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Retirement board says proposed cut to state subsidy won’t immediately affect retired teachers but will draw on health fund
Summary
Teachers' Retirement System officials told the Appropriations subcommittee that a proposed Office of Policy and Management change to reduce the state's health subsidy from one-third to one-quarter for budget years 2026–27 would not raise costs for retirees but would reduce the system's health fund balance and risk longer-term solvency pressures.
State Rep. Tammy Exum, chairing the Appropriations Subcommittee on Education, heard on Wednesday that a proposed Office of Policy and Management change to reduce the state's contribution to retired teachers' health coverage from one-third to one-quarter in fiscal years 2026 and 2027 would not immediately increase retirees' out‑of‑pocket costs.
Helen, a representative of the Teachers' Retirement Board, told the subcommittee that “there'll be no impact to the teachers, Senator Austin, our retirees. That they'll still have that one‑third covered.” She said the health fund would “use the difference between the one‑third and the one‑quarter of the fund to maintain that one‑third contribution for the retirees in budget year 26/27.”
The board provided numbers to illustrate the near‑term fiscal effect: an estimated $13 million in the first year and $15…
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