LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION May 17, 2011 TO: Honorable Robert Duncan, Chair, Senate Committee on State Affairs 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.), As Engrossed 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, KJG, AG, JGM, JW
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION
May 17, 2011
TO: Honorable Robert Duncan, Chair, Senate Committee on State Affairs 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.), As Engrossed
TO: Honorable Robert Duncan, Chair, Senate Committee on State Affairs
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.), As Engrossed
Honorable Robert Duncan, Chair, Senate Committee on State Affairs
Honorable Robert Duncan, Chair, Senate Committee on State Affairs
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.), As Engrossed
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.), As Engrossed
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, KJG, AG, JGM, JW
JOB, KJG, AG, JGM, JW