89th Regular Legislative Session
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. TRS is prohibited by law from advocating or influencing legislative action or inaction. During the 89th Regular Legislative Session, a total of 9,014 bills and joint resolutions were filed. Of those, 1,231 passed the legislature. The following list summarizes prominent TRS-related legislation.
TRS and the State’s Budget
Senate Bill 1: General Appropriations Bill
- Maintains the 8.25% state contribution to the TRS Pension Trust Fund.
- Maintains the 1.25% state contribution and the 0.75% employer contribution to TRS-Care.
- Maintains other existing riders including the regional office rider, updated actuarial valuation; intern exemption; settle-up dollars directed to TRS-Care; GASB implementation, TRS to incentivize members of TRS-Care and TRS-ActiveCare to shop for lower cost care within health plans to achieve shared savings; and an exception to the FTE limitation is permitted with a Board fiduciary finding and a report to the LBB and the governor.
- Creates a new rider directing TRS to conduct a pension plan design study. The rider states, “out of funds appropriated elsewhere in this Act, the Teacher Retirement System (TRS) shall produce a report that compares TRS’ current defined benefit plan with alternative benefit plan designs. The report shall consider workforce and demographic trends among TRS members and retirees and the actuarial and fiscal impacts of the alternative plan designs. The report shall be submitted to the Legislative Budget Board and the Governor no later than September 1, 2026.”
House Bill 500: Relating to making supplemental appropriations and reductions in appropriations and giving direction and adjustment authority regarding appropriations.
- Provides a one-time appropriation of $369 million to keep the average premium rate increase in TRS-ActiveCare below 10% for FY 2026 and FY 2027.
TRS Specific Laws
House Bill 3126: Relating to the election of certain entities to participate in the uniform group coverage program for active school employees; imposing a fee.
- Allows an entity that discontinued participation in TRS-ActiveCare effective September 1, 2022, to be able to elect to return to the program before the expiration of the 5-year exclusion period if they provide a written notice to TRS no later than December 31, 2025, to begin participation on September 1, 2026, and comply with any other requirements established by TRS for program participation. TRS will be able to impose on such early returning entities a risk stabilization fee on the premiums for the plan year that begins on September 1, 2026. An entity that elects to return early will not be able to leave TRS-ActiveCare until September 1, 2031. TRS is authorized to impose additional requirements, conditions, and deadlines under this new section by rule.
House Bill 4945: Relating to a study by the Teacher Retirement System of Texas on the feasibility of offering alternative service retirement benefits to certain members of the retirement system engaged in wildland firefighting or employed in positions related to wildland firefighting.
- Requires TRS to conduct a study regarding alternate service retirement benefits to Texas A&M Forest Service wildland firefighters. The bill provides that the study should include the feasibility, costs, and impact of creating two new tiers within the existing TRS retirement plan—one for Hazardous Duty and one for Hazardous Duty-Administrative Support. TRS is required to begin meeting with Texas A&M Forest Service regarding information for the study by March 1, 2026. TRS must complete the study and report to the Legislature by December 31, 2026.
New Laws Impacting TRS and Other State Entities
House Bill 2: Relating to public education and public school finance.
- Provides increased funding for public schools, including additional compensation for public education employees under the Foundation School Program based on several factors and provides that these compensation increases are creditable in the TRS system.
- Repeals the prohibition that the public education employer is prohibited from directly or indirectly passing the costs of pension and applicable health care surcharges for retirees returning to work full time.
House Bill 34: Relating to prohibiting the investment of state money in certain countries and in certain private business entities in those countries.
- Requires TRS and other state investing entities to divest of certain holdings in a country of concern and prohibits investing entities from acquiring listed securities in such countries. The bill defines countries of concern as China, Iran, North Korea, and Russia and any country the Governor designates as a “country of concern.” The bill requires the Comptroller to create and maintain a list of scrutinized companies beginning on January 1, 2026. The bill states that if the U.S. government declares that a company is no longer under sanctions or no longer designated as a foreign terrorist organization, it is not subject to divestment or investment prohibition. A state governmental entity is not subject to the divestment requirements of the bill if the entity determines that the requirement would be inconsistent with its fiduciary responsibility with respect to the investment 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.
Senate Bill 667: Relating to prohibiting certain state governmental entities from investing in certain Chinese-affiliated entities.
- Requires TRS and other state investing entities to identify direct and indirect investments in China-related entities and to divest certain of the direct investments within specified time periods. A state governmental entity is not subject to the divestment requirements of the bill if the entity determines that the requirement would be inconsistent with its fiduciary responsibility with respect to the investment 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.