Legislative proposals to shore up Texas’ two largest public pension funds could require teachers and state employees to work years longer than they must today to get full retirement benefits.
For example, a teacher who started in the classroom at age 23 may now take full retirement at age 52; that would increase to age 62 under House and Senate bills that are set for committee votes Monday.
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Proposed retirement changes
Establishes minimum retirement age of 62 to receive full benefits for members of the Employees Retirement System of Texas and the Teacher Retirement System of Texas. The annuity is decreased by 5 percent per year before age 62.
To retire now, longtime employees have to satisfy the Rule of 80 — years of service plus age equal 80 — with no minimum age. Recent hires, however, are subject to age minimums.
Older employees nearing retirement would not be subject to the new rules. Grandfathered ERS members must be at least 50 years old, have 20 years of service or satisfy the Rule of 70 as of Dec. 1, 2013. TRS members must have 25 years of service as of Aug. 31, 2014, or satisfy one of the the same grandfathering standards as ERS members.
Retiree health care
State employees: The state would cover only half of the health care premium for someone who had worked for 10 years, compared with the full premium now. Twenty years of service would be required to get full coverage.
School employees: An employee who retires before age 62 would not be eligible for the comprehensive retiree health care plan but would qualify for catastrophic coverage.
Source: Legislative documents for Senate Bill 1458/House Bill 1884 for TRS and Senate Bill 1459/House Bill 1882 for ERS
Kate Alexander has covered the state budget since the 2009 legislative session and written extensively about state employee pay and pensions.