LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 87th LEGISLATURE 1st CALLED SESSION 2021 July 9, 2021 TO: Honorable Rafael Anchia, Chair, House Committee on Pensions, Investments & Financial Services FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB85 by Rogers (Relating to a one-time supplemental payment of benefits under the Teacher Retirement System of Texas.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for HB85, As Introduced : an impact of $0 through the biennium ending August 31, 2023. However, there would be an impact of ($699,352,155) to the Teacher Retirement System which could impact the actuarial soundness of the fund. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill. General Revenue-Related Funds, Five- Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact toGeneral Revenue Related Funds2022$02023$02024$02025$02026$0All Funds, Five-Year Impact: Fiscal Year Probable Savings/(Cost) fromTRS Trust Account Fund9602022($699,352,155)2023$02024$02025$02026$0 Fiscal AnalysisThe bill would provide a one-time supplemental payment to eligible Teacher Retirement System (TRS) retirees as of December 31, 2020. The payment would be the lesser of the annuitant's current monthly benefit or $2,400 and would be payable no later than January 2022.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 87th LEGISLATURE 1st CALLED SESSION 2021
July 9, 2021
TO: Honorable Rafael Anchia, Chair, House Committee on Pensions, Investments & Financial Services FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB85 by Rogers (Relating to a one-time supplemental payment of benefits under 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: HB85 by Rogers (Relating to a one-time supplemental payment of benefits under 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
HB85 by Rogers (Relating to a one-time supplemental payment of benefits under the Teacher Retirement System of Texas.), As Introduced
HB85 by Rogers (Relating to a one-time supplemental payment of benefits under the Teacher Retirement System of Texas.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB85, As Introduced : an impact of $0 through the biennium ending August 31, 2023. However, there would be an impact of ($699,352,155) to the Teacher Retirement System which could impact the actuarial soundness of the fund. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
Estimated Two-year Net Impact to General Revenue Related Funds for HB85, As Introduced : an impact of $0 through the biennium ending August 31, 2023. However, there would be an impact of ($699,352,155) to the Teacher Retirement System which could impact the actuarial soundness of the fund. The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
The bill would make no appropriation but could provide the legal basis for an appropriation of funds to implement the provisions of the bill.
General Revenue-Related Funds, Five- Year Impact:
2022 $0
2023 $0
2024 $0
2025 $0
2026 $0
All Funds, Five-Year Impact:
2022 ($699,352,155)
2023 $0
2024 $0
2025 $0
2026 $0
Fiscal Analysis
The bill would provide a one-time supplemental payment to eligible Teacher Retirement System (TRS) retirees as of December 31, 2020. The payment would be the lesser of the annuitant's current monthly benefit or $2,400 and would be payable no later than January 2022.
The bill would provide a one-time supplemental payment to eligible Teacher Retirement System (TRS) retirees as of December 31, 2020. The payment would be the lesser of the annuitant's current monthly benefit or $2,400 and would be payable no later than January 2022.
Methodology
TRS estimates the cost to provide a onetime supplemental annuity payment under the provisions of the bill would total $699.4 million. This analysis assumes the cost would be paid from the TRS Trust Account Fund 960. According to the actuarial impact statement provided by the Pension Review Board, TRS is currently actuarially sound, with an amortization period of 26 years. The projected funding period of TRS would increase to 27 years following the passage of this bill.
TRS estimates the cost to provide a onetime supplemental annuity payment under the provisions of the bill would total $699.4 million. This analysis assumes the cost would be paid from the TRS Trust Account Fund 960.
Local Government Impact
No fiscal implication to units of local government is anticipated.
Source Agencies: b > td > 323 Teacher Retirement System, 338 Pension Review Board
323 Teacher Retirement System, 338 Pension Review Board
LBB Staff: b > td > JMc, LBO, SD, RSTE, AH, ASA, AAL
JMc, LBO, SD, RSTE, AH, ASA, AAL