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A BILL TO BE ENTITLED
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AN ACT
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relating to cost-of-living adjustments applicable to certain |
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benefits paid by the Teacher Retirement System of Texas and a |
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biennial study on providing additional cost-of-living adjustments |
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based on the effects of increased inflation. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter H, Chapter 824, Government Code, is |
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amended by adding Section 824.704 to read as follows: |
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Sec. 824.704. COST-OF-LIVING ADJUSTMENTS FOR INFLATION; |
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BIENNIAL DETERMINATION. (a) Notwithstanding any other law, the |
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amount of a service retirement benefit, disability retirement |
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benefit, or death benefit paid under this chapter is adjusted in |
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accordance with this section as necessary to reflect inflation. |
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(b) During the last seven days of October of each |
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odd-numbered year, the board of trustees shall set the rate of the |
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adjustment that will apply to the following two calendar years |
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based on the sum of each annual percentage increase, if any, in the |
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current year and the previous year in the Consumer Price Index for |
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Urban Wage Earners and Clerical Workers (CPI-W) published by the |
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Bureau of Labor Statistics of the United States Department of Labor |
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as determined by the commissioner of social security under 42 |
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U.S.C. Section 415(i) for purposes of providing an annual |
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cost-of-living increase to social security benefit payments |
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payable in the next calendar year. |
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(c) Subject to Subsection (d), the board of trustees shall |
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increase the amount of a benefit payable under this chapter by |
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applying the adjustment rate set by the board of trustees under |
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Subsection (b) to the amount otherwise required to be paid as |
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determined in accordance with the other applicable provisions of |
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this chapter. |
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(d) The board of trustees may not pay a benefit increase |
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under this section in any calendar year unless the board finds that |
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the retirement system is actuarially sound and has money available |
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to pay increased benefits in that year. If the board of trustees |
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finds that the retirement system is actuarially sound, but that the |
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amount of money available is not sufficient to pay the full amount |
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of the adjustment under Subsection (b), the board shall compute the |
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largest rate of adjustment possible for the amount of money |
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available while maintaining the actuarial soundness of the system |
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and shall use that rate in increasing benefits under Subsection (c) |
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for that calendar year. |
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(e) The board of trustees by rule shall define "actuarially |
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sound" for purposes of this section. |
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SECTION 2. Subchapter B, Chapter 825, Government Code, is |
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amended by adding Section 825.1086 to read as follows: |
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Sec. 825.1086. BIENNIAL STUDY AND REPORT ON PROVIDING |
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ADDITIONAL COST-OF-LIVING ADJUSTMENTS BASED ON EFFECTS OF |
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INFLATION. Not later than January 1 of each even-numbered year, the |
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retirement system shall: |
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(1) conduct a study to evaluate and identify the |
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effects, if any, that increased inflation has had on annuitants of |
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the system: |
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(A) during the preceding state fiscal biennium; |
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and |
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(B) unless the annuitants received a |
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cost-of-living adjustment in the preceding fiscal year, since |
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annuitants last received a cost-of-living adjustment; and |
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(2) submit a written report to the legislature |
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containing: |
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(A) findings of the study; and |
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(B) if appropriate, recommendations for |
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potential legislation to address any adverse effects of inflation |
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identified under Subdivision (1), including specific |
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recommendations regarding whether and in what amount the |
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legislature would need to provide a cost-of-living adjustment to |
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the benefits of annuitants to remedy those effects. |
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SECTION 3. Section 824.704, Government Code, as added by |
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this Act, applies only to a benefit paid by the Teacher Retirement |
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System of Texas on or after January 1, 2026. |
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SECTION 4. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2025. |