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TRS omnibus bill signed into law; chart shows key provisions
The TRS omnibus bill was signed into law by Gov. Rick Perry on Sat., June 18. The governor could have let the bill pass into law without his signature, but instead chose to sign the measure. The bill changes several calculations for receiving TRS retirement benefits but includes many grandfather provisions for those currently in the system. The following chart shows several key provisions of the new law.
| ACTION | DESCRIPTION | GRANDFATHER PROVISION |
| Impose minimum age of 60 | Provides that an individual retiring under the Rule of 80 who is not yet 60 will receive a reduction of 5% for each year under age 60. (I.e., at 55, the reduction would be 5 X 5%, or 25% of the normal benefit.) |
Anyone who is currently a member of the system, or who enters the system prior to 9/1/07, is exempted. |
| Change calculation of highest average salary to base on 5 years rather than 3 | Provides that an individual’s retirement benefit will be based on the average of the highest 5 years of salary. | A member who, as of 8/31/05, is at least age 50, meets the Rule of 70, or has at least 25 years of experience is exempted. |
Harsher penalty for early retirement |
Revises the tables that address the calculation of benefits for individuals retiring before meeting the Rule of 80 to significantly increase the penalty. | A member who, as of 8/31/05, is at least age 50, meets the Rule of 70, or has at least 25 years of experience is exempted. |
| Increase cost for purchasing out-of-state service credit | Provides that individuals with out-of-state service must pay the actuarial cost of the service in order to establish credit. | An employee in the system as of 12/31/05 with prior out-of-state service will be exempted from the change. |
| Eliminate 90-day membership wait | Eliminates the temporary provision passed last session that delayed membership in TRS for 90 days for new employees. Now requires districts to pick up the state’s contribution to TRS for that 90-day period. |
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| Increase contribution to TRS-Care | Increases the active member contribution to TRS-Care from the current .5% of salary to .65%. | |
| Require district contribution for rehired retirees | Requires districts to pay the state and employee contributions to TRS, as well as an amount toward TRS-Care (that depends on the coverage chosen by the employee). | An employee who was reported in the current year (January 2005) as a rehired retiree will be exempted as long as he/she remains with the district. |
| Elimination of local retirement incentives | Prohibits districts from offering early retirement incentives. | |
| Repeal of “air time” | Eliminates current option to purchase 3 years of service credit at full actuarial cost. | A person who has entered into an agreement to purchase air time prior to 1/1/2006 is exempted. |
| Restrict access to Partial Lump Sum Option | An individual could not take the PLSO unless he/she met the Rule of 90 upon retirement. |
A member who, as of 8/31/05, is at least age 50, meets the Rule of 70, or has at least 25 years of experience is exempted. |
| Remainder of bill is related to TRS administrative functions. | ||
