The Texas Senate on Wednesday passed a bill that would close
the Texas Employees Retirement System's traditional defined benefit plan and
move new hires to a cash balance plan.
The bill, passed 19-12 in the Texas Senate, closes the $30.9
billion Austin-based system's traditional defined benefit plan effective Sept.
1, 2022 and state workers hired as of that date would be enrolled in a cash
The bill was introduced in order to address the pension
fund's unfunded liability of over $14.7 billion, said Texas Sen. Joan Huffman,
co-sponsor of the bill, in an email.
She said as a result of the unfunded liability, ERS is
currently set to run out of money by 2061.
"SB 321 addresses this financial disaster in a fiscally
responsible manner that provides for a long-term financial commitment from the
State and still provides a guaranteed lifetime retirement annuity to new state
employees," Ms. Huffman said.
Mary Jane Wardlow, ERS spokeswoman, said the pension fund
does not comment on pending legislation.
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