All Roll Calls
Yes: 186 • No: 0
TexasHB 280289th Legislature Regular SessionHouseWALLET
Relating to the administration of, contributions to, and benefits under retirement systems for firefighters in certain municipalities.
Sponsored By: John H. Bucy lll, Giovanni Capriglione, Donna Howard, Charles Schwertner (Republican)
Signed by Governor
City Government--Employees/OfficersFire Fighters & Police--GeneralRetirement Systems--Police & FirefightersSTATE PENSION REVIEW BOARD
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Bill Overview
Analyzed Economic Effects
28 provisions identified: 11 benefits, 8 costs, 9 mixed.
Firefighter pension formulas differ by group
For members retiring under the regular service retirement rules, monthly pensions depend on their group. Group A receives 3.3% of average monthly pay for each year of service, up from 3%. Group B receives 3% of average monthly pay for each year of service. Both formulas count partial years of service credit.
Retroactive retirement accounts for firefighter families
Eligible Group A firefighters can open a deferred retirement option plan (DROP) account when leaving service for retirement. Credits can reach back after retirement eligibility, for no more than seven years before actual retirement. If an eligible member dies before retirement without an account, a spouse not yet paid under the regular spouse-benefit provision can elect hypothetical credits and interest for up to seven years. Without a spouse, dependent children not yet paid under the regular child-benefit provision can jointly elect hypothetical credits with interest and a 75% survivor benefit, based on at least 20 years of service. All dependent children must elect; a guardian makes the binding choice for children under 18.
Survivor payments for firefighter spouses and children
When a Group A or B firefighter dies before retirement, the spouse receives an immediate monthly benefit of 75%. That percentage applies to the firefighter's retirement benefit, with a minimum based on 20 years of service. Dependent children of active Group A or B firefighters, or retired Group A members, also qualify. Without a spouse, children share 75%, with the same service minimum; with a spouse, each child receives 15%. More than five children share no more than the no-spouse amount; children of retired Group B members are excluded.
Delayed, tighter pension increases for Group A
Group A cost-of-living increases are discretionary, with total actuarial value capped at 1.5% of eligible benefits, not a guaranteed individual increase. Starting in 2027, eligibility generally begins January 1 after the later year of age 67 or the fifth retirement anniversary; early retirees must reach 69. Actuarial certification requires debt-payoff periods no longer than 25 years in 2026–2035, 20 in 2036–2040, and 15 afterward. Required funding levels are at least 80% through 2040, 85% in 2041–2045, and 90% afterward. Increases cannot start on the second January 1 after a negative-return year or a five-year return below the assumed rate. They are also blocked if the estimated city rate exceeds the corridor midpoint by four percentage points; approved increases start no earlier than the following January 1, and benefits cannot fall below their original payment.
Different pension calculations for newer firefighters
Group B firefighters cannot use the early-retirement option in Section 5.05. Pension salary averages use Group A members' 36 highest-paid months and Group B members' 60 highest-paid months. When service is shorter than that period, missing months use pay for the member's rank upon joining.
Group B loses special retirement account route
Group B firefighters cannot establish a DROP account under the special account-establishment provision. This restriction applies to that route, rather than describing every DROP rule elsewhere in the law.
Tighter survivor rules for firefighter families
A retiree's spouse receives this 75% survivor pension only for Group A members married to the spouse at retirement. A former firefighter's spouse qualifies only with Group A status, 10 years each of service credit and required contributions, and no contribution withdrawal at or after leaving. That former-member benefit is 75% of the applicable pension. A retired Group A member's dependent parent receives a spouse-equivalent benefit only when no spouse, designated beneficiary, or child is entitled. Parent payments end at death, and these survivor provisions exclude Group B.
New coverage groups for firefighter pensions
The law replaces the covered city population range of 450,000–500,000 with 950,000–1,050,000. Eligible new firefighters must join the fund. Group A includes people retired or working as firefighters on December 31, 2025. Former employees also qualify with at least 10 years of service credit and no withdrawal or refund of contributions. Firefighters hired beginning January 1, 2026, generally enter Group B unless that former-employee exception applies; all remaining members are Group B.
Annual pension increases for Group B
Eligible Group B retirees and survivors receive annual compounded cost-of-living adjustments. They start January 1 after the latest applicable year: age 67, the fifth retirement anniversary, or full DROP account distribution. The percentage equals half the five-year investment return minus an adjustment factor, with a floor of 0% and ceiling of 2%.
Cities can approve blocked pension increases
A city's governing body can approve a Group A cost-of-living adjustment when the listed statutory limits otherwise block it. The board must recommend the adjustment. The city decides its amount and how it is applied.
