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 adjustments will be determined by the board of trustees during the last week of October each year, based on the annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The bill stipulates that any increase in benefits is contingent upon the retirement system being actuarially sound and having sufficient funds available.

Additionally, if the board of trustees finds that the system is actuarially sound but lacks enough funds to provide the full adjustment, they are required to calculate the maximum possible adjustment rate that can be supported by the available funds while maintaining the system's actuarial soundness. This legislation will apply to benefits paid by the Teacher Retirement System of Texas starting January 1, 2026, and is set to take effect on September 1, 2025.

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