BILL ANALYSIS

 

 

Senate Research Center

H.B. 4945

89R21893 RDR-D

By: Ashby; Bumgarner (Nichols)

 

Finance

 

5/8/2025

 

Engrossed

 

 

 

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

 

The Teacher Retirement System of Texas (TRS) is the largest pension fund in Texas and one of the largest in the country and the pension fund and its benefits are always a major discussion point during Texas legislative sessions; however, the discussion is always centered around teachers. A discussion concerning firefighters under TRS is needed and that many of the entry level firefighters are in their early twenties, which would mean a forty-year career on the fire line, while federal wildland firefighters qualify for twenty-year pensions, along with firefighters in most municipalities. This disparity may affect recruitment and retention efforts, and many firefighters may either leave for jobs with more attractive benefits or do not apply for these positions. H.B. 4945 seeks to address this issue by requiring TRS to conduct a study on the feasibility of offering members who are Texas A&M Forest Service wildland firefighters and are employed in positions related to wildland firefighting alternative service retirement benefits under the system.

 

H.B. 4945 amends current law relating to a study by the Teacher Retirement System of Texas on the feasibility of offering alternative service retirement benefits to certain members of the retirement system engaged in wildland firefighting or employed in positions related to wildland firefighting.

 

RULEMAKING AUTHORITY

 

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

 

SECTION BY SECTION ANALYSIS

 

SECTION 1. Amends Subchapter B, Chapter 825, Government Code, by adding Section 825.1086, as follows:

 

Sec. 825.1086. STUDY AND REPORT ON ALTERNATIVE SERVICE RETIREMENT BENEFITS FOR CERTAIN WILDLAND FIREFIGHTERS AND RELATED EMPLOYEES. (a) Requires the Teacher Retirement System of Texas (TRS) to conduct a study on the feasibility of offering members who are Texas A&M Forest Service (service) wildland firefighters and are employed in positions related to wildland firefighting alternative service retirement benefits under the system.

 

(b) Requires TRS, in conducting the study, to assess the costs to and impact on TRS associated with offering members described by Subsection (a) the following alternative service retirement benefits:

 

(1) a service retirement benefit under the existing benefit plan that provides retirement eligibility and a supplemental benefit under Subsection (c) within a new tier, to be named Hazardous Duty, for certain members; and

 

(2) a service retirement benefit under the existing plan that provides retirement eligibility and a supplemental benefit under Subsection (c), as applicable, within a new tier, to be named Hazardous Duty-Administrative Support, for:

 

(A) a member who is vested in TRS and who has been employed as a wildland firefighter during the entirety of the member's employment with the service; or

 

(B) a member who has service credit as a wildland firefighter equal to at least the minimum number of years of service credit required to vest in the system and who is employed in a position that provides support services to wildland firefighters on the member's retirement date.

 

(c) Provides that the standard service retirement annuity for a member who is eligible to retire under a proposal described by Subsection (b)(1) or (b)(2)(A) would be an amount computed on the basis of the member's average annual compensation for the five years of service, whether or not consecutive, in which the member received the highest annual compensation, times the sum of the percentage factor used in the computation of a standard service retirement annuity under Section 824.203(a) (relating to establishing the standard service retirement annuity amount) plus 0.5 percent.

 

(d) Provides that the standard service retirement annuity for a member who is eligible to retire under a proposal described by Subsection (b)(2)(B) based on the age and service requirements described in Subsection (b)(1) is the standard service retirement annuity described by Subsection (c), provided the member is not entitled to the additional 0.5 percent described by Subsection (c).

 

(e) Requires TRS, not later than March 1, 2026, to begin coordinating with the service to determine:

 

(1) positions that will qualify for benefits proposed by Subsection (b) and the salaries of both existing and terminated employees who accrued service credit for service provided on or after September 1, 2009, and who would be eligible to retire under any of the requirements proposed by Subsection (b) based on that service credit;

 

(2) the effectiveness of using either the standard service retirement annuity calculation under Section 824.203 (Standard Service Retirement Benefits) plus 0.5 percent or a different annuity calculation that would provide similar or more benefits than the calculation under Section 824.203 for a member who would be eligible to retire under any of the requirements proposed by Subsection (b)(1) while maintaining the actuarial soundness of TRS;

 

(3) the additional percentage of salary contribution needed by both the employer and employee to provide for the alternative retirement benefits proposed by Subsection (b) while maintaining the actuarial soundness of TRS;

 

(4) the cost computed as additional employer and employee contributions to provide the alternative retirement benefits proposed by Subsection (b) attributable to service credit described by that subsection for service performed on or after September 1, 2009; and

 

(5) the cost and implications of the minimum age or service credit requirements proposed by Subsection (b) to the extent those age or service credit requirements are less stringent than the minimum age or service credit requirements provided by Subtitle C (Teacher Retirement System of Texas).

 

(f) Requires TRS, not later than December 31, 2026, to prepare and submit a report to the legislature that contains the findings of the study and the determinations required by Subsection (e).

 

(g) Requires the Legislative Budget Board and the State Pension Review Board to, as necessary, assist TRS in conducting the study and provide TRS with any information needed to complete the report required by Subsection (f).

 

(h) Provides that this section expires September 1, 2027.

 

SECTION 2. Effective date: upon passage or September 1, 2025.