On Monday, February 10, 2025, the Senate Finance Committee met to begin discussions on Article III of Senate Bill 1, the General Appropriations bill, also referred to as the state budget bill. The Teacher Retirement System of Texas (TRS) presented invited testimony, and the Texas Retired Teachers Association (TRTA) provided a public statement.
TRS Executive Director Brian Guthrie presented on behalf of the agency. The system now has more than 2 million members, including 1.5 million active employees and more than 500,000 retirees. TRS pays out more than $1 billion per month in annuities, and more than $15 billion in annuities per year.
The TRS Pension Trust Fund currently is actuarially sound, with a funding period of 28 years. As of August 31, 2024, the fund had a market value of $210.5 billion and is the sixth largest pension fund in North America. TRS will update its actuarial valuation of the fund as of February 28, 2025. Guthrie stated that he expects the fund to continue to be actuarially sound once that valuation is completed.
| TRS Pension Trust Fund Valuation | Aug. 31, 2024 |
| Trust Fund Value | $210.5 Billion |
| Unfunded Actuarial Accrued Liability (UAAL) | $60.6 Billion |
| Funding Period | 28 Years |
| Investment Return | 12.83% |
Guthrie also shared that the TRS-Care retiree health insurance program has a healthy fund balance. This resulted in premium decreases for those participating in the TRS-Care Medicare Advantage plan, which went into effect on Jan. 1, 2025. Participants will save between $720 and $4,884 annually.
Monthly Premium Reduction for TRS-Care Medicare Advantage
The Legislative Budget Board (LBB) currently lists the total appropriated general revenue and general revenue-related funding to TRS for the pension fund, TRS-Care, and TRS-ActiveCare for the FY 2026-27 biennium is more than $8 billion.
When asked by Sen. Lois Kolkhorst about Senate Bill 2, which provides funding for education savings accounts (esas), Guthrie stated that SB 2 will not have a material impact on the TRS pension fund based on an actuarial analysis.
Sen. Joan Huffman, Chair of the Senate Finance Committee, stated that the Legislature is committed to sustaining the TRS pension fund, adding “we are in the forever business.”
TRTA Associate Director, Strategic Partnerships and Member Outreach, Brock Gregg provided public testimony. Gregg expressed gratitude to the members of the committee for their work last session to provide most TRS retirees with their first pension increase in many years and the first for many.
As TRTA members recall, Senate Bill 10 provided a cost-of-living adjustment (COLA) of either 2%, 4%, or 6% to retirees who retired before August 2020. Voters approved the funding for the COLAs via a constitutional amendment, Prop 9, on the November 2023 General Election ballot.
Gregg noted that Prop 9 received the most votes of all the propositions on the ballot, even more than property tax relief. “It shows how much Texans respect and appreciate their educators who dedicate their lives to this profession,” Gregg said.
Gregg also explained that the U.S. Congress “finally eliminated the WEP and GPO, a great victory for over 3 million public servants across the nation who have been suffering these penalties for four decades.” He noted that this change will positively impact over 270,000 public service retirees in Texas; however, it may take 12 to 18 months for eligible retirees to begin receiving their adjusted Social Security benefits.
Gregg shared TRTA’s legislative priorities for the 89th Legislative Session, explaining that “the greatest enemy to TRS retirement security is inflation—even after the increases from last session, retirees are still behind cumulative inflation by thirty percent on average.”
TRTA is focused on the following priorities, among others:
- Maintaining system solvency and using excess state revenue to help reduce the unfunded liability of the system.
- Providing a benefit enhancement to help offset the negative impacts of inflation.
“We want to work with you to help all TRS retirees and the only way they can be helped and that is with your support,” Gregg said. He also thanked the committee members for their support of the premium reductions for TRS-Care Medicare Advantage participants.
As usual, TRTA will have a very busy legislative session that will include working with legislators, monitoring TRS-related bill activity, and representing our members so they can have a healthy pension system and increased benefits over time.
Gracias
Gracias por su membresía en TRTA. Estamos luchando ardientemente por sus beneficios todos los días en el Capitolio. Si aún no es miembro de TRTA, por favor únete aquí.
Asegúrate de Danos like en facebook, Síganos en Twitter y suscríbete a nuestro canal de youtube.
