LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 87TH LEGISLATIVE REGULAR SESSION April 6, 2021 TO: Honorable Rafael Anchia, Chair, House Committee on Pensions, Investments & Financial Services FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB4205 by Davis (Relating to adjustments to certain benefits paid by the Teacher Retirement System of Texas.), As Introduced No significant fiscal implication to the State is anticipated. However, there would be an impact to the Teacher Retirement System which could impact the actuarial soundness of the fund. The bill provides for a 10 percent increase in benefits payable to eligible retirees effective September 1, 2021. The bill also provides that the Teacher Retirement System (TRS) include an annual Consumer Price Index (CPI)-cost-of-living adjustment (COLA) to all current and future retirees. The annual CPI-COLA will only be granted if the TRS Board finds the retirement system in an actuarially sound position and has money available to increase benefits that year. According to the actuarial impact statement provided by the Pension Review Board, the bill would have a significant negative impact on the long-term funding of TRS, and that retirement system would be actuarially unsound following the passage of the bill. Local Government ImpactNo fiscal implication to units of local government is anticipated. Source Agencies: b > td > 323 Teacher Retirement System LBB Staff: b > td > JMc, AAL, AH, RSTE
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 87TH LEGISLATIVE REGULAR SESSION
April 6, 2021
TO: Honorable Rafael Anchia, Chair, House Committee on Pensions, Investments & Financial Services FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB4205 by Davis (Relating to adjustments to certain benefits paid by the Teacher Retirement System of Texas.), As Introduced
TO: Honorable Rafael Anchia, Chair, House Committee on Pensions, Investments & Financial Services
FROM: Jerry McGinty, Director, Legislative Budget Board
IN RE: HB4205 by Davis (Relating to adjustments to certain benefits paid by the Teacher Retirement System of Texas.), As Introduced
Honorable Rafael Anchia, Chair, House Committee on Pensions, Investments & Financial Services
Honorable Rafael Anchia, Chair, House Committee on Pensions, Investments & Financial Services
Jerry McGinty, Director, Legislative Budget Board
Jerry McGinty, Director, Legislative Budget Board
HB4205 by Davis (Relating to adjustments to certain benefits paid by the Teacher Retirement System of Texas.), As Introduced
HB4205 by Davis (Relating to adjustments to certain benefits paid by the Teacher Retirement System of Texas.), As Introduced
No significant fiscal implication to the State is anticipated. However, there would be an impact to the Teacher Retirement System which could impact the actuarial soundness of the fund.
No significant fiscal implication to the State is anticipated. However, there would be an impact to the Teacher Retirement System which could impact the actuarial soundness of the fund.
The bill provides for a 10 percent increase in benefits payable to eligible retirees effective September 1, 2021. The bill also provides that the Teacher Retirement System (TRS) include an annual Consumer Price Index (CPI)-cost-of-living adjustment (COLA) to all current and future retirees. The annual CPI-COLA will only be granted if the TRS Board finds the retirement system in an actuarially sound position and has money available to increase benefits that year. According to the actuarial impact statement provided by the Pension Review Board, the bill would have a significant negative impact on the long-term funding of TRS, and that retirement system would be actuarially unsound following the passage of the bill.
According to the actuarial impact statement provided by the Pension Review Board, the bill would have a significant negative impact on the long-term funding of TRS, and that retirement system would be actuarially unsound following the passage of the bill.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: b > td > 323 Teacher Retirement System
323 Teacher Retirement System
LBB Staff: b > td > JMc, AAL, AH, RSTE
JMc, AAL, AH, RSTE