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