Honorable Rafael Anchia, Chair, House Committee on Pensions, Investments & Financial Services
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
HB3929 by Bernal (relating to the loss of benefits of and the payment of certain employer contributions for certain retirees of the Teacher Retirement System of Texas who resume service.), Committee Report 1st House, Substituted
COST ESTIMATE
The bill would amend the Government Code to allow retirees to return to work without the current 12 month waiting period if they were working in a necessary position, as determined by the Teacher Retirement System of Texas (TRS) board of trustees, for implementing a special education program under Subchapter A, Chapter 29 of the Education Code. However, IRS plan qualification requirements must still be met in accordance with Government Code Section 825.506.
For a retiree who returns to work in such a position and in an area covered under a disaster declaration, the bill would eliminate the requirement that the employer pays the contributions that would otherwise be made if the position were held by a regular active member. This applies for the year the disaster was declared and two years following.
The actuarial analysis notes that the requirement of the employer to be in an area covered by a disaster declaration limits the potential impact of the bill, as the circumstances are less predictable by the member and only remain for a limited time. The analysis notes that the impact on TRS is likely to be minimal. Additionally, because TRS would not receive contributions on this payroll, it would be financially subsidizing the program.
The analysis continues that while the bill is unlikely to have an immediate impact it could set a precedent for future legislation that may negatively affect the system.
SOURCES Actuarial Analysis by Daniel Siblik, ASA, EA, MAAA, and Joseph P. Newton, FSA, Gabriel Roeder Smith & Company, May 3, 2021.