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HB 958 Reduces TCDRS Interest Paid

This information is provided by TCDRS. Please direct any questions regarding this matter to the TCDRS Legal Department at (512) 328-8889.

Filed by Rep. Rob Orr (R-Burleson), HB 958 reduces the interest crediting rate on all Texas County & District Retirement System (TCDRS) funds from 7 percent to 5 percent, including employee accounts. HB 958 not only reduces the benefit that employees would receive, but would also deplete the annuity reserve fund which would, over time, force TCDRS to either reduce retiree benefits, increase employer cost, or both.

Employers currently have local control to select benefits and costs based on their workforce needs and budget. Employers may reduce benefits and costs by reducing the amount employees are saving toward retirement (the employee deposit rate) or by reducing the employer matching rate.

TCDRS is a savings-based or cash-balance plan, which receives no state dollars.  TCDRS was designed to give county and district employers the ability to directly determine employee benefits and control employer costs, and House Bill 958 reduces employers’ ability to make those local determinations.  The TCDRS Board did not seek this legislation as the majority of our county and district employers have expressed support to maintain TCDRS as it currently exists.