Honorable Robert Duncan, Chair, Senate Committee on State Affairs
FROM:
John S. O'Brien, Deputy Director, Legislative Budget Board
IN RE:
HB2918 by Kuempel (Relating to resumption of employment within the Texas Municipal Retirement System by a person who has filed an application for retirement.), As Engrossed
The bill would make changes in the Statutes governing the Texas Municipal Retirement System which would allow employees to retire and return to work for the same employer after a month had passed, without reducing any benefit payment. According to the Texas Municipal Retirement System (TMRS), the bill would have no actuarial or fiscal impact on the system, nor would it change current funding by TMRS cities. Yet allowing active employees to retire and return to work after a month will likely create actuarial losses for the municipalities in the system from anti-selection, even given the individual account nature of the system. In the long run, this is likely to decrease the actuarial soundness of the plans of member cities.