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.
