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.), Committee Report 1st House, Substituted
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. 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 7, 2021.