LEGISLATIVE BUDGET BOARD
                                   Austin, Texas
         
                                   FISCAL NOTE
                               75th Regular Session
         
                                  May 7, 1997
         
         
      TO: Honorable Barry Telford, Chair            IN RE:  Senate Bill No. 1209, Committee Report 2nd House, Substituted
          Committee on Pensions and Investments                              By: Barrientos
          House
          Austin, Texas
         
         
         
         
         FROM:  John Keel, Director    
         
In response to your request for a Fiscal Note on SB1209 ( Relating 
to participation in the proportionate retirement program for 
public employees.) this office has detemined the following:
         
         Biennial Net Impact to General Revenue Funds by SB1209-Committee Report 2nd House, Substituted
         
No significant fiscal implication to the State is anticipated.
         

         
 
Under current statutes, a retiree from the Employees Retirement 
System (ERS) who has a total of 10 years of credit under the 
proportionate retirement program is eligible to participate 
in the Uniform Group Insurance Program (UGIP) and receive a 
state contribution for health insurance with as little as one 
month of credit in the ERS.  This bill would expand the number 
of retirement systems eligible to participate in the proportionate 
retirement program.  As a result, there could be additional 
ERS members who qualify for state contributions for health insurance 
during retirement.  At current contribution rates, the average 
state contribution for coverage for each additional retired 
member would be $2,740 per year.
          
Participating systems incur actuarial losses when members retire 
under the proportionate retirement program.  The actuarial impact 
on a particular retirement system will not be known until the 
provisions of this legislation are utilized.  It is possible 
that a municipal retirement system that elected to join the 
proportionate retirement program could incur actuarial losses 
large enough to require an increase in contributions by the 
municipality that finances the system.
          
   Source:            Agencies:   
                                         
                      LBB Staff:   JK ,PE ,SC