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Summary of 2021 TRS-Related Legislation

87th Texas Legislation 2021

TRS follows a collaborative process in responding to the needs of the legislature by involving all departments at TRS. Strong working relationships are developed with all stakeholders and maintained in providing cost estimates and impact statement analysis for agency bill assignments. During the 87th Legislative Session, a total of 7,148 bills and joint resolutions were filed. Of those, 1,081 passed the legislature. Approximately 15% of all bills and joint resolutions filed became law. The following list summarizes prominent TRS related legislation.

SB 1 – General Appropriations Act

  • Includes funding for state contribution increases per 86R SB 12: 7.75% for FY 2022 and 8.00% for FY 2023.
  • Maintains the 1.25% state contribution and the 0.75% district contribution to TRS-Care.
  • Approves funding as requested by the TRS Board of Trustees (“Board”) for the administrative operating budget, including 25 additional FTEs to reduce external management fees and operating costs to expand member services by opening a pilot regional office in El Paso to provide additional counseling services in the region.
  • Requires TRS to engage a third-party vendor to examine alternative methods to deliver the current benefits supplied under TRS-ActiveCare and requires TRS to provide a report to certain members of the legislature and the Governor.
  • Amends the TRS Internship Program to include trade school, community college, law school, graduate school, or post-graduate fellowship recipients without counting against the FTE cap.
  • Sustains the following existing riders: no funds may be used for the purpose of hiring an external communications consultant; settle-up dollars are to be directed to TRS-Care; the intent of the legislature is that TRS incentivize members of TRS-Care and TRS-ActiveCare to shop for lower cost care within health plans to achieve shared savings; an exception to the FTE limitation is permitted with a Board fiduciary finding and a report to the Legislative Budget Board (“LBB”) and the Governor; several agencies, including TRS, are to engage in cross-agency collaboration to compare health care data to identify outliers and improvements for efficiency and quality that can be implemented within each system with a report due to the LBB and the Governor.

HB 1585 – TRS Sunset Legislation

Major Provisions: Provides that when a retiree exceeds employment after retirement (“EAR”) restrictions for the first time, the retiree receives a warning without the loss of annuity. After notice of their first violation, the retiree must pay back the lesser of earnings for the month the violation occurred or their full annuity. After notice of their second violation, the retire must forfeit their full monthly annuity. Note: This provision does not apply to disability retirees. Disability retirees have different limitations than service retirees. After one full calendar-month break in service, a disability retiree may work up to 90 days per school year (September-August). Changes the Jan. 1, 2011 date to Jan. 1, 2021 to allow service retirees who retired on or before Jan. 1, 2021 to return to work full time without forfeiting their annuities. Creates an ombudsman (“ombuds”) position designated by the Board for the purpose of assisting active and retired members by performing member protection and advocacy functions and regularly submitting a report recommending changes to operations that would benefit members and retirees. 

Administrative: Establishes 2033 as TRS’ next Sunset review date. Adds additional for training the board of trustees including the scope of and limitations on rulemaking authority and adds a requirement that TRS create a training manual for annual distribution and review by board members. Extends the appeal deadline to afford a member or retiree the same amount of time to file an appeal as TRS had to issue the determination or decision.

Benefits: Requires TRS to provide retirement benefits counseling for individual members in person or by phone, at the election of the member. Requires TRS to develop and adopt an outreach plan designed to assist each member of the system, and as appropriate the members’ employers, in effectively planning for the member’s retirement.

Benefits Processing: Requires TRS to certify to the state auditor the name of each employer that is an institution of higher education and has failed to remit all payments for the school year. Requires TRS to develop a policy to locate and notify a member or the member’s heirs of their entitlement to a return of contributions, including sending certified letters and manual internet searches. 

