Senate approves bill giving extra $2,000 to retired teachers

AUSTIN — Retired educators will receive a bonus check of up to $2,000 this year under a bill the Senate passed Sunday that will invest over $1 billion into shoring up the state pension fund for teachers.

“They have been waiting a long time, and I’m happy we can deliver for them,” said Sen. Joan Huffman, R-Houston, who sponsored Senate Bill 12.

Over 420,000 former school district employees are covered by the Teacher Retirement System of Texas, one of the largest pension funds in the country, but they haven’t received a cost of living increase in over a decade. Many retired teachers depend almost entirely on their pension because they don’t receive Social Security checks.

With an average monthly pension check of roughly $2,000, retirees say it’s time for a boost, especially as the costs for their health care plan continue to soar.

“SB 12 makes the pension fund actuarially sound and also provides retirees a much needed supplemental paycheck,” said Tim Lee, executive director of the Texas Retired Teachers Association. “My members consider this a big win, and the relief cannot come soon enough.”

Retirees are set to receive the so-called 13th check this fall if Republican Gov. Greg Abbott signs the bill into law, which he is expected to do. The Senate passed the bill Sunday, with the House still to take it up.

Under the bill, active teachers and school districts will eventually pay more into the pension plan, which could eat into the pay bumps educators

are expecting under the Legislature’s sweeping school finance reform plan.

By the start of the 2023 school year, teachers will start contributing 8.25 percent of their salaries, instead of the current 7.7 percent. It means a teacher with a $50,000 salary would pay $275 more.

School districts will ultimately pay 2 percent of payroll, instead of the current 1.5 percent. And those that haven’t been paying the full contribution will be forced to, including San Antonio Independent School District. The change is expected to cost the district $12 million over the next two years.

The state will also gradually raise its contribution to the Teacher Retirement System from 6.8 percent to 8.25 percent of active teacher payroll.

Together, the changes will help rein in the pension plan’s unfunded liability of roughly $46.2 billion. While not an issue now, it means the fund doesn’t have enough money set aside to pay the pensions it has promised current employees.