LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION April 29, 2011 TO: Honorable Vicki Truitt, Chair, House Committee on Pensions, Investments & Financial Services FROM: John S O'Brien, Director, Legislative Budget Board IN RE:HB3542 by Gonzales, Larry (Relating to a supplemental payment for retirees of the Teacher Retirement System of Texas and the unfunded actuarial liabilities allowed under that system.), Committee Report 1st House, Substituted No significant fiscal implication to the State is anticipated. The bill would authorize the Teacher Retirement System of Texas (TRS) to make one-time supplemental payments, capped at $2,400, to retirees and beneficiaries as of August 2011 who retired prior to January 1, 2009. The payment would be authorized only if the supplemental payment could be made without causing the systems pension obligations to fall below 80 percent and if investment earnings in the previous year exceeded 8.0 percent by an amount sufficient to fund the payments. According to the TRS, based on the provisions of the bill, the pension system is not expected to maintain an 80 percent funding level and one-time supplemental payments would not be paid. The bill would take effect on September 1, 2011, or immediately upon passage with the necessary voting margins. Local Government Impact No fiscal implication to units of local government is anticipated. Source Agencies:323 Teacher Retirement System LBB Staff: JOB, AG, JGM, JW
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION
April 29, 2011
TO: Honorable Vicki Truitt, Chair, House Committee on Pensions, Investments & Financial Services FROM: John S O'Brien, Director, Legislative Budget Board IN RE:HB3542 by Gonzales, Larry (Relating to a supplemental payment for retirees of the Teacher Retirement System of Texas and the unfunded actuarial liabilities allowed under that system.), Committee Report 1st House, Substituted
TO: Honorable Vicki Truitt, Chair, House Committee on Pensions, Investments & Financial Services
FROM: John S O'Brien, Director, Legislative Budget Board
IN RE: HB3542 by Gonzales, Larry (Relating to a supplemental payment for retirees of the Teacher Retirement System of Texas and the unfunded actuarial liabilities allowed under that system.), Committee Report 1st House, Substituted
Honorable Vicki Truitt, Chair, House Committee on Pensions, Investments & Financial Services
Honorable Vicki Truitt, Chair, House Committee on Pensions, Investments & Financial Services
John S O'Brien, Director, Legislative Budget Board
John S O'Brien, Director, Legislative Budget Board
HB3542 by Gonzales, Larry (Relating to a supplemental payment for retirees of the Teacher Retirement System of Texas and the unfunded actuarial liabilities allowed under that system.), Committee Report 1st House, Substituted
HB3542 by Gonzales, Larry (Relating to a supplemental payment for retirees of the Teacher Retirement System of Texas and the unfunded actuarial liabilities allowed under that system.), Committee Report 1st House, Substituted
No significant fiscal implication to the State is anticipated.
No significant fiscal implication to the State is anticipated.
The bill would authorize the Teacher Retirement System of Texas (TRS) to make one-time supplemental payments, capped at $2,400, to retirees and beneficiaries as of August 2011 who retired prior to January 1, 2009. The payment would be authorized only if the supplemental payment could be made without causing the systems pension obligations to fall below 80 percent and if investment earnings in the previous year exceeded 8.0 percent by an amount sufficient to fund the payments. According to the TRS, based on the provisions of the bill, the pension system is not expected to maintain an 80 percent funding level and one-time supplemental payments would not be paid. The bill would take effect on September 1, 2011, or immediately upon passage with the necessary voting margins.
The bill would authorize the Teacher Retirement System of Texas (TRS) to make one-time supplemental payments, capped at $2,400, to retirees and beneficiaries as of August 2011 who retired prior to January 1, 2009. The payment would be authorized only if the supplemental payment could be made without causing the systems pension obligations to fall below 80 percent and if investment earnings in the previous year exceeded 8.0 percent by an amount sufficient to fund the payments.
According to the TRS, based on the provisions of the bill, the pension system is not expected to maintain an 80 percent funding level and one-time supplemental payments would not be paid. The bill would take effect on September 1, 2011, or immediately upon passage with the necessary voting margins.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: 323 Teacher Retirement System
323 Teacher Retirement System
LBB Staff: JOB, AG, JGM, JW
JOB, AG, JGM, JW