Home > Public Capital > Archives > 2009 > July > 17 > Entry
ERS lends heft to argument for $500 payment to retirees
As the Office of the Attorney General mulls the legality of a $500 supplemental payment to retired state workers and teachers, the general counsel of the Employee Retirement System of Texas says it would be “reasonable” to determine that payment does not run afoul of the state constitution.
Legislative budget-writers asked the attorney general to determine if the payment, which would come from the state’s general fund and not the retirement trust funds, would violate a provision of the Texas Constitution that prohibits the payment of extra compensation for services already rendered.
As expected, retiree and employee groups argue in legal briefs that the payments are not a problem.
But the ERS brief adds some additional weight to that argument since a decision against the one-time payment would actually better serve the retirement system’s obligation to both current retirees and future retirees.
If the $155 million does not go directly to the retirees, it will be split among the trust funds of ERS and the Teacher Retirement System of Texas.
“An increase in the state’s overall contributions to the trust fund will bring the fund closer to actuarial soundness, and, therefore, will increase the fund’s long-term financial stability. Such a result inures to the benefit of both annuitants and active employees,” according to the brief.
Even so, Paula Jones, the ERS general counsel, writes in a brief submitted to the attorney general that the $500 payment would not be considered compensation under federal tax law. Nor would it fit within the definition of “compensation” under state law, Jones wrote.
“ERS believes it is reasonable for the (Office of the Attorney General) to determine that the one-time payments described in the (budget) are not ‘compensation’ being paid in contravention of” the state constitution.”
Permalink | Comments (6) | Post your comment Categories: Employee Retirement System of Texas
Comments
Austinites love to be heard, and we're giving you a bullhorn. We just ask that you keep things civil. Leave out the personal attacks. Do not use profanity, ethnic or racial slurs, or take shots at anyone's sexual orientation or religion. If you can't be nice, we reserve the right to remove your material and ban users who violate our Visitor's agreement. Click here to report comment abuse.
By Skeptical
July 22, 2009 12:56 PM | Link to this
2 years ago when the legislature provided a one time payment to retired teachers a “13th check” the IRS considered it compensation and taxed it, as well as counted in calculating both WEP and GPO. Why is this any different? Because the money comes directly from GR and does not pass through the trust fund?
By Great
July 30, 2009 12:26 PM | Link to this
Paula Jones…bending the law to serve her own purpose once again
By Dn
August 5, 2009 10:18 AM | Link to this
This makes me sick.
By Payoffs
August 8, 2009 2:24 PM | Link to this
Not income? Someone had to be paid off to pass this. I hope the AG comes down hard and discourages future attempts for this kind of fraud. I’m still teed off at previous changes that change the rule of 80 to rule of 90 for some folks. I was barely grandfathered in for the old rules. Plus you can’t retire when you qualify and keep your old job. Thus, the State will pay me to retire and hire a less qualified person for more money to fill my position, another smart move. I will retire at the very first second I am qualified before they make any other stupid changes even if I have to go to work in another State or governmental unit (as a less qualified person for more money!), to keep from being affected from any other stupid rules.
By PhillDoc
November 19, 2009 7:13 AM | Link to this
Great post as for me. It would be great to read more about that theme. By the way look at the design I’ve made myself Russian escorts
By Bob Peterman
November 20, 2009 8:27 PM | Link to this
Since I retired on 9-01-03 I have not received one red cent in the was of an increase in my monthly benefit. Yet insurance keeps going up the costs of living keep going up and yet there have been no adjustment(s) to offset the increases.
I put 28 yeare of my life into serving the public and Texas taxpayers. I feel a measley $ 500. isn’t going to break the bank especially in light of the current general revenue fund’s surplus. ( I am assuming that the news reporting is accurate )