CSHB 3608 would allow qualified health insurance premium payments to be deducted on a pre-tax basis from the annuity received by certain retired public safety officers of the Teacher Retirement System of Texas (TRS). The payments must be eligible under Section 845 of the Pension Protection Act of 2006, and the payment must be less than the total of the TRS annuity.  The provisions of the bill would take effect September 1, 2009.

According to the analysis prepared by the TRS actuarial consultants, because this bill would not affect the timing or payment of benefits for annuitants under the retirement program, it is their opinion that the changes in the bill would have no material impact to the actuarial liabilities of TRS.  However, there could be additional administrative and technology expenses associated with implementing the proposed provisions.

The bill, if enacted, will not have a significant actuarial effect because it does not propose to change the funding or obligations of any public retirement system.

The analysis and calculations are based on the member data of TRS as of August 31, 2008, the actuarial value of assets updated as of February 28, 2009, and the actuarial assumptions and methods in use as of August 31, 2008 for valuing the actuarial condition of TRS.  Finally, this analysis is based on all other provisions of TRS in effect as of August 31, 2008.

SOURCES:

Actuarial Analysis by W. Michael Carter, FSA, Lewis Ward, Joseph P. Newton, FSA, Gabriel Roeder Smith & Company, Consultants and Actuaries, March 31, 2009.

Actuarial Review by Martin McCaulay, Deputy Executive Director/Actuary, Pension Review Board, March 31, 2009