Texas House Bill HB1393

Texas 2023 - 88th Regular

• Filed: 1/18/23
• Out of House Committee: 3/30/23
• Voted on by House: 4/26/23
• Out of Senate Committee: 5/10/23
• Voted on by Senate: 5/15/23
• Governor Action: 6/9/23

Caption

Relating to an optional service retirement annuity that provides an increasing annuity under the Employees Retirement System of Texas.

Impact

The enactment of HB 1393 will impact individuals eligible for service retirement annuities, granting them new options for structuring their retirement income. Eligible members can choose a standard annuity or an increasing annuity, which is calculated in such a way to prevent any actuarial loss to the retirement system. The introduction of this option could potentially influence how future retirees plan their finances, allowing them to tailor their annuity selections to better fit their long-term financial goals.

Summary

House Bill 1393 establishes an optional increasing annuity option under the Employees Retirement System of Texas for eligible members. This bill allows members who meet certain requirements to select an annuity that starts at a lower level but increases by a specified percentage each year for a defined period. This approach enables retirees to have a self-administered cost-of-living adjustment (COLA) which does not incur additional costs to the retirement system. The bill is designed to provide flexibility and financial planning options for retirees while maintaining the system's actuarial integrity.

Sentiment

The sentiment around HB 1393 appears to be positive, with unanimous support from both the House and the Senate. Supporters, including stakeholders and law enforcement associations, consider the bill a significant improvement in providing retirement options. The emphasis on allowing members to elect their own COLA reflects a broader commitment to enhancing retiree financial security without imposing added costs on the Retirement System.

Contention

While the overall reception of HB 1393 has been favorable, some concerns may arise regarding the complexities involved with implementing optional annuities. Given that individuals will need clear information on how their annuity selection could affect their retirement income, the requirement for the retirement system to provide educational resources and tailored notices about annuity reductions before retirement becomes essential. Thus, the successful implementation of this bill relies on ensuring that accurate information is communicated effectively to all eligible members to aid their decision-making.

Texas Constitutional Statutes Affected

Government Code

• Chapter 814. Benefits
  • Section: 110
  • Section: 110
  • Section: 110
  • Section: New Section