TO: | Honorable Allan Ritter, Chair, House Committee on Pensions & Investments |
FROM: | John Keel, Director, Legislative Budget Board |
IN RE: | HB985 by Thompson (Relating to a temporary service retirement option for certain members of the Employees Retirement System of Texas who are employed by the legislature.), As Introduced |
Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
---|---|
2004 | ($155,361) |
2005 | ($36,139,389) |
2006 | ($67,943,770) |
2007 | ($96,233,955) |
2008 | ($121,410,336) |
Fiscal Year | Probable Savings/(Cost) fromGENERAL REVENUE FUND 1 |
---|---|
2004 | ($155,361) |
2005 | ($36,139,389) |
2006 | ($67,943,770) |
2007 | ($96,233,955) |
2008 | ($121,410,336) |
State law (Section 811.006 of the Texas Government Code) provides that benefit changes may not be implemented if the result is a period to amortize the unfunded liability of the retirement system by more than 31 years. Based on an Employee Retirement System (ERS) actuarial analysis, the state contribution rate required to achieve a 30-year funding period would increase from 7.02 percent of payroll, as determined by the February 28, 2003 actuarial valuation, to 7.69 percent of payroll as a result of passage of this bill.
The current ERS state contribution rate is 6 percent. The biennial General Revenue cost to increase the state contribution rate from 6 percent to 7.69 percent is estimated to be $144.1 million. The portion of the biennial General Revenue cost attributable to the bill, and associated with a contribution rate increase from 7.02 percent to 7.69 percent of payroll, is estimated to be $36.5 million (as reflected in the Fiscal Impact table).
Source Agencies: | 304 Comptroller of Public Accounts, 327 Employees Retirement System
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LBB Staff: | JK, JO, RR, MS, ZS
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