LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
February 25, 2001
TO: Honorable Dale B. Tillery, Chair, House Committee on
Pensions & Investments
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB1546 by Uher (Relating to disability retirement
benefits for certain peace officers under the Employees
Retirement System of Texas.), As Introduced
**************************************************************************
* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB1546, As Introduced: positive impact of $0 through the biennium *
* ending August 31, 2003. *
* *
* 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 *
* 2002 $0 *
* 2003 0 *
* 2004 (3,229,000) *
* 2005 (685,000) *
* 2006 (713,000) *
****************************************************
All Funds, Five-Year Impact:
***********************************************************************
*Fiscal Probable Probable Probable Probable Change in *
* Year Savings/ Savings/ Savings/ Savings/ Number of *
* (Cost) from (Cost) from (Cost) from (Cost) from State *
* General General Federal State Employees *
* Revenue Revenue Funds - Highway from FY 2001 *
* Fund Dedicated Federal Fund *
* 0001 Accounts 0555 0006 *
* (ERS and *
* CPA only) *
* 0994 *
* 2002 $0 $0 $0 $0 0.0 *
* 2003 0 0 0 0 0.0 *
* 2004 (3,229,000) (72,000) (36,000) (290,000) 0.0 *
* 2005 (685,000) (15,000) (8,000) (62,000) 0.0 *
* 2006 (713,000) (16,000) (8,000) (64,000) 0.0 *
***********************************************************************
Fiscal Analysis
The bill modifies current provisions regarding disability retirement
benefits for members of the Law Enforcement and Custodial Officers
Supplemental Retirement program (LECOS). The bill would increase the
minimum occupational disability benefit from 50% of the monthly
compensation of a retired officer at retirement to 70% of the monthly
compensation of an officer in the same classification as the retired
officer, as adjusted from time to time, until the retired officer
reaches age 55. The occupational disability benefit of disabled members
who are totally disabled would be 100% of the monthly compensation of an
officer in the same classification as the retired officer, as adjusted
from time to time, until the retired officer reaches age 55. Currently,
the occupational disability benefit is not adjusted after retirement,
except for ad hoc adjustments.
Methodology
The provisions of this bill would result in an increase in the normal
cost of the LECOS program from the current 1.95% to 2.0%. Currently, the
state is not making contributions to the plan, but at the point when the
state again makes contributions, the annual cost will be higher as a
result of the higher normal cost. Additionally, the impact of this
legislation is to require state contributions to start in May of 2003,
rather than in October 2003 (fiscal year 2004), which increases the cost
for both fiscal year 2003 and 2004. However, there are currently
sufficient appropriations in the General Appropriations Act, As
Introduced, for fiscal year 2003 to cover the required contributions of
$8.5 million.
For fiscal year 2004, the additional cost is $3,628,000 which reflects
both the need to make contributions for a full year, instead of 11
months, and the higher contribution rate. For subsequent years, the
projected cost is $770,000 in fiscal year 2005 and $801,000 in fiscal
year 2006, solely as a result of the higher contribution rate.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 327 Employees Retirement System
LBB Staff: JK, RB, SC