BILL ANALYSIS

H.B. 886

By: Vasut

Pensions, Investments & Financial Services

Committee Report (Unamended)

BACKGROUND AND PURPOSE

The Employees Retirement System of Texas (ERS) administers retirement benefits for state employees, elected officials, and law enforcement personnel in Texas. The bill author has informed the committee that over time, inflation and rising living costs have diminished the purchasing power of retirees' fixed incomes. H.B. 886 aims to provide a one-time supplemental payment, often referred to as a "13th check," to eligible ERS beneficiaries. This additional payment seeks to offer financial relief to retirees, helping them manage increased expenses and maintain their standard of living.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

H.B. 886 requires the Employees Retirement System of Texas (ERS) to make a one-time supplemental payment of a retirement or death benefit to an eligible annuitant, payable in January 2026 and, to the extent practicable, on a date or dates that coincide with the regular annuity payment payable to the annuitant. The amount of the supplemental payment is equal to the lesser of $2,000 or the gross amount of the regular annuity payment to which the eligible annuitant is otherwise entitled for the month of December 2025. The bill requires ERS to make applicable tax withholding and other legally required deductions before disbursing the supplemental payment and clarifies that the payment is in addition to the regular monthly annuity payment to which the eligible annuitant is otherwise entitled.

H.B. 886 makes eligible for the supplemental payment an annuitant who, for the month of December 2025, is eligible to receive one of the following:

· a standard retirement annuity payment;

· an optional service retirement annuity payment or cash balance annuity payment as either a retiree or beneficiary, if the effective date of the member's retirement was on or before September 1, 2024;

· a standard or occupational disability retirement annuity payment;

· a death benefit annuity payment or cash balance annuity payment for survivors of certain law enforcement or custodial officers; or

· an alternate payee annuity payment in lieu of benefits awarded by qualified domestic relations order, if the payment commenced on or before September 1, 2024.

The bill clarifies that the supplemental payment is in addition to the annuitant's guaranteed number of optional service retirement annuity payments or cash balance annuity payments, if applicable, and may not be counted as one of those guaranteed monthly payments.

The supplemental payment provided by the bill does not apply to the following:

· retirement annuity payments or cash balance annuity payments made to retirees or disability retirees on the basis of service in the elected class of membership;

· death benefit annuity payments or cash balance annuity payments, for the surviving spouse of a member of the elected class; or

· payments provided under statutory provisions that are not applicable to ERS unless otherwise specified by the bill.

H.B. 886 requires the ERS board of trustees to determine the eligibility for and the amount and timing of a supplemental payment and the manner in which the payment is made.

H.B. 886 provides that ERS is required to make a one-time supplemental payment of benefits only if the ERS board of trustees finds that the legislature appropriated money to ERS in an amount sufficient to provide the payment without increasing the unfunded actuarial liabilities of ERS. The amount appropriated by the legislature to provide the payment must be in addition to any amounts the state is required to contribute to the retirement system under applicable state law. If the board finds that the legislature did not appropriate money in an amount sufficient to provide a one-time supplemental payment of benefits under the bill's provisions without increasing the unfunded actuarial liabilities of ERS, ERS may not make the payment.

EFFECTIVE DATE

September 1, 2025.