During the 86th legislative session, a total of 7,541 bills and joint resolutions were filed in both the Texas House and Senate. Of those, 1,439 were passed by the legislature and sent to the governor, and approximately 18% of all bills and joint resolutions filed became law. The following bills represent those that directly impact the Teacher Retirement System of Texas (TRS):
TRS-Specific Bills
Bills Impacting TRS and Other Agencies
The legislature’s budget plan authorizes the government to spend funds. Money in the budget is allocated to:
- Increase the state’s contribution rate to the TRS pension fund from 6.80% to 7.50%.
- Provide supplemental state funding of $231 million for the TRS-Care fund to maintain plan year 2019 premiums and benefit levels.
- Provide authority for additional TRS employees and for TRS to implement agency-wide initiatives to align and improve customer service and reduce investment fees.
The bill ushers in changes to contribution rates to the TRS pension fund and offers eligible retirees a one-time supplemental payment.
- Provides for gradual contribution increases from the state, public education employers and active employees over the next several fiscal years to make the pension fund actuarially sound.
Gradual Contribution Increases Calendar Date
Previous
Sept. 1, 2019
Sept. 1, 2020
Sept. 1, 2021
Sept. 1, 2022
Sept 1, 2023
Sept. 1, 2024
State
6.80%
7.50%
7.50%
7.75%
8.00%
8.25%
8.25%
Active Employee
7.70%
7.70%
7.70%
8.00%
8.00%
8.25%
8.25%
Public Education Employer
1.50%*
1.50%
1.60%
1.70%
1.80%
1.90%
2.00%
- *Prior to SB 12, only public education employers that did not contribute to Social Security were required to pay the 1.50 % contribution to TRS. Starting Sept. 1, 2019 all public education employers began contributing the 1.50 %.
- Eligible members who retired on or before Dec. 31, 2018 will receive a one-time supplemental payment in either the amount of their monthly annuity payment or $2,000, whichever is less.
The bill gives directions regarding approved appropriations.
- Provides $524 million to fund the increases for the state’s contribution to the pension fund from 6.80% to 7.50% in fiscal years 2020 and 2021.
- Provides $589 million to fund the supplemental one-time annuity check for 405,538 annuitants or alternate payees. Of those, 193,279 will receive $2,000.
- In total, the state is contributing an additional $1.113 billion for the biennium to TRS for contributions to the pension plan and supplemental payments to retirees.
Eliminated a sunset date on TRS’s ability to invest up to 10% of pension trust assets in hedge funds. Had the sunset date not been repealed, the hedge fund limit would have reverted to 5% as of Sept. 1, 2019.
- TRS will no longer certify 403(b) companies nor will TRS maintain a list of registered 403(b) investment products.
- Products will continue to be regulated by the Texas Department of Insurance, the Texas State Securities Board and applicable federal agencies.
Requires TRS to establish a contingency reserve fund equal to sixty days of average projected claims and administrative costs for TRS-Care.
When adopting rules governing the appeal of a final administrative decision of TRS, the bill requires the TRS Board of Trustees to ensure that rules establishing deadlines for the filing of an appeal afford a member or retiree at least the same amount of time to file an appeal as TRS has to issue a decision. The bill applies to appeals made on or after Jan. 1, 2020.
Subjects TRS to a review from the Texas Sunset Advisory Commission in 2019/2020 rather than 2023/2024.
Provides for additional oversight and requirements in state agency contracting and procurement.
- Prevents an out-of-network emergency care, facility-based provider, out-of-network laboratory service, or an out-of-network diagnostic imaging service from balance billing patients in TRS-ActiveCare and TRS-Care.
- The bill instead requires mediation for participants in TRS health care programs on a disputed out-of-network facility claims. For out-of-network physicians’ charges, TRS and the physician will either settle claims in an informal teleconference or in arbitration.
- Requires public retirement systems to adopt a funding policy.
- The policy would include a plan to achieve a 100% or more funded ratio.
- Requires certain public retirement systems to select an independent firm to evaluate investment practices and performance and make recommendations for improving the retirement systems’ investment policies, procedures and practices.
- Public retirement systems are required to include in their annual financial report a listing, by asset class, of all direct and indirect commissions and fees paid by the retirement system for the sale, purchase or management of its assets and to provide the names of the investment managers engaged by the retirement system.