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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. |
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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 Sections 824.704 and 824.705 to read as follows: |
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Sec. 824.704. COST-OF-LIVING ADJUSTMENT: JANUARY 2026. (a) |
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Notwithstanding any other section of this subchapter, the |
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retirement system shall make a one-time cost-of-living adjustment |
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payable to annuitants receiving a monthly death or retirement |
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benefit annuity, as provided by this section. |
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(b) Subject to Subsections (c) and (d), to be eligible for |
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the adjustment, a person must be, on the effective date of the |
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adjustment and disregarding any forfeiture of benefits under |
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Section 824.601, an annuitant eligible to receive: |
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(1) a standard service or disability retirement |
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annuity payment; |
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(2) an optional service or disability retirement |
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annuity payment as either a retiree or beneficiary; |
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(3) an annuity payment under Section 824.402(a)(3) or |
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(4); |
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(4) an annuity payment under Section 824.502; or |
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(5) an alternate payee annuity payment under Section |
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804.005. |
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(c) If the annuitant: |
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(1) is a retiree, or is a beneficiary under an optional |
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retirement payment plan, to be eligible for the adjustment under |
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this section: |
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(A) the annuitant must be living on the effective |
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date of the adjustment; and |
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(B) the effective date of the retirement of the |
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member of the retirement system must have been before January 1, |
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2025; |
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(2) is a beneficiary under Section 824.402(a)(3) or |
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(4) or 824.502, to be eligible for the adjustment: |
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(A) the annuitant must be living on the effective |
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date of the adjustment; and |
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(B) the date of death of the member of the |
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retirement system must have been before January 1, 2025; or |
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(3) is an alternate payee under Section 804.005, the |
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annuitant is eligible for the adjustment only if the effective date |
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of the election to receive the annuity payment was before January 1, |
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2025. |
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(d) An adjustment made under this section does not apply to |
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payments under: |
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(1) Section 824.203(d), relating to retirees who |
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receive a standard service retirement annuity in an amount fixed by |
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statute; |
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(2) Section 824.304(a), relating to disability |
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retirees with less than 10 years of service credit; |
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(3) Section 824.304(b)(2), relating to disability |
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retirees who receive a disability annuity in an amount fixed by |
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statute; |
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(4) Section 824.404(a), relating to active member |
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survivor beneficiaries who receive a survivor annuity in an amount |
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fixed by statute; |
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(5) Section 824.501(a), relating to retiree survivor |
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beneficiaries who receive a survivor annuity in an amount fixed by |
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statute; or |
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(6) Section 824.804(b), relating to participants in |
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the deferred retirement option plan with regard to payments from |
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their deferred retirement option plan accounts. |
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(e) An adjustment under this section must be made beginning |
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with an annuity payable for the month of January 2026. |
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(f) The amount of the adjustment provided under this section |
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is calculated by multiplying the amount of the monthly benefit |
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subject to the adjustment by six percent. The adjustment under this |
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section is in addition to the adjustments, if any, granted under |
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Section 824.702, 824.703, or 824.705 or any other law. |
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Sec. 824.705. COST-OF-LIVING ADJUSTMENTS FOR INFLATION; |
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ANNUAL 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) 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. The adjustment under this section is in addition to |
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the adjustments, if any, granted under Section 824.702, 824.703, or |
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824.704 or any other law. |
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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. The Teacher Retirement System of Texas is |
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required to make a cost-of-living adjustment under Section 824.704, |
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Government Code, as added by this Act, only if the board of trustees |
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of the Teacher Retirement System of Texas finds that the |
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legislature appropriated money to the retirement system in an |
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amount sufficient to provide the payment without increasing the |
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unfunded actuarial liabilities of the retirement system. The |
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amount appropriated by the legislature to provide the payment must |
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be in addition to any amounts the state is required to contribute to |
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the retirement system under Subchapter E, Chapter 825, Government |
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Code. If the board of trustees of the Teacher Retirement System of |
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Texas finds that the legislature did not appropriate money in an |
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amount sufficient to provide the cost-of-living adjustment 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 adjustment payment. |
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SECTION 3. Sections 824.704 and 824.705, 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 Teacher 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. |