Firefighter retirement accounts receive group-based credits
After a DROP election, accounts receive 100% of Group A firefighter contributions and 50% of Group B contributions. During DROP, annual interest is credited December 31 at 5% for Group A and 4% for Group B. After DROP, Group A earns 5%, credited monthly at one-twelfth of that rate before January 1, 2026, and yearly each December 31 afterward. Group B post-DROP accounts receive December 31 interest of 4% when the prior year's fund return was positive, or 2% otherwise.
Monthly pensions for named firefighter beneficiaries
A named beneficiary can receive an immediate monthly benefit after an eligible Group A member or retiree dies. The member must have filed the designation, and no spouse or child benefit can be payable. The payment equals 75% of the retiree's pension or the retirement-eligible member's normal pension at death. Payments are reduced for a beneficiary at least 10 years younger than the member. Group B members are excluded.
Protection for already-earned firefighter pension benefits
Benefits vested and accrued by September 1, 2025, receive a specific protection. The law bars reductions under this provision to meet federal Section 415 pension benefit limits. This is not a general ban on every possible benefit change.
Firefighters face higher pension payments
Beginning September 1, 2025, a funding rule raises firefighter contributions when the estimated municipal rate exceeds its maximum. The firefighter rate rises by the gap, capped at two percentage points under this rule. The municipal maximum is the funding corridor's midpoint plus five percentage points. If the gap exceeds two percentage points, the municipality and pension board must discuss more funding solutions.
Future firefighter deferred retirement accounts face limits
The pension board may reduce interest or other future credits in the Deferred Retirement Option Plan to protect fund finances. Reductions apply to accounts established on or after the reduction's effective date. The board may also end the plan for members who have not yet established an account.
Interest ends on firefighter contribution accounts
Eligible Group A members and former firefighters who have not retired receive 5% annual interest through December 31, 2025. Interest covers accumulated contributions, including earlier interest, but cannot cover periods beyond five calendar years after employment ends. Beginning January 1, 2026, Group A individual contribution accounts earn no interest. Group B individual contribution accounts earn no interest for any period. Separate interest rules apply to deferred retirement accounts.
Limits on firefighter retirement account growth
During Group A DROP participation, cost-of-living adjustments apply only to amounts credited after the adjustment. This includes adjustments granted before January 1, 2026. Later retirement-formula changes do not increase DROP credits. Group A retirement benefits also cannot rise from covered formula changes during DROP or service credit earned after election. The Group A benefit restriction does not apply to Group B.
Disabled account participants receive regular pensions
DROP participants remain ineligible for the fund's disability retirement benefits. If trustees find a participant qualifies for disability retirement, the participant instead receives a normal service retirement annuity. The participant also receives the DROP balance accumulated through employment termination, paid under the account's distribution rules.
Firefighter pensions can be divided after divorce
The fund can pay a former spouse or other alternate payee through a domestic relations order it finds qualified. Covered payments include retirement, disability, survivor, DROP benefits, and contribution withdrawals. An awarded DROP share must be paid as soon as administratively practicable after entitlement. When the alternate payee dies, that interest ends, and remaining benefits are paid as though the order never existed.
Firefighters control disability filings, face recovery limits
Only a firefighter or legal representative can start a disability retirement application; the board cannot initiate one itself. The medical board must certify inability to perform firefighter duties, and trustees must approve retirement. Benefits follow normal retirement calculations with a 20-year service minimum and applicable disability and cost-of-living adjustment rules. During the first 2½ years, trustees can end benefits after recovery enough to perform the job. Restoration to active service at the same or a higher rank is no longer required.
Military pension credit requires both contributions
For qualifying military service performed on or after January 1, 2026, firefighters claiming pension credit must pay missed member contributions. The municipality must pay the employer contributions it would have owed during that period. Firefighters must return to department service within the required period and leave their contributions in the fund. They must apply with proof of military service, and payments must follow federal law.
Firefighter pension records gain privacy protection
Fund records about individual members, retirees, annuitants, and beneficiaries are confidential and exempt from public disclosure. The law allows disclosure to the person, authorized recipients, certain spouses or former spouses, and qualifying government personnel. Subpoena disclosure requires the executive director to find that the person has a reasonable chance to challenge it.
Firefighter pension fund must preserve tax status
The fund and its administrators must operate the pension system to maintain its federal tax-qualified status under Section 401(a). This preserves the tax-qualified framework for members and beneficiaries.
Firefighter pension money cannot fund campaigns
Fund money cannot pay campaign expenses for pension board candidates. Fund office supplies and equipment also cannot help candidates or their supporters. This restriction covers fund resources, not members' personal campaign spending.
