Regular Session
Employees Retirement System of Texas (ERS) • Judicial Retirement System of Texas Plan Two
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BILL ANALYSIS
| Senate Research Center | S.B. 1738 |
| 89R4781 KFF-D | By: Huffman |
| Finance | |
| 3/14/2025 | |
| As Filed |
AUTHOR'S / SPONSOR'S STATEMENT OF INTENT
During the 88th Regular Legislative Session, S.B. 1245 was passed to reform the Judicial Retirement System of Texas Plan Two. This session, S.B. 1738 provides further clarification relating to the resumption of service by certain judicial officers under the Judicial Retirement System of Texas Plan Two. These clarifications are necessary to carry out the original intent of S.B. 1245 relating to resumption of service, specifying that judges who have rejoined the plan get credit for additional salary increases and that the contribution rate for these judges is 9.5 percent.
As proposed, S.B. 1738 amends current law relating to the resumption of service by certain judicial officers under the Judicial Retirement System of Texas Plan Two.
RULEMAKING AUTHORITY
Rulemaking authority is expressly granted to the board of trustees of the Employees Retirement System of Texas in SECTION 4 of this bill.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Section 837.102(a), Government Code, to prohibit a retiree who resumes service as a judicial officer other than by assignment described in Section 837.101 (Judicial Assignment) from rejoining or receiving credit in the Judicial Retirement System of Texas Plan Two (retirement system) for the resumed service, except as provided by Section 837.103 (Resumption of Full-Time Judicial Service by Certain Retirees; Optional Election to Rejoin System), rather than unless an election is made as provided by Section 837.103.
SECTION 2. Amends Section 837.103, Government Code, by amending Subsections (b) and (c) and adding Subsections (b-1), (b-2), (c-1), and (c-2), as follows:
(b) Authorizes a retiree who resumes full-time service as a judicial officer other than by assignment described in Section 837.101, notwithstanding certain provisions and subject to the requirements of this section, to elect to rejoin the retirement system as a member if, before taking the oath of office, the retiree has been separated from judicial service for at least six full consecutive months. Deletes existing text authorizing a retiree described by Section 837.102(a), notwithstanding certain provisions and subject to Subsection (d) (relating to providing that a person is authorized to make an election under this section only once), to elect to rejoin the retirement system as a member and receive service credit in the system for resuming service as a judicial officer if, before taking the oath of office, the retiree has been separated from judicial service for at least six full consecutive months.
(b-1) Creates this subsection from existing text. Requires the retiree to provide notice of an election to rejoin the retirement system under this section:
(1) not later than the 30th day after the date the retiree takes the oath of office; and
(2) in the form and manner prescribed by the system.
Makes nonsubstantive changes to this subsection.
(b-2) Requires a person who rejoins the retirement system under this section to resume making member contributions at the rate required under Section 840.102(a) (relating to requiring a judicial officer who is a member of the retirement system to contribute 9.5 percent of the officer's state compensation).
(c) Requires the retirement system, for a person who rejoins the retirement system under this section, rather than for a person who makes an election under this section, and completes at least 24 months of resumed judicial service, on the person's subsequent retirement from resumed service, rather than on the resumption of annuity payments that have been suspended under Section 837.102 (Resumption of Full-Time Judicial Service), to recompute the annuity selected at the time of the person's original retirement to reflect:
(1) the highest state annual salary associated with the classification of a court on which the person served during any period of judicial service; and
(2) the additional service credit established during the person's period of resumed service, rather than during membership under this section.
Makes nonsubstantive changes to this subsection.
(c-1) Requires the retirement system, for a person who rejoins the retirement system under this section but who does not complete at least 24 months of resumed service, on the person's subsequent retirement from resumed service, to resume annuity payments suspended under Section 837.102 and issue the person a refund of the person's accumulated member contributions made during the person's period of resumed service.
