HB3857 - Relating to cost-of-living adjustments applicable to certain benefits paid by the Teacher Retirement System of Texas and a biennial study on providing additional cost-of-living adjustments based on the effects of increased inflation.

  89R10760 RDR-D     By: Bucy H.B. No. 3857       A BILL TO BE ENTITLED   AN ACT   relating to cost-of-living adjustments applicable to certain   benefits paid by the Teacher Retirement System of Texas and a   biennial study on providing additional cost-of-living adjustments   based on the effects of increased inflation.          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 ADJUSTMENTS FOR INFLATION;   BIENNIAL DETERMINATION. (a) Notwithstanding any other law, the   amount of a service retirement benefit, disability retirement   benefit, or death benefit paid under this chapter is adjusted in   accordance with this section as necessary to reflect inflation.           (b)     During the last seven days of October of each   odd-numbered year, the board of trustees shall set the rate of the   adjustment that will apply to the following two calendar years   based on the sum of each annual percentage increase, if any, in the   current year and the previous year in the Consumer Price Index for   Urban Wage Earners and Clerical Workers (CPI-W) published by the   Bureau of Labor Statistics of the United States Department of Labor   as determined by the commissioner of social security under 42   U.S.C. Section 415(i) for purposes of providing an annual   cost-of-living increase to social security benefit payments   payable in the next calendar year.           (c)     Subject to Subsection (d), the board of trustees shall   increase the amount of a benefit payable under this chapter by   applying the adjustment rate set by the board of trustees under   Subsection (b) to the amount otherwise required to be paid as   determined in accordance with the other applicable provisions of   this chapter.           (d)     The board of trustees may not pay a benefit increase   under this section in any calendar year unless the board finds that   the retirement system is actuarially sound and has money available   to pay increased benefits in that year. If the board of trustees   finds that the retirement system is actuarially sound, but that the   amount of money available is not sufficient to pay the full amount   of the adjustment under Subsection (b), the board shall compute the   largest rate of adjustment possible for the amount of money   available while maintaining the actuarial soundness of the system   and shall use that rate in increasing benefits under Subsection (c)   for that calendar year.           (e)     The board of trustees by rule shall define "actuarially   sound"   for purposes of this section.          SECTION 2.  Subchapter B, Chapter 825, Government Code, is   amended by adding Section 825.1086 to read as follows:           Sec.   825.1086.     BIENNIAL STUDY AND REPORT ON PROVIDING   ADDITIONAL COST-OF-LIVING ADJUSTMENTS BASED ON EFFECTS OF   INFLATION.   Not later than January 1 of each even-numbered year, the   retirement system shall:                 (1)     conduct a study to evaluate and identify the   effects, if any, that increased inflation has had on annuitants of   the system:                       (A)     during the preceding state fiscal biennium;   and                       (B)     unless the annuitants received a   cost-of-living adjustment in the preceding fiscal year, since   annuitants last received a cost-of-living adjustment; and                 (2)     submit a written report to the legislature   containing:                       (A)  findings of the study; and                         (B)     if appropriate, recommendations for   potential legislation to address any adverse effects of inflation   identified under Subdivision (1), including specific   recommendations regarding whether and in what amount the   legislature would need to provide a cost-of-living adjustment to   the benefits of annuitants to remedy those effects.          SECTION 3.  Section 824.704, Government Code, as added by   this Act, applies only to a benefit paid by the Teacher Retirement   System of Texas on or after January 1, 2026.          SECTION 4.  This Act takes effect immediately if it receives   a vote of two-thirds of all the members elected to each house, as   provided by Section 39, Article III, Texas Constitution.  If this   Act does not receive the vote necessary for immediate effect, this   Act takes effect September 1, 2025.