Honorable Jane Nelson, Chair, Senate Committee on Finance
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
SB288 by Seliger (Relating to preventing the loss of benefits by certain retirees of the Teacher Retirement System of Texas who resume service.), As Introduced
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, a second notice must be provided requesting the retiree to: 1) return the prorated amount of the monthly benefit attributable to the period; or 2) pay the difference between what they were actually compensated and what is permissible.
If the retiree continues to exceed the statutory limitations of employment, monthly benefits may be withheld as currently provided for in the Government Code.
The actuarial analysis indicates the additional time associated with providing a warning prior to a potential loss of benefits is not expected to be significant; therefore, the impact on TRS will not be material. Thus, it is unlikely the bill would have an impact on the actuarial soundness of TRS.
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, Gabriel, Roeder, Smith & Company, April 2, 2021.