(c-2) Creates this subsection from existing text. Requires the retirement system, if, at the time of the person's original retirement, a person described by Subsection (c) or (c-1) selected an optional retirement annuity payable under certain sections, to reduce the number of months of payments by the number of months for which the annuity was paid before the person resumed service. Makes a nonsubstantive change.
SECTION 3. Repealer: Section 837.103(e) (relating to requiring that the retirement system implement this section only if the system is considered actuarially sound), Government Code.
SECTION 4. (a) Provides that, subject to Subsection (b) of this section and except as provided by Subsection (c) of this section, the changes in law made by this Act apply only to:
(1) a former retiree of the Judicial Retirement System of Texas Plan Two who, on the effective date of this Act, holds a judicial office included within the membership of the retirement system; or
(2) a retiree who resumes service as a judicial officer on or after the effective date of this Act.
(b) Requires the board of trustees of the Employees Retirement System of Texas to adopt rules necessary to implement this Act, including rules governing the application of Section 837.103, Government Code, as amended by this Act, to persons described by Subsection (a)(1) of this section, including certain rules.
(c) Makes application of Section 837.103(b-1)(1), Government Code, as added by this Act, prospective.
SECTION 5. Effective date: upon passage or September 1, 2025.
| S.B. No. 1738 | ||
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| relating to the Judicial Retirement System Plan Two, including | ||
| resuming service in the retirement system and contributions to the | ||
| retirement system. | ||
| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
| SECTION 1. Section 837.102(a), Government Code, is amended | ||
| to read as follows: | ||
| (a) A retiree who resumes service as a judicial officer | ||
| other than by assignment described in Section 837.101 may not | ||
| rejoin or receive credit in the retirement system for the resumed | ||
| service, except [ |
||
| 837.103. | ||
| SECTION 2. Section 837.103, Government Code, is amended by | ||
| amending Subsections (b) and (c) and adding Subsections (b-1), | ||
| (b-2), (c-1), and (c-2) to read as follows: | ||
| (b) Notwithstanding Sections 837.001(c) and 837.002(2) and | ||
| subject to the requirements of this section [ |
||
| retiree who resumes full-time service as a judicial officer other | ||
| than by assignment described in Section 837.101 [ |
||
| member [ |
||
| the retiree has been separated from judicial service for at least | ||
| six full consecutive months. | ||
|
(b-1) The retiree shall provide notice of an [ |
||
| to rejoin the retirement system under this section: | ||
| (1) not later than the 60th day after the date the | ||
| retiree takes the oath of office; and | ||
| (2) in the form and manner prescribed by the system. | ||
| (b-2) A person who rejoins the retirement system under this | ||
| section shall resume making member contributions at the rate of 9.5 | ||
| percent of the person's state compensation. | ||
| (c) For a person who rejoins the retirement system [ |
||
| resumed judicial service, on the person's subsequent retirement | ||
| from resumed service [ |
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| recompute the annuity selected at the time of the person's original | ||
| retirement to reflect: | ||
| (1) the highest annual state salary earned by the | ||
| person while holding a judicial office included within the | ||
| membership of the retirement system; and | ||
|
(2) [ |
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| credit established during the person's period of resumed service | ||
| [ |
||
| (c-1) For a person who rejoins the retirement system under | ||
| this section but who does not complete at least 24 months of resumed | ||
| service, on the person's subsequent retirement from resumed | ||
| service, the retirement system shall: | ||
| (1) resume annuity payments suspended under Section | ||
| 837.102; and | ||
| (2) issue the person a refund of the person's | ||
| accumulated member contributions made during the person's period of | ||
| resumed service. | ||
| (c-2) If, at the time of the person's original retirement, a | ||
| [ |
||
| optional retirement annuity payable under Section 839.103(a)(3) or | ||
