Honorable Dan Patrick, Lieutenant Governor, Senate Honorable Dade Phelan, Speaker of the House, House of Representatives
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
SB288 by Seliger (Relating to preventing 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.), Conference Committee Report
COST ESTIMATE
The bill would amend the Government Code to require the Teacher Retirement System of Texas (TRS) to send a written warning to any retiree subject to a loss of benefits due to further employment exceeding those limitations. If TRS determines that a retiree continues to exceed the statutory limitations on employment, the retiree is required to pay, for each month after issuance of the warning, either the amount they earned in benefits or the amount earned through employment.
The bill would not withhold benefits for retirees returning to work or collect contributions from the employer on behalf of the rehired retiree (employer surcharge) for positions related to student learning loss because of COVID-19. The position would have to be in addition to the normal staffing level at the public educational institution; be funded wholly or partly by federal funds for the purpose of COVID-19 relief; and end on or before December 31, 2024. It would not apply to disability retirees. This would be a temporary exemption scheduled to expire February 1, 2025.
The bill would apply only to the employment of a retiree after the effective date. It would become effective September 1, 2021.
According to the TRS analysis, the bill would not have a meaningful effect on the actuarial soundness of the plan. The TRS analysis relies on the participant data, financial information, benefit structure, and actuarial assumptions and methods used in the TRS actuarial valuation for February 28, 2021.
SOURCES
Actuarial Analysis by Joseph Newton, FSA, EA, MAAA and Daniel Siblik, ASA, EA, Gabriel, Roeder, Smith & Company, May 28, 2021.