Health Care: Requires TRS to develop and distribute materials to enrollees of TRS-Care, the retiree health care program,  regarding their right to appeal a denial of an adverse determination to an Independent Review Organization (IRO)  including the procedures for making the appeal to IRO and what assistance TRS can provide in navigating the procedures for appeal. Changes the reporting period for the TRS-ActiveCare prior authorization savings report from 6 months to 12 months.

TRS Specific Laws

SB 202 relates to the payment of certain employer contributions for employed retirees of TRS.

Provides that a reporting employer is ultimately responsible for the pension and applicable health care surcharges for retirees returning to work full time. Provides that the employer is prohibited from directly or indirectly passing the costs to the retiree and provides that the pass-through prohibition begins in the 2021-2022 school year.

SB 288 relates to preventing the loss of benefits of and the payment of certain employer contributions for certain TRS retirees who resume service.

Includes EAR provisions that are identical to provisions in HB 1585 (87R). Provides that TRS may not withhold benefits for certain retirees returning to work in public education (kindergarten through grade 12) or collect pension or health care surcharges from the employer on behalf of the rehired retiree for positions related to mitigating student learning loss because of COVID-19. The position must be in addition to the normal staffing level at the public educational institution, be funded wholly by federal funds for the purpose of COVID-19 relief and must end on or before Dec. 31, 2024. Note: This provision does not apply to disability retirees. Disability retirees have different limitations than service retirees. After one full calendar-month break in service, a disability retiree may work up to 90 days per school year (September-August).

SB 483 relates to a biennial report on the investment returns of ERS and TRS.

Requires TRS to provide a biennial report that compares the assumed rate of return and the actual rate of return achieved by the system for the most recent 1-year, 5-year, 10-year, and 20-year fiscal periods. For each period, the report must include an estimate of what the market value of the total assets of the fund would have been if the assumed rate of return was met and a comparison of that estimate against the actual market value of total assets in the fund.

SB 1444 relates to participation in TRS-ActiveCare and to a study concerning health coverage for school district employees.

Prohibits participating entities (PE) from offering competing health coverage to the TRS-ActiveCare program. Permits a PE to leave TRS-ActiveCare by providing written notice to TRS not later than Dec. 31 of the year preceding the first day of the plan year in which the election will be effective. A PE that elects to leave may not re-enter until the fifth anniversary of the effective date. A PE that elects to join shall provide notice by Dec. 31 of the year preceding the year entry is effective and may not leave until the fifth anniversary of the effective date of entry. Requires that education service centers establish a school district health coverage advisory committee to study health benefit options for employees and issue a report by Nov. 1, 2022.

HB 2022 relates to enrollment of certain retirees in TRS-Care.

Allows a one-time opportunity for certain Medicare eligible retirees to reenroll in TRS-Care. Requires TRS to allow certain retirees who voluntarily disenrolled from TRS-Care between Jan. 1, 2017 and Dec. 31, 2019 and who opt to reenroll on or before Dec. 31, 2023, a one opportunity to come back to TRS-Care. The one-time opportunity would expire on Sept. 1, 2024.

New Laws Impacting TRS and Other State Agencies

SB 13 relates to state contracts with and investments in certain companies that boycott energy companies.

Prohibits state governmental entities, including TRS, from contracting with or investing in certain financial companies that boycott energy firms (applies to contracts with a value of $100,000 or more and companies with ten or more FTEs). A state governmental entity is not subject to the investment requirements of the bill if the entity determines that the requirement would be inconsistent with its fiduciary responsibility with respect to the invest of entity assets or other duties imposed by law related to the investment of entity assets, including the duty of care established under Section 67, Article XVI, Texas Constitution. The governmental entity cannot enter a contract with a company for goods and services unless the contract states the company (i) does not boycott energy companies and (ii) will not boycott energy companies during the term of the contract; unless this requirement is inconsistent with certain constitutional or statutory duties related to the issuance, incurrence, or management of debt obligations or the deposit, custody, management, borrowing, or investment of funds.

SB 19 relates to prohibited contracts with companies that discriminate against the firearm or ammunition industries.