| (4), the retirement system shall reduce the number of months of | ||
| payments by the number of months for which the annuity was paid | ||
| before the person resumed service. | ||
| SECTION 3. Section 840.1025(b), Government Code, is amended | ||
| to read as follows: | ||
| (b) A member who elects to make contributions under | ||
| Subsection (a) shall contribute 9.5 [ |
||
| state compensation for each payroll period in the manner provided | ||
| by Sections 840.102(b)-(f). | ||
| SECTION 4. Section 840.1027(b), Government Code, is amended | ||
| to read as follows: | ||
| (b) A member who elects to make contributions under | ||
| Subsection (a) shall contribute 9.5 [ |
||
| state compensation for each payroll period in the manner provided | ||
| by Sections 840.102(b)-(f). | ||
| SECTION 5. Section 837.103(e), Government Code, is | ||
| repealed. | ||
| SECTION 6. (a) Except as provided by Subsection (c) of this | ||
| section, Sections 837.102 and 837.103, Government Code, as amended | ||
| by this Act, apply only to: | ||
| (1) a former retiree of the Judicial Retirement System | ||
| of Texas Plan Two who, on the effective date of this Act, holds a | ||
| judicial office and has resumed membership in the retirement | ||
| system; or | ||
| (2) a retiree who, on or after the effective date of | ||
| this Act, resumes service as a judicial officer holding a judicial | ||
| office included in the membership of the retirement system. | ||
| (b) A person described by Subsection (a)(1) of this section | ||
| may purchase service credit for resumed judicial service performed | ||
| before the effective date of this Act, including service performed | ||
| before June 18, 2023, by depositing with the Judicial Retirement | ||
| System of Texas Plan Two, for each month of service credit, member | ||
| contributions calculated by multiplying 9.5 percent by the person's | ||
| monthly judicial state salary on the effective date of this Act. | ||
| Not later than September 1, 2027, the person must purchase service | ||
| credit under this subsection and make the required deposits. | ||
| (c) Section 837.103(b-1)(1), Government Code, as added by | ||
| this Act, applies only to an election to rejoin the Judicial | ||
| Retirement System of Texas Plan Two under Section 837.103, | ||
| Government Code, made on or after the effective date of this Act. | ||
| SECTION 7. Section 5 of this Act takes effect immediately if | ||
| this Act receives a vote of two-thirds of all the members elected to | ||
| each house, as provided by Section 39, Article III, Texas | ||
| Constitution. If this Act does not receive the vote necessary for | ||
| immediate effect, Section 5 has no effect. | ||
| SECTION 8. Except as otherwise provided by this Act, this | ||
| Act takes effect September 1, 2025. | ||
| TO: | Honorable Joan Huffman, Chair, Senate Committee on Finance |
| FROM: | Jerry McGinty, Director, Legislative Budget Board |
| IN RE: | SB1738 by Huffman (Relating to the resumption of service by certain judicial officers under the Judicial Retirement System of Texas Plan Two.), As Introduced |
| Source Agencies: | 212 Office of Court Administration, Texas Judicial Council, 304 Comptroller of Public Accounts, 327 Employees Retirement System |
| LBB Staff: | JMc, KK, LCO, JPO, NV |
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Common questions about SB1738
SB1738 mandates a non-negotiable 9. 5% payroll contribution for retired judges returning to service in the Judicial Retirement System Plan Two (JRS 2), replacing prior ambiguous or lower rate references. State court administrators and payroll departments must enforce a strict 60-day election window and a six-month separation prerequisite for eligibility, effective September 1, 2025.
SB1738 was authored by Texas Senator Joan Huffman during the Regular Session.
SB1738 was signed into law by Governor Greg Abbott on May 15, 2025.
SB1738 is enforced by Employees Retirement System of Texas (ERS) and Judicial Retirement System of Texas Plan Two.
The compliance urgency for SB1738 is rated as "low". Businesses and organizations should review the requirements and timeline to ensure timely compliance.
The cost impact of SB1738 is estimated as "low". This may vary based on industry and implementation requirements.
SB1738 addresses topics including retirement systems, retirement systems--judicial, retirement systems--state employees, employees retirement system of texas and courts.
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