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Seal of the Senate of the State of Texas
Welcome to the official website for the
Texas Senate
May 8, 2013
(512) 463-0300


(AUSTIN) — Both the state and current teachers would kick in more for their retirement, but a retirement age increase will affect fewer teachers under a bill passed by the Senate Wednesday. Lubbock Senator Robert Duncan has worked over many sessions to try and reform the state Teachers' Retirement System (TRS) and make it actuarially sound. On Wednesday, he won unanimous support for a bill that he believes would accomplish that goal. "We were upside down earlier, because we were relying too much on investment returns," he said. "This puts us in a situation where we are actually having long term fixed contributions rates that should support this system for a long time."

Currently, active teachers pay 6.4 percent of their gross pay into TRS, which the state matches. That rate will go up in increments over the next four years to 7.7 percent in 2017 and the state contribution will increase to 6.8 percent. For the first time, all school districts will help foot the bill for teacher retirement by contributing 1.5 percent of their annual salary scale into the teacher retirement fund. The bill also links all three rates so that if the state contribution rate is decreased in the future, the employee and district contribution rates would be lowered by the same amount.

The retirement age for many teachers will also go up. Any teacher with five or more years of service as of September 1, 2014 will not see a change to their retirement age. Teachers with fewer than five years will see their retirement age raised from 60 to 62 and would face a 5 percent per year annuity reduction if they retire before age 62. The rule of 80 would still apply; that means that in order to qualify for benefits a person's age plus years of service must add up to 80.

Healthcare for future retirees would get a tweak. At 60, a retired teacher could enroll only in the catastrophic tier one plan under TRS, and would be eligible for more comprehensive plans once they turn 62. This is intended to stave off a predicted negative fund balance of $1 billion in TRS care in 2017. All currently retired teachers as well as any teachers with either 25 years of service or age plus years of service equal to 70 would be exempted from these changes.

Under the bill passed Wednesday, many retired teachers will see their first cost of living benefit increase since 2001. As long as sufficient funds are available, all teachers who have been retired for 15 years or more would see a 3 percent cost of living adjustment. This would affect approximately one hundred thousand teachers and would average out to a $42 per month increase in benefits.

Before it makes its way to the Governor's desk, this bill must still be considered and approved by the House of Representatives.

The Senate will reconvene Thursday, May 9 at 11 a.m.

Session video and all other Senate webcast recordings can be accessed from the Senate website's Audio/Video Archive.