In preparation for the 90th Texas Legislative Session, which begins next January, the House Committee on Pensions, Investments and Financial Services (PIFS) met today to hear from the Teacher Retirement System of Texas (TRS) regarding its interim charges.
The committee is charged with reporting to the next Legislature on TRS actuarial soundness, current contribution levels, defined benefit plan assumptions, projected liabilities, and the long-term financial stability of the system. Members are also expected to evaluate employer contribution options and the impact of potential benefit enhancements.
Tim Lee, the Executive Director of the Texas Retired Teachers Association (TRTA), will be live on Facebook and YouTube on Friday, Aug. 21, at 2 p.m. Central. Lee will be joined by members of TRTA’s legislative team to discuss the results of this committee hearing.
TRS Status: Not Currently Actuarially Sound
Brian Guthrie, the TRS Executive Director, told the committee that the TRS pension fund is currently not actuarially sound under state law, which defines soundness as the ability to pay off fund liabilities in less than 31 years. Before August 2026, the fund had been considered sound with a 28-year funding period. That period increased to 35 years following implementation of salary increases passed during the 2025 Legislature.
Investment Returns May Help, but More Work Remains
TRS expects its next valuation at the end of August 2026 to show some improvement in the funding period, supported by an expected investment return of more than 13% this year in addition to last year’s return of more than 9%. However, TRS does not expect the system to return to actuarial soundness before the next legislative session.
TRTA’s Position
TRTA submitted written testimony addressing the issues included in the interim charge. The testimony and related legislative priorities document outline the funding shortfall tied to salary increases, the contribution levels needed to address that shortfall, and the continued impact of inflation on retirees.
TRTA is advocating for benefit enhancements in the next session to help retirees combat inflation while also restoring the TRS system to actuarial soundness. Read TRTA’s legislative priorities here: TRTA Legislative Priorities.
Key Takeaways for Retired Educators
- TRS is currently outside the statutory definition of actuarial soundness.
- Salary increases passed in 2025 improved educator pay but also increased TRS liabilities without added pension funding to offset the impact.
- Strong investment returns may reduce the funding period, but TRS does not expect to reach actuarial soundness before the next session.
- TRTA will continue urging lawmakers to address both system funding and meaningful benefit relief for retirees.
What Comes Next
For more in-depth details about today’s hearing, including questions posed by committee members and ways you can encourage your legislator to support retired educators, tune in to the live show on Friday, Aug. 21 at 2 p.m. Central on both Facebook and YouTube.
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