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18 Mar
0

House Appropriations Discusses Budget Bills: HB 1 and SB 500

 

  • Today is day 70 of the 140-day legislative session!
  • At the halfway mark of session, the House Appropriations Committee considered budget bills
  • TRTA Executive Director Tim Lee testified in favor of HB 1 and the committee substitute for SB 500, which includes additional dollars for the TRS pension fund
  • HB 1 and SB 500 passed out of committee, laying the groundwork for making the TRS pension fund actuarially sound
  • Send your legislators an email asking them to continue their work to help retired educators this session!

Today, March 18, House Bill 1, the major budget bill in the House, and Senate Bill 500, which includes supplemental appropriation dollars for the state budget, were heard by the House Appropriations Committee. These are two of the most important bills the Legislature is constitutionally mandated to pass.

TRTA Executive Director Tim Lee testified in support of HB 1, stating appreciation for the focus put on the TRS pension fund and TRS-Care program.

Mentioning House Bill 9, the House’s plan to help the pension fund reach actuarial soundness, Lee said it’s important that the budget include “a funding plan that will ensure long-term solvency of the trust fund and provide some financial relief for retirees.”

Lee also said that although contributions established during the previous legislative session are maintained in the current budget bill, “health care could be improved in the overall budget discussion.”

TRS-Care faces a shortfall this session of approximately $230 million. “If we don’t raise the base contribution for TRS-Care, long-term that program will continue to destabilize,” said Lee, adding that TRTA supports ongoing budget discussions to bolster the plan. “Retirees’ pocketbooks are immediately affected by the cost of healthcare.”

When asked how the state could improve the program and lower costs for retirees, Lee stated that “TRTA recommends increasing the contribution to 2.25% of payroll.” Currently, that contribution is 1.25% of payroll.

Last week, the Texas State Senate passed SB 500, authored by Senator Jane Nelson, which includes supplemental funding for the Teacher Retirement System of Texas (TRS) pension fund. As you may have read in last week’s Inside Line article (found here), the funding for Senate Bill 12 is included in SB 500. SB 12 was voted favorably out of the Senate State Affairs committee on March 14 and is similar to HB 9 in the House.

SB 500 includes money from the Economic Stabilization Fund (ESF), also known as the Rainy Day Fund, to help bring the TRS pension fund to actuarial soundness. By state law, the Texas Legislature cannot approve a cost-of-living increase for retirees unless the system can pay off its liabilities within 31 years or less—our state’s definition of actuarial soundness.

Today, the House Appropriations Committee proposed budget substitutes to SB 500. Per Appropriations Committee Chairman John Zerwas, the committee substitute for SB 500 includes $1.34 billion in the budget for TRS with $658.2 million of that designated for a supplemental payment to TRS retirees. These items reflect the plan for actuarial soundness and financial relief for retirees as proposed in HB 9 and are contingent upon its passage.

TRS Executive Director Brian Guthrie was called as a resource witness and discussed the change made to the fund’s rate of return assumption last summer, which brought the pension fund’s funding period to 87 years. However, based on returns from 2018, the February 28, 2019 valuation of the fund indicated the period is now 99 years. Because of this, it is vital that a plan be put into place to help the fund reach actuarial soundness.

Tim Lee testified in favor of the committee substitute for SB 500, stating that the “most important component this session is putting in place a funding plan for the long-term solvency of the pension fund.”

Lee also added “we support any help the retirees can receive financially,” stressing that both a cost-of-living (COLA) increase and supplemental payment are welcome, though retirees prefer a true COLA. “Ensuring the solvency of the fund puts that possibility on the table.”

The House Appropriations Committee adopted the committee substitute to SB 500 unanimously. The bill will now move to the House floor to be voted upon by the entire body.

The March is On to #RAISETHEBASE for the Pension Fund and TRS-Care!

March is the most crucial month for legislative action on issues that impact you and your fellow public education retirees. TRTA is moving full steam ahead and we need your help! March is the month that will make all the difference in our legislative agenda!

The Legislature is moving at a rapid pace, finalizing budget discussions, hearing bills in committee, having heated floor session debates, and we need them to be THINKING ABOUT YOU while they are doing the work of Texas!

TRTA Needs Your Help!

