Texas Government Code 820.103 – Gain Sharing Interest Adjustment
(a) Each fiscal year and subject to Subsection (b), the retirement system shall compute the gain sharing interest rate by:
(1) determining the average return on the investment of the system’s cash and securities during the preceding five fiscal years, expressed as a percentage rate;
(2) subtracting four percentage points from the percentage rate determined under Subdivision (1); and
(3) multiplying the resulting difference under Subdivision (2) by 50 percent.
(b) Subject to Subsection (c), each fiscal year, the retirement system shall:
(1) in addition to the amount deposited under § 820.102, deposit into each member’s individual account in the employees saving account an amount equal to the gain sharing interest rate determined under Subsection (a) for the fiscal year multiplied by the member’s accumulated account balance as of the end of the preceding fiscal year; and
(2) recalculate the annuity payment of a retiree or annuitant under this chapter by:
(A) multiplying the annuity payment amount as of the end of the preceding fiscal year by the gain sharing interest rate determined under Subsection (a); or
(B) if the retiree or annuitant was not entitled to an annuity payment as of the end of the preceding fiscal year, multiplying the retiree’s or annuitant’s first annuity payment amount by the gain sharing interest rate determined under Subsection (a).
Terms Used In Texas Government Code 820.103
- Annuity: A periodic (usually annual) payment of a fixed sum of money for either the life of the recipient or for a fixed number of years. A series of payments under a contract from an insurance company, a trust company, or an individual. Annuity payments are made at regular intervals over a period of more than one full year.
- Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- Year: means 12 consecutive months. See Texas Government Code 311.005
(c) The gain sharing interest rate applied under Subsection (b) may not be less than zero or more than three percent.
(d) Subsection (b) applies only to a retiree or annuitant who is receiving a cash balance annuity under § 820.053 or 820.0535, including an alternate payee under § 804.005.