No COLA Since 2001; "13th" Check Issued in 2008
Unlike Social Security, which offered Cost of Living Allowances from 1975 until 2009 and again in 2013, TRS has not provided a COLA to its annuitants since 2001.
In January, 2008, TRS issued a one-time "13th" check to approximately 245,000 eligible retirees. Normally, TRS retirees receive up to 12 pension payments in a year. Eligible annuitants who retired on or before December 31, 2006 received an extra amount equal to their normal monthly pension payment (up to a maximum of $2,400). The TRS Board of Trustees approved the one-time, additional check in November 2007. TRS issued the payment without any increase to the current active member contribution rate. This was the first time that such an extra annuity payment has been issued by the System. It was made possible thanks to passage of Senate Bill 1846, sponsored by Senator Robert L. Duncan of Lubbock and Representative Vicki Truitt of Southlake. The bill, passed by the 80th Texas Legislature, required the TRS Board of Trustees to approve a supplemental annuity payment based on results of the 2007 actuarial valuation, but only if the resulting funding period to amortize liabilities would be under 31 years after payment of the additional benefit. The 80th Texas Legislature increased the state contribution rate to the Teacher Retirement System of Texas from 6.0% to 6.58% of employee payroll. This, coupled with investment returns of 14.4% in 2007, yielded an actuarial valuation that allowed the pension trust fund to pay the supplemental payment and still have a funding period under 31 years. More than $372 million was paid to eligible retirees through these supplemental checks.
Read more about this topic: Teacher Retirement System Of Texas
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