New trustees and powers for firefighter pensions
The seven-member board includes the mayor and city finance chief, or their permitted replacements, plus four elected firefighter-and-retiree representatives. The city appoints one public trustee who is a qualified voter, a five-year city resident, and experienced in finance or investing. Specified city employment, board, fund-member, and beneficiary ties disqualify that appointee. The board can set how many elected seats go to firefighters or retirees. Its expanded authority covers any fund-administration matter, and its determinations are final and binding.
Cities follow new firefighter pension payment schedules
Before 2026, the specified city contribution rate is 22.05%; beginning January 1, 2026, each pay period uses the applicable rate times pensionable payroll, plus 1/26 of the yearly legacy payment. Legacy debt follows a 30-year schedule starting in 2026, with payments phased in by roughly one-third of the increase annually during 2026–2028. Legacy payments rise 2.5% yearly from 2029 through 2055; cities can pay extra to reduce future payments, requiring an actuary's revised schedule. Other liability losses generally use 20-year repayment periods, starting in the calendar year beginning 12 months after the recognizing valuation. Gains use the largest remaining loss layer's remaining period, or 20 years without one; payments use a level percentage of projected payroll, and the annual city rate excludes legacy debt.
Funding levels set city pension payment limits
Beginning in 2026, city contribution rates operate within a corridor extending five percentage points above and below its midpoint. When an estimate is below midpoint, a fund below 90% funded must use midpoint; otherwise it uses the estimate, subject to the minimum. At or above midpoint, the city uses the estimate but never more than that year's maximum. At 100% funded, existing debt layers count as paid, and legacy payments must stop. At 100% funding, or in a year after legacy debt payoff, the city and board can agree in writing to reset the midpoint and firefighter and city contribution rates.
Stronger reviews of firefighter pension forecasts
The board must commission an actuarial experience study at least every five years and notify the city beforehand. Cities can conduct a separate study within three months of notice or review results within one month of presentation. Rate differences above 2% of pensionable payroll trigger up to 20 business days of reconciliation, then an independent actuary if unresolved. The independent actuary comes from three firms supplied by the fund; this process also covers assumption or method changes outside studies. The board can adopt alternative methods approved by its actuary that meet professional standards and leave the city's legacy contribution unchanged.
Sponsors & Cosponsors
Sponsors
John H. Bucy lll
House
Giovanni Capriglione
House
Donna Howard
House
Charles Schwertner
Republican • Senate
Cosponsors
Sarah Eckhardt
Democratic • Senate
Pete Flores
Republican • Senate
Judith Zaffirini
Democratic • Senate
Roll Call Votes
House vote • 5/23/2025
Record vote
Yes: 134 • No: 0
Senate vote • 5/19/2025
Record vote
Yes: 0 • No: 0
Senate vote • 5/19/2025
Record vote
Yes: 31 • No: 0
House vote • 5/7/2025
Record vote
Yes: 0 • No: 0
Senate vote • Unknown
Committee vote: Finance
Yes: 15 • No: 0
House vote • Unknown
Committee vote: Pensions, Investments & Financial Services
Yes: 6 • No: 0
Actions Timeline
Effective on 9/1/25
6/20/2025HouseSigned by the Governor
6/20/2025HouseSent to the Governor
5/26/2025HouseSigned in the Senate
5/25/2025SenateSigned in the House
5/25/2025HouseReported enrolled
5/24/2025HouseHouse concurs in Senate amendment(s)-reported
5/23/2025SenateText of Senate Amendment(s)
5/23/2025HouseRecord vote (RV#3424)
5/23/2025HouseHouse concurs in Senate amendment(s)
5/23/2025HouseSenate Amendments Analysis distributed
5/19/2025HouseSenate Amendments distributed
5/19/2025HouseSenate passage as amended reported
5/19/2025HouseRecord vote
5/19/2025SenatePassed
5/19/2025SenateRead 3rd time
5/19/2025SenateRecord vote
5/19/2025SenateThree day rule suspended
5/19/2025SenateVote recorded in Journal
5/19/2025SenateRead 2nd time & passed to 3rd reading
5/19/2025SenateRules suspended-Regular order of business
5/19/2025SenateCo-sponsor authorized
5/19/2025SenatePlaced on intent calendar
5/16/2025SenateCommittee report printed and distributed
5/14/2025SenateRecommended for local & uncontested calendar
5/14/2025Senate
Bill Text
Engrossed
Enrolled
House Committee Report
Introduced
Senate Committee Report
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