The bill, H.B. No. 3870, proposes amendments to the Employees Retirement System of Texas, specifically introducing two new sections, 814.605 and 814.606, to provide enhanced benefits for annuitants. Section 814.605 establishes a one-time 10 percent adjustment to monthly benefits for service retirement, disability retirement, death, or other benefits, effective from January 1, 2026. The board of trustees is tasked with recalculating the monthly benefit amounts to include this adjustment. Section 814.606 mandates an annual cost-of-living adjustment based on the Consumer Price Index, ensuring that benefits reflect inflation, with the board determining the adjustment rate each year.

Additionally, the bill outlines a one-time supplemental payment to eligible annuitants in January 2026, which will be the lesser of $2,000 or the gross amount of the regular annuity payment for December 2025. Eligibility criteria are specified, including that the annuitant must have been receiving benefits based on service credited in the employee class as of December 2025. The supplemental payment is contingent upon the legislature appropriating sufficient funds to avoid increasing the unfunded actuarial liabilities of the retirement system. The bill is set to take effect on September 1, 2025, and the new benefit provisions will apply to payments made on or after January 1, 2026.

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