Two must-pass bills are coming up for a vote, and will require your attention!
The Texas Retired Teachers Association (TRTA) has received information on how the deal to make the Teacher Retirement System of Texas (TRS) actuarially sound and provide retirees with a supplemental payment will be voted on as the session enters its final day for action. That final day is today: Sunday, May 26! TIME TO TAKE ACTION!
Two bills, SB 500 and SB 12, must pass for TRTA members to get the supplemental payment and for the TRS pension plan to become actuarially sound. SB 500 is the funding bill. SB 12 is the policy bill.
All eligible TRS members retired as of 12-31-2018 will receive an extra check capped at $2,000. The check is projected to be paid this fall. (Editor’s Note: An earlier version of the Inside Line mistakenly read 12-31-208. We apologize for the typo and any confusion this may have caused).
Because SB 500 allocates money out of the Rainy Day Fund, it must receive a total of 100 votes in favor in the House and 21 votes in favor in the Senate.
We need EVERY TRTA MEMBER TO GET ACTIVE ON THIS EMAIL ALERT! In addition, please call your state Senator and your state Representative offices today, Sunday, May 26, and ask them to vote “YES” on SB 500 and SB 12. Use our toll-free legislator hotline: 1.888.674.3788.
TRTA’s major issue has come down to the very last part of session. It all comes down to today, Sunday, May 26! Please, make sure you click the email link above and call your legislators and ask for their support as soon as possible!
All About the Legislature’s Plan to Fund the TRS Pension
Actuarial Soundness—$524 million in additional TRS Pension Funding
The state of Texas has a plan to make the Teacher Retirement System (TRS) pension fund actuarially sound. The plan will increase the base funding from 6.8 percent to 7.5 percent. By fiscal year 2025, the state will have increased its base funding for TRS to 8.25 percent.
A few school districts will see an increase in their TRS contributions in the coming biennium. Ninety-six percent of school employees don’t participate in Social Security.
The few school districts that do participate in Social Security were exempt from paying an additional contribution to TRS when the Legislature required it in 2013.
SB 12 brings parity to ISD contributions, and then phases in additional employer funding over the next 6 years.
Active school employees will see no TRS pension fund contribution increases in the coming biennium. TRS employee contributions will see phased in increases as of fiscal year 2022.
According to TRS, this plan to raise the base will ensure the plan’s actuarial soundness.
Overview of TRS Plan (SB 12) Chart
The Texas Retired Teachers Association (TRTA) supports the efforts being made by the Legislature to increase base funding to TRS. Our membership call this session has been to “raise the base!” The Legislature has done just that! We look forward to working with our friends in the active educator community to ensure the pension fund is solvent for decades to come, and we will protect this plan for every pre-retired TRS plan participant! TRS is a great value to the state and a tried-and-true pension plan for our retired and active school employees!
Supplemental Payment—$589 Million to Provide Financial Relief to Current Retirees
The Legislature is providing $589 million out of the Economic Stabilization Fund, also known as the Rainy Day Fund, to provide retirees with a “13th check.”
The check will be provided to those who were retired on or before 12-31-2018. It will be equal to a retiree’s monthly annuity with a cap of $2,000. The payment is projected to occur in the fall of 2019.
TRTA supports the supplemental payment. We know the TRS fund’s condition is improving with the state’s increased appropriations. We believe the pension fund’s overall actuarial condition will continue to improve over time, and that this supplemental payment is a welcome financial relief for hundreds of thousands of retirees who need some immediate financial help!
TRTA is working to ensure the long-term solvency for all TRS members. We have worked with the Legislature and with stakeholders on what matters most to our organization—the preservation of the defined benefit pension plan for ALL TRS retired and active participants.
SB 12 provides a plan to ensure the fund’s solvency, and it does so by reducing the funding period for TRS from 87 years to just 29 years. This may be the most aggressive and proactive work ever done with a state teacher pension system to ensure its long-term solvency.
TRTA members need financial help. The Legislature is investing $1.113 billion to help ensure the system is on a path to solvency and to provide a one-time supplemental payment to TRS retirees who retired on or before 12-31-2018.
TRTA estimates that about half of the current TRS retirees have never received a cost-of-living increase or a supplemental payment. With the passage of SB 12 and SB 500, that will change and hundreds of thousands of TRS retirees will receive a supplemental payment in the fall of 2019.
TRTA is proud to support the efforts made by both the Texas Senate and House to reach this compromise. Considering the work being done by the Legislature to focus on overall school funding and so many other issues, TRTA is pleased to see $1.113 billion in additional funding coming to the TRS pension fund, as well as directly into retirees’ pocketbooks.
It should also be pointed out that retirees are receiving an additional $231 million for TRS-Care to cover the projected shortfall in that program, meaning retirees should not have increased health care costs in the coming biennium.
This is a developing story. Please check back regularly for updates. TRTA anticipates a vote on SB 12 and SB 500 sometime late today, Sunday, May 26.