The bill, H.B. No. 1596, proposes amendments to the Government Code regarding cost-of-living adjustments for benefits provided by the Teacher Retirement System of Texas. It introduces a new section, 824.704, which mandates that service retirement benefits, disability retirement benefits, and death benefits be adjusted annually to reflect inflation. The board of trustees is required to determine the adjustment rate based on the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) during the last week of October each year. This adjustment is intended to ensure that benefits keep pace with inflation.

Additionally, the bill stipulates that any increase in benefits is contingent upon the board of trustees finding that the retirement system is actuarially sound and has sufficient funds to support the increased benefits. If the available funds are insufficient to cover the full adjustment, the board must calculate the maximum possible adjustment rate that maintains the system's actuarial soundness. The provisions of this bill will apply to benefits paid on or after January 1, 2026, and it is set to take effect on September 1, 2025.

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