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AUSTIN (KXAN) — The Texas Legislature passed Senate Bill 10 this session, setting the stage for a cost-of-living adjustment to the Texas Teacher Retirement System (TRS) at the start of the new year.
It will become law in Texas unless vetoed by Gov. Greg Abbott before June 18.
Once the bill becomes law, it mandates an immediate one-time payment of $2,400 for TRS retirees and beneficiaries who are at least 70 years old. This payment is increased to $7,500 for those who are 75 and older.
According to the Texas Retired Teachers Association (TRTA), 186,000 TRS retirees will receive $7,500 and 104,000 TRS retirees will receive $2,400.
The total cost of these payments is estimated at $1.636 billion, according to the Legislative Budget Board.
Voters to decide cost-of-living adjustment
SB 10 also lays out the legal groundwork for a cost-of-living adjustment to the TRS annuity. However, voters have the final say on whether to use state money for that purpose.
On Election Day in November, a constitutional amendment to approve this funding will be on the ballot. The exact wording remains to be seen.
This cost-of-living adjustment would only effect TRS retirees and beneficiaries who began receiving benefits before September 2020. The purposed rate depends on when those benefits began.
Date of benefitsAdjustmentNumber of retirees*Between Sept. 1, 2013 and Aug. 31, 20202%150,000Between Sept. 1, 2001 and Aug. 31, 20134%195,000Before or on Aug. 31, 20016%75,000Number of retirees provided by TRTA.
The specific amount this requires from the state budget is an estimated $3.354 billion, according to the Legislative Budget Board.