The Teacher Retirement System (TRS) Board of Trustees met on July 18 and 19, 2019. The board reviewed the bills passed during the 86th Texas Legislative session.
The board praised the increased contribution rates from the state and approved the 13th check retirees will be receiving in September, which is capped at $2,000. It will be the first 13th check retirees have received since 2007. Sen. Joan Huffman (R – Houston) released this press release on the 13th check.
TRS Executive Director Brian Guthrie reviewed the primary funding bills, HB1 and SB12, that were passed during the legislative session as they related to TRS.
He discussed how the state was using a stair-step approach to increase its contributions to TRS from 6.8 percent to 8.25 percent by 2024. When that occurs, the state will be putting in the same rate as TRS members into the pension fund.
In total, the state is contributing an additional $1.113 billion for this biennium to TRS for contributions to the pension plan and supplemental payments to retirees.
The guarantee of a 13th check is useful for retirees, as Guthrie stated, because while TRS is currently actuarially sound, it might not remain in that state. TRS is currently slated to pay off its unfunded liabilities in 29 years, but that number could slip to 31 years or more by the time the board meets again in November. Guthrie said that this potential change is due to the stock market’s volatility.
The TRS Board Chairman, Jarvis Hollingsworth, said it was “just an outstanding session,” and described it as a “great day” for TRS.
The Texas Retired Teachers Association (TRTA) also participated in the board meeting. TRTA’s President Patricia Macias provided public comment. She stated that while the work done by the Legislature is commendable, there will be more to accomplish going into the future.
“TRTA is proud of our work with the committed stakeholders who helped achieve these goals and we will do all that is necessary to ensure that future Legislatures remain committed to the work accomplished during the 86th Legislative Session,” she said.
While the 13th check and increased funding into TRS is great news for retirees, TRS-Care, the health care program for retirees, is facing a massive shortfall coming into the next session. The shortfall is projected to be approximately $1 billion. TRTA will need the full force of its membership involved as we push towards a more sustainable solution for the continuous TRS-Care shortfalls. Additionally, more work will need to be done to provide a cost-of-living adjustment for retirees.