19 Oct

TRTA Update October 19th, 2012

TRS Releases Investment Report for FY 2012

The Teacher Retirement System of Texas (TRS) released its FY 2012 Annual Investment Performance Report. The report states that TRS earned 7.58% on its investments for the fiscal year ending August 31.  The fund grew by over $4 billion to reach $111.1 billion in assets.

The report confirms the success of the TRS Strategic Partner Network, which utilizes external partners in locating investment opportunities in private equity and real assets, for example. The TRS Strategic Partner Network program independently earned 11.4% during the fiscal year.

TRS Executive Director Brian Guthrie explains that the Emerging Manager program and the use of hedge funds aided TRS in its performance and helped the agency run its investment division more efficiently.

The report also includes information about expenses related to running the investment division, including salaries and building expenses.

TRTA members may recall that the fund’s value was at $95.7 billion in August of 2010 and quickly rose to $108 billion in February 2011. TRS continues to perform well through difficult market cycles, coming from a low of approximately $70 billion during the crash of 2008.

While the news we have received this week is good, TRS is not considered actuarially sound by Texas statute. In order for the TRS pension trust fund to be actuarially sound, it must be able to amortize its unfunded liability within 30 years. Right now, TRS has a funding period of “never.”

While TRS is financially healthy and your monthly annuity is not at risk of vanishing, retirees who have not received a pension increase in nearly 12 years are feeling the pinch. In order for the fund to achieve the level of success needed to provide you with a permanent cost-of-living increase, the Texas Legislature must consider making a higher contribution to TRS.

Presently, the state contribution is 6.4% for FY 2013. The retirement system was receiving the Texas Constitutional minimum for the benefit program of 6 percent in the previous biennium.

As you have read in recent issues of the Inside Line, the legislatively mandated study of the pension fund performed by TRS indicates that incremental increases in the state’s contribution can have a strong, long-term impact on the fund’s investment returns.

TRTA will continue to work with legislators now and during the 83rd legislative session to increase the state’s contribution to TRS while maintaining its defined benefit structure.

Medicare Advantage Update

TRTA continues to try and answer questions about the upcoming Medicare Advantage plan. Perhaps the most important questions TRTA has tried to answer over the last month are about medical providers in the plan. Many TRTA members emailed us their provider information to a special email account through There were a few challenges that developed out of using this email question and answer system. Surprisingly, they had nothing to do with technology issues, these problems really stemmed from rule limitations placed on Aetna and TRS from answering these emails directly, something we all believed was possible at the time, but turned out not to be the case (thank you federal rules governing Medicare Advantage plans).

Even still, TRS and Aetna worked diligently to help provide the necessary information so that TRTA could respond to these emails (well over 900 emails, and more than 3,000-plus actual provider questions). The bottom line is that TRTA has been responding to these questions as quickly as we receive new information about providers from Aetna.

We know this has been a frustrating transition, and we appreciate your patience and understanding as we have tried to help as much as possible. If you are still waiting to hear about the providers asked about in your email, we are working to get you than information as quickly as possible (TRTA has responded to about half of the emails we have received so far). For an immediate answer, you can always call Aetna and speak to a representative. Hold times on this toll-free call-in service are generally less than 1 minute. As you read in the TRTA Voice magazine, Aetna is the best and only source for information on your medical provider(s) acceptance of the new Medicare Advantage plan.

We know that specific provider information is critical to you knowing more about staying in or opting out of this new plan option. We are replying to emails as quickly as possible, but to restate, the best way to get an answer about your provider questions is to call Aetna. That number is 1.866.217.2409.

Concluding Comment

Thank you for being a TRTA member and supporting our efforts. Our member network exceeded 73,000 members last year. We hope that you will continue to support us as we fight to protect your retirement. If you are not a member and want more information about joining, please contact our office at 1.800.880.1650. TRTA membership costs $25 per year.

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15 Sep

TRTA Update September 15, 2012

TRTA Helps Lead a United Front Defending TRS Benefits

 Associations Testify in Favor of Maintaining Pension and Health Care Benefits

The House Pensions, Investments, and Financial Services Committee (PIFS) met this week to discuss their interim charge on the Teacher Retirement System and other statewide, county, and municipal retirement programs. TRTA expected an attack on the defined benefit traditional retirement program by those interest groups that seem determined to implement a privatized retirement program for all educators and other government workers. Unfortunately, these attacks may just be the beginning.

TRTA members from around the state attended the hearing. Many of these TRS retirees stayed the entire day listening to over 8 hours of testimony on various pension fund structures in the state. All TRTA members and all TRS retirees are fortunate to have such dedicated TRTA members giving their time to be present through these hearings.

TRTA made a strong case promoting the value of the existing TRS defined benefit retirement program for education employees and retirees. Tim Lee, TRTA Executive Director, testified before the committee stressing the need to continue with the TRS defined benefit program. Key points from the TRTA testimony are provided below.

You can also watch Tim’s presentation by clicking here (Pensions, Investments and Financial Services Committee hearing September 12, 2012 advance video to mark 7:25…towards the end of the video presentation).

