89R9325 RDR-D
By: Menéndez S.B. No. 2472
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 Employees Retirement System of Texas.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter G, Chapter 814, Government Code, is
amended by adding Section 814.605 to read as follows:
Sec. 814.605. COST-OF-LIVING ADJUSTMENT: JANUARY 2026. (a)
The amount of a service retirement, disability retirement, death,
or other monthly benefit paid under this chapter or Chapter 804 to
an annuitant based on service credited in the employee class is
increased to include a cost-of-living adjustment in accordance with
this section.
(b) Subject to Subsections (c) and (d), to be eligible for
the adjustment, a person must be, for the month of December 2025, an
annuitant eligible to receive:
(1) a standard retirement annuity payment;
(2) an optional service retirement annuity payment as
either a retiree or beneficiary under Section 814.108;
(3) a standard or occupational disability retirement
annuity payment;
(4) a death benefit annuity payment under Section
814.301, 814.302, or 814.305; or
(5) an alternate payee annuity payment under Section
804.005.
(c) The adjustment does not apply to benefit payments:
(1) based on service credited in the elected class; or
(2) under a subtitle other than this subtitle except
as provided by Subsection (b)(5).
(d) If the annuitant:
(1) is a retiree, or is a beneficiary under an optional
service or disability 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 on whose service the annuity is
based must have been before September 1, 2024;
(2) is a person eligible to receive a death benefit
annuity described by Subsection (b)(4), 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 on whose service the annuity is based must have
been before September 1, 2025; or
(3) is an alternate payee under Section 804.005, to be
eligible for the adjustment:
(A) the annuitant must be living on the effective
date of the adjustment; and
(B) the effective date of the annuitant's
election to receive the annuity payment must have been before
September 1, 2025.
(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 the following percentage rate, as
applicable:
(1) for annuitants described by Subsection (d)(1):
(A) if the effective date of retirement of the
member of the retirement system on whose service the annuity is
based was before January 1, 2007, eight percent;
(B) if the effective date of retirement of the
member of the retirement system on whose service the annuity is
based was on or after January 1, 2007, but before January 1, 2019,
six percent;
(C) if the effective date of retirement of the
member of the retirement system on whose service the annuity is
based was on or after January 1, 2019, but before January 1, 2024,
four percent; and
(D) if the effective date of retirement of the
member of the retirement system on whose service the annuity is
based was on or after January 1, 2024, two percent;
(2) for annuitants described by Subsection (d)(2):
(A) if the date of the death of the member of the
retirement system on whose service the annuity is based was before
January 1, 2007, eight percent;
(B) if the date of the death of the member of the
retirement system on whose service the annuity is based was on or
after January 1, 2007, but before January 1, 2019, six percent;
(C) if the date of the death of the member of the
retirement system on whose service the annuity is based was on or
after January 1, 2019, but before January 1, 2024, four percent; and
(D) if the date of the death of the member of the
retirement system on whose service the annuity is based was on or
after January 1, 2024, two percent; and
(3) for annuitants described by Subsection (d)(3):
(A) if the effective date of the annuitant's
election was before January 1, 2007, eight percent;
(B) if the effective date of the annuitant's
election was on or after January 1, 2007, but before January 1,
2019, six percent;
(C) if the effective date of the annuitant's
election was on or after January 1, 2019, but before January 1,
2024, four percent; and
(D) if the effective date of the annuitant's
election was on or after January 1, 2024, two percent.
(g) The board of trustees shall recompute the amount of an
annuity paid monthly under this chapter or Chapter 804, as
applicable, by applying the adjustment required under Subsection
(f) to the monthly amount otherwise required to be paid under the
applicable chapter. The adjustment under this section is in
addition to the adjustment, if any, granted under Section 814.604
or any other law.
(h) 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) Subject to Section 811.006, Government
Code, the Employees Retirement System of Texas shall make a
one-time supplemental payment of a service retirement, disability
retirement, death, or other monthly 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:
(1) $10,000, if the effective date of retirement of
the member of the retirement system on whose service the annuity is
based was before January 1, 2007;
(2) $7,500, if the effective date of retirement of the
member of the retirement system on whose service the annuity is
based was on or after January 1, 2007, but before January 1, 2019;
(3) $5,000, if the effective date of retirement of the
member of the retirement system on whose service the annuity is
based was on or after January 1, 2019, but before January 1, 2024;
and
(4) $2,500, if the effective date of retirement of the
member of the retirement system on whose service the annuity is
based was on or after January 1, 2024.
(d) The Employees 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 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, an annuitant eligible to receive based on
service credited in the employee class:
(1) a standard retirement annuity payment;
(2) an optional service retirement annuity payment as
either a retiree or beneficiary under Section 814.108, Government
Code;
(3) a standard or occupational disability retirement
annuity payment;
(4) a death benefit annuity payment under Section
814.305, 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 Employees Retirement System of Texas must have been on
or before September 1, 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 on or before September 1, 2024. The supplemental payment
is in addition to the guaranteed number of payments under Section
814.108, Government Code, and may not be counted as one of the
guaranteed monthly payments.
(g) The supplemental payment does not apply to payments:
(1) based on service credited in the elected class; or
(2) under a subtitle other than Subtitle B, Title 8,
Government Code, except as provided by Subsection (e)(5) of this
section.
(h) Except as provided by this section, the board of
trustees of the Employees 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 814.605, Government Code, as added by
this Act, applies only to a monthly benefit payment made by the
Employees Retirement System of Texas on or after January 1, 2026.
SECTION 4. The Employees Retirement System of Texas is
required to make a cost-of-living adjustment under Section 814.605,
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 Employees 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 Subchapter
E, Chapter 815, Government Code. If the board of trustees of the
Employees 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.