1.            Call Your Legislators
Use our toll-free hotline 1.888.674.3788. Let’s make 25,000 phone calls in March! Make regular, once-weekly phone calls to your elected officials asking them to “Raise the Base Funding for the Pension Fund and TRS-Care!”

2.            Email Your Legislators
Email your elected officials! TRTA members have sent thousands of emails so far this session. Let’s send 50,000 emails this month!
Send your email today by clicking here!

3.            RSVP to TRTA Day at the Capitol
Make a plan to join us at Day at the Capitol on Wednesday, April 3! RSVP via Facebook here!

Thank You

Thank you for your membership to TRTA. We are fighting ardently for your benefits every day at the Capitol. If you are not yet a TRTA member, please join here.

Be sure to like us on Facebookfollow us on Twitter and subscribe to our YouTube channel.

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14 Mar
0

Senate State Affairs Meets, Discusses SB 12

 

  • SB 12 receives hearing in Senate State Affairs
  • Senator Huffman is working closely with the House to provide a long-term funding plan for the retirement system
  • Without a stable funding plan for TRS, the pension plan’s unfunded liability will continue to increase, making a true cost-of-living increase impossible
  • Executive Director Tim Lee testified in favor of the bill, asking that the amount of the proposed supplemental payment be increased as the process moves forward
  • Send your legislators an email asking them to continue their work to help retired educators this session!

SB 12 Hearing Overview

Today, March 14, the Senate State Affairs Committee met to discuss various bills, including Senate Bill 12 filed by Committee Chair Joan Huffman (R – Houston).

As the Texas Retired Teachers Association (TRTA) has reported before, if passed, SB 12 would make the pension fund actuarially sound and provide retirees with a one-time supplemental payment. Per a press release written by Huffman’s office, “by addressing TRS’s solvency problem with a conservative plan, the Legislature can secure the retirement for teachers!”

The press release continues “the proposed bill would increase state, district, and active employees’ pension contributions over a six-year period.” The bill would also provide a payment to ALL retired school employees, “putting more money in retirees’ hands immediately.”

TRTA knows Senator Huffman has been working with Representative Greg Bonnen (R – League City) in the Texas House to introduce legislation that would shore up the Teacher Retirement System of Texas (TRS) pension fund and provide some kind of benefit increase to retirees. Bonnen’s bill, HB 9, also proposes to make the TRS pension fund actuarially sound and provide a supplemental payment to retired educators.

As many TRTA members know, legislation can be fluid during a legislative session, undergoing multiple versions before a final bill is passed. At the moment, the bills differ on a few elements, including the amount of the proposed payment. However, both bills are working toward the vital and necessary step to make the pension fund sound enough to provide a much-needed benefit increase for retirees.

While laying out SB 12, Senator Huffman stated that the current amortization period of the pension fund is 87 years. “Without a long-term, cost-efficient proposal like this, retirees may never receive a COLA,” said Huffman.

As our members may know, by state law, the Legislature cannot approve a cost-of-living increase for retirees unless the system can pay off its liabilities within 31 years or less.

Huffman’s bill proposes changes that would occur over several years, eventually increasing the state contribution from the current 6.8 percent to 8.25 percent by fiscal year 2024. Huffman stated that this would incur an ongoing cost, but it would be “shared among all contributors.” The bill also proposes that the school district contribution rise from 1.5 percent to 2 percent by 2025 and the active employee contribution from 7.7 percent to 8.25 percent by 2024. At present, the bill’s proposed supplemental payment for retirees would be capped at $500.

The bill, if passed, would take the funding period for the pension from 87 years down to 29 years by 2020. “Without this plan,” said Huffman, “the funding period will jump to 99 years by 2020.”

Huffman stated that acting now, despite a significant financial commitment, is a far more cost-efficient way to address the pension system’s long-term sustainability. She further stated that the benefits received by retirees are “not lavish benefits but are critical to thousands of Texans and their families.”

Huffman also pointed out that HB 9 is similar to SB 12, and that it is “the intent of both chambers to pass a long-term cost-efficient plan.” Senator Huffman said she is working with Dr. Bonnen in the Texas House “to bring more financial stability to one of largest pension funds in the world and to provide additional money for retired teachers.”

