Texas House Bill HB3542

Texas 2011 - 82nd Regular

• Out of House Committee: 5/3/11
• Introduced: 3/11/11
• Voted on by House: 5/15/11
• Refer: 3/22/11
• Report Pass: 4/28/11

Caption

Relating to a supplemental payment for retirees of the Teacher Retirement System of Texas and the unfunded actuarial liabilities allowed under that system.

Impact

This bill modifies the Government Code to enable a one-time supplemental payment for retirees who are eligible to receive various types of annuity payments, including standard retirement annuities and optional retirement payments. The payments can be approved even if the retirement system's unfunded actuarial liabilities have an amortization period exceeding 30 years, as long as the board of trustees determines that the payment will not jeopardize the system's ability to meet 80% of its pension obligations.

Summary

House Bill 3542 relates to the provision of a supplemental payment for retirees of the Teacher Retirement System of Texas and addresses the unfunded actuarial liabilities associated with that system. The bill aims to offer an additional financial boost to eligible annuitants without requiring extra funds from the state's general revenue. It specifically allows for a one-time supplemental payment based on certain conditions tied to the system's investment earnings.

Contention

Some concerns arise over the bill's conditions for making the supplemental payments, which are tied to the earnings from investments made by the retirement system. Critics may argue that depending on investment performance to provide additional financial support to retirees exposes them to risks tied to market fluctuations. Furthermore, there is a discussion around whether the one-time payment is sufficient to address the broader issues of funding and sustainability within the Teacher Retirement System, particularly in light of the rising costs associated with pension liabilities.