On Monday, March 9, the Teacher Retirement System of Texas (TRS) testified before the House Pensions, Investments, and Financial Services (PIFS) Committee. The testimony provided by TRS primarily focused on long-term facility planning for the TRS headquarters and the process leading to the recent decision not to move the investments division to the Indeed Tower.
TRS Executive Director Brian Guthrie began his testimony with a statement, and he expressed that TRS is working to become more transparent in its future decision-making. He also expressed concern about TRS’s image of being “tone deaf.”
“It’s a privilege to serve our retirees around the state,” said Guthrie. “We are trying to be sound fiduciaries of the fund.”
TRS has come under fire from both members and legislators for its decision to lease space at Indeed Tower at the cost of $326,000 per month. However, TRS reversed that decision at its February board meeting. Instead, TRS is renewing its lease at 816 Congress, where its investment team currently resides. The move, paired with subleasing the Indeed Tower space, is expected to save the TRS pension fund more than $9 million.
Rep. Roland Gutierrez criticized TRS’s communication to the community about the lease. In particular, Gutierrez criticized TRS’s lack of transparency. Gutierrez pushed to know which law prohibits TRS from disclosing the details of the lease to the public.
According to Guthrie, section 552.143 of the Public Information Act limits the information that can be shared about any private investment deal. The Attorney General concurred with this reading of this newly passed section of law.
Gutierrez asked Guthrie about what other spaces were considered outside of the Indeed Tower. Guthrie said that the Indeed Tower was the only space considered. Guthrie said that it was the only downtown space was available. Gutierrez also encouraged TRS to work with the Attorney General to remove itself from the Indeed Tower lease.
Gutierrez added, “We (the legislators) deal in billions. We get it, but folks back home . . . they don’t deal in billions. They don’t deal in hundreds of thousands. They don’t even deal in thousands anymore.”
Rep. Gene Wu asked Guthrie if the decision to lease the Indeed Tower space was an aesthetic choice. Wu said that TRS wanted to “look like one of the big boys.”
While Guthrie didn’t agree with Wu’s sentiment, he said that the board felt that the Indeed Tower represented a good opportunity to attract talent.
Rep. Barbara Gervin-Hawkins asked if there is any way to include the membership when the TRS Board makes big decisions.
“We need to do a better job of educating our members about what we’re doing and how we’re managing their fund,” replied Guthrie. “We’re looking at ways to reach them better.”
In addition to the legislators on the committee, Rep. Giovanni Capriglione, who serves as the House Appropriations Chair, and Rep. Tony Tinderholt were in attendance.
The Texas Retired Teachers Association’s (TRTA) Executive Director Tim Lee provided testimony. “When our members think about this issue, they put it in context of what is their reality, and the idea of spending $326,000 per month is very eye-opening,” Lee said. Lee emphasized that TRTA thinks TRS made the right decision by not moving into the Indeed Tower, but that the agency needs to focus on opening up its transparency on these types of decisions.