TRTA Executive Director Tim Lee testified in support of the bill, showing appreciation for taking a long-term view of the retirement system and stating that although the supplemental payment is appreciated, he hopes the Senate and House “will continue to work to see if we can increase the amount.”

Senator Eddie Lucio asked about how the changes to TRS-Care last session affected retirees, and Lee replied that “more costs have shifted onto retirees for healthcare.”

Senator Brian Birdwell asked if passing a cost-of-living raise as opposed to a supplemental payment would affect the soundness of the system and Lee responded that the payment “has a one-time cost but doesn’t incur any new ongoing liability for the system.”

“The most important thing that needs to occur this session is a stable funding plan for the long-term health of the system,” said Lee.

Without a stable funding plan for TRS, the pension plan’s unfunded liability will continue to increase, making a true cost-of-living increase impossible
.

SB 12 was voted favorably out of committee. The funding for the bill is included in SB 500, which passed favorably out of the Senate on Wednesday, March 13 and has now been referred to the House. Funds would come from the Economic Stabilization Fund (ESF), also known as the Rainy Day Fund.

A representative of the Texas Public Policy Foundation (TPPF) testified against SB 12, promoting the idea that the TRS pension fund should be changed from a defined benefit (DB) plan to a defined contribution (DC) or 401k-style plan. TRTA does not support eliminating the DB plan for current or future educators, as TRS is the sole form of retirement security for 96 percent of Texas educators.

The March is On to Help Retired Educators this Session!

March is the most crucial month for legislative action on issues that impact you and your fellow public education retirees. TRTA is moving full steam ahead and we need your help!

The Legislature is moving at a rapid pace, finalizing budget discussions, hearing bills in committee, having heated floor session debates, and we need them to be THINKING ABOUT YOU while they are doing the work of Texas!

The march is on to #RAISETHEBASE funding for the pension fund and TRS-Care!

The Most Important Things You Can Be Doing Right Now

TRTA needs your help! March is the month that will make all the difference in our legislative agenda! LET’S SET OUR GOALS HIGH AND GO FOR THEM! THE MARCH IS ON!

1.            Call Your Legislators
Use our toll-free hotline 1.888.674.3788. Let’s make 25,000 phone calls in March! Make regular, once-weekly phone calls to your elected officials asking them to “Raise the Base Funding for the Pension Fund and TRS-Care!”

2.            Email Your Legislators
Email your elected officials! TRTA members have sent thousands of emails so far this session. Let’s send 50,000 emails this month!

Send your email today by clicking here!

3.            RSVP to TRTA Day at the Capitol
Make a plan to join us at Day at the Capitol on Wednesday, April 3! RSVP via Facebook here!

Thank You

Thank you for your membership to TRTA. We are fighting ardently for your benefits every day at the Capitol. If you are not yet a TRTA member, please join here.

Be sure to like us on Facebookfollow us on Twitter and subscribe to our YouTube channel.

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12 Mar
0

TRTA Convention Registration Deadline Extended: 4 Days Left to Register!

Registration for the 66th Annual TRTA Convention to be held in Austin, Texas April 1–2, 2019 has been extended to this Friday, March 15! TRTA members can register online by clicking here.

This year’s theme is Connecting the Dots to TRTA’s Success, a meaningful metaphor that matches TRTA’s legislative goals as we head into another challenging session in the Texas capital city! The convention will be held at the Austin Hilton on 500 E. 4th Street.

There is no better time to be in Austin! The Texas Legislature will be in regular session, discussing such vital issues as the TRS–Care health insurance program and ways to protect the longevity of benefits for our public education retirees and pre–retirees.

More than 1,000 TRTA members are expected to come to Austin to receive training, hear from legislators, and receive a comprehensive legislative session update. This year’s sessions include “Making a Digital Memory Book,” “Benefits of Owning a Pet,” “The Texas Silver Haired Legislature,” officer and committee training sessions, and more!

Members will convene for a Pep Rally on the afternoon of April 2 to prepare for the April 3 TRTA Day at the Capitol event and learn how TRTA wants the Legislature to #RaisetheBase. A complete schedule of convention events is listed here. A full update about TRTA Day at the Capitol was emailed last week and can be found online here.

Don’t forget to submit your convention registration by this Friday, March 15! REGISTER NOW! We look forward to seeing you in Austin on April 1.

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