Key points of the TRTA Testimony:

  • TRS is NOT in crisis and under current contributions levels and investment return assumptions, the plan can pay benefits through the year 2075
  • TRS is not coordinated with the federal Social Security program and is the sole source of retirement security for 95% of retired public school personnel
  • TRS is not being ignored by the Texas Legislature, while other states with flailing pension plans have skipped contributions to their systems, sometimes for years
  • Implementing a defined contribution style plan for TRS is not needed, and is not good public policy; it is, in fact, drastic, costly, and fiscally irresponsible
  • TRS is not a tremendous burden on Texas taxpayers and is not an entitlement program
  • TRS is not an overly rich benefit plan with an average monthly benefit of $1,867
  • TRS is not far from achieving actuarial soundness
  • TRS is not perfect, but would benefit significantly from modest changes to the system while maintaining its defined benefit structure
  • The issue at hand is about ideology versus good public policy
  • TRS is in the forever business, with 75 years of proven success in providing benefits for its members
  • TRS brings tremendous value to the state of Texas, including $690 million in state revenues
  • TRS is a bargain for Texas taxpayers, costing them far less than what private sector businesses pay in for their hourly employees
  • TRS is well-managed and has earned more than $40 billion since the two major market declines in 2008 and 2009
  • TRS provides real retirement security and is a legacy worth protecting.

TRTA is convinced that the argument to eliminate the TRS defined benefit plan is based more on political ideology than any fiscal need. As TRTA already reported, the TRS study on alternative plan design (TRTA report, click here…TRS Study, click here) indicates that changing to a defined contribution plan would increase the TRS unfunded liability by $11.7 billion!

Make no mistake, TRTA and our members will do whatever we can to protect the TRS retirement program! We are meeting with legislators, talking to educators, sending letters to newspapers, talking to additional media, and informing our own members about this attack. We will never stop fighting those interests that want to undermine the TRS benefit plan.

While it is important to be fully engaged in the existing attacks on the TRS defined benefit plan, the far more critical issue is adequate funding for the TRS-Care retiree health insurance program. Again, as TRTA reported earlier this month (click here), the TRS-Care health insurance program is quickly running out of reserve funding and may experience a funding shortfall in the next two to three years. That funding shortfall may be as much as $1.2 billion.

TRTA expects action this session to improve the funding condition of the TRS-Care program. The need for action was highlighted by Brian Guthrie, TRS Executive Director, stating that the healthcare issue is in need of attention far more than any perceived pension funding crisis.

TRTA members need to tell legislators that their health care is a vital part of their retirement benefit and their livelihood. They should also remind legislators that this program is not a “no-cost” health care plan. TRS-Care participants pay significant premiums to participate in this plan. Combining what retirees pay in premiums, as well as deductibles and out-of-pocket costs indicates that plan participants are paying the highest portion of these health care costs.

TRTA members want the legislature to restore funding to the TRS-Care program that was cut last session and to be ready to provide any additional funding necessary to maintain the TRS-Care retiree health insurance program.

TRTA is working hard to be your voice on these important issues. Thank you for being a TRTA member and supporting our efforts. Our member network exceeded 73,000 members last year. We hope that you will continue to support us as we fight to protect your retirement.

If you are not a member and want more information on joining, please contact our office at 1.800.880.1650. TRTA membership is $25 per year.

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07 Sep

Pensions, Investments and Financial Services Committee to Meet Next Week

Many TRTA members are interested in the legislatively mandated studies completed by the Teacher Retirement System of Texas (TRS) last week. The full report can be read by clicking here.

TRS began working on the studies at the end of the 82nd legislative session in 2011. The Texas Legislature directed TRS to research the impacts of potential changes to its current defined benefit pension plan. Additionally, the legislature instructed TRS to address the solvency issues with the TRS-Care health insurance program by doing a separate study.

To read the complete TRTA report on the study, please click here.

Next week will be the first opportunity for the TRTA staff and members of TRTA to respond publicly to the Texas Legislature about the results of the reports. Many of you have expressed interest in attending this meeting of the Pensions, Investments and Financial Services Committee (PIFS) next Wednesday, September 12.

The meeting will be held in room E2.010 of the Texas Capitol building. TRS is scheduled to present its findings at approximately 12:00 p.m. (Please note the time is subject to change) Public testimony is welcome. We encourage those of you who want to speak to arrive early, no later than 11:00 a.m., to complete a comment card.

Next Wednesday is also the TRS 75th Anniversary celebration. As you have heard, this event has sold out. Although we are unable to sell any additional tickets to the event, we still encourage any TRTA member within travelling distance to attend the PIFS Committee hearing. We believe you will find tremendous value in learning the results of the studies and in hearing legislators’ comments about those results.

For those of you who purchased tickets to the TRS 75th Anniversary event, you should receive your tickets in the mail shortly. We hope you are able to arrange your travel schedule to attend the PIFS meeting earlier in the day.

The PIFS hearing will also be broadcast live online from the following webpage: A specific link for the meeting has not yet been created. Please check back at the link provided on the day of the meeting.

Update on Special Email Lists

Over 700 emails have been received through the new email service. We appreciate your inquiry and are working with TRS and Aetna to get answers to your emails as quickly as possible.

Additionally, over 300 emails have been sent to We know that Aetna is working hard to answer your Medicare Advantage questions, as well.

Please allow up to 14 days for these emails to be processed. Aetna officials are still involved with their statewide information seminar schedule. Providing information about the new Medicare Advantage program is being accomplished through multiple levels. Your patience in having your questions addressed is appreciated.

Please feel free to continue using the two email services below. If you want an immediate answer, try the TRS-Care Aetna hotline at 1-866-217-2409 (TDD: 711). These calls are being answered with little to no hold time.

For questions regarding your doctor’s participation in the TRS-Care Medicare Advantage plan (please provide your doctor’s full name, office address, and office phone number):

General questions regarding the TRS-Care Medicare Advantage plan:

As always, thank you for your membership in TRTA. If you are not a member and would like to join, please call us at 1.800.880.1650.

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