The Texas House has postponed a vote on HB 3221 until Monday, May 12, at 8 a.m. HB 3221 is projected to have an actuarial impact of $806M to the Teacher Retirement System (TRS). HB 3221 attempts to equalize TRS contribution percentages for Independent School Districts (ISDs) and charter schools as a portion of the employer cost for TRS benefits.
While the bill’s author, Rep. Carl Tepper (R – Lubbock), represents the legislation as a way to ensure equal contributions among public school employers, what he has failed to remedy is the unfunded cost his legislation would levy on the Teacher Retirement System of Texas (TRS).
The bill has a projected $13.5 million cost per year to TRS. While this amount may seem small when considering the size of all TRS employer contributions, TRS has reported an actuarial impact to the system of $806 million!
The actuarial cost is based on the loss of the $13.5 million per year, as well as the loss of interest on those contributions over the next 30 years.
The Texas Retired Teachers Association (TRTA) opposed HB 3221 in committee based solely on the lack of funding necessary to ensure the bill is cost neutral to TRS.
On the Texas House floor, Rep. Jeff Barry (R – Pearland) offered an amendment that made the implementation of the bill contingent on the Texas budget providing the $13.5 million per year to keep the bill cost neutral for TRS.
Ultimately, Rep. Barry’s amendment was withdrawn and Rep. Tepper moved to postpone the vote on HB 3221 until Monday, May 12 at 8 a.m.
TRTA thanks Rep. Barry for his work on the amendment even though it was withdrawn. TRTA also appreciates the comments offered by House members during that debate who were working to ensure TRS is not hurt by the lack of funding for HB 3221.
As TRTA reported to its members on Friday, we respect Rep. Tepper and understand what he is attempting to accomplish with his bill.
However, HB 3221 undeniably equates to a funding reduction in contributions to the TRS pension trust fund. Current and future TRS retirees will be handed the cost of this bill in the form of an $806 million unfunded liability.
Rep. Gina Hinojosa (D – Austin) argued this bill, if passed, would put more pressure on the TRS trust fund and its ability to maintain actuarial soundness. She noted that other pending legislation could increase costs for the TRS trust fund, compounding the actuarial concerns surrounding HB 3221.
TRTA members have worked collaboratively with the Texas Legislature to achieve many victories in funding the TRS pension trust fund. Legislators have strong connections to their TRTA chapters in their home districts. We are all cognizant of the time and effort it has taken to find ways to pass benefit enhancements for TRS retirees when possible.
While HB 3221 may be well-intentioned, it absolutely reduces funding for TRS and gives up hard-fought ground we have all achieved by working together. This bill should, at a minimum, be amended to ensure that funding is provided by the state to offset the negative impact this bill will have on the TRS fund, or the Legislature should vote it down!
Please use our Action Alert to email your state representative asking them to vote “NO” on HB 3221!
TRTA wishes the mothers out there a Happy Mother’s Day!
¡Gracias!
Por favor apóyanos hoy y Renueva tu cuota de membresía! Si no eres miembro, Por favor únete hoy¡Puede ser el mejor $35 que invierta cada año en proteger y mejorar su sustento y sus ingresos mientras seguimos luchando por su seguridad jubilatoria!
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