LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 76th Regular Session February 8, 1999 TO: Honorable Florence Shapiro, Chair, Senate Committee on State Affairs FROM: John Keel, Director, Legislative Budget Board IN RE: SB82 by Brown, J.E. "Buster" (Relating to benefits payable by the Judicial Retirement System of Texas Plan Two.), As Introduced ************************************************************************** * Two-year Net Impact to General Revenue Related Funds for SB82, As * * Introduced: negative impact of $(12,157,000) through the biennium * * ending August 31, 2001. * * * * The bill would make no appropriation but could provide the legal * * basis for an appropriation of funds to implement the provisions of * * the bill. * ************************************************************************** General Revenue-Related Funds, Five-Year Impact: **************************************************** * Fiscal Year Probable Net Positive/(Negative) * * Impact to General Revenue Related * * Funds * * 2000 $(5,942,000) * * 2001 (6,215,000) * * 2002 (6,307,000) * * 2003 (6,490,000) * * 2004 (6,596,000) * **************************************************** All Funds, Five-Year Impact: *************************************************************************** *Fiscal Probable Savings/(Cost) from Probable Savings/(Cost) from * * Year General Revenue Fund Judicial Fund * * 0001 0573 * * 2000 $(5,942,000) $(967,000) * * 2001 (6,215,000) (1,012,000) * * 2002 (6,307,000) (1,027,000) * * 2003 (6,490,000) (1,056,000) * * 2004 (6,596,000) (1,074,000) * *************************************************************************** Technology Impact None. Fiscal Analysis The bill would change the retirement annuities for Judicial Retirement Plan Two (JRS 2) members to be based on the state salary, as adjusted from time to time, of a judge of the court on which the retiring member last served. Currently, retirement annuities are based on the state salary being paid at the time of retirement without any later adjustments. The change applies to current and future JRS 2 annuitants. Methodology The increase in retirement annuities would increase the unfunded liabilities of the JRS 2 fund by $39.8 million. As a result, the unfunded liability could not be amortized within the statutorily required 31 years. In order to meet this requirement, the state's contribution rate would have to increase from the current 16.83% to 34.89%. Local Government Impact No fiscal implication to units of local government is anticipated. Source Agencies: 327 Employees Retirement Sys LBB Staff: JK, SD, SC