The bill, H.B. No. 2087, 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, disability retirement, 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, thereby protecting the purchasing power of retirees.

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 cover the increased benefits. If full adjustments cannot be made due to insufficient funds, the board must calculate the maximum possible adjustment while maintaining 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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