and Insurance Codes relating to the Teacher Retirement System of Texas (TRS). The bill reduces the annuity of a member who is hired on or after September 1, 2006, or September 1, 2007, and bases a retirement annuity on the member’s highest five years of salary, rather than the highest three years, as provided under previous law. The bill modifies a provision that allows a member to purchase additional service credit for up to five years by requiring the member purchasing such credits for out-of-state service to pay the actuarial present value of the additional benefits granted. It allows a member who earned service in another state before January 1, 2006, to buy that time under current rates at any time in the future. The bill prohibits a school district from offering financial or other incentives for early retirement and requires that the sum of a member’s age and amount of service prospectively equal the number 90 to qualify for a partial lump-sum payment at retirement. The bill requires a retiree to elect to participate in the TRS deferred retirement option plan (DROP) no later than December 31, 2005, and allows a member currently in the plan to withdraw before that date.
The bill transfers responsibility for supplemental payments, such as the health insurance pass-through, from TRS to the Texas Education Agency (TEA) and outlines procedures for distributing and using the payments. As of September 1, 2005, the bill requires employers to pay TRS for new members the amount the state would have contributed to TRS during a new employee’s 90-day waiting period. It requires a school district that hires a retired TRS member to pay both the state and employee’s share of TRS contributions as if the retiree were an active employee, as well as the difference between the retiree’s required payment to TRS-Care and the full cost of the retiree’s participation in the program, with certain exceptions. The bill increases the amount an active employee must contribute to TRS-Care from 0.5 percent to 0.65 percent of the employee’s salary. The bill raises the requirements for new retirees to participate in the retired school employees' health insurance program. Finally, the bill requires TEA to notify TRS if a school's charter is revoked, denied, or surrendered, or if a charter school no longer receives state funds within 10 business days after such action and also to notify TRS within that time if funding is restored.
The bill generally takes effect September 1, 2005.