LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE 74th Regular Session April 19, 1995 TO: Honorable Barry Telford, Chair IN RE: House Bill No. 411 Committee on Pensions & Investments By: Longoria House of Representatives Austin, Texas FROM: John Keel, Director In response to your request for a Fiscal Note on House Bill No. 411 (relating to eligibility for service retirement from the Judicial Retirement System of Texas Plan One or the Judicial Retirement System of Texas Plan Two) this office has determined the following: The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill. The bill would lower the age at which members of the Judicial Retirement System (JRS), Plans One and Two, may retire with unreduced benefits from age 65 with 12 years of service (10 years of service if currently holding office) to age 60 with 10 years of service (8 years of service if currently holding office). Retirement would also be allowed for anyone whose age plus years of service add to at least 75. For those who meet the service requirements, early retirement with actuarial reductions would be allowed at age 55, instead of the current age of 60. The estimated state contribution for a 31-year amortization period for JRS Plan Two would be 24.49% compared to the current requirement of 16.54%. The cost of additional contributions for JRS Plan Two increases from $1.8 million in Fiscal Year 1996 to $2.0 million in FY 2000. Additional contributions would be also required on a yearly basis for JRS Plan One, recognizing that members will retire earlier due to the revised eligibility for benefits. The cost of additional contributions for JRS Plan One increases from $1.6 million in FY 1996 to $2.4 million in FY 2000. The combined fiscal implication on both plans is indicated below. The probable fiscal implication of implementing the provisions of the bill during each of the first five years following passage is estimated as follows: Fiscal Probable Cost Year Out of General Revenue Fund 001 1996 $3,458,132 1997 3,795,294 1998 4,033,200 1999 4,271,864 2000 4,411,301 Similar annual fiscal implications would continue as long as the provisions of the bill are in effect. No fiscal implication to units of local government is anticipated. Source: Employees Retirement System, State Pension Review Board LBB Staff: JK, RN, WM, RR