Prohibits state contracts with companies that discriminate against the firearm or ammunition industries (applies to contracts with a value of $100,000 or more and companies with ten or more FTEs). A governmental entity may not enter a contract with a company for the purchase of goods or services unless the contract contains a written verification from the company that it does not discriminate against a firearm entity or firearm trade association and will not discriminate against a firearm entity or firearm trade association during the term of the contract. Provides that contracts related to the issuance, sale or delivery of tax and revenue anticipation notes are exempted at the comptroller’s sole discretion if it meets certain provisions.

SB 1356 relates to the participation by members of nonprofit teacher organizations in a tutoring program for public school students and related retirement benefits for certain tutors participating in the program.

Allows a nonprofit teacher organization to facilitate the tutoring of public school students in kindergarten through grade 12 by active or retired certified teachers. Requires TRS to provide each member information electronically about the teacher tutoring program. Provides that these individuals would not be subject to EAR restrictions, but they would be subject to surcharges unless otherwise exempt.

Includes funding for state contribution increases per 86R SB 12: 7.75% for FY 2022 and 8.00% for FY 2023.Maintains the 1.25% state contribution and the 0.75% district contribution to TRS-Care.Approves funding as requested by the TRS Board of Trustees (“Board”) for the administrative operating budget, including 25 additional FTEs to reduce external management fees and operating costs to expand member services by opening a pilot regional office in El Paso to provide additional counseling services in the region.Requires TRS to engage a third-party vendor to examine alternative methods to deliver the current benefits supplied under TRS-ActiveCare and requires TRS to provide a report to certain members of the legislature and the Governor.Amends the TRS Internship Program to include trade school, community college, law school, graduate school, or post-graduate fellowship recipients without counting against the FTE cap.Sustains the following existing riders: no funds may be used for the purpose of hiring an external communications consultant; settle-up dollars are to be directed to TRS-Care; the intent of the legislature is that TRS incentivize members of TRS-Care and TRS-ActiveCare to shop for lower cost care within health plans to achieve shared savings; an exception to the FTE limitation is permitted with a Board fiduciary finding and a report to the Legislative Budget Board (“LBB”) and the Governor; several agencies, including TRS, are to engage in cross-agency collaboration to compare health care data to identify outliers and improvements for efficiency and quality that can be implemented within each system with a report due to the LBB and the Governor.

Major Provisions: Provides that when a retiree exceeds employment after retirement (“EAR”) restrictions for the first time, the retiree receives a warning without the loss of annuity. After notice of their first violation, the retiree must pay back the lesser of earnings for the month the violation occurred or their full annuity. After notice of their second violation, the retire must forfeit their full monthly annuity. Note: This provision does not apply to disability retirees. Disability retirees have different limitations than service retirees. After one full calendar-month break in service, a disability retiree may work up to 90 days per school year (September-August). Changes the Jan. 1, 2011 date to Jan. 1, 2021 to allow service retirees who retired on or before Jan. 1, 2021 to return to work full time without forfeiting their annuities. Creates an ombudsman (“ombuds”) position designated by the Board for the purpose of assisting active and retired members by performing member protection and advocacy functions and regularly submitting a report recommending changes to operations that would benefit members and retirees.  Administrative: Establishes 2033 as TRS’ next Sunset review date. Adds additional for training the board of trustees including the scope of and limitations on rulemaking authority and adds a requirement that TRS create a training manual for annual distribution and review by board members. Extends the appeal deadline to afford a member or retiree the same amount of time to file an appeal as TRS had to issue the determination or decision. Benefits: Requires TRS to provide retirement benefits counseling for individual members in person or by phone, at the election of the member. Requires TRS to develop and adopt an outreach plan designed to assist each member of the system, and as appropriate the members’ employers, in effectively planning for the member’s retirement. Benefits Processing: Requires TRS to certify to the state auditor the name of each employer that is an institution of higher education and has failed to remit all payments for the school year. Requires TRS to develop a policy to locate and notify a member or the member’s heirs of their entitlement to a return of contributions, including sending certified letters and manual internet searches.  Health Care: Requires TRS to develop and distribute materials to enrollees of TRS-Care, the retiree health care program,  regarding their right to appeal a denial of an adverse determination to an Independent Review Organization (IRO)  including the procedures for making the appeal to IRO and what assistance TRS can provide in navigating the procedures for appeal. Changes the reporting period for the TRS-ActiveCare prior authorization savings report from 6 months to 12 months.

