TO: | Honorable Robert Duncan, Chair, Senate Committee on State Affairs |
FROM: | John S. O'Brien, Director, Legislative Budget Board |
IN RE: | HB2882 by Hughes (Relating to the service retirement annuity of certain members of the Judicial Retirement System of Texas Plan One and the Judicial Retirement System of Texas Plan Two.), As Engrossed |
Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
---|---|
2008 | ($20,000) |
2009 | ($30,000) |
2010 | ($40,000) |
2011 | ($50,000) |
2012 | ($60,000) |
Fiscal Year | Probable (Cost) from GENERAL REVENUE FUND 1 |
---|---|
2008 | ($20,000) |
2009 | ($30,000) |
2010 | ($40,000) |
2011 | ($50,000) |
2012 | ($60,000) |
The bill changes the formula relating to benefits payable by the Judicial Retirement System Plan One and Judicial Retirement System Plan Two by increasing the accrual rate for the extra years of contributing service from 2 percent to 2.3 percent. The bill increases the maximum benefit members may earn to an amount no greater than 90 percent of the state salary.
Based on the analysis by the Employees Retirement System actuaries, the Judicial Retirement System Plan Two would remain actuarially sound; however, the ERS consulting actuary cannot offer an actuarial opinion regarding the soundness of Judicial Retirement System Plan One because the plan is funded on a pay-as-you-go basis.
The bill changes are for annuity payments made to members retiring on or after September 1, 2007. Annuities that became payable prior to September 1, 2007 continue to be paid under current law.
The amounts listed in the above table reflect increased annuity payments for the JRS-1 plan members and are based on a 0.3 percent increase in payroll for 43 active judges and 486 retired judges who would receive the increased benefits. For purpose of determining the impact, it is assumed that the size of the active member workforce would continue to be 498 in the future.
ERS' analysis assumes the JRS-2 plan would remain actuarially sound under the current contribution rate of 22.78 percent with no further increase in funding.
Source Agencies: | 327 Employees Retirement System
|
LBB Staff: | JOB, KJG, MS, JW
|