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Important TRS Information – Update on SB 1458

On Wednesday, the Senate passed SB 1458 by Sen. Robert Duncan by a vote of 30-0. SB 1458 gets the TRS pension fund actuarially sound within the 31-year funding period to ensure the continuation of the current defined benefit pension program, and provides a Cost of Living Adjustment (COLA) for some retirees. The bill is now headed to the House for consideration. We will update you as additional information becomes available.

SB 1458 as passed by the Senate:

Benefit Changes

  • All current TRS members that are vested in the system would not be impacted by the changes in the retirement calculation
  • Minimum age of 62 only for new hires and non-vested members (as of August 1, 2014)
  • 5 percent per year early retirement reduction factor for all new hires and non-vested members
  • Minimum age of 62 for TRS-Care 2 or TRS-Care 3 eligibility (Grandfather provision as of August 31, 2014: Rule of 70 or 25 years of service)
  • 3 percent COLA increase for certain retirees who are retired 15 years or more, not to exceed $100 per month

Contribution Rate Changes

  • State contribution rate would increase from 6.4 percent to 6.8 percent
  • Employee contribution rate would increase incrementally from 6.4 percent to 7.7 percent over several years (2014–6.4%   2015–6.7%   2016–7.2%   2017–7.7%)
  • Creates a new school district rate set at 1.5 percent of minimum salary for any TRS participating employee for whom the district is not already contributing to Social Security in the second year of the biennium
  • All three contribution rates would be linked together to ensure future rate decreases would be shared by all contributors