Includes funding for state contribution increases per 86R SB 12: 7.75% for FY 2022 and 8.00% for FY 2023.Maintains the 1.25% state contribution and the 0.75% district contribution to TRS-Care.Approves funding as requested by the TRS Board of Trustees (“Board”) for the administrative operating budget, including 25 additional FTEs to reduce external management fees and operating costs to expand member services by opening a pilot regional office in El Paso to provide additional counseling services in the region.Requires TRS to engage a third-party vendor to examine alternative methods to deliver the current benefits supplied under TRS-ActiveCare and requires TRS to provide a report to certain members of the legislature and the Governor.Amends the TRS Internship Program to include trade school, community college, law school, graduate school, or post-graduate fellowship recipients without counting against the FTE cap.Sustains the following existing riders: no funds may be used for the purpose of hiring an external communications consultant; settle-up dollars are to be directed to TRS-Care; the intent of the legislature is that TRS incentivize members of TRS-Care and TRS-ActiveCare to shop for lower cost care within health plans to achieve shared savings; an exception to the FTE limitation is permitted with a Board fiduciary finding and a report to the Legislative Budget Board (“LBB”) and the Governor; several agencies, including TRS, are to engage in cross-agency collaboration to compare health care data to identify outliers and improvements for efficiency and quality that can be implemented within each system with a report due to the LBB and the Governor.

Major Provisions: Provides that when a retiree exceeds employment after retirement (“EAR”) restrictions for the first time, the retiree receives a warning without the loss of annuity. After notice of their first violation, the retiree must pay back the lesser of earnings for the month the violation occurred or their full annuity. After notice of their second violation, the retire must forfeit their full monthly annuity. Note: This provision does not apply to disability retirees. Disability retirees have different limitations than service retirees. After one full calendar-month break in service, a disability retiree may work up to 90 days per school year (September-August). Changes the Jan. 1, 2011 date to Jan. 1, 2021 to allow service retirees who retired on or before Jan. 1, 2021 to return to work full time without forfeiting their annuities. Creates an ombudsman (“ombuds”) position designated by the Board for the purpose of assisting active and retired members by performing member protection and advocacy functions and regularly submitting a report recommending changes to operations that would benefit members and retirees.  Administrative: Establishes 2033 as TRS’ next Sunset review date. Adds additional for training the board of trustees including the scope of and limitations on rulemaking authority and adds a requirement that TRS create a training manual for annual distribution and review by board members. Extends the appeal deadline to afford a member or retiree the same amount of time to file an appeal as TRS had to issue the determination or decision. Benefits: Requires TRS to provide retirement benefits counseling for individual members in person or by phone, at the election of the member. Requires TRS to develop and adopt an outreach plan designed to assist each member of the system, and as appropriate the members’ employers, in effectively planning for the member’s retirement. Benefits Processing: Requires TRS to certify to the state auditor the name of each employer that is an institution of higher education and has failed to remit all payments for the school year. Requires TRS to develop a policy to locate and notify a member or the member’s heirs of their entitlement to a return of contributions, including sending certified letters and manual internet searches.  Health Care: Requires TRS to develop and distribute materials to enrollees of TRS-Care, the retiree health care program,  regarding their right to appeal a denial of an adverse determination to an Independent Review Organization (IRO)  including the procedures for making the appeal to IRO and what assistance TRS can provide in navigating the procedures for appeal. Changes the reporting period for the TRS-ActiveCare prior authorization savings report from 6 months to 12 months.

