Update: SB 1750 and 1751 did not advance out of committee. Thank you for your support!
*Editor’s Note: This story has been updated based on conversations with Senator Bettencourt.
As the 85th Legislative Session continues to move at breakneck speed, the Texas Retired Teachers Association’s (TRTA) leaders are meeting with Senators and Representatives on a variety of urgent matters, including TRS-Care and now, the move to do away with the TRS defined benefit plan!
Senator Paul Bettencourt (R-Houston) has filed two bills that may convert the Teacher Retirement System of Texas (TRS) defined benefit plan—which offers a lifetime benefit for our dedicated Texas educators—to a defined contribution (401k-style) or hybrid plan for new and future education employees!
Senator Bettencourt has communicated with TRTA that these bills are designed to be “permissive,” giving TRS and ERS the ability to implement such plan designs for future educators, and that the intent is to gather more information about making such changes.
TRTA appreciates Senator Bettencourt for reaching out to us and providing insight on his legislation.
Still, TRTA opposes any change to the defined benefit plan for future education employees.
Having new education employees go into a defined contribution or hybrid style retirement plan:
- Does not provide them retirement security after their career in education is over;
- Will not solve the TRS unfunded liability issue, as TRS would no longer be investing new contributions and managing pension obligations with a long-term view;
- Does not create a path to a secure retirement. Ninety-five percent of current school districts do not pay into the Social Security system for their employees;
- Will have an adverse impact on current retirees by destabilizing the TRS pension fund and preventing a path to future retirement increases for current retirees as the unfunded liability grows due to inadequate investment strategies;
- Will force TRS to manage the investments differently resulting in less revenue and a decreased likelihood for future cost of living increases for current and future retirees;
- May cause the federal government to require mandatory Social Security. Texas could potentially lose hundreds of millions of dollars a year in employment costs for Texas public workers;
- Replaces the very efficient defined benefit plan with a much less efficient defined contribution plan with higher costs, loss of professional asset management of a pooled trust fund and less incentive for educators to remain in their profession.
Texas should want to incentivize educators to remain in the classroom, and we should also want to attract the best educators to Texas. The current teacher retirement system, which is solid and secure, motivates future Texas educators to work for our children, communities and state!
You can read the full text of both bills by clicking the links below:
- SB 1750: Relating to a study of the cost-effectiveness and feasibility of implementing a hybrid retirement plan for newly hired state employees and teachers.
- SB 1751: Relating to authorizing the Employees Retirement System of Texas and the Teacher Retirement System of Texas to establish defined contribution plans or hybrid retirement plans to provide retirement benefits to certain employees.
Both bills were filed on March 9 and have been referred to the Secretary of the Senate. TRTA does not support changing the TRS defined benefit plan into a defined contribution or hybrid plan for current OR future public education retirees.
Senator Bettencourt believes it is important to have all the facts necessary to know how changing to a DC or hybrid plan for future employees may impact the system. TRTA respects his willingness to share his perspective and open a dialogue.
TRTA never objects to learning all we can about these types of retirement plans. TRTA is convinced that the traditional defined benefit plan design is the best model for real retirement security for all public educators.
The DC vs. DB debate will continue this session and into the interim. Considering the national pressure being exerted by various think-tank groups to eliminate defined benefit plans for public educators and other public workers, TRTA knows the fight to preserve TRS defined benefit plan will not go away.
TRS will experience a number of significant hurdles in 2019 when it goes through a process known as “sunset review.” The sunset review may provide momentum for DC and hybrid plan supporters.
Josh McGee serves as the Chairman for the Pension Review Board. McGee, who works for the Laura and John Arnold Foundation, (a group that often criticizes defined benefit pension plans) will likely be involved in this debate.
TRTA will defend the TRS defined benefit plan for all current and future TRS retirees…even the ones that have not even started their educator career!
TRS is the sole form of retirement security for the vast majority of Texas educators, as 95% of school districts in the state do not pay into the federal Social Security program. Even educators who paid in, either through their work in the school system or work in the private sector, do not receive all of the Social Security benefits they have earned due to an unfair law called the Windfall Elimination Provision (WEP).
While TRTA continues to work with Congress to repeal the WEP, movement on that issue is being delayed by other congressional priorities such as tax reform and the Affordable Care Act (ACA) replacement.
Call and Email Your Legislators Today!
Today, it is vital that our members contact their state Senators about SB 1750 and SB 1751. To be passed, these bills must first go through the Senate before reaching the House. Let your legislators know that we want to keep our DB plan for all TRS employees… current and future! Share our helpful Fact Page about the TRS Pension Fund with them!
Let your legislators know that TRS offered financial security to more than 375,000 retirees, and should be there for the 1,000,000 active school personnel who are dedicating their lives to Texas’ school children!
TRTA has worked to defeat similar legislative proposals in the past, and we must band together with active educators again now to defeat SB 1750 and SB 1751.
Call your legislators TODAY using our toll-free legislative hotline: 1.888.674.3788. Tell them to say NO to SB 1750 and SB 1751.
Send an email to your State Senator and Representative
BY CLICKING HERE now!
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. Be sure to read our comprehensive Frequently Asked Questions about TRS-Care aquí.
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