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A BILL TO BE ENTITLED
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AN ACT
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relating to certain benefits paid by the Employees Retirement |
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System of Texas. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter G, Chapter 814, Government Code, is |
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amended by adding Sections 814.605 and 814.606 to read as follows: |
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Sec. 814.605. ONE-TIME ADJUSTMENT TO BENEFITS. (a) The |
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amount of a service retirement, disability retirement, death, or |
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other monthly benefit paid under this chapter or Chapter 804 to an |
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annuitant based on service credited in the employee class is |
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increased to include a one-time 10 percent adjustment payable each |
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month of each calendar year beginning with the 2026 calendar year in |
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accordance with this section. |
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(b) The board of trustees shall recompute the amount of a |
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benefit paid monthly under this chapter or Chapter 804 by applying |
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the 10 percent adjustment to the monthly amount otherwise required |
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to be paid as determined in accordance with those chapters. |
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Sec. 814.606. ANNUAL COST-OF-LIVING ADJUSTMENT. (a) |
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Notwithstanding Section 814.604 or 814.605, the amount of a service |
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retirement, disability retirement, death, or other monthly benefit |
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paid under this chapter or Chapter 804 to an annuitant based on |
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service credited in the employee class is increased in accordance |
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with this section as necessary to reflect inflation. |
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(b) Each year, during the last seven days of October, the |
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board of trustees shall set the rate of the adjustment for the next |
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calendar year to equal the annual percentage increase, if any, in |
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the Consumer Price Index for Urban Wage Earners and Clerical |
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Workers (CPI-W) published by the Bureau of Labor Statistics of the |
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United States Department of Labor as determined by the commissioner |
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of social security under 42 U.S.C. Section 415(i) for purposes of |
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providing an annual cost-of-living increase to social security |
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benefit payments 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 or Chapter 804. |
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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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SECTION 2. (a) Subject to Subsection (i) of this section |
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and Section 811.006, Government Code, the Employees Retirement |
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System of Texas shall make a one-time supplemental payment of a |
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service retirement, disability retirement, death, or other monthly |
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benefit, as provided by this section. |
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(b) The supplemental payment is payable in January 2026 and, |
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to the extent practicable, on a date or dates that coincide with the |
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regular annuity payment payable to each eligible annuitant. |
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(c) The amount of the supplemental payment is equal to the |
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lesser of: |
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(1) $2,000; or |
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(2) the gross amount of the regular annuity payment to |
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which the eligible annuitant is otherwise entitled for the month of |
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December 2025. |
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(d) The Employees Retirement System of Texas shall make |
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applicable tax withholding and other legally required deductions |
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before disbursing the supplemental payment. A supplemental payment |
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under this section is in addition to the regular monthly annuity |
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payment to which the eligible annuitant is otherwise entitled. |
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(e) Subject to Subsection (f) of this section, to be |
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eligible for the supplemental payment, a person must be, for the |
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month of December 2025, an annuitant eligible to receive based on |
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service credited in the employee class: |
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(1) a standard retirement annuity payment; |
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(2) an optional service retirement annuity payment as |
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either a retiree or beneficiary under Section 814.108, Government |
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Code; |
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(3) a standard or occupational disability retirement |
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annuity payment; |
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(4) a death benefit annuity payment under Section |
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814.305, Government Code; or |
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(5) an alternate payee annuity payment under Section |
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804.005, Government Code. |
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(f) If the annuitant is a retiree or a beneficiary under an |
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optional retirement payment plan, to be eligible for the |
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supplemental payment, the effective date of the retirement of the |
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member of the Employees Retirement System of Texas must have been on |
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or before September 1, 2024. The supplemental payment shall be made |
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to an alternate payee who is an annuitant under Section 804.005, |
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Government Code, only if the annuity payment to the alternate payee |
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commenced on or before September 1, 2024. The supplemental payment |
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is in addition to the guaranteed number of payments under Section |
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814.108, Government Code, and may not be counted as one of the |
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guaranteed monthly payments. |
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(g) The supplemental payment does not apply to payments |
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based on service credited in the elected class, including payments |
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under: |
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(1) Section 814.103, 814.205, 820.053(a)(3), or |
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820.054, Government Code, relating to retirees or disability |
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retirees from the elected class of membership; |
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(2) a subtitle other than Subtitle B, Title 8, |
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Government Code, except as provided by Subsection (e)(5) of this |
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section; or |
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(3) Section 814.304 or 820.054, Government Code, |
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relating to retiree survivor beneficiaries who receive a survivor |
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annuity as the surviving spouse of a member of the elected class. |
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(h) Except as provided by this section, the board of |
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trustees of the Employees Retirement System of Texas shall |
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determine the eligibility for and the amount and timing of a |
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supplemental payment and the manner in which the payment is made. |
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(i) The Employees Retirement System of Texas is required to |
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make a one-time supplemental payment of benefits under this section |
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only if the board of trustees of the Employees Retirement System of |
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Texas finds that the legislature appropriated money to the |
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retirement system in an amount sufficient to provide the payment |
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without increasing the unfunded actuarial liabilities of the |
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retirement system. The amount appropriated by the legislature to |
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provide the payment must be in addition to any amounts the state is |
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required to contribute to the retirement system under Subchapter E, |
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Chapter 815, Government Code. If the board of trustees of the |
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Employees Retirement System of Texas finds that the legislature did |
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not appropriate money in an amount sufficient to provide a one-time |
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supplemental payment of benefits under this section without |
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increasing the unfunded actuarial liabilities of the retirement |
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system, the retirement system may not make the payment. |
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SECTION 3. Sections 814.605 and 814.606, Government Code, |
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as added by this Act, apply only to a monthly benefit payment made |
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by the Employees Retirement System of Texas on or after January 1, |
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2026. |
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SECTION 4. This Act takes effect September 1, 2025. |