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
balance plan.
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.
Click here for the original
article.