AUSTIN, Texas – In honor of National Retirement Security Month, Texas House Speaker Dade Phelan today touted the many recent legislative achievements that enhance the retirement security of working Texans and provide momentous savings for taxpayers, including meaningful investments to improve public pension systems for members of the Employees Retirement System (ERS), Teacher Retirement System (TRS) and Texas Municipal Retirement System (TMRS)—among other legislative efforts to remain fiscally conservative while ensuring Texas retirees have greater financial security and accessible health benefits after careers of service.
“Texas is forever grateful to the hardworking men and women who have dedicated their careers to serving our state and communities,” said Speaker Phelan. “Through historic financial investments and legislative measures to strengthen and fully fund these systems, we’re providing significant relief to Texas taxpayers by saving tens of billions of dollars in costly interest payments in the long run as well as safeguarding the financial future of our retirees. After years of public service, these retirees deserve the security of stable pension payments and benefits that continue to meet their needs well into retirement. The Texas Legislature remains committed to forward-thinking public pension policy and ensuring our state remains a leader in protecting both our workforce and our fiscal health.”
The Texas Legislature accomplished the following pension funding reforms in the 87th and 88th legislative sessions, reflecting the state’s commitment to securing a stable financial future for its retirees, including:
Improvements to ERS
- Enhanced Funding for Retirement Systems: Dedicated historic funding to address unfunded liabilities and ensure the actuarial soundness of all three retirement plans administered by ERS; Returned ERS to fully funded status by 2054, ensuring the fund can meet its long-term obligations to retirees while saving taxpayers nearly $40 billion in interest payments over the next few decades.
- More Benefit Options: Provided eligible ERS members more options for retirement benefits, like allowing changes in beneficiaries, new retirement options and a partial lump-sum payout at retirement.
- Keep up With Inflation: Introduced a retirement plan with annual annuity payments to help ensure a retiree’s income keeps up with inflation.
- Expanded ERS Board Eligibility: Allowed retirees to run for elected positions on the ERS board, previously limited to only active employees.
- Peace Officer Benefits: Maximized disability benefits for peace officers or custodial officers, supporting the long-term needs of those injured in the line of duty.
Enhanced Support for Retired Educators
- Cost-of-Living Adjustment: Implemented a cost-of-living adjustment for retired teachers to enhance financial security amid rising inflation.
- 13th Paycheck: Provided two bonus paychecks to retired teachers—up to $7,500 in 2023 and $2,400 in 2021.
- Curbing Insurance Premium Hikes: Prevented health insurance premiums from increasing by more than 10% a year for retired teachers.
- Strengthened TRS Investment Abilities: Enhanced TRS’ ability to make certain investments for better financial returns and improved liquidity.
Improved Pension Management
- Established financial safeguards to get pension funds back on track if a system falls behind.
- Set firm deadlines and stricter guidelines to fix struggling pension funds and protect employees’ retirements.
- Increased transparency and accountability in pension investments, ensuring decisions are made in the best interest of retirees and free from conflicts of interest.
Law Enforcement & Fire Services Care
- Potential Peace Officer Benefits: Instigated a study to explore providing campus peace officers enhanced pension benefits similar to state officers.
- More Security for Surviving Spouses: Increased benefits for surviving spouses of San Antonio fire and police personnel, raising the death benefit from 50% to 75% of their salary.
More Flexibility for City Employees
- Optional Increased Annuities: Provided certain municipal retirees more options for their retirement benefits to help them keep up with rising inflation.
- Resumption of Benefits: Allowed municipal retirees who return to work for the same city after a 12-month break to not lose their retirement benefits.