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05 Apr
0

Senate State Affairs Committee Meets, Discusses Future of TRS Pension Plan

Sign TRTA’s Petition requesting the Texas Legislature to fully fund the TRS Pension Plan!

The Texas Senate State Affairs Committee met on April 4 to discuss the state of public pension systems, including the Teacher Retirement System of Texas (TRS) pension plan. Senators received testimony from the Executive Directors of several state agencies, as well as actuaries.

During the Senate State Affairs meeting, senators inquired about the health of the TRS pension plan, and how changing TRS’s assumed rate of return would require additional funds from the Legislature. Read the full TRS presentation here.

The TRS Board of Trustees is scheduled to meet on April 19 and 20. During this meeting, the Board will decide on whether to change its assumed rate of return. If the Board changes the assumed rate of return, it could push back the timeline for future cost-of-living increases for retirees significantly.

During the meeting, TRS Executive Director Brian Guthrie discussed how the TRS Board is considering changing its assumed rate of return from 8 percent to either 7.25 percent or 7.5 percent. By changing the assumed rate of return to 7.25 percent, TRS would require approximately $1.6 billion from the Legislature to maintain its course for actuarial soundness. Actuarial soundness is a state requirement for providing cost-of-living increases.

Actuarial soundness is defined as the number of years required to pay off liabilities of the fund. The state law has set this standard as being less than 31 years. For retirees to receive a cost-of-living increase, the TRS fund can’t be more than the 31-year range of paying off its liabilities. At the current assumed rate of return, TRS will pay off its liabilities in 34 years.

If TRS changes its assumed rate of return to 7.25 percent and doesn’t receive additional funding, the funding period before reaching actuarial soundness would reach 86 years.

Senator Jane Nelson (R-Flower Mound) expressed concern that retirees were not aware of the costs associated with funding the pension plan. “We need to do a better job of getting that information out,” Nelson said.

Senator Joan Huffman (R-Houston) said that the information needed to be put out into the open that “it’s a major contribution from the state.”

TRTA agrees that the investment from the state is significant. TRTA was formed more than six decades ago to ensure that its members understood the partnership between the state and public educators to properly and adequately fund the TRS pension plan. We appreciate the commitment this state has made to TRS.

Since TRS was created in the 1930s, this pension fund has always received contributions from the state and active employees. Today, employees still make contributions (7.7 percent of their paycheck) and the employer’s share is a joint responsibility between the state and the school districts (the state portion is about 4 percent of payroll and the school district portion adds the other 2.8 percent, for a combined total of 6.8 percent).

Keith Brainard, public pension fund expert and Texas Pension Review Board member, testified that Texas is getting a bargain on its contributions to the TRS pension fund as compared to other states who do not contribute to Social Security. The average contribution for most states in this category is closer to 19 percent. The contribution from Texas to TRS is 6.8 percent.

The Texas Retired Teachers Association (TRTA) is asking its members and supporters to sign (and share!!) a petition encouraging the Texas Legislature to fully fund the TRS Pension Plan. Retired educators are in desperate need of a cost-of-living increase. By changing the assumed rate of return, TRS will not impact current pension benefits, but will delay much needed cost-of-living increases. Sign the petition here!

The tradition of supporting the TRS plan must continue. The Texas Legislature has never missed a payment into the TRS fund, and TRS has never missed a payment to its annuitants!

At certain times, TRS has received much lower contributions from the state, and now is the time to work toward more adequate funding for the pension plan. From 1995 through 2007, the pension fund contribution from the state dropped from 7.31 percent to the constitutional minimum of 6 percent. That changed when the Legislature increased its contribution in 2007. Now that the TRS trustees are looking to change their rate of return assumption, TRS will need higher contributions from its funding sources or benefits may be reduced for future retirees.

The Senate State Affairs Committee will continue to discuss this topic as the next legislative session approaches. It will be imperative for legislators to be as informed as possible about retirees’ needs, as well as the great benefit TRS Texas provides to our state and our public education workforce. TRTA will keep its members up-to-date on any changes to the assumed rate of return that occur during the April 19 and 20 TRS Board meeting.

Tomorrow, the Inside Line will review the testimony given regarding TRS-Care at the Senate State Affairs Committee meeting.

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02 Apr
0

Sign TRTA’s Online Petition Encouraging the Texas Legislature to Fund the TRS Pension Plan

The Teacher Retirement System of Texas (TRS) is considering changing its rate of return assumption from 8 percent to 7.25 percent. The practical implications of this change would have an impact on future cost-of-living adjustments for retired educators. By lowering the rate of return assumption to 7.25, TRS would need to request an increase of 1.82 percent from the Texas Legislature in contributions. This 1.82 percent represents billions of dollars, approximately $786 million per year.

Retired Texas educators need and deserve cost-of-living adjustments. Many retirees have had their budgets stretched to the limit by the changes to the state-run health care program, TRS-Care. Those who have retired since Sept. 2004 have never seen a cost-of-living adjustment.

The Texas Retired Teachers Association (TRTA) is encouraging TRS to seek enough funding from the Texas Legislature to offset the changes made to the investment return assumption.

Follow TRTA’s lead by signing the petition. Your signature will help make a difference when we lobby the Legislature.

Important Upcoming Dates and Events

Now is not the time for retirees to sit on the sidelines. April is a critical month for TRS retirees.

This Wednesday, April 4, the Senate State Affairs Committee will meet at 12:30 p.m. to discuss public pension systems in Texas. View the complete agenda by clicking here.

According to the meeting agenda, the committee will review and assess (1) the different types of retirement plans; (2) the actuarial assumptions used by retirement systems to value their liabilities and the consequences of amending those assumptions; (3) retirement systems’ investment practices and performance; and (4) the adequacy of financial disclosures including asset returns and fees. Make recommendations to ensure public pension system retirees’ benefits are preserved and protected.

The meeting will take place in the Senate Chamber, and public testimony will be limited to two minutes per person. TRTA encourages members who live in the area or are willing to travel to Austin to attend the hearing and to provide oral or written testimony. If you are submitting written testimony, you must provide fifteen copies to the committee clerk and include your name on each copy.

TRTA will keep its members apprised about the results of this meeting, as well as provide a link to the live broadcast.

Additionally, TRTA is hosting its Convention on April 8-10, and TRS is hosting a board meeting on April 19-20. Now is a good time to join TRTA’s campaign and sign this petition! Don’t forget to renew your TRTA dues and ramp up our advocacy efforts! Don’t forget that the state run-off elections are coming in May!

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28 Mar
0

TRTA 65th Annual Convention Starts April 8!

The Texas Retired Teachers Association (TRTA) is finalizing plans for the 65th Annual TRTA Convention to be held in San Antonio April 8-10. Nearly 1,000 retirees are registered for the event already, which is taking place at the La Cantera Resort and Spa located at 16641 La Cantera Parkway.

This year’s theme, “Preserving the Past; Securing the Future,” focuses on maintaining and improving Texas public education retirees’ hard-earned benefits, such as health care and the pension fund. Late registration for the Convention is open online and ends Monday, April 2. Late registration will also be available onsite at La Cantera beginning at 11:00 a.m. on Sunday, April 8. To view the full convention schedule, please click here.

In addition to conducting the business of the association, such as officer elections and bylaws amendment considerations, members will attend a number of informational and training sessions. A complete list of sessions, their descriptions and a schedule are available by clicking here.

Legislation is always a key focus of our annual conventions, and despite 2018 being an interim year when the Legislature is not meeting, our members are ready to address a permanent funding solution for the TRS-Care health insurance program in 2019. Attendees should be sure to listen to Tim Lee’s thorough update during the House of Delegates on Tuesday, April 10 about what to expect as TRTA prepares for the coming legislative session.

The Texas Retired Teachers Foundation (TRTF), the charitable arm of TRTA, will host its first-ever fundraising golf tournament on Monday, April 9. Held on the Palmer Golf Course adjacent to La Cantera Resort, the $125 tickets include breakfast, a box lunch, swag bag, range balls, green fee and cart. Prizes will be awarded for 1st, 2nd and 3rd place, closest to the pin and longest drive. Check-in begins at 7:00 a.m., and the shotgun start for the four-person scramble begins at 8:00 a.m. Mulligans and raffle tickets will be available for purchase onsite. You may register as a player by clicking here! Registration ends Tuesday, April 3.

For any questions about your registration or delegate certification, please contact our Membership Department at 1.800.880.1650 or email us at membership@trta.org. We look forward to seeing you in San Antonio soon! Please be sure to share our press release about Convention with your fellow retirees and media outlets.

Thank You

TRTA and its members have the respect of both congressmen and legislators. Your membership is making a difference as we lobby here in Texas and at the U.S. Capitol. We will continue to bring you the latest updates on all issues involving retired educators.

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