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A BILL TO BE ENTITLED
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AN ACT
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relating to public financing of the public education employee |
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retirement system and an annual cost-of-living adjustment for |
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certain retirement benefits. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter A, Chapter 824, Government Code, is |
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amended by adding Section 824.007 to read as follows: |
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Sec. 824.007. ANNUAL COST-OF-LIVING ADJUSTMENT. (a) The |
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amount of a monthly service retirement benefit, disability |
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retirement benefit, or death benefit paid under this chapter is |
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increased to include an annual cost-of-living adjustment in |
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accordance with this section. |
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(b) Effective September 1 of each year, the board of |
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trustees shall recompute the amount of a benefit paid monthly under |
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this chapter by applying the cost-of-living adjustment to the |
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monthly amount otherwise required to be paid as determined in |
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accordance with this chapter, including the amount of any previous |
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cost-of-living adjustment made under this section or other increase |
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required by law. |
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(c) The amount of a cost-of-living adjustment made under |
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this section is equal to the automatic cost-of-living adjustment |
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made by the United States Social Security Administration and |
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applicable to social security benefits in December of the year |
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preceding the year in which the adjustment under Subsection (b) is |
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made. |
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SECTION 2. Sections 825.404(a) and (b), Government Code, |
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are amended to read as follows: |
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(a) During each fiscal year, the state shall contribute to |
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the retirement system an amount sufficient to amortize, within a |
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30-year funding period, the actuarial liability of the retirement |
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system for service retirement benefits, disability retirement |
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benefits, and death benefits, including the amount of the annual |
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cost-of-living adjustment applied under Section 824.007, provided |
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under this subtitle for members, retirees, and beneficiaries. The |
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amount must be determined based on the annual August 31 actuarial |
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valuation and must be equal to at least six and not more than 10 |
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percent of the aggregate annual compensation of all members of the |
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retirement system during that fiscal year. |
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(b) Before November 2 of each even-numbered year, the board |
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of trustees shall certify to the comptroller of public accounts for |
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review and adoption an estimate of the amount necessary to pay the |
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state's contributions to the retirement system for the following |
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biennium. At the time the board of trustees makes the certification |
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under this subsection, the board of trustees shall report the |
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amount certified to the lieutenant governor, the speaker of the |
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house of representatives, and the presiding officers of the |
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appropriate committees of the house and the senate. |
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SECTION 3. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2007. |