Provides that a reporting employer is ultimately responsible for the pension and applicable health care surcharges for retirees returning to work full time. Provides that the employer is prohibited from directly or indirectly passing the costs to the retiree and provides that the pass-through prohibition begins in the 2021-2022 school year.

Includes EAR provisions that are identical to provisions in HB 1585 (87R). Provides that TRS may not withhold benefits for certain retirees returning to work in public education (kindergarten through grade 12) or collect pension or health care surcharges from the employer on behalf of the rehired retiree for positions related to mitigating student learning loss because of COVID-19. The position must be in addition to the normal staffing level at the public educational institution, be funded wholly by federal funds for the purpose of COVID-19 relief and must end on or before Dec. 31, 2024. Note: This provision does not apply to disability retirees. Disability retirees have different limitations than service retirees. After one full calendar-month break in service, a disability retiree may work up to 90 days per school year (September-August).

Requires TRS to provide a biennial report that compares the assumed rate of return and the actual rate of return achieved by the system for the most recent 1-year, 5-year, 10-year, and 20-year fiscal periods. For each period, the report must include an estimate of what the market value of the total assets of the fund would have been if the assumed rate of return was met and a comparison of that estimate against the actual market value of total assets in the fund.

Prohibits participating entities (PE) from offering competing health coverage to the TRS-ActiveCare program. Permits a PE to leave TRS-ActiveCare by providing written notice to TRS not later than Dec. 31 of the year preceding the first day of the plan year in which the election will be effective. A PE that elects to leave may not re-enter until the fifth anniversary of the effective date. A PE that elects to join shall provide notice by Dec. 31 of the year preceding the year entry is effective and may not leave until the fifth anniversary of the effective date of entry. Requires that education service centers establish a school district health coverage advisory committee to study health benefit options for employees and issue a report by Nov. 1, 2022.

Allows a one-time opportunity for certain Medicare eligible retirees to reenroll in TRS-Care. Requires TRS to allow certain retirees who voluntarily disenrolled from TRS-Care between Jan. 1, 2017 and Dec. 31, 2019 and who opt to reenroll on or before Dec. 31, 2023, a one opportunity to come back to TRS-Care. The one-time opportunity would expire on Sept. 1, 2024.

Provides that a reporting employer is ultimately responsible for the pension and applicable health care surcharges for retirees returning to work full time. Provides that the employer is prohibited from directly or indirectly passing the costs to the retiree and provides that the pass-through prohibition begins in the 2021-2022 school year.

Includes EAR provisions that are identical to provisions in HB 1585 (87R). Provides that TRS may not withhold benefits for certain retirees returning to work in public education (kindergarten through grade 12) or collect pension or health care surcharges from the employer on behalf of the rehired retiree for positions related to mitigating student learning loss because of COVID-19. The position must be in addition to the normal staffing level at the public educational institution, be funded wholly by federal funds for the purpose of COVID-19 relief and must end on or before Dec. 31, 2024. Note: This provision does not apply to disability retirees. Disability retirees have different limitations than service retirees. After one full calendar-month break in service, a disability retiree may work up to 90 days per school year (September-August).

Requires TRS to provide a biennial report that compares the assumed rate of return and the actual rate of return achieved by the system for the most recent 1-year, 5-year, 10-year, and 20-year fiscal periods. For each period, the report must include an estimate of what the market value of the total assets of the fund would have been if the assumed rate of return was met and a comparison of that estimate against the actual market value of total assets in the fund.

Prohibits participating entities (PE) from offering competing health coverage to the TRS-ActiveCare program. Permits a PE to leave TRS-ActiveCare by providing written notice to TRS not later than Dec. 31 of the year preceding the first day of the plan year in which the election will be effective. A PE that elects to leave may not re-enter until the fifth anniversary of the effective date. A PE that elects to join shall provide notice by Dec. 31 of the year preceding the year entry is effective and may not leave until the fifth anniversary of the effective date of entry. Requires that education service centers establish a school district health coverage advisory committee to study health benefit options for employees and issue a report by Nov. 1, 2022.

