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A BILL TO BE ENTITLED
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AN ACT
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relating to providing a one-time supplemental payment and a |
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cost-of-living adjustment applicable to certain benefits paid by |
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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 Section 824.704 to read as follows: |
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Sec. 824.704. COST-OF-LIVING ADJUSTMENT: JANUARY 2026. |
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(a) 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 after August 31, |
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2020, but before January 1, 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 after August 31, 2020, but before |
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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 after August 31, |
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2020, but before January 1, 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 two percent. The adjustment under this |
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section is in addition to the adjustments, if any, granted under |
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Sections 824.702 and 824.703, or any other law. |
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(g) The board of trustees shall determine the eligibility |
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for and the amount of any adjustment in monthly annuities in |
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accordance with this section. |
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SECTION 2. (a) The Teacher Retirement System of Texas |
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shall make a supplemental payment of a retirement or death benefit, |
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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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gross amount of the regular annuity payment to which the eligible |
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annuitant is otherwise entitled for the month of December 2025. |
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(d) The supplemental payment is payable without regard to |
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any forfeiture of benefits under Section 824.601, Government Code. |
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The Teacher Retirement System of Texas shall make applicable tax |
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withholding and other legally required deductions before |
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disbursing the supplemental payment. A supplemental payment under |
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this section is in addition to and not in lieu of the regular |
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monthly annuity payment to which the eligible annuitant is |
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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, and disregarding any forfeiture of benefits |
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under Section 824.601, Government Code, an annuitant eligible to |
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receive: |
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(1) a standard retirement annuity payment; |
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(2) an optional retirement annuity payment as either a |
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retiree or beneficiary; |
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(3) a life annuity payment under Section |
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824.402(a)(4), Government Code; |
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(4) an annuity for a guaranteed period of 60 months |
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under Section 824.402(a)(3), 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 Teacher Retirement System of Texas must have been |
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before December 31, 2024. If the annuitant is a beneficiary under |
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Section 824.402(a)(3) or (4), Government Code, to be eligible for |
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the supplemental payment, the date of death of the member of the |
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retirement system must have been before December 31, 2024. The |
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supplemental payment shall be made to an alternate payee who is an |
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annuitant under Section 804.005, Government Code, only if the |
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annuity payment to the alternate payee commenced before December |
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31, 2024. The supplemental payment is in addition to the guaranteed |
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number of payments under Section 824.204(c)(3) or (4) or |
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824.402(a)(3), 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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under: |
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(1) Section 824.304(a), Government Code, relating to |
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disability retirees with less than 10 years of service credit; |
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(2) Section 824.304(b)(2), Government Code, relating |
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to disability retirees who receive a disability annuity in an |
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amount fixed by statute; |
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(3) Section 824.804(b), Government Code, relating to |
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participants in the deferred retirement option plan with regard to |
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payments from their deferred retirement option plan accounts; |
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(4) Section 824.501(a), Government Code, relating to |
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retiree survivor beneficiaries who receive a survivor annuity in an |
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amount fixed by statute; or |
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(5) Section 824.404(a), Government Code, relating to |
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active member survivor beneficiaries who receive a survivor annuity |
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in an amount fixed by statute. |
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(h) Except as provided by this section, the board of |
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trustees of the Teacher Retirement System of Texas shall determine |
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the eligibility for and the amount and timing of a supplemental |
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payment and the manner in which the payment is made. |
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SECTION 3. Section 824.704, Government Code, as added by |
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this Act, applies only to a monthly benefit payment made by the |
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Teacher Retirement System of Texas on or after January 1, 2026. |
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SECTION 4. 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, or a one-time supplemental |
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payment of benefits under Section 2 of this Act only if the board of |
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trustees 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 adjustment or payment without |
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increasing the unfunded actuarial liabilities of the retirement |
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system. The amount appropriated by the legislature to provide the |
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adjustment or payment must be in addition to any amounts the state |
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is required to contribute to the retirement system under Section |
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825.404, Government Code. If the board of trustees of the Teacher |
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Retirement System of Texas finds that the legislature did not |
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appropriate money in an amount sufficient to provide the |
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cost-of-living adjustment or one-time supplemental payment 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 or |
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payment. |
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SECTION 5. This Act takes effect September 1, 2025. |