HB3870 - Relating to certain benefits paid by the Employees Retirement System of Texas.

  89R13013 RDR-D     By: Allen H.B. No. 3870       A BILL TO BE ENTITLED   AN ACT   relating 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 Sections 814.605 and 814.606 to read as follows:           Sec.   814.605.     ONE-TIME ADJUSTMENT TO BENEFITS.   (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 one-time 10 percent adjustment payable each   month of each calendar year beginning with the 2026 calendar year in   accordance with this section.           (b)     The board of trustees shall recompute the amount of a   benefit paid monthly under this chapter or Chapter 804 by applying   the 10 percent adjustment to the monthly amount otherwise required   to be paid as determined in accordance with those chapters.           Sec.   814.606.     ANNUAL COST-OF-LIVING ADJUSTMENT. (a)   Notwithstanding Section 814.604 or 814.605, 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 in accordance   with this section as necessary to reflect inflation.           (b)     Each year, during the last seven days of October, the   board of trustees shall set the rate of the adjustment for the next   calendar year to equal the annual percentage increase, if any, 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 or Chapter 804.           (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.          SECTION 2.  (a)  Subject to Subsection (i) of this section   and 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 the   lesser of:                (1)  $2,000; or                (2)  the gross amount of the regular annuity payment to   which the eligible annuitant is otherwise entitled for the month of   December 2025.          (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   based on service credited in the elected class, including payments   under:                (1)  Section 814.103, 814.205, 820.053(a)(3), or   820.054, Government Code, relating to retirees or disability   retirees from the elected class of membership;                (2)  a subtitle other than Subtitle B, Title 8,   Government Code, except as provided by Subsection (e)(5) of this   section; or                (3)  Section 814.304 or 820.054, Government Code,   relating to retiree survivor beneficiaries who receive a survivor   annuity as the surviving spouse of a member of the elected class.          (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.          (i)  The Employees Retirement System of Texas is required to   make a one-time supplemental payment of benefits under this section   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 payment   without increasing the unfunded actuarial liabilities of the   retirement system.  The amount appropriated by the legislature to   provide the 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 a one-time   supplemental payment of benefits under this section without   increasing the unfunded actuarial liabilities of the retirement   system, the retirement system may not make the payment.          SECTION 3.  Sections 814.605 and 814.606, Government Code,   as added by this Act, apply only to a monthly benefit payment made   by the Employees Retirement System of Texas on or after January 1,   2026.          SECTION 4.  This Act takes effect September 1, 2025.