HB 5156

relating to cost-of-living adjustments applicable to certain
benefits paid by the Teacher Retirement System of Texas.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Subchapter H, Chapter 824, Government Code, is
amended by adding Sections 824.704 and 824.705 to read as follows:
Sec. 824.704.  COST-OF-LIVING ADJUSTMENT: JANUARY 2026.  (a)
Notwithstanding any other section of this subchapter, the
retirement system shall make a one-time cost-of-living adjustment
payable to annuitants receiving a monthly death or retirement
benefit annuity, as provided by this section.
(b)  Subject to Subsections (c) and (d), to be eligible for
the adjustment, a person must be, on the effective date of the
adjustment and disregarding any forfeiture of benefits under
Section 824.601, an annuitant eligible to receive:
(1)  a standard service or disability retirement
(2)  an optional service or disability retirement
annuity payment as either a retiree or beneficiary;
(3)  an annuity payment under Section 824.402(a)(3) or
(4)  an annuity payment under Section 824.502; or
(5)  an alternate payee annuity payment under Section
(1)  is a retiree, or is a beneficiary under an optional
retirement payment plan, to be eligible for the adjustment under
(A)  the annuitant must be living on the effective
(B)  the effective date of the retirement of the
member of the retirement system must have been before January 1,
(2)  is a beneficiary under Section 824.402(a)(3) or
(4) or 824.502, to be eligible for the adjustment:
(A)  the annuitant must be living on the effective
(B)  the date of death of the member of the
retirement system must have been before January 1, 2025; or
(3)  is an alternate payee under Section 804.005, the
annuitant is eligible for the adjustment only if the effective date
of the election to receive the annuity payment was before January 1,
(d)  An adjustment made under this section does not apply to
(1)  Section 824.203(d), relating to retirees who
receive a standard service retirement annuity in an amount fixed by
(2)  Section 824.304(a), relating to disability
retirees with less than 10 years of service credit;
(3)  Section 824.304(b)(2), relating to disability
retirees who receive a disability annuity in an amount fixed by
(4)  Section 824.404(a), relating to active member
survivor beneficiaries who receive a survivor annuity in an amount
(5)  Section 824.501(a), relating to retiree survivor
beneficiaries who receive a survivor annuity in an amount fixed by
(6)  Section 824.804(b), relating to participants in
the deferred retirement option plan with regard to payments from
their deferred retirement option plan accounts.
(e)  An adjustment under this section must be made beginning
with an annuity payable for the month of January 2026.
(f)  The amount of the adjustment provided under this section
is calculated by multiplying the amount of the monthly benefit
subject to the adjustment by six percent.  The adjustment under this
section is in addition to the adjustments, if any, granted under
Section 824.702, 824.703, or 824.705 or any other law.
Sec. 824.705.  COST-OF-LIVING ADJUSTMENTS FOR INFLATION;
ANNUAL DETERMINATION.  (a)  Notwithstanding any other law, the
amount of a service retirement benefit, disability retirement
benefit, or death benefit paid under this chapter is adjusted 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
this chapter.  The adjustment under this section is in addition to
the adjustments, if any, granted under Section 824.702, 824.703, or
(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.  The Teacher Retirement System of Texas is
required to make a cost-of-living adjustment under Section 824.704,
Government Code, as added by this Act, only if the board of trustees
of the Teacher 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 825, Government
Code.  If the board of trustees of the Teacher Retirement System of
Texas finds that the legislature did not appropriate money in an
amount sufficient to provide the cost-of-living adjustment without
increasing the unfunded actuarial liabilities of the retirement
system, the retirement system may not make the adjustment payment.
SECTION 3.  Sections 824.704 and 824.705, Government Code,
as added by this Act, apply only to a monthly benefit payment made
by the Teacher Retirement System of Texas on or after January 1,
SECTION 4.  This Act takes effect September 1, 2025.