HB 3870

relating to certain benefits paid by the Employees Retirement
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Subchapter G, Chapter 814, Government Code, is
amended by adding Sections 814.605 and 814.606 to read as follows:
Sec. 814.605.  ONE-TIME ADJUSTMENT TO BENEFITS.  (a)  The
amount of a service retirement, disability retirement, death, or
other monthly benefit paid under this chapter or Chapter 804 to an
annuitant based on service credited in the employee class is
increased to include a one-time 10 percent adjustment payable each
month of each calendar year beginning with the 2026 calendar year in
(b)  The board of trustees shall recompute the amount of a
benefit paid monthly under this chapter or Chapter 804 by applying
the 10 percent adjustment to the monthly amount otherwise required
to be paid as determined in accordance with those chapters.
Sec. 814.606.  ANNUAL COST-OF-LIVING ADJUSTMENT.  (a)
Notwithstanding Section 814.604 or 814.605, the amount of a service
retirement, disability retirement, death, or other monthly benefit
paid under this chapter or Chapter 804 to an annuitant based on
service credited in the employee class is increased in accordance
with this section as necessary to reflect inflation.
(b)  Each year, during the last seven days of October, the
board of trustees shall set the rate of the adjustment for the next
calendar year to equal the annual percentage increase, if any, in
the Consumer Price Index for Urban Wage Earners and Clerical
Workers (CPI-W) published by the Bureau of Labor Statistics of the
United States Department of Labor as determined by the commissioner
of social security under 42 U.S.C. Section 415(i) for purposes of
providing an annual cost-of-living increase to social security
benefit payments payable in the next calendar year.
(c)  Subject to Subsection (d), the board of trustees shall
increase the amount of a benefit payable under this chapter by
applying the adjustment rate set by the board of trustees under
Subsection (b) to the amount otherwise required to be paid as
determined in accordance with the other applicable provisions of
(d)  The board of trustees may not pay a benefit increase
under this section in any calendar year unless the board finds that
the retirement system is actuarially sound and has money available
to pay increased benefits in that year.  If the board of trustees
finds that the retirement system is actuarially sound, but that the
amount of money available is not sufficient to pay the full amount
of the adjustment under Subsection (b), the board shall compute the
largest rate of adjustment possible for the amount of money
available while maintaining the actuarial soundness of the system
and shall use that rate in increasing benefits under Subsection (c)
SECTION 2.  (a)  Subject to Subsection (i) of this section
and Section 811.006, Government Code, the Employees Retirement
System of Texas shall make a one-time supplemental payment of a
service retirement, disability retirement, death, or other monthly
benefit, as provided by this section.
(b)  The supplemental payment is payable in January 2026 and,
to the extent practicable, on a date or dates that coincide with the
regular annuity payment payable to each eligible annuitant.
(c)  The amount of the supplemental payment is equal to the
(2)  the gross amount of the regular annuity payment to
which the eligible annuitant is otherwise entitled for the month of
(d)  The Employees Retirement System of Texas shall make
applicable tax withholding and other legally required deductions
before disbursing the supplemental payment.  A supplemental payment
under this section is in addition to the regular monthly annuity
payment to which the eligible annuitant is otherwise entitled.
(e)  Subject to Subsection (f) of this section, to be
eligible for the supplemental payment, a person must be, for the
month of December 2025, an annuitant eligible to receive based on
service credited in the employee class:
(1)  a standard retirement annuity payment;
(2)  an optional service retirement annuity payment as
either a retiree or beneficiary under Section 814.108, Government
(3)  a standard or occupational disability retirement
(4)  a death benefit annuity payment under Section
(5)  an alternate payee annuity payment under Section
(f)  If the annuitant is a retiree or a beneficiary under an
optional retirement payment plan, to be eligible for the
supplemental payment, the effective date of the retirement of the
member of the Employees Retirement System of Texas must have been on
or before September 1, 2024.  The supplemental payment shall be made
to an alternate payee who is an annuitant under Section 804.005,
Government Code, only if the annuity payment to the alternate payee
commenced on or before September 1, 2024.  The supplemental payment
is in addition to the guaranteed number of payments under Section
814.108, Government Code, and may not be counted as one of the
(g)  The supplemental payment does not apply to payments
based on service credited in the elected class, including payments
(1)  Section 814.103, 814.205, 820.053(a)(3), or
820.054, Government Code, relating to retirees or disability
retirees from the elected class of membership;
(2)  a subtitle other than Subtitle B, Title 8,
Government Code, except as provided by Subsection (e)(5) of this
(3)  Section 814.304 or 820.054, Government Code,
relating to retiree survivor beneficiaries who receive a survivor
annuity as the surviving spouse of a member of the elected class.
(h)  Except as provided by this section, the board of
trustees of the Employees Retirement System of Texas shall
determine the eligibility for and the amount and timing of a
supplemental payment and the manner in which the payment is made.
(i)  The Employees Retirement System of Texas is required to
make a one-time supplemental payment of benefits under this section
only if the board of trustees of the Employees Retirement System of
Texas finds that the legislature appropriated money to the
retirement system in an amount sufficient to provide the payment
without increasing the unfunded actuarial liabilities of the
retirement system.  The amount appropriated by the legislature to
provide the payment must be in addition to any amounts the state is
required to contribute to the retirement system under Subchapter E,
Chapter 815, Government Code.  If the board of trustees of the
Employees Retirement System of Texas finds that the legislature did
not appropriate money in an amount sufficient to provide a one-time
supplemental payment of benefits under this section without
increasing the unfunded actuarial liabilities of the retirement
system, the retirement system may not make the payment.
SECTION 3.  Sections 814.605 and 814.606, Government Code,
as added by this Act, apply only to a monthly benefit payment made
by the Employees Retirement System of Texas on or after January 1,
SECTION 4.  This Act takes effect September 1, 2025.