The TRS bills to enhance retiree benefits both made progress Wednesday – SB 10 passed the Senate and HB 600 was voted favorably out of the House Pensions, Investments and Financial Services Committee.
While both provide enhanced benefits for TRS retirees, there are key differences.
|SB 10 Sen. Joan Huffman
|HB 600 Rep. Greg Bonnen
|Beginning in Sept. 2028, TRS must provide additional COLAs in years when the average investment return for the previous five years is at least 7%. The increases will depend on the fund's performance but will not exceed 2%.
|$7,500 to retirees who are at least age 75 as of the month before TRS sends the check. The bill requires TRS to make the payment no later than February 2024.
|$5,000 to retirees who are at least age 70 as of the month before TRS sends the check. The bill requires TRS to make the payment no later than February 2024.
|$4.7 billion appropriated by Legislature.
|Partial funding by Legislature; also requires increases in annual
contributions from active members and the state. Active members
currently pay 8% of their salary toward TRS; that would increase to 9%.
|Passed Senate on 31-0 vote.
|Passed out of the House PIFS Committee on 9-0 vote (after unsuccessful effort by Rep. John Bryant and other supporters to remove requirement for active members to increase contributions).
To clarify the different types of increases: A COLA is essentially a raise - the retiree will continue to receive that higher amount. The continuing COLA is a mechanism that is intended to continue increasing benefits in future years; for example, under HB 600 a retiree could receive 4% now, then another 2% beginning in 2028, then another 1.5% the following year, etc. Note that under the HB 600 language, continuing COLAs are not guaranteed but will depend on the financial performance of the fund. A supplemental payment is similar to a bonus, it is a one-time payment and does not permanently increase the regular benefit.