The bill, H.B. No. 1596, introduces a new section to the Government Code that mandates cost-of-living adjustments for benefits paid by the Teacher Retirement System of Texas. Specifically, it establishes that service retirement, disability retirement, and death benefits will be adjusted annually to reflect inflation, based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The board of trustees is tasked with determining the adjustment rate during the last week of October each year, which will be applied to the benefits for the following calendar year.

Additionally, the bill stipulates that any increase in benefits is contingent upon the retirement system being actuarially sound and having sufficient funds available. If the system is sound but lacks enough funds for the full adjustment, the board must calculate the maximum possible adjustment rate that maintains the system's actuarial soundness. This legislation will apply to benefits paid on or after January 1, 2026, and is set to take effect on September 1, 2025.

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