Allows a one-time opportunity for certain Medicare eligible retirees to reenroll in TRS-Care. Requires TRS to allow certain retirees who voluntarily disenrolled from TRS-Care between Jan. 1, 2017 and Dec. 31, 2019 and who opt to reenroll on or before Dec. 31, 2023, a one opportunity to come back to TRS-Care. The one-time opportunity would expire on Sept. 1, 2024.

Prohibits state governmental entities, including TRS, from contracting with or investing in certain financial companies that boycott energy firms (applies to contracts with a value of $100,000 or more and companies with ten or more FTEs). A state governmental entity is not subject to the investment requirements of the bill if the entity determines that the requirement would be inconsistent with its fiduciary responsibility with respect to the invest of entity assets or other duties imposed by law related to the investment of entity assets, including the duty of care established under Section 67, Article XVI, Texas Constitution. The governmental entity cannot enter a contract with a company for goods and services unless the contract states the company (i) does not boycott energy companies and (ii) will not boycott energy companies during the term of the contract; unless this requirement is inconsistent with certain constitutional or statutory duties related to the issuance, incurrence, or management of debt obligations or the deposit, custody, management, borrowing, or investment of funds.

Prohibits state contracts with companies that discriminate against the firearm or ammunition industries (applies to contracts with a value of $100,000 or more and companies with ten or more FTEs). A governmental entity may not enter a contract with a company for the purchase of goods or services unless the contract contains a written verification from the company that it does not discriminate against a firearm entity or firearm trade association and will not discriminate against a firearm entity or firearm trade association during the term of the contract. Provides that contracts related to the issuance, sale or delivery of tax and revenue anticipation notes are exempted at the comptroller’s sole discretion if it meets certain provisions.

Allows a nonprofit teacher organization to facilitate the tutoring of public school students in kindergarten through grade 12 by active or retired certified teachers. Requires TRS to provide each member information electronically about the teacher tutoring program. Provides that these individuals would not be subject to EAR restrictions, but they would be subject to surcharges unless otherwise exempt.

Prohibits state governmental entities, including TRS, from contracting with or investing in certain financial companies that boycott energy firms (applies to contracts with a value of $100,000 or more and companies with ten or more FTEs). A state governmental entity is not subject to the investment requirements of the bill if the entity determines that the requirement would be inconsistent with its fiduciary responsibility with respect to the invest of entity assets or other duties imposed by law related to the investment of entity assets, including the duty of care established under Section 67, Article XVI, Texas Constitution. The governmental entity cannot enter a contract with a company for goods and services unless the contract states the company (i) does not boycott energy companies and (ii) will not boycott energy companies during the term of the contract; unless this requirement is inconsistent with certain constitutional or statutory duties related to the issuance, incurrence, or management of debt obligations or the deposit, custody, management, borrowing, or investment of funds.

Prohibits state contracts with companies that discriminate against the firearm or ammunition industries (applies to contracts with a value of $100,000 or more and companies with ten or more FTEs). A governmental entity may not enter a contract with a company for the purchase of goods or services unless the contract contains a written verification from the company that it does not discriminate against a firearm entity or firearm trade association and will not discriminate against a firearm entity or firearm trade association during the term of the contract. Provides that contracts related to the issuance, sale or delivery of tax and revenue anticipation notes are exempted at the comptroller’s sole discretion if it meets certain provisions.

Allows a nonprofit teacher organization to facilitate the tutoring of public school students in kindergarten through grade 12 by active or retired certified teachers. Requires TRS to provide each member information electronically about the teacher tutoring program. Provides that these individuals would not be subject to EAR restrictions, but they would be subject to surcharges unless otherwise exempt.