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21 Nov
0

TRS Pension Fund Healthy, Actuarially Sound

The Teacher Retirement System of Texas (TRS) Board of Trustees met this week in Austin to discuss several issues, including the actuarial valuation of the pension fund.

There is a lot of good news about the TRS pension fund to share with our members. TRS reported the pension fund is at a healthy $130 billion. The rate of return on investments for the year was 16.8 percent, net of expenses. The return was large enough to eliminate deferred losses and is now in a position of deferred investment gains.

These developments are a direct result of so many people dedicated to making TRS Texas the best public pension plan in the nation. This includes the TRS administrative and investment teams, as well as the legislators who have supported the TRTA legislative agenda to protect the TRS defined benefit plan.

Above all, improving actuarial condition of our pension fund is thanks to the tremendous effort you, your fellow retirees and our friends in the active educator community made during the 83rd Legislative Session in 2013. As a result of our determination and cooperation, Senate Bill 1458 has had a huge impact on the health of TRS.

We have proven that when we work together and stay the course, it works! It is also important to note, however, that we cannot go backwards! TRTA members must remain vigilant in maintaining the provisions passed through SB 1458. These provisions are good for the pension fund and necessary. Any step backwards undermines our hard-earned success!

With TRS Fund in Better Shape, What Do I Need to Know about the Coming Legislative Session?

While this news is positive for all 1.3 million participants—retired and active—there were some concerns presented during the meeting as well. An independent actuary reported that while the system is sound, no room exists for benefit increases for the fund’s annuitants under the current contribution structure. This means that any benefit increases for annuitants must be funded with additional revenue.

Our TRS-Care retiree health insurance program is facing a huge shortfall that must be addressed in 2015. During the TRS Board of Trustees meetings, the TRS staff and independent actuaries released the final version of its TRS-Care Sustainability Study.

Next week, TRTA will release a complete review of the study through the Inside Line. An important part of the TRS report on health care is that the plan is still projecting to be underfunded by nearly $730 million. Without a fix to this immediate health care crisis in the coming session, our retirees could see their premiums more than double!

Our legislators must know that funding for our health care program and the pension fund are independent issues, and considerable TRTA effort will focus on resolving the TRS-Care shortfall and protecting the insurance plan for the future.

The resolution of the TRS-Care crisis cannot sacrifice the pension fund or the provisions earned through SB 1458! Retirees need a reliable, steady monthly income with the potential for increases but they also need affordable, accessible health care! TRTA will support equally the increased appropriations needed for TRS-Care and its protection and the preservation of the defined benefit pension plan.

We cannot allow the dollars won through SB 1458 to stabilize the pension fund to be shifted to TRS-Care in an attempt to resolve the coming health care crisis. This line of thinking is short-sighted and unreasonable.

TRTA is your advocate and we always will work to protect your retirement AND improve your benefits. TRTA’s core value is a sound retirement system, but helping retirees receive benefit increases is also a major part of our long-term legislative agenda. We successfully worked to improve the condition of the TRS fund and provide a cost-of-living increase to hundreds of thousands of TRS retirees last session, and we are going to work on these goals again in the 84th Legislative Session.

TRTA members know the solvency of TRS-Care is our top priority for the 84th Legislative Session beginning in January, but we will also seek ways to provide additional funding to the TRS pension fund so that the possibility of a cost-of-living increase for those who did not receive one in 2013 may be considered. As the health of the fund continues to improve, opportunities may be presented to make this a reality.

As you can see, we have a broad legislative agenda this coming session. Please look for next week’s update on the TRS-Care Sustainability Study as we take a deeper look at what TRS is reporting to the Legislature on this important topic.

Thank You!

Thank you for being a member of TRTA! It is your steadfast support that allows us to be the state’s lead advocate for protecting your retirement and health care benefits. It is also what allows us to work with Congress on bills such as the Equal Treatment of Public Servants Act, the bill working to give you back more of your hard earned Social Security benefits. Check our previous Inside Line to read more about this bill. And, yes, TRTA absolutely is working with our friends in Congress to address the Government Pension Offset issue as well!

If you are not a member of TRTA and want more information about joining, please contact us at 1.800.880.1650. Follow us on Facebook! Visit our YouTube channel for regular video updates.

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20 Nov
0

Federal Legislation to Repeal Windfall Elimination Provision (WEP) Introduced

Last week, two members of Congress, Representative Kevin Brady of Texas and Representative Richard Neal of Massachusetts, introduced H.R. 5697, the Equal Treatment of Public Servants Act. The bill, if passed, would repeal the Social Security Windfall Elimination Provision (WEP), and replace it with a more fair formula helping those who have been impacted by the WEP and those who will be in the future.

In a press release dated November 13, Representative Brady stated, “Our goal for many years has been to end the unfair WEP and provide equal treatment to all workers in Social Security, including our teachers, firefighters, police and other public servants who have contributed into Social Security.”

Members of the Texas Retired Teachers Association (TRTA) have advocated for many years that Congress repeal the WEP, and TRTA Executive Director Tim Lee was invited last summer to Washington, D.C. by Congressman Brady to discuss the bill and share his thoughts about how it impacts hundreds of thousands of retired public educators in Texas and throughout the nation.

H.R. 5697, if passed, would:

  • Permanently repeal the current Windfall Elimination Provision and replace it with a new and fair formula that treats public servants like the rest of American workers.
  • Guarantee public servants receive the benefits they earned while they paid into Social Security.
  • Reduce the WEP by up to a third for current retirees, and up to half for future retirees – increasing lifetimeSocial Security benefits by between $20,000 and $32,400 (as estimated by the Social Security actuary).
  • Not impact the Social Security trust fund.

What does this mean for retired educators in Texas? If H.R. 5697 passes, your Social Security amount will no longer be figured by the arbitrary WEP formula established in 1983, but will be based on your real-life Social Security contributions and work history — just like everyone else.

An estimate provided by the Social Security Actuary’s office indicates the average retiree would receive an annual $1,034 increase in Social Security income, or an additional $20,000 over the lifetime of an average retiree for those who are retired already or will turn age 62 before December 31, 2016. Retiree’s Social Security income would increase by approximately 32 percent.

Persons who turn age 62 after January 1, 2017, would be subject to the new Public Servant Fairness Formula. On average, retirees would receive $1,620 in additional Social Security benefits per year, about $32,400 over the average lifetime of retirement.

What Happens Now?

The bill has been referred to the House Committee on Ways and Means, a committee on which Representative Brady serves. After review by the Committee, the bill would need to be brought to the House of Representatives for a vote, then if passed, would need to be presented to the Senate for a vote as well. If the bill passed both Houses of Congress, it would then be sent to the President to be signed and become law.

We are still in the very early stages of the bill’s progress. While the news is good, there is much work to be done to get H.R. 5697 passed! TRTA will launch an email advocacy campaign on this issue with our Texas Congressional Delegation in the weeks to come.

For now, TRTA members can spread the word to their fellow retirees and their friends in the active school community that we have not given up on the idea of fairness for our members and their Social Security earnings. We are gearing up to pass a bill that puts more money back into your pockets!

WEP Repeal Fact Sheet

Thank You!

Thank you for being a member of TRTA. If you are not a member of TRTA and want more information about joining, please contact us at 1.800.880.1650. Follow us on Facebook! Visit our YouTube channel for regular video updates.

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19 Nov
0

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