The Texas Retired Teachers Association (TRTA) has confirmed that Teacher Retirement System of Texas (TRS) retirees will be eligible to receive help from the $2 trillion federal stimulus package. The stimulus amount will be based upon adjusted gross income, with no distinction between active and retired employees. The amount will vary depending upon the individual’s or married couple’s income.
Recipients are eligible for up to $1,200 per person and up to $500 per child. Retirees affected by the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) are also eligible for this funding.
The House of Ways and Means Committee released this fact sheet about the stimulus.
As the fact sheet explains, everyone in the US is eligible for the full rebates ($1,200 per adult, $500 per minor child) as long as they have a Social Security number and don’t exceed the household income thresholds ($75,000 single/$150,000 married). There’s no exclusion based on type of income, whether it’s Social Security or government pensions or other benefits. (For a fact sheet on the rebates generally, see aquí.)
Tim Lee Hosts TRS Executive Director Brian Guthrie on Facebook Live Q&A
On Friday, March 27, 2020, TRTA Executive Director Tim Lee hosted a Facebook live event, welcoming as his guest TRS Executive Director Brian Guthrie. The two discussed various topics pertaining to the TRS pension trust fund and current market fluctuations amid the COVID-19 pandemic.
TRTA members who were unable to view the live broadcast may watch it by clicking this link.
How is the pension trust fund doing now with the market fluctuations?
Director Guthrie said, “Fluctuations in the marketplace provide a lot of anxiety for our members … but their annuities are safe.”
After a volatile couple of weeks, the fund currently sits at a value of $151 billion. To put that into context, the value of the fund at the start of the calendar year on January 1 was $163 billion. The fund started the fiscal year in September 2019 at $157 billion.
“Our loss has been much less than what you will see in the broader market,” said Guthrie. He said that the pension fund has a “diversified portfolio designed to withstand fluctuations.”
Is this market downturn different than the one that occurred in 2008?
Guthrie said that it is too early to say, but that “the dynamics were significantly different.” The current downturn is a result of economic activity coming to a halt.
Guthrie continued that “as a trust fund, we are large, long-term and liquid.”
“We have the opportunity to take advantage of fluctuations in the market as this persists.” He said, “We don’t have to react spontaneously to market fluctuations like we’re seeing today . . . We’re not overreacting.”
Guthrie also said that six of the nine trustees serving on the TRS Board of Trustees have an investment background. There are 180 investment professionals working for TRS, along with external partners “all working in lockstep.”
He emphasized that this team will do what’s in the best interest for the pension fund for the long-term.
Should the retirees right now be concerned the downturn will affect monthly annuity payment?
Guthrie responded emphatically that retirees’ annuities are safe.
“They are not changing—at all,” Guthrie said. “Your annuities are guaranteed, even if market is up or down, your annuity won’t change not like a 401k.”
He also stressed that although most TRS employees are now working remotely, annuities will be paid on time and “are not going to be delayed in any way.” Annuities paid through direct deposit and with paper checks will remain on the same schedule as they were before the pandemic began. “Nothing will change,” Guthrie said.
TRS continues to process retirements for new retirees planning to retire this year. Guthrie stated that the amount new retirees are supposed to receive will not change due to changes in the market and encouraged those thinking about retiring to call TRS to set up a time meet with a counselor by phone.
TRS counselors are answering phone calls and responding to requests by using special technology that enables them to answer calls from home during normal business hours.
Should retirees have any concerns about using their healthcare benefits if are dealing with possibly having COVID-19 (coronavirus)?
Guthrie stated that retirees should have no issues with using their insurance benefits at this time. TRS healthcare plans are also offering testing for free if retirees meet the CDC guidelines for receiving the test. There is also no charge for using Teladoc.
Guthrie also discussed the provider change that will occur in January 2021. At that time, United Healthcare will be new provider for Medicare Advantage. He said there will be no change in terms of benefits retirees will receive and that the provider base should not change.
“Our Medicare Advantage plan provides the same benefits in or out of network regardless of whether or not the provider accepts Medicare Advantage, they just have to accept Medicare and agree to bill UHC,” said Guthrie.
What can we expect during the next legislative session that begins in January 2021? Specifically, will retirees be able to receive a cost-of-living increase?
Guthrie emphasized that in order for COLAs to be approved by the Legislature, the pension fund must be actuarially sound.
The system will perform an actuarial assessment on August 31, 2020 to determine its soundness. Guthrie said, “If the fund continues to trend down, TRS may not meet the threshold for soundness at that time.”
During session on either February 28 or March 31, TRS will reassess the fund to determine soundness.
“The market will have impact on short-term ability to meet soundness,” Guthrie said, but emphasized that due to the passage of Senate Bill 12 in 2019, “We believe we will be sound in the long-term.”
Generally, the possibility for receiving a COLA for retirees will depend on what the markets look like at the aforementioned points in time.
TRTA will host a series of Facebook Live videos over the next few weeks to help keep our members informed during this difficult time. We hope you will continue to tune in with us every week! Next week, Tim Lee plans to discuss the Windfall Elimination Provision (WEP). Remember, you don’t need to have a Facebook profile to watch TRTA’s Facebook Live videos. Also, if you miss one of our live events, the recordings will be available in the videos section of TRTA’s Facebook page and shared via La línea interior.
Thank you for your membership to TRTA and your continued support through these trying times. If you aren’t already a member, please join us today!
