89R14137 RDR-F
By: Smithee H.B. No. 5191
A BILL TO BE ENTITLED
AN ACT
relating to providing a one-time supplemental payment and a
cost-of-living adjustment applicable to certain benefits paid by
the Teacher Retirement System of Texas.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter H, Chapter 824, Government Code, is
amended by adding Section 824.704 to read as follows:
Sec. 824.704. COST-OF-LIVING ADJUSTMENT: JANUARY 2026.
(a) Notwithstanding any other section of this subchapter, the
retirement system shall make a one-time cost-of-living adjustment
payable to annuitants receiving a monthly death or retirement
benefit annuity, as provided by this section.
(b) Subject to Subsections (c) and (d), to be eligible for
the adjustment, a person must be, on the effective date of the
adjustment and disregarding any forfeiture of benefits under
Section 824.601, an annuitant eligible to receive:
(1) a standard service or disability retirement
annuity payment;
(2) an optional service or disability retirement
annuity payment as either a retiree or beneficiary;
(3) an annuity payment under Section 824.402(a)(3) or
(4);
(4) an annuity payment under Section 824.502; or
(5) an alternate payee annuity payment under Section
804.005.
(c) If the annuitant:
(1) is a retiree, or is a beneficiary under an optional
retirement payment plan, to be eligible for the adjustment under
this section:
(A) the annuitant must be living on the effective
date of the adjustment; and
(B) the effective date of the retirement of the
member of the retirement system must have been after August 31,
2020, but before January 1, 2025;
(2) is a beneficiary under Section 824.402(a)(3) or
(4) or 824.502, to be eligible for the adjustment:
(A) the annuitant must be living on the effective
date of the adjustment; and
(B) the date of death of the member of the
retirement system must have been after August 31, 2020, but before
January 1, 2025; or
(3) is an alternate payee under Section 804.005, the
annuitant is eligible for the adjustment only if the effective date
of the election to receive the annuity payment was after August 31,
2020, but before January 1, 2025.
(d) An adjustment made under this section does not apply to
payments under:
(1) Section 824.203(d), relating to retirees who
receive a standard service retirement annuity in an amount fixed by
statute;
(2) Section 824.304(a), relating to disability
retirees with less than 10 years of service credit;
(3) Section 824.304(b)(2), relating to disability
retirees who receive a disability annuity in an amount fixed by
statute;
(4) Section 824.404(a), relating to active member
survivor beneficiaries who receive a survivor annuity in an amount
fixed by statute;
(5) Section 824.501(a), relating to retiree survivor
beneficiaries who receive a survivor annuity in an amount fixed by
statute; or
(6) Section 824.804(b), relating to participants in
the deferred retirement option plan with regard to payments from
their deferred retirement option plan accounts.
(e) An adjustment under this section must be made beginning
with an annuity payable for the month of January 2026.
(f) The amount of the adjustment provided under this section
is calculated by multiplying the amount of the monthly benefit
subject to the adjustment by two percent. The adjustment under this
section is in addition to the adjustments, if any, granted under
Sections 824.702 and 824.703, or any other law.
(g) The board of trustees shall determine the eligibility
for and the amount of any adjustment in monthly annuities in
accordance with this section.
SECTION 2. (a) The Teacher Retirement System of Texas
shall make a supplemental payment of a retirement or death benefit,
as provided by this section.
(b) The supplemental payment is payable in January 2026 and,
to the extent practicable, on a date or dates that coincide with the
regular annuity payment payable to each eligible annuitant.
(c) The amount of the supplemental payment is equal to the
gross amount of the regular annuity payment to which the eligible
annuitant is otherwise entitled for the month of December 2025.
(d) The supplemental payment is payable without regard to
any forfeiture of benefits under Section 824.601, Government Code.
The Teacher Retirement System of Texas shall make applicable tax
withholding and other legally required deductions before
disbursing the supplemental payment. A supplemental payment under
this section is in addition to and not in lieu of the regular
monthly annuity payment to which the eligible annuitant is
otherwise entitled.
(e) Subject to Subsection (f) of this section, to be
eligible for the supplemental payment, a person must be, for the
month of December 2025, and disregarding any forfeiture of benefits
under Section 824.601, Government Code, an annuitant eligible to
receive:
(1) a standard retirement annuity payment;
(2) an optional retirement annuity payment as either a
retiree or beneficiary;
(3) a life annuity payment under Section
824.402(a)(4), Government Code;
(4) an annuity for a guaranteed period of 60 months
under Section 824.402(a)(3), Government Code; or
(5) an alternate payee annuity payment under Section
804.005, Government Code.
(f) If the annuitant is a retiree or a beneficiary under an
optional retirement payment plan, to be eligible for the
supplemental payment, the effective date of the retirement of the
member of the Teacher Retirement System of Texas must have been
before December 31, 2024. If the annuitant is a beneficiary under
Section 824.402(a)(3) or (4), Government Code, to be eligible for
the supplemental payment, the date of death of the member of the
retirement system must have been before December 31, 2024. The
supplemental payment shall be made to an alternate payee who is an
annuitant under Section 804.005, Government Code, only if the
annuity payment to the alternate payee commenced before December
31, 2024. The supplemental payment is in addition to the guaranteed
number of payments under Section 824.204(c)(3) or (4) or
824.402(a)(3), Government Code, and may not be counted as one of the
guaranteed monthly payments.
(g) The supplemental payment does not apply to payments
under:
(1) Section 824.304(a), Government Code, relating to
disability retirees with less than 10 years of service credit;
(2) Section 824.304(b)(2), Government Code, relating
to disability retirees who receive a disability annuity in an
amount fixed by statute;
(3) Section 824.804(b), Government Code, relating to
participants in the deferred retirement option plan with regard to
payments from their deferred retirement option plan accounts;
(4) Section 824.501(a), Government Code, relating to
retiree survivor beneficiaries who receive a survivor annuity in an
amount fixed by statute; or
(5) Section 824.404(a), Government Code, relating to
active member survivor beneficiaries who receive a survivor annuity
in an amount fixed by statute.
(h) Except as provided by this section, the board of
trustees of the Teacher Retirement System of Texas shall determine
the eligibility for and the amount and timing of a supplemental
payment and the manner in which the payment is made.
SECTION 3. Section 824.704, Government Code, as added by
this Act, applies only to a monthly benefit payment made by the
Teacher Retirement System of Texas on or after January 1, 2026.
SECTION 4. The Teacher Retirement System of Texas is
required to make a cost-of-living adjustment under Section 824.704,
Government Code, as added by this Act, or a one-time supplemental
payment of benefits under Section 2 of this Act only if the board of
trustees of the Teacher Retirement System of Texas finds that the
legislature appropriated money to the retirement system in an
amount sufficient to provide the adjustment or payment without
increasing the unfunded actuarial liabilities of the retirement
system. The amount appropriated by the legislature to provide the
adjustment or payment must be in addition to any amounts the state
is required to contribute to the retirement system under Section
825.404, Government Code. If the board of trustees of the Teacher
Retirement System of Texas finds that the legislature did not
appropriate money in an amount sufficient to provide the
cost-of-living adjustment or one-time supplemental payment without
increasing the unfunded actuarial liabilities of the retirement
system, the retirement system may not make the adjustment or
payment.
SECTION 5. This Act takes effect September 1, 2025.