HB5